The Company's activities are associated with certain risks which should be regarded by investors. Below is a description of the key risk factors which the Company considers the most important at the moment.

Country and Regional Risks

Country and regional risks arise, mainly, due to macroeconomic factors which manifest themselves at the global level, at the level of the Russian Federation and specific regions. The said factors may have a negative effect on borrowing opportunities, liquidity indicators, investment and operational efficiency and, finally, the Company's shareholder value. Besides, crisis phenomena in the world economy affect negatively the industrial production and energy consumption volumes which leads to a decrease in the Company's revenues.

The key factor of the macroeconomic risk is the ongoing global financial crisis affecting key performance indicators of raw material and financial markets: prices for fuel, energy and other resources, the cost of capital, global currency rates, and inflation.

The economy of the Russian Federation, same as the economies of other BRICS countries, is an emerging economy which is sensitive to global crisis phenomena. This results from the economy dependency on prices for energy resources, the low volume and volatility of the Russian financial market and the transitional state of the national banking system.

In order to minimize the consequences of macroeconomic risks the Company takes a set of measures aimed at optimization of the share of borrowings in the overall capital structure and increase of efficiency of operational and investment expenses.