AIM Presentation Press

8/4/2019 AIM Presentation Press

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Benefits of Listing on

February 2007

a Market Regulated by the


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Table of Contents

AIM The Fastest Growing Stock Market in Europe

Historic Information

Relative Performance

Sectors on AIM

Recent Developments

Benefits and Advantages of an AIM Listing

Contacts

I

II

III

IV

V

VI

VII


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AIM The Fastest Growing Stock Market in Europe

AIM is established as the leading growth company stock market

A diverse market with companies admitted from all business sectors ranging from young, venture capital-

backed businesses to more established businesses looking to expand operations

462 admissions to AIM in 2006 increasing the total number of AIM stocks to 1,632 ( more than theMain Board of LSE)

Extraordinary growth driven by:

Relatively light touch regulatory environment low cost

Access to increasingly deep investor base over 900 institutions

Alternative to US markets - Sarbanes Oxley a significant deterrent

Opportunity to fast track AIM listing for companies already on one of ten AIM Designated Markets

Dual listings of international companies looking to access the capital and European shareholder base provided

by London

Migration of companies from the Main Board preferring less stringent requirements of AIM

Tax efficient

Reputation as stock market of choice for UK and internationalgrowth companies


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Historic Information

Since its inception in 1995, AIM has witnessed

an increasingly rapid rise in the number of

company listings on the exchange, both

domestic and international AIM provides international companies with a

public market to fund further expansion and raise

their global profile

To date, companies have raised a total of

approximately 39.6 billion EUR 56.6 billion

24.6 billion in IPOs

15.0 billion in Secondary Offerings

Number of Companies Listed on AIM (1995 - Dec 2006)

Money Raised from IPOs & Secondary Listings (m)

An AIM listing provides access to the worlds largest and deepest pool ofcapital for investment in international companies

Source: London Stock Exchange


118235 286 291

325493

587 654694

905

1,1791,328

60

116

220

306

3

5042

31

222122

17

0

200

400

600

800

1000

1200

1400

1600

1800

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 to

Dec

International

UK

514 344 268 3341,754

593 490 1,0952,776

6,461

9,944

600

1,320

535 4861,000

1,880

2,481

5,734

302 350 290

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 to

Dec

Secondary Issues

IPO


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Relative Performance of AIM All-Share Index

From Jan 2003 to February 2007, the AIM Index increased 85%

Relative Performance of AIM Jan 2003- Feb 2007

Source: Bloomberg

-50%

0%

50%

100%

150%

200%

250%

Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Feb-06 Aug-06 Feb-07

TSX Venture: 182%

S&P Small-cap 600: 111%

FTSE AIM ALL-Share: 85%

FTSE 100: 63%

Note: TSX Venture is heavily weighted towards commodities, oil & gas and, as a result, it has enjoyed extraordinary returns from these sectors


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Distribution of AIM Companies by Market Cap

As of December 2006 there are 21 companies listed on AIM with a market cap greater than 500m

compared to only 3 companies in 2003

Some companies, such as NewStar Asset Management, listed on AIM with a large market cap, others such as

Peter Hambro Mining have grown organically to cross the 500m market cap mark

Distribution of AIM Companies by Market Cap from 2003 December 2006*

AIM continues to attract larger companies

* To December 2006 34 securities were suspendedSource: London Stock Exchange

0

50

100

150

200

250

300

350

400

450

0-5m 5-10m 10-25m 25-50m 50-100m 100-250m 250-500m Over 500m

NumberofCompanies

2003

2004

2005

2006 toDecember


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Sectors on AIM - by Market Capitalisation

As of December 2006, the aggregate market cap on AIM is 90.6 billion

As of 15 February 2007, FTSE AIM 100 Index has a total market cap of 38.3 billion

Financials, Oil & Gas and Mining sectors account for 56.1% or 50.8 billion of the total market cap

on AIM These three sectors make up 75.7% of the FTSE AIM 100 Index

Sector Breakdown on AIM Sector Breakdown of FTSE AIM 100 Index

Source: London Stock Exchange Source: 3C estimates, FTSE, London Stock Exchange

AIM is a diversified stock market across a broad range of sectors

Oil & Gas

12%

Mining

16%

Basic Materials

5%

Consumer Services

11%

Financials

28%

Technology

6%

Utilities

1%

Telecommunications

1%

Health Care

5%Consumer Goods

2%

Industrials

13%

Financials

29%

Mining

30%

Oil & Gas

16%

Consumer Services

9%

Industrials

6%

Health Care

3%

Technology

2%

Telecommunications

2% Utilities

3%


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Sector Analysis of New Admissions to AIM in 2006

Of 461 admissions to November 2006, 146 were from the Financial sector followed by the

Industrials and Consumer Services sectors

Financials, Oil & Gas and Mining sectors have been most successful at raising capital through new

issues and secondary issues, accounting for 8,641m, 1,525m and 1,163m respectively

Consumer Goods sector raised 37.4m through IPOs and 76.1m through secondary issues

Companies Admitted to AIM by Sector to December 2006 Total Money Raised to December 2006

Source: London Stock Exchange Source: London Stock Exchange

Mining, 1,163m

Financials, 8,641m

Technology, 503mOil & Gas, 1,525m

Utilities, 184m

Telecommunications, 68m

Health Care, 513m

Consumer Goods, 114m

Consumer Services, 1,183m

Basic Materials, 728m

Industrials, 1,015m

Mining, 47

Basic Materials, 16

Industrials, 72

Consumer Goods, 15

Health Care, 25

Consumer Services, 62

Telecommunications, 11

Financials, 146

Technology, 38Oil & Gas, 26

Utilities, 3


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An International Market By Domicile

AIM continues to attract International companies

Fast Track option if listed on 1 of 10 AIM Designated Markets

Companies domiciled in a total of 28 countries are listed on AIM

Country of Origin of AIM Listed Companies

1South Africa

1Sweden

1,296UK

36US

1Singapore

3Hong Kong

8Netherlands

1Malaysia

2India

17Israel

39Republic of Ireland

1Norway

1New Zealand

4Luxembourg

1Japan

3Italy

1Bangladesh

1Belgium

1Gibraltar

2Germany

2Falkland Islands

6Cyprus

20Cayman Islands

44Canada

21British Virgin Islands

20Bermuda

3Belize

47Australia


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Companies with International Assets

Today, virtually all types of investors are active on AIM

Currently totaling more than 900 institutions

Small CapFunds

VentureCapitalTrusts

PensionFunds

HedgeFunds

MainstreamAIM Institutions

RetailInvestors

GlobalInstitutions

European GrowthFunds

StrategicInvestors


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Top Institutions on AIM

UBS Asset MgmtRothschild Asset MgmtISIS Asset

ManagementDWSAvlar Bioventures

Unicorn Asset MgmtSavoy Investment MgmtJP Morgan FlemingF & CBarclays Global Inv.

T.Rowe PriceRathboneIntercapitalDeutsche BankAXA Asset Mgmt

Troy Asset MgmtRAB CapitalHSBC Asset MgmtCredit SuisseArtemis

Threadneedle InvPrudentialHermesClose BrothersAlker Investments

Strand AssociatesMerrill Lynch MercuryHenderson Inv MgmtCitibankAlliance Dresdner

Standard Life InvM & GGuild VenturesCharlemagne CapitalAMVESCAP

Sky Capital VenturesLibertyGartmoreCG Asset MgmtAIG Global Investment

Scottish WidowsLansdowneFramlingtonCazenoveAberdeen Asset Mgmt

SchrodersJupiter Asset MgmtFidelityBaring Asset MgmtABN Amro

Well regarded institutions such as Fidelity, M&G & Schroders are activeinvestors


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Appetite for mining, oil and gas sectors remained strong in 2006

Media, biotechnology, industrials, financials and real estate emerging as popular sectors

Investors are requiring more rigorous due diligence, evidence of revenues and a track record

AIM launched a tracker fund for its top 50, top 100 and All Shares to address criticisms that the exchange did not

have the same passive investor following of its larger rivals, such as the LSE main market

The interest of the bulge-bracket investment banks, demonstrated by an increasing number being approved as

nomads, suggests they have spotted lucrative potential. Nomads include Citigroup, Merrill Lynch and UBS

It became clear that many industries, such as mining, oil & gas, technology, need an early-stage market

IPO on AIM has became a popular exit-route for Venture Capitalist firms

AIM is increasingly the market of choice for international companies in the mid-market

In late 2006/early 2007 AIM increasingly attracted adverse press criticism following recent high profile problem

companies (eg. Torex, Cape Diamonds) and 2007 is widely expected to be a tougher year for IPOs on AIM

New Nomad Rules and tighter compliance may result in a shake out of advisers on AIM

Recent Trends


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Recent Developments - FTSE AIM Index Series

The introduction of the FTSE AIM UK 50 Index, FTSE AIM 100 Index and FTSE AIM All-Share Index

Improve the liquidity of the market by creating increased transparency and profile

Investable indices will attract additional investment in AIM

Recently launced FTSE AIM All-Share Supersector Indices will provide investorswith 18 new sector indices


March, June, September & DecemberReview period

1) Annual review of free float & liquidity 2) Quarterly constituent reviewReview

YesYesYesLiquidity requirements

Minimum of 15%Free float

UK & internationalUK & internationalUK domiciled onlyNationality

All classes of ordinary shares quoted on AIMClass of share

All AIM quoted companies that

meet the eligibility criteria

below

The largest 100 eligible

companies by full market

capitalisation

The largest 50 eligible UK


capitalisation

Definition

FTSE AIM All-Share IndexFTSE AIM 100 IndexFTSE AIM UK 50 Index

March, June, September & DecemberReview period

1) Annual review of free float & liquidity 2) Quarterly constituent reviewReview

YesYesYesLiquidity requirements

Minimum of 15%Free float

UK & internationalUK & internationalUK domiciled onlyNationality

All classes of ordinary shares quoted on AIMClass of share

All AIM quoted companies that

meet the eligibility criteria

below

The largest 100 eligible AIM


capitalisation

The largest 50 eligible UK AIM


capitalisation

Definition

FTSE AIM All-Share IndexFTSE AIM 100 IndexFTSE AIM UK 50 Index


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Regulation

AIM companies do not escape regulation but the rules are significantly more focused than for a company on the

Official List in London. AIM rules amount to only 43 pages whilst the Listing Rules on the Official List consist of

27 chapters and 13 schedules

AIMs philosophy is that the Nominated Advisor (NOMAD) is responsible for ensuring a Company complies with

the AIM rules, making a good Company/NOMAD relationship essential for success on the market

Admission Process

Relatively light touch regulatory environment

No trading record is required

No minimum market capitalisation requirements

No free float requirement

Focused on-going disclosure and reporting requirements

Advantages of AIM


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Commercial Requirements for an AIM listing

Corporate Structure

Onshore vs. offshore, legal, taxation

If offshore incorporation is chosen for tax purposes, it should be in a jurisdiction with UK law such as Jersey or

Guernsey

Management Team

CEO: industry experience and good track record

CFO: preferably with public markets experience and in place well ahead of the IPO

Investor Relations: can be responsibility of CFO or outsourced

Board of Directors

Balanced Board with credible non-executives and independent directors

Business Outlook

Strong growth prospects: upwards of 20% top line growth per annum. Profitable within 1 to 2 years

Limited ongoing capex requirements: reduce need to continue to raise further capital

Some revenues: start up not appropriate unless asset backed such as with resource companies


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Commercial Requirements for an AIM listing

Accounting

IFRS, UK GAAP or US GAAP audited accounts, but IFRS recommended in all UK listed companies must move to

IFRS

Long Form and Short Form reports, working capital report, Financial Reporting Procedures Report

Legal Due Diligence Report

Offer Size

No minimum free float requirement, but NB valuation impact of overhangs

To attract real institutional interest and to make the IPO cost efficient, a minimum offer size of 10 million is

recommended

Lock ups

Standard practice that holders of more than 10% of the equity are locked up for 6-12 months after the IPO, and

AIM Rules require lock-ins for start-ups


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Nominated Broker /Financial Adviser

COMPANY Accountant / Auditor

Registrar

Legal Counsel

Nominated Advisor

A requirement for all AIM listed companies. Primary roles are

distribution and research. Provides quality service to clients in

sectors, markets and products where they have specialist

expertise.

A requirement for all AIM listed companies. Primary role is

ensuring the company's compliance with the AIM rules and

maintaining the relationship with the listing authorities.

Advises the Company on an ongoing basisand in the IPO principally to prepare theoffering prospectus, due diligence andclosing documentation.

Prepares the consolidated, audited

financial accounts and financial

documents to be included in the

offering prospectus.

Maintaining the issuers

shareholder list and mailings as

well as effecting share transfers.

Financial PR

Advises the company on press

and other public relations issues

and may assist in the investorrelations.

Transaction Team For An AIM Deal


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Provides quality service to clients in sectors, markets and products where they have

specialist expertise. Represents the companys best interest to all other advisors.Financial Advisor

Capita

Computershare

Maintains the issuers shareholder list and mailings as well as effecting share

transfers.Registrar

Beaumont Cornish

WH Ireland

A requirement for all AIM listed companies. Primary role is ensuring the company's

compliance with the AIM rules and maintaining the relationship with the listing

authorities.

NOMAD

BDO

Grant Thornton

KPMG

Preparation of consolidated, audited financial accounts to be included in the offering

prospectus. Also responsible for financial due diligence including the long form and

working capital reports.

Accountants

Clyde & Co.

Linklaters

Freshfields

Advises the Company in the IPO process and on an ongoing basis as required.

Prepares the offering prospectus, legal due diligence and closing documentation.The company will appoint its own legal council.

Legal / Issuer Council

Winterflood

Shore Capital

Numis

A member firm of the LSE that has agreed to quote prices and buy and sell stock

actively during market hours.Market Maker

Maitland

College HillBankside

Advises the company on press and other public relations issues. May also assist inthe investor relations function.

PR Advisor

Nominated Broker A requirement for all AIM listed companies. Primary roles are distribution and

research. Also maintains relationships between the company and investors in the

aftermarket and provides ongoing research coverage and market intelligence.

ExamplesDescriptionRole

City Capital Securities Limited

Key Parties to the AIM Listing Process


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Less Onerous Admission Requirements on AIM

2.5 millionCN$500,000

CN$1,000,000

No minimum requirementNo minimum requirementMarket Capitalisation

No minimum requirementNo minimum requirementNo minimum requirementNo minimum requirementTrading History

No minimum requirementYes in most of the casesNo minimum requirementNo minimum requirementProfitability

IFRS / French GAAPIFRS / CN GAAP / US GAAPUK GAAP / IFRSUK GAAP / IFRS / US GAAP

(moving to IFRS only)Accounting Standards

Interview with

Exchange

Initial equity required

Minimum public float

No

No minimum requirement


No



NoNo

No minimum provided the

company made a private

placement of at least 5m

20% of issued &

outstanding shares with

Shareholders

2.5 million10% Public Float

TSX Venture AlternextAIM OFEX

AIM provides relatively light and flexible admission requirements


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Tax Individual and Corporate

Individual Investors have a number of tax benefits

Capital Gains Tax

Enterprise investment scheme

Inheritance tax

Relief for losses

Venture Capital Trusts (VCTs)

Corporate Investors

Corporate Venturing Schemes

Capital Gains Tax Rates for UK & Foreign Investors

Tax RateNumber of years Invested

20%One Year

10%Two Years

Attractive tax benefit for AIM Investors

Tax Advantages of AIM


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Steps to an AIM Flotation

Final round of

financing within

12 months of

IPO, if

applicable

IPO ExecutionTransaction

Considerations

W1 W2 W4 W6 W9 W10W3 W5 W7 W8 W11 W1 W2 W3

Company / Legal Advisors

3C

Company / Auditor

IPOExecution

Pre-IPO

FinancingIPO Execution Listing / AftermarketTransaction

ConsiderationsW1 W2 W4 W6 W9 W10W3 W5 W7 W8 W11 W1 W2 W3 W4+

Listing / Aftermarket

W4+

NOMAD / Auditor

Company / 3C

NOMAD / Legal

Key for primary responsibility:

Audit

Research & Valuation

Legal Due Diligence

Prepare up to date 3 audited, consolidatedfinancial statements in IFRS or UK GAAP

Prepare the short form/long form report

and working capital report

Update due diligence process

Financial Due

Diligence

Prepare offering prospectusOffering ProspectusPrintpros.

Up to date research report with

revised valuation

Marketing &

Placement

Investor Presentation Prepare roadshow presentation

Develop

Marketing

strategy

Pre-

marketing

Rehear-

sals

Aftermarket

Roadshow

Submit 10 dayannouncement

Finalpros.

Admission /

Listing Effective

Greenshoe 4 week

exercise period

Aftermarket support,

research / IR

Research blackout period

Verifi-cation

process

Finaliseaccounts

Print

research

Pre-IPO

Financing

3-9 Months

3-9 Months

Bookbuilding


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Contact Details

City Capital Corporation Limited

Sion Hall

56 Victoria Embankment

EC4Y 0DZ

London, UK

Tel: +44 (0)20 7583 5800

Fax: +44 (0)20 7583 8001

www.city-capital.com

David Kent 0207 842 5855

[email protected]


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Disclaimer

This presentation is strictly private and confidential and solely to provide information to you about the services

provided by City Capital Corporation Limited. This presentation contains general information only and is not intended

to constitute an offer, be comprehensive, or to provide specific accounting, business, financial, investment, legal, tax

or other professional advice or services. This presentation is not a substitute for such professional advice or services,

and it should not be acted on or relied upon or used as a basis for any decision or action that may affect you or your

business. Before making any decision or taking any action that may affect you or your business, you should consultwith City Capital Corporation Limited who would be happy to discuss your detailed requirements.

Whilst every effort has been made to ensure the accuracy of the information contained in this presentation, this can

not be guaranteed and neither City Capital Corporation Limited nor any related entity shall have any liability to any

person or entity who relies on the information contained in this presentation. Any such reliance is solely at the users

risk.

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