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									IPO Readiness
Preparing the Company
What do you need to do to get ready?


                                   Financial and corporate
                                          structure                   People
              BR GAAP>>
            IFRS Conversion
                                            Resources                  Financial
                                                                   reporting systems
        Pension scheme
                                 Ability to pay dividends
             deficit
                                                                   Reward structure/
                                                                  Employee incentives
                                       Non-financial metrics
      Access to accounting
            records
                                                 Relationships with suppliers
                                                     and key customers

                         JV relationships
                                                     Virtual Data Room?

PricewaterhouseCoopers                                                                 Slide 2
Preparing for life as a Public Company




                Before   During          After




PricewaterhouseCoopers                           Slide 3
                         • Audit (or reaudit)
                         • Consulting accounting issues (combinations, proformas, etc)
                         • Succession planning, HR, professional team
                         • Restructurings/ strategic partner/ exit strategy
                         • Tax planning
                         • Corporate restructurings
                         • Management of contingencies
                         • Offshores

                         • Internal controls & Procedures
                         • Enterprise Risk Management
                         • IT systems
                Before           During                             After
                         • Reengineering processes to close the books
                         • Corporate Governance
                         • Strategy and sustainability consulting
                         • Selection of Sponsor, banks, lawyers
                         • Legal due diligence
                         • Sell side due diligence
                         • Search / finders fees
                         • UKLA & CVM consultations
                         • Corporate finance
                                 •   NPV
                                 •   Valuations

PricewaterhouseCoopers                                                              Slide 4
Preparing for life as a Public Company

                         •    Audit
                         •    Profit forecasts
                         •    Pro forma financial information
                         •    Long form reports
                         •    Prospectus drafting comments
                         •    Working capital report
                         •    Arrangement letters
                         •    Comfort letters

                Before                    During                After

                             • Project management

                             • Preparing the Prospectus




PricewaterhouseCoopers                                                  Slide 5
Preparing for life as a Public Company



                                                   •   IT
      • On going audit requirements for LSE        •   Closing the books
        listed company                             •   Corporate Governance
      • Six monthly reports
                                                   •   Audit and other committees
                                                   •   Environmental, etc
                                              During
                                                   •   HR                     After
      • ITRs for CVM                               • Sustainability
      • The New Brazilian 20F                      • Investor Relations and Corporate
      • CVM and Novo Mercado Annual financial          Communications
         statements
                                                   • Tax and dividend considerations
                                                   • Corporate structure
                                                   • Internal controls and procedures
                                                   • Risk management




PricewaterhouseCoopers                                                                  Slide 6
A successful public offering begins with:

establishing a strong governance structure focused on coordination
execution and monitoring of critical activities necessary to meet the
 timing of the market.

    Key questions management must address               IPO Governance
    during the planning process.
    • How does the offering affect the Company’s
      existing strategy?
    • How will the Company meet the reporting        Financial        Internal
                                                     Reporting        Controls
      requirements for the first set of month-end,
      quarter-end, and year-end periods?
    • How will corporate governance be
      developed and deployed at the Company as
                                                           Infrastructure
      a public company?                                       Services
    • How will the Company measure and report
      performance as a public company (e.g.,
      operating metrics, balanced scorecards,
      etc.)?



PricewaterhouseCoopers                                                           Slide 7
Assess the functional capabilities of the organization to:

create the appropriate program structure to prioritize,
execute and monitor the activities necessary for a successful IPO and
position it as a high performing public company.
                                                          IPO Governance
    Implementing a strong IPO Program
    Management structure….
    • Allows management to focus its time and effort
    • Identifies issues to avoid critical delays       Financial        Internal
                                                       Reporting        Controls
    • Efficiently coordinates the efforts of diverse
      transaction teams
    • Validates new reporting requirements.
                                                             Infrastructure
    • Helps management collect and anticipate issues            Services
    • Facilitates management planning and
      preparation for the rigors of life as a public
      company,
    • Assesses the security and controls frameworks




PricewaterhouseCoopers                                                             Slide 8
The IPO Framework


       Financial                     Infrastructure                     Internal                   Program
       Reporting                     Services                           Controls                   Management
       Assessment                    Assessment                         Review                     Office


 • Assess the sufficiency       • Review current activities     • Assess the adequacy of      • Develop and maintain
   and quality of global          and capabilities of key         the current internal          consistent format and
   financial reporting            supporting processes            control framework             tools: opportunity
   information                    and functions                 • Assess the adequacy of        status, priority matrix,
 • Review and assess the        • Assess current level of         the underlying control        combined business
   global financial reporting     understanding related to        documentation, focusing       model
   systems and processes          support functions role in       on those controls and       • Develop overall
 • Assess sufficiency of          IPO activities                  locations that are            program plan with
   public company               • Evaluate current                highest risk                  project
   functions (management,         activities and projects to    • Perform controls testing,     interdependencies and
   counsel, board                 understand                      evaluate the impact of        interfaces identified
   committees, internal           organizational capacity         control deficiencies        • Manage issues
   audit)                         to support IPO activity         noted and suggest             between teams and
 • Outline potential            • Define key initiatives          appropriate control           track progress
   accounting and                 and prioritizes initiatives     remediation                 • Ensure reporting is
   reporting issues               lists                         • Perform re-testing as         complete (i.e., drive the
                                • Establish key readiness         considered necessary          process)
                                  criteria possibly                                           • Direct communications
                                  impacting offering date                                       with transition teams
                                  or price




PricewaterhouseCoopers                                                                                                      Slide 9
The Offering Roadmap
  Governance
                                     Detailed Planning                      IPO Execution                      Public Operations
  and Assessment


 Establish overall structure and   Develop detailed plans and           Execute work plans and             Oversee Post Offering
 assess:                           budgets to:                          processes for:                     Operations:
 • Establish IPO Program           • Address findings and issues        • Completing the offering          • Financial Operations
   Governance                        related to financial reporting       activities in Finance                Changes
 • Financial Reporting             • Develop the offering               • Completing Financial filing      • Public Financial Reporting
   Assessment                        framework, documentation,            activities                           • Prospects
 • Assess Financial                  and processes                      • Establishing Corporate               • - New Brazilian 20F
   Organization Readiness          • Implement organizational             Governance
                                                                                                           • Public Controls Testing and
 • Review impact on                  changes necessary to               • Establishing financial
                                     execute the IPO and post-                                                 Reporting
   organizational Human                                                   systems and processes
                                     offering operations and                                               • Investor Relations
   Resource Readiness                                                   • Deploying adequate
                                     reporting                                                                 Processes
 • Complete diligence on                                                  controls prior to offering for
                                   • Implement Controls                                                    • Information Technology
   organization's Information                                             certification by
   Technology capabilities to        Frameworks changes that are          management                           Governance Controls and
   support IPO preparation           necessary to facilitate controls                                          Change Management
                                                                        • Establishing compliance
   and post-offering                 adequacy, testing, and                                                • Corporate Governance and
                                     reporting                            reporting for Human
   operations                                                             Resources                            Reporting
 • Review and assess status        • Make Information Technology
                                                                        • Executing IT Day One
   of Internal Controls              changes necessary for
                           Readiness                                      changes as necessary Offering Date
   frameworks, risks, and Assessment business process changes
                           Complete related to the IPO and post-        • Establishing appropriate
   identified issues
                                     offering operations                  communication to external
                                   • Implement appropriate
                                                                          constituents
                                     communications processes
                                     and systems to external
                                     constituents
                                   • Establishment of Corporate
PricewaterhouseCoopers               Governance                                                                                        Slide 10
                    All major capital markets are moving toward IFRS




                                                             Top 10 Global Capital Markets
                                                             US              Converging to IFRS
                                                             Japan           Converging to IFRS


                                                             UK              IFRS
                                                             France          IFRS
                                                             Canada          Converging to IFRS


                                                             Brazil          Converging to IFRS


                                                             Germany         IFRS
                                                             Hong Kong       IFRS


    Countries converging to IFRS with the goal of adoption   Spain           IFRS

    Countries that require or permit IFRS                    Switzerland     IFRS or US GAAP

  Countries with no announced plan to adopt
                                                             Australia       IFRS
PricewaterhouseCoopers                                                                       Slide 11
                                What does a conversion involve?
                                                CHANGING NUMBERS
                                 Addition of another GAAP and / or change in primary GAAP

                     - Accounting policies determination; Chart of Accounts review, Opening Balance Sheet,….


             CHANGING PEOPLE                  CHANGING PROCESSES                        CHANGING SYSTEMS
            (a new business language)
                                                                                        - Data availability and system
                                                                                          requirements
            - Communication                     - Existing processes to be
                                                  enhanced:                             - New systems components:
               - Internal
                                                                                          datawarehouse, calculation
                                                - New processes created
               - External                                                                 engine
                                                - Budgeting & forecasting
            - Training:                                                                 - Re-alignment of management
                                                - Internal controls revisited             information systems
               - at different levels
                                                                                        - Multi-GAAP solutions
               - not only Finance people
                                                                                        - Primary GAAP changeover


                                                 CHANGING BUSINESS
            - Performance management to be embedded across :          - Financial and Business impact analysis: debt
              - Performance measure / KPIs                              covenants
              - Management accounts
              - Remunerations / bonuses                               - Different valuations
              - Budgeting / forecasting

PricewaterhouseCoopers                                                                                                   Slide 12
How to do it ?



 Phase 1                              Phase 2                          Phase 3




                           2.1              2.2               2.3
   Preliminary           Project   Component Evaluation     Initial      Embedding
      Study              Set-Up     & Issues Resolution   Conversion           aka
                                                                       “Integrate Change”




PricewaterhouseCoopers                                                             Slide 13
Establishing a
Methodology &
Designing Tools
Financial Reporting Assessment
To be successful…                                                                             Phase I Approach
• Review existing financial information and convert
  it to IFRS compliant financial statements            Week         Week       Week       Week        Week        Week                Deliverables
                                                        1            2          3          4           5           6
• Establish the financial consolidation and
                                                                                                                            • High-level understanding of
  combination processes
                                                        Project                                                              business
• Leverage your existing auditor to:                   Initiation
                                                                                                                            • Project calendar and
  • Identify, research, and respond to accounting                                                                            strategy
      and reporting issues.                                                                                                 • Documentation request list
  • Define financial information requirements               Understand acquisition and
                                                                                                                            • Interview schedule
                                                             consolidation accounting
      given the nature and timing of the offering.                                                                          • Preliminary systems/controls
• Resolve and pre-clear issues with CVM/ LSE             Assess financial reporting information,                             assessment
                                                        systems and processes, public company
• Developing interim financial statement processes                    information                                           • Preliminary list of significant
  and requirements.                                                                                                          issues
• Draft the offering, including:                                                                                            • Summarize and prioritize
                                                                Outline accounting and reporting issues                      findings and issues relating
  • Financial information table
                                                                                                                             to financial reporting areas
  • Management's Discussion and Analysis                                                     Outline offering               • Outline of requirements and
                                                                                               document
  • Pro forma financial statements                                                         framework, public
                                                                                                                             assess timeline
  • GAAP and Non-GAAP metrics                                                                   reporting                   • Outline Phase II
                                                                                           requirements, IPO
                                                                                                                             recommendations and work
  • Capitalization, dilution, sources and uses and                                            work streams
                                                                                                                             streams
      other financial schedules
                                                                                                          Assess IPO        • Comprehensive written
• Manage reporting of complicated accounting                                                               Timeline          report on all areas reviewed
  issues and respond to formal regulator comment
  letters                                                                                                        Review     • Communication of findings
                                                                                                                 Findings   • Next steps
• Ensure consistency of public financial information
  and other marketing financial information (e.g.,
  analyst presentations)
• Prepare verification files for legal due diligence
  and comfort letter process
                                                                     6
PricewaterhouseCoopers                                                                                                                               Slide 15
Infrastructure Services Assessment – Finance, Human
Resources, IT, Communications
To be successful…                                        Week         Week     Week      Week   Week   Week                Deliverables
• Establish best financial organizational model to        1            2        3         4      5      6
  meet public company regulatory and reporting            Project
                                                                                                                  • Project Calendar
  requirements and business objectives                   Initiation                                               • Project Plan
• Update financial processes to support public
                                                                                                                  • Data Request List
  reporting requirements                                        Key Documentation
                                                               Request and Collection                             • Calendar of Assessment
• Review employment agreements for change in                                                                       Sessions
  control and other triggers
                                                                                                                  • List of Finance, IT and HR
• Design and implement Human Resource policy                                                                       systems and processes
  changes for all levels of the organization                                                                       impacted by IPO Activities
• Determine how equity as a currency will effect total                                                            • Prioritized list of business
                                                                            Rapid
  rewards                                                                Assessment                                projects requiring Finance,
                                                                          Sessions                                 IT or HR support
• Determine what disclosures of executive
                                                                                                                  • Prioritized list of Finance, IT
  compensation will include
                                                                                                                   and HR projects and
• Establish benefits policy changes for                                                                            activities to support IPO
  executive/management/employee
                                                                                                                  • Identified Finance, IT and
• Establish the right retention/ separation strategy                                                               HR improvement
  and non-compete documentation as a public                                                                        opportunities in the areas of
  company                                                                                                          project management,
                                                                                                                   governance, strategic
• Review, establish and monitor security and control                                                               alignment, delivery and
  priorities and frameworks as a public company                                                                    support, and standard
                                                                                     Finalize
• Prioritize current and future IT projects from                                   Assessment                      operating procedures to
                                                                                                                   implement prior to the IPO
  exposure, cost, or timeliness or other factors
                                                                                                                  • Assessed Finance, IT and
• Review existing and update external and internal
                                                                                                                   HR organization to support
  communications strategies to manage                                                                              the IPO
  expectations of the organization and other
                                                                                                                  • Initial Communication of
  constituents                                                                                                     Findings
• Develop and coordinate changes to signage or
                                                                                                       Review     • Communication of Findings
  other external messaging                                                                             Findings   • Next Steps
Internal Controls
To be successful…                               Week         Week        Week       Week     Week   Week                   Deliverables
• Define control assurances necessary            1            2           3          4        5      6
  by the IPO Underwriters/ Sponsors                                                                            • Project Calendar
                                                 Project Initiation
• Define the nature and extent of                                                                              • Project Plan

  company level controls                                                                                       • Data Request List
                                                 Key Documentation
• Perform a risk assessment to quickly          Request and Collection                                         • Calendar of Assessment Sessions
  identify relevant financial reporting risks                                                                  • List of different control frameworks
• Define the frameworks to support                                                                              as well as list of IT systems and
                                                                                                                processes in scope from a controls
  control activities and implement it on a
                                                                                                                perspective
  consistent global basis
                                                                                                               • Assessment of the “as is” control
• Review the impact of the acquisition on                        Rapid Assessment                               environment based on review of
                                                                     Sessions
  the control framework                                                                                         the existing control frameworks, a
                                                                                                                sample of process documentation
• Update the controls framework                                                                                 and the results of control testing
                                                                                                                performed by KPMG as part of
• Leverage monitoring or automated
                                                                                                                their 2006 financial statement
  controls to speed implementation of an                                                                        audits
  updated framework
                                                                                                               • Determination of extent of existing
• Review and address control issues                                                                             documentation (control
  identified by management or external                                                                          frameworks and documentation) as
                                                                                                                well as gap identification
  audit
                                                                                                               • Suggested priority for remediating
• Re-evaluate decisions and frameworks                                                                          any identified gaps, including plan
  for outsourced functions, spreadsheets,                                              Finalize                 for performing initial testing to
                                                                                     Assessment                 evaluate control effectiveness
  segregation of duties, etc.
                                                                                                               • Suggested priority for level of
• Review IT risk and control points, re-
                                                                                                                commonization and rationalization
  test and remediate                                                                                            based on quality of existing
• Review and update formal controls                                                                             documentation and timing needed
                                                                                                                to complete certification
  documentation
                                                                                                    Review     • Initial Communication of Findings
                                                                                                    Findings   • Next Steps
                                                                         8
PricewaterhouseCoopers                                                                                                                        Slide 17
Integration Program Management Office
To be successful…                                   Week         Week      Week        Week          Week   Week            Deliverables
• Determine the priorities of the different          1            2         3           4             5      6
  projects to understand what should be done         Project                                                       • Project Charter
  first, second, etc.                               Initiation
                                                                                                                   • PMO project plan
• Determine the project interdependencies and                                                                      • Communication strategy
  manage to meet optimal market timing                                                                               developed
• Monitor, track, and resolve issues on an                                                                         • Communications templates
                                                     Develop Program Communications Plan
  overall program basis                                                                                              established
• Determine the impact that a change in one                                                                        • Communication plan
  project may have on the overall program                                                                            implemented

  • Dependencies                                                                                                   • List of projects documented

  • Milestones                                                                                                     • Project plan templates
                                                                                                                     developed
  • Due dates
                                                                                                                   • Activity level project plans
  • Resources                                                                                                        documented in templates
  • Financials                                                    Project Planning, Prioritization
                                                                      and Program Planning                         • Project prioritization criteria
• Establish project status reporting rules and                                                                       established
  formats to projects to improve visibility which                                                                  • Prioritized project roadmap
  require management attention                                                                                       developed
• Manage the resources of multiple projects                                                                        • High-level integrated project
  that are competing for the same                                                                                    plans for overall program
  management resources                                                                                             • Program office roles and
• Generate clear and concise communications                                                                          responsibilities developed
  on the program’s status to the appropriate                            Program Office Development                 • Program office charter
  personnel                                                                                                          developed

• Track and communicate quick wins along the                                                                       • Program office operational
  overall program’s lifecycle                                                                                      • Achievement reports
• Report with confidence on the overall                                                                              delivered
                                                                                                                   • Initial communications
  program’s status                                                          Ongoing Project Management
                                                                                                                     delivered
                                                                                                                   • Issue & risk tracking
PricewaterhouseCoopers                                                                                               implemented           Slide 18
The Role of the Integration Program Management Office
Form PMO structure then standardized tools and methodologies



                                                                                                                                           Integration Initiative
                                                                                                                        Business Case Summary: [NUMBER]
                                                                                                                                   [Title of Business Case Initiative]
                                                                                                                                                   Executive Summary
                                                                                              D escription:
                                                                                              Proposed Action
                                                                                              Plan:
                                                                                              (include key
  Business Strategy Summary:
                                                                                              intitiatives /
                                                                                               growth while
   Protect and grow existing profitable Segment 1 business – identify opportunities to enhancemilestones) reducing overall costs.
  Operating Tactics Summary:                                                                  Evaluation Team:
  Segment 1 will remain in its current location with existing personnel and equipment, supported by back office, and taking advantage of some capacity and
  technical infrastructure load-sharing with Segment 2.
                                      Current (2000-2001 Avg.) Size/Performance                Impediments /
                                                                                                                   Future (2006) Size/Performance
  Growth Metrics         Target Deal       Company2          Combined Total       % Total Co. R isks: Combined Co.            % Total Co.       CAGR (5.5 Years)
  Revenues                   $50M              N/A                $50M               51%                  $41M                   34%                    6%
  EFO                         10%              N/A                 10%              108%                   18%                   43%                   12%
                                                                                               Accountable
                                                                     Set /                     Personnel (include
        Anticipated Operational Model                                                                          Issues to Resolve
                                                       Area        Not Set

                                                                                                                                                          E
                                                                                               leader and team
   Maintain current operating model,           Operations,      Set        Identify and retain key operating personnel.
                                                                                               members):
     including customer interface, quality and     People                    Verify current location is sufficient for future (core franchise) needs.
     workflow efficiency                                                                      using Path
                                                                               Verify model ofC ritical other types of professionals.
   Segment 1 capacity (people and                                                          Prerequisites:
                                                 Operations,   Not Set         Determine capacity utilization profile (of both segments) over time.
     equipment) will be load shared with           People                 

                                                                                                                     E
                                                                               Assess operational compatibility of Segment 1 and Segment 3.
     Segment 3
   Transfer operational knowledge from OS      Technology,      Set        Establish cross-company operational and technical teams to share knowledge post-
     Segment 1 to expanded Segment 3             Operations,                   merger (including clear milestones).                       T ime Frame / Approvals
     business
   Continue cost reduction opportunities.        People,     Not Set       Assess technical/labor to start: improvement opportunities.
                                                                                               M onths
                                                                                                        efficiency                            0           Functional Sign Off:
                                                                                               M onths to complete:                           0
                                                 Technology,                 Review capacity utilization and ongoing capital requirements (with aim to reduce
                                                                                               M onths to full run rate:                      0           IMSO Sign Off:
                                                 Operations                    CAPEX to historical “maintenance” run rates).
   Segment 3 will be managed under             Operations    Not Set       Assess excess capacity availability and cost-effectiveness.          Synergy C alculation
     Segment 1 but will fully support other                                  Determine feasibility of doing print-processing and printing (since OS exited this
                                                                                                                      Description                                                              EBITDA Im pact
     divisions.                                                                business a couple of years ago).
                                                                             Evaluate need for additional hires (to cover 24/7 operation, if necessary).
   Joint Sales/Customer interface with            Sales/     Not Set       Evaluate sales personnel and identify opportunities for integrated delivery.
     Segment 3 sales group.                       Customer                   Analyze potential for cross selling between Segment 3 and post production services.
                                                  Interface                  Evaluate difficulty of cross training sales force to learn the full Company offerings.
   Continue transition from Technology 1 to    Technology,      Set        Determine rate of transition of film-based shows from Technology 1 to Technology 2
     Technology 2                                Operations                    and whether additional capital will be required to fulfill this demand.
                                                                             Project future Technology 1 vs. Technology 2pricing trends (including potential
                                                                               erosion of Tech 1 premium).
                                                                             Estimate rate of substitution for origination and how OS will be able to manage the
                                                                                                                                                                                           Total
                                                                               potential loss of segment 3 and segment 4 revenues.
                                                                                                                                                   F inancial M easures

                                                                                               Estimated C osts:                                          Estimated EBIT DA Benefit
                                                                                                 C apital Expenditure                       0             Benefit - 6 months                         0
                                                                                                 N on-recurring P&L Costs                   0             Benefit - 12 months                        0
                                                                                                 Purchase Accounting                        0             Benefit - 24 months                        0
                                                                                               T otal Non-recurring C osts                  0             Full Annual Benefit (Run Rate)             0




                                         Prioritization                                                                                                                                                             Project                     Milestone
                                                                                                                                                                                                                                                                             Achievement                 Ongoing
                                         Tools &                                                                                                                                                                    Management                  Tracking / Issue
                                                                                                                                                                                                                                                                             Reporting                   Communication
                                         Templates                                                                                                                                                                  Program                     Resolution

              •                        Develop and                                                                                                                                                              •   Prepare tools and       •    Work with the teams     •   Review reporting        •   Structured
                                       maintain consistent                                                                                                                                                          reporting templates          to be fully up to           templates                   communication plan
                                       format and tools:                                                                                                                                                        •   Train users on the           speed on progress       •   Determine reporting     •   Frequent and honest
                                       opportunity status,                                                                                                                                                          project management           and issues                  frequency by type           communications on
                                       priority matrix,                                                                                                                                                             tools                   •    Highlight issues to     •   Train teams on the          value driver status
                                       combined business                                                                                                                                                        •   Assist in the                sponsors and                reporting process       •   Direct
                                       model                                                                                                                                                                        development of               executives, as          •   Ensure reporting is         communications
              •                        Work with teams as                                                                                                                                                           individual project           needed                      complete (i.e., drive       with transition teams
                                       needed to use tools                                                                                                                                                          plans                   •    Manage issues               the process)
                                       and build cases                                                                                                                                                          •   Develop overall              between teams and
              •                        Assess business                                                                                                                                                              program plan with            track progress
                                       cases, facilitate their                                                                                                                                                      inter-project           •    Anticipate shortfalls
                                       completeness                                                                                                                                                                 dependencies and             or off plan activity
              •                        Ready templates for                                                                                                                                                          interfaces identified   •    Propose solutions to
                                       management review                                                                                                                                                                                         off track initiatives




PricewaterhouseCoopers                                                                                                                                                                                                                                                                                                       Slide 19
The Working Capital report for the LSE




PricewaterhouseCoopers                   Slide 20
The London Regulatory Map



                  Prospectus       Transparency     Market Abuse
                   Directive         Directive        Directive



                                      CESR
                                  Recommendations

                               FSA Handbook chapters
                 Prospectus            Listing         Disclosure
                   Rules               Rules             Rules




PricewaterhouseCoopers                                              Slide 21
Working Capital - Directors’ undertaking

The directors must have undertaken
appropriate procedures to support the working
capital statement.

• Preparation of supporting working capital
   projections for at least 18 months from the
   prospectus date.

• The projections should consist of a forecast
   income statement, balance sheet and cash
   flow statement at monthly rests

• Assumptions should be clear and identifiable

• The projections are usually based on
   management’s existing forecasting
   procedures

PricewaterhouseCoopers                           Slide 22
What does the Rule say

 Prospectus              Minimum Disclosure Requirements for the Share Securities Note:
 Rules                   Statement by the issuer that, in its opinion, the working capital is sufficient for the
 Item 3.1 of             issuer’s present requirements or, if not, how it proposes to provide the additional
 Annex III               working capital needed.

 Listing Rules           An applicant for the admission of shares must satisfy the FSA that it and its
 6.1.16R                 subsidiary undertakings (if any) have sufficient working capital available for the
                         group’s requirements for at least the next 12 months from the date of publication of
                         the prospectus for the shares that are being admitted.

 Listing Rules           A sponsor must not submit to the FSA an application on behalf of an applicant, in
 8.4.2R (5)              accordance with LR 3, unless it has come to a reasonable opinion, after having
                         made due and careful enquiry, that:…the directors of the applicant have a
                         reasonable basis on which to make the working capital statement required in LR
                         6.1.16R.




In addition further guidance on working capital statements is given in paragraphs 107-126 of CESR’s
recommendations for the consistent implementation of the European commission’s Regulation on
Prospectuses no 809/2004


PricewaterhouseCoopers                                                                                        Slide 23
Working Capital – the Reporting Accountants role

                            • Issue a working capital report,
                              privately, to Issuer and the
                              Sponsor as part of the due
                              diligence process.

                            • Opinion will center around the
                              statement made by the Issuer in
                              the prospectus.

                            • Confirm whether the Directors
                              have a reasonable basis on
                              which to make the Working
                              Capital Statement.




PricewaterhouseCoopers                                       Slide 24
Working Capital - what might the auditor look at?

• Does the business have sufficient cash for the forecast period?

• Is there sufficient “headroom”?

• Do sufficient committed facilities exist?

• Do the assumptions reflect understanding of the business?

• Is the model robust? What is the model sensitive to?

• Are management capable of forecasting?

• Are the covenants complied with?

• Can management forecast?




PricewaterhouseCoopers                                              Slide 25
Main building blocks for directors working capital
statement

               The Company                     Sponsor                       Auditor




        Working capital projections

                                                                    Auditor field work and due
                                                                             diligence



            Board memorandum           Sponsor’s due diligence

                                                                     Auditor working capital
                                                                             report
          Board minutes adopting
         board memo and working                                     Private letter from Auditor
            capital projections                                       to Board and Sponsor
                                                                      confirming that in our
                                                                    opinion the Directors have
                                                                      a reasonable basis on
            Public statement of       Private letter from sponsor
                                                                    which to make the working
        directors in the prospectus             to UKLA
                                                                         capital statement



PricewaterhouseCoopers                                                                            Slide 26
Diagnostic – Are you ready to go Public?

                                          Sustainability
                                             Model
                                                                 Back Office

                                                                Controls and
                  Corporate Governance                          Procedures

                         Investor relations                  Closing the books to
                                                               meet deadlines
                     Tax and dividends
                                                                Contingency
                                              Benchmarking        planning
                          Control Self          Pre - IPO
                          Assessment                                     IT
                                                                     Supply chain
                              ERP
                                                                   The Working
                                                                  Capital Report

PricewaterhouseCoopers                                                              Slide 27
IPO Readiness
Preparing the Company




PricewaterhouseCoopers   Slide 28

								
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