Conflict of interests

1. Conflict of interests Ohrid,10-11 June 2004

2. Corporate Law • Conflict of interests • Shareholders of the company and management of the company may enter into financial contracts with the company only with the approval of other shareholders and/or the Board of Directors or the Supervisory Board. • Shareholders may not vote at the General Meeting of shareholders when deciding in all cases when the interests of the shareholder concerned are contrary to the interests of the company (conflicts of interests clause). • Incompatibility of Functions in the case of linked enterprises • The General Manager of a parent enterprise may not be the General Manager of a subsidiary. • The General Manager of a subsidiary enterprise may not be the General Manager of the parent enterprise. • The General Manager of a parent enterprise may not be the Chairman of the Board of Directors of a subsidiary. • The General Manager of a subsidiary enterprise may not be the Chairman of the Board of Directors of a parent enterprise. A new Corporate Law is expected to be adopted in 2004. Hopefully this will create the framework for improved regulation of conflicts of interests. Conflict of interests

3. Law on Securities Market (and by-laws) • A broker-dealer company: • Cannot put its own interests in front of the interests of the client. • Is obliged to present possible conflicts of clients interests and company interests, as well as interests of other broker-dealer company clients. • Is obliged to organize its business in such a manner as to minimize possible conflicts of interests among its employees, clients, and other broker-dealer companies. • The bidder has to point out in its takeover bid: • Data concerning persons who possess more than 10% of votes in bidder’s General Meeting, or ten major shareholders with a right to vote, General Manager, Board of Directors and Supervisory Board, • Data on the bidder’s participation in the capital of another legal entity and subsidiaries of the bidder, • Data on important business deals and contracts concluded between the bidder and the targeted company, • Data on possible negotiations between the bidder and management of the targeted company concerning the takeover bid as well as the outcome of those negotiations, • Data on concluded contracts or protocols, or the intention to do so, between the bidder and the members of the target company management concerning payment of remuneration because of the previous recall or discharge of duties of company’s management due to control overtake, • Data on concluded contracts between the bidder and the targeted company’s shareholders . Conflict of interests

4. Law on Prevention of Conflicts of Interests in Performing Public Activities Public officials • Persons who perform public administrative activities, e.g. those who have been elected or appointed to such positions by the Republic of Serbia, Autonomous region, municipality, town, City of Belgrade and/or Public Enterprises founded by those entities, are deemed public officials. • Every person who acts as a public official is obliged, in a time period of 30 days since the day he/she was elected or appointed, to transfer his/her management rights in a company to a legal or natural person, so that they could exercise these rights in their own name but on the public official’s behalf, as long as the public official performs his/her public duties. • Members of Parliament (National and City assemblies) may be General Manager, General Manager’s deputy or its assistant, member of Board of Directors or Supervisory Board, in only oneinstitution, enterprise or any other legal entity with participation of state capital. • In othercommercial entities members may continue to exercise all of their rights, only if suchactivity would not affect their performing of public activity and if the nature ofbusiness activities of the company in question would not affect their objective performingof public activity. Conflict of interests

5. Law on Prevention of Conflicts of Interests in Performing Public Activities (contd.) Property report • Property report is prescribed under the Law as one of the systems developed for preventing possible violations of the Law. • The obligation of public officials to submit their and their closest relatives’ (spouse, ascendants and descendents) property reports is prescribed in several periods: before, during and after performing public activity. • The competent body for deciding on conflicts of interests is the Republic Board for Deciding on Conflicts of Interests (further: Board) established under the Law. • These measures do not include any fines and the Board has no power to discharge, sanction or withdraw public officials. • Possible measures are non-public warning and recommendation for public official’s discharge or resignation. • However, the Board has not been formed yet. • This is a completely new Law, enacted on 28 April 2004, and therefore there is no practice in accordance with this Law at all. Conflicts of interest

6. Contact Vladimir Dašić Attorney at law Bojović & Dašić Makedonska 30 11000 Belgrade Serbia and Montenegro Tel: +381 11 3302 100 Fax:+ 381 11 3302 101 E-mail: vladimir.dasic@yu.pwc.com Web: www.pwc.com/yu