Listing in London November 2005. 2 Agenda wThe London markets and Russia wWhy consider accessing the international capital markets? wWhy London’s Main

Listing in London

November 2005

November 2005 2

Agenda

The London markets and Russia

Why consider accessing the international capital markets?

Why London’s Main Market?– Range of markets– Flexible regulation– Access to capital– Access to liquidity

AIM – the benefits of accessing the world’s most successful growth companies market

Case studies

Questions?

November 2005 3

Source: London Stock Exchange – September 2005

London Stock Exchange - key statistics

Admitted companies (inc AIM)2,494 domestic companies519 international companies1,311 AIM

Market capitalisation UK listed: US$3,020bn International listed: US$3,786bn AIM: US$88bn

Equity turnover (Jan-Dec 2004) Main Market:

US$4,447bn domestic US$4,614bn international

GDRs: US$109bn

AIM: US$34.8bn

November 2005 4

Companies on the London Stock Exchange: Russian focus

18 Companies traded on the LSE Main Market

In 2004, the total trade volume in Russian DR’s was over US$63.96bn

Privatisation expertise in London

Balanced approach to corporate governance

Gateway to European consumers and investors

Source: London Stock Exchange trade statistics

November 2005 5Source: London Stock Exchange trade statistics

AO TATNEFT GAZPROM

LUKOIL OMZ

EFES Breweries International SISTEMA

PYATEROCHKA EVRAZ Group

NOVATEK

Companies listed in London, Main Market

Companies traded in London, Main Market

AO MOSENERGO

ROSTELEKOM

SIBNEFT

MOBILE TELESYSTEMS OJSC

MMC NORILSK NICKEL

SURGUTNEFTEGAZ

WIMM BILL DANN FOODS

UNIFIED ENERGY SYSTEMS OF RUSSIA

YUKOS

November 2005 6

Companies on AIM with CIS focus -22 companies


ARICOM ORIEL RESOURCES

AVOCET MINING PALLADEX

CARDINAL RESOURCES PETER HAMBRO

CELTIC RESOURCES RAMBLER MEDIA

EUREKA MINING RAVEN RUSSIA

FRONTIER MINING REGAL PETROLEUM

HAMBLEDON MINING SIBIR ENERGY

HIGHLAND GOLD TRANS SIBERIAN

KRYSO RESOURCES UKRPRODUCT

NELSON RESOURCES URALS ENERGY

OXUS GOLD VICTORIA OIL

November 2005 7

Case Study: London – a leader in international trading


The Exchange’s member firms traded around US$64bn of Russian securities in 2004, representing around 59% of the total trading volume on the IOB for 2004.

Trading Value on Russian DRs

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2001 2002 2003 2004 2005YTD

Date

Val

ue

(mil

lio

n U

SD

)

November 2005 8

Company growth

Growth

Independent Market ExpertiseRecommendations on how to maximise the value of

joining a London market

The LSE supports customers in maximising shareholder value through supporting capital raising and generating liquidity whilst maximising

opportunities from their increased profile

CapitalRaising it

efficiently & effectively when

required

ProfileMaximising

marketing/PR opportunities

LiquidityIncreasing and

maintaining liquidity

November 2005 9

CAPITAL: Case study - Main Market GDRs

Core business activities

Sistema is the largest private sector consumer services company in Russia and the CIS, with over 35 million customers. Founded in 1993, the company reported revenues of US$ 4.1 billion for the first nine months of 2004 and total assets of US$ 7.7 billion.

Transaction Synopsis

Date of Admission : 14 February 2005Market: Main Market Transaction: PlacingMoney raised: $1.56 billionTurnover (first 11 days): $2.54 billionFTSE Classification: Diversified Industrials

“London is a major capital markets center and the choice of the London Stock Exchange

reflects our desire to attract a broad institutional shareholder base, as well our strategic partnerships with leading global

companies based in Europe”.

Vladimir Evtushenkov,

President of Sistema

Sistema is the largest Russian IPO ever and the biggest international IPO on the London Stock Exchange since Orange

in 2001.

Sistema

November 2005 10

LIQUIDITY: Case study – Main Market ADR’s Lukoil OAO


Date of Admission : 7 August 2002Market: Main Market Transaction: PlacingMarket Capitalisation: US$34 billionFTSE Classification: Oil integrated

“We listed ADR’s on the London Stock Exchange in August 2002 and are delighted

with the recent ADR listing and the volume of trading.”

Mr Alekperov, President

The increased level of information transparency and corporate governancehas fuelled the liquidity of Lukoil securities.

Lukoil DR’s are one of the most liquid securities on the London’s IOB.

Monthly traded values of LUKOIL's shares

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05

$ M

illio

ns

Date

November 2005 11

PROFILE: Case study – Main Market ADR’s


Date of Admission : 30 September 2003Market: Main Market FTSE Sector: Engineering - General

OMZ

“The listing of our DRs on the Official List of the UK Listing Authority is a significant step

in our efforts to increase the transparency of our company for our investors, customers,

employees and partners.”

Kakha Bendookidze, Chief Executive Officer


OMZ (Uralmash - Izhora Group) is one of the largest Russian heavy industry enterprises. The Company has manufacturing and engineering operations in Russia and the Czech Republic and representative offices in India and China.

November 2005 12

London attracts companies raising capital

London dominated the European IPO market in the year 2004 with 79% of all IPOs

Source: London Stock Exchange trade statistics and individual exchange websites

Breakdown of the Western European IPO Market 2004

Deutsche Borse2%

Borsa Italia2%

Scandinavian Exchanges8%

Madrid1%

Euronext7%

Other1%

LSE79%

AIM82%

Main Market18%

November 2005 13

London Stock Exchange: the choice for international companies

• London Stock Exchange - 423 new companies joined in 2004, 293 of which were IPOs, 49 of which were international

• NYSE – 131 IPOs in 2004, 11 companies of which were international

• Nasdaq – 166 IPOs in 2004, 18 of which were international

Source: London Stock Exchange and individual exchange websites

Total num ber of IPOs on the LSE, Nasdaq and NYSE 2000 to 2004

0

50

100

150

200

250

300

350

400

2000 2001 2002 2003 2004

To

tal

No

of

IPO

s

London Stock Exchange

Nasdaq

NYSE

November 2005 14

London Stock Exchange – 16 Intl Companies on the MM in 2005

Source: London Stock Exchange - 2005

Company NameCountry of Origin

Admission Date

Money RaisedUS$m

FRUTAROM INDUSTRIES Israel 08/02/2005 55

KUMHO TIRE CO INC South Korea 16/02/2005 367

SISTEMA JSFC Russia 14/02/2005 1,560

UTI BANK India 22/03/2005 240

NEWS CORP USA 18/04/2005 0

SREI INFRASTRUCTURE FINANCE India 21/04/2005 34

PYATEROCHKA HLDG N.V. Netherlands 11/05/2005 562

AGCERT INTERNATIONAL Eire 08/06/2005 109

EVRAZ GROUP SA Luxembourg 08/06/2005 417

PARTYGAMING Gibraltar 30/06/2005 1,632

BANCO SANTANDER CENTRAL HISPANO Spain 01/07/2005 0

OAO NOVATEK Russia 27/07/2005 966

888.com Gibraltar 04/10/2005 270

BANKMUSCAT Oman 05/10/2005 163

INVESTCOM UAE 11/10/05 700

KHAZAKHMYS Kazakhstan 12/10/05 1,124

November 2005 15

London has the widest choice of proven markets globally

A choice of globally respected markets supported by a wide range of institutional &

retail investors

Main MarketSupports the capital raising

activities of more established companies seeking further

growth.1,702 issuers

Supports the capital raising activities of earlier stage

companies in their initial growth period.

1,311 issuers

No other Exchange globally can offer the same choice ofmarkets with the same breadth and depth of investors

Source: London Stock Exchange – September 2005

November 2005 16

Key differences between our markets

Pre-vetting of admission documents by the UKLA Compliance required with the rules of the UKLA Normally a three-year trading record required Minimum of 25% shares in public hands Prior shareholders approval for certain transactions Sponsors needed for certain transactions

Regulation by the LSE No trading record required No minimum amount of shares to be in public hands In most cases, no prior shareholder approval required

for transactions Normally, admission documents not pre-vetted by

Exchange or UKLA but by nominated adviser Nominated adviser required at all times

AIM and Main Market are structured differently to assist different types of companies

Main Market

November 2005 17

AIM: the international market for smaller and growing companies

• AIM companies: 1,311

• Overseas AIM companies: 185

• New companies on AIM in 2004: 355 - 294 UK

- 61 overseas

• Capital raised since 1995: US$35bn

• Capital raised in 2004: US$8.8bn- US$ 7.8bn UK companies- US$ 1.02bn overseas companies

AIM Key statistics

Source: London Stock Exchange trade statistics – September 2005

November 2005 18

AIM – since launch

YTD 2005, there were 389 admissions to AIM, the largest number since launch.


Number of AIM Admissions 1995 to September 2005

123145

10775

102

277

177160 162

355

389

0

50

100

150

200

250

300

350

400

450

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

YEAR

AD

MIS

SIO

NS

November 2005 19

All companies must appoint a Nomad at all times

Advisers such as accountants and lawyers are brought on board to assist with the floatation

AIM companies normally work alongside an Investor Relations Company. The Nomad will advise on this.

The Nomad will draft and prepare the AIM admission documentation and carryout the due diligence required.

A 10 day announcement is required by all AIM applicants giving notification of your intention to join the market

AIM – Admission Process

November 2005 20

AIM - Continuing Obligations

AIM companies are subject to the AIM Rules which outline the continuing obligations of being on a public market. Some of the key continuing obligations are:

AIM companies must have a Nomad at all times, otherwise they will be suspended from the market

AIM companies must disclose all price sensitive information in a timely manner including substantial transactions, related party transaction,

reverse takeovers and other miscellaneous transactions

All directors accept full responsibility, collectively and individually for the AIM Rules

Half Yearly and Annual Report and accounts required in adherence with deadlines

Restrictions on deals for directors and applicable employees on AIM securities during close periods

November 2005 21

AIM companies by market capitalisation

79% of companies on AIM have a market capitalisation under $50million.

27 companies on AIM are capitalised above $440million. Source: London Stock Exchange trade statistics – September 2005

Distribution of AIM Companies by market valueSeptember 2005

145

203 199

275

214

129

87

27

0

50

100

150

200

250

300

less than$3.5m

$3.5m to$8.8m

$8.8m to$17.6m

$17.6m to$44m

$44m to$88m

$88m to$176m

$176m to$440m

more than$440m

Market Value Range ($m)

Nu

mb

er o

f co

mp

anie

s

November 2005 22

AIM: a diverse market


AIM – a diverse market, with 33 sectors represented.

Top 10 AIM sectors by market capitalization and no of companies for September 2005

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Oil

& G

as

Min

ing

Spe

cial

ity &

Oth

er F

inan

ce

Sup

port

Ser

vice

s

Sof

twar

e &

Com

pute

rS

ervi

ces

Leis

ure

& H

otel

s

Med

ia &

Ent

erta

inm

ent

Pha

rmac

eutic

als

& B

iote

chno

logy

Rea

l Est

ate

Gen

eral

Ret

aile

rs

Mar

ket

cap

ital

izat

ion

($m

)

0

50

100

150

200

250

No

of

com

pan

ies

Market Capitalisation ($m)

No. of Companies

November 2005 23

Secondary markets

Average daily turnover = £72million

6,600 average bargains per day during 2004

Market is price driven – prices quoted and liquidity provided by 33 market makers

One AIM Index at present – FTSE AIM Index - which comprises all AIM companies

Liquidity varies across the market

Source: Teather & Greenwood, Institutional Investors in AIM

November 2005 24

Investment in AIM

All but one of the main UK institutions invests in AIM

Value of Institutional holdings = £10billion

Top 3 by value: CDS & Co, Fidelity, Artemis, Chase, Foreign & Colonial

Top 5 by number of investments: Foreign & Colonial, Artemis, Fidelity, Framlington, Gartmore

80% of secondary market bargains are retail

Source: Teather & Greenwood, Institutional Investors in AIM

November 2005 25

Case study – Russian AIM Company, Celtic Resources Hldgs

Celtic ResourcesCore business activitiesThe ownership and operation of gold mines in Russia and Kazakhstan, two of which are already in production. The Group is also exploring and developing other base metal and hydrocarbon prospects in the Former Soviet Union, and holds minor oil and gas interests in the UK.

Transaction SynopsisDate of Admission : 14 October 2002Market: AIMTransaction: PlacingMarket Cap. at admission: US$68m Capital raised: US$9.4mMkt. Cap. as of 06 Sept 2005:US$244mFTSE Classification: Gold Mining

Celtic Resources Hldgs Turnover

0

50

100

150

200

250

Jul-04

Aug-04

Sep-04

Oct-04

Nov-04

Dec-04

Jan-05

Feb-05

Mar-05

Apr-05

May-05

Jun-05

Jul-05

Date

To

tal

Mo

nth

ly V

alu

e $m

0

5

10

15

20

25

To

tal

no

. o

f sh

ares

(m

)

TOTAL Mnthly Value US$ Total Shares

November 2005 26

Case study – Russian AIM Company, Peter Hambro Mining Plc

PETER HAMBRO MINING


Peter Hambro Mining Plc has 10 gold sites, two of which, Pokrovskiy and Pioneer are in production. Pokrovskiy is where Peter Hambro Mining Plc started mining and produced its first gold in 1999. It is approximately 320 km north-northwest of the regional capital, Blagoveschensk, and 50 km north of the border with China. Pioneer entered production this year and is located approximately 40 km from Pokrovskiy.

Peter Hambro Mining Plc is involved in the mining of gold ore and the production of dor bars which are sent for refining into London Good Delivery bars of gold and silver at a refinery in Krasnoyarsk. Most of the gold is currently sold to Sberbank in Moscow and the silver is sold to other banks in Russia. Under Russian law, the group has the right to export its product, once refined, to be sold for hard currencies.

Transaction SynopsisDate of Admission : 29 April 2002Market: AIMTransaction: PlacingMarket Cap. at admission: US$67m Capital raised initially: US$20.3mMkt. Cap. as of 6 Sept.2005: US$1.09bnFTSE Classification: Gold Mining

Peter Hambro Mining Plc Turnover

0

50

100

150

200

250

300

350

Jul-04

Aug-04

Sep-04

Oct-04

Nov-04

Dec-04

Jan-05

Feb-05

Mar-05

Apr-05

May-05

Jun-05

Jul-05

Date

To

tal

Mo

nth

ly V

alu

e $m

0

5

10

15

20

25

30

To

tal

no

. o

f sh

ares

(m

)

TOTAL Mnthly Value US$

Total Shares

November 2005 27

Case study –Ukrproduct (UPG)- First Ukrainian group on AIM

Ukrproduct Group Ltd

Core business activitiesUkrproduct Group (UPG) is one of Ukraine's leading producers of branded foods, the company's main business focuses on the production and distribution of branded food products, namely packaged butter and processed cheese, to wholesale and retail outlets in Ukraine through its own distribution network. UPG also produces dried-milk powder for export to countries across Europe as well as the Far East.

Transaction SynopsisDate of Admission : 11 February 2005Market: AIMTransaction: PlacingMarket Cap. at admission: US$41m Capital raised initially: US$11mMkt. Cap. as of 06 Sept.2005: US$45FTSE Classification: Food Processors

The funds raised will be utilised to invest in:

•New plant & equipment in core sectors

•Expansion of distribution network

•Provide additional working capital for the group

November 2005 28

Case study – Nelson Resources – Among the largest placings on AIM

NELSON RESOURCES


Nelson Resources is a fast-expanding Bermuda-registered, Toronto-listed independent, which over the past two years has picked up several oil production projects in Kazakhstan and which recently made its debut on the London Stock Exchange's AIM market

Transaction SynopsisDate of Admission : 19 July 2004Market: AIMTransaction: PlacingMarket Cap. at admission: US$886m Capital raised: US$120mFTSE Classification: Oil & GasNominated Advisor: Canaccord Capital LimitedBroker: Hoare Govett Limited

Top 6 Individual money raisings

CompanyDate of issue

Money raised (£m)

Issue type

NORTHUMBRIAN WATER GROUP PLC 23-May-03 389.0 New Issue

CENTER PARCS(UK)GROUP 11-Dec-03 245.0 New Issue

MELROSE 26-May-05 202.0 New Issue

TRADING EMISSIONS 21-Apr-05 135.0 New Issue

CENTAUR HOLDINGS 10-Mar-04 134.2 New Issue

PRI GROUP 26-Jun-02 130.8 New Issue

November 2005 29

Case study – Russian AIM Company, Urals Energy Public Company Limited

URALS ENERGYCore business activities

Urals Energy is an independent exploration and production company with its principal assets and operations in Sakhalin Island, Timan Pechora and the Republic of Udmurtia, Russia.

Transaction SynopsisDate of Admission : 09 August 2005

Market: AIMTransaction: PlacingMarket Cap. at admission: US$389m

Capital raised initially: US$138mFTSE Classification: Oil & Gas – Exploration &

Production

“We are delighted that our IPO has been so positively received by investors. The

offering will allow us to continue with our exploration and development

program in Russia and provide flexibility to our capital structure. Becoming a

public company has been an important milestone for us.”

William Thomas, Chief Executive Officer of Urals Energy

November 2005 30

Case study – Russian AIM Company, Rambler Media Ltd

RAMBLER MEDIACore business activities

Rambler Media is an integrated and diversified Russian language media, entertainment, services and content delivery company with three main segments: internet services, mobile value added services and television broadcasting. Rambler.ru, Rambler media’s portal, is one of the most popular portals and search engines with the global Russian speaking community.

Transaction SynopsisDate of Admission : 15 June 2005Market: AIMTransaction: PlacingMarket Cap. at admission: US$m158 Capital raised initially: US$m46FTSE Classification: Publishing & Printing

“We are very pleased to be admitted to trading on AIM and would like to

thank investors for their strong support and interest in our business.”

Irina Gofman, CEO of Rambler Media

November 2005 31

AIM: Top 10 IPOs by money raised in 2005

Source: London Stock Exchange trade statistics – 2005

Company Admission date

Country of Origin

Money raised at admission£m

Sub sector

MELROSE 26/05/2005 UK 201.99 Other Financial

RAVEN RUSSIA 29/07/2005 UK (CIS focused) 153.00 Real Estate Holding & Development

DAWNAY DAY CARPATHIAN

26/07/2005 UK (CEE focused) 140.00 Real Estate Holding & Development

TRADING EMISSIONS 21/04/2005 UK 135.00 Other Financial

EMPIRE ONLINE 15/06/2005 British Virgin Island 123.47 Media Agencies

BILLING SERVICES GROUP 15/06/2005 Bermuda 84.13 Transaction and Payroll Services

URALS ENERGY 09/08/2005 Cyprus (CIS focused)

74.00 Oil & Gas- Exploration & Production

IBS OPENSYSTEMS 23/03/2005 UK 56.00 Software

UTILICO EMERGING MARKETS UTILITIES

20/07/2005 Bermuda 52.50 Investment Companies

BLACK SEA PROPERTY FUND (THE)

14/03/2005 UK (CEE focused) 50.14 Real Estate Holding & Development

November 2005 32

Russian/CIS website www.londonstockexchange.com/ru

www.londonstockexchange.com/ru/AIM

Documents

Listing in London November 2005. 2 Agenda wThe London markets and Russia wWhy consider accessing the international capital markets? wWhy London’s Main