The Situation Analysis

The 2004 Tandem Program was well received by the trade, being widely

recognized as a success. As a recognition of our efforts, JTI launched a similar

program. The preliminary reports show a high rate of compliance in trade.

There is no trade program in place to optimize our volume and presence at the

wholesale channel (around 30% of our business).

By the end of 2004 we will introduce PPOSMs in the top 500 HORECA

locations. According to the Bucharest Census preliminary data, there are more

than 1500 HORECA locations only in the Bucharest area. We need to continue

to expand our presence in this channel and also to protect our investments via a

trade program.

The distribution and the merchandising capacity of the EZDs’ sales agents could

be improved based on the nationwide introduction of the DSMS by Sept. 2004.

The 2005 TM Main Objectives

To continue the Tandem trade program, including the HORECA.

To develop a trade program for the wholesale channel.

To optimize the merchandising capacity of the EZDs sales agents based on the introduction of the DSMS nationwide.

To increase our investment in the permanent category platform and to secure our position in trade by signing long term contracts.

To continue the FB program, in spite of the anticipated ad –ban introduction (generic materials installation).

To get the full TM Department team on board no later than Feb. 2005.

The TM Organization Chart

Mircea Boboc

Manager TM

Luiza Serbanescu

TM Executive

Ioana Filip

TM Executive

Tunde Szedlacsek

TM Executive

Bogdan Militaru

TM Executive