PartnerIT 2012 - matchmaking B2B event & FundraiseIT - conference and investment evening 15. – 16. November 2012. Belgrade, Serbia The PartnerIT is a international B2B matchmaking event organized by Outsourcing Center Serbia, followed by the FundraiseIT conference organized in partnership with Serbian Business Angels Network (SBAN) and other partners. B2B matchmaking event On http://partnerit.talkb2b.net, you have the opportunity to leave your profile and book your face-to-face meetings with other international companies and research institutions. This is a cost and time-effective way to discover new business and cooperation opportunities while expanding your contact network. All profiles will be published online and will be extensively promoted before the event and could still be viewed after the event. FundraiseIT conference During the conference you will be involved in the direct communication channel with competent well-known serial entrepreneurs and investors from Silicon Valley and Europe. In the live discussions panels among successful entrepreneurs and investors you will be able to hear some interesting personal stories, information about various investing models, fundraising methods, success stories, experiences and valuable tips. More on: http://partnerit.talkb2b.net/ http://www.sban.eu/eng/ http://www.ocs.rs/

1. EBRD support
to private enterprises in Serbia
November 2012

2. EBRD in Serbia
• Country of operation since 2001
• Total cumulative commitments of €3.16bn as of September 2012
- Private sector participates with 50% in total cumulative
commitments
• Total outstanding portfolio of €2.39bn, consists of 141 active
operations
• Team of 22 people in Resident Office in Belgrade
• Objectives are to promote a sound investment climate, good
corporate governance and stronger institutions

3. Serbia: Total Cumulative
Commitments Composition (€ m)
481
15%
1,087
34%
745
24%
845
27%
Infrastructure
Financial Institutions
Industry, Commerce and Agribusiness
Power and Energy

4. Serbia: Total Cumulative Commitments
Composition (# of operations)
10
22 5%
11%
86
44%
79
40%
Industry, Commerce and Agribusiness
Financial Institutions
Infrastructure
Power and Energy

5. Serbia: Portfolio Development
€m No. of operations
700 35
31
600 28 30
24
500 25
21
400 20
15
300 15
200 10
100 5
216 127 444 598 526
- -
2007 2008 2009 2010 2011
Annual business volume Number of operations

6. Serbia: 2011 Operations Composition
(€ m)
60
12%
202
38%
128
24%
137
26%
Financial Institutions
Industry, Commerce and Agribusiness
Power and Energy
Infrastructure

7. Serbia: 2011 Operations Composition
(# of operations)
2
7%
3
11%
13
46%
10
36%
Financial Institutions
Industry, Commerce and Agribusiness
Power and Energy
Infrastructure

8. Local Enterprise Facility
(LEF)

9. What is LEF?
• Established jointly by the EBRD and the Italian Government in
2006
• A delegated facility for equity, quasi-equity investments and tailor-
made debt financing
• Investment region encompasses Western Balkans, Turkey,
Bulgaria and Romania
- Extension to South, Eastern and Mediterranean region (SEMED) is
proposed
• Developed to support financing needs of dynamic local enterprises

10. LEF Snapshot
• €270m of capital provided jointly by the EBRD (€250m) and the
Italian government (€20m)
• Total cumulative commitment of €184m, out of which € 146.4m
(83%) disbursed
Number of LEF Deals in Western Balkans
Project Composition
(% of total signings)

11. Key LEF Objectives
• Enhancing competitiveness and product quality by strengthening
market competitiveness and improving the quality of goods and
services provided
• Restructuring by introducing new, replicable products and
technologies to achieve better use of labour, higher productivity and
efficiency improvements
• Setting standards for corporate governance by encouraging investee
companies to apply higher standards of corporate governance and
business conduct

12. LEF Investment Criteria
• Eligible investments: expansion, restructuring or acquisitions of
existing private businesses
• Eligible sectors: a wide range of sectors, with only few exceptions
(weapons, liquors and tobacco). All investments must be in line with
sound environmental principles
• Size of investments: LEF individual investment could amount up to
€10m
• Target Stake: Minority stake, preferably in the range of 20 to 35% of
the capital of the company
• Time horizon: a period from 3 up to 8 years

13. Case Study – Forma Ideale Serbia
Company Information
• Limited liability company
• Producer of a wide range of furniture
Investment Details
• EUR 5+2 million equity investment
Purpose of investment
• Construction of a modern warehouse and logistics centre
• Restructuring of the company’s balance sheet

14. Investment Process
Pre-Investment phase (from 3 to 9 months)
Mandate Letter Term sheet
Preliminary Due Diligence and
Screening
Discussions Structuring
Entrepreneurs  EBRD and outside  Final Decision
 Initial meetings 
of the
and site visits provide information consultants conduct
about their company technical, Investment
 Discussions on and the project environmental, legal Committee
mutual interest for and financial due
cooperation  EBRD Bankers diligence on the
prepare a Screening company and the
Memorandum for project
approval by the
Investment  Bankers and Sponsor
Committee define and agree on the
transaction structure
and valuation/ pricing

15. Investment Process (Cont’d)
Post-Investment phase (from 3 to 8 years)
Management and
Investment Exit
Monitoring
 Legal  EBRD appoints a  Decision of the  EBRD sells its stake in
Agreements are member of the Board Investment the Company in one of
drafted and of Directors (if agreed) Committee to the following ways:
executed exit its
 EBRD could hire (if investment in the
 trade sale
 Subscription and needed) consultants company (the  sale back to the
disbursement to assist the company timing is usually entrepreneur
take place in its project coordinated with
implementation the  IPO
Company provides entrepreneur)
  secondary buy-
EBRD with regular out
updates on financial
performance and  re-leveraging of
project progress the Company

16. SME financing through EBRD
partner banks

17. SME Financing Provided Through
Credit Lines to Local Banks
• Improve access to longer term finance for private enterprises
for urgent capital investments, as well as working capital;
• Facilitate upgrades of SME operations towards EU production
standards;
• Promote sustainability and competitiveness of the SME sector
through crisis and beyond;
• Capacity building at the level of participating banks to assess
and finance environmental investments.

18. Partner Banks We Work With in
Financing the SME Sector
• Banca Intesa Beograd
• Komercijalna Banka
• Societe Generale
• Unicredit Bank Serbia
• Alpha Bank Serbia
• Erste Bank Serbia
• Cacanska Banka

19. Small Business Support –
Building stronger business

20. EBRD fosters entrepreneurship by providing
business expertise in addition to financing
• EBRD’s Small Business
Support (SBS) has been SBS at a glance
helping Micro, Small and Over €200m donor
Medium sized Enterprises funding
(MSMEs) since 1993
1,970 EGP projects
• 2 instruments: the Enterprise
Growth Programme (EGP) 11,700 BAS projects
and Business Advisory
Over 750 market
Services (BAS)
development activities
• Run on a not-for-profit basis
with donor funding in
24 countries

21. EGP brings international know how,
whilst BAS fosters local expertise
EGP supports the introduction BAS assists individual
of international best practice in enterprises to engage with
small and medium-sized local consultants on a cost
enterprises with the potential of sharing basis through narrowly-
becoming future leaders in based, specific projects with a
their market through the rapid payback. It also directly
placement of international increases the supply and
advisors with at least 15 years quality of local advisory
of professional experience and services, through targeted
expertise in the specific market development activities,
business sector. to create a sustainable market
of support for the small
business sector.

22. Transition from Entrepreneurial to a
Professional Company

23. EGP Methodology
• Project lasts 12-18 months, visits every 6-8 weeks
• Experienced senior executives work with CEOs and
management teams
• Project team consists of Senior Industrial Advisor (SIA),
Specialist(s) and Team Coordinator / Local Manager
• Scope tailored to the needs of the individual enterprise
• Typical areas: General management, Sales and
marketing, Financial and strategic planning, Attract
finance, Organisational restructuring, Production and
design, Export opportunities, International standards

24. EGP Enterprise criteria
• Medium size enterprises, normally >100 employed, >€1 million
t/o
• All sectors, except banking and financial services, military
products/services, gambling, tobacco and hard liquors
• Private, majority locally owned businesses with significant
importance for the local economy
• Acceptable debt structure, potential to be commercially viable
in the longer term
• Strong commitment to undergo restructuring / development
programme agreed
• Willing to co-share minimum 10% of total project cost (~
€5,000)

25. BAS Methodology
• Narrowly defined projects with shorter duration (depending on the type of
business advice)
• Advisory services provided by local consultants, qualified by BAS (over
110 in the database, regularly updated)
• Types of business advice supported: everything, except tax and legal.
Examples: market analysis, business plans, introduction of QMS, design
and implementation of IS, energy audits, reorganization and HR
development etc.
• BAS contributes 25-75% of the total net project cost capped at € 10,000.
BAS grants are post-transactional - they are paid only upon successful
completion of the project.
• BAS team screens applicants, assists with selection of consultants and
development of ToR. Once a project is approved by a Head of Regional
Programme and the consultancy services contract is signed between the
beneficiary enterprise and a consultant chosen, an Agreement for
Payment of a Grant for Business Advice ("Grant Agreement") is signed.
BAS monitors project implementation

26. Criteria to qualify for BAS assistance
• Size: up to 500 employees (with the key target group under 50
employees)
• Ownership: Be majority privately and locally owned.
• Area of activity: Operate in all sectors except banking and financial
services, military products or services, gambling, tobacco.
• Viability: Be able to demonstrate potential for growth,
• Management attitude: Be open to cooperate with BAS and the
consultant.
• Respectability/Integrity: Enterprise and management are credible and
respectable.
• Experience with external consultancy services: Have a genuine need for
business advice and a capacity to absorb the assistance given yet little
or no previous experience of using external consultants, and/or do not
have resources to finance a complete project

27. EGP and BAS in Serbia
EGP BAS
•Started in 2001 •Started in 2006
•Over 180 projects, 3 ongoing •329 projects projects, 26
•Funded by EU, Italy, Austria, ongoing
Denmark, UK, Taipei China •Funded by the Netherlands,
•Key sectors – wood EU, EBRD, Taipei China
processing, textile, chemical, •All sectors, leading – food and
electrical equipment, food beverages, metals and
processing machinery
•66.7% reported increase in •67% BAS clients reported
turnover increase in turnover, 34% have
•EBRD investments over 10 attracted investment, over 2/3
mio EUR continue using consultancy

28. BAS in Serbia
Feasibility Studies
4%
Reorganisation/Restructu
ring
Environment 15%
5%
Computerised
Financial/Management
T o Introduce Quality
Information System
Management &
20%
Certification
40%
Market Analysis &
Planning
Energy efficiency 9%
1%
Development Planning
6%

29. SBS supports ICT enterprises - A business matching trip to Taipei China
(June 2012)
• Participants: Active senior-level executives from leading ICT
companies (5 per country from Western Balkans)
• Serbian participants:
Orion telekom Srbija, Belgrade (Telecom Operator)
Megatrend DOO, Nis (ICT - Design and development of
information systems)
Enel PS, Belgrade (ICT Infrastructure - UPS, Cooling systems,
management, racks)
CIM grupa DOO, Nis (ICT & Management Consulting)
Logo, Belgrade (Fiber optic, solutions in ICT)
• Objective: Explore business matching opportunities, create
linkages with other companies in the same industry, exchange
knowledge and foster potential import and export links and
franchising opportunities.

30. BAS Serbia support to ICT sector
• 67 SME’s were supported for projects in the field of ICT
(Management/Financial and Manufacturing Computerised
Systems Implementation)
• 31 SME’s from ICT industry received BAS grants
• 32 consulting ICT companies are registered in BAS database
• 2 Market Development Activities designed and implemented
with the goal to enhance development of ICT sector
- ICT Business Incubator (6 start-up companies as participants)
- Project management training (33 participants)

31. Contact Information
European Bank for Reconstruction and Development
Bulevar Zorana Djindjica 64a
11070 Novi Beograd
Serbia
Tel: +381 11 21 20 530
Fax: +381 11 212 0534