1. TRANSACTION SERVICES ADVISORY Romania conference – IPO process Victor Kevehazi, Senior Partner 18 October 2005

2. © 2005 KPMG Romania SRL, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. 2 Contents Overview of IPO Process Preparing for the IPO process Survey respondents - lessons learned Auditor’s role

3. © 2005 KPMG Romania SRL, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. 3 Overview of the IPO process c         Consider suitability and address key issues Planning Detailed due diligence Prospectus Verification Marketing to prospective investors Pricing the issue Completion

4. © 2005 KPMG Romania SRL, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. 4 Preparing for an IPO – Getting in shape Select advisers Ensure contracts are in good order Prepare three-year financials for audit Review management team and add new staff members, if necessary Implement appropriate accounting systems Prepare due diligence materials

5. © 2005 KPMG Romania SRL, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. 5 Preparing for an IPO – Key challenges Respondents consider preparation and verification of the prospectus the most challenging stage of the process This stage is considered less stressful than others since advisers do most of the work in this area Due diligence and marketing road shows are labelled as the “most stressful” stages for the executives because they have to take charge of the most part of these stages

6. © 2005 KPMG Romania SRL, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. 6 Preparing for an IPO - Timetable Companies often underestimate time needed for a listing 70% of the companies spend less than 3 months planning and preparing for the IPO Same percentage of companies need less than 3 months to complete the process 40% of the companies say the process took longer than predicted Main delay causes are: solving issues uncovered during due diligence, unrealistic schedule, changing market conditions

7. © 2005 KPMG Romania SRL, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. 7 Preparing for an IPO – Executive time consumption 62% of the CEOs and 81% of the Financial Directors spend more than 50% of their time on the IPO Extra tier of competent managers is needed to look after the business, while executives sell the company to investors The IPO process should be seen as a long-term project by the executives After the actual listing, the process will continue to be time demanding on executives The hiring of permanent staff in sections like investor relations, finance and business development should be considered

8. © 2005 KPMG Romania SRL, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. 8 IPO Survey The survey that led to the results presented was conducted by MORI Telephone interviews were conducted with directors of 77 companies listed since 1 January 2002, out of which 48 achieved listing in 2004 KPMG added to the survey a selection of in-depth qualitative interviews The KPMG interviews took place between 5 October – 24 November 2004 The results of the survey have been analyzed and presented in an aggregate format

9. © 2005 KPMG Romania SRL, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. 9 Respondents – lessons learned Adapt existing company procedures and implement new policies and procedures Be prepared for corporate governance requirements and institution and market attention Make sure the company is ready for flotation Get the right team on board before starting the process Processes are expected to go beyond the established deadlines Prepare for a large amount of your time to be consumed by the IPO process

10. © 2005 KPMG Romania SRL, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. 10 Contd. Respondents – lessons learned Do not underestimate the depth you have to use in due diligence Be ready to handle the IPO process and your business at the same time Have enough resources available to avoid problems with the functioning of the company Prepare all the information for the due diligence beforehand Be certain you perceive the size of the effort involved in the IPO before acting

11. © 2005 KPMG Romania SRL, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. 11 Auditor’s role Assistance provided with the preparation and verification of the prospectus Advise about the amount of internal resources required Assist with process preparation and planning Provide guidance for the due diligence stage Help with corporate governance requirements Give advice and assistance with other issues

12. 12 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2005 KPMG Romania SRL, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. Victor Kevehazi Senior Partner KPMG Romania SRL +40 (741) 800 800 vkevehazi@kpmg.rowww.kpmg.ro