NOVY NEFT LIMITED - CONVERSION TO OPEN ENDED MUTUAL FUND

Schedule 3

In the event of the continuance of the Company, it will become a mutual fund and the following features shall apply:-

The information below should be read in conjunction with the full text of the Placing Memorandum dated 13 November 2003 and addenda dated 1 December 2003, 27 January 2004 and 24 April 2006 (together the "Placing Memorandum").

The Company has applied for, and obtained, an exemption from the Bermuda Monetary Authority (Collective Investment Scheme Classification) Regulations 1998 on the basis that investments may only be made by a Qualified Investor.  The Company is, therefore, not subject to regulation by the Bermuda Monetary Authority and should be viewed as an investment suitable only to investors who can fully evaluate the risk involved in investing in the Company.

DEFINITIONS

"Administrator and Registrar" HSBC Securities Services (Isle of Man) Limited

"Cash Custodian" HSBC Custody Services (Isle of Man) Limited

"Dealing Day"                                                                         The last business day of each week, together with such other day or days as the Directors shall determine.

"Net Asset Value" The net asset value of the Company calculated in the manner described under the heading "Net Asset Value" in paragraph 6 of "General Information" of the Placing Memorandum.

"Net Asset Value per Share" The Net Asset Value attributable to each Share as determined in accordance with the provisions summarised in paragraph 6 of "General Information" of the Placing Memorandum.

"Qualified Investor" A Qualified Investor is any person who warrants at the time of investment that he is a "qualified investor" for the purposes of the Bermuda Monetary Authority (Collective Investment Scheme Classification) Amendment Regulations 2005 and the rules of the Bermuda Stock Exchange ("BSX") being either:

(a) a sophisticated investor;

(b) a high net worth private investor;

(c) a high income private investor;

(d) a body corporate in which all the shareholders fall within the classes of persons in paragraph (a), (b) or (c);

(e) a partnership in which all the partners fall within the classes of persons in paragraph (a), (b) or (c);

(f) a trust in which all the beneficiaries fall within the classes of persons in paragraph (a), (b) or (c);

(g) a body corporate that has total assets of not less than five million dollars, whether such assets are held solely by the body corporate or held partly by the body corporate and partly by any other body corporate of which it is a subsidiary company or a holding company and (i) each of its equity owners is a sophisticated investor or (ii) it is listed on a stock exchange which is recognised for the purpose by the BSX or (iii) it is a bank, stockbroker, insurance company, investment company, mutual fund or pension fund which is licensed in it home jurisdiction as such, or

(h) an unincorporated association or a trust that has total assets of not less than five million dollars and all of its equity owners are sophisticated investors.

For this purpose, "sophisticated investor", "high net worth private investor" and "high income private investor" have the following meanings:

"sophisticated private investor" means:

a person who has such knowledge of, and experience in, financial and business matters as would enable him to properly evaluate the merits and risks of a prospective purchase of investments; and

who in the case of an individual, in respect of each investment transaction, deals in amounts of not less than US$100,000.

"high net worth private investor" means an individual whose net worth or joint net worth with that person's spouse in the year in which he purchases an investment exceeds US$1,000,000;

"net worth" means the excess of total assets at fair market value over total liabilities; and

"high income private investor" means an individual who has had a personal income in excess of US$200,000 in each of the two years preceding the current year or has had a joint income with that person's spouse in excess of US$300,000 in each of those years, and has a reasonable expectation of reaching the same income level in the current year; and "current year" means the year in which he purchases an investment."

Each applicant for, and transferee of, Shares must warrant on the relevant Application Form that he is a Qualified Investor.

"Redemption Notice" A notice in writing given by a Shareholder to redeem all or part of his holding of Shares, such notice to take effect on the next Dealing Day following the expiry of 2 days from the date of receipt of such notice by the Company.

"Valuation Day"                                                                      The Business Day immediately preceding each Dealing Day, by reference to which date the Net Asset Value and Net Asset Value per Share are calculated, together with such other day or days as the Directors shall determine

Structure

The Company will become as an open ended mutual fund, in accordance with Section 15bA of the Companies Act 1981 of Bermuda (as amended).  The Company will apply for, and expects to obtain, an exemption from the Bermuda Monetary Authority (Collective Investment Scheme Classification) Regulations 1998 on the basis that investments may only be made by a Qualified Investor.  The Company will, therefore, not be subject to regulation by the Bermuda Monetary Authority and should be viewed as an investment suitable only to investors who can fully evaluate the risk involved in investing in the Company.

Investment Objective and Policy

The investment objective of the Company will be to achieve capital appreciation through investment in a concentrated portfolio of Russian investment opportunities.  The Investment Manager will continue to seek to invest the entire assets of the Company in Gazprom, including but not limited to local shares and depository receipts.

Valuation Policy

The Company's Net Asset Value will be calculated by the Administrator and Registrar on each Valuation Day (which is the day prior to each Dealing Day) and at such other times as the Directors consider appropriate.  Further information on calculation of the Company's Net Asset Value is set out in paragraph 6 of the section entitled "General Information" of the Placing Memorandum.

Fees

There are no changes to the Agreements or Fees payable to the Service Providers of the Company.

Taxation

EU Council Directive 2003/48/EC of 3 June 2003 (the "Directive") took effect on 1 July 2005. Under the Directive, dividends and other distributions of income made by the Company, and payment of the proceeds of sale and/or redemption of Shares in the Company, may in the future (depending on the investment portfolio of the Company) be subject to the withholding tax and/or information providing regime imposed by the Directive on taxation of savings in the form of interest payments, where payment is made to a Shareholder who is an individual resident in a Member State of the European Community for the purposes of the Directive (or a "residual entity" established in a Member State) by a paying agent resident in another such Member State.  Certain other jurisdictions (including Switzerland) have, or are proposing to introduce, an equivalent withholding tax and/or information providing regime ("equivalent legislation") in respect of payments made through a paying agent established in such jurisdictions.

Whether the Directive or equivalent legislation will apply to payments in respect of the Company made by a paying agent established in a particular jurisdiction will depend upon whether the Company is regarded as within the scope of the Directive or equivalent legislation under applicable law and practice.  The Company is within the scope of the Directive under current practice and, as the Administrator is established in the Isle of Man, one of the jurisdictions that is operating an information providing regime, the Administrator may have information providing obligations under the Directive.  To the extent that any other paying agent makes cross border payments to EU resident individuals from jurisdictions that operate the Directive or equivalent legislation, the relevant legislative provisions and practice of such jurisdictions may apply.  The Company is registered with Telekurs as being outside the scope of the Swiss equivalent legislation.

Transfer of Shares

A transfer may be effected at any time by an instrument in writing in any usual or common form which the Directors or the Investment Manager may approve. The Directors or the Investment Manager shall decline to register any transfer of Shares to a person who, either alone or together with others, in the sole and exclusive opinion of the Directors or the Investment Manager is a person referred to in sub-paragraph 5(b) of "General Information" of the Placing Memorandum. Shares held in Euroclear or Clearstream are freely transferable in the Euroclear and Clearstream systems and no ownership or transfer restrictions will be monitored by either of the Euroclear or Clearstream operators.

Further Issues of Shares

The Directors are entitled to issue the unissued share capital of the Company at such times and on such terms and conditions as they think fit.  There are no pre-emption rights in favour of Shareholders in respect of the Company.  The Directors will consider issuing further Shares in the Company from time to time if they believe it would be in the best interests of the Company to do so.  In order to protect the interests of existing Shareholders, the Directors will only issue further Shares at prices equal to or greater than the most recently published Net Asset Value.

Form of Shareholding

Shares may be held through Euroclear or Clearstream or in the Shareholder's own name in registered form. The Shares have been accepted for clearance through Euroclear and Clearstream. Euroclear and Clearstream will not be responsible for monitoring beneficial ownership of the Shares credited to the accounts of any Euroclear or Clearstream account holder. The minimum tradable number of Shares in Euroclear or Clearstream is one Share. Shares held through Euroclear or Clearstream are held with the Euroclear or Clearstream specialised depository, as the case may be. US persons may not hold Shares in Euroclear or Clearstream.

Redemption of Shares

A Shareholder wishing to redeem Shares must serve a Redemption Notice on the Company C/o the Administrator, on fax No. 44 1624 637778.

Attention of The Manager, Shareholder Services

HSBC Securities Services (Isle of Man) Limited

P.O. Box 34, 12-13 Hill Street

Douglas

Isle of Man, IM1 1EF

British Isles

A Redemption Notice can be in any written form provided it is signed by the registered Shareholder or authorised signatories thereof and shall include full details of the shareholding including the name(s) and address of the holder, contact name, telephone and fax number and the number of Shares held, the number of Shares to be redeemed, and bank account details.  In accordance with anti-money laundering regulations no redemption proceeds will be paid out unless the Administrator is in possession of the full completed original application form and appropriate original anti-money laundering documentation and any other documentation required.

A Shareholder holding Shares through either of Euroclear or Clearstream should instruct Euroclear or Clearstream, accordingly.

Redemption requests received by the Administrator before 12.00 noon (UK time) two Business Days prior to the relevant Dealing Day will be dealt with on that Dealing Day.  Redemption requests received after 12.00 noon (UK time) two Business Days before the relevant Dealing Day will be deemed to have been received on the next succeeding Business Day and dealt accordingly.

In the event of a Shareholder requesting a redemption which would, if carried out, leave the Shareholder holding Shares having a Net Asset Value less than the Minimum Holding, the Directors may, if they think fit, redeem the whole of the Shareholder's holding.

Payment of Redemption Proceeds

Subject to the prior receipt of the correct documentation, the redemption proceeds will be dispatched in US Dollars by telegraphic transfer within 5 Business Days of the relevant Dealing Day.  Alternatively, settlement of redemption proceeds may be cleared through Euroclear or Clearstream, in which case the redemptions proceeds will be paid to the Euroclear or Clearstream participant against receipt of the Shares.  Contract Notes will normally be issued within 48 hours of the Dealing Day.

Shareholders are advised to specify settlement instructions when submitting their Redemption Notice and the onus is on the Shareholder to provide accurate bank account details for the purposes of telegraphic transfers.  The costs of any administrative expenses which arise as a result of the transfer of redemption proceeds to the Shareholder's designated account (including without limitation any charges imposed by the Shareholder's own bank) will be borne by the Shareholder.

Payment of redemption proceeds will only be made to the registered Shareholder of the relevant Shares and no such payments will be made to any third party.  In accordance with anti-money laundering regulations, whilst Shareholders may serve notice to redeem by fax, redemption proceeds will not be paid where bank details other than those previously disclosed on the original application form differ, in which case redemption proceeds will only be paid once the original Redemption Notice has been received by the Administrator.

Withdrawal of Redemption Requests

Requests for redemption may not be withdrawn save with the written consent of the Company or the Investment Manager or in the event of suspension of calculation of the Net Asset Value of the Fund.

Risk Factors

Investors' attention is drawn to the risks outlined in the section entitled "Risk Factors" in the Placing Memorandum.