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IPO Readiness: Are you ready for the IPO Journey? Be confident you are ready to list: A Deloitte IPO readiness review will leave you fully prepared to execute a successful IPO. Are you ready to embark on the IPO Journey? To complete a successful IPO it is vital that you are ready to list at the right moment. Many IPOs are delayed, or even fail completely, due to a lack of rigorous up-front planning. Deficiencies in the planning stage can impact the IPO process in a number of ways: • late identification of significant issues which can derail the process; • lack of skill-set in the organisation to meet the requirements of the IPO process; or insufficient resourcing levels to deal with the requirements of the IPO on top of the ‘day job’. The consequences of a failed IPO can be significant for any organisation – with implications for company reputation, morale and the significant real costs incurred for no ultimate benefit. Our approach to IPO readiness We have used our combined experience from working on IPOs in the last decade to create our IPO diagnostic tool – the diagnostic underpins a rigorous assessment process covering all areas of your organisation, and gives you confidence in the completeness of our findings. Over a relatively short period of time and with minimal impact on senior management we can gather the information we need to complete our diagnostic. Our assessment concludes with a focused management presentation, a written report detailing prioritised findings on the deficiencies in your organisation to be rectified in advance of any IPO process, and a tailored first draft timetable for your specific situation. Working alongside you we will then develop a step-by-step practical response to the issues raised to leave you ready for the challenges ahead. IPO Readiness Red Flag Reporting Detailed planning Project timelines No surprises Practical guidance Identifying solutions Detailed assessment Focussed action plan Scoping workstreams Expert advice Mapping the process Anticipating roadblocks A considered planning process will leave you in the best position to focus on what really matters – interacting effectively with potential investors.

IPO Readiness:Are you ready for the IPO Journey? · IPO Readiness: Are you ready for ... a written report detailing prioritised ... How Deloitte can help you be ready for the IPO

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IPO Readiness:Are you ready for the IPO Journey?

Be confident you are ready to list: A Deloitte IPO readiness review will leave you fully prepared to execute a successful IPO.

Are you ready to embark on the IPO Journey?To complete a successful IPO it is vital that you are ready to list at the right moment. Many IPOs are delayed, or even fail completely, due to a lack of rigorous up-front planning.

Deficiencies in the planning stage can impact the IPO process in a number of ways:

• late identification of significant issues which can derail the process;• lack of skill-set in the organisation to meet the requirements of the IPO process; or• insufficient resourcing levels to deal with the requirements of the IPO on top of the

‘day job’.

The consequences of a failed IPO can be significant for any organisation – with implications for company reputation, morale and the significant real costs incurred for no ultimate benefit.

Our approach to IPO readinessWe have used our combined experience from working on IPOs in the last decade to create our IPO diagnostic tool – the diagnostic underpins a rigorous assessment process covering all areas of your organisation, and gives you confidence in the completeness of our findings.

Over a relatively short period of time and with minimal impact on senior management we can gather the information we need to complete our diagnostic. Our assessment concludes with a focused management presentation, a written report detailing prioritised findings on the deficiencies in your organisation to be rectified in advance of any IPO process, and a tailored first draft timetable for your specific situation.

Working alongside you we will then develop a step-by-step practical response to the issues raised to leave you ready for the challenges ahead.

IPOReadiness

Red FlagReporting

Detailed planning

Projecttimelines

No surprises

Practicalguidance

Identifyingsolutions

Detailed assessment

Focussedaction plan

Scopingworkstreams

Expert advice

Mapping the process

Anticipatingroadblocks

A considered planning process will leave you in the best position to focus on what really matters – interacting effectively with potential investors.

2

IPO Readiness

Strategy and equity story

• Have you developed a clear and supportable business strategy to engage investors?

• Do you have a clear vision for the future of your business as a public company?

• Have you benchmarked yourself against your competitors?

• Have you considered potential quoted peers including where listed, size and valuation metrics?

• What are likely investor perceptions and market conditions?

• What is the likely investor appetite?

Corporate and tax structure

• Have you considered what corporate vehicle you will IPO?

• Are there non-core activities that need to be transferred or disposed?

• Do you have tax losses, risks and exposures that need to be addressed before IPO?

• Are there opportunities to make improvements before going to market?

Corporate governance

• Have you considered the impact of the UK Corporate Governance Code on your business?

• Does your Board and senior management have the appropriate experience and skills?

• Is the current constitution of the Board appropriate for a listed company?

• Are you prepared for additional scrutiny from independent non-executive directors?

• Can you demonstrate a well developed corporate governance framework?

Debt structure

• Have you evaluated the optimum debt structure for your business pre and post IPO?

• Do your existing facilities fit your IPO story and support your working capital statement?

• Have you considered changing your existing financing terms and conditions to facilitate the IPO? Preparation of management

informationFinancial and legal due diligence

UKLA Analysts presentations

Audit of the track record Prospectus preparation

How ready are you to undertake the following workstreams?

Key considerations

FTSE inclusion

• Are you planning a premium listing? • Will the company be assigned ‘UK nationality’?• Will the company have its sole listing in the UK or are listings overseas also anticipated?• What free float will you need to satisfy FTSE requirements?

Why do you want to IPO?

To raise capital.

To raise profile.

To provide an exit strategy for existing shareholders.

To use listed shares as an acquisition currency or to

incentivise staff.

Are you eligible?

Minimum 25% of shares in public hands.

3 years audited historical financial information under IFRS or equivalent.

Sufficient working capital for at least 12 months following IPO.

Appropriate financial reporting procedures for a listed company.

Considering an IPO? Maximising value on the IPO Journey 3

Undertaking an IPO is a complex and challenging journey. A Deloitte IPO Readiness Review will help you identify and address the main considerations.

Incentivisation and remuneration

• What impact does the IPO have on existing incentive arrangements?

• Have you considered the tax implications of these arrangements?

• What changes are needed to remuneration strategy to reflect the Company’s post IPO position?

Historical financial information (“HFI”)

• Does your HFI conform with the rules of the market you are targeting?

• Do you need to covert to a new GAAP eg IFRS?• Have you benchmarked your accounting policies

against your peers? • Have you identified the business segments and KPIs

that you will report as a listed company?• Do you have a complex financial history with major

acquisitions or carve-outs to address?

Financial and legal due diligence Working capital

Analysts presentations Marketing/roadshows

Prospectus preparation Verification

How ready are you to undertake the following workstreams?

Key considerations

Forecasting and working capital

• Are current procedures sufficient to produce reliable 18+ month forecasts?

• Are longer term forecasts integrated into the annual budgeting process?

• Are facilities committed for the length of the working capital period?

Financial reporting procedures

• Are your internal controls and procedures up to the standard required of a listed company?

• Do your IT systems have the capacity to fulfil the requirements arising from your growth strategy?

• Does your treasury function have procedures in place to identify, manage and report financial risks?

Resource

• Do you have sufficient resource and expertise in-house to get through the IPO process?

• Do you have the depth and breadth of resource to operate and report as a listed company?

Operational matters

• Are there any regulatory restrictions on raising capital?

• Will the IPO require the support of government? • Are there likely to be political challenges?• Are you aware of any instances of significant

litigation against the Company (past and present)?

What type of listing?

London Main Market Premium Listing and FTSE index inclusion.

London Main Market Standard Listing.

London AIM growth market.

Are you suitable?

Is there market interest in your sector?

Do you have growth potential?

Do you have a clear strategy and a comprehensive business plan?

How Deloitte can help you be ready for the IPO JourneyThe Deloitte IPO Readiness Team, using our IPO diagnostic tool, can quickly assess your readiness for IPO and provide detailed practical recommendations built into a draft IPO timetable.

Our team has a wealth of direct experience in successfully preparing companies for an IPO and supporting them as the process unfolds. We deploy skilled teams that take a hands-on approach: from the prompt, clear identification of what needs to be done, advising on every step along the way, through to delivering tangible results.

The combination of our specialised team and our significant capital markets experience gives us confidence that we can deliver the most valuable and cost effective solutions to you to enable a smooth and efficient IPO process.

Are you ready for the IPO Journey?

Contacts

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Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world class capabilities and deep local expertise to help clients succeed wherever they operate. Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.

Deloitte’s professionals are unified by a collaborative culture that fosters integrity, outstanding value to markets and clients, commitment to each other, and strength from diversity. They enjoy an environment of continuous learning, challenging experiences, and enriching career opportunities. Deloitte’s professionals are dedicated to strengthening corporate responsibility, building public trust, and making a positive impact in their communities.

© 2014 ZAO Deloitte & Touche CIS. All rights reserved.

John Robarts Partner, Audit Advisory+7 (495) 580 97 01 [email protected]

James Ferguson Partner, Tax & Legal+7 (495) 787 06 00, ext. [email protected]

Matthew Gorman Director, Audit Advisory+7 (495) 787 06 00, ext. [email protected]