Listing in London

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Listing in London March 2005
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Agenda

• The London markets and Russia
• Why consider accessing the international capital
  markets?
• Why London?
• Range of markets
• Flexible regulation
• Access to capital
• Access to liquidity
• Case studies
• Questions?

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London Stock Exchange - key statistics

• Admitted companies (inc AIM)
• 2,375 domestic companies
• 469 international companies
• 1,035 AIM
• Market capitalisation
• UK listed US2,906 billion
• Non-UK listed US3,824 billion
• AIM US66 billion
• Equity turnover (Jan-Dec 2004)
• Main Market
• US4,447 billion domestic
• US4,614 billion international
• AIM US34.8 billion

Source London Stock Exchange January 2005
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Russian companies and the London Stock Exchange

• 15 Russian companies traded on the LSE Main
  Market
• In 2004, the total trade volume in Russian DRs
  was over US63.96bn
• Privatisation expertise in London
• Balanced approach to corporate governance
• Gateway to European consumers and investors

Russian companies
Source London Stock Exchange trade statistics
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Russian companies listed in London, Main Market
AO TATNEFT GAZPROM LUKOIL OAO OMZ EFES
Breweries International N.V. SISTEMA
Russian Companies traded in London, Main Market
MMC NORILSK NICKEL SURGUTNEFTEGAZ WIMM BILL
DANN FOODS UNIFIED ENERGY SYSTEMS OF
RUSSIA YUKOS
AO MOSENERGO ROSTELEKOM SIBNEFT MOBILE
TELESYSTEMS OJSC
Source London Stock Exchange trade statistics
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Russian Companies on AIM
TRANS-SIBERIAN GOLD CELTIC RESOURCES
HLDGS PETER HAMBRO MINING SIBIR ENERGY HIGHLAND
GOLD MINING ARICOM PLC
Source London Stock Exchange trade statistics
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Case Study London a leader in international
trading
The Exchanges member firms traded around US64
billion of Russian securities in 2004.
Source London Stock Exchange trade statistics
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Case study Main Market GDRs
Sistema
Transaction Synopsis Date of Admission 14
February 2005 Market Main Market
Transaction Placing Money raised
1.56 billion Turnover (first 11 days)
2.54 billion
Sistema is the largest Russian IPO ever and
the biggest international IPO on the London
Stock Exchange since Orange in 2001.
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.
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
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Company growth
Liquidity Increasing and maintaining liquidity
Capital Raising it efficiently effectively when
required
Profile Maximising marketing/PR opportunities
Growth
Independent Market Expertise Recommendations 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
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London continues to attract companies seeking to
raise capital
London dominated the European IPO market over the
financial year 2004 having 79 of all IPOs
Source London Stock Exchange trade statistics
and individual exchange websites
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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
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London Stock Exchange International Companies
2004
9 International Companies coming to the Main
Market in 2004
Source London Stock Exchange - 2004
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International assets under management in London
The LSE is the worlds most internationally
focussed financial centre
Source IR Channel Feb 2005
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Composition of investors in international trading
on the London market
Source London Stock Exchange trade statistics
The North American investor is more volatile
with a tendency to dramatise when there is an
adverse event and a tendency to get over-excited
from time to time. Bernard Isautier, CEO,
PetroKazakhstan Inc.
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London has an intelligent approach to regulation
Less
More
Balance Competing Needs
Companies
Investors
Minimise the cost and hassle of the regulatory
framework
Maximise the protection inherent in the
regulatory framework

• UK is more flexible as it is based on sound
  principles (comply or explain) and effective
  codes, whereas the US is prescriptive, costly and
  expensive
• UK had the highest standards of corporate
  governance in the world for 5 consecutive years
  (1996 2000 survey by Davis Global Advisors)

• Investors willing to pay 12 14 premium for UK,
  US and EU companies with good governance
  (McKinseys Global Investor Opinion Survey)

Alan Greenspan, chairman of the US Federal
Reserve, has hailed the success of London in
staying at the top of the worlds financial
pyramid
Greenspan praises Londons success story by Ed
Crooks, FT, 25 September 2002
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London has an intelligent approach to regulation
Increased Cost SOX has negatively impacted
companies bottom line by increasing the cost of
compliance
The reality of SOX
Uncertainty SOX has increased international
companies uncertainty due to the changing
regulatory framework
Increased Risk SOX has increased international
companies exposure to US litigation
After a year, were still struggling with the
compliance issues (due to SOX) and trying to make
the new rules work in large, complex
organisations. Alex Cohen, partner, Latham
Watkins
Increased Threat SOX has increased the threat to
the individuals in key roles (CEO CFO) of
personal liability claims
Companies struggle to come to terms with
Sarbanes-Oxley by Kit Bingham, eFinancial News,
4 August 2003
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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 Market

Supports the capital raising activities of more
established companies seeking further
growth. 1,809 issuers
Supports the capital raising activities of
earlier stage companies in their initial growth
period. 1,035 issuers
No other Exchange globally can offer the same
choice of markets with the same breadth and depth
of investors
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Key differences between our markets

• 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
• Admission documents not pre-vetted by Exchange or
  UKLA but by nominated adviser
• Nominated adviser required at all times

• 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
• Pre-vetting of admission documents by the UKLA
• Sponsors needed for certain transactions

Main Market
AIM and Main Market are structured differently to
assist different types of companies
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AIM the international market for smaller and
growing companies

• AIM companies 1,035
• Overseas AIM companies 120
• New companies on AIM in 2004 355
• - 294 UK
• - 61 overseas
• Capital raised since 1995 US28.5bn
• Capital raised in 2004 US8.8bn
• US 7.8bn UK companies
• US 1.02bn overseas companies
• FTSE AIM index increased by 20.4 in 2004

Source London Stock Exchange trade statistics
January 2005
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AIM since launch

• During 2004, we have seen 355 admissions to AIM,
  the biggest number of companies admitted since
  the AIM launch year (1995).

Source London Stock Exchange trade statistics
Jan 2005
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AIM a market for companies of all sizes
On average, AIM companies have a market value
between 5m and 100m.
Source London Stock Exchange trade statistics
January 2005
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AIM a diverse market
AIM a diverse market, with 32 sectors
represented.
Source London Stock Exchange trade statistics
January 2005
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Case study Russian AIM Company, Celtic
Resources Hldgs
Celtic Resources Core business activities The
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 Synopsis Date of Admission
14 October 2002 Market
AIM Transaction Placing Market Cap. at
admission m36.34 Capital raised
m5.04 Mkt. Cap. as of 14 Jan.2005
m161.58 FTSE Classification Gold Mining

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Case study TV Loonland, AIM German Company, 2004
Transaction Synopsis Date of Admission
30 September 2004 Market
AIM Transaction Introduction Market Cap.
at admission m8.41 FTSE
Classification Television, Radio and Filmed
Entertainment
The growing international interest in this
special segment of the London Stock Exchange is
sure to have a positive impact on our business.
One of the main reasons for its growing appeal is
the fact that, unlike the former Neuer Markt in
Germany, the AIM portfolio is broadly based and
not restricted to a handful of fields such as
tech stocks, explained Peter Völkle, CEO and
President of TV-Loonland

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Case study Russian AIM Company, Peter Hambro
Mining Plc
PETER HAMBRO MINING Core business
activities 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 Synopsis Date of Admission
29 April 2002 Market AIM Transaction
Placing Market Cap. at admission m35.87
Capital raised initially
m10.84 Mkt. Cap. as of 14 Jan.2005
m375.54 FTSE Classification Gold Mining

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Case study Ukrproduct (UPG)- First Ukrainian
group on AIM
Ukrproduct Group Ltd Core business
activities Ukrproduct 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 Synopsis Date of Admission
11 February 2005 Market
AIM Transaction Placing Market Cap. at
admission m22.05 Capital raised
initially m6.00 FTSE 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

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Case study Nelson Resources Among the largest
Placings on AIM
NELSON RESOURCES Core business activities 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 Synopsis Date of Admission
19 July 2004 Market AIM Transaction
Placing Market Cap. at admission m474
Capital raised m64.2 FTSE
Classification Oil Gas Nominated
Advisor Canaccord Capital Limited Broker
Hoare Govett Limited

Source London Stock Exchange trade statistics
2004
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AIM Top 10 International IPOs by money raised
Source London Stock Exchange trade statistics
2004
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Russian/CIS website
www.londonstockexchange.com/ru