Yekaterinburg, January, 1st, 2005. Today the largest Russian perfumery-cosmetics manufacturer OJSC Concern "Kalina" (Concern "Kalina") announced the  launch of a Level I 'OTC' American Depositary Receipts (ADR) program in respect of the ordinary shares of Kalina administered by Deutsche Bank Trust Company Americas, as depositary bank.  ADRs can be issued in respect of up to 19, 99% of the issued and outstanding share capital of the Company.  The Level I ADR program has been approved by the Board of Directors of Concern "Kalina".  One ADR will represent the right to receive one ordinary share of Concern "Kalina".
 
As it was reported earlier, on December, 23rd, 2004, the Federal Service for Financial Markets gave permission for circulation outside the Russian Federation of 1,949,487 ordinary shares of the Concern "Kalina".

Timur Gorayev, CEO at Kalina said: "We consider the ADR program as logical step in extension of investor base and better service for our existing shareholders".

Note.  American depositary receipts are US dollar-denominated negotiable instruments issued in the US by a depositary bank evidencing American depositary shares (ADSs) representing ownership of the underlying ordinary shares of a non-US issuer.  A Level I ADR program is established in respect of existing ordinary shares of an issuer trading in the issuer's home market.  A Level I ADR program establishment does not involve any new issuance of shares, a registration of shares with the United States Securities and Exchange Commission or a capital raising by an issuer under a Level I ADR program.  American depositary receipts within a Level I ADR program are traded on the Over-The-Counter 'OTC' Market and are not listed on a US national stock exchange. 

About the company. JSC concern "Kalina " is one of the leading Russian perfumery and cosmetics producers. The leading brands of the company are "Black Pearl", "Clean Line" and "MIA" among the skin-care products, "32", "Forest Balsam"- on the mouth-care market, 'Angelica Varum" - among perfumes.
Concern "Kalina" consists of the parent enterprise in Ekaterinburg, Omskiy factory of detergents, subsidiary "Pallada Ukraine" (Ukraine), "Novoplast", Kalina Overseas Holding B. V. (Netherlands)

Further information you may get from the press-secretary of the JSC Concern 'Kalina"- Kazantsev Sergey, tel./fax.(343) 365 83 06, e-mail: pressa@kalina.org.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of JSC Concern "Kalina" (the "Company"), as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.  You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions.  We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date of this press release and to reflect the occurrence of unanticipated events.  We refer you to the documents the Company files from time to time with the Federal Service for the Financial Markets.  These documents contain and identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, our competitive environment, dependence on new product development, rapid market change, acquisition strategy, risks associated with operating in Russia, volatility of stock price, financial risk management, and future growth subject to risks.

Not for distribution in the United States.

This press release is not an offer or solicitation of an offer of securities by Concern "Kalina" or any other entity for the purchase or sale of any securities nor does it constitute an offer or solicitation to any person in any jurisdiction where solicitation would be unlawful.  Securities may not be offered or sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration.

 This announcement is only for circulation to persons to whom it may lawfully be issued in circumstances in which Section 21(1) of the Financial Services and Markets Act 2000 does not apply to the Company.