semi-annual review 2006 - enr · 2020. 5. 28. · 30.06.2006 investment portfolio by sector...

Semi-annual Review2006

�

The Investment company’s net assets rose

CHF 8 million over the first half of 2006. The

share price over this period appreciated a

solid 16.6%. Overall market conditions how-

ever have been volatile, particularly over the

last three months as Russian assets moved in

lock-step with other global emerging markets.

This is a confirmation to us that the market has

not been driven by the fundamental outlook for

earnings and cash flow but rather by liquidity

factors. Within the Russian market, the decline

in sentiment also indiscriminately hit energy

and non-energy, blue-chip and second-tier

shares equally. We would remind our share-

holders of the limited impact of rising global

interest rates or shifting capital flow trends on

Russian GDP growth - the country’s economic

output is re-inforced by a large dual current

account and budget surpluses along with

strong domestic demand growth.

The fundamental outlook for Russian equi-

ties remains sound. The market is trading at

less then 10x on a price to earnings ratio and

approximately 1.8 times book value with cor-

porate earnings expected to grow by double

digits over the next three years. Likewise, the

macro-economic environment is robust. Re-

cently, the Russian Central Bank announced

foreign currency reserves of $265bn (now

third largest worldwide). This was followed

by a statement from the Finance Ministry that

Russia had reached agreement to pre-pay

it’s entire Paris Club debt ($18bn). Fitch has

since upgraded the country’s credit rating. As

a backdrop to this commodity prices have re-

mained firm, with oil, nickel and copper back

to all time highs. All good news for the Russian

economy, which expanded 7.1% over the sec-

ond quarter of this year.

The listed equities portfolio remains to be fo-

cused on value based mid-capitalization secu-

rities, particularly in the telecom sector and the

electric utilities. Over the past several months,

Russia’s regional telecom operators have been

buoyed by news that President Putin at last

signed a decree paving the way for privatiza-

tion; a long awaited trigger that is sure to unlock

considerable value imbedded in these opera-

tors. Also over the last quarter tangible progress

was made in electricity sector reform, notably

the decision to allow newly created generation

companies to raise capital through new share

issues. This will not only allow these companies

to raise an estimated $15bn required to expand

generation by some 20,000 Mw, but these eq-

uity issuances will also effectively dilute state

ownership and increase the traded free float; all

catalysts for a share price re-rating.

Semi-annual Review

�

Mosmart (Sarnatus Trading Ltd.)

The first of Mosmart’s three operational shop-

ping complexes opened in June 200� on

Yaroslavkoye Shosse near Moscow’s MKAD

beltway. The next two centres, at Dmitrovskoye

Shosse, and MKAD 71, opened in September

and October 200�. Each complex is anchored

by a Mosmart hypermarket, which shelves ap-

proximatively 50’000 food and non-food items

from over 500 producers. In addtion, the Yaro-

slavskoye Shosse complexes are retail centers

which rent space to retailers, banks, restau-

rants and other services providers. The MKAD

71 store has its own small trade gallery within

the much larger Waypark retail center.

During the first half year of 2006, Mosmart

opened an additional store in Krasnodar in

a leased location. A further hypermarket,

the 82’000 sqm hypercenter in Borovskoye

Shosse, Moscow, is expected to open in the

�th quarter of the year. The �0’8000 sqm

hypercenter in Nizhny Novgorod, originally

expected to open this December, is now ex-

pected to open in the first half of 2007. The

new “Mosmart Express” format of convenient-

ly located 2’000 sqm stores allows the chain

to capitalize on its growing buying power, and

in the case of a regional city like Krasnodar,

Mosmart can make additional use of the lo-

gistics network developed to supply its large

format hypermarkets.

Batumi Oil Terminal

After a record year in 2005 with with 9.7 tonnes

of transshipment volume and revenues of USD

1�0 million, the terminal continues to perform

strongly, as the rail corridor was running at al-

most maximum capacity during the 1st half of

this year. Important settlements with the new

government have been concluded, which pro-

vides the terminal with a strengthened legal

framework and a basis for further expansion.

Based on our forecasts for the financial year

in course, we are expecting again double digit

dividend yields from this investment.

Portfolio Highlights

derivative financialinstruments 0.5%

energy21.4%

mining4.4%

oil & gas19.4%

other3.2%

real estate14.2%

steel manufacturing1.8%

retail13.7%

banking and finance services 4.6%

auto parts & equipment0.7%

communications16.1%

listed equities55.1%

private equities30.2%

real estate14.2%

derivative financial instruments0.5%

30.06.2006 Investment portfolio by sector

30.06.2006 Investment portfolio by asset class

derivative financialinstruments 0.5%

energy21.4%

mining4.4%

oil & gas19.4%

other3.2%

real estate14.2%

steel manufacturing1.8%

retail13.7%

banking and finance services 4.6%

auto parts & equipment0.7%

communications16.1%

listed equities55.1%

private equities30.2%

real estate14.2%

derivative financial instruments0.5%

5

6 Net Asset Value

Determination of the Net Asset Value as of June 30, 2006 (unaudited)

NoteThe net asset value per share (“NAV”) is calculated in Swiss Francs as the aggregate of the value of all invest-ments and treasury shares less the aggregate amount of the liabilities and accrued expenses divided by the total number of shares outstanding. The main differences between the two calculations is due to applying the IFRS standards versus the Swiss GAAP standards. The differences are particularly prominent in the calculation and booking of Treasury Shares, convertible bonds, and in reclassifying the shareholders’ equity.

30.06.2006 31.12.2005 inCHF Following IFRS Representing the Following IFRS Representing the presentation existing shareholders’ presentation existing shareholders’ economic interest economic interestAssetsTreasury stock - at market value - 21’�51’0�� - 12’18�’�� Cash, investments and other assets ��8’6��’2�� 8’6��’2�� 50’011’125 �50’011’125 Totalassets 448’634’233 470’085’276 450’011’125 462’194’558 Liabilities Derivative financial instruments - - �’�18’010 �’�18’010Convertible bonds �7’59�’��2 �9’028’655 �8’511’7�� 9’9�5’798Other liabilities 16’210’511 16’210’511 2�’88�’�1� 2�’88�’�1�Totalcurrentliabilities 63’804’943 65’239’166 76’713’066 78’147’122 Share capital 80’5�0’750 80’5�0’750 80’026’800 80’026’800 Capital paid in excess of value (share premium) �6’�66’��2 �0’297’1�0 �7’�68’272 �9’9��’�18 Equity component of convertible bonds 1’��’22� - 1’��’22� - Treasury stock - at cost (18’785’097) - (1’8�9’688) - Retained earnings 275’28�’081 28�’018’2�0 256’�08’�51 26�’087’218 Totalshareholders’equity 384’829’290 404’846’110 373’298’059 384’047’436 Totalliabilitiesandshareholders’equity 448’634’233 470’085’276 450’011’125 462’194’558

Total number of shares outstanding 1’610’515 1’600’5�6 Net Asset Value per share CHF 251.�8 CHF 2�9.95Number of treasury shares 79’068 56’068

7

Consolidated Balance Sheet as of June 30, 2006 (unaudited)

Notes 30.06.2006 31.12.2005

inCHF

AssetsCash and cash equivalents 19’09�’961 �0’012’875 Accounts receivable �2’�72’690 1’9�5’581 Derivative financial instruments � 1’892’625 - Investments at fair value through profit or loss � �85’17�’957 �18’052’669 Totalcurrentassets 448’634’233 450’011’125 Available for sale investments non-current � 1�5’�01 118’612Totalassets 293’825 279’539Liabilities Bank Overdraft 11’281’162 1’8�8’5��Derivative financial instruments � - �’�18’010 Accounts payable and accrued expenses 5 �’�70’90� 22’226’��Current taxes liabilities 558’��5 808’��5Convertible bonds 5 �7’59�’��2 �8’511’7�� Totalliabilities 63’804’943 76’713’066 Shareholders’Equity Share Capital 6 80’5�0’750 80’026’800 Capital paid in excess of par value (share premium) �6’�66’��2 �7’�68’272 Treasury stock 6 (18’785’097) (1’8�9’688)Equity component of convertible bonds 5 1’��’22� 1’��’22� Retained earnings 275’28�’081 256’�08’�51 TotalShareholders’Equity 384’829’290 373’298’059TotalLiabilitiesandShareholders’Equity 448’634’233 450’011’125

Number of shares issued and fully paid 1’610’515 1’600’5�6 Nominal CHF 50.00 CHF 50.00

Financial StatementsConsolidated Balance Sheet

8

Consolidated statement of Income for the period started January 1, to June 30, 2006 (unaudited)

Notes 30.06.2006 31.12.2005

inCHF

RevenueInterest income 680’589 8�9’092 Dividends 2’770’658 2’151’865 Realised gains on sale of investments at fair value through profit or loss � ��’179’059 �7’5�7’1�2Unrealised gains on investments at fair value through profit or loss � 20’066’0�7 -Realised gains on derivative financial instruments � 8’109’885 - Unrealised gains on derivative financial instruments � 1’892’625 - Other income 119’520 10’�57 TotalRevenue 66’818’373 50’548’556OperatingexpensesRealised losses on sale of investments at fair value through profit or loss � 6’827’750 12’055’61�Realised losses on derivative financial instruments � ��’�88’9�0 -Unrealised losses on derivative financial instruments � - -Exchange loss 889’079 16’679’�96 Management fees �’7�8’9�9 2’812’298 Performance fees - - Administrative fees 91’96� - Directors’ fees �’210 - Investment bank and professional fees 572’06� 7�7’669 Bank charges and interest expenses 57’080 27�’052 Interest and charges on convertible bonds 1’029’�70 650’092 Taxes other than on income 106’509 2�8’�07Other expenses 28’7�8 - Totaloperatingexpenses 47’843’743 33’457’428Profitbeforetax 18’974’630 17’091’128 Income taxes - - Profitfortheperiod 18’974’630 17’091’128Attributable to : EquityholdersoftheCompany 18’974’630 17’091’128Retainedearningsattheendoftheperiod Weighted average number of outstanding shares 1’5�6’260 1’261’268 Basic earnings per share CHF 12.27 CHF 1�.55Diluted earnings per share CHF 11.25 CHF 11.�7 Net income for the period 18’97�’6�0 17’091’128Retained earnings at the beginning of the year 256’�08’�51 1�6’287’�75Retainedearningsattheendoftheperiod 275’283’081 163’378’503

Financial StatementsConsolidated statement of Income

9

Consolidated Cash Flow Statement for the period ended June 30, 2006 (unaudited)

Notes 30.06.2006 31.12.2005

inCHF

CashflowfromoperatingactivitiesProfit before tax 18’97�’6�0 17’091’128 Adjustments for : Dividend income (2’770’658) (2’151’865)Interest income (680’589) (8�9’092)Bank charges and interest expenses 57’080 27�’052 Interest on convertible bonds 1’029’�70 (722’728)Fair value adjustment on investment portfolio � 11’528’201 (�2’65�’868)Operatingincomebeforeworkingcapitalchanges 28’138’134 (19’013’373) Movement in working capital :Net purchase of investments � 16’1�9’876 18’�88’209 Accounts receivable (�0’527’109) �1’�76 Accounts payable and accrued expenses (17’855’��0) (7’5�7’27�)Provision for taxes (250’000) (15’508)Dividends received 2’770’658 2’151’865 Interest received 680’589 8�9’092 Bank charges and interest expenses (57’080) (27�’052) Netcashflowsfrom/(usedin)operatingactivities (10’960’362) (5’419’665) Cashflowsfromfinancingactivities Net (purchase) / sale of treasury stock (�’166’21�) (�’9��’775)Net (purchase) / sale of options on own shares (7’072’500) - Netcashflowsfromfinancingactivities (11’238’714) (3’934’775) Net decrease in cash and cash equivalent (22’199’076) (9’�5�’��0) Cash and cash equivalents at the beginning of the year �0’012’875 �7’579’162 Cashandcashequivalentsattheendoftheperiod 7’813’799 28’224’723

Financial StatementsConsolidated Cash Flow Statement

10

Sharecapital Sharepremium Treasurystock Retaining Equitycomp. TotalEquity earnings ofconvertible bonds inCHF

Balance as at December �1, 200� 6�’20�’550 2�’727’15� (�’27�’650) 1�6’287’�75 1’859’07� 2�2’802’50�

Increase of share capital 15’82�’250 15’�58’7�2 - - - �1’181’992 Equity impact of repurchase of convertible bond - (1’801’�79) - - - (1’801’�79) Reversal of equity component convertible bond 2008 - 1’859’07� - - (1’859’07�) - Equity component convertible bond 2010 - - - - 1’��’22� 1’��’22� Purchase of treasury shares - - (�’122’07�) - - (�’122’07�)Sale of treasury shares - 162’787 5’557’0�5 - - 5’719’822Purchase of options on own shares - (5’��’226) - - - (5’��’226)Sale of options on own shares - �’�06’220 - - - �’�06’220 Netincomefortheyear - - - 110’021’076 - 110’021’076Balance as at December �1, 2005 80’026’800 �7’�68’272 (1’8�9’688) 256’�08’�51 1’��’22� �7�’298’059 Increase of share capital 50�’950 �6�’71� - - - 867’66� Purchase of treasury shares - - (5’221’808) - - (5’221’808)Purchase of options on own shares - - (11’72�’601) - - (11’72�’601)Sale of options on own shares - 8’6��’��7 - - 8’6��’��7 Netincomefortheperiod - - - 18’974’630 - 18’974’630Balance as at June �0, 2006 80’5�0’750 �6’�66’��2 (18’785’097) 275’28�’081 1’��’22� �8�’829’290

Consolidated Statement of Changes in Equity for the period ended June 30, 2006 (unaudited)

Financial StatementsConsolidated Statement of Changes in Equity

The third Mosmart at Dmitrovskoye Shosse, Moscow

11

Note 1 Incorporation and activityENR Russia Invest SA, Geneva ( Hereinafter, the “Company”) is an investment holding company incorporated as a limited company under the laws of Switzerland. The company’s registered office is 2-�, Place du Molard, Geneva, Switzerland. The company has no employees.

These condensed consolidated interim financial statements have been prepared in accordance with Interna-tional Financial Reporting Standard (IFRS) IAS ��. They do not include all of the information required for full annual statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended �1 December 2005.

Note 2 Significant accounting policiesThe accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended �1 December 2005.

Note 3 Fully consolidated companiesAt June �0, 2006, the ENR Group was composed of ENR Russia Invest SA and the following wholly-owned subsidiaries (see table below).

Financial StatementsNotes as of June �0, 2006 (unaudited)

30.06.2006* 31.12.2005*

ENR Russia Limited, Nicosia C£ 0.1 C£ 0.1ENR Holdings Ltd., Nicosia C£ �’�10.0 C£ �’�10.0ENR Investment Ltd., Nicosia C£ �’8�6.0 C£ �’8�6.0ENR Overseas Ltd., Nicosia C£ 1’8��.0 C£ 1’8��.0ENR One LLC, Moscow RUB 10.0 RUB 10.0ENR Russia Invest Finance Ltd., Grand Cayman USD 0.1 USD 0.1ENR Securities Ltd., Grand Cayman USD 0.1 USD 0.1

*in thousands

12

3.1 Earning per shareBasic earning per share is calculated by dividing the net income for the period by the weighted average number of shares outstanding during the same period.

Diluted earnings per share is calculated by dividing the net income of shares outstanding during the period, adjusted for the effect of shares resulting from conversion of the convertible bond.

30.06.2006 30.06.2005

Net Profit CHF 18’97�’6�0 17’091’12Weighted average number of outstanding shares NBR 1’5�6’260 1’261’26Basicearningspershares CHF 12.7 13.5Diluted earnings calculation per shares Convertible bonds (2005-2010) CHF 50’000’000 29’000’00

Interest expenses CHF 1’029’�70 650’09Adjusted net profit CHF 20’00�’100 17’7�1’22Number of ordinary shares resulting from conversion of bonds NBR 2�1’192 285’26Number of shares used to calculate the diluted earnings NBR 1’777’�5� 1’5�6’5�Dilutedearningspershares 11.25 11.4

Each block of CHF 5’000 is

convertible into 2�.1192�9 shares

Each block of CHF 5’000 is

convertible into �9.18�55� shares


1�

30.06.2006 31.12.2005

inCHF

Fair value of portfolio brought forward �1�’7��’669 2�0’599’000 Investment portfolio movement for the period Purchase of investments 582’�20’�78 2’�26’228’651 Sale of investments (6��’021’558) (2’276’06�’72�)Net realised gain / (loss) on disposal of investments ��’�61’19� 11’218’779 Net investment portfolio movement for the year (16’1�9’886) 61’�82’707 Net unrealised gain (11’528’201) 112’752’962 Fairvalueofportfolio 387’066’582 414’734’669

TheinvestmentportfolioisrepresentedasfollowsonthebalancesheetHeld for trading :- listed equity securities held for trading 2�8’500’�88 276’527’066 - listed debt securities - ��’�58’91� Totalheldfortrading 248’500’388 309’985’979

Designated as fair value through profit or loss : - unlisted equity securities 1�5’��5’96� 106’627’590- unlisted debt securities 1’��7’606 1’��9’100Totaldesignatedasfairvaluethroughprofitorloss 136’673’569 108’066’690Totalfinancialassetsatfairvaluethroughprofitorloss 385’173’957 418’052’669

Derivativesexchange rate forward agreements 1’892’625 (�’�18’010)Total derivatives 1’892’625 (�’�18’010)

Gains/(losses) recognised in relation to financial assets at fair value through profit or loss :- net realised gains 26’�51’�08 �1’9�8’19�- unrealised losses/gains (1�’�20’825) 116’070’972Totalgains/losses 12’930’483 158’009’166 Gains/(losses) recognised in relation to derivatives :- net realised gains/losses 8’109’885 (�0’719’�15)- unrealised gains/losses 1’892’625 (�’�18’010)Totalgains/losses 10’002’510 (34’037’425)

Note 4 Investment portfolio

1�

Amtel-vredestein - Gdr Sp. - Reg. S �60‘000 5‘12� - - - - - (2‘588) �60‘000 2‘5�6Azot - - 1‘077 (1‘�26) ��9 - - - - -Bashkirenergo-$us 2‘�75‘000 2‘050 - - - 190 - - 2‘�75‘000 2‘2�0Central Telecommunicat-pfd $ 10‘000‘000 6‘06� - - - - - (2‘265) 10‘000‘000 �‘798Chelyabenergo �0‘000‘000 1‘�2� - (2��) 66 - - (17�) �5‘000‘000 1‘072Chelyabinsk Pipe Works -$us 15‘8�7‘616 21‘51� - (29‘569) 8‘056 - - - - -Comstar-united Reg. S - Gdr Spons. - - 21‘299 (1�‘2��) 295 - (262) (1‘679) 750‘000 5‘�21Consolidated Puma Minerals Corp. 500‘000 65� - - - 1�� - - 500‘000 799Consolidated Puma Minerals Corp. Wts 26.12.2006 250‘000 - - - - 165 - - 250‘000 165Eastern Property Holdings Ltd. �12‘178 �7‘026 - (252) �5 - - (1‘8�6) �10‘�10 ��‘972European Minerals Corp. 250‘000 271 - - - - - (15) 250‘000 256Evraz Group Reg. S - Gdr Spons. 1�2‘000 �‘�69 - (2‘�61) - 88 26� - �2‘000 1‘261Gazprom Oao - - ��‘285 (26‘658) 652 227 (1‘1�6) - 500‘000 6‘�70Gazprom Oao-spon Adr Reg S 21�‘000 20‘128 17‘1�8 (�2‘�17) 5‘�7� 1‘6�0 - - 2�2‘500 11‘962International Marketing & Sales Group �00‘000 1‘�2� 126 - - - - (87) �25‘000 1‘�62Kirovnergo-pfd 2‘000‘000 �7 - - - - - (11) 2‘000‘000 �7Kolenergo �66‘6�2 12� 2�� (2�5) 50 - - - �66‘6�2 172Kolskaya Generation Company �66‘6�2 � - - - ��0 - - �66‘6�2 ��Kondopoga Pulp & Paper-$ Brd 79‘�1� �‘70� - (5‘61�) 910 - - - - -Korshunovsky Mining & Processing 1‘000 1‘0�1 - - - - - (61) 1‘000 980Kostroma Gres 8‘500‘000 2‘958 - (2‘958) - - - - - -Kubanenergo - - 6‘0�6 - 8� - - - 185‘000 6‘119Kuzbassrazrezugol Coal - - 775 (975) 200 - - - - -Lenenergo-pfd $us 750‘000 198 198 (198) - 78 - - 750‘000 276Lukoil Holding - Adr Spons. - 52‘000 �‘01� 7‘�67 (8‘790) ��9 221 (715) - 25‘000 2‘5�5Lukoil-nizhnegorodneft. Pfd - - 596 - - - - (26) 7‘500 570Mechel Steel Group Oao-adr �7‘900 1‘26� �05 (1‘�12) �02 - - (29) 19‘600 529Megabank - - 515 (�8�) - - - (�1) - -Mikhaylovsky Gok Pfd 69� 2�� - - - - - (1) 69� 2�2Mobile Telesystems - Ordinary Shares �90‘000 �‘�18 8‘558 - - - - (�‘2��) 1‘�20‘000 8‘7�2Mobile Telesystems - Adr Spons. 150‘000 6‘919 �‘�52 - - - - (2‘�55) 250‘000 9‘016Murmanskaya �66‘6�2 1� - - - - - (1) �66‘6�2 11Norilsk Nickel Jsc - Mmc 25‘000 1‘977 9‘557 (12‘0�7) 1‘�0� - (901) - - -Norilsk Nickel Jsc - Adr Spon. 25‘000 �‘1�0 2‘590 (5‘587) 27 - (161) - - -Novatek - Gdr Spons. - Reg. S - - �‘8�5 (5‘1��) 6�0 - (��1) - - -7 November Coal Mines Pfd - - 18 - - - - (8) 28 9Novolipetsk Iron & Steel - Gdr - Reg. S 200‘000 �‘769 - (1�1) �6 1‘580 - - 195‘000 5‘255Novorossiysk Sea Shipping Pfd 500‘000 61� - - - - - (106) 500‘000 507Ogk-2 - - 1‘721 - - - - (121) 25‘126‘666 1‘600Ogk-� (Third Generation Wholesale Electricity) 62‘615‘78� 2‘261 2‘958 (10‘��0) 5‘211 - - - - -Ogk-5 (Fifth Generation Wholesale Electricity) �7‘500‘000 �‘1�0 - - - 856 - - �7‘500‘000 �‘986Omskshina �1‘100 5‘�29 5� (980) 12� - - (1‘�02) 26‘�07 �‘22�Oskol Elektrometall-rts Brd$ 12‘500 �‘�60 - - - - - (1‘086) 12‘500 2‘�7�Promstroibank St Petersburg �‘050‘000 �‘�62 - - - - - (8�8) �‘050‘000 �‘62�Polyus Gold - - - - - 1‘�22 - - 25‘000 1‘�22Pyaterochka - Gdr Spons. - Reg. S �0‘000 571 - - - �5 - - �0‘000 606

SecuritiesinCHF Quantity CHF* CHF* CHF* Realised* Unrealised* Realised* Unrealised* Quantity CHF


Balance as of 1. 1. 2006 Additions Withdrawals Gains Losses Balance as of 30.6. 2006

15

Amtel-vredestein - Gdr Sp. - Reg. S �60‘000 5‘12� - - - - - (2‘588) �60‘000 2‘5�6Azot - - 1‘077 (1‘�26) ��9 - - - - -Bashkirenergo-$us 2‘�75‘000 2‘050 - - - 190 - - 2‘�75‘000 2‘2�0Central Telecommunicat-pfd $ 10‘000‘000 6‘06� - - - - - (2‘265) 10‘000‘000 �‘798Chelyabenergo �0‘000‘000 1‘�2� - (2��) 66 - - (17�) �5‘000‘000 1‘072Chelyabinsk Pipe Works -$us 15‘8�7‘616 21‘51� - (29‘569) 8‘056 - - - - -Comstar-united Reg. S - Gdr Spons. - - 21‘299 (1�‘2��) 295 - (262) (1‘679) 750‘000 5‘�21Consolidated Puma Minerals Corp. 500‘000 65� - - - 1�� - - 500‘000 799Consolidated Puma Minerals Corp. Wts 26.12.2006 250‘000 - - - - 165 - - 250‘000 165Eastern Property Holdings Ltd. �12‘178 �7‘026 - (252) �5 - - (1‘8�6) �10‘�10 ��‘972European Minerals Corp. 250‘000 271 - - - - - (15) 250‘000 256Evraz Group Reg. S - Gdr Spons. 1�2‘000 �‘�69 - (2‘�61) - 88 26� - �2‘000 1‘261Gazprom Oao - - ��‘285 (26‘658) 652 227 (1‘1�6) - 500‘000 6‘�70Gazprom Oao-spon Adr Reg S 21�‘000 20‘128 17‘1�8 (�2‘�17) 5‘�7� 1‘6�0 - - 2�2‘500 11‘962International Marketing & Sales Group �00‘000 1‘�2� 126 - - - - (87) �25‘000 1‘�62Kirovnergo-pfd 2‘000‘000 �7 - - - - - (11) 2‘000‘000 �7Kolenergo �66‘6�2 12� 2�� (2�5) 50 - - - �66‘6�2 172Kolskaya Generation Company �66‘6�2 � - - - ��0 - - �66‘6�2 ��Kondopoga Pulp & Paper-$ Brd 79‘�1� �‘70� - (5‘61�) 910 - - - - -Korshunovsky Mining & Processing 1‘000 1‘0�1 - - - - - (61) 1‘000 980Kostroma Gres 8‘500‘000 2‘958 - (2‘958) - - - - - -Kubanenergo - - 6‘0�6 - 8� - - - 185‘000 6‘119Kuzbassrazrezugol Coal - - 775 (975) 200 - - - - -Lenenergo-pfd $us 750‘000 198 198 (198) - 78 - - 750‘000 276Lukoil Holding - Adr Spons. - 52‘000 �‘01� 7‘�67 (8‘790) ��9 221 (715) - 25‘000 2‘5�5Lukoil-nizhnegorodneft. Pfd - - 596 - - - - (26) 7‘500 570Mechel Steel Group Oao-adr �7‘900 1‘26� �05 (1‘�12) �02 - - (29) 19‘600 529Megabank - - 515 (�8�) - - - (�1) - -Mikhaylovsky Gok Pfd 69� 2�� - - - - - (1) 69� 2�2Mobile Telesystems - Ordinary Shares �90‘000 �‘�18 8‘558 - - - - (�‘2��) 1‘�20‘000 8‘7�2Mobile Telesystems - Adr Spons. 150‘000 6‘919 �‘�52 - - - - (2‘�55) 250‘000 9‘016Murmanskaya �66‘6�2 1� - - - - - (1) �66‘6�2 11Norilsk Nickel Jsc - Mmc 25‘000 1‘977 9‘557 (12‘0�7) 1‘�0� - (901) - - -Norilsk Nickel Jsc - Adr Spon. 25‘000 �‘1�0 2‘590 (5‘587) 27 - (161) - - -Novatek - Gdr Spons. - Reg. S - - �‘8�5 (5‘1��) 6�0 - (��1) - - -7 November Coal Mines Pfd - - 18 - - - - (8) 28 9Novolipetsk Iron & Steel - Gdr - Reg. S 200‘000 �‘769 - (1�1) �6 1‘580 - - 195‘000 5‘255Novorossiysk Sea Shipping Pfd 500‘000 61� - - - - - (106) 500‘000 507Ogk-2 - - 1‘721 - - - - (121) 25‘126‘666 1‘600Ogk-� (Third Generation Wholesale Electricity) 62‘615‘78� 2‘261 2‘958 (10‘��0) 5‘211 - - - - -Ogk-5 (Fifth Generation Wholesale Electricity) �7‘500‘000 �‘1�0 - - - 856 - - �7‘500‘000 �‘986Omskshina �1‘100 5‘�29 5� (980) 12� - - (1‘�02) 26‘�07 �‘22�Oskol Elektrometall-rts Brd$ 12‘500 �‘�60 - - - - - (1‘086) 12‘500 2‘�7�Promstroibank St Petersburg �‘050‘000 �‘�62 - - - - - (8�8) �‘050‘000 �‘62�Polyus Gold - - - - - 1‘�22 - - 25‘000 1‘�22Pyaterochka - Gdr Spons. - Reg. S �0‘000 571 - - - �5 - - �0‘000 606


*in thousands


16 Financial StatementsNotes as of June �0, 2006 (unaudited)

Razrez Borodinsky 150 19� - (296) 102 - - - - -Rosneft-sakhalinmorneft-$pfd 1�5‘000 1‘779 - - - 701 - - 1�5‘000 2‘�81Rostelecom-pfd 1‘200‘000 2‘689 - (2‘72�) - �� - - - -Rostov Power Generation Company Pfd - - 1‘�22 (1‘�22) - - - - - -Sakhalinenergo 2‘200‘000 1�8 - - - 81 - - 2‘200‘000 229Samaraenergo-us $ 9‘050‘000 1‘670 - - - 880 - - 9‘050‘000 2‘550Samaraenergo-pfd $us �‘200‘000 �98 - - - �26 - - �‘200‘000 82�Saratov Power - - 17‘772 (1‘981) 2�1 90� - - 2�0‘�15‘629 16‘9�6Sberbank �52‘000 9‘858 �‘251 (7‘270) �57 682 - - 260‘500 7‘978Sibir Energy Plc ��0‘000 �‘55� - (1‘�7�) �08 808 - - �01‘000 �‘296Sibirtelecom-$us 9‘000‘000 872 - (600) 91 - - (76) �‘750‘000 287Sibirtelecom-$us Pfd 2�6‘050‘000 19‘781 - - - - - (�‘806) 2�6‘050‘000 15‘975Sinarsky Tube Works-$us 156‘6�1 1�‘079 - (15‘�07) 1‘�29 - - - - -Sistema Afk Reg. S - Gdr Spons. 168‘019 5‘20� - (�‘1�8) 51 - - (�61) 68‘019 1‘6�6Surgutneftegaz-pfd $us 7‘275‘000 8‘52� - (10‘661) 2‘1�7 - - - - -Surgutneftegaz-sp Adr Pref 62‘000 7‘�95 2‘659 - - 796 - - 82‘000 10‘851Sverdlovenergo $us �60‘000 152 - - - 1�6 - - �60‘000 287Sverdlovenergo-pfd $us 500‘000 1�2 1�2 (1�2) - 67 - - 500‘000 199Siloviye Mashiny - - 1‘209 - - 129 - - 12‘000‘000 1‘��8Third Generation Wholesale Electricity - - 7‘971 (8‘�20) ��9 - - - - -Tnk-bp Holding 92�‘�05 �‘��2 - (2‘��) - - (988) - - -Tnk-bp Holding Pfd 1‘9�5‘�50 6‘179 - - - - - (221) 1‘9�5‘�50 5‘958Tulenergo �‘000‘000 17� - (280) 107 - - - - -Udmurtenergo Ojsc 2‘892‘�12 1‘258 799 - - - - (2�0) 2‘892‘�12 1‘828Ufaneftekhim Pfd 750‘000 1‘512 - - - �25 - - 750‘000 1‘8�8Ufa Oil Processing Plant Pfd �00‘000 �8� - - - �7 - - �00‘000 ��0Unified Energy System - - 15‘081 (1‘�15) - 1‘5�7 (70) - 17‘800‘000 15‘1��Unified Energy System Pfd 10‘000‘000 �‘718 - - 2‘26� - - - 10‘000‘000 6‘98�Unified Energy Sys-adr Pfd 50‘000 2‘�99 - - - 1‘0�1 - - 50‘000 �‘��0Unified Energy Sys-gdr 60‘000 �‘�61 11‘086 (1�‘566) 175 557 (61�) - - -Urasia Energy Ltd. 2‘620‘000 6‘�85 - (2‘�00) 69� 1‘200 - - 1‘920‘000 5‘879Uralsvyazinform $us 19‘1�6‘098 91� - (96�) 51 - - - - -Uralsvyazinform Pfd $us 2�5‘100‘000 8‘986 1‘922 - - - - (1‘758) 285‘100‘000 9‘150Uralsvyazinform Pfd - Adr - $us 165‘000 1‘17� - - - - - (8�) 165‘000 1‘092Vimpelcom-sp Adr 1‘000 60 - (58) - - (1) - - -Volgatelecom - - 2‘689 - - - - (91) 700‘000 2‘598Volgatelecom-pfd $ 1‘�20‘000 6‘�9� - - - - - (1‘780) 1‘�20‘000 �‘71�Voronezhsintezkautchuk - - �17 - - - - (1��) 7�0 27�Zakhidenergo - - �6 - - - - (2) 1‘000 ��Sub-totalListedShares 276‘543 191‘056 (237‘602) 32‘815 17‘127 (4‘924) (26‘516) 248‘500



17

Razrez Borodinsky 150 19� - (296) 102 - - - - -Rosneft-sakhalinmorneft-$pfd 1�5‘000 1‘779 - - - 701 - - 1�5‘000 2‘�81Rostelecom-pfd 1‘200‘000 2‘689 - (2‘72�) - �� - - - -Rostov Power Generation Company Pfd - - 1‘�22 (1‘�22) - - - - - -Sakhalinenergo 2‘200‘000 1�8 - - - 81 - - 2‘200‘000 229Samaraenergo-us $ 9‘050‘000 1‘670 - - - 880 - - 9‘050‘000 2‘550Samaraenergo-pfd $us �‘200‘000 �98 - - - �26 - - �‘200‘000 82�Saratov Power - - 17‘772 (1‘981) 2�1 90� - - 2�0‘�15‘629 16‘9�6Sberbank �52‘000 9‘858 �‘251 (7‘270) �57 682 - - 260‘500 7‘978Sibir Energy Plc ��0‘000 �‘55� - (1‘�7�) �08 808 - - �01‘000 �‘296Sibirtelecom-$us 9‘000‘000 872 - (600) 91 - - (76) �‘750‘000 287Sibirtelecom-$us Pfd 2�6‘050‘000 19‘781 - - - - - (�‘806) 2�6‘050‘000 15‘975Sinarsky Tube Works-$us 156‘6�1 1�‘079 - (15‘�07) 1‘�29 - - - - -Sistema Afk Reg. S - Gdr Spons. 168‘019 5‘20� - (�‘1�8) 51 - - (�61) 68‘019 1‘6�6Surgutneftegaz-pfd $us 7‘275‘000 8‘52� - (10‘661) 2‘1�7 - - - - -Surgutneftegaz-sp Adr Pref 62‘000 7‘�95 2‘659 - - 796 - - 82‘000 10‘851Sverdlovenergo $us �60‘000 152 - - - 1�6 - - �60‘000 287Sverdlovenergo-pfd $us 500‘000 1�2 1�2 (1�2) - 67 - - 500‘000 199Siloviye Mashiny - - 1‘209 - - 129 - - 12‘000‘000 1‘��8Third Generation Wholesale Electricity - - 7‘971 (8‘�20) ��9 - - - - -Tnk-bp Holding 92�‘�05 �‘��2 - (2‘��) - - (988) - - -Tnk-bp Holding Pfd 1‘9�5‘�50 6‘179 - - - - - (221) 1‘9�5‘�50 5‘958Tulenergo �‘000‘000 17� - (280) 107 - - - - -Udmurtenergo Ojsc 2‘892‘�12 1‘258 799 - - - - (2�0) 2‘892‘�12 1‘828Ufaneftekhim Pfd 750‘000 1‘512 - - - �25 - - 750‘000 1‘8�8Ufa Oil Processing Plant Pfd �00‘000 �8� - - - �7 - - �00‘000 ��0Unified Energy System - - 15‘081 (1‘�15) - 1‘5�7 (70) - 17‘800‘000 15‘1��Unified Energy System Pfd 10‘000‘000 �‘718 - - 2‘26� - - - 10‘000‘000 6‘98�Unified Energy Sys-adr Pfd 50‘000 2‘�99 - - - 1‘0�1 - - 50‘000 �‘��0Unified Energy Sys-gdr 60‘000 �‘�61 11‘086 (1�‘566) 175 557 (61�) - - -Urasia Energy Ltd. 2‘620‘000 6‘�85 - (2‘�00) 69� 1‘200 - - 1‘920‘000 5‘879Uralsvyazinform $us 19‘1�6‘098 91� - (96�) 51 - - - - -Uralsvyazinform Pfd $us 2�5‘100‘000 8‘986 1‘922 - - - - (1‘758) 285‘100‘000 9‘150Uralsvyazinform Pfd - Adr - $us 165‘000 1‘17� - - - - - (8�) 165‘000 1‘092Vimpelcom-sp Adr 1‘000 60 - (58) - - (1) - - -Volgatelecom - - 2‘689 - - - - (91) 700‘000 2‘598Volgatelecom-pfd $ 1‘�20‘000 6‘�9� - - - - - (1‘780) 1‘�20‘000 �‘71�Voronezhsintezkautchuk - - �17 - - - - (1��) 7�0 27�Zakhidenergo - - �6 - - - - (2) 1‘000 ��Sub-totalListedShares 276‘543 191‘056 (237‘602) 32‘815 17‘127 (4‘924) (26‘516) 248‘500


*in thousands


18

Atf Bank - Atfbp 9 05/11/16 - - 7‘250 (7‘2�2) - - (8) - - -Azovstal Capital Bv For Pjsc Azovstal Iron - Azovtl 9 1/8 02/11 - - 9‘18� (9‘189) 19 - (12) - - -Bta Finance Luxembourg Sa - Btas 8 1/� 01/29/�9 - - 5‘669 (5‘720) 51 - - - - -Centercredit International Bv - Bccrd 8 02/02/11 - - 5‘099 (5‘19�) 95 - - - - -Evraz Group S.a. - Evraz 8 1/� 11/15 8‘000‘000 10‘�81 - (10‘��5) - - (1�6) - - -Ing Bank Nv - Intned 0 0�/06/07 5�‘000‘000 1‘�20 - (1‘�20) - - - - - -Ing Bank Nv For Oao Coal Co Kuzbassrazrezugol - Cckru 9 07/1�/07 �‘000‘000 5‘�58 5‘199 (10‘156) - - (�02) - - -Ing Bank Nv For Open Investments Oao - Oivs 9 1/8 11/09/07 1‘000‘000 1‘��6 - (1‘�0�) - - (��) - - -Megafon Sa For Ojsc Megafon - Megafo 8 12/10/09 5‘000‘000 6‘69� - (6‘650) 19 - (62) - - -Russian Standard Finance Sa For Cjsc Rusb 8 1/8 0�/21/08 1‘500‘000 1’996 - (1’980) - - - (15) - -Sistema Capital Sa - Sisfin 8 7/8 01/11 2‘000‘000 2‘770 - (2‘77�) 5 - - - - -Sistema Finance Sa - Sisfin 10 1/� 0�/08 2‘500‘000 �‘506 2‘767 (5‘992) - - (281) - - -Ukrchem Capital Bv - Stiruz 7 7/8 08/08 - - 2‘526 (2‘55�) 28 - - - - -Vtb Capital Sa For Vneshtorgbank - Vtb 0 09/21/07 - - 1�‘178 (12‘208) - - (970) - - -Sub-total Fixed Income Instruments ��‘�59 50‘872 (82‘628) 217 0 (1‘90�) (15) -TotalInvestmentsAtFairValueTroughProfitOrLoss-Trading 310‘002 241‘928 (320‘230) 33‘033 17‘127 (6‘828) (26‘531) 248‘500 Apatitskaya �66‘6�2 1� - - - - - (1) �66‘6�2 12Bam Resources Plc -reg- 200‘000 - - - - - - - 200‘000 -Chelyabinsk Energy Generation Company 65‘000‘000 2‘227 - (885) 29 5�0 - - �0‘000‘000 1‘911Chelyabinsk Management Energy Company 65‘000‘000 86 - - - - - (6) 65‘000‘000 80Chelyabinsk Trunk Grids Company �0‘000‘000 26 - - - - - (2) �0‘000‘000 25Ibs Group Hold. Reg. S - Gdr Spons. - 250‘000 5‘980 - - - - - (�22) 250‘000 5‘558Kolsk Energy Retail Co. - - 1 - - - - (0) �66‘6�2 1Kolsk Trunk Grids - - - - - 16 - - �66‘6�2 16Kirovenergo Management Company Pfd 2‘000‘000 - - - - - - - - -Mcsi Holding - 0 % Mcsi Holding 0�/07 1‘091‘92� 1‘��9 - - - - - (102) 1‘091‘92� 1‘��8Mct Special Opportunities Fund - - 6‘�77 - - - - (�51) 5‘000 6‘126Naftrans Ltd, Limassol, Cyprus 8‘000‘000 12‘1�2 28‘2�8 - - 1‘680 - - �0‘000‘000 �2‘060North Western Energy Management Pfd 750‘000 - - - - - - - 750‘000 -Panariello Enterprises Ltd. �‘0�9 21‘29� - (99�) - - - (�88) �‘0�9 19‘811Petersburg Energy Retail Company Pfd 750‘000 - - - - - - - 750‘000 -Petersburg Generation Company Pfd 750‘000 - - - - 18� - - 750‘000 18�Petersburg Trunk Grid Pfd - - - - - - - - 750‘000 -Polyus Gold - Adr - Technical Right - - 5�0 - - - - (�8) 25‘000 502Prioskaya Territorialnaya Generation Company �‘000‘000 185 - - - 501 - - �‘000‘000 686Pskovskaya Gres 12‘000‘000 1‘708 - (1‘708) - - - - - -Redberry Resources Limited 50 �‘�27 - - - - - (2�2) 50 �‘185Sarnatus Trading Limited Company 1 56‘9�5 - - - - - (�‘015) 1 52‘920Serovskaya Tpp Pfd 500‘000 1� - (1�) - - - - - -Sverdlovsk Energy Management Company �60‘000 1 - - - - - (0) �60‘000 1Sverdlovsk Energy Management Company Pfd 500‘000 1 - - - - - (0) 500‘000 1Sverdlovsk Energy Service Company �60‘000 � - - - - - (0) �60‘000 �Sverdlovsk Energy Service Company Pfd 500‘000 28 - - - - - (2) 500‘000 26Sverdlovsk Energy Retail �60‘000 152 - - - 6 - - �60‘000 158




19

Atf Bank - Atfbp 9 05/11/16 - - 7‘250 (7‘2�2) - - (8) - - -Azovstal Capital Bv For Pjsc Azovstal Iron - Azovtl 9 1/8 02/11 - - 9‘18� (9‘189) 19 - (12) - - -Bta Finance Luxembourg Sa - Btas 8 1/� 01/29/�9 - - 5‘669 (5‘720) 51 - - - - -Centercredit International Bv - Bccrd 8 02/02/11 - - 5‘099 (5‘19�) 95 - - - - -Evraz Group S.a. - Evraz 8 1/� 11/15 8‘000‘000 10‘�81 - (10‘��5) - - (1�6) - - -Ing Bank Nv - Intned 0 0�/06/07 5�‘000‘000 1‘�20 - (1‘�20) - - - - - -Ing Bank Nv For Oao Coal Co Kuzbassrazrezugol - Cckru 9 07/1�/07 �‘000‘000 5‘�58 5‘199 (10‘156) - - (�02) - - -Ing Bank Nv For Open Investments Oao - Oivs 9 1/8 11/09/07 1‘000‘000 1‘��6 - (1‘�0�) - - (��) - - -Megafon Sa For Ojsc Megafon - Megafo 8 12/10/09 5‘000‘000 6‘69� - (6‘650) 19 - (62) - - -Russian Standard Finance Sa For Cjsc Rusb 8 1/8 0�/21/08 1‘500‘000 1’996 - (1’980) - - - (15) - -Sistema Capital Sa - Sisfin 8 7/8 01/11 2‘000‘000 2‘770 - (2‘77�) 5 - - - - -Sistema Finance Sa - Sisfin 10 1/� 0�/08 2‘500‘000 �‘506 2‘767 (5‘992) - - (281) - - -Ukrchem Capital Bv - Stiruz 7 7/8 08/08 - - 2‘526 (2‘55�) 28 - - - - -Vtb Capital Sa For Vneshtorgbank - Vtb 0 09/21/07 - - 1�‘178 (12‘208) - - (970) - - -Sub-total Fixed Income Instruments ��‘�59 50‘872 (82‘628) 217 0 (1‘90�) (15) -TotalInvestmentsAtFairValueTroughProfitOrLoss-Trading 310‘002 241‘928 (320‘230) 33‘033 17‘127 (6‘828) (26‘531) 248‘500 Apatitskaya �66‘6�2 1� - - - - - (1) �66‘6�2 12Bam Resources Plc -reg- 200‘000 - - - - - - - 200‘000 -Chelyabinsk Energy Generation Company 65‘000‘000 2‘227 - (885) 29 5�0 - - �0‘000‘000 1‘911Chelyabinsk Management Energy Company 65‘000‘000 86 - - - - - (6) 65‘000‘000 80Chelyabinsk Trunk Grids Company �0‘000‘000 26 - - - - - (2) �0‘000‘000 25Ibs Group Hold. Reg. S - Gdr Spons. - 250‘000 5‘980 - - - - - (�22) 250‘000 5‘558Kolsk Energy Retail Co. - - 1 - - - - (0) �66‘6�2 1Kolsk Trunk Grids - - - - - 16 - - �66‘6�2 16Kirovenergo Management Company Pfd 2‘000‘000 - - - - - - - - -Mcsi Holding - 0 % Mcsi Holding 0�/07 1‘091‘92� 1‘��9 - - - - - (102) 1‘091‘92� 1‘��8Mct Special Opportunities Fund - - 6‘�77 - - - - (�51) 5‘000 6‘126Naftrans Ltd, Limassol, Cyprus 8‘000‘000 12‘1�2 28‘2�8 - - 1‘680 - - �0‘000‘000 �2‘060North Western Energy Management Pfd 750‘000 - - - - - - - 750‘000 -Panariello Enterprises Ltd. �‘0�9 21‘29� - (99�) - - - (�88) �‘0�9 19‘811Petersburg Energy Retail Company Pfd 750‘000 - - - - - - - 750‘000 -Petersburg Generation Company Pfd 750‘000 - - - - 18� - - 750‘000 18�Petersburg Trunk Grid Pfd - - - - - - - - 750‘000 -Polyus Gold - Adr - Technical Right - - 5�0 - - - - (�8) 25‘000 502Prioskaya Territorialnaya Generation Company �‘000‘000 185 - - - 501 - - �‘000‘000 686Pskovskaya Gres 12‘000‘000 1‘708 - (1‘708) - - - - - -Redberry Resources Limited 50 �‘�27 - - - - - (2�2) 50 �‘185Sarnatus Trading Limited Company 1 56‘9�5 - - - - - (�‘015) 1 52‘920Serovskaya Tpp Pfd 500‘000 1� - (1�) - - - - - -Sverdlovsk Energy Management Company �60‘000 1 - - - - - (0) �60‘000 1Sverdlovsk Energy Management Company Pfd 500‘000 1 - - - - - (0) 500‘000 1Sverdlovsk Energy Service Company �60‘000 � - - - - - (0) �60‘000 �Sverdlovsk Energy Service Company Pfd 500‘000 28 - - - - - (2) 500‘000 26Sverdlovsk Energy Retail �60‘000 152 - - - 6 - - �60‘000 158


*in thousands


20

Sverdlovsk Energy Retail Pfd 500‘000 5 - - - - - (0) 500‘000 �Sverdlovsk Generation Company Pfd 500‘000 12� - (12�) - - - - - -Sverdlovsk Trunk Grid Pfd - - - - - - - - 500‘000 -Sverdlovskie Magistralnye Seti �60‘000 �9 - - - - - (�) �60‘000 �5Tgc-5 - - 105 - - - - (�) 2��‘��5‘001 10�Tgc-8 - - 1‘�22 - - - - (96) �‘575‘�27‘000 1‘226Tgc-9 - - 12� - - - - (10) 1‘�20‘000‘000 11�Tula Trunk Grid Company Ord. - - - - - - - - �‘000‘000 -Tulskaya Power Manager Company �‘000‘000 5 - (5) - - - (0) - -Tulskaya Sales Company �‘000‘000 8 - - - 12 - - �‘000‘000 20Trans-siberian Gold 200‘000 ��0 - (��8) 118 - - - - -Udmurt Energy Distribution 2‘�92‘�12 1‘261 - - - - - (1‘1�1) 2‘�92‘�12 120Udmurt Management Energy Company 2‘�92‘�12 �2 - (�2) - - - (0) - -Udmurtia Trunk Grids 2‘�92‘�12 �7� - - - - - (��) 2‘�92‘�12 ��0Vyatskaya Electricity & Heat Pfd 2‘000‘000 105 - (105) - - - - - -Total Unlisted Investments Designated At FairValueThroughProfitOrLoss 108‘051 36‘808 (4‘315) 147 2‘939 0 (6‘956) 136‘674

Forward Foreign Exchange Contracts - (�‘�18) �0�‘685 (�08‘�77) 8‘110 1‘89� - - - 1‘89�Sub-total Derivative Financial Instruments (�‘�18) �0�‘685 (�08‘�77) 8‘110 1‘89� 0 0 1‘89� Total Investments �1�‘7�5 582‘�21 (6��‘022) �1‘289 21‘959 (6‘828) (��‘�87) �87‘067 Derivatives On Currency Currency Sold Currency Bought Contract Forward Rate Forward Rate �0.06.2006 Fair Value �0.06.2006Forward Foreign Exchange Contracts - Expiry Date 15.09.2006 2�5‘000 Usd 299‘�86 Chf 1.222 1.21� 1‘89�Total 1‘89�




21

Sverdlovsk Energy Retail Pfd 500‘000 5 - - - - - (0) 500‘000 �Sverdlovsk Generation Company Pfd 500‘000 12� - (12�) - - - - - -Sverdlovsk Trunk Grid Pfd - - - - - - - - 500‘000 -Sverdlovskie Magistralnye Seti �60‘000 �9 - - - - - (�) �60‘000 �5Tgc-5 - - 105 - - - - (�) 2��‘��5‘001 10�Tgc-8 - - 1‘�22 - - - - (96) �‘575‘�27‘000 1‘226Tgc-9 - - 12� - - - - (10) 1‘�20‘000‘000 11�Tula Trunk Grid Company Ord. - - - - - - - - �‘000‘000 -Tulskaya Power Manager Company �‘000‘000 5 - (5) - - - (0) - -Tulskaya Sales Company �‘000‘000 8 - - - 12 - - �‘000‘000 20Trans-siberian Gold 200‘000 ��0 - (��8) 118 - - - - -Udmurt Energy Distribution 2‘�92‘�12 1‘261 - - - - - (1‘1�1) 2‘�92‘�12 120Udmurt Management Energy Company 2‘�92‘�12 �2 - (�2) - - - (0) - -Udmurtia Trunk Grids 2‘�92‘�12 �7� - - - - - (��) 2‘�92‘�12 ��0Vyatskaya Electricity & Heat Pfd 2‘000‘000 105 - (105) - - - - - -Total Unlisted Investments Designated At FairValueThroughProfitOrLoss 108‘051 36‘808 (4‘315) 147 2‘939 0 (6‘956) 136‘674

Forward Foreign Exchange Contracts - (�‘�18) �0�‘685 (�08‘�77) 8‘110 1‘89� - - - 1‘89�Sub-total Derivative Financial Instruments (�‘�18) �0�‘685 (�08‘�77) 8‘110 1‘89� 0 0 1‘89� Total Investments �1�‘7�5 582‘�21 (6��‘022) �1‘289 21‘959 (6‘828) (��‘�87) �87‘067 Derivatives On Currency Currency Sold Currency Bought Contract Forward Rate Forward Rate �0.06.2006 Fair Value �0.06.2006Forward Foreign Exchange Contracts - Expiry Date 15.09.2006 2�5‘000 Usd 299‘�86 Chf 1.222 1.21� 1‘89�Total 1‘89�


*in thousands


22

Note 5 Liabilities

5.1AccountsPayableandaccruedexpenses

inCHF 30.06.2006 31.12.2005Pending Securities settlements - �’608’275Accrued management and performance fees 2’�82’01� 16’602’�81Interest accrued on �.75% CV Bond maturing 2010 1’1�0’208 197’917Others creditors 858’682 817’761Balance as of December �1 �’�70’90� 22’226’��

5.2Convertiblebonds

Convertiblebondshaschangedasfollows:Balance as at �1.12.2005 �8’511’7��Convertions during the 1st semester 2006 (1’025’000)Amortisation of transaction cost 107’689Balance as at �0.06.2006 �7’59�’��2

On November 2�, 2005, ENR Russia Invest Finance Ltd. issued, at par value, � �/�% convertible bonds for CHF 50’000’000, which mature on November 2�, 2010. Each bond of CHF 5’000 nominal is convertible into 2�.11 bearer shares of ENR Russia Invest SA of CHF 50 nominal each. In the consolidated financial state-ments, the loan is divided into a liability and an equity component. The fair value of the liability component is calculated using a discount rate of �.2�%, as if the bonds have no embedded conversion rights and the market rate of interest applied.

The convertible bond includes a call option which allows the group to call for the redemption of the bond at 100% in case the closing price of the shares for a period of 20 consecutive Business days is at least 1�0 per cent of the then applicable conversion price, with a period of 60 days prior notice. The value of the option call has been estimated to CHF �05’000 and has been deducted from the liability component.

As at June �0, 2006 the detail of the liability and equity components were the following:

3.75%convertiblebonds2005-2010Present value of the principal (CHF 50.0 million payable at 2�.11.2010) �0’6��’92�Value of interest (CHF 1.87 million payable annually in arrears until 2�.11.2010) 8’29�’507Value of call option (�05’000)Allocation of transaction cost (9�8’999)Total Liability component �7’59�’��2Equity component 1’��’22�Proceeds of bonds Issue �9’028’656

The outstanding nominal value of the bonds (excluding treasury bonds) is protected with cash and liquid se-curities during the whole life of the bonds. The Group has issued an unconditional and irrevocable guarantee in accordance with the article 111 of the Swiss Federal Code of Obligations up to a maximum amount of CHF 59’�75’000 in favour of OZ Bankers AG on behalf of the bondholders for the due payment of all amounts payable on the bonds.


2�2�

Note 6 Share capital

At June �0, 2006, the issued ordinary share capital of the Company was CHF 80.5 million, divided into 1’610’615 bearer shares of par value CHF 50 each and one voting right per share. There are no restrictions on share transfer.

IssuedCapital 30.06.2006 31.12.2006 NBR CHF NBR CHFOpening Balance 1’600’5�6 80’026’800 1’28�’071 6�’20�’550 Capital Increase 10’079 50�’950 �16’�65 15’82�’250Closing Balance 1’610’615 80’5�0’750 1’600’5�6 80’026’800 All issued shares are fully paid in.

Treasuryshares in NBR 30.06.2006 31.12.2005Opening Balance 56’068 56’055 Purchase �1’250 �0’59� Sales (8’250) (�0’580) Closing Balance 79’068 56’068

1stsemester2006Date Purchase Sale UnitPriceCHFApril 2�’000 228.19 May 8’250 228.19 May 7’500 227.19 May 750 202.67 Total �1’250 8’250

During the period the company acquired and sold put and call options on own shares. As of June �0, 2006 the company held an option to buy 25’000 own shares at the price of CHF 100 expiring on September 15, 2006 2006 and an option to buy �5’000 own shares at the price of CHF 100 expiring on December 15, 2006. The premium paid amounts to CHF 7’072’500.00

6.1 Authorised capital and conditional capital

The Company may increase its capital by up to CHF 18’87�’050 through the issue of a maximum of �77’�60 bearer shares each with a par value of CHF 50.

ConditionalCapital 31.12.2006 30.06.2006 NBR CHF NBR CHFConditional Capital �77’�60 18’87�’000 662’700 ��’1�5’000 Authorised increase of capital �77’�60 18’87�’000 662’700 ��’1�5’000

Furthermore, the Company may increase its share capital by the exercise of option or conversion rights by up to a maximum amount for CHF 18’87�’050 through the issue of a maximum �77’�60 bearer shares each with a par value of CHF 50. The options and conversion rights are limited to a maximum exercise period of 5 years.

Note 7 Segment reporting

Since ENR only has one sector of business activity and one geographical sector, the breakdown by segment does not apply.

2� Financial StatementsPrice Information

Date NetAssets NAVpershare Sharepricein CHF in thousands adjusted

�1.12.1995 �5’958 75.�1 88.69�0.6.1996 70’260 115.1� 118.55�1.12.1996 69’202 11�.�9 109.6��0.6.1997 1) 162’998 217.�� 15�.00�1.12.1997 1�9’752 199.67 155.00�0.6.1998 65’00� 86.67 91.00�1.12.1998 N/A N/A 25.85�0.6.1999 N/A N/A 2�.20�1.12.1999 N/A N/A 25.85�0.6.2000 �0’261 �0.�5 ��.00�1.12.2000 �2’296 ��.06 �8.50�0.6.2001 52’710 70.28 �8.10�1.12.2001 5�’2�� 72.�2 �9.00�0.6.2002 2) 121’621 10�.1� 86.00�1.12.2002 116’�� 99.69 80.00�1.�.200� 116’89� 100.08 79.50�0.6.200� 1�5’��0 12�.52 95.50�0.9.200� 16�’087 1�9.6� 102.75�1.12.200� 179’52� 15�.70 11�.50�1.�.200� 219’28� 187.7� 1�0.50�0.6.200� �) 208’1�� 177.�� 1�7.50�0.9.200� �) 225’85� 177.65 1�5.00�1.12.200� 5) 2�9’�91 186.51 1�6.00�1.�.2005 250’862 195.�6 151.00�0.6.2005 6) 261’6�� 197.�0 1�9.00�0.09.2005 7) ��7’��6 2��.98 17�.00�1.12.2005 8) �8�’1�� 2�1.�2 181.00�1.0�.2006 9) �98’298 278.�� 216.00�0.06.2006 �0�’8�6 251.�8 211.00

N°ParValueCapitalincrease Conversionfactor Date NBRofshares

1 CHF 50 Subscription price CHF 120.00 n/a June �0, 1997 250’0002 CHF 50 Subscription price CHF 95.80 n/a April 26, 2002 �18’000 3 CHF 50 Conversion of the convertible bonds CHF 5’000.00 for �9.18 shares May 5, 200� 2’016 4 CHF 50 Conversion of the convertible bonds CHF 5’000.00 for �9.18 shares �rd quarter 200� 101’268 5 CHF 50 Conversion of the convertible bonds CHF 5’000.00 for �9.18 shares November �, 200� 12’787 6 CHF 50 Conversion of the convertible bonds CHF 5’000.00 for �9.18 shares 2nd quarter 2005 �1’�1� 7 CHF 50 Conversion of the convertible bonds CHF 5’000.00 for �9.18 shares �rd quarter 2005 57’295 8 CHF 50 Conversion of the convertible bonds CHF 5’000.00 for �9.18 shares �th quarter 2005 217’857 9 CHF 50 Conversion of the convertible bonds CHF 5’000.00 for �9.18 shares January 2006 10’079

25

Summary

Organisation Board of Directors Christoph Löw Chairman Gustav Stenbolt Vice-Chairman Peter Rüegg Member Walter Fetscherin Member Investment Committee Gustav Stenbolt Timothy Rogers Volker Hemprich Christine Spyrou-Catras Georg von Opel Alexander Nikolaev Medina Dietz Investment Manager MCT International Limited, B.V.I. Portfolio Management Committee Alexander Nikolaev Christine Spyrou-Catras Medina Dietz Custodian Pictet & Cie, Geneva ING Bank Eurasia A/O, Moscow Administrator Rhône-Audit Société Fiduciaire S.A., Geneva Auditors PricewaterhouseCoopers, Geneva Management Fees 2% per annum of the average Net Asset Value Performance Fee 15% of the amount if the Net Asset Value increase exceeds an annual return of 10% and 20% of the amount if the Net Asset Value increase exceeds an annual return of 20%

Publication List NAV Publication Finanz & Wirtschaft (Twice a week) The Financial Times (Once a week) Reuters : OZ Bankers (Daily) Bloomberg (Daily) Interim Report Available upon request from the Company Available on the company web site : http://www.enr.ch Listing SWX Swiss Exchange Ticker Symbol Bloomberg ENR SW Reuters ENRZ.S Security Number Bearer Shares ��7166 CH000��71668 Convertible bonds 2�2�7�9 CH002�2�7�95

Investment Policy The investment objective of the Company is to maximize long term returns to shareholders. The investment Manager intends to achieve this by investing the Company’s assets in a diversified portfolio of securities of companies with substantial activities in Russia and in other CIS and others Baltic states, and within certain limits, in debt instruments, physical commodities and privatization vouchers.

©ENRRussiaInvest|printedinSwitzerland|september2006|1000

www.enr.ch

ENR Russia Invest SAInvestorRelations2-4placeduMolard|P.O.Box34581211Geneva3Tel:+41227161000|Fax:+41227161001

semi-annual review 2006 - enr · 2020. 5. 28. · 30.06.2006 investment portfolio by sector...

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