Depositary ReceiptsHandbook

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CONTENTS

Section

1 Background 2

2 Why DRs? 4

3 Types of DRs 6

4 Listing Requirements 11

5 US Securities and ExchangeCommission Compliance

14

6 Other Considerations 16

7 What Benefits does Deutsche Bankoffer?

18

8 Contacts 21

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1

BACKGROUND

ADRs

Historically, American Depositary Receipts (ADRs) were the first type of depositary receipt toevolve. They were introduced in 1927 in response to a law passed in Britain, which prohibitedBritish companies from registering shares overseas without a British-based transfer agent. UKshares were not allowed physically to leave the UK, and so, to accommodate US investordemand, a US instrument had to be created; this was called an American Depositary Receipt.ADRs assumed their present form in 1955, when the Securities and Exchange Commission(SEC) established its Form S-12 for registering all depositary receipt programs. Form S-12 waslater replaced by Form F-6, which is still in use today.

ADRs are US dollar denominated negotiable instruments issued in the US by a depositary bank(eg Deutsche Bank), representing ownership in non-US securities, usually referred to as theunderlying ordinary shares. ADRs enable US investors to acquire and trade non-US securitiesdenominated in US dollars without concern for the differing settlement timetables and theproblems typically associated with overseas markets. They also provide non-US companies withaccess to the US capital markets, the largest domestic investor base in the world.

Capital raising and non-capital raising ADRs

There are several types of ADR, each of which involves a different level of disclosure ofinformation and compliance with the regulations of the SEC. But perhaps the most importantdistinction for issuers of ADRs is that some structures allow the company to raise capital in theUS, while others simply provide a mechanism which makes it easy for US investors to buy andtrade existing shares.

Global Depositary Receipts (GDRs)/European DepositaryReceipts (EDRs)

In the last few years, the depositary receipt concept has developed considerably. Issuers in avariety of countries have realised that there are advantages in making their stock available in aform convenient not only to US investors but also, or alternatively, to investors in theEuromarkets or elsewhere. This has prompted the development of European DepositaryReceipts (EDRs) and Global Depositary Receipts (GDRs).

The EDR accesses the Euromarkets but not the US market. It settles and trades through theEuromarket clearing systems, Euroclear and Clearstream, and may be listed on a EuropeanStock Exchange, normally London or Luxembourg.

A GDR will access two or more markets, usually the Euromarkets (like an EDR) and the US (likean ADR). GDRs are often launched for capital raising purposes, so the US element is generallyeither a Rule 144(a) ADR or a Level III ADR, depending on whether the issuer aims to tap theprivate placement or public US markets. However, we have also pioneered the non-capitalraising Unsponsored and Level I GDR.

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EDRs and GDRs are generally denominated in US dollars, but may be denominated in anycurrency. They represent the underlying shares in exactly the same way as ADRs, and make itpossible for foreign investors to trade in the issuing company's stock without the problemsassociated with custody and settlement in foreign markets.

Buying and Selling DRs

If an investor wishes to purchase shares in a foreign company, he can either buy the foreignshares in the local market through a broker in that country or, providing the foreign company inquestion has a DR program, the investor can request his broker to buy DRs. The broker mayeither purchase existing DRs or, if none are available, he may arrange for a depositary bank (e.gDeutsche Bank) to issue new ones.

The process for issuing new DRs is very simple. The investor's broker contacts a broker in theissuing company's home market and acquires shares in that company. These shares are thendeposited with the depositary bank's local custodian. Upon confirmation that the custodian hasreceived the shares, the depositary issues the requisite number of DRs to the investor via thebroker.

In some exceptional cases there may be restrictions on the issuance of new DRs under existingprograms (eg Indian GDR programs) because of local regulations.

DRs can be sold in DR form, in which case they trade and settle like other US or Euro securities.They can also, however, be cancelled. In this case the broker acting on behalf of the owner of theDRs will request the depositary bank to cancel the DRs and release the underlying shares to adomestic broker in the issuing company's home market. The domestic broker will then sell theshares locally and the proceeds will be remitted to the investor who cancelled those DRs.

• DRs certify that a stated number of underlying shares have been deposited with thedepositary's custodian in the foreign country.

• DR holders are entitled to all the dividends payable on the underlying foreign shares and,

furthermore, to have these paid in the currency in which the DRs are denominated - usuallyUS dollars.

• The DRs may be bought or sold through investors' own brokers, and they clear and settle

through the Depository Trust Company (DTC) for ADRs, through Euroclear and Clearstreamfor EDRs and through all three (and possibly other clearing systems) in the case of GDRs,depending on which markets they access.

Shareholder information such as annual reports, notices of general meetings and corporateactions, and official news releases are provided by the issuer to the depositary and to the receiptholders, either direct or through the local custodian. The investor is thus spared the costs and difficulties often encountered when direct investment ismade in local markets, where currency, settlement, and linguistic problems may be compoundedby an excessive number of intermediaries.

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2

Why DRs?

WHY DO INVESTORS BUY DRs? US investors have become increasingly interested in overseas markets as a result of their higheryields compared to the US equity market over recent years. International investors are also eager to diversify their portfolios, both geographically and byindustry sector, in order to increase their returns while spreading their risk. They have long beenactive in the debt markets, as evidenced by the vast size of the Euromarkets, and sophisticatedinternational clearing systems have been developed to handle Euro instruments. Until recently,however, cross-border equity investments have involved all the currency, settlement andlinguistic problems which occur when dealing with overseas equity markets. Building on the concept of the ADR, investment banks developed the EDR/GDR to solve theseproblems for international investors. Some of the factors contributing to the appeal of DRs to international investors: • They offer investors a convenient means of holding foreign shares. • They simplify the trading and settlement of foreign equities. DRs trade and settle just like US

or Euro securities. • They offer lower trading and custody costs when compared with shares bought directly in the

foreign market. • Many US bank and pension fund portfolios may be prohibited by their charters from

purchasing foreign securities. ADRs, however, are recognised as US domestic securities. • ADRs, and normally GDRs too, are denominated in US dollars. Dividend payments on the

underlying shares are converted into US dollars by the depositary bank. These featuresminimise foreign exchange problems for international and US investors.

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WHY DO COMPANIES LAUNCH DR PROGRAMS?

ADRs ADR programs are becoming ever more attractive to non-US corporations, as the most effectivemeans of entering the important US market. Furthermore, certain types of ADR programs permitcapital raising in the US, and the amount of new capital raised through ADRs has risen, fromUSD 2.5 billion in 1990 to over USD 27.7 billion in 2000. ADRs have also taken on increasingimportance in cross border merger and acquisition activity. Advantages to a non-US corporation of initiating an ADR program: • An ADR program provides a simple means of diversifying a company's shareholder base and

accessing the important US market. • It may increase the liquidity of the underlying shares of the issuer. • ADRs can be used as an equity financing tool in both M&A transactions and ESOPs

(Employee Stock Ownership Plans) for US subsidiaries. • An ADR program helps to increase a non-US company's visibility and name recognition in

the important US investor community. • A company may raise capital in the US market through some types of ADR program.

EDRs/GDRs The advantages of an EDR/GDR program are similar to those of an ADR program. An EDRprogram gives access to the vast pool of international capital, while a GDR combines this withaccess to the domestic US market. This allows capital raising on a scale, which could be difficult in some domestic market’s, and inthe case of an EDR avoids all the US SEC reporting and registration requirements associatedwith ADRs. Advantages to a non-US corporation of initiating an EDR/GDR program: • A DR program provides a simple means of diversifying the company's shareholder base and

of tapping the global capital markets. • It allows capital raising on a scale which might prove impossible in the local market. • It increases the issuer's visibility and name recognition in the international markets, which may

enhance knowledge of its products and ease the path of future capital raising exercises.

A USEFUL STRUCTURING TOOL While DRs are generally used to make equity more widely available or to raise capital outside theissuer's domestic market, they can also be used as part of many other financing structures. Theconcept of a receipt trading in one market, which represents an instrument held in custody in adifferent market, can be adapted to a wide variety of transactions.

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3

Types of DRs? There are a variety of DR program types. These can be divided into capital raising and non-capital raising structures. The type of program used will depend on the requirements of theissuer, the features of the issuer's domestic market and on investor attitudes. A third type of DR program is known as "unsponsored". This differs from other types in that thecompany whose shares are represented by unsponsored DRs is not involved in setting up theprogram. We deal with the three different types of DR in three separate sections of this chapter.

SECTION ONE

NON CAPITAL RAISING DRS

ADR TYPE GDR STRUCTURE POSSIBLE? Sponsored Level I Yes Sponsored Level II Yes

1. SPONSORED ADR PROGRAM - LEVEL 1

A Level I sponsored ADR program is the easiest and least expensive means for acompany to provide for issuance of its shares in ADR form in the US. A Level I programis initiated by the issuer and involves the filing of an F-6 registration statement, butallows for exemption under Rule12g 3-2(b) from full SEC reporting requirements. (Seechapter 6 for details of Form F6, Rule 12g 3-2(b)). The issuer has a certain amount ofcontrol over the ADRs issued under a sponsored Level I program, since a depositaryagreement is executed between the issuer and one selected depositary bank. Level IADRs can however only be traded over-the-counter and cannot be listed on a nationalexchange in the US.

Advantages of a Level I ADR program: • It avoids full compliance with the SEC's reporting requirements. • By working with a single depositary bank, the issuer has greater control over its ADR

program than would be the case with an unsponsored program.

• The depositary acts as a channel of communication between the issuer and its USshareholder base. Dividend payments, financial statements and details of corporateactions will be passed on to US investors via the depositary.

• The depositary bank maintains accurate shareholder records for the issuer and can, ifrequested, monitor large stock transactions and report them to the issuer.

• Set-up costs are minimal and all transaction costs are absorbed by the ADR holder.

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• It is easy and relatively inexpensive to upgrade the program to Level II or III as the

issuer and depositary bank do not have to negotiate cancellation of unsponsoredADRs with several depositaries, as would be the case if upgrading an unsponsoredprogram.

Disadvantages of a Level I ADR program:

• It cannot be listed on any of the national exchanges in the US. As a result, investorinterest might be somewhat restricted which may limit the issuer's ability to enhanceits name recognition in the US.

• Capital raising is not permitted under a Level I program.

2. SPONSORED ADR PROGRAM - LEVEL II

A sponsored Level II ADR must comply with the SEC's full registration and reportingrequirements. In addition to filing an F-6 registration statement, the issuer is alsorequired to file SEC Form 20-F (see chapter 6 for details) and to comply with the SEC'sother disclosure rules, including submission of its annual report which must be preparedin accordance with US Generally Accepted Accounting Principles (GAAP). Registration allows the issuer to list its ADRs on one of the three major national stockexchanges, namely the New York Stock Exchange (NYSE), the American StockExchange (AMEX), or the National Association of Securities Dealers AutomatedQuotation (NASDAQ) Stock Market, each of which has reporting and disclosurerequirements. Level II sponsored programs are initiated by non-US companies to give US investorsaccess to their stock in the US. As with a Level I program, a depositary agreement issigned between the issuer and a depositary bank. The agreement defines theresponsibilities of the depositary, which usually include responding to investor enquiries,mailing annual reports and other important material to shareholders and maintainingshareholder records. Advantages of a Level II ADR program:

• It is more attractive to US investors than a Level I program because the ADRs may

be listed on one of the major US exchanges. This raises the profile of the ADRprogram to investors, thus increasing the liquidity and marketability of the securities.

• Listing and registration also enhance the issuer's name recognition in the US. • US disclosure regulations for large investors enable the issuer to monitor the

ownership of its shares in the US.

Disadvantages of a Level II ADR program:

• More detailed SEC disclosure is required than for a Level I program. For example,the issuer's financial statements must conform to US Generally Accepted AccountingPrinciples (GAAP), or else a detailed summary of the differences in financialreporting between the home country and the US must be submitted.

• SEC regulations do not permit a public offering of ADRs under a Level II program.

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• It is more expensive and time-consuming to set up and maintain a Level II programthan a Level I program because of the more stringent reporting requirements andhigher legal, accounting and listing costs.

SECTION TWO

CAPITAL RAISING DRs

ADR TYPE GDR STRUCTURE POSSIBLE? Sponsored Level III Yes Rule 144a Yes (No ADR element) EDR

3. SPONSORED ADR PROGRAM - LEVEL III

Level III sponsored ADRs are similar to Level II ADRs in that the issuer initiates theprogram, deals with one depositary bank, lists on one of the major US exchanges, andfiles Form F-6 and 20-F registration statements with the SEC. The major difference isthat a Level III program allows the issuer to raise capital through a public offering ofADRs in the US and this requires the issuer to submit a Form F-1 (see chapter 6 fordescription) to the SEC. Advantages of a Level III ADR program:

• All of the advantages of a Level II program. • It permits public offerings of ADRs in the US which can be used for a variety of

purposes, for example the raising of capital to finance acquisitions or theestablishment of an Employee Stock Ownership Plan (ESOP) for the issuer's USsubsidiary.

Disadvantages of a Level III ADR program:

• SEC reporting is more onerous than for Level I or II programs. • The costs of setting up and maintaining a Level III program can be high. Set-up

costs, which would include listing, legal, accounting, investor relations and "roadshow" costs, might amount to approximately US$ 300,000 to US$ 500,000.

4. RULE 144(a) ADRs (RADRs)

Rule 144(a) ADRs, or restricted ADRs (RADRs) are simply privately placed depositaryreceipts which are issued and traded in accordance with Rule 144(a). This rule wasintroduced by the SEC in April 1990 in part to stimulate capital raising in the US by non-US issuers. Some of the former restrictions (under Rule 144) governing resale ofprivately placed securities (or "restricted securities") have been lifted under Rule 144(a),providing the sale is made to "qualified institutional buyers" (QIBs), with the aim ofadding liquidity to the private placement market. A QIB is currently defined as aninstitution, which owns and invests on a discretionary basis at least US$ 100 million (or,in the case of registered broker-dealers, US$ 10 million) in securities of an unaffiliatedentity. At present there are believed to be in excess of 4000 QIBs but the SEC maydecide to broaden the definition of a QIB to allow a larger number to participate in theRule 144(a) market.

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Non-US companies now have easy access to the US equity private placement marketand may thus raise capital through the issue of restricted ADRs without conforming tothe full SEC registration and reporting requirements. Additionally the cost of issuingRule 144(a) ADRs is considerably less than the cost of initiating a Sponsored Level IIIADR program. In June 1990, the National Association of Securities Dealers (NASD) established aclosed electronic trading system for RADRs called "PORTAL" (Private Offerings,Resales and Trading through Automated Linkages). This system is designed to provide amarket for privately traded securities such as RADRs and access to it is available toboth investors and market makers.

Advantages of RADRs:

• ADRs offered under Rule 144(a) do not have to conform to full SEC reporting and

registration requirements. QIBs may demand certain financial disclosure, however,unless the reporting exemption under Rule 12g 3-2(b) has been granted.

• RADRs provide a cheaper means of raising equity capital than through a public

offering and they can be issued more easily and quickly. • RADRs can be launched on their own or as part of a global offering. • They can be traded through the NASD's "PORTAL" system and they clear through

the DTC.

Disadvantages of RADRs:

RADRs cannot be created for classes of share already listed on a US exchange. RADRs can only be sold in the US to QIBs. Although there are in excess of 4000potential QIBs, the RADR market is not as liquid as the public US equity market.

5. EUROPEAN DEPOSITARY RECEIPTS AND GLOBAL DEPOSITARY RECEIPTS (EDRs and GDRs)

With the global integration of the major securities markets, it is now commonplace tohave fungible securities listed and cleared in more than one market. The links that existbetween Euroclear and Clearstream in Europe and DTC in the US allow for efficient andtrouble-free settlement of securities between these two major markets. Just as ADRs allow non-US issuers to access the important US market, EuropeanDepositary Receipts allow issuers to tap the Euromarkets. GDRs, far more common thanEDRs, give access to two or more markets, most frequently the US market and theEuromarkets, with one fungible security. EDRs and GDRs are most commonly usedwhen the issuer is raising capital in the local market as well as in the international andUS markets, either through private placement or public offerings. The US component of a GDR is normally structured either as a Level III ADR with fulldisclosure and reporting to the SEC, or privately placed under Rule 144(a), in which casefull compliance with the SEC's onerous reporting and registration requirements isavoided.

TWO DIFFERENT GDR STRUCTURES

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When GDRs are structured with a Rule 144(a) offering for the US and a "Regulation S"offering for non-US investors, there are two possible options for the structure. Unitary Structures Under a unitary structure, a single class of DRs is offered both to QIBs in the US and tooffshore purchasers outside the issuer's domestic market, in accordance with RegulationS. All DRs are governed by one Deposit Agreement and all are subject to deposit,withdrawal and resale restrictions. Bifurcated Structure Under a bifurcated structure, Rule 144(a) ADRs are offered to QIBs in the US andRegulation S DRs are offered to offshore investors outside the issuer's domestic market.The two classes of DRs are offered using two separate DR facilities and two separateDeposit Agreements. The Regulation S DRs are not restricted securities, and cantherefore be deposited into a "side-by-side" Level I DR program, and are not normallysubject to restrictions on deposits, withdrawals or transfers. However, they may besubject to temporary resale restrictions in the US. Advantages of EDRs/GDRs: • EDRs/GDRs can be launched as part of a private or public offering. • They allow a single fungible security to be placed in one or more international

markets, thus giving access to a global investor base. • They may allow the issuer to overcome local selling restrictions to foreign share

ownership. • GDRs are eligible for settlement through Clearstream, Euroclear and DTC. Disadvantages of EDRs/GDRs:

• If the US tranche of a GDR is structured as a Rule 144(a) private placement, thedisadvantages of an RADR program will apply. If it is structured as a Level IIIprogram, the reporting and cost features of such programs will apply.

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4

Listing Requirements

WHERE TO LIST One of the more important decisions facing a prospective issuer of DRs is determining where tolist them. Listing on a recognised stock exchange is important partly because many institutionalinvestors are required to limit their investment in unlisted securities. Critical factors such asshare liquidity, visibility, listing costs and funding requirements must be carefully evaluatedbefore the exchange which best suits the issuer's needs can be selected. In order to ensure thatthe correct decision is reached, the prospective issuer should hold in-depth discussions with themajor exchanges. We would be happy to introduce issuers to representatives of the variousexchanges in the US and in Europe. The type of DR program desired will determine what listing options are available. For example,a listing on one of the three national US exchanges, the New York Stock Exchange (NYSE), theAmerican Stock Exchange (AMEX) or NASDAQ, is only possible for Level II and Level III ADRs.We set out below a summary of the differences between the "over-the-counter" market and themajor US exchanges, and information on the London and Luxembourg Stock Exchanges wheremost GDRs are currently listed. This is followed by details of the minimum requirements for listing on each exchange and theirrespective listing charges.

US LISTINGS - ADRs THE OVER-THE-COUNTER MARKET Over-The-Counter (OTC) market trades are listed in the "Pink Sheets". The Pink Sheets arepublished daily by the National Quotation Bureau and represent a non-automated listing ofstocks, which trade outside the three major exchanges. Listing fees are paid by the broker-dealer who seeks the listing. The broker-dealer must file a National Quotation Form 211, which includes updated financials ofthe company and other relevant information. Listing on the "Pink Sheets" is available forsponsored Level I and unsponsored ADR programs, while a listing on NASDAQ, AMEX or theNYSE is only available to Level II and III sponsored programs. THE NATIONAL EXCHANGES Issuers of Level II or III sponsored ADRs will benefit in several ways from a listing on any one ofthe three national exchanges. The increased visibility to the US investment community, which alisting provides, together with access to the automated trading and efficient market pricingavailable on the national exchanges, should lead to a significant expansion of the issuer's

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investor base. Importantly, listing fees for ADRs are generally less expensive than those forordinary shares in the US. A description of the three exchanges follows:- • NASDAQ (NATIONAL ASSOCIATION OF SECURITIES DEALERS AUTOMATED

QUOTATION)

NASDAQ, the first electronic stock market, operates a system of competing market makerslinked to investors by sophisticated telecommunications networks. There are two options for listing; the Small Cap Market which, as its name implies, caters forsmaller companies, and the National Market System, where the majority of NASDAQsecurities are listed. While criteria for listing on these two markets differ, the ADR listing charges are very similar. The NASD also operates PORTAL, the market for securities issued under Rule 144(a).

• AMEX (AMERICAN STOCK EXCHANGE)

AMEX operates an auction market system, intended to facilitate trading between buyers andsellers with minimum intervention from professional dealers. Each listed stock is handled bya specialist unit. There are special listing requirements for non-US issuers, with "Alternate" requirementsintended to cover companies which are financially sound but which, because of the nature oftheir business, would not qualify under the "Regular" requirements.

• NYSE (NEW YORK STOCK EXCHANGE)

The NYSE, like AMEX, operates an auction market system where stock prices aredetermined largely by public orders competing with each other. By value of shares listed andby volume of trading, the NYSE is the largest exchange in the United States. Foreign companies listing on the NYSE can choose to qualify either under the "AlternateListing Standards" designed specifically for non-US corporations, or under the "Original" or"Alternate Original" standards which apply to US domestic corporations.

Each of the exchanges sets additional standards concerning corporate governance. However,non-US corporations may be exempted from these requirements upon application. Confidentialmeetings can be arranged with the exchanges in advance of any decision-making to discussspecific concerns or exemptions.

EUROPEAN LISTINGS LONDON AND LUXEMBOURG At the time of writing, most GDRs have consisted of a Rule 144a offering in the US and aEuromarket element. With these instruments there is no listing in the US, but many are listed inLondon or Luxembourg, the traditional exchanges for listing euromarket instruments.

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A listing on a recognised stock exchange adds to the visibility of the issue and provides a widerpotential market; many institutional investors have limits on the number of unlisted securities, orsecurities which are not listed on certain specified exchanges, in which they can invest. Both the London and Luxembourg Stock Exchanges list GDRs, and since both are governed bythe same European Union directive, their listing requirements are broadly similar. Thedifferences lie mainly in the level of disclosure, the ease and speed with which listings can beobtained and the level of visibility afforded by the listing. Listings on the London Stock Exchange are generally arranged by the Lead Manager of the GDRissue acting as Listing Agent, while for Luxembourg the Listing Agent must be a Luxembourgbank with a seat on the Luxembourg Stock Exchange. This is not normally a service the LeadManager of the GDR issue can provide directly. A listing on the London Stock Exchange makes it easier for a GDR to be quoted on SEAQInternational, the exchange's electronic price quotation service, although such a listing is not a requirement for trading on SEAQ.

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5

US Securities and Exchange Commission Compliance

ADRS, ADR ELEMENTS OF GDRS The following table outlines the different filings required by the SEC in the US, the wayADRs are traded and whether new capital can be raised, according to the type of ADRprogram issued: Type of Program

SEC Filing Required

Trading

Raising Capital

Level I Sponsored Level II Sponsored Level III Sponsored Rule 144(a)

F-6 12g 3-2(b) F-6 20-F F-6 20-F F-1 N/A

OTC NYSE AMEX NASDAQ NYSE AMEX NASDAQ PORTAL

No No Yes Yes

T GDR - Filings for any US tranche will depend on which structure is chosen:

normally a Level III or Rule 144(a) program. Exemption from Supplying Information: Rule 12g 3-2(b) Under certain circumstances, the SEC exempts non-US corporations wishing to trade theirshares in the US from the full reporting burden. The Information Supplying Exemption, alsoknown as Rule 12g 3-2(b), can be obtained by those non-US corporations that are not seeking alisting on a national exchange and are not intending to launch a public offering of their securities.In order to gain exemption, a company must do the following: • Send a letter to the SEC outlining its intentions. • Send whatever information that is (1) made or required to be made public in its home

country, (2) required to be filed with a stock exchange on which its securities are traded or,(3) distributed or required to be distributed to its shareholders.

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• The SEC be placed on the company's mailing list. All important future public information

must be made available to the SEC. Information supplied to the SEC under this exemption is not technically "filed" with the SEC andthe non-US corporate does not therefore make itself liable under the Exchange Act's provisionsagainst filing false or misleading statements. Agreeing to supply information under thisexemption does not in any way render a non-US corporate subject to the Exchange Act. Form F-6 Form F-6 is used for the registration of depositary shares as evidenced by ADRs (or GDRs) thatare issued by a depositary bank against the deposit of securities of a foreign issuer under theSecurities Act of 1933. The information is prepared by the company under the guidance of thedepositary bank at the inception of either an unsponsored or sponsored program. Form 20-F A Form 20-F is filed as a registration statement/annual report by issuers of Level II or IIIsponsored ADRs/GDRs. It is a comprehensive report of all material business activities andfinancial results and must comply with US GAAP. The Form 20-F consists of four distinct parts.Part I requires a full description of the issuer's business, details of its property, any outstandinglegal proceedings, taxation and any exchange controls that might affect security holders. Part IIrequires a description of any securities to be registered, the name of the depositary bank for theDRs and all fees to be charged to the holders of DRs. Part III requires information on anydefaults upon senior securities. Part IV requires various financial statements to be submitted. Form F-1 Foreign issuers planning a public offering in the US via a Level III DR program must register theproposed new securities by filing Form F-1. This form requires the following information to beincluded in the prospectus: use of proceeds, summary information, risk factors and ratio ofearnings to fixed charges, determination of offering price, dilution, plan of distribution,description of securities to be registered, name of legal counsel and disclosure of commissions.

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6

Other Considerations

Investor Relations A prospective DR issuer needs to understand the functions performed by an investor relations(IR) firm and how IR can enhance the success of a DR program. An investor relations firm canprovide valuable services both prior to and following the launch of a program.

Before launch, it is important for the issuer to realise that "road-show" information provided tointernational investors may need to be markedly different from that supplied to investors in theissuer's home market. To make a road-show successful and to justify its cost, an investorrelations firm will undertake market research which will give the issuer insight into investors'perceptions and attitudes, their portfolio strategies, the type of information they would expectfrom the issuer and how and when it should be provided. With this knowledge, the issuer is in abetter position to develop a road-show specifically targeted at those investors having thegreatest interest in its DRs.

The decision to employ an IR firm will be influenced by a company's particular needs, interestsand objectives. For example, a retail oriented company may wish to emphasise broad-basedadvertising and public relations activities which enhance name recognition. A major wholesaleor manufacturing company on the other hand may be more concerned with reaching thespecialist analysts and institutional investors through a series of very targeted road-shows. Anissuer contemplating a Level III program would be more likely to benefit from an extensiveinvestor relations campaign than one opting for a Level I program. However, a smaller scall IRcampaign for a Level I or Level II issuer could significantly enhance liquidity and contribute tothe program's overall success.

Ideally, a prospective issuer should appreciate how an investor relations firm can contribute tothe success of its DR program before deciding whether, or to what extent, to engage an IR firm. GAAP Conversion (Level II and Level III ADR Programs) The process of converting financial statements to the US standard of Generally AcceptedAccounting Principles (GAAP) can be complex but depends on the compatibility of accountingprocedures in the issuer's home country with those of the US. Regulated industries such asbanking may find the costs of conversion more onerous than those companies in less regulatedsectors. Tax Compliance US Tax Non-US companies are not responsible for complying with the US tax requirements regardingdividend payments made in the US under their DR program. The depositary bank handles anysuch issues.

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Local Tax The depositary provides registered GDR holders with tax certification forms prior to eachpayment date and returns them to the issuer so that the correct tax can be deducted according tolocal regulations. Subscription Rights The right granted to existing shareholders of a company to receive or to subscribe to new sharesunder a "rights" or "bonus" issue is also extended to registered ADR holders. However, a USinvestor can only take possession of these rights in the US if the issuer undertakes to register theoffering, or if an exemption from registering it is available. In all other cases, the depositary mustarrange to sell the entitlement to the rights in the home country and distribute the cash proceedsto the ADR holders. Voting Rights The non-US company will give notice to the depositary of a sponsored program of when itsannual general meeting will take place. The depositary is responsible for distributing proxymaterial to all registered ADR holders of Level II or III programs. The depositary is only obligedto vote if instructed to do so by the record holder of the ADR. On unsponsored or Level Isponsored ADR programs, the issuer and/or depositary will decide whether voting rights are tobe offered to ADR holders, and in these cases the depositary will provide information regardingvoting procedures on request. EDR programs and GDR programs with Rule 144(a) elements can be set up with or without theprovision for DR holders to enjoy voting rights.

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7

What benefits does DeutscheBank offer?

Deutsche Bank is one of the largest securities services banks in the world, with a reputation forproviding first class and innovative products. We offer exceptional benefits to those issuers who choose Deutsche Bank as their depositary. DR Service Package Our depositary services "package" provides the following:- • Original issuance of DRs and provision of Transfer Agency services. • Recordkeeping and Registrar function. • Custodian services for the underlying shares. • Collection and payment of the interest or dividends (including conversion from foreign

currency). • Corporate actions processing. • Distribution of the issuing company's financial statements, notices and shareholder

meeting material (proxy forms etc) as requested. • Cancellation and exchange of DRs for underlying shares and vice versa. • Mailing of proxy forms, collection and tabulation of DR holder responses and voting on

their behalf, where this applies. • Answering investors' inquiries and other investor relations services. • ADR information services to the issuer available via our web site. Information includes

regular reporting of total outstandings and number of ADR holders, changes, trends and"flowback" levels, monitoring large or unusual transactions and other general informationrequired by the issuer.

• Tax reporting. • General program administration.

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Shareholder Relations Deutsche Bank is particularly proud of the success of its effective shareholder relations unitwhich addresses any inquiries shareholders may have. As a depositary, we deal directly withshareholders on a daily basis. Communication is of the greatest importance, which is why weplace such emphasis on customer service. We also liaise with issuers, so that they are keptinformed of both general market sentiment in the US and, more specifically, the attitudes of theADR holders. Security Holder Relations Unit Our Security Holder Relations Unit in the US provides timely and accurate responses to writtenand telephone inquiries received from ADR holders. Clients and investors can • The Customer Service Group is a dedicated "telephone unit", which has responsibility for

handling easily answered questions. Our statistics show that over 95% of customers'inquiries can be resolved immediately over the telephone.

• The Control Group deals with more complex questions requiring extensive research. Our

systems provide tracking of inquiries and reporting on problem types and turnaroundtimes, all of which can be made available to the issuer.

• The Research Group is staffed by full-time professional researchers who have the

technical expertise to answer complex questions. • The Security Replacement Group is responsible for replacing lost securities. This unit is

staffed by research professionals who are trained to address the legal and operationalissues associated with security replacement.

The above services help to facilitate a two-way communication between ADR holders and theissuer. In addition to monitoring comments and inquiries from ADR holders, we can also, ifrequired, conduct specific ADR holder surveys. In this way we can keep the issuer apprised ofUS investor attitudes and concerns.

Deutsche Bank Credentials We maintain a presence in all major securities markets and are involved in all important aspectsof the securities business. We are experts in international securities settlements, being thelargest member of DTC and a common depositary for Euroclear and Clearstream. • We have the capacity to cater for the individual needs of each of our clients. Each

program is important to us. • Our aim is to provide a first class DR service with professional, multilingual administrators. • We have been actively involved as a depositary for "receipt" products since 1986. • Deutsche Bank currently acts on over 170 sponsored or unsponsored depositary receipt

programs, and is the fastest-growing depositary. • We act as depositary on all types of DR structure. We also have the expertise and

flexibility to tailor our service to suit the individual needs of our clients. • We have the resources and capabilities to handle the most complex structures.

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• Deutsche Bank’s DR unit has offices in New York and London for processing andadministration. We have experience in ADR, GDR and EDR programs of all types, andthe expertise to deal equally easily with programs governed by New York or English law.

• We also have specialist staff located in New York, London, Frankfurt, Hong Kong,

Luxembourg and Nashville for sales assistance and program maintenance, givingDeutsche Bank the ability to service securities on a global basis.

• We can offer market making and underwriting services on selected DR programs through

Deutsche Bank’s investment banking affiliates. Our research group and dedicated marketmakers can help promote liquidity and the success of the program.

Copyright 2003 Deutsche Bank AG (Regulated by the FSA). The information contained herein is based on data obtained

from sources believed to be reliable. However, Deutsche Bank does not make any representations as to its accuracy or

completeness. The information is not intended as an offer or solicitation, or as the basis for any contract for the purchase or

sale of any investment.

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CONTACTS

Akbar Poonawala Mike HughesHead of Global Equity Services Global DR Product Manager

New York LondonTel: +1 (212) 250 1303 Tel: +44 (20) 7547 7995

Christian StarckCustomized Client Solutions

New YorkTel: +1 (212) 250 1103

Client Management

Jim Holden Cato Wille

London LondonTel: +44 (20) 7547 3632 Tel: +44 (20) 7547 3773

Michael Jung Curt Lam

Germany Hong KongTel: +49 (69) 910 43540 Tel: +852 220 37868

Bozena Trydos Eleazar Castellanos

New York New YorkTel: +1 (212) 250 1204 Tel: +1 (212) 250 1304

Sameer Shah

Mumbai - Tel: +91 (22) 220 79645Singapore - Tel: +65 6423 8234

Visit the Deutsche Bank ADR Web site at www.adr.db.com