intrast financial group covers intrast finance company (russia)

INTRAST Financial Group covers

INTRAST Finance Company (Russia) INTRAST Managing Company (Russia) Inter PID Financial Services Ltd. (Cyprus)

Inter PID Financial Services Ltd.

http://eng.intrast.ru/index.php


- Central Bank of Russia Permit of 20.04.2001- Registration certificate issued by Russia Ministry of Justice #795.19, 20 June, 2001- Central Bank of Cyprus Permit of 5 Oct., 2001 (registered in 2001) - Parent INTRAST Finance Company, Moscow, Russia- Moscow-based office at the parent company and in Nicosia (From 2002 start till Aug. 2003 office address 5 Hytron str., Nicosia, Cyprus)- Member of CIFSA- Share capital 150.000 CYP

Intrast (Russi

a)

Inter PID Financial Services

Ministry for Economy

Central Bank of Russia

ASMK (founde

r)

Ministry for Foreign Economic Relations

Ministry for Internal Affairs

Russian SEC

Scheme of Inter PID Financial Services Ltd. setting-up



Internal AuditorKrasilnikov Vladimir

Non-Executive ManagerSavvas Shiatis (Cyprus)

General Manager 2Sinukaev Victor

General Manager 1Klokov Engueni

Investment CommitteePavlinova VeraFrolov Vadim

Vekshin Mikchail

Fund Management Department Arisrakesian

Mikchail

Reception and Transmission of

Orders Department

(Outsourced to Intrast)

Finance and Operations Department

Credit and loan Department

Analysis Department

(Outsourced to Intrast)

Corporate Services

DepartmentPavlinova Vera

Reception of Orders

Abramov Dmitriy

Verification of Orders Executed

Vlasova Nina

Accounting Department

Sinukaev Pavel

I.T Systems Department

Boronenkov Victor

Risk Management

Vekshin Mikchail

Briefing of Customers

Bodganov Aleksei

Administration-Secretarial Department

Bodganov Aleksei

Board of Directors

Klokov Evgueni

Andreas Xenophontos (Cyprus)

Christos Meraclis (Cyprus)

Structure

Customer Services

DepartmentFrolov Vadim



- INTRAST Finance Company (Russia) - INTRAST Managing Company (Russia) - Inter PID Financial Services Ltd. (Cyprus)

Founder

- INTRAST Finance Company, Moscow, Russia- Experience from 1992- Own capital $1.65mln License: 177-02671-100000

Date: 1 Nov., 2000Company: FC INTRASTValidity: infinite Licensor: FSCM Activity: brokerage services

License: 177-02694-010000Date: 1 Nov., 2000Company: FC INTRASTValidity: infiniteLicensor: FSCMActivity: dealer services

License: 177-02709-001000 Date: 1 Nov., 2000Company: FC INTRASTValidity: infiniteLicensor: FSCMActivity: asset management

License: 177-02714-000100Date: 1 Nov., 2000Company: FC INTRASTValidity: infiniteLicensor: FSCMActivity: depository services

License: 22-000-1-00020Date: 13 Dec., 2000 Company: FC INTRASTValidity: infinite Licensor: FSCMActivity: investment/unit share investment/non state pension fundsspecial depository services

100% being held by ASMK(asset management company).



- INTRAST, Managing Company Moscow, Russia

- Experience from 1993

- Own capital $1.75mln .

License: 077-06197-001000Date: 02 Sep., 2003 Company: FC INTRASTValidity: infinite Licensor: FSCMActivity: investment/unit share investment/non state pension fundsspecial depository services

License: 21-000-1-00073Date: 08 July, 2002 Company: MC INTRASTValidity: 8 July, 2007Licensor: FSCMActivity: investment/unit share investment/non state pension funds special


INTRAST Financial Group cover

Services of Founder

- Broker services- Asset management on Russian capital market- Advising services on investments in Russian enterprises (long term investments)- Special depository of investment/unit share investment funds/non government pension fundsMarkets of Founder

- Government short term coupon-free bonds market- Moscow International Stock Exchange - St.Petersburg Stock Exchange- Russian Trading System - Stock auctions arranger- participant of Russian promissory notes system


Member

Member of National Association of Stock Exchange Dealers (NAUFOR) and Professional Association of Registrars, Transfer Agents and Depositories (PARTAD)

Ratings (assigned in IH 2003)

- A group (NAUFOR) high reliability of the company - AA group (PARTAD) rather high reliability of the company- Top 10 as special depository on

total amount of own capitaltotal number of accounts for non government pension funds/managing

companies volume of serviced securities


Target of Inter PID Financial Services Ltd. performance

To attract native/foreign clients due to the legacy and transparency of Inter PID business.

- Broker services on European/US markets (NY, London, Dusseldorf) - Broker/depository services on Russian market - reception and transmission of transferable securities- money market instruments- financial futures contracts- options on behalf of third parties) - Asset management for Russian/foreign investors- Non-core services include- granting of credits or loans to third parties;- foreign exchange services connected with investment services- advising services for Russian/foreign investors- on capital structure, shaping of business strategy- advice on mergers and acquisitions- investment advice on financial instruments

Services:



Cyprus-based Inter PID advisor

Horwath Pillipides & Partners

Address: 70 Kennedy Avenue, Papabasiliou House, Nicosia, Cyprus Legal adviser - law office of Dr.Christos Klerides.

Foreign Brokers/depositories

- White Pacific Securities (USA broker)- Investerra (broker division of White Pacific Securities, USA)- US Clearing (Depository, USA)- CCS (Depository Computer Clearing Services, USA)

Inter PID Financial Services Ltd. performance markets NYSE (USA) LSE UK (London Stock Exchange) Xetra (Germany) Swiss Exchange (Switzerland )


Clients

Russia USA Europe

Intrast LtdMoscow,

Computer Clearing ServicesGlendale, CA, USA

Interactive Brokers LLC Greenwich, CT, USA

MICEXRTS

NYSENASDAQ

AMEX

LSE (UK)XETRA (Germany)SE (Switzerland)

International Personal Investment Dealing

Countries

Brokers(Executions).

Clearings U.S. Clearing

New York, NY,

White Pacific Securities, Inc. San Francisco, CA, USA

Intrast LtdMoscow,Russia

Interactive Brokers LLCGreenwich, CT, USA

Markets




The following software is used

Clients

Inter PID

Countries Russia USA Europe

Software for access to markets

Net Investor(Direct access)

InstaQuote v.6.3(Direct access)

CCS-Traderv.1.0(Web-based access)

IB Trader WorkStation B.814.2 (Direct access)

MarketsMICEXRTS

NYSENASDAQ

AMEX

LSE (UK)XETRA (Germany)SE (Switzerland)


Clients accounts and Tax Services Control scheme

Bank of

Moscow

(Russia)

Alpha BankCyprus & Greece

Intrast (Russia)

Ministry of Tax Services (Russia)

Inter PID Financial Services

Ministry of FinanceIncome Tax Service

(Cyprus)

All client accounts opened with Alpha Bank being under control of Russian/Cyprus tax services


Performance control system INTRAST

Inter PID

ASMK (founde

r)

Russian SEC

CB Russia

CySEC

CB Cyprus

In Russia:

1. ASMK (asset management company as Intrast founder)2. Central Bank of Russia3. Russian SEC 4. Special tax inspection (for brokers)5. National Association of Stock Exchange Dealers 6. Professional Association of Registrars, Transfer Agents and

Depositories7. Money Laundering Committee

In Cyprus Inter PID is under control of:

1. CySec2. Central Bank of Cyprus3. Money Laundering Committee/Alpha Bank4. Ministry of Finance department of Inland revenue Income

Tax Office


Advantages of Inter PID Financial Services Ltd.

Officially registered at the Russia Ministry of Justice in 2001, which permits

- to manage clients’ assets on foreign capital markets- to place the funds on the accounts legally opened with foreign brokers - to provide legal broker services on foreign markets for small private Russian investors- to settle disputes within the Russian legislation system- almost 24-hours performance.- 11-year experienced reliable INTRAST (parent company) having 100% in Inter PID


Financial results in 2002-2003

Starting period of operations used to develop proper order of functioning:

- to choose brokers to perform on US and European capital markets

- to attract Russian/foreign clients

- to develop legal settlement schemes for Russian/foreign clients

- to set legal order of functioning in line with the Cyprus legislation in force

$10mln were raised on the own asset management, mainly.

2003 end the share capital raised to 150.000 CYP to meet the CySEC demands


Clients servicing scheme

0.85

0.9

0.95

1

1.05

1.1

1.15

1.2

1.25

31.12.02

14.01.03

28.01.03

12.02.03

25.02.03

10.03.03

21.03.03

03.04.2003

16.04.2003

30.04.2003

13.05.2003

27.05.2003

09.06.2003

20.06.2003

03.07.2003

17.07.2003

30.07.2003

19.08.2003

02.09.2003

15.09.2003

26.09.2003

09.10.2003

22.10.2003

04.11.2003

17.11.2003

01.12.2003

12.12.2003

26.12.2003

Byu&Hols on SP500

Equity of Inter PID

Inter PID Financial Services Ltd. operations on US/European markets (2003) Transactions: 974.Yield: 20.1 % ann. Portfolio value movement vs. Buy&Hold on SP500 index:

The short term operations permit to generate the profit on the uptrend within the 3-12 months period. Short term operations are used to even fluctuations of the portfolio yield curve. It provides to reach the Buy&Hold-close yield at the back of the less well- pronounced fluctuations of the account.


Clients servicing scheme

In the trust management sphere Inter PID is ready to offer the decision-making on the allocation of assets aimed to reach profits but with respect to the risk of investments which can be appraised by the company.

The company can place the money of the client at the investment fund or settle individual trust management contract providing flexible strategy and prompt reaction to the market situation.

Thus, to meet the demands of the long-term investor it will permit to save his capital and cover loses provoked by stock investments.

For short term investors the strategy based upon the blue chips movement can be used to execute the high-yielding and risky short- term transactions.


Total portfolio yield

Savings capital strategy Max drowndown1.7%1 year 6 months 3 months 1 month

Average 25.0% 12.1% 5.7% 1.9%

Deviation 12.2% 8.3% 5.0% 2.2%

Active management strategy Max drowndown2.4%1 year 6 months 3 months 1 month

Average 35.8% 17.5% 8.4% 2.7%

Deviation 23.0% 13.7% 7.9% 3.2%

Yield

Yield


0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

05.1

999

08.1

999

11.1

999

02.2

000

05.2

000

08.2

000

11.2

000

02.2

001

05.2

001

08.2

001

11.2

001

02.2

002

05.2

002

08.2

002

11.2

002

02.2

003

05.2

003

08.2

003

11.2

003

Saving capital strategy

Active management strategy



Savings capital strategy Max drowndown5.4%1 year 6 months3 months 1 month

Average 33.7% 16.0% 7.5% 2.5%

Deviation 19.0% 12.1% 7.3% 3.3%

Active management strategy Max drowndown2.4%1 year 6 months3 months 1 month

Average 54.4% 25.8% 12.1% 3.9%

Deviation 44.4% 23.7% 13.1% 5.0%

Yield

Yield


0.5

1.5

2.5

3.5

4.5

5.5

6.5

7.5

8.5

05.

1999

07.

1999

09.

1999

11.

1999

01.

2000

03.

2000

05.

2000

07.

2000

09.

2000

11.

2000

01.

2001

03.

2001

05.

2001

07.

2001

09.

2001

11.

2001

01.

2002

03.

2002

05.

2002

07.

2002

09.

2002

11.

2002

01.

2003

03.

2003

05.

2003

07.

2003

09.

2003

11.

2003

01.

2004

Saving capital strategy

Active management strategy


Money laundering rules (Russian/Cyprus) observed

Money laundering rules set by the Cyprus (Jan. 2000) and Russia legislation (Aug. 2001) are observed.

To prevent money laundering and guard the company the following procedures used:

- customer identification

- record keeping in relation to customer’s identity

- internal reporting to competent person appointed

- internal control for forestalling and preventing money laundering

- measures for making employees aware of the above procedures

- training of employees in the recognition and handling of transactions suspected with money laundering.


Income statement projection (CYP)

Prospected financial results

Item 2004 year 2005 year 2006 year

Sales revenues 22,055.70 43,581.04 64,704.67

Net sales 22,055.70 43,581.04 64,704.67

Gross profit 22,055.70 43,581.04 64,704.67

Administrative expenses 6,381.82 6,360.50 6,143.58

Production expenses 12,518.18 12,476.37 12,050.87

Marketing expenses 245.45 244.63 236.29

Salary of administrative personnel 5,823.07 5,838.58 5,909.06

Salary of production personnel 3,235.04 3,243.66 3,282.81

Total operating expenses 28,203.56 28,163.75 27,622.62

Other revenues 23,740.00 21,240.00 25,200.00

Losses from prior periods

Profit before tax 17,592.15 36,657.29 62,282.06

Effect of operating with foreign currency -18.77 -20.24 -29.35

Taxable profit 17,573.37 36,637.05 62,252.71

Tax on profit 820.68 2,017.34 6,847.80

Net profit 16,752.70 34,619.71 55,404.91


BOD Directors - active members of the performance

Weekly contacts on issues; consideration of main issues at the BOD sittings

Communication with Russia-based office maintained either by telephone, fax, email or on-site visit

Klokov Evgueni – executive directorAndreas Zenophontos - non executive directorSavvas Shiatis - non executive directorChristos Meraclis - non executive director BOD approves:

enterprising objectives of companygeneral policy of companyinvestment policy of companystrategic direction of companyannual enterprising plan


Duties/responsibilities of directors

Investment Committee (three-member board) is aimed

- to shape investment choices

- to determine pricing policy

- to set frequency of customers briefing

- to determine markets and financial instruments

- Every quarter to conduct BOD sitting on quarterly management accounts

- Once every six months to conduct BOD sitting to review current financial results

- Annually BOD to be held to review yearly performance and financial statements

BOD


Structure

General managers are to direct and supervise all operations

to attract customers

to preside regular meetings of the company

to provide general supervision of all work of company

to supervise IT systems manager

to supervise accounting department

to supervise human resources

Internal auditor is obliged to supervise personnel

to supervise operations

to locate deviations from standard procedures

to take appropriate measures to prevent errors

to prevent any criminal activities

to assess internal audit mechanisms

to receive information considered as concerning money laundering

to provide advise and guidance to employees on money laundering matters


Fund management department functions

to follow up and study conditions of purchases

to evaluate offered investment products and services

to contact with customer to analyze investors profile

to examine investment opportunities

to formulate written proposals on investment portfolio of client

to control portfolios of customers and planning of investments

Structure

Corporate services department obliged

to provide advisory services on investments in enterprises

to undertake a project

to develop the work

to brief the customer on the course of work


Verification of orders executed department mustcheck transmitted orders on daily basis

inform the brokerage firm, customer and internal auditor on errors

Structure

Briefing of customers departmentto provide convenient and valid briefing on transactions

to undertake monthly analytic written briefing of customers on transactions


Customer Services Department is obliged

to complete the form on the customer to open a trading account

to compete the form “Know-your-client”

to complete and sign conventions of customer with the company

Notify the customer of general information and terms of collaboration

to brief the customer for the operation of Company

Register customer in the computer system

to brief Internal Auditor of any problem and complaints of customer.

Structure


Administration and secretarial

to guide and monitor the finance and operations department

to receive customers

to provide smooth and order operation of telephone center

to follow correspondence

Structure

Finance and operations department

to provide correct practice of general rules of accountancy

to follow agreements of bank accounts

to observe payment of taxes, submission of statements, to compliance to tax obligations

to follow legislation in force

to prepare and submit reports to the authorities

to develop annual general draft audit of the economic situation of the company

to publish results of company performance end of each month


Credit and loans department includes

Structure

Risk management department

to identify the risks

to analyze the risks

to administer risks

to seek credit approval before transacting business

to assist in obtaining the proper documents

to advise of any change in the position of the client

to monitor all transactions

to evaluate and provide recommendations for the new product

to evaluate and approve clients within authorized approval levels

to keep BOD informed of individual credit risks or the portfolio

to build and maintain measurement models for credit and market risk transactions


Analysis and Reception and Transmission of orders departments are outsourced to INTRAST Finance Services Company.

Structure

Analysis Department shouldFollow up and study conditions of purchases

Evaluate offered investment products and services

Contact with customer to analyze investors profile

Examine investment opportunities

Formulate written proposals on investment portfolio of client

Control portfolios of customers and planning of investments Reception/transmission of orders departmentThe company will receive and transmit orders to

- Intrast Ltd. (Financial Company licenses stockbroker in Russia)

- 1st Discount Brokerage Execution (Brokerage House in the US market)


IT systems manager

Structure

to supervise and guarantee effective operation of electronic systems

to evaluate effectiveness of existing electronic systems

to upgrade software systems

to control and confirm correctness of new electronic registration

to check if all backups been taken properly, check connections between servers

to provide control over the users

to make two copies of the back ups


The following software is used:

Structure

Operation systems:

• Microsoft: Windows 98, 2000, XP

• FreeBSD

Software:

• Microsoft Office: 2000, XP

• Microsoft SQL Server

• 1C:Predpriyatie - the most important (1C:Enterprise) system of company automation products.

• METASTOCK PROFESSIONAL - implementing state-of-the-art technology

• SAGE Accounting Software

• Trader Work Station as proprietary software of interactive brokers

Back-up devices ( HP DLT)

intrast financial group covers intrast finance company (russia)

Documents

investment services

financial instruments

core services

pidfinancial services

fc intrast validity

parent intrast finance

cyp intrast russia

dealer services license