RHTSE ENG

RHTSE: 

RHTSE russian high-tech stock exchange 30/3 Konyushkovskaya, Moscow, 123242, Russia tel: +7(095)253-4688 fax: +7(095)253-4689 web: www.fbvt.ru e-mail: info@fbvt.ru

Financing of State Research Centers under Federal Scientific Technical Target Program: 

Financing of State Research Centers under Federal Scientific Technical Target Program         Presently, there are in the Russian Federation 58 RF SRCs and the Russian Research Center “The Kurchatov Institute”(established by a presidential decree).          In 2004, the SRCs signed in contracts with state, totaling more than RUR 1 bn. 120 mln., as a result of a number of open tenders held in that same year. All the contracts so made have been fully financed.          The first half-year of 2005 has witnessed 23 RF SRCs bidding on open tenders held in FSTTP priority areas. They have put in 138 bids, from the total of 2,073 bids. Out of the winning bids numbering 421, the 43 were the RF SRCs’.          The aggregate budget of the 1st half-year of 2005 winner SRCs has reached: more than RUR 570 mln. – for 2005, and more than RUR 400 mln. – for 2006.

Other forms of state support to high technologies: 

Other forms of state support to high technologies On 18 November 2004 the Federal Government approved of the Ministry of Communications’ conception of building information technologies market in Russia entitled “The Concept of Development of Information Technologies Market in the Russian Federation”. According to the Concept, the domestic IT-market will by 2010 grow by a factor of 5, to reach up to $40 bn., with the overall number of specialists employed in the sector to rise 4 times, to number thus up to 3.5 million people. Late in June 2005, President Putin has given a directive to the Federal Government to have The Russian Investment Fund for Technologies & Innovations established. Responsible for the preparation of the Project are the Ministry of Information & Communications, Ministry of Finance and Ministry of Economic Development and Trade. As an initial step to raise the Fund, $76 mln. are supposed to be sent from federal budget this year and the total of attracted investment will attain $100 mln., to rise, in the subsequent period, to up to $ 0.3–0.4 bn. However, by the involvement of IT, Russia lags far behind Western Europe countries – against the general background of the market growth rates still remaining too low for the Russian Economy to overcome its still low efficiency. SUMMARY: More investments are needed from private capital.

Geographical location of 25 first-rate scientific centres on tne territory of Russia: 

Geographical location of 25 first-rate scientific centres on tne territory of Russia Source of information: Scientific Park of Lomonosov Moscow State University.

Russian High-Tech Stock Exchange : 

Russian High-Tech Stock Exchange Mission To attract investments into promising high-tech Russian projects and ensure that the overall process is conditioned to the maximal benefit to both issuers and investors. Objective To organize and hold regular tenders and public sales of securities issued by high-tech companies. Strategy To evolve into one of the leading trade grounds of the high-tech stock market; - to attain a maximal decrease of the investment risk in an investor’s joining/quitting high-tech projects’ starting phase; - to attract portfolio and retail investors.

Information on the Exchange: 

Information on the Exchange Legal status – An open joint-stock company (ОJSC) Constituent assembly: held on 14 July 2004 State Registration of a Legal Entity Date – 18 October 2004 On-the-strength – 17 employees Current number of shareholders – 40

The Board of Directors : 

The Board of Directors Vladimir G. Sister - Chairman of the Board of Directors, Chairman of the Moscow Committee for Science & Techniques, Corresponding Member of Russian Academy of Sciences. Sergey M. Aldoshin - Director of Institute of problems of chemical physics RAS, Member of the Presidium of the Russian Academy of Sciences, Academician. Vladimir S. Vinogradov - General Director & CEO of the Russian High-Tech Exchange. Anatoly G. Gavrilenko - President of Alor Invest, Investment Company. Valentin N. Parmon - Member of the Presidium of the Russian Academy of Sciences, Academician. Viktor A. Sadovnichy - Rector of Lomonosov Moscow State University, Member of the Presidium of Russian Academy of Sciences, Academician. Gennady F. Tereshchenko - Vice-Chairman of the Presidium of St. Petersburg Scientific Center RAS, Academician. Igor B. Fedorov - Rector of N.E. Bauman Moscow State Technical University, Chairman of Rectors’ Council in Moscow and Moscow Region. Evgeny A. Fedosov - General Director of FGUP State Scientific Research Institute of Aviation Systems (GosNIIAS).

Board of Trustees: 

Board of Trustees The Board of Trustees has been created to co-ordinate the interaction of the Exchange with government agencies and public associations and help managerial bodies of the Exchange define basic principles and major areas of its business. Boris S. Alyoshin - Chairman of the Board of Trustees of the Exchange, Chief Executive Officer of the Federal Agency for Industry. Valery V. Kozlov - Vice-President of the Russian Academy of Sciences, Academician. Yevgeny A. Panteleyev - Member of the Moscow City Hall Cabinet (a Minister), Head of the Department for Science and Industrial Strategy. Boris P. Simonov - Chief Executive Officer of the Federal Service for Intellectual Property, Patents and Trademarks. Andrey G. Fonotov - Chief Executive Officer of the State Department of “Russian Fund for Technological Development”

ОJSC “High-Tech Stock Exchange”Organizational Structure : 

ОJSC “High-Tech Stock Exchange” Organizational Structure

Holders of shares in the Exchange: Research Centers and Technoparks: 

Holders of shares in the Exchange: Research Centers and Technoparks A.M.Prokhorov Institute of General Physics (IGP RAS) Institute of Extremal-States Thermophysics (IEST), RAS Institute of Applied Mechanics (IAM) Moscow State University of Applied Biotechnology (MSUAB) K.E.Tsiolkovsky Russian State Technological University Russian State University of Innovative Technologies and Entrepreneurship IT Center “The Kurchatov” Technopark Presidium of the Dagestani Scientific Center NTsVI IOFRAN (RCWS under IGP RAS) Research Center for Wave Studies, A.M.Prokhorov Institute of General Physics Moscow State Academy of Instrument Making and Informatics FGU [Federal State Department] the Russian Research Center of “Kurchatov Institute” RAS Research Center in Chernogolovka International Board of Trustees of K.E.Tsiolkovsky MATI CJSC [closed joint-stock company] “NPP Mayak*93” Moscow Committee for Science & Technology Non-government Educational Institution (NEI) “International Academy of Valuation and Consulting” Moscow Academy of Labor Market and Information Technologies GOU MARTIT Russian Academy of Engineering RAS Institute of System Programming M.V. Lomonosov Moscow State University N.E.Bauman Moscow State University OJSC [open joint-stock company] “DIOD” Moscow Plant

HTSE Technical Facilities: 

HTSE Technical Facilities Local computing network of the Exchange features state-of-the-art technologies and advanced hardware. As the Network kernel are operating high-performance Hewlett Packard servers. They provide the operation of the trade system, WEB portal and mailing system of the Exchange and allow employees an high-speed access to Internet by fiber channel. Every employee’s workstation has modern computer equipment. A team of highly qualified IT-specialists provides operability and safe-operation mode of the Local Network.

Positioning and role of the OJSC “HTSE” in setting the process of investment attraction into research and development [см. Cлайд 12.doc]: 

Positioning and role of the OJSC “HTSE” in setting the process of investment attraction into research and development [см. Cлайд 12.doc] Tenders Undertaker RHTSE, OJSC SECURITIES BUYERS Venture/unit funds High-tech-seeking investor Investment companies Brokerage firms Private investors SECURITIES ISSUERS Technoparks Research Centers Business Incubators Inventor Individuals Well-established High-Tech companies

Organizational Support by HTSE to Project Developers: 

Organizational Support by HTSE to Project Developers The Innovations Public Offering Centre (IPOC) has been formed under the auspices of the HTSE to undertake the following tasks: - to create Projects data base with non-discriminatory access to potential investor; - to render assistance to companies in obtaining state registration; - to facilitate legal protection of intellectual property rights; - to open, promote and advance per-Project information resource, in and via Internet; - to provide management staff qualified in finance, accounting, advertising, and business planning. The IPOC offers all spectrum of services, for the consideration of a percentage of securities issued by the company incorporated in direct relevance to a Project concerned.

Pre-Terms of Giving Consideration to Projects : 

Pre-Terms of Giving Consideration to Projects Project’s commercial prospects – a condition precedent to any Project being given consideration. Initiators of putting a Project to consideration. Any legal or natural person may apply for giving consideration to a Project (Project Applicant/s). The current realization-status. For a Project to be submitted to the consideration of the HTSE, it may have at the time any realization status whatsoever (as a notion, patent, prototype model, industrial design, novel or improved technology, etc.) Scope of application. Any area of application if not prohibited under the applicable law. In particular and as an instance, fundamental and applied researches, development of whatever business direct, management improvement, changes in social aspects of performance, conservancy and ecology-betterment issues, etc. The key condition is that a Project yield a good financial effect amenable to quantitative evaluation (except the fundamental research which financial gains can only be measured against related applied-developments). Application Form. There is a standard form in which any one Project should be submitted – that of an Application/Request framed to provide for full picture of a Project concerned. Initially, a Financial Plan, it typically seeming to cause some obvious problems to Project developers, may be submitted in a form deviated from the standard one. Yet, the substantial part of a Project must be presented in full. Some Projects that require fundamental research undertaking can be submitted in a less standardized form and without financial gains appraisal.

Pre-evaluation of a Project: 

Pre-evaluation of a Project The objective of Project pre-evaluation is to determine whether promise held by a given Project in terms of attracting investments using the Exchange as a mechanism is much or not. Any preliminary evaluation will include: Appraisal of the fullness of information presented; Determining the Applicant’s rights in the material and/or intellectual property underlying the Project; Appraisal of the competitive strength of a Project, under the angle of the prospects for attracting investments (the amount of capital required, the rough identification and assessment of risks; scope of the findings application; whether stated results can really be reproduced/obtained within the specified deadline, etc.); Defining the qualifications potential of members of the team that will undertake realization of the Project.

Pre-evaluation of a Project(continued from the previous page): 

Pre-evaluation of a Project (continued from the previous page) As scientific analysis – novelty, essentiality, feasibility; In legal terms – analysis of the current and potential level of the intellectual property rights protection. In marketing terms – appraisal of marketing ‘capacity’, Project’s versus analogs’ competitive advantages – by their amount and durability; PR and media assessment; Business planning - underlain by the analysis of Project’s resource security (current and for future), period of recoupment, earning capacity trends and prospects for the capitalization growth of the Project under the planned tactics for future-value managing; As investment analysis - identification and assessment of risks and necessary investments (currently required and as projected trends); offer conditions development for allocation of interest in the Project to investors and issuers.

Criteria for selecting projects investment-attractive to participants of the stock market: 

Criteria for selecting projects investment-attractive to participants of the stock market Preferential sectors Power Engineering Ecology and rational nature-management Telecommunications, information technologies and software Nanotechnologies Sensors and devices of detection and safety systems Laser technologies Novel materials Machine building and metal working Microbiological, medical and biotechnological sectors of industry Electronic industry Woodworking industry Construction industry (construction material production and construction works) Food industry, processing, storage and packaging of agricultural products and foodstuff Production of consumer goods

Criteria for selecting projects investment-attractive to participants of the stock market (continued from the previous page): 

Criteria for selecting projects investment-attractive to participants of the stock market (continued from the previous page) Amount of investments: $50 thou to $250 thou Outlook: profitability * 50…85% per annum; future value * 5-…8-fold growth over 2...4 years to come The probability of attaining the planned figures: not less than 65% Minimal allowable share in the Project: not less than 50%

Projects accepted for the consideration by IPOC: 

Projects accepted for the consideration by IPOC Preliminary consideration has been given to some 500 projects. About 80 projects are prepared for external expertise. Negotiations have been held with developers of more than 40 projects to settle introduction issues. 8 projects of some $-1,300,000 investments requested are under preparation to the sale of shares therein. There have been created 3 JS companies with the amount of investments attracted of $ 250,000. as of July 2005

Breakdown of the Projects under consideration by scientific branches: 

Breakdown of the Projects under consideration by scientific branches

Breakdown of the Projects under consideration by application areas : 

Breakdown of the Projects under consideration by application areas

Slide22: 

The Required Amount of Projects Financial Procurement, US $

The distinction between the HTSE and other exсhanges: 

The distinction between the HTSE and other exсhanges RHTSE undertakes tenders for securities in high-tech fast growing enterprises with starting capitalization (value) ranging from $0.05-0.1 mln to $20-50 mln and not in heavyweights’ (those of the so called ‘blue chips’).

Slide24: 

Location of the Russian High-Tech Stock Exchange (OJSC). Krasnopresnenskaya St., 30/3 Konyushkovskaya, Moscow, 123242, Russia.

Slide25: 

Russian High-Tech Stock Exchange, OJSC. 2006