Executive Summary
Prosperity Voskhod Fund Limited's investment objective is to achieve capital growth by investing in a portfolio of securities involved in the corporate restructuring and consolidation which are expected to take place in Russia and other newly independent states (\NIS\) of the former Soviet Union. The Company will invest primarily in small and medium-sized companies, with the aim of being an active and influential minority shareholder. The Company has appointed Prosperity Capital Management Limited (the \Manager\), to provide it with investment management services. The Manager is a leading manager of Russian equity funds. It had assets under management of approximately US$2.4 billion as at 31 July 2006. It has managed special situations funds since 1999. The Company will invest at least 75% of its gross assets in the securities of companies established or having their principal operations in Russia. The Company may invest up to 25% of its gross assets in the securities of companies established or having their principal operations in NIS countries other than Russia, which the Company expects to be the Ukraine and Kazakhstan; however, the Company may, within such limitation and on an opportunistic basis, invest in the securities of companies established or having their principal operations in other NIS countries. The Company may not invest more than 25% of its gross assets in the securities of companies not listed on a recognised stock exchange or traded on a recognised Over-the-counter securities market. The Manager expects such unlisted investments to become more liquid as a result of the ongoing corporate restructuring and consolidation process and will actively seek to identify the most attractive of such unlisted investments. For all investments, the Manager will take into consideration both foreign and domestic potential strategic interest in such investments and the likely impact this will have on their performance. The Company will seek to fulfil its investment objective by making investments in approximately 8-10 main investment opportunities arising from the expected corporate restructuring and consolidation of the Russian and other NIS economies. Each such investment opportunity may involve an initial investment in a number of related companies. The Company is expected to invest in the engineering, chemicals, mining and other energy and commodity-intensive sectors, but may invest in other sectors of the economies of Russia and other NIS countries which are subject to corporate restructuring and consolidation. Investment will be directed towards companies considered attractive from a fundamental value…
