Acquisition

OJSC Granit-Kuznechnoye, a subsidiary of LSR Group (LSE: LSRG; MICEX, RTS: LSRG), has entered into a contract to acquire OOO Petrovsky Quarry, a crushed granite producer which holds license for Petrovskoye granite deposit located in the Vyborgsky district of the Leningrad region. The total value of the transaction amounts to RUR 59 million. The acquisition is financed with the proceeds OJSC LSR Group received from the secondary public offering.

OOO Petrovsky Quarry holds a license for gneiss granite deposit with proven reserves of 25 million cub. m and owns two foreign-made aggregate processing plants which produce crushed granite. After the acquisition is completed, OJSC Granit-Kuznechnoye production facilities will include 8 plants and 5 deposits in the Vyborgsky and Priozyorsky districts of the Leningrad region.

The production capacity of the quarry amounts to 500 thousand cub. m per year. The quarry is provided with the necessary transport infrastructure - internal truck roads and access to railway.

Georgy Vedernikov, Managing Director of Building Materials, Aggregates and Construction Services Business Division of LSR Group, comments:

"Acquisition of OOO Petrovsky Quarry is part of our strategy to strengthen our positions in the crushed granite market in St. Petersburg and the Leningrad Region. Petrovskoye is one of the best granite deposits in the Leningrad region. Its products can be used both for manufacture of building materials and all types of construction including infrastructure projects. This is important considering the significant number of infrastructure projects in St. Petersburg and Moscow, both planned and under way, as well as state interest to road construction. In addition, transport accessibility of the Vyborgsky district makes this quarry particularly attractive for development of our crushed granite production facilities. In future we are planning to increase our production capacity in this district".

Note to Editors:

OJSC LSR Group is a real estate development and building materials company founded in 1993 and operating in a number of complementary market segments. Its core business areas are production of building materials, real estate development and panel construction. LSR Group's main operations are located in St. Petersburg, Moscow, Yekaterinburg and Ukraine. In 2009, the sales revenues of LSR Group were RUR 51,024 (IFRS). LSR Group is a public company, with its GDRs traded on the London Stock Exchange and its ordinary shares traded on MICEX and RTS.

OJSC Granit-Kuznechnoye - is the largest crushed granite producer in the North-West region of Russia. The company exploits five sites in the Priozyorsky and Vyborgsky districts of the Leningrad region. Eight plants produce crushed-granite, six of them are foreign-made. Total volume of established resources of OJSC Granit-Kuznechnoye is around 400 million cub. m. Its production capacities amount to more than 6.5 million cub. m per year.

For more details please contact: LSR Group Press Service Tel.: +7 812 314 10 44 Fax: +7 812 458 83 72 E-mail: [email protected]www.lsrgroup.ru