On August 25, 2011, the Executive Committee of the Company met in Moscow chaired by ALROSA’s President Fyodor Andreev.

The Executive Committee discussed the report on implementation of ALROSA’s consolidated budget for the first half of 2011.

For the first six months of this year, ALROSA Group (OJSC ALROSA, OJSC “ALROSA-Nyurba”, OJSC “Almazy Anabara”, OJSC “Severalmaz”) rough diamond production grew 1,735,900 carats as compared to the relevant period in 2010, and totaled 19,326,200 carats. Rough and polished diamond sales totaled USD 2,200.2 mln., the sales growth amounted to USD 153.2 mln. by contract to the same period of the last year.

ALROSA’s proceeds from sales of goods, works and services totaled RUB 52,444.8 mln.

Following the results of the first half of 2011, ALROSA’s net profit amounted to RUB 16,395.7 mln., and grew 5.5 times compared with the same period in 2010.

ALROSA’s expenditures on production and sales of goods (works and services) decreased RUB 1,370.7 mln. against the target parameters, mainly owing to the measures aimed at saving material and equipment, and energy resources, reducing specific consumption rates, optimizing cost of works, and reducing depreciation cost, and totaled RUB 33,831.0 mln.

ALROSA’s credit portfolio structure and actual debt on credits and loans remain on the list of target parameters.

In compliance with the resolution passed by the Supervisory Board, the Executive Committee considered execution of the “Innovation Development Program for the period 2011-2018” adjusted for the results of the completed technical audit of ALROSA.

The expected economic effect from innovation projects and production modernization measures is RUB 12.6 bln. Twenty to thirty development projects will be implemented annually in ALROSA. ALROSA’s innovation program defense was held in RF Ministry of Economic Development, it was supported by the Workgroup at the Government Commission on High Technology and Innovation. ALROSA’s innovation development strategy will give an additional impetus to production development due to increase of R&D volume and implementation of high technologies. The program will be implemented by the Innovation and Technology Centre created as part of Yakutniproalmaz institute.