An American Depositary Receipt (ADR) is a negotiable receipt issued in certificate or book-entry form, which represents shares in an existing outstanding class of equity shares in a non-U.S. company. Each ADR represents a number of American Depositary Shares (ADSs). In Phynova's case, each ADS will represent 10 of our ordinary shares.

ADRs will facilitate purchases by U.S. investor of Phynova's non-U.S. securities and allow Phynova as a non-U.S. company to have its stock trade in the United States by reducing or eliminating potential settlement delays, high transaction costs and other inconveniences associated with international securities trading. ADRs are treated in the same manner as U.S. securities for clearance, settlement, transfer and ownership purposes.

The Bank of New York Mellon, as Phynova's U.S. depositary bank, will issue an ADR when the actual ordinary shares are deposited in Phynova's local custodian bank (which is The Bank of New York Mellon with offices located in London, England) usually by a broker who has purchased the shares in the open market. Once issued, these securities may be freely traded on the Pink Sheets in the U.S. over-the-counter marker (see Question 4 below).

Phynova's ADRs will be issued or created when you contact your broker to make a purchase. The broker, through its own international offices or through a local broker in Phynova's home market, purchases the actual ordinary shares and requests that the shares be delivered to the custodian bank. The broker who initiated the transaction will convert the U.S. dollars received from you into the corresponding foreign currency and pay the local broker for the shares purchased. On the same day that the shares are delivered to the custodian bank, the custodian notifies the depositary bank. Upon such notification, ADRs are issued and delivered to the initiating broker, who then delivers the ADRs to you.

Once ADRs are issued, they are tradable in the United States and, just as with any U.S. security, they can be sold to other investors. When an ADR is sold to another U.S. investor and the existing ADR is simply transferred from one ADR holder (seller) to another ADR holder (buyer), it is known as an intra-market transaction.

An intra-market transaction is settled in the same manner as any other U.S. security purchase:  in U.S. dollars on the third business day after the trade date and typically through Depository Trust Company (DTC).

Level I Depositary Receipts are traded in the U.S. OTCQX market with prices published in the "Pink Sheets" and on some exchanges outside the United States. Establishment of a Sponsored Level I program does not require full SEC registration or provide full SEC disclosure. Essentially, a Sponsored Level I Depositary Receipt program allows companies to enjoy the benefits of a publicly traded security without changing its current reporting process.

The Pink Sheets is a quotation service for over-the-counter (OTC) securities. An OTC security is generally considered to be any equity security that is not listed on the NASDAQ,NYSE or AMEX. The Pink Sheets is a privately owned company that permits NASD members to quote any OTC security and does not maintain U.S. regulatory filing requirements.

The International OTCQX (www.otcqx.com) is a premium market tier operated by Pink Sheets LLC that distinguishes the leading international companies traded on the Pink Sheets and provides a way for companies to communicate with investors without the regulatory burdens of a traditional U.S. exchange cross-listing.

International companies have already established their credibility by listing on their home market qualified foreign exchange; OTCQX provides them with the one thing their primary listing is lacking - visibility with and access to a wider circle of U.S. investors.

U.S. investors generally prefer to purchase ADRs rather than ordinary shares in the issuer's home market because ADRs trade, clear and settle according to U.S. market conventions. One of ADRs' main advantages is the facilitation of diversification into foreign securities. ADRs allow easy comparison to securities of similar companies as well as access to price and trading information. ADR holders receive corporate action notifications.

ADRs issuers are typically large multinational corporations. Any non-U.S. company seeking to engage the U.S. market to diversify its investor base, raise capital in the U.S. or offer U.S.-type employee plans.

ADR issuers generally have full information in English about themselves on their websites, as well as on the main depositary bank websites, and are better tracked by the main U.S. financial websites.

When you want to sell your ADRs, you should notify your broker.  The broker can either sell the ADRs in the U.S. market through an intra-market transaction or sell the shares outside of the U.S., typically into the home market, through a procedure known as a cross-border transaction.  In cross-border transaction, brokers, either through their own international offices or through a local broker in the home market, will sell the shares back into the home market.  In order to settle the trade, the U.S. broker will surrender the ADR to the depositary bank with instructions to deliver the shares to the buyer in the home market.  The depositary bank will cancel the ADR and instruct the custodian to release the underlying shares and deliver them to the local broker who purchased the shares.  The broker will arrange for the foreign currency to be converted into U.S. dollars for payment to you.

Once ADRs are issued and there are an adequate number of ADRs outstanding in the U.S. market, usually 3% to 6% of the company's shares in ADR form, a true intra-market trading market emerges. Until this market develops, the majority of ADR purchases result in ADR issuances resulting from the deposit of shares. When executing an ADR trade, brokers seek to obtain the best price by comparing the ADR price in U.S. dollars to the dollar equivalent price of the actual shares in the home market.

The continuous buying and selling of ADRs in either market tends to keep the price differential between the local and U.S. markets to a minimum. As a result, a significant majority of ADR trading is done in the form of intra-market trading and does not involve the issuance or cancellation of an ADR.

Because the Bank of New York Mellon will actually hold the ordinary shares held in the form of ADRs, you must rely on it to exercise your rights as a shareholder. The obligations of The Bank of New York Mellon are set out in the deposit agreement among us, The Bank of New York Mellon, and you, as an ADR holder. Copies of the deposit agreement will be available for inspection at the corporate trust office of The Bank of New York Mellon, which is located at 101 Barclay Street, New York, New York 10286. The offices of The Bank of New York Mellon, as custodian, is located at One Canada Square, London E14 5AL and The Bank of New York Mellon's principal executive office is located at One Wall Street, New York, New York 10286.

If you are an ADR holder, you must rely on the procedure of your broker or other financial institution to assert your rights as an ADR holder. You should consult with your broker or financial institution to find out what those procedures are.

The Bank of New York Mellon (BNYM). The depositary bank plays a key role in the process of issuance and as cancellation of ADRs. It also maintains the ADR holder register. The Bank of New York Mellon is a DTC (Depositary Trust Company) participant as are brokers & dealers, other banks, trust companies and clearinghouses. For additional general information, please visit The Bank of New York Mellon's website at www.adrbny.com and search for Phynova Profile Page. Registered holders wishing to access their account with The Bank of New York Mellon (BNYM acts as both ADR depositary bank & registrar):

The Bank of New York Mellon

The Bank of New York Mellon
Investor Services
P.O. Box 11258,
Church Street Station,
New York,
NY 10286-1258
Toll Free Tel # for domestic callers:
1-888-BNY-ADRS (1-888-269-2377)

International Callers can call:
212-815-3700

For the issuance of ADRs please contact:
Mr Jason Paltrowitz
Tel: +1 212 815 2077
Fax: +1 212 571 3050
Email: jason.paltrowitz@bnymellon.com

Email: shrrelations@bnymellon.com
Websites: www.bnymellon.com/shareowner

An ADR (American Depositary Receipt) is a negotiable certificate issued by a depositary bank representing a specific number of shares of a non-U.S. company traded on a U.S. stock exchange. An ADS is the share issued under the ADR agreement which is actually traded.

Yes.

Converting ordinary shares into ADRs must be done through a broker or an investment advisor.

No.

A registered holder is one whose name appears on the books of the depositary. The registered holder is considered the owner of the record. A beneficial holder is one whose holdings are registered in a name other than his or her own, such as the name of a broker, bank or nominee.

For registered owners, ownership is registered by the depositary bank and is evidence by an account statement provided by the depositary.

Owners of Phynova ADRs that are registered in the "nominee name" or "street name" of a bank, broker or other institution that holds such securities for the accounts of others are considered beneficial owners. ADRs held in this form are book-entry securities, where the beneficial owner's interest is recorded in an account held by the institution rather than by registration with the ADR depositary. Major benefits of book-entry ownership are the elimination of problems associated with paper certificates such as storage, safety of securities or cost and inconvenience of replacement. Book-entry ADRs eliminate the requirement for physical movement of certificates at the time of sale or transfer of ownership. Investors purchasing ADRs through a broker who wish to become registered owners must specifically direct the broker to register the shares with the ADR depositary. If you choose to have a certificate issued, please contact The Bank of New York Mellon.

For those holders who are not registered because their shares are held through a "Street name" (nominee account), please contact your nominee for information on your ADR holdings.

Your Phynova ADR represents your ownership of shares in the company and can be held in certificate or book-entry form. If you hold your ADRs in certificate form these should be kept in a safe-deposit box or secure place. Certificates are negotiable documents and should be signed only in the event of a sale or transfer of ownership. If you hold your ADRs through a "Street Name" (nominee account) these will be in book-entry form and therefore you will not have an ADR certificate.

You will receive account statements following each investment activity. You will also receive a statement at the end of the year showing all year-to-date transaction activity. You should retain these statements for tax purposes.

If your certificate is lost, stolen, or destroyed, notify The Bank of New York Mellon investor hotline +1-888-BNY-ADRS (+1-888-269-2377). Please ensure that you have your Social Security Taxpayer Identification number ready when calling.