TMT INVESTMENTS PLC. (incorporated in Jersey with registration number )

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1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document and the action you should take, you are recommended immediately to seek your own independent advice from a person duly authorised under the Financial Services and Markets Act 2000 (or, if you are a person outside of the United Kingdom, from a person otherwise duly qualified in your jurisdiction) who specialises in the acquisition of shares and other securities. This document, which constitutes an AIM admission document relating to TMT Investments Plc (the Company ), has been drawn up in accordance with the AIM Rules for Companies. This document does not contain an offer of transferable securities to the public in the United Kingdom within the meaning of section 102B of the Financial Services and Markets Act 2000 (as amended) ( FSMA ) and is not required to be issued as a prospectus pursuant to section 85 of FSMA. This document is, however, a prospectus for the purposes of the Companies (Jersey) Law 1991 (as amended) and the Companies (General Provisions) (Jersey) Order Application has been made for the admission of the entire issued and to be issued ordinary share capital of the Company to trading on AIM, a market operated by the London Stock Exchange. It is expected that dealings in the Ordinary Shares will commence on AIM on 10 December The rules of AIM are less demanding than those of the Official List of the United Kingdom Listing Authority. It is emphasised that no application is being made for admission of these securities to the Official List of the United Kingdom Listing Authority. The Ordinary Shares are not dealt on any other recognised investment exchange and no application has been or is being made for the Ordinary Shares to be admitted to any other exchange. AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. AIM securities are not admitted to the Official List of the United Kingdom Listing Authority. A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser. Each AIM company is required pursuant to the AIM Rules for Companies to have a nominated adviser. The nominated adviser is required to make a declaration to the London Stock Exchange on Admission in the form set out in Schedule Two to the AIM Rules for Nominated Advisers. Neither the United Kingdom Listing Authority nor the London Stock Exchange has examined or approved the contents of this document. The Directors of the Company, whose names appear on page 3 of this document, and the Company, accept responsibility both individually and collectively for the information contained in this document and compliance with the AIM Rules for Companies. To the best of the knowledge of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and contains and does not omit anything likely to affect the import of such information. To the extent information has been sourced from a third party, this information has been accurately reproduced and, as far as the Directors and the Company are aware no facts have been omitted which may render the reproduced information inaccurate or misleading. All the Directors accept responsibility accordingly. It should be remembered that the price of securities and the income from them can go down as well as up. The whole of this document should be read. Attention is drawn in particular to the Risk Factors set out on pages 8 to 14 of this document. TMT INVESTMENTS PLC (incorporated in Jersey with registration number ) Placing of 20,000,000 Ordinary Shares at a price of $1 per share and Admission of Ordinary Shares to trading on AIM Nominated Adviser and Broker: ZAI Corporate Finance Limited ZAI Corporate Finance Ltd, which is authorised and regulated by the Financial Services Authority in the United Kingdom, is acting as nominated adviser and broker to the Company for the purposes of the AIM Rules for Companies in connection with the Placing and Admission and as such, its responsibilities are owed solely to the London Stock Exchange PLC and are not owed to the Company or to any Director or to any other person or entity. ZAI Corporate Finance Ltd will not be responsible to any person other than the Company for providing the protections afforded to clients of ZAI Corporate Finance Ltd or for providing advice to any other person in connection with the Placing and Admission or any acquisition of shares in the Company. ZAI Corporate Finance Ltd is not making any representation or warranty, express or implied, as to the contents of this document. ZAI Corporate Finance Ltd has not authorised the contents of, or any part of, this document, and no liability whatsoever is accepted by ZAI Corporate Finance Ltd for the accuracy of any information or opinions contained in this document or for the omission of any material information. A copy of this document has been delivered to the Registrar of Companies in Jersey in accordance with Article 5 of the Companies (General Provisions) (Jersey) Order 2002, and he has given and not withdrawn his consent to its circulation. The Jersey Financial Services Commission has given, and has not withdrawn, its consent under Article 2 of the Control of Borrowing (Jersey) Order 1958 to the issue of shares in the Company. It must be distinctly understood that, in giving these consents, neither the Registrar of Companies in Jersey nor the Jersey Financial Services Commission takes any responsibility for the financial soundness of the Company or for the correctness of any statements made, or opinions expressed, with regard to it. If you are in any doubt about the contents of this document you should consult your stockbroker, bank manager, lawyer, accountant or other financial adviser. The Directors of the Company have taken reasonable care to ensure that the facts stated in this document are true and accurate in all material respects and that there are no other facts the omission of which would make misleading any statement in this document, whether of fact or opinion. All the Directors accept responsibility accordingly. This document does not constitute an offer to sell or the solicitation of an offer to buy shares, warrants or any other securities in any jurisdiction other than the United Kingdom and should not be taken, transmitted, distributed or sent directly or indirectly to any persons with addresses in the United States of America (or any of its territories or possessions), Canada, Japan, Australia, or to any corporation, partnership or other entity created or organised under the laws thereof, or in any other country outside the United Kingdom where such distribution may lead to a breach of any legal or regulatory requirement. The Ordinary Shares have not been and will not be registered under the applicable securities laws of the United States of America (or any of its territories or possessions), Canada, Japan or Australia. Accordingly, subject to certain exceptions, the Ordinary Shares may not, directly or indirectly, be offered, sold, transferred, taken up or delivered, directly or indirectly, in or into the United States of America (or any of its territories or possessions), Canada, Japan or Australia to or for the account or benefit of any national, resident or citizen of such countries. The Ordinary Shares have not been registered in the United States under the Securities Act or under other applicable securities law and are subject to restrictions on transfer contained in such law. The Ordinary Shares may not be resold in the United States, except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities law. The Ordinary Shares constitute restricted securities as defined in Rule 144 under the Securities Act, and, accordingly, are not freely tradable in the United States. The Company does not intend to list the Ordinary Shares on an established securities exchange, have them quoted on an automated inter-dealer quotation system or otherwise create a public market in the United States for resales of the Ordinary Shares. The distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this document comes should inform themselves about and observe such restrictions. Any failure to comply with any such restriction may constitute a violation of the securities laws of such jurisdictions. This document contains forward-looking statements. These relate to the Company s future prospects, developments, intentions and strategies. Forwardlooking statements are identified by their use of terms and phrases such as believe, could, envisage, estimate, intend, may, plan, will or the negative of those, variations or comparable expressions, including references to assumptions. The forward-looking statements in this document are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements.

2 CONTENTS Page DIRECTORS, SECRETARY AND ADVISERS 3 DEFINITIONS 4 ADMISSION AND PLACING STATISTICS 7 EXPECTED TIMETABLE OF PRINCIPAL EVENTS 7 RISK FACTORS 8 PART 1 INFORMATION ON THE COMPANY 15 PART 2 TAXATION 23 PART 3 ADDITIONAL INFORMATION 27 2

3 DIRECTORS, SECRETARY AND ADVISERS Directors Registered Office Administrator & Company Secretary Nominated Adviser and Broker Solicitors to the Company as to English Law Legal Advisers to the Company as to Jersey Law Solicitors to the Nominated Adviser and Broker Reporting Accountants and Auditors Registrar Receiving Agents Company s website Alexander Selegenev, Executive Director Petr Vladimirovich Lanin, Non-Executive Director James Joseph Mullins, Non-Executive Director Queensway House, Hilgrove Street St Helier, Jersey JE1 1ES Computershare Company Secretarial Services (Jersey) Limited Queensway House, Hilgrove Street St Helier, Jersey JE1 1ES ZAI Corporate Finance Ltd 12 Camomile Street London EC3A 7PT Adams & Remers LLP Dukes Court, 32 Duke Street, St James s London SW1Y 6DF VerrasLaw Third Floor, 22 Hill Street St. Helier, Jersey JE2 4YE Lawrence Graham LLP 4 More London Riverside London SE1 2AU UHY Hacker Young LLP 4 Thomas More Square London E1W 1YW Computershare Investor Services (Jersey) Limited Queensway House, Hilgrove Street St Helier, Jersey JE1 1ES Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS13 8AE 3

4 DEFINITIONS The following definitions apply throughout this document unless the context requires otherwise: Administrator Administration Agreement Admission AIM AIM Rules for Companies AIM Rules for Nominated Advisers Articles Board or Directors Business Day Company or TMT Investments Companies Law Consultants Corporate Governance Code CREST CREST Regulations Disclosure Rules Enlarged Share Capital Existing Ordinary Shares Computershare Company Secretarial Services (Jersey) Limited the agreement entered into between the Administrator and the Company dated 6 December 2010, details of which are set out in paragraph 10.8 of Part 3 of this document the admission of the entire issued and to be issued Ordinary Share capital of the Company to trading on AIM becoming effective in accordance with the AIM Rules for Companies the market of that name operated by the London Stock Exchange the rules which set out the obligations and responsibilities in relation to companies whose shares are admitted to AIM as published by the London Stock Exchange from time to time the rules of the London Stock Exchange which set out the eligibility, obligations and certain disciplinary matters in relation to nominated advisers as published by the London Stock Exchange from time to time the memorandum and articles of association of the Company from time to time the current directors of the Company, whose names are set out on page 3 of this document or any duly authorised committee thereof any day on which the London Stock Exchange is open for the transaction of business TMT Investments Plc, a company incorporated in Jersey with registered number the Companies (Jersey) Law 1991 (as amended) German Kaplun and Alexander Morgulchik the UK Corporate Governance Code issued by the Financial Reporting Council the computerised settlement system (as defined in the CREST Regulations) operated by Euroclear UK & Ireland Limited which facilitates the transfer of title to shares in uncertificated form the Uncertificated Securities Regulations 2001 of the UK (SI 2001/3755) and the Companies (Uncertificated Securities) (Jersey) Order 1999 (as amended) the Disclosure and Transparency rules as set out in the FSA Handbook the enlarged share capital of the Company upon Admission, comprising the Existing Ordinary Shares and the Placing Shares the 2 Ordinary Shares in issue as at the date of this document 4

5 FSA FSA Handbook Group IFRS Investment Strategy Lock-in Agreements Locked-in Persons London Stock Exchange Official List Ordinary Shares Placees Placing Placing Agreement Placing Price Placing Shares Receiving Agent Registrar Reverse Takeover Regulatory Information Service Securities Act Shareholders the United Kingdom Financial Services Authority the rules and guidance published by the FSA from time to time under the powers given to it by the Financial Services and Markets Act 2000 the Company and its subsidiaries from time to time, to include, where the context so requires, an investment that the Company or any of its subsidiaries makes in a corporate body International Financial Reporting Standards the strategy approved by the Board relating to investments and/or acquisitions, further details of which are set out in paragraph 3 of Part 1 of this document the conditional agreements not to dispose of interests in Ordinary Shares save in certain circumstances dated 6 December 2010 and described in paragraph 10.4 of Part 3 of this document the Directors, the Consultants and MacMillan Trading Company London Stock Exchange PLC the official list of the United Kingdom Listing Authority ordinary shares of no par value in the capital of the Company subscribers for Placing Shares procured by ZAICF on behalf of the Company pursuant to the Placing Agreement the conditional placing by ZAICF on behalf of the Company of the Placing Shares pursuant to the Placing Agreement the conditional agreement dated 6 December 2010 between (i) ZAICF, (ii) the Company, (iii) the Directors and (iv) the Consultants relating to the Placing, further details of which are set out in paragraph 10.3 of Part 3 of this document US$1 per Placing Share 20,000,000 new Ordinary Shares to be issued at the Placing Price by the Company pursuant to the Placing Computershare Investor Services PLC Computershare Investor Services (Jersey) Limited any acquisition which would be of a size or nature to be deemed a reverse takeover transaction under Rule 14 of the AIM Rules for Companies a regulatory information service that is on the approved list of service providers maintained by the FSA the United States Securities Act 1933 (as amended) holders of the Ordinary Shares from time to time 5

6 Substantial Shareholder Takeover Code Takeover Panel TMT Sector UK or United Kingdom UKLA or UK Listing Authority US or United States ZAICF any person who, on Admission, holds any legal or beneficial interest directly or indirectly in 10 per cent. or more of the Enlarged Share Capital or voting rights of the Company, as defined in the AIM Rules for Companies the City Code on Takeovers and Mergers the Panel on Takeovers and Mergers in the United Kingdom the technology, media and telecommunications business sector the United Kingdom of Great Britain and Northern Ireland the FSA acting in its capacity as the competent authority for the purposes of Part VI of the FSMA the United States of America, its territories and possessions, any state of The United States of America and the District of Columbia ZAI Corporate Finance Ltd, the Company s nominated adviser and broker or Sterling pounds sterling, the lawful currency from time to time of the United Kingdom $ or US$ or Dollars US Dollar, the official currency of the United States 6

7 ADMISSION AND PLACING STATISTICS Number of Existing Ordinary Shares 2 Number of Placing Shares 20,000,000 Number of Ordinary Shares in issue following Admission 20,000,002 Placing Shares as a percentage of the Enlarged Share Capital Placing Price Market capitalisation of the Company at the Placing Price on Admission Estimated net proceeds of the Placing receivable by the Company International Securities Identification Number (ISIN) of Ordinary Shares per cent. US$1 US$20.0 million US$19.64 million JE00B3RQZ289 EXPECTED TIMETABLE OF PRINCIPAL EVENTS 2010 Publication of this AIM admission document Admission and commencement of dealings on AIM CREST stock accounts credited in respect of Placing Shares Definitive share certificates despatched by 6 December 8.00 a.m. on 10 December 10 December 22 December 7

8 RISK FACTORS The Ordinary Shares should be regarded as a highly speculative investment and an investment in Ordinary Shares should only be made by those with the necessary expertise to fully evaluate the investment. In addition to the usual risks associated with an investment in a business which is a start-up or at an early stage of development, the Directors believe that the following risks should be considered carefully by investors before acquiring Ordinary Shares. Prospective investors are advised to consult an independent adviser authorised under the FSMA. If any of the risks described in this Admission Document actually occurs, the Company may not be able to conduct its business as currently planned and its financial condition, operating results and cash flows could be seriously harmed. In that case, the market price of the Ordinary Shares could decline and all or part of an investment in the Ordinary Shares could be lost. No inference ought to be drawn as to the order in which the following risk factors are presented as to their relative importance or potential effect. RISK FACTORS RELATING TO THE BUSINESS AND OPERATIONS OF THE GROUP Reliance on the retention of management and consultants The Company will rely heavily on a small number of key individuals, in particular the Directors and the Consultants to identify, acquire and manage suitable assets, companies or businesses. The retention of their services cannot be guaranteed. Accordingly the loss of any Director or Consultant may have an adverse effect on the Company s prospects. Identifying and acquiring suitable investments The Company is recently formed, and has not yet made any investments and has no operating history upon which to evaluate its likely performance. The Company s ability to implement its Investment Strategy and achieve its desired returns will be limited by its ability to identify and acquire suitable investments. Suitable investment opportunities may not always be readily available. The Company s initial and future investments may be delayed or made at a relatively slow rate because, among other things: the Company intends to conduct detailed due diligence prior to approving investments; the Company may conduct extensive negotiations in order to secure and facilitate aninvestment; certain structures may need to be established in order to facilitate an investment; attractive investments may not be identified or available at the rate currently anticipated by the Company due to competition from other investors, market conditions or other factors; and the Company may need to raise further capital to make investments and/or fund the assets or businesses invested in. The Company cannot accurately predict how long it will actually take to deploy the capital available to it or at all. Precise timing will depend on, among other things, the availability of suitable direct investments, due diligence, negotiations with counterparties and investment structuring considerations. In addition, the Company may face significant competition in identifying and acquiring suitable investments from other investors, including competitors who may have greater resources. Competition in the investment market may lead to prices for investments identified by the Company as suitable being driven up through competing bids by potential purchasers. Accordingly, the existence and extent of such competition may have a material adverse effect on the Company s ability to acquire investments at satisfactory prices and otherwise on satisfactory terms, thereby reducing the Company s potential profits. Pursuant to the AIM Rules for Companies, if the Company has not substantially implemented its Investment Strategy within eighteen months of Admission, the Investment Strategy will be subject to approval by Shareholders at the next annual general meeting and annually thereafter. 8

9 Success of Investment Strategy not guaranteed Returns achieved are reliant upon the performance of the assets of the Company and the Investment Strategy followed. The success of the Investment Strategy depends on the Directors ability to identify investments in accordance with the Company s investment objectives and to correctly interpret market data. No assurance is given that the strategy to be used will be successful under all or any market conditions or that the Company will be able to identify opportunities meeting the Company s investment criteria and that the Company will be able to invest its capital on attractive terms and generate returns for investors. Ongoing effects of economic downturn The global financial markets have recently experienced significant disruptions as a number of large financial institutions have failed, have been supported by national governments or have merged into other organisations creating unprecedented uncertainty and instability. With global credit markets experiencing substantial disruption and liquidity shortages, financial instability has penetrated the markets where investee companies may be located and the subsectors that they operate in. There can be no assurances that conditions in the global financial markets will not worsen and/or adversely affect the Company s ability to exit, or secure follow on investment for future investee companies. The inability of the Company to exit, or to exit on attractive terms, will mean the Company may not be able to generate returns for investors. Concentration of risk There can be no assurance that the actual investment opportunities which the Directors are able to source for the Company will not lead to concentration of risk. To the extent that the Company s investments are concentrated in any one sub-sector of the TMT Sector, region, country or asset class, downturns affecting the source of the concentration may result in a total or partial loss on such investments and have a material adverse effect on the Company s performance. Exposure to emerging markets The Company will seek to make investments in any region of the world. However the expertise of the Directors and the Consultants is predominantly in emerging markets, and in particular Russia and the Commonwealth of Independent States. These markets are not as politically or financially secure as developed markets. Future growth of any portfolio company operating in an emerging market is dependent on the political, economic, regulatory and social conditions in these countries. Any changes in policies implemented by the governments in these countries, currency and interest rate fluctuations, exchange controls and changes in duties and taxation could materially and adversely affect operations, financial performance and future growth of prospective portfolio companies in an emerging market. Investments in private companies are subject to a number of risks The Company may invest in or acquire privately held companies or assets. These may (a) be highly leveraged and subject to significant debt service obligations, stringent operational and financial covenants and risks of default under financing and contractual arrangements which may adversely affect their financial condition; (b) have limited operating histories and smaller market shares than larger businesses making them more vulnerable to changes in market conditions or the activities of competitors; (c) have limited financial resources; (d) be more dependent on a limited number of management and operational personnel, increasing the impact of the loss of any one or more individuals; (e) have limited public information available; (f) have less predictable operating results; and (g) require additional capital. All of these factors may have a material adverse effect on the Company s performance, which could reduce the value of the Ordinary Shares. Material facts or circumstances not revealed in the due diligence process Prior to making or proposing any investment, the Company will undertake legal, financial and commercial due diligence on potential investments to a level considered reasonable and appropriate by the Company on a case by case basis. However, these efforts may not reveal all material facts or circumstances which would have a material adverse effect upon the value of the investment. In undertaking due diligence, the Company will need to utilise its own resources and may be required to rely upon third parties to conduct 9

10 certain aspects of the due diligence process. Further, the Company may not have the ability to review all documents relating to the investee company and assets. In circumstances where the Company is not the lead co-investor, it may need to rely upon the due diligence carried out by the lead investor. Any due diligence process involves subjective analysis and there can be no assurance that due diligence will reveal all material issues related to a potential investment which might be necessary or helpful in evaluating a potential investment. Further funding When a suitable investment is identified, it is possible that the Company will need to raise further capital either to purchase such investment and/or facilitate the development of such investment. There is no guarantee that the Company will be able to raise such capital, and this may prejudice the Company s ability to invest in and develop investments. The Company is a new company with no operating history The Company was incorporated on 30 September 2010 and has no track record or operating history. The Company is subject to all of the business risks and uncertainties associated with any new business enterprise including the risk that the Company will not achieve its investment objectives and that the value of an investment in the Company could decline and may result in the total loss of all capital invested. The past performance of companies, assets or funds managed by the Directors, or persons affiliated with them in other ventures in the TMT industry Sector or otherwise, is not necessarily a guide to the future performance of the Company. Dependence on third party services The Company will rely on products and services provided by third parties, such as undertaking due diligence and technical reviews and providing general financial and strategic advice. If there is any interruption to the products or services provided, or failure to perform these services with due care and skill by such third parties or those products or services are not as scalable as anticipated, or if there are problems in upgrading such products or services as the Company may require, the Company s business could be adversely affected and the Company may be unable to find adequate replacement services on a timely basis, if at all, and/or on acceptable commercial terms. The Company may experience fluctuations in its results The Company may experience fluctuations in its operating results due to a number of factors, including the rate at which the Company makes new investments, the interest rates payable on debt capital, the level of expenses, variations in and the timing of the recognition of realised and unrealised gains or losses, the degree to which it encounters competition in sourcing suitable investment opportunities and general economic conditions. Accordingly, results for any period should not be relied upon as being indicative of performance in future periods. No assurance of profitability The expenses of operating the Company may, at times, exceed the Company s income, thereby requiring that the difference be paid from the Company s capital. Initially the Company will have no income save for any interest earned on cash reserves. Borrowings The Company may, from time to time, raise capital for investments or borrow for short term capital purposes. There is no guarantee that the Company will be able to obtain financing upon appropriate terms and conditions or at all. The companies in which the Company invests may also have borrowings or otherwise be geared or leveraged. Although such facilities may increase investment returns, they also create greater potential for loss. This includes the risk that the borrower will be unable to service the interest repayments, or comply with other requirements, rendering the debt repayable, and the risk that available capital will be insufficient to meet required repayments. There is also the risk that existing borrowings will not be able to be refinanced or that the terms of such refinancing will not be as favourable as the terms of 10

11 existing borrowings. A number of factors (including changes in interest rates, conditions in the banking market and general economic conditions which are beyond the Company s control) may make it difficult for the Company or its investee companies to obtain new financing on attractive terms or even at all. Early stage of development The Company may make investments in entities and assets at a relatively early stage of development. Although the Company will seek, where appropriate, active management involvement in the underlying investee companies or assets, there can be no assurances that such companies or assets will successfully develop or that the resources they have will be suitable for commercialisation. Such entities and assets may require the injection of further capital at a level which the Company or any third party may consider that it is unable to meet. Currency risks The Company may make investments in currencies other than US$ and the Company does not intend to hedge against exchange rate fluctuations. Accordingly, the value of such investments may be adversely affected by changes in currency exchange rates notwithstanding the performance of the investments themselves. Jersey Law The Company is an investment company that has been formed and registered under the laws of Jersey. The rights of its Shareholders and the fiduciary duties that its Board of Directors owes to the Company and Shareholders are governed by Jersey law and the Articles of the Company. A change to Jersey law or regulations could affect the Company s tax status or its ability to make distributions The Company is incorporated in Jersey and has tax neutral status in this jurisdiction. The Directors intend to maintain that status. Should any tax authority challenge that status the Directors intend to defend the Company s tax position. However, should that status be challenged successfully at any time the Company s profits and/or capital gains may be subject to taxation at a higher rate than is payable under its current status. Statements in this document concerning the taxation of the Company and its investments and the taxation of Shareholders are based upon current tax law and practice which is subject to change. Control by Substantial Shareholders In aggregate, the Consultants will be beneficially interested in 20 per cent. of the issued share capital of the Company as at the date of Admission. The Consultants could therefore be able to exercise significant influence over the Company, including matters requiring Shareholder approval such as the election of Directors. Such decisions or actions may conflict with the interest of public investors, however, the Consultants relationship with the Company will be the subject of a relationship agreement under which they have each undertaken that they will procure, at all times for so long as they each hold 10 per cent. or more of the issued share capital of the Company, the Company will carry on its interests and the Group s business on arm s length and commercial basis in relation to them and their interests. The principal terms of the relationship agreement are summarised in paragraph 10.5 of Part 3 of this document. The City Code on Takeovers and Mergers The Company is not subject to the Takeover Code. Accordingly, Shareholders will not benefit from the protections of the Takeover Code, including, in particular Rule 9 of the Takeover Code. Although the Company s Articles contain provisions substantially similar to Rule 9 of the Takeover Code (as summarised in paragraph 8.15 of Part 3 of this document), it should be noted that such provisions do not necessarily accord Shareholders protections similar to the Takeover Code. In particular, the Takeover Panel 11

12 will not have the authority to monitor Shareholders compliance with the takeover provisions of the Articles nor impose sanctions in respect of any breach of such provisions. Different Rules Governing Corporate Governance There is no applicable regime of corporate governance to which directors of a Jersey company must adhere over and above the general fiduciary duties and duties of care, diligence and skill imposed on such directors under Jersey law. The Directors, however, recognise the importance of good corporate governance and confirm that following Admission, will comply, so far as is practicable taking into account the Company s size and nature, with the provisions of the Corporate Governance Code to the extent practicable and commensurate with the size and operations of the Company. The Company has also adopted a share dealing code for Directors dealings in securities of the Company. RISKS RELATING TO THE TMT SECTOR The Company intends to invest in companies operating in the TMT Sector. Set out below are industry risk factors relating to companies operating in the TMT Sector. Dependence on the TMT Sector Any significant downturn in the TMT Sector may result in a reduction in expenditure on TMT projects which would have a detrimental impact on future portfolio companies turnover and profit growth. Future developments in the TMT Sector, such as changes in the regulatory environment and industry consolidation, could adversely affect future portfolio companies existing or potential customers. This could result in a reduction in demand for the future portfolio companies products and services and, in turn, have an adverse impact on portfolio companies financial performance and valuation. Technological change The TMT Sector is characterised by rapid change due to changing market trends, evolving industry standards and the introduction of new technologies. The development and commercialisation of new products and services can render existing products and services obsolete or un-marketable. The success of prospective portfolio companies will depend on their ability to introduce and successfully deploy new products and services to cater for customers changing needs. Competition The TMT Sector is highly competitive. Other companies operating within the sector will have access to larger financial, operational and management resources than companies in which the Company will invest. As a result, they may be able to adapt more quickly than the prospective portfolio companies to new and emerging technologies and changes in customer requirements. Portfolio companies may be unable to compete successfully with such new or existing competitors and its inability to adapt to changing market conditions could have a material and adverse effect on their business and financial condition. Reliance on proprietary technology The success and ability of companies in the TMT Sector to compete can be dependent upon their proprietary technologies. The ability of companies to protect their proprietary rights may not be adequate and consequently they might not be able to prevent others from using what they consider to be their technology. Existing trade secret, copyright and trademark laws and non-disclosure agreements only offer limited protection and, in addition, laws in certain countries may not protect TMT companies comprehensively. Other companies can independently develop similar or superior technology without violating proprietary rights. Any misappropriation of prospective portfolio companies technology or the development of competitive technology may seriously harm such companies business and financial position. Policing unauthorised use of products or services is difficult and costly. 12

13 Regulatory Issues Companies in the TMT Sector face a large number of rules and regulations that relate to information security. Failure to comply can expose a company to hefty fines and significant liability. In some countries, any loss of personal identifiable information must be disclosed. This can lead to significant costs, fines and reputational damage. In addition, businesses that lose another company s data can be held liable. This is particularly relevant in a tough economy, when distressed companies may use legal channels as a way to make up for reduced operating income. Similarly, lack of clarity about digital rights ownership raises the prospect of digital ambulance chasing. Copyright breaches may be an income stream that more companies start to target. To protect themselves, companies involved with digital products and services must be careful to avoid infractions whether such might be committed by their employees, customers, business partners or recent acquisitions. In any cases, a prospective portfolio company could be liable. Risks related to foreign legislation The Company plans to do business internationally. Due to the fact that legislation differs in every country, some internet resources, provided by the prospective portfolio companies, may be forbidden in some countries. RISKS RELATING TO THE ORDINARY SHARES AND THEIR TRADING ON AIM No prior trading record for the Company or its Ordinary Shares Since the Ordinary Shares have not previously traded, their market value is uncertain. There can be no assurance that the market will value the Ordinary Shares at or above the Placing Price. Following Admission the market price of the Ordinary Shares may be volatile and may go down as well as up and investors may therefore be unable to recover their original investment. The Company s operating results and prospects from time to time may be below the expectations of market analysts and investors. At the same time, stock market conditions may affect the Ordinary Shares regardless of the investment performance of the Company. Stock market conditions are affected by many factors, such as general economic outlook, movements in or outlook on interest rates and inflation rates, currency fluctuations, commodity prices, changes in investor sentiment towards particular market sectors, the demand and supply of capital and other factors. Accordingly, the market price of the Ordinary Shares may not reflect the underlying value of the Company s net assets and the price at which investors may dispose of their Ordinary Shares at any point in time may be influenced by a number of factors, only some of which may pertain to the Company while others may be outside the Company s control. Further issues of Ordinary Shares could dilute the interests of existing Shareholders Under the Articles, the Company may in the future issue additional securities, including Ordinary Shares, and pursuant to a resolution of the Company, options, rights, warrants and rights relating to its securities, for any purpose. Future issues may consist of Ordinary Shares or securities having greater rights and preferences and may be priced at a discount to the market price of the Ordinary Shares and/or below the prevailing net asset value of each Ordinary Share. The Articles require the Directors to offer any such Ordinary Shares or other securities on a pre-emptive basis, but pursuant to a resolution of the Company the Directors have the authority to issue Ordinary Shares representing 50 per cent. of the issued share capital of the Company as at the date of Admission without reference to the pre-emption rights (further details of which are set out in paragraph 3.5 of Part 3). Therefore, to this extent it may not be possible for existing Shareholders to participate in such future issues by the Company and the possibility of such future issues of Ordinary Shares, may cause the market price of the Ordinary Shares to decline. Investing company status The Company is currently considered an investing company by AIM. As a result it may benefit from certain partial carve-outs to the AIM Rules for Companies such as those in relation to the classification of Reverse Takeover. Were the Company to lose investing company status for any reason, such carve-outs would cease to apply. One consequence of losing investing company status would be that if the Company decides a further fundraising is required before purchasing a significant stake in a selected investee 13

14 company or on re-investing the proceeds in a new investee company the transactions may be considered a Reverse Takeover. Certain stake building activities might also be considered a Reverse Takeover for the purposes of the AIM Rules for Companies, which would, amongst other things, require Shareholder approval of the stake building. In certain cases this may result in the name of the selected investee company or a new investee company becoming public knowledge before the Company has acquired its desired holding in either the selected investee company or a new investee company and thus lead to an increase in the price of shares in the relevant company. Dividends There is no guarantee of a dividend on the Ordinary Shares, and the payment and growth or contraction of any such dividend will depend, amongst other things, on the availability of the financial resources return and distributable reserves of the Company. Shareholder tax Investors should take their own tax advice as to the consequences of acquiring and owning Ordinary Shares as well as receiving dividends and other distributions from the Company. In particular investors should be aware that ownership of Ordinary Shares can be treated in different ways in different jurisdictions. Trading on AIM An investment in shares traded on AIM is generally perceived to involve a higher degree of risk and to be less liquid than an investment in shares listed on the Official List of the United Kingdom Listing Authority. AIM has been in existence since June 1995 but its future success and liquidity in the market for the Company s Ordinary Shares cannot be guaranteed. Consequently, it may be more difficult for an investor to sell his or her Ordinary Shares than it would be if the Ordinary Shares were listed on the Official List of the United Kingdom Listing Authority, and he or she may receive less than the amount paid. Lack of active market On Admission, there will be a limited number of shareholders in the Company and therefore it is possible that an active trading market may not develop. Even if an active trading market develops, the market price for the Ordinary Shares may fall below the Placing Price. If an active trading market is not developed or maintained, the liquidity and trading price of the Ordinary Shares could be adversely affected. Volatility of the price of the Ordinary Shares Investors should be aware that the value of the Ordinary Shares may be volatile and may go down as well as up and investors may therefore not recover any or all of their original investment, especially as the market in the Ordinary Shares on AIM may have limited liquidity. In addition, the price at which investors may dispose of their Ordinary Shares may be influenced by a number of factors, some of which may pertain to the Company, and others of which are extraneous. These factors could include the performance of the Company s operations, large purchases or sales of Ordinary Shares, liquidity (or absence of liquidity) in the Ordinary Shares, currency fluctuations, legislative or regulatory or taxation changes and general economic conditions. The value of the Ordinary Shares will therefore fluctuate and may not reflect their underlying asset value. Investors may realise less than the original amount invested. 14

15 PART 1 INFORMATION ON THE COMPANY 1. Introduction TMT Investments plc is a new company incorporated under the laws of Jersey. The Company has been established for the purpose of identifying and acquiring, or making and disposing of investments in the TMT Sector where the Directors believe there is a potential for growth and the creation of shareholder value. The Company will primarily target companies operating in markets that the Directors believe have strong growth potential and having the potential to become multinational businesses. Although the Company can invest in any region of the world, the Directors and Consultants have expertise in emerging markets and in particular in Russia and the Commonwealth of Independent States. On Admission, TMT Investments plc will have no trading business, giving the Directors a platform to carry out a detailed examination of potential acquisition targets. The Directors current intention is to make at least three investments within the first 18 months from Admission. The actual number and the size of each investment is likely to vary dependent upon the nature of each opportunity. The Directors may use the Company s quoted equity as a currency to increase the size of its investment in target companies. In conjunction with the Admission, the Company has conditionally raised US$20 million through a Placing of 20,000,000 Placing Shares with new investors, details of which are set out in paragraph 9 of Part 1 of this document. 2. The Investment Case The Directors believe that market conditions over recent years have proven difficult for certain businesses operating in the TMT Sector and that an opportunity now exists for acquiring and/or investing in such businesses so that their growth potential can be realised for the benefit of the Shareholders. The Directors believe that recent volatility in the general economic markets and the TMT Sector has created a number of investment and acquisition opportunities and that a number of TMT businesses may be short of capital but yet have potentially highly valuable assets and operations. In addition, an increasing proportion of venture capital firms are shifting their focus to later-stage companies and follow-on investments in existing portfolio companies exacerbating the lack of capital available for early stage TMT companies. The Directors believe that they can take advantage of such opportunities and invest in companies on attractive valuation multiples. In the future, the Directors believe they can create value by sourcing further funds and experienced personnel, thereby positioning the Company to take further advantage of demand in the TMT Sector. 3. Investment Strategy and Policies The Company s objective is to generate an attractive rate of return for Shareholders, predominantly through capital appreciation, by taking advantage of opportunities to invest in the TMT Sector. The Company aims to provide equity and equity-related investment capital, such as convertible loans, to private companies which are seeking capital for growth and development, consolidation or acquisition, or as a pre-ipo financing. In addition, the Company intends to invest in publicly traded equities which have securities listed on a stock exchange or over-the-counter market. These investments may be in combination with additional debt or equity-related financing, and in appropriate circumstances in collaboration with other value added financial and/or strategic investors. The Company is not geographically restricted in terms of where it will consider making investments. It will consider any geographical area, to the extent that the investment fits within the Company s investment criteria. The Directors and Consultants have expertise in emerging markets and, in particular, in Russia and the Commonwealth of Independent States. The Company will not be subject to any borrowing or leveraging limits. 15

16 Private Companies The Company will target small and mid-sized companies and will seek to secure at least blocking stakes and board representation, where it considers that the Company and/or an investee company would benefit from such an appointment. The Company will consider making equity investments in lower than blocking stakes only where it sees ways to increase the stakes to blocking or controlling stakes at a later date. Each investment is expected to be at least US$250,000. The investments targeted by the Company will aim to support rapidly-growing private companies to increase market share and achieve long-term shareholder value. It is envisaged that if the Company invested in a private company prior to that company listing on a stock market, the Company would retain a part of its investment in the listed entity going forward. The Company intends to work closely with the management of each investee company to create value by focusing on driving growth through revenue creation, margin enhancement and extracting cost efficiencies, as well as implementing appropriate capital structures to enhance returns. Public Companies When investing in public equities, the Company will seek to select companies with a dominant market share or strong growth potential in their respective segments. No restrictions will be placed on the size of public companies in which the Company may make an investment. The Directors intend to make investments in companies or businesses with attractive valuation, growth potential, with competent and motivated management, which enjoy brand recognition, have scalable business models, have strong relationships with customers and have in place transparent accounting policies. Realisation of Returns The Directors will, when appropriate, consider how best to realise value for Shareholders whether through a trade sale, flotation or secondary refinancing of the investee companies. The proposed exit route will form a key consideration of the initial investment analysis. The Company expects to derive returns on investments principally through long-term capital gains and/or the payment of dividends by investees. The primary ways in which the Company expects to realise these returns include: (a) the sale or merger of a company; (b) the sale of securities of a company by means of public or private offerings; and (c) the disposal of public equity investments through the stock exchanges on which they are listed. For private investee companies the Company believes that its typical investment holding period should provide sufficient time for investee companies to adequately benefit from the capital and operational improvements resulting from the Company s investment. The targeted holding period shall be reviewed on a regular basis by the Company, but it is expected that this will typically be between two to four years. For public equities the Company s objective is to maximise capital appreciation. Following the acquisition, the Company will continue to conduct extensive research and monitoring of the investment. Importance will be placed on the timing of any disposal which will follow a thorough review of market conditions and those reports and sources that are available to investors. Should the Company consider that the capital appreciation of a particular public equity investment has reached its peak or is likely to or has begun to decline, then the Company will consider the sale of that investment. 4. Valuation Methodology It is intended that following acquisition of investments by the Company, its portfolio of investments will be initially recognised at cost as of the date of the investment. The portfolio will subsequently be re-measured at fair value. IAS 39 (Financial Instruments: Recognition and Measurement) requires investments to be held (for trading purposes) and financial liabilities at fair value, or at cost less provision for impairment in value where no reasonable range of fair values can be determined. Valuations will occur to coincide with the preparation by the Company of its interim half yearly report and its annual accounts. Unrealised gains and losses arising from the revaluation of investments at the Company s financial year ends (31 December) and half year period ends (30 June) will be taken directly to the income statement. 16