The Role of the Depositary Bank

7 —— DRs provide flexibility to adjust the stock price in line with peers in the overseas market through the use of DR ratio • Seamless Asset Servicing —— DR issuers can leverage depositary banks to provide seamless asset servicing, which is a benefit that is not available in the case of ordinary share listing —— Issuers can benefit from the “one stop shop” in case of DRs, in which appointing a share registrar and transfer agent is the Depositary Bank’s responsibility; in ordinary share listings, the issuer will have to deal with multiple service providers. • Cost-Effective —— DR issuers will avoid the need to have costly infrastructure in place to service overseas listed securities —— In certain cases, DR banks absorb costs associated with the listing Table 2: Benefits of a DR program The Role of the Depositary Bank  | Introduction • Value-Add Services —— Issuers will benefit from the complimentary IR Advisory services provided by Citi —— Issuers will also have access to dedicated account managers who will be a single point of contact and will coordinate with the issuer and industry participants on all DR-related matters including regulatory and tax matters —— Issuers will benefit from the Depositary Bank’s equity distribution network which will help gauge investor sentiment on real-time basis and facilitate systematic investor targeting. Cross-border Transactional benefits of DRs DRs can play a critical role in multiple types of cross-border transactions, such as privatizations, mergers and acquisitions, corporate actions, and strategic Issuer objectives. Privatizations The privatization of state-owned assets is an important undertaking for governments worldwide, as countries seek to restructure their economies and reduce fiscal deficits. Infrastructure and service enterprises such as telecommunications, utilities, airlines and petrochemicals are among those commonly targeted for privatization. DRs have been used successfully by governments seeking to privatize state-owned enterprises. Privatizations require a successful offering of securities to investors, and DRs provide an effective mechanism both to increase private ownership and to raise capital overseas. M&A and Other Corporate Actions DRs can enhance the ease of trading and settlement related to cross-border mergers and acquisitions. Types of M&A transaction that have made successful use of DRs include: • Spin-offs of non-U.S. subsidiaries; • Equity-based acquisitions of U.S. business entities; and • Equity-based acquisitions of non-U.S. business entities. Strategic Objectives Issuers can also structure a DR program based on particular corporate objectives. An issuer’s aims in selecting and establishing a DR program to align with their strategic objectives may include: • Expanding its shareholder base; • Gaining international recognition for the company name and for its products and services; • Using DRs as a capital-raising tool; and • Providing a convenient investment vehicle for its globally based employees. Benefits of a DR program specific to issuers and investors are highlighted in Table 2. DRs enable issuers to: DRs aid investors by: Access capital outside the issuer’s home market Facilitating diversification into non-U.S. securities Build issuer visibility in the United States and/or internationally Trading, clearing and settling in accordance with the practices of the investor’s home market Broaden and diversify issuer shareholder base Eliminating cross-border custody safe-keeping changes Increased opportunities to increase local share prices as a result of global demand/trading Enhancing accessibility of research and of price and trading information Enlarge the market for the issuer’s shares, potentially increasing liquidity Allowing easy comparison to securities or similar companies trading in the investor’s home market Adjust share price levels to those of peers through a DR ratio Permitting dividend payments in U.S. dollars and corporate action processing Utilize DRs to facilitate privatizations, M&A and strategic corporate objectives for the Issuer Enabling uniform proxy and corporate action processing Develop stock option plans and stock purchase plans for employees outside the issuer’s home market Providing opportunities to move between markets