Issue prospectus

Please note: this is non-official translation!

Issue Prospectus of Open Joint-Stock Company

Joint-Stock Bank «Ukrgasbank»

1) Issuer description:Full name: Open Joint-Stock Company Joint-Stock Bank «Ukrgasbank»Short name: OJSB «Ukrgasbank»Location: 1 Yerevanska street, 03087, KyivPost address: 39 Chervonoarmiyska street, 01004, KyivTelephone/fax: (044) 239-28-30Date of state registration: OJSB «Ukrgasbank» was registered by the National Bank of Ukraine, state registration certificate № 183 dated 21.07.1993.Subject and purpose of activities:The purpose of issuer’s activities is receiving the profit from operations complying with the Law of Ukraine "On Banks and Banking" The issuer’s activities correspond with the type of activities by the Classification of business activities:

65.12.1 – Commercial Banks.In accordance with the Articles of Association the subject of OJSB «Ukrgasbank» activities

includes:- accepting deposits from legal entities and individuals;- opening and keeping current accounts of clients and correspondent banks, including money

transfers from these accounts by payment instruments and crediting funds to them;- placing borrowed funds in its own name, on its terms and at its risk;- operating with currency values;- issue of own securities;- organizing purchase and sale of securities on behalf of its clients;- operating on the equity market in its name (including underwriting);- supplying guarantees and warranties and other obligations from third persons, providing for

their performance in money terms;- acquiring the right of demanding the performance of obligations in money terms under

delivered goods or provided services, taking the risk of performing these demands and accepting payments (factoring);

- leasing;- depositary services and property lease of safes for keeping valuables and documents;- issuing, purchasing, selling and servicing cheques, promissory notes and other working

payment instruments;- issuing bank payment cards and performing operations with these cards;- providing consulting and information services regarding banking operations;- investing in authorized funds and shares of other legal entities;- issuing, circulating, repaying (distributing) public and other monetary lotteries;- transporting currency values and collecting funds; - operating on behalf of clients or on its own behalf: with monetary market instruments, with

the instruments, based on currency exchange rates and interests, with financial futures and options;- trust managing funds and securities on the contractual basis with legal entities and

individuals;- depositary activities and keeping records of registered securities owners.

Amount of authorized capital: total amount of the authorized capital – 600 000 000,00 (six hundred million) hryvnias 00 cop.Number of employees as of 30.06.2008: 4 373 persons.Number of shareholders as of 30.06.2008: 1 501 persons.

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2) Data on the executives of the Issuer:Family name,

First name, patronymic Position at

OJSB «Ukrgasbank» and position at the principal

business

Date of birth

Education

Qualifications Working experience

*

Working experience

at the Issuer*

LyashkoVadym Petrovych

Chairman of the Board 09.05.1969 Higher Economist 14 years9 months

3 years 11 months

RusynYegor Gavryilovych

First Deputy Chairman of the Board – member of the Board

27.10.1972 Higher Economist 14 years 7 months

11 months

Bonch-BruyevychLyudmyla Viktorivna

Deputy Chairman of the Board – member of the Board

16.02.1963 Higher Lawyer 27 years 8 months

2 years6 months

DeynehaYuriy Petrovych



2 years 6 months

DmitriyevaOlena Mykhaylivna


05.08.1972 Higher Applied mathematics;Banking

11 years 7 months

1 year8 months

MamedovSergiy Gennadiyovych


22.12.1975 Higher Master of Business Administration

11 years 9 months

1 year6 months

NaumenkoSergiy Gennadiyovych


03.10.1972 Higher Accountant and auditor 14 years 10 months

3 years 9 months

MalomuzhSergiy Volodymyrovych


27.11.1971 Higher Bachelor of Business Management; Master of Banking

13 years 5 months

TkalichIgor Oleksandrovych

Head of Financial monitoring Department – member of the Board

14.09.1962 Higher Lawyer 28 years 8 months

2 years1 month

IlnytskaNataliya Gennadiivna

Chief accountant 24.03.1970 Higher Master of Information Systems in Management

16 years appointed on

07.07.2008GorbalOleg Mykhaylovych

Head of Supervisory Board – Deputy Director of Central Sales Department of OJSB «Ukrgasbank»

16.10.1974 Higher Master of Banking 11 years 5 years

OmelyanenkoOleksiy Anatoliyovych

Member of Supervisory Board, advisor of the Chairperson of CJSC "Insurance company "Ukrainian insurance group "Zhyttia"


4 years 9 months

ObshtyrValentyn Vitaliyovych

Member of Supervisory Board, temporary out of work


4 years 9 months

SmythJohn Joseph

07.10.1949 Higher Degree in Banking; Degree in Corporate Governance and Law;Diploma of Corporate Governance;Diploma of company management.

36 years 2 years

FedotovSergiy Volodymyrovych

Member of Supervisory Board, temporary out of work

05.08.1972 Higher Accountant and auditor 19 years 6 months

4 years9 months

Yaremenko Sergiy Oleksandrovych

Member of Supervisory Board,Advisor to the Minister of Economic Affairs of Ukraine

22.11.1948 Higher Economist - international economic relations

35 years 3 months

KolomiyetsSemen Oleksandrovych

Head of Auditing commission 20.04.1949 Higher Economist 39 years3 years

6 months

* as of 30.06.2008

3) Information on average salary of members of the executive body: The average salary of the members of OJSB «Ukrgasbank» Board in 2007 was 15 603,58 hrn., in Q2 of 2008 – 23 696,82 hrn.

4) List of licenses (permits) of OJSB «Ukrgasbank»:

Activity Number of license

(permit)

Issue date Issuing authority Expiry date

2

Banking license for bank operations, set in part one and paragraphs 5-11 of part two of Article 47 of the Law of Ukraine "On Banks and Banking"

123 19.11.2001 National Bank of Ukraine

Non-identified

Permit for performing operations, set in paragraphs 1-4 of part two and part four of Article 47 of the Law of Ukraine "On Banks and Banking", according to the Appendix of this Permit.

123-3 05.07.2007 National Bank of Ukraine

Non-identified

License for performing professional activities on equity market: activity of issuing and circulating securities; depositary activities

АБ 124927 09.02.2005 State commission for Securities and Stock

market

09.02.2010

5) Information on participation of OJSB «Ukrgasbank» in holding companies, trusts, associations etc:

OJSB «Ukrgasbank» is a member of the Association of Ukrainian Banks, Association «First Stock Exchange Trading System», OJSC «Interregional Stock Union», Professional association of registrars and depositaries, Association «Kyiv Banking Union», Ukrainian Interbank Currency Exchange, Ukrainian share exchange and Individual Deposits Guarantee Fund. OJSB «Ukrgasbank» is a principal member of MasterCard and VISA payment systems.

6) Information on legal persons where the Issuer owns over 10 % of the authorized capital (assets), including subsidiaries, branches and representatives of the Issuer.

1. CJSC "Audit chamber "KUB" (enterprise code 23511393) – 60 shares for the amount of 6,0 thousand hrn. (15,0 % authorized capital);

2. "Media-Service" LLC (enterprise code 32295045) – contribution 1 650,00 hrn. (10,00 % authorized capital).

7) Branches of OJSB «Ukrgasbank» (as of 30.06.2008):1) Vinnytsia branch (21009, 34, Ivana Bevza street, Vinnytsia)2) Dnipropetrovsk branch (49000, 12, Chelyuskina street, Dnipropetrovsk)3) Donetsk branch (83000, 107 Postysheva street, Donetsk)4) Kamyanets-Podilsk branch (32300, 32 Khmelnytske road, Kamyanets-Podilsk)

– was reorganized into outlet in July 2008. 5) Kirovograd branch (25006, 20 Lunacharskogo street, Kirovograd)6) Lugansk branch (91005, 4 30th block street, Lugansk)7) Lviv branch (79026, 98 Striyska street, Lviv)8) Odessa branch (65104, 29, Akademik Glushko Avenue, Odessa)9) Second Odessa branch (65059, 1/1, Malynovskogo street, Odessa)10) Poltava branch (36020, 19, Zhovtneva street, Poltava)11) Rivne branch (33001, 31, P. Mogyly street, Rivne)12) Simferopol branch (95051, 68 Gogol street, Simferopol)13) Sumy branch (40030, 4, Kirova street, Sumy)14) Uzhgorod branch (88018, 70 Shwabska street, Uzhgorod)15) Kharkiv branch (61145, 20, Kosmichna street, Kharkiv)16) Kherson branch (73024, 21, Perekopska street, Kherson)17) Cherkassy branch (18002, 221, Gogol street, Cherkassy)

As of 30.06.2008 OJSB «Ukrgasbank» also had 320 outlets (as of 01.09.2008 – 340 outlets).As of 30.06.2008 OJSB «Ukrgasbank» has no representative offices.

8) Description of the issuer’s activities as of 30.06.2008.General trends and specific features of the development in the industry, where the Issuer

operatesThe basic principles of the monetary and credit policy for 2008, indicated by the NBU, are:

- encouraging monetary measures to keep inflation at the rate of about 9,6 per cent; - securing predictable dynamics of exchange rate of hryvnia to the essential rate-basing currency –

US Dollar: hryvnia to US Dollar exchange rate (average for the period) – 4,95-5,25 hrn. per US

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dollar;- rate of monetary expansion – 130-135 %; - assisting in providing conditions for the share market development regarding the intensification of

real economy and banking system needs in reliable share instruments; - providing economic conditions for increasing the share of long-term investment loans in the bank

assets through the adequate risk management and improvement of the corporate management level;

- increasing the volumes of banking capital and improvement of its quality, as well as enhancing the system regulating the flow of resources, received by Ukrainian banks from non-residents;

- raising the level of confidence to the national currency, lowering the level of economy dollarization and its regulation by means of monetary and credit policy, encouraging gradual equalization of the conditions for crediting in the national and foreign currencies.

Economic trends in 2005 – 2008 encouraged the development of the banking system of Ukraine. The assets of the banks as of 30.06.2008 in comparison with information as of 30.06.2007 increased by 59 % and amounted 699 billion hrn. Credit and investment portfolio increased rapidly, including bank claims as of 30.06.2008 under the extended loans to legal entities at the rate of 332 billion hrn., and individuals – 190 billion hrn. The volumes of funds borrowed by banks from corporate and individual clients increased by 55 % during the year – up to 381 billion hrn. In 2008 the priority for the banking system was further increase of the banking capital. During the year total capital of Ukrainian banks rose by 33 billion hrn. or by 65 %. The result of banking activities in this year was the net profit in the amount of 4,3 billion hrn., which is by 1,7 billions more than in the same period last year.

Essential specific features of financial market functioning in Ukraine:- large number of banks, registered on the territory of Ukraine;- small volume of total assets and capital of the banking system of Ukraine in relation to the GDP;- quite strict supervision by state regulating bodies;- large demand of the economy and population of the country for credit funds, which enables to

suggest the unsaturation of this economic segment and its potential attractiveness for investors.

Volume of major operations and services, performed by OJSB «Ukrgasbank»: Credit operations The volume of the bank credit investments as of 30.06.2008 in comparison with the data as of 30.06.2007 increased by 2 916,4 million hrn., or by 88,5 %, up to 6 213 million hrn. The volume of loans, extended to retail business, increased faster than that of loans, extended to corporate business: the amount of loans, extended to individual clients, increased by 1 290 million hrn. or by 150 % up to the amount of 2 145,7 million hrn., to corporate clients – by 1 626,6 million hrn. or by 67 % up to the amount of 4 067 million hrn.

According to the data of the Association of Ukrainian Banks as of 30.06.2008 OJSB «Ukrgasbank» took position 23 among Ukrainian banks by the amount of credit portfolio of legal entities and position 19 among Ukrainian banks by the amount of credit portfolio of individuals.

This considerable increase of the credit portfolio of individuals is encouraged by a wide range of retail standardized products of the Bank, among them: 1. Crediting programs for purchasing transport vehicles. 2. Crediting programs for purchasing real estate property (both housing and commercial). 3. Consumer crediting programs. 4. Card crediting programs. 5. Other crediting programs.

Deposit operations The Bank considers corporate clients’ funds to be an important constituent part of the Bank liabilities and provides attractive conditions for settlement services and deposit products. As of 30.06.2008 the deposits of legal entities and local budgets equaled 1 489 million hrn. (growth from the beginning of the year was 916 million hrn. or 160 %), the funds on demand of legal entities (taking into account the funds on card accounts) were 789 million hrn. (growth from the beginning of the year was 312 million hrn. or 65 %).

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The Bank offers its clients various deposit products, both classical deposits with monthly interest payments or at the end of the term, and products with an opportunity of replenishing and partial withdrawal of funds with the increase of the interest rate depending on the term of keeping the funds on the account. During 2008 OJSB «Ukrgasbank» offered legal entities and individual entrepreneurs 9 standardized deposit products. Besides, a significant number of deposit products were sold by the Bank on individual terms.

According to the data of the Association of Ukrainian Banks OJSB «Ukrgasbank» took position 10 among Ukrainian banks by the amount of the debt capital of individuals. As of 30.06.2008 the deposit portfolio of individuals equaled 3 455 million hrn. (growth of the deposit portfolio from the beginning of the year was 1 716 million hrn. or 99 %), the funds on demand of individuals (taking into account the funds on card accounts) were 642 million hrn. (growth from the beginning of the year was 275 million hrn. or 75 %). During 2008 OJSB «Ukrgasbank» offered individuals 10 standardized deposit products. The largest demand of the individuals was for long-term deposits for the period of 24 months «Fixed-term» and «Classical».

Bank operations with plastic cards Payroll projects. The Bank continues developing payroll projects and corporate payment cards — both as individual products and as an element of client complete servicing. During 2008 the Bank launched 323 new payroll projects. At the moment the Bank services 1773 payroll projects. Operations with payment cards. In Ukraine the popularity of international payment cards is rapidly growing thus the efforts of the Bank in terms of card business were directed on the expansion on this market, first of all, by increasing the volumes of the implemented card projects for all strata of the population. According to the data of the Ukrainian Interbank Association of the members of ЕМА payment systems the bank has position 13 among the Ukrainian banks by the volumes of the card issue. The basis of the activities on the market is permanent growth of card service infrastructure and principal membership of OJSB «Ukrgasbank» in three international payment systems: - MasterCard International (since 2000), - Visa International (since 2002), - UkrCard (since 2002). Servicing is performed by the processing company OJSC "UkrCard", where OJSB «Ukrgasbank» is a co-owner. The operative client service is performed 7 days a week providing 24 hour information and support of the Bank services. Due to the aggressive policy in the field of payment cards OJSB «Ukrgasbank» is the leader of Ukrainian card business in the introduction of innovative technologies, which made the payment cards from OJSB «Ukrgasbank» not only safe but also possessing innovative functional features, which are not characteristic of regular cards with a magnetic strip. OJSB «Ukrgasbank» was first in Ukraine to begin acquiring chip payment cards of both Visa and MasterCard payment systems. For the best convenience of the Bank clients there is an ongoing process of developing the infrastructure for servicing payment cards by the increase of the number of ATMs and cash desks, and by the increase of the number of partner banks.

Thus:- it has become possible to receive cash in 1396 ATMs with no extra commission;- total infrastructure of the Bank ATM and outlet network and partner banks equals 4218 cash

outlets on the territory of Ukraine.At present OJSB «Ukrgasbank» may offer its clients 17 different card products of Visa and MasterCard payment systems to any taste and for any purpose.

During 2008 the Bank concentrated on development of card credit programs. Short-term credit programs in form of overdrafts were launched first of all for present clients, that allowed to increase the level of cross sales. The followings specialized programs were launched:

- «Payroll» overdraft – overdraft for the employees of payroll projects. The limit of overdraft is fixed on payroll account and amounts of 5 average monthly salaries;

- Overdraft for bank borrowers – credit program directed on card credit sale for the bank

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borrowers that already had good credit story in the bank. The loyal terms of credit program allow to market this product as a loyalty program for present clients.

- Credit card «Espresso» – revolver credit card with favourable period (up to 45 days) and monthly commitment amount (7%). The program is aimed at product sale to clients that don’t have credit story in the bank, i.e. at new clients.

Due to increasing of payment cards operations volumes and banking services range granted to clients, commission incomes from operations with payment cards for the first half year of 2008 increased in comparison with the same period last year by 55 %.

The Bank issued 469 thousand payment cards as of 30.06.2008, growth from the beginning of the year was 87 thousand items or 23 %. As of 30.06.2008 balances on client card accounts amounted 604,3 million hrn. (growth from the beginning of the year was 265,1 million hrn. or 78 %).

Commission products Money transfers The volume of incomes from individuals’ transfers (via Western Union, CONTACT, LEADER, ANELIK and MoneyGram systems) in the first half year of 2008 tripled in comparison with incomes in the same period last year. Such money transfer systems as CONTACT and LEADER were in best demand. For the first half year of 2008 over 17 000 transactions were accomplished by CONTACT system, and more than 9 500 transactions – by LEADER system. Considerable impact on increasing in volumes of transferring and paying out transfers via international systems has been made due to the development of the regional network of the Bank and permanent work is aimed at the best clients service, including advertising campaigns for them.

As for individual payments in favor of legal entities, incomes volume for 6 months of 2008 vs. the first half year of 2007 increased more than in four times.

Operations with banking metals are among the perspective directions of OJSB «Ukrgasbank» activities. The volumes of the Bank availability on the market of banking metals of Ukraine are steadily increasing.

Since December 2005 OJSB «Ukrgasbank» has independently imported banking metals to Ukraine, which allowed for significant improvement of this system and satisfaction of the needs of various client categories, offering them metals at competitive market prices. At the moment the Bank is selling its clients bullions of banking gold and silver, and upon client’s request the delivery of platinum and palladium bullions is available.

Bank operations with securities The Bank performs all the operations with securities, indicated in the existing legislation of

Ukraine, on the basis of the license issued by the State commission for Securities and Stock Market for performing professional activities on the equity market, including the activity of securities issuing and circulating, as well as depositary activity (series АБ №124927 dated 09.02.2005). The first permit for performing professional activities on the equity market of the Ministry of Finance of Ukraine bank has obtained in 1996. Bank has long successful experience of working on the equity market as evidenced by annual increasing of operations volumes with securities issue and volumes Issuer Markets, major service consumers In 2008 OJSB «Ukrgasbank» continued its further development and enforced its positions on the market of banking services, which is confirmed by the rating of the Association of Ukrainian Banks as of 30.06.2008, according to which the bank has the following positions: - by the amount of total assets — position 17; - by the amount of capital — position 20; - by the amount of credit and investment portfolio — position 18; - by the volume of borrowed deposits of individuals — position 10; - by the number of issued international payment cards — position 13.

Corporate business (clients – legal entities).

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Target segments: - small and medium size enterprises (construction/real estate, wholesalers and retailers, agriculture

and agricultural enterprises, transport, mining and processing energy carriers, machinery, processing industry, Mass Media and advertising, service industry);

- financial institutions;- budget-funded and public organizations.

OJSB «Ukrgasbank» services over 20 thousand legal entities and individual entrepreneurs and is planning to increase its share on the market of servicing corporate clients in Ukraine, continuing to improve the quality and expand the range of services.

The Bank provides corporate clients with a wide range of services, including:- service of current accounts in the national and foreign currency; - payments and different forms of settlements, including international settlements;- documentary letters of credit, bank guarantees;- cash service and collection; - term deposits; - various forms of crediting; - payroll projects with the use of international payment cards; - operations with securities (brokerage services, equity market services, purchase and sale on the

clients’ behalf of corporate bonds, shares, promissory notes and other securities; activities of securities issuing and circulating, depositary activity);

- lease of individual bank safes;- consulting services.

OJSB «Ukrgasbank» services over 20 thousand individual entrepreneurs and corporate clients on the territory of Ukraine from among leaders of Ukrainian economy: CJSC «Eurocar», PC «Kryazh», OJSC «Myronivsky khliboprodukt» (ТN «Nasha Ryaba»), CJSC ASC «Ingo Ukraine Zhyttya», CJSC «Sammit», OJSC trust «Kyivmiskbud-1» n.a. М.P. Zagorodny, LLC «М.І.B.S.–Travel», LLC «Tez-Tour», CJSC «Informational computer systems» (Corporation Inkom), CJSC «Ukrainian insurance company». The issuer credits enterprises of such industries of Ukrainian economy as oil and gas complex, woodworking, cellulose and paper, food and light industry, electrical energy industry, machine building and metalworking, agriculture and forestry, construction, trade, services, insurance etc.

Retail business ( clients – individuals). Target segments:

- middle class representatives (private company employees, highly-qualified experts, public officers and military men, medium and senior executives of private enterprises, businessmen, entrepreneurs, business owners, well-qualified blue and white collar workers);

- retired people;- youth (pupils, students);- non-residents.

Products (services) for retail clients:- Settlement service: money transfers in the national and foreign currencies, service of current

accounts, payment of pensions and allowances.- Deposits: short and long term deposits in the national and other currencies, placement of saving

(deposit) certificates.- Loans: consumer loans, mortgages, vehicle-purchase loans, educational loans.- Payment cards: debit, credit, pre-paid.- Non-trading operations: currency purchase and sale, conversion of foreign currencies, purchase

and sale of banking metal bullions, purchase and sale of traveller’s cheques, purchase and sale of registered cheques, collection of worn and damaged bank notes of foreign currencies, sale of commemorative coins.

- Lease of safes for keeping valuables and documents.

The Issuer is developing individuals’ retail and mortgage crediting, implementing new credit programs in order to demand satisfaction of all population segments.

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As of 30.06.2008 OJSB «Ukrgasbank» services over 350 thousand individuals.

The Bank sales network as of 30.06.2008 was represented by 17 branches and 320 outlets in 24 regions of Ukraine (as of 01.09.2008 the Bank has 16 branches and 340 outlets).

Thus the Bank has an extensive network of branches and outlets and is represented in nearly all geographic regions of Ukraine.

Major competitors of the IssuerOne of the trends in the development of financial market in the coming years is enlargement of

banking sector, first of all, due to the increase of market share of banks with foreign capital. This will encourage a significant rise of competition in the banking system of Ukraine. According to the experts’ forecasts in Ukraine until 2010 the share of banks with foreign capital will amount over 50%. For determining major competitors the analysis of the following directions was performed:

- Analysis of competitors by financial indices;- Analysis of competitors by the level of activities on retail and corporate banking service markets;- Analysis of competitors by the level of developing the sales network.

Major competitors of the Bank are: OJSC "Bank "Financy ta Credyt", JSCB "Forum", OJSC «VTB Bank», CJSC "OTP Bank", OJSC "Kreditprombank", OJSC "Sevdbank", JSCB "Pravex-Bank", LLC "Ukrprombank", OJSC "RODOVID-BANK", CJSC "Alpha-Bank", JSB "Brokbusinessbank ", CJSC PUMB.

Volumes and lines of the Issuer’s investing activitiesIn the first half year of 2008 the Bank implemented active policy of increasing the profitability of

operations with securities, improvement of the investment portfolio structure and reduction of risk level. The Bank performed operations in all the segments of the equity market. As of 30.06.2008 the Issuer invested into securities for the total amount of over 593 million hrn., including: - shares and shares – 4,01% - corporate bonds – 91,34% - state bonds – 0,27% - municipal bonds – 4,38% Carrying out investment activities for years the Bank has been taking leading positions in the rating of securities traders, made up by the FSTS and has been one of this market leaders. The volume of securities purchase and sale contracts, performed by the Bank in the first half year of 2008, reached 7,6 billion hrn., which is 67% higher than in all 2007.

During the first half year of 2008 the Bank performed securities operations of following issuers: OJSC "Ukrnafta", OJSC "Poltavsky ore-dressing and processing enterprise", OJSC "Mostobud", OJSC "Nikopolsky ferroalloy plant", OJSC "Yenakiyivsky metallurgical plant". Among debt securities in the first half year of 2008 the Bank performed very actively operations with bonds of CJSC "IC"Ukrainian insurance group", LLC "Classic-Assistance", LLC "Trading network "Favorit", CJSC "ProCredit Bank", CJSC CB "Kredyt-Dnipro", OJSC CB "Khreschatyk", OJSC trust "Kyivmiskbud-1" n.a. М.P. Zagorodny, LLC "Soyuz-Viktan Treyd", LLC "Firma T.M.M.", CJSC "Druzhby Narodiv Nova", LLC "Kernel-Treyd", OJSC "RODOVID BANK", LLC "Ukrainian investment engineering company", LLC "Firma T.M.M.", OJSC "Lucky car plant", LLC "Zhytlomarket KMB-1", LLC "PA "Zhytlomarket-Invest", OJSC "UPB", BE "Agrolayt", LLC "FLG", OJSC "Ipobank", OJSC "Drogobycky drilling plant", OJSC "Kredytprombank", LLC CB "Financial initiative", LLC "International car holding company "Atlant-M", JSCB "Imeksbank", OJSC "Lucky car plant", OJSC "Rodovid Bank", CJSC "Alfa-Bank", CJSC "Food company"Podillya", CJSC "Production association "Konti", CJSC "Nikopolsky plant of steel pipes "YUTIST", ITC LLC "Agromat", JSCB "Praveks-Bank", OJSC "State saving bank of Ukraine", BE "Imidzh Holding", LLC "Euro Leasing", with bonds of internal state loan facilities.

Research and Development policyFor the purpose of performing objective and unprejudiced complete system assessment of the

Bank market activities, singling out major market tendencies in the development of banking, the OJSB «Ukrgasbank» Strategic Marketing Department regularly carries out its own research and cooperates with specialized research companies.

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In the first half year of 2008 Strategic Marketing Department organized and carried out following marketing researches:

- Annual regular research of Ukrainian market of banking services to legal entities and individuals (contractor – research agency);

- Research of the quality of retail clients’ consulting by the front-office employees of OJSB «Ukrgasbank» (Mystery Calls) (contractor – specialized call-centre);

- Research of the quality of retail clients’ consulting by the front-office employees of OJSB «Ukrgasbank» (Mystery Calls) (contractor – Strategic Marketing Department);

- Research of bank depositors as to consumer’s choice concerning deposit advertising campaigns during holding of advertising campaign «Money love silence»;

- Research of individuals – bank clients apropos of overdraft (credit card) end use;- Research of banking service for VIP-clients;- Analysis of advertising means efficiency;- Current research of efficiency of the OJSB «Ukrgasbank» advertising campaigns for legal entities

and individuals. The Bank product range and the rate of the development of new products meets the level of a

universal banking institution, capable of satisfying clients’ needs in products and services in full. OJSB «Ukrgasbank» is systematically developping and updating the list of banking products for corporate and retail clients.

Prospects of Issuer’s activities for the current and following yearThe purpose of the Bank for the period of 2008-2010 is not only to confirm the status of a "large

bank", but also to raise its rating within the second dozen of the banks. It has been planned to increase the assets of the Bank up to 29,9 billion hrn. by the end of 2010. It will comply with the specific weight of the Bank in the forecast assets of the Ukrainian banking system at the rate of 3 % - which will exceed the Bank share in the assets of the Ukrainian banking system in 2005 by 3,5 times.

To achieve this purpose OJSB «Ukrgasbank» is to develop more rapidly, than the Banks of its group and demonstrate the best efficiency indices. The yield rise is planned to reach by taking a number of measures as to cutting costs, reducing the price of resource base and increase of sales in the most profitable segments.

The essential tasks for the banking services development in 2008 – 2010 will be:- Enforcement of the Bank positions on the market of services provided to enterprises and

institutions – players of foreign economic activities;- Establishment of priority client segments (by social, industrial and other characteristics) and

complete service of these clients; transition from individual product/service to package/cross sales to a client;

- Increase of the Bank share on the market of payments of legal entities in the national and foreign currencies. Participation in servicing monetary flows of state authorities and budget-funded organizations;

- Increase of the Bank share on the market of non-cash service of monetary flows of population, including social and pay transfers. Expansion of participation in the operations of servicing retail goods circulation and services industry, increase of the Bank share on the market of operations with bank payment cards. Maintaining the share of currency exchange operations;

- Bank participation on the market of trust management bank operations, service of real estate property sales contracts;

- Implementation of joint projects with enterprises – Bank clients or other banks, directed on providing the Bank clients with additional financial services, which are not currently available at the Bank.

Seasonal nature of production: no.

9) Possible risk factors in the issuer’s activities

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Present risk management system in OJSB «Ukrgasbank» is built in compliance with international principles of risk management organization in a bank sphere. Bank developed system on policy forming and realization regarding bank risk accepted level. Bank ensured the management of following bank risks: credit risk, market risk, operating risk. The essential functions of credit risk management belong to the Bank Credit Board, which acts within its powers, set by the Supervisory Board. The main instrument of managing credit risks in the bank is the system of limitation, including three types of limits: limits of individual credit risk, limits of portfolio credit risk, limits of powers. Assessing credit risks that belong to the investment activities, the bank evaluates and analyzes bank investment applications for corporate bonds similarly to the analysis of credit applications. The Bank monitors the financial condition of issuers and related to them companies, prospects of repayment, as well as analyzes their reputation, availability of market risks for these securities. In case of purchasing shares the analysis is carried out in respect of the issuer’s financial condition and the liquidity of these shares (availability of quotation, fixed limits for the securities by other banks and companies), market risks. The bank has established the Assets Quality Commission that regularly monitor credit portfolios of the bank subdivisions. Bank controlling body in market risk (liquidity risk, currency risk, risk of interest rates change) management sphere is Committee on assets and liabilities management (KUAP). Taking administrative decisions on optimization of assets and liabilities structure, liquidity level, bank risks minimization in bank activity is a key target of Committee performance.

Purpose of bank policy on liquidity management is to provide assets and liabilities optimal structure in terms of gaps, and also to ensure its optimization for achieving necessary level of profitableness. Liquidity risk management process is permanent. Bank treasury performs daily monitoring of current liquidity risk liability.

Interest-rate risk management policy contains sensibility determination of bank statement to the interest rates change at financial resources market. Sensibility determination of bank statement to the interest rates change is conducted by potential losses and incomes evaluation by means of curtailing of bank interest rate assets and liabilities taking into account interest rates changes at financial resources market .

OJSB «Ukrgasbank» is affected by operating risk, arises by virtue of deficiencies in corporate governance system, internal control or information technologies systems and in data processing. For the purpose of high-quality operating risk management in accordance to internal acts of local control, OJSB «Ukrgasbank» performs an authentication, evaluation, monitoring and implements instruments of operating risk prevention that provide:

- the detailed description of basic operating risks and its forms, classified by certain features of risk factors by reasons of its nascency;

- a permanent surveillance and control on abidance of established procedures on operating risks prevention ;

- permanent surveillance and application of prevention instruments or operating risks decreasing.

10) Prospects of Issuer’s activities for the current and following yearThe purpose of the Bank for the period of 2008-2010 is not only to confirm the status of a "large

bank", but also to raise its rating within the second dozen of the banks. It has been planned to increase the assets of the Bank up to 18,6 billion hrn. by the end of 2010. It will comply with the specific weight of the Bank in the forecast assets of the Ukrainian banking system at the rate of 3 % - which will exceed the Bank share in the assets of the Ukrainian banking system in 2005 by 3,5 times. To achieve this purpose OJSB «Ukrgasbank» is to develop more rapidly, than the Banks of its group and demonstrate the best efficiency indices. The yield rise is planned to reach by taking a number of measures as to cutting costs, reducing the price of resource base and increase of sales in the most profitable segments.

The essential tasks for the banking services development in 2008 – 2010 will be:- Enforcement of the Bank positions on the market of services provided to enterprises and

institutions – players of foreign economic activities;- Establishment of priority client segments (by social, industrial and other characteristics) and

complete service of these clients; transition from individual product/service to package/cross sales to a client;

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- Increase of the Bank share on the market of payments of legal entities in the national and foreign currencies. Participation in servicing monetary flows of state authorities and budget-funded organizations;

- Increase of the Bank share on the market of non-cash service of monetary flows of population, including social and pay transfers. Expansion of participation in the operations of servicing retail goods circulation and services industry, increase of the Bank share on the market of operations with bank payment cards. Maintaining the share of currency exchange operations;

- Bank participation on the market of trust management bank operations, service of real estate property sales contracts;

- Implementation of joint projects with enterprises – Bank clients or other banks, directed on providing the Bank clients with additional financial services, which are not currently available at the Bank or are not typical of banks.

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11) Balance-sheet and Profit and Loss Statement for the first half year of 2008

Balance-sheet of OJSB «Ukrgasbank» as of the day end of 30.06.2008 (thousand hryvnias)

Line Name of account As of 30.06.2008 As of 31.12.2007 Assets

1 Funds at the National Bank of Ukraine and cash funds of the bank 727 271 500 3482 Securities, refinanced by the National Bank of Ukraine 1 512 2 179

2.1 Reserves for depreciation of debt securities, refinanced by the National Bank of Ukraine

0 0

2.2 Reserves in percentage to the assets 0 03 Funds at other banks 3 941 676 3 845 444

3.1 Reserves for the debts in other banks (14 963) (10 494)3.2 Reserves in percentage to the assets 0,38 0,274 Securities in the bank trading portfolio 174 502 82 3255 Securities in the bank portfolio for sale 415 152 409 568

5.1 Reserves for depreciation of securities in the bank portfolio for sale (26) (26)5.2 Reserves in percentage to the assets 0,01 0,016 Loans, extended to: 6 213 089 4 861 670

6.1 Legal entities 4 067 417 3 439 9276.2 Individuals 2 145 672 1 421 7436.3 Reserves for the loan debts (283 206) (203 320)6.4 Reserves in percentage to the assets 4,56 4,187 Securities held to maturity 0 0

7.1 Reserves for depreciation of securities held to maturity 0 07.2 Reserves in percentage to the assets 0 08 Investments into associated companies and subsidiaries 0 09 Fixed assets 740 259 678 22610 Intangible assets 3 752 2 31911 Accrued receivables: 84 232 50 155

11.1 Including overdue accrued income 5 144 3 14311.2 Including doubtful accrued income 5 544 5 32511.3 Reserves for debt by accrued income (8 531) (7 569)11.4 Reserves in percentage to the assets 79,82 89,3712 Deferred tax asset 23 519 14 26913 Other assets 163 709 89 956

13.1 Reserves for other assets (7 354) (1 223)13.2 Reserves in percentage to the assets 11,22 3,214 Long-term assets, for sale 0 0

14.1 Reserves for utility reduction of investments into associated companies and subsidiaries held for sale

0 0

14.2 Reserves in percentage to the assets 0 015 Total assets 12 174 593 10 313 827

Liabilities16 Funds of banks 3 800 177 3 536 41717 Funds of legal entities 2 297 956 2 110 22318 Funds of individuals 4 101 079 3 072 97019 Saving (deposit) certificates, issued by bank 44 678 41 44020 Debt securities, issued by bank 464 954 375 25821 Accrued expenses, payable 146 891 103 40322 Deferred tax liabilities 73 984 67 47123 Other liabilities 100 590 77 33724 Total liabilities 11 030 309 9 384 519

Equity capital25 Authorized capital 600 000 500 00026 Own shares (shares), bought out from shareholders (shareholders) 0 027 Issue differences 119 224 68 61228 Reserves, capitalized dividends and other funds of bank 171 342 70 99129 Reserves of revaluation of fixed assets, including: 187 574 187 574

29.1 Reserves of real estate property revaluation 187 317 187 31729.2 Reserves of intangible assets revaluation 0 030 Reserves of securities revaluation 0 031 Profit/loss of previous years 1 779 1 77932 Profit/loss of current year 64 365 100 35233 Total equity capital 1 144 284 929 30834 Total liabilities 12 174 593 10 313 827

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Profit and Loss Statement of OJSB «Ukrgasbank» for the first half year of 2008 (thousand hrn.)

Line Name of account As of the quarter reporting date

As of

30.06.2008

As of

30.06.2007

1 Net interest income 208 801 100 3221.1 Interest income 667 279 282 5291.2 Interest expenses (458 478) (182 207)2 Net commission income 71 947 47 623

2.1 Commission income 82 753 54 9562.2 Commission expenses (10 806) (7 333)3 Commercial income 104 839 21 5104 Income in dividends 0 15 Income from share in capital 0 06 Other income 36 571 33 3147 Total income 422 158 202 7708 Total administrative expenses (74 798) (46 045)9 Personnel expenses (151 297) (66 369)10 Expenses of share in capital 0 011 Other expenses (28 685) (13 245)12 Profit from operations 167 378 77 11113 Net expenses for forming reserves (95 841) (37 111)14 Income/loss from long-term assets for sale 0 015 Earnings before taxes 71 537 40 00016 Expenses for profit tax (7 172) 2 09917 After tax profit 64 365 42 09918 Net profit /loss from sale of long-term assets for sale 0 019 Net profit/loss of bank 64 365 42 099

12) Balance-sheet and Profit and Loss Statement for 2007

Balance-sheet of OJSB «Ukrgasbank» as of the end of 31.12.2007 (thousand hryvnias)

Line Name of account As of 31.12.2007 As of 31.12.2006 Assets

1 Funds at the National Bank of Ukraine and cash funds of the bank 500 348 307 0352 Securities, refinanced by the National Bank of Ukraine 2 179 9

2.1 Reserves for depreciation of debt securities, refinanced by the National Bank of Ukraine

0 0

2.2 Reserves in percentage to the assets 0 03 Funds at other banks 3 845 444 1 175 351

3.1 Reserves for the debts in other banks (10 494) (5 935)3.2 Reserves in percentage to the assets 0,27 0,514 Securities in the bank trading portfolio 82 325 96 2435 Securities in the bank portfolio for sale 409 568 374 840

5.1 Reserves for depreciation of securities in the bank portfolio for sale (26) (336)5.2 Reserves in percentage to the assets 0,01 0,096 Loans, extended to: 4 861 670 2 164 449

6.1 Legal entities 3 439 927 1 573 1826.2 Individuals 1 421 743 591 2676.3 Reserves for the loan debts (203 320) (86 468)6.4 Reserves in percentage to the assets 4,18 47 Securities held to maturity 0 0

7.1 Reserves for depreciation of securities held to maturity 0 07.2 Reserves in percentage to the assets 0 08 Investments into associated companies and subsidiaries 0 09 Fixed assets 678 226 362 17610 Intangible assets 2 319 81811 Accrued receivables: 50 155 28 913

11.1 Including overdue accrued income 3 143 6 23511.2 Including doubtful accrued income 5 325 1 81711.3 Reserves for debt by accrued income (7 569) (7 722)11.4 Reserves in percentage to the assets 89,37 95,912 Deferred tax asset 14 269 1 09413 Other assets 89 956 51 577

13.1 Reserves for other assets (1 223) (1 211)13.2 Reserves in percentage to the assets 3,2 3,5314 Long-term assets, for sale 0 0

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Line Name of account As of 31.12.2007 As of 31.12.200614.1 Reserves for utility reduction of investments into associated companies and

subsidiaries held for sale 0 0

14.2 Reserves in percentage to the assets 0 015 Total assets 10 313 827 4 460 833

Liabilities16 Funds of banks 3 536 417 1 010 18117 Funds of legal entities 2 110 223 964 39218 Funds of individuals 3 072 970 1 724 01219 Saving (deposit) certificates, issued by bank 41 440 57 34720 Debt securities, issued by bank 375 258 84 56521 Accrued expenses, payable 103 403 49 73922 Deferred tax liabilities 67 471 34 53523 Other liabilities 77 337 59 39224 Total liabilities 9 384 519 3 984 163

Equity capital25 Authorized capital 500 000 300 00026 Own shares (shares), bought out from shareholders (shareholders) 0 027 Issue differences 68 612 2 02528 Reserves, capitalized dividends and other funds of bank 70 991 43 10729 Reserves of revaluation of fixed assets, including: 187 574 102 008

29.1 Reserves of real estate property revaluation 187 317 101 73129.2 Reserves of intangible assets revaluation 0 030 Reserves of securities revaluation 0 (112)31 Profit/loss of previous years 1 779 (1 132)32 Profit/loss of current year 100 352 30 77433 Total equity capital 929 308 476 67034 Total liabilities 10 313 827 4 460 833

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Profit and Loss Statement of OJSB «Ukrgasbank» for 2007 (thousand hrn.)

Line Name of account As of the quarter reporting date

As of

31.12.2007

As of

31.12.2006

1 Net interest income 258 210 118 7181.1 Interest income 757 520 357 7871.2 Interest expenses (499 310) (239 068)2 Net commission income 131 207 57 010

2.1 Commission income 149 109 69 4702.2 Commission expenses (17 902) (12 460)3 Commercial income 64 828 32 8094 Income in dividends 15 15 Income from share in capital 0 06 Other income 74 375 17 8867 Total income 528 635 226 4258 Total administrative expenses (106 097) (68 989)9 Personnel expenses (162 266) (80 080)10 Expenses of share in capital 0 011 Other expenses (36 427) (19 337)12 Profit from operations 223 845 58 01913 Net expenses for forming reserves (-128 026) (28 446)14 Income/loss from long-term assets for sale 0 015 Earnings before taxes 95 819 29 57316 Expenses for profit tax 4 533 1 54917 After tax profit 100 352 31 12218 Net profit /loss from sale of long-term assets for sale 0 (348)19 Net profit/loss of bank 100 352 30 774

12) Data on public placement:

Date and number of decision (minutes) on share issue:Minutes of the Extraordinary General Shareholders Meeting of OJSB «Ukrgasbank» № 3 dated 16

September 2008.

Name of authority that adopted the share issue decision:The decision was adopted by the Extraordinary General Shareholders Meeting of OJSB

«Ukrgasbank» that took place 16 September 2008 (Minutes № 3 dated 16.09.2008). The voting results to confirm this decision: the meeting was attended by shareholders and their representatives, owning 573 869 519 shares, which is 95,7210 % of the total number of votes of shareholders and their representatives, who have the right of vote at the Extraordinary General Shareholders Meeting on all the agenda matters. Votes: «pro» – 573 869 519, or 100 % of the number of persons present at the meeting.

Total par value of shares offered to public placement: 100 000 000,00 (one hundred million) hryvnias.

Purpose of using financial resources, borrowed by public placement: funds, borrowed by public placement will be used for increasing the authorized capital.

The Issuer undertakes not to use the funds borrowed by public placement for covering its losses.

Public placement offer: 100 000 000 (one hundred million) common registered shares. Preference shares are not placed.

Share form: documentary.

Share par value – 1,00 hrn. (one hrn. 00 cop.)

Share series and index numbers – shares are placed with series "N" and index numbers from 000000001 to 100000000.

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List of founders indicating the quantity, type and category of shares belonging to them as of the date of adopting the decision on placement:

OJSB «Ukrgasbank» founders are:Name of founder Share q-ty,

pcs.State joint-share holding company "Ukrgas" (Enterprise code: 24370569) 0OJSC for gas supply and gasification "Kyivoblgas" (Enterprise code: 20578072) 0Limited Liability Company "Company "Veles Ltd" (Enterprise code: 16293091) 0CJSC "Company ADI" (Enterprise code: 20053731) 0Ukrainian-Belgian-Irish joint venture "Argo Trading, Ltd" (Enterprise code: 14297647) 0

Rights, given to common shareholders: participate and vote at the General Shareholders Meeting on all the issues personally or via their

representatives; be elected to members of the Issuer’s elected management bodies; participate in the distribution of the Issuer’s net profit; receive dividends in proportion to the quantity of shares they own; preemptive right for purchasing the Issuer’s shares during further placements; receive information on the Issuer’s activities; freely dispose of the shares they own according to the procedure set in the existing legislation; in case of the Issuer’s liquidation receive monetary funds in proportion to the quantity of shares

they own; act in the way set out in the existing legislation of Ukraine.

Rights, given to preference shareholders: for preference share in the Issuer’s property distribution in case of its liquidation; preemptive right for purchasing the Issuer’s share during further placements; independently dispose of shares, belonging to them on the basis of the right of property: sell,

transfer, present, give in will, pledge the shares with compulsory registration of changes at the register holder and respective notice of the bank;

receive information on the Issuer’s activities; quit the membership of the bank shareholders in accordance with the established procedure.

Preference shareholders are entitled to participate in the Issuer’s management, attend and take part in the General Shareholders Meeting with the right of vote only in cases of taking decision on:

separation, merger, joining, division, conversion of the Issuer, providing exchange of preference shares of this type for preference shares of another type or for common shares;

alterations or additions to the Issuer’s Articles of Association, setting limitations of shareholders’ rights owning this type preference shareholders;

new issue of preference shares, whose owners will have privileges in the order of receiving dividends or payments in case of the Issuer’s liquidation;

expansion of shareholders’ rights, owning placed types of preference shares, having privileges in the order of receiving dividends or payments in case of the Issuer’s liquidation.

Addresses of places, dates of commencement and completion of the first stage of public placement:The first stage of public placement will be last from 20 October 2008 till 26 October 2008 included from 10:00 to 16:00 at the address: 39 Chervonoarmiyska Street, 01004, Kyiv.

Addresses of places, dates of commencement and completion of the second stage of public placement:The second stage of public placement will be last from 27 October 2008 till 31 October 2008 included from 10:00 to 16:00 at the address: 39 Chervonoarmiyska Street, 01004, Kyiv.

Information on the market value of shares: as of 12.09.2008, according to the data of the First Stock Trading System, the price of the last agreement with shares of OJSB «Ukrgasbank» was 3,50 hrn. per share.

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Estimated rate of share sales: shares are placed at the price, set in the sale contract, but not lower than their par value.

At the first stage of public placement the share sale contracts are concluded at the par value (1,00 hrn. per share)

The price for shares offered to public placement at the second stage is set by the decision of the Supervisory Board of OJSB «Ukrgasbank» prior to the beginning of the second stage of public placement, but this price may not be lower than the par value and may not be higher than the price of the last agreement, concluded in the trade system FSTS as of the end of the day 12.09.2008, that is 3,50 hrn. per share. Information on the share price, set for placement on the second stage, is subject to be published in an official periodical of the Securities and Stock Market State Commission not later than at the beginning of the second stage of public placement. The price, set for every stage of placement, may not be changed during the term of the placement chargeable stage.

Detailed description of procedure of public placement and payment:Public placement may be carried out after being registered in the Securities and Stock Market

State Commission for issuing shares and publishing issue prospectus not earlier, than 10 days after the issue prospectus publication. OJSB «Ukrgasbank» publishes the issue prospectus in full in the official periodical issued by the Securities and Stock Market State Commission not later than 10 days before the beginning of public placement.

In case of altering the issue prospectus OJSB «Ukrgasbank» shall register the alterations and publish information on them within 30 days after publishing the issue prospectus, but at least 10 days prior to the beginning of the public placement. Provided the alterations to the issue prospectus cannot be registered and published during the indicated term, these alterations must also contain the data on postponing the terms of the public placement. The public placement shall be carried out in two stages by applications from the interested persons/entities for purchasing shares and conclusion of contracts between them and OJSB «Ukrgasbank» and payment for these shares.

The public placement will be held at the address: 39 Chervonoarmiyska street, 01004, Kyiv.At the first stage of the public placement the preemptive right of shareholders for the placed share

purchase is executed, in the volume proportional to their share in the authorized capital of OJSB «Ukrgasbank» as of the date of beginning the public placement. Applications that were received prior to the beginning of the second stage of the public placement- from investors, non-shareholders, and - shareholders, that have already executed their preemptive right at the first stage of the public placementare not considered and are not deemed to be valid for participation at the second stage of the placement.

At the second stage of the public placement the right of existing shareholders is executed in the volume limited by the number of shares regarding which the shareholders have used their preemptive right as well as the right of other investors for the purchase of additionally placed shares. Herewith at the second stage the preemptive right to purchase additionally placed shares belongs to the OJSB «Ukrgasbank» shareholders.

Performance of applications of the existing shareholders for the purchase of shares during the second stage of the public placement is executed in the order of receiving the applications (depending on the date and time of arrival). Applications of other investors are considered after satisfying the applications of the shareholders, similarly in the order of receiving the applications during the second stage (depending on the date and time of arrival).

As exceeding the scheduled rate of the public placement is not allowed, all the applications received during the second stage of placement, will be considered only within the limit of share quantity left after the shareholders’ execution of their preemptive right during the first stage of placement. That means the applications from the shareholders or investors, received during the second stage after exhausting the quantity of offered for placement shares by the previous applicants, are not satisfied.

The application from the a shareholder or an investor for the purchase of shares in the volume exceeding the number of unplaced shares may be satisfied (by mutual agreement) only in the quantity of shares left unplaced.

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Working hours of persons, appointed by the General Shareholders Meeting to accept and register documents during the period of the public placement: daily from 10 to 16. Applications for purchasing shares shall be submitted in the name of the head of OJSB «Ukrgasbank» during the respective stage of the public placement in a free form and must include: family name, first name, patronymic (full name) of the applicant, his/her residence address (place of registration/location) post address, identification number or code, quantity and par value of the shares (indicated in digits and words), the applicant is willing to register, banking details (if appropriate). An application from a individual shall be signed by him/her or in his/her presence by an authorized representative and the presence of OJSB «Ukrgasbank» representative; application on behalf of a legal entity shall be signed by its director (authorized person) and sealed.

All the applications for purchasing shares are accepted by the centralized office of OJSB «Ukrgasbank». Registration of the applications is performed the day of its receipt. At the registration the applications are given registration indexes and date and time of their arrival are indicated.

Acceptance of applications by the authorized persons of OJSB «Ukrgasbank» is performed from 10:00 till 16:00 at the address: 39 Chervonoarmiyska street, Kyiv. Individuals, intending to purchase the shares of OJSB «Ukrgasbank», submit the applications personally or through their authorized persons, whose powers are set in accordance with the existing legislation. Legal entities submit applications through the persons, authorized in compliance with the requirements of the existing legislation.

According to the requirements of the existing legislation of Ukraine, for the purpose of confirming the availability of own funds, that may be directed on purchasing shares and confirming the sources of their origin, legal entities, along with the application for purchasing shares, submit to OJSB «Ukrgasbank» documents and data regarding their financial condition, indicated in the regulations of the National Bank of Ukraine (in particular, set in the Provisions on the procedure of establishment and state registration of banks, opening their branches, representations, outlets, approved by the decision of the Board of the National Bank of Ukraine dated 31.08.2001 № 375 – hereinafter the Provisions), necessary for finding out the sources of receiving the funds, directed on purchasing the Bank shares, namely:

1) financial reports in forms, set in subparagraph "й" of paragraph 3.1 of the Provisions signed by the director and the chief accountant (if applicable) and sealed by the buyer’s stamp:

- for one last reporting period (quarter) and the first day of the month, in which the payment is due for the Bank shares placed in accordance with the conditions of this Issue Prospectus, and/or

- as of the first month day in which the payment was due for the shares on the secondary market and for reporting period (quarter) preceded the month in which the payment was due for the shares on the secondary market (in case of the payment due for the shares on the secondary market was accomplished).

Legal entity – non-resident of Ukraine, willing to purchase shares during the public placement, or having paid for the Bank shares on the secondary market, shall submit financial reports and the opinion of a foreign auditing company:

- on the financial condition of the legal entity – non-resident of Ukraine as of the end of the previous full financial (reporting) year and

- on the possibility of performing the declared contribution to the authorized capital of the Bank at the expense of own capital;

2) providing shareholders (investors) also purchased the bank shares on the secondary market on the basis of civil contracts, notarized copies of the respective civil contracts are submitted additionally, along with duly certified copies of payment documents, confirming the payment under these contracts;

3) opinions of auditing companies (auditors), made up in accordance with the requirements set in subparagraph "і" of paragraph 3.1 of the Provisions – regarding the Bank shareholders (members) – legal entities, intending to purchase the shares during the public placement or having purchased the Bank shares on the secondary market in the volume, exceeding 300 thousand hrn. (or the amount in hard currency, whose equivalent according to the official rate of hryvnia to foreign currencies, set by the National Bank of Ukraine as of the date of deciding to increase the authorized capital of the Bank or as of the date of concluding the contract of purchasing the Bank shares on the secondary market, equals or exceeds the amount of 300 thousand hrn., - if this legal entity is a non-resident of Ukraine). Auditor opinion are supplied with: notarised copy of certificate on insertion of auditing companies (auditors) that prepare an opinion, to «Register of auditing companies and auditors that provide single-handedly audit services», and notarised copy of certificate on auditor who signed an opinion.

Legal entity - non-resident of Ukraine provides a duly certified at the place of issue copy of opinion of a foreign auditing company on the financial condition of the legal entity is a non-resident of Ukraine as of the end of the previous last full financial (reporting) year and the on the possibility of

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performing the declared contribution to the authorized capital of the Bank at the expense of own funds (own capital). The above opinion shall be confirmed by a Ukrainian auditing company;

4) copies of constituent documents of shareholders (members) of the Bank and a copy of the certificate of state registration, notarized;

5) copy of the license issued by the Securities and Stock Market State Commission for activities of securities holder or trader (if applicable), notarized; 6) notarized copies of constituent documents of owners (shareholders, members) of considerable share in the new shareholder, that will have a considerable share in the Bank, as well as their financial reports for the previous four reporting years (quarters) and the opinions of auditing companies (auditors) confirming their reports for the last reporting period (quarter).

Individuals – shareholders (members) of the Bank (residents of Ukraine), intending to purchase shares during the public placement or having purchased the Bank shares on the secondary market in the volume equaling or exceeding 80 thousand hrn. (taking into account already existing quantity of earlier purchased shares), submit a certificate from the State Tax Administration of Ukraine of incomes for the last reporting period (year), and in case of purchasing shares in less quantity – certificates of the income received at the principal place of work, signed by the director and the chief accountant or other documents, confirming the income receipt.

Individuals – foreigners, intending to purchase shares during the public placement or having purchased the Bank shares on the secondary market in the volume equaling or exceeding 80 thousand hrn. (taking into account already existing quantity of earlier purchased shares) (or the amount in hard currency, whose equivalent according to the official rate of hryvnia to foreign currencies, set by the National Bank of Ukraine as of the date of deciding to increase the authorized capital of the Bank or as of the date of concluding the contract of purchasing the Bank shares on the secondary market, equals or exceeds the amount of 80 thousand hrn.), submit certificates from the State Tax Administration of Ukraine of incomes for the last reporting period (year), or a certificate of the competent body of the foreigner’s country of registration (residence) on his/her incomes for the last reporting period (year), or a reference from the bank, where he/she has an open account, on the funds availability on this account as of the date of their transfer.

All the documents, related to a legal entity – non-resident of Ukraine or a individual – foreigner, are to be submitted in the original language with the notarized translation into Ukrainian. Copies of documents are to be notarized at the place of their issue. The documents shall be legalized in consular offices of Ukraine, unless otherwise provided by the international treaties, whose compulsory nature was approved by the Verkhovna Rada of Ukraine.

OJSB «Ukrgasbank» may reject concluding a share sales contract in case of non-provision by the applicant of the above mentioned documents and in case the persons, intending to purchase the bank shares lack own funds (own capital) (calculated in accordance with appendix 1 to the Provisions on the procedure of establishment and state registration of banks, opening their branches, representations, outlets, approved by the decision of the Board of the National Bank of Ukraine dated 31.08.2001 № 375) for performing contributions to the authorized capital of OJSB «Ukrgasbank».

Applicants, who are not shareholders, as well as applicants-shareholders in case of changes in their requisites, placed in the system of OJSB «Ukrgasbank» register, attach a filled in questionnaire of a individual or a legal entity to the application.

Herewith a share sales contract is considered concluded, provided it is made up as a single integrated written document in the form established by OJSB «Ukrgasbank», and signed by OJSB «Ukrgasbank» and the person/entity purchasing shares.

Submission of the application for purchasing shares and their payment in any amount on the basis of the issue prospectus contents - without being signed by OJSB «Ukrgasbank» and the person/entity, willing to purchase shares, single integrated written document (share sales contract), made up in the form established by OJSB «Ukrgasbank» - is not considered the conclusion of the share sales contract.

Legal entities and individuals, intending to purchase a considerable share in the bank or increase it in the way that these persons/entities will directly or indirectly own or control 10, 25, 50 and 75 per cent of the authorized capital of the bank or voting on the basis of the purchased shares (shares) in the bank management bodies, undertake to obtain a written consent of the National Bank of Ukraine in advance.

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By the time of completing the respective stage of the public placement (first or second) persons, having purchased shares, shall have paid their full value.

In case of shareholder’s non-performance of the conditions of the share sales contract, concluded with him/her/it during the first stage of the public placement, regarding the payment of the share value, the placement is considered to be performed only for the number of shares, whose value has actually been paid up by the shareholder within the term, stipulated in the share sales contract (therewith, in case the actually paid up amount does not correspond with the whole number of shares at the price per share, agreed by the sales contract, rounding is made in favor of reduction, the excess transferred funds are returned to the applicant). The quantity of shares, non-paid up in accordance with the conditions of the share sale, shall be subject to the public placement at the second stage.

Payment under the share sales contracts is performed by monetary funds in the national currency, and in cases and in the procedure, set out in the existing legislation – in a foreign hard currency. The payment is to be performed to the Issuer’s account № 363051, OJSB «Ukrgasbank», Kyiv, MFO 320478. Correspondent account of OJSB «Ukrgasbank» № 32008186401 in the Central Department of the National Bank of Ukraine in Kyiv and Kyiv region, MFO 321024.

OJSB «Ukrgasbank» provides the production of share certificate forms and their distribution among the shareholders providing their full payment for the purchased shares. Dates of the public placement first stage commencement and completion: from 20 October 2008 till 27 October 2008 included. Dates of the public placement second stage commencement and completion: from 27 October 2008 till 31 October 2008 included.

The results and report on the results of the public placement by OJSB «Ukrgasbank» are approved by the General Shareholders Meeting of OJSB «Ukrgasbank».

Procedure of shareholders’ execution of their preemptive right for purchasing shares: To execute their preemptive right for purchasing additionally placed shares, shareholders at the first stage of the public placement execute their preemptive right for purchasing additionally placed shares, in the volume proportional to their share in the authorized capital of OJSB «Ukrgasbank» as of the date of commencement of the first stage of the public placement.

Actions to take in case of non-achievement of public placement planned rate or its early termination:

In the event of non-achievement of the public placement planned rate the General Shareholders Meeting of OJSB «Ukrgasbank» approves the results of shares placement and report on results of shares placement in actual placed and paid volume.

Exceeding the public placement planned rate is not allowed. In case of early achievement of the public placement planned rate and in case of full payment of the shares this placement may be terminated early. The decision on the early termination of public placement is to be made by the Supervisory Board of OJSB «Ukrgasbank», but not earlier than the first day of second stage of shares public placement. In case of refusing from the public placement OJSB «Ukrgasbank» reimburses the funds to the respective applicants within 30 days after adopting the correspondent decision by the General Shareholders Meeting. In case of delay OJSB «Ukrgasbank» shall recover losses in full.

Name of securities trader: OJSB «Ukrgasbank» does not use the services of securities traders for the placement.

Terms, procedure and addresses of places of dividend payment by results of calendar year:Payment of dividends is carried out once a year by the results of the calendar year according to the

decision of the General Shareholders Meeting on approving the results of the Issuer’s activities for the year. The payment begins 14 calendar days after the date of making the decision on paying dividends and is performed during three months. The right for receiving dividends in proportion to the share of each shareholder belongs to the persons, being shareholders of OJSB «Ukrgasbank» at the beginning of the dividend payment period.

Distribution of profit and accrual of dividends to the shareholders are carried out in accordance

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with the decision of the General Shareholders Meeting of OJSB «Ukrgasbank» by the results of OJSB «Ukrgasbank» activities for the year. Payment of dividends for shares is performed by the Issuer or register holder, keeping the record of the Issuer’s shareholders, by transfer according to the details indicated by the shareholder or by cash. Provided it is not possible to pay dividends to a shareholder due to his/her/its fault, the indicated monetary funds are deposited on the account at OJSB «Ukrgasbank» and paid out on demand of the shareholder in compliance with the requirements of the existing legislation. Place of cash dividend payment: 39 Chervonoarmiyska street, 01004, Kyiv.

13) List and results of previous securities placements: 13.1. Shares:

1) issue of shares of Closed Joint-Stock Company JSB «Ukrgasbank» in the volume of 100 000 common shares, at par value of 10 hryvnias each, for the total amount of 1 000 000 hryvnias registered by the Ministry of Finance of Ukraine 15 February 1996, certificate № 90/1/96, shares were placed among the founders;

2) issue of shares of Closed Joint-Stock Company JSB «Ukrgasbank» in the volume of 130 000 common shares, at par value of 10 hryvnias each, for the total amount of 1 300 000 hryvnias registered by the Securities and Stock Market State Commission 15 May І997 certificate № 477/1/97, shares were placed among the founders;

3) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to increasing the authorized capital in the volume of 230 000 common registered shares, at par value of 10 hryvnias each for the total amount of 2 300 000 hryvnias registered by the Securities and Stock Market State Commission 15 October 1997, registration № 802/1/97, shares were placed among the shareholders – legal entities;

4) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to increasing the authorized capital in the volume of 705 000 common registered shares, at par value of 10 hryvnias each for the total amount of 7 050 000 hryvnias registered by the Securities and Stock Market State Commission 15 September 1998, registration № 484/1/98, shares were placed among the shareholders – legal entities and individuals;

5) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to increasing the authorized capital in the volume of 1 395 016 common registered shares, at par value of 10 hryvnias each for the total amount of 13 950 160 registered by the Securities and Stock Market State Commission 11 August 1999, registration № 376/1/99, shares were placed among the shareholders – legal entities and individuals;

6) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to denomination in the volume of 13 950 160 common registered shares, at par value of 1 hryvnia each for the total amount of 13 950 160 hryvnias registered by the Securities and Stock Market State Commission 29 September 1999, registration № 442/1/99, shares were placed among the shareholders – legal entities and individuals;

7) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to increasing the authorized capital in the volume of 477 078 registered preference shares at par value of 1 hryvnia each for the total amount of 477 078 hryvnias registered by the Securities and Stock Market State Commission 06 September 2000, registration № 459/1/00 and 36 090 493 common registered shares at par value of 1 hryvnia each for the total amount of 36 090 493 hryvnias registered by the Securities and Stock Market State Commission 06 September 2000, registration № 458/1/00, all shares were issued in the documentary form. Shares were placed among the shareholders – legal entities and individuals;

8) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to increasing the authorized capital in the volume of 64 090 493common registered shares at par value of 1 hryvnia each for the total amount of 64 090 493hryvnias registered by the Securities and Stock Market State Commission 23 December 2002, registration № 657/1/02, all shares were issued in the documentary form. Shares were placed among the shareholders – legal entities and individuals;

9) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to increasing the authorized capital in the volume of 89 522 922 common registered shares at par value of 1 hryvnia each for the total amount of 89 522 922 hryvnias registered by the Securities and Stock Market State Commission 29 December 2003, registration № 701/1/03, all shares were issued in

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the documentary form. Shares were placed among the shareholders – legal entities and individuals;

10) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to increasing the authorized capital in the volume of 119 522 922 common registered shares at par value of 1 hryvnia each for the total amount of 119 522 922 hryvnias registered by the Securities and Stock Market State Commission 15 September 2004, registration № 557/1/04, all shares were issued in the documentary form. Shares were placed among the shareholders – legal entities and individuals;

11) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to increasing the authorized capital in the volume of 162 522 922 common registered shares at par value of 1 hryvnia each for the total amount of 162 522 922 hryvnias registered by the Securities and Stock Market State Commission 06 July 2005, registration № 313/1/05, all shares were issued in the documentary form. Shares were placed among the shareholders – legal entities and individuals.

12) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to increasing the authorized capital in the volume of 199 522 922 common registered shares at par value of 1 hryvnia each for the total amount of 199 522 922 hryvnias registered by the Securities and Stock Market State Commission 26 травня 2006 року, registration № 226/1/06, all shares were issued in the documentary form. Shares were placed among the shareholders – legal entities and individuals;

13) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to increasing the authorized capital in the volume of 299 522 922 common registered shares at par value of 1 hryvnia each for the total amount of 299 522 922 hryvnias registered by the Securities and Stock Market State Commission 22 December 2006, registration № 614/1/06, all shares were issued in the documentary form. Shares were placed among the shareholders – legal entities and individuals;

14) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to increasing the authorized capital in the volume of 399 522 922 common registered shares at par value of 1 hryvnia each for the total amount of 399 522 922 hryvnias registered by the Securities and Stock Market State Commission 23 January 2007, registration № 29/1/07, certificate issuing date – 05.06.2007, all shares were issued in the documentary form. Shares were placed among the shareholders – legal entities and individuals;

15) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due to increasing the authorized capital in the volume of 499 522 922 common registered shares at par value of 1 hryvnia each for the total amount of 499 522 922 hryvnias registered by the Securities and Stock Market State Commission 02 August 2007, registration № 349/1/07, certificate issuing date – 06.12.2007, all shares were issued in the documentary form. Shares were placed among the shareholders – legal entities and individuals.

16) issue of shares of Open Joint-Stock Company JSB «Ukrgasbank» due ro increasing the authorized capital in the volume of 599 522 922 common registered shares at par value of 1 hryvnia each for the total amount of 599 522 922 hryvnias registered by the Securities and Stock Market State Commission 26 February 2008, registration № 73/1/08, certificate issuing date – 03.06.2008, all shares were issued in the documentary form. Shares were placed among the shareholders – legal entities and individuals.

13.2. Bonds:1) public placement of registered interest bearing bonds of OJSB «Ukrgasbank» in the volume of

100 000 pieces at par value of 1 000,00 hryvnias each for the total amount of 100 000 000 hryvnias, issue registered by the Securities and Stock Market State Commission 04 July 2006, registration №388/2/06, all bonds were issued in one series “А” in non-documentary form. The bonds were placed among legal entities in full.

2) public placement of common mortgage bonds of OJSB «Ukrgasbank» in the volume of 50 000 pieces at par value of 1 000,00 hryvnias each for the total amount of 50 000 000 hryvnias, issue registered by the Securities and Stock Market State Commission 23 January 2007, registration №1/4/07, all bonds were issued in one series “В” in non-documentary form. The bonds were placed among legal entities in full.

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3) private placement of registered interest bearing secured bonds of OJSB «Ukrgasbank» in the volume of 300 000 pieces at par value of 1 000,00 hryvnias each for the total amount of 300 000 000 hryvnias, issue registered by the Securities and Stock Market State Commission 30 July 2007, registration №402/4/07, all bonds were issued in one series “С” in non-documentary form. The bonds were placed among legal entities in full.

4) public placement of registered interest bearing secured bonds of OJSB «Ukrgasbank» in the volume of 100 000 pieces at par value of 1 000,00 hryvnias each for the total amount of 100 000 000 hryvnias, issue registered by the Securities and Stock Market State Commission 30 August 2007, registration №520/2/07, all bonds were issued in one series “D” in non-documentary form. The bonds were placed among legal entities in full.

5) public placement of registered interest bearing secured bonds of OJSB «Ukrgasbank» in the volume of 100 000 pieces at par value of 1 000,00 hryvnias each for the total amount of 100 000 000 hryvnias, issue registered by the Securities and Stock Market State Commission 30 August 2007, registration №521/2/07, certificate issuing date – 25.02.2008, all bonds were issued in one series «Е» in non-documentary form. On 25 December 2007 the public placement of bonds started. The bonds were placed among legal entities in full.

14) Stock quantity, being in property of members of executive body:As of 30.06.2008 members of the executive body own 198 051 shares, which is 0,0330 % of the

authorized capital of OJSB «Ukrgasbank».List of entities, whose share in the Issuer’s authorized capital exceeds 5%:- Limited Liability Company «Financial-investment alliance», enterprise code 32959617, share

quantity – 198 037 500 pieces (33,0063 %);- Limited Liability Company «Company «Ukrgasinvest plus», enterprise code 32961228, share

quantity – 108 003 133 pieces (18,0005 %);- Limited Liability Company «Investanalityk», enterprise code 33107916, share quantity – 57

013 647 pieces (9,5023 %);- Limited Liability Company «Ukrainian project development company», enterprise code

32849848, share quantity – 52 942 764 (8,8238 %);- Limited Liability Company «Ukrainian venture capital», enterprise code 32591999, share

quantity – 47 528 255 pieces (7,9214 %).

15) Information on registrarLimited Liability Company «Registrar-capital», enterprise code 24576957, license for keeping

records of registered securities holders series АВ №189874, issued by the Securities and Stock Market State Commission 22.12.2006, location – 01025, 24-А Velyka Zhytomyrska street, Kyiv, tel./fax272-60-51.

The Issuer does not use the services of depository.

16) Data on the persons responsible for the prospectus: Chairman of the Board of OJSB «Ukrgasbank» V.P. Lyashko; Chief accountant of OJSB «Ukrgasbank» N.G. Ilnytska; Head of Share Capital Managing Center М.Y. Shliuyev tel./fax239-28-30

17) Data on issuer’s dividend policy for last five years: The General Shareholders Meeting of OJSB «Ukrgasbank», held on 11 July 2003, adopted the decision on directing 95% of the bank net profit, received in 2002, on the payment of dividends. The amount of funds directed on the payment of dividends was 1 205 000,00 hryvnias. Dividends were paid on the basis of 1,93 % of the par value per each common and preference share. According to the decision of the General Shareholders Meeting of OJSB «Ukrgasbank» dividends for 2003-2007 were not paid.

18) Information on the organizers of trading, where the Issuer’s securities are on sale:

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Registered common shares of OJSB «Ukrgasbank» were included into the quotation list of the second level in the list of the First Stock Trading System (FSTS). Contracts on OJSB «Ukrgasbank» shares are concluded at this trading organizer.

19) Data on the entities responsible for auditing OJSB «Ukrgasbank»: Limited Liability Company "Grant Thornton Ukraine" (Certificate № 002166, issued by the decision of the Auditing Chamber of Ukraine № 98 dated 26.01.2001, address: 3/34 Frolivska street, Kyiv) and Closed Joint-Stock Company "Deloitte & Touche USC" (Certificate № 1973, issued by the decision of the Auditing Chamber of Ukraine № 102 dated 22.06.2001)

20) During all the period of activities , OJSB «Ukrgasbank» has been operating with no losses, measures of financial restructuring have not been applied to it, settlements of bills payable and budget payments were performed in a timely manner.

"We, Chairman of the Board of OJSB «Ukrgasbank» V.P. Lyashko, Chief accountant of OJSB «Ukrgasbank» N.G. Ilnytska, Head of Share Capital Managing Center of OJSB «Ukrgasbank» М.Y. Shliuyev, confirm the reliability of the data in this prospectus."

Chairman of the Board ofOJSB «Ukrgasbank» V.P. Lyashko

Chief accountantOJSB «Ukrgasbank» N.G. Ilnytska

Head of Share Capital Managing CenterOJSB «Ukrgasbank» М.Y. Shliuyev

«I, audit partner of «Grant Thornton Ukraine» LLC I.L. Konstantinov, confirm the reliability of financial data in this prospectus. »

Audit partner«Grant Thornton Ukraine» LLC I.L. Konstantinov

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Documents

Issue prospectus