AMERICAN DEPOSITARY AMERICAN DEPOSITARY RECEIPTSRECEIPTS

What is ADR?What is ADR?

An ADR is a negotiable U.S. certificate representing ownership of shares in an non-U.S. corporation. ADRs are quoted and traded in U.S. dollars in the U.S. securities market. Also, the dividends are paid to investor in U.S. dollars.

ADRs were specifically designed to facilitate the purchase, holding and sale of non-U.S. securities by U.S. investor, and to provide a corporate finance vehicle for non-U.S. companies.

Some more points about ADRs...Some more points about ADRs...

ADRs were first introduced in 1927. The stock of many non-US companies, trade on US

exchanges through the use of ADRs. ADRs enable US investors to buy shares in foreign

companies without undertaking cross-border transactions. The shares of the non-US corporation trade on a non-US

exchange, while the ADRs trade on a US exchange.

ADR RatioADR Ratio

ADR IssueADR Issue

Benefits of ADRsBenefits of ADRs

BENEFITS TO COMPANIES

Broadening and diversifying acompany’s US investor base

Enhancing a company’s visibility, status and profile in the US and internationally, among investors.

Offers a new avenue for raising equity capital, often at highly competitive rates.

BENEFITS TO INVESTORS

Convenient to purchase and hold anon-U.S. issuer's securities.

Opportunity to invest and earn inUS dollars.

Diversifying portfolio.

Invest in high-growth economies.

Working of ADR MarketWorking of ADR Market

Participants in ADR MarketParticipants in ADR MarketISSUER

Appoint depositary, lawyers, investment bank, etc.

Determine program type.

Obtain approval from Board of Directors, shareholders and regulators.

DEPOSITARY

Prepare & issue certificates.

Announcement of issue.

Coordinate with lawyers,accountants & bankers.

BROKERS

Make securities available to investors.

Submit required forms.

Execute & settle trades.

CUSTODIAN

Receive underlying shares.

Confirm deposit of under-lying shares.

Transmit dividend payments.

INVESTMENT BANKERS

Advise on DR structure.

Conduct roadshow.

Price & launch securities.