Services to Businesses in Agriculture and Food Industry

SERVICES TO BUSINESSES IN AGRICULTURE AND FOOD INDUSTRY

BDO International auditors and consultants 2 SERVICES TO AGRICULTURAL AND FOOD INDUSTRY BUSINESSES

BDO IS THE FIFTH LARGEST INTERNATIONAL AUDIT AND CONSULTING NETWORK IN THE WORLD BDO HAS 60 000 EMPLOYEES AND 1328 OFFICES IN 151 COUNTRIES*

The story of BDO development is a perfect example of the rapid We have selected the best of experie g audit and consulting services response to changing market conditions and customer needs. BDO in different countries and different sectors of the economy. We organization was founded in Europe in 1963, when progressive-minded preach a common approach to service delivery, which also guarantees accounting firms in Germany, Great Britain, the Netherlands, the individuality and professionalism to the customers. United States and Canada came together to share and expand their Stake on the local experience of BDO partner firms and their knowledge, and to support cross-national operations and customers. geographical proximity to customers is part of the BDO global strategy. We were known as the Binder Seidman International Group, and since Membership of each member-firm in the global network is a guarantee 1973 changed the name to Binder Dijker Otte & Co: BDO. that the services provided comply with the high standards of BDO. The beginning of the modern world structure of the organization began BDO member-firms are active in all regions of the world, and the in 1988 when it was decided to use the acronym in front of the names close cooperation among them made it possible to create a common of local BDO member firms. This, along with the introduction of a new strategy of the BDO that is targeted at meeting the customer needs. logo and a global brand, clearly demonstrated that the local experience Our customers see us as their preferred adviser in matters of auditing, of our member firms has been merged with the international while appreciating the constantly high level of service throughout the experience and the strength of our international network. world. Since then, our network has continued to evolve in response to International executive office is located in Brussels (Belgium). customer needs, which led to a change in our name in 2009 to just BDO. Such transition to a single global name demonstrates our commitment to serve customers on a seamless high level and compete successfully in the international arena.

Rating Top 5 International networks, associations and alliances 2014 per level of revenue gain

NETWORKS BY FEE INCOME

LATEST COMBINED ANNUAL INTERNATIONAL ORGANISATION PREVIOUS YEARS INCOME ($M) % CHANGE TOTAL INCOME ($M) 1 Deloitte 32,400 31,300 3,5 2 PwC 32,300 31,510 1,8 3 Ernst&Young 25,829 24,420 5,8 4 KPMG International 23,420 23,030 1,7 5 BDO 6,453 6,016 7,3

*data for October, 2014 SERVICES TO AGRICULTURAL AND FOOD INDUSTRY BUSINESSES 3

BDO IS THE FIFTH LARGEST INTERNATIONAL AUDIT BDO OFFERS SERVICES IN EVERY CONTINENT AND CONSULTING NETWORK IN THE WORLD AND IN ALL ECONOMICALLY SIGNIFICANT REGIONS BDO HAS 60 000 EMPLOYEES AND 1328 OFFICES IN 151 COUNTRIES*

Aruba Argentina Albania Kazakhstan Angola Bahrain Australia Bahamas Bolivia Algeria Kosovo Botswana Egypt Brunei Darussalam Barbados Brazil Armenia Kyrgyzstan Burundi Jordan Cambodia British Virgin Islands Chile Austria Latvia Comoros Kuwait China Canada Colombia Azerbaijan Liechtenstein Kenya Lebanon Hong Kong Cayman Islands Costa Rica Belarus Lithuania Madagascar Oman India Curaçao Ecuador Belgium Luxembourg Malawi Qatar Indonesia Dominican Rep. El Salvador Bulgaria Macedonia Mauritius Saudi Arabia Japan Jamaica Guatemala Cape Verde Malta Mozambique UAE Korea Puerto Rico Mexico Croatia Moldova Namibia Macao St Lucia Panama Cyprus Mongolia Nigeria Malaysia St Maarten Paraguay Czech Rep. Montenegro Rwanda Myanmar St Vincent Peru Denmark & Faroe Islands Morocco Seychelles New Zealand Grenadines Uruguay Estonia Netherlands South Africa Pakistan Suriname Venezuela Finland Norway Tanzania Philippines Trinidad & Tobago France Poland Uganda Singapore USA Georgia Portugal Zambia Sri Lanka Germany Romania Zimbabwe Taiwan Gibraltar Russia Thailand Greece San Marino Vietnam Greenland Serbia Guernsey Slovak Rep. Hungary Slovenia Iceland Spain Ireland Sweden Isle of Man Switzerland Israel Tajikistan Italy Tunisia Jersey Turkey Turkmenistan Ukraine United Kingdom 4 SERVICES TO AGRICULTURAL AND FOOD INDUSTRY BUSINESSES

OVERVIEW OF THE INDUSTRY

Agricultural complex, indeed, is essential for each The main problems in the development of agricultural particular country and the world as a whole. enterprises at present are: • the lack of working capital and the low working If we talk about the current state of the industry, the efficiency; following should be noted. The perspective of extending • high debt load and low investment activity; areas under cultivation with high probability will be exhausted in the next 40 years. Wider use of water • low capitalization and lack of available long-term financial resources; resources is also limited, because today agriculture uses 70% of the global renewable water. • lack of risk management effectiveness and the low level of corporate governance; Natural disasters also cause damage to agriculture. • discrepancy between the plans for business Statistics of the last two decades shows that the number development and opportunities to raise funds from of disasters increases, and the total damage to agriculture external and internal market; is becoming more serious. Risk management in emergency • flaws in the system of state support for agricultural situations and adaptation to climate change require new complex enterprises; approaches to management, and substantial investment. • flaws in the system of legal regulation and control over the activities of the sector enterprises. Looking to the future, the major source of growth In 2011, BDO in Russia carried out a study of agro in agricultural production will be the increase of industry in Russia, which focused on current situation productivity. In all countries, more resources will be in the industry, its prospects and state regulation. The spent on the introduction of scientific and technological study interviewed 27 respondents - representatives of progress in agriculture, which will increase the efficiency agriculture of the Russian market. of their use. Economic globalization, with all its contradictions and distortions has the potential for FLASH REPORT ON RESEARCH PROTOCOLS the development of cost-effective and ecology-saving agriculture. This requires elaboration of long-term • Respondents consider that the most effective agricultural complex development programs, when state support measures are funding and creation particular value is given to resource-saving technologies in of a special tax regime. all areas of activities. • Among the state actions to support the Speaking about the dynamics of world prices, it should agricultural sector, the most expected are be noted that the rise in food prices has led to increased continuing financial support and regulation of investment in the agricultural sector. During the long prices for resources consumed by the industry, as time the investment in this sector was low-yield. Today, well as the reduction of administrative burden on however, the share of agriculture in Official development business. assistance (ODA) on average increased - from 4.49% in • The most likely tool for further development of 2008-2009 to 5.63% in 2010. Financial obligations of the its company most respondents see the increase World Bank for agriculture and related industries have of its operational efficiency. They are followed by grown to $ 5.3 billion in 2011, compared to 2.9 billion in specialization, vertical integration, mergers and 2008. Loans to the International Fund for Agricultural acquisitions, horizontal integration, diversification, Development (IFAD) for the period 2010-2012 increased and more. by 67% - to 1.05 billion. • The consequences of the abnormal heat wave FDI in the agricultural sector have increased by 1.5 times were primarily rated by respondents as negative from 2008 to 2010. In perspective, the scope of necessary (large and medium financial loss). investments for production increase will continue to grow. SERVICES TO AGRICULTURAL AND FOOD INDUSTRY BUSINESSES 5

THE LEADER FOR EXCEPTIONAL CLIENT SERVICE

Member firms of BDO International in each country are ready to assist agricultural companies to elaborate and WHY THE CLIENTS CHOOSE US implement a competent development strategy in order to provide high performance and sustainable development. • Single quality standards all over the world due to What we can offer to the companies in the sector: strict procedures of control and risk-management.

• Assist in forming a strategy to attract funding • Global base of knowledge, unique methodology of BDO audit. • Services for entity restructuring: legal, tax, operational aspects • Highly skilled specialists with considerable experience • Advisory on increasing operational efficiency, of a particular sector. improving financial performance and ensuring the growth of the company’s value • Audit conclusions, given out by our firm, are • Management consulting, development of acknowledged by all foreign and international management accounting methodology and KPI companies and organizations. system to improve accounting efficiency • Development of models to predict demand • Combination of the best world practices and deep (seasonally adjusted) understanding of local traditions. • Development of strategy for optimal stock replenishment • Fixed communication channels, detailed planning during close cooperation with a client. • Optimization of the transport and warehouse logistics • Establishment and improvement of risk management • Considerable participation of partners in the team systems work. • • Разработка моделей оценки различных типов биологических активов в зависимости от технологического цикла сельскохозяйственного предприятия; оценка всех типов биологических активов • Построение единых процессов объемного планирования и бюджетирования, создание автоматизированных систем бюджетирования для холдинговых структур • Построение интегрированных систем управления на базе ИТ-решений • Аудит отчетности по национальным и международным стандартам • Налоговое и юридическое консультирование 6 SERVICES TO AGRICULTURAL AND FOOD INDUSTRY BUSINESSES

BDO provides the following services for enterprises of the agricultural LEGAL ADVICE sector and food industry: Our legal experts provide comprehensive protection of business AUDIT interests in conditions of increasingly complex legislation and economic globalization. In the area of legal advice, we specialize in legal support We provide clients with a full services in audit of IFRS financial of anti-crisis measures, corporate law, public-private partnership, statements, where the main are annual and semiannual audit of support of mergers and acquisitions projects, conclusion of real estate consolidated and non-consolidated IFRS financial statements, quarterly contracts, judicial practice, development of regulations. In agricultural reviews of IFRS financial statements, consulting on the transformation sector, one of the main activities of our company is support of land and IFRS requirements to the information disclosure. transactions. INTERNATIONAL STRUCTURING ACCOUNTING OUTSOURCING International structuring as a process of legal, economic and • Maintenance of accounting registers of tax accounting procedures operational optimization of business opportunities through the in accordance with accounting standards and law. effective combination of different jurisdictions to increase profitability and achieve goals is truly topical for agricultural and food industry • Preparation of monthly and quarterly mandatory reporting. enterprises. As part of our services for international structuring we • Preparation of statistical and financial reports. offer: • legal protection of ownership by beneficial owners of the business • Submitting the statements to statistical authorities, social by means of 100% corporate control through reliable jurisdictions; insurance agencies, pension fund and tax inspection office. • ensuring the confidentiality of end owners through the use of trust • Preparation of tax returns that need to be prepared in accordance mechanisms OR ensuring transparency of end owners in order to with the Tax Code and the Law on Corporate Income Tax and VAT. create a positive image, credit history; • Services for payroll accounting. • reducing the overall tax burden at the expense of efficient • Restoration of accounting data. distribution of profits and use of mechanisms for the payment of interest and royalties; • Preparation of source documents in accordance with the • Providing profiling of the business in certain areas to achieve requirements of Ukrainian legislation. maximum effectiveness of management, operational processes • Posting bank payment documents in the “Client-Bank” system. and cash flows; • Preparation and processing of incoming and outgoing invoices and • Creating conditions for profitable attraction of debt and shared bills. financing in international capital markets (transparency and structure); Preparation of internal reports in a format prescribed by the parent • Creating conditions for efficient going out of the business company. TAX ADVICE VALUATION PRACTICE We assist clients in solving complex tax issues, given due consideration Experts of BDO carry out valuation as part of projects under IFRS to objectives and priorities of their business. Basic services in the tax (valuation of assets at transformation, review of valuation results area include: during an audit, etc.), as well as a separate service line. The important directions in valuation activities of the company in relation to relevant • Tax optimization and tax structuring advice sectors are land and biological assets valuation. • Tax advisory on local issues and cross-border transactions Engaging a valuer on projects under IFRS is an added benefit. In • Review of tax returns on corporate income tax, VAT, other taxes assessing the impairment of assets or determining discount rates, • Buy- and Sell-side Tax Due Diligence and deal structuring involvement of an independent valuer reduces the costs of accounting and auditing. During the first application of IFRS (IFRS 1), valuation • Support in tax disputes of non-current assets usually increases the value of assets of the • Transfer Pricing advice enterprise and improves its investment appeal. • Developing internal tax accounting policy In some cases, when choosing a model of fair value estimation of • Expatriate tax services (including tax returns preparation) assets in the reporting, the involvement of an independent valuer is • Full accounting, tax, payroll and HR outsourcing mandatory. • Legal services SERVICES TO AGRICULTURAL AND FOOD INDUSTRY BUSINESSES 7

SERVICES IN CORPORATE FINANCE AND BUSINESS AUTOMATION CONSULTANCY An important tool to improve the efficiency of business management Now companies increasingly require assistance in corporate finance and is a unified IT system, which allows for budgeting, management, business consulting. Agro-holdings are developing through mergers and bookkeeping, tax accounting, and also provides daily monitoring and acquisitions. Companies need to attract additional investment. control over functioning of the business. We offer services in selection and implementation of IT systems on turnkey basis, with due account BDO Agroservice package in corporate finance and business of industry-specific client, using the most effective solutions that exist consultancy is aimed at providing comprehensive care to our clients in the software market. in the optimization of enterprise activities, searching sources of financing, substantiation of return on investment projects, designing RECRUITING OF THE FINANCIAL SPECIALISTS development strategies, conducting transactions for purchase or sale • Standardized approach to the search and selection of highly of business, as well as for mergers and acquisitions of companies and qualified financial sector professionals - accountants, auditors, their subsequent restructuring. Our professional consultants will help financial advisors, tax professionals, CFOs and other professions increase the efficiency of your enterprises by providing a wide range of services in corporate finance and business advisory services, which • Objective professional testing and psychological assessment: IFRS, NAS, taxation, etc., tests identifying types of personality, include: level of intelligence and style of communication / management of • Conducting diagnostics of company’s financial situation. applicants in compliance with Client’s requirements • Optimization of cash flow and working capital management. • Confirmation of references (recommendations) and professional achievements of applicants from their previous work places • Carrying out Due Diligence procedures. • Arranging interviews and Client assistance in conducting • Assessment of business value. interviews • Development of programs of debt restructuring and cost • Support the process of firing the approved applicant from the reduction. previous work place • Designing of development strategy and optimization of management structure, including the optimization of the number of production and office personnel. PROFESSIONAL DEVELOPMENT PROGRAMS • Description and optimization of business processes. • International Financial Reporting Standards IFRS (IFA) • Development of job descriptions (with performance criteria), • Internal Audit (IFA) provisions on units, improvement of organizational structure. • Strategic Management (IFA) • Optimization of production and office staff number. • Business Performance Management (IFA) • Development of the financial structure of the business. • Financial Management (IFA) • Creating a management reporting system (MRS) and key • Prifessional Code of Ethics of Accountants (IFA) performance indicators (KPI). • АССА • Organization of bookkeeping and tax accounting under national standards. • European Business Competence* License (EBC*L) • Organization of management accounting, IFRS accounting and • Corporate Training consolidation of financial statements. • Implementation of budgeting and plan vs. actual analysis. • Introduction of a centralized treasury. • Organization of controls and cost reduction. 8 SERVICES TO AGRICULTURAL AND FOOD INDUSTRY BUSINESSES

Managing sustainability risk while securing consistent business OUR SOLUTIONS INCLUDE: results means dealing with all layers of sustainable business • Training practice: financial, social and ecological. • Risk assessment A fresh sustainability approach offers your company new business opportunities to stay competitive and develop • Strategy a winning, sustainable business model for the future. • Implementation OUR SOLUTIONS: • Reporting systems SUSTAINABILITY FRAMEWORKS • Communication on progress A journey of a thousand miles begins with a single step. Whether you CARBON MANAGEMENT are embarking on your unique sustainability journey or are already It is the challenge of our times: how to grow and prosper in a carbon advanced, we can provide expert assessment and advice on the constrained world? International carbon frameworks regulate and set suitability of available frameworks that will optimise your experience requirements that affect a growing number of industries worldwide. and performance. How prepared are you for new national and international regulations, OUR SOLUTIONS INCLUDE: competitive pressures in your market and impacts on your operations and infrastructure due to climate change? • Initial assessment of your material sustainability risks and opportunities We can help you become carbon aware and provide solutions for greater integration of carbon and energy management into your • Sustainability finance options company’s operations with the view to improve your competitiveness • Taylor-made sustainability frameworks addressing your specific and lower your energy related costs. needs OUR SOLUTIONS INCLUDE: • Global Reporting Initiative (GRI) guidelines • Carbon awareness and measurement programmes • ISO 26000 – social responsibility guidelines (see below for more • Energy efficiency programs detail) • Carbon footprinting and reporting • UN Global Compact principles (see below for more detail) • Reduction and offset solutions • The Natural Step sustainability framework • GHG protocol and Carbon Disclosure Project (CPD) SUSTAINABILITY FRAMEWORKS IN FOCUS • Carbon finance options ISO 26000 – SOCIAL RESPONSIBILITY ENVIRONMENTAL RISK This voluntary standard has received acceptance from over 90 countries worldwide. The standard is flexible, adaptable and applicable to all kinds Environmental risks are often downplayed by companies leading of organisations. We bring it into practice through an introduction course to potentially greater risk exposure. We identify potential hazards and tailored workshops. We also check how well you are prepared for the through an environmental risk assessment; an approach that identifies recommendations and support the implementation of systems so that environmental threats, analyses associated risks and produces a set of you act in accordance with the standard. procedures to deal with them. OUR SOLUTIONS INCLUDE: OUR SOLUTIONS INCLUDE: • Training • Risk assessment following best international practice • Materiality assessment • Compliance with Ukrainian and international laws • Gap analysis • Improvement programmes based on best practice • Improvement programmes SUPPLY CHAIN • Reporting requirements The global reach and complexity of corporate value chains have resulted in new risks emerging which need a robust, professional response. Risks UN GLOBAL COMPACT PRINCIPLES areas include carbon emissions, working conditions, anti-corruption The UN Global Compact is a global framework for corporate citizenship. policies and supplier sustainability audits. BDO will help you get a By joining, you agree to incorporate ten principles, covеring human firm grip on all potential supply chain risk issues, provide a roadmap rights, labour, environment and corruption, in your company’s strategy addressing identified risks and finding cost effective measures to mitigate and operations. Through our unique expertise, we introduce you to them. the requirements, and assist you in identifying critical issues and developing a strategy to improve your performance on the principles. We support you in meeting the annual reporting requirement, and help you understand how you can maximise the benefit from participating in the network. SERVICES TO AGRICULTURAL AND FOOD INDUSTRY BUSINESSES 9

OUR SOLUTIONS INCLUDE: OUR SOLUTIONS INCLUDE: • Supplier risk mapping • Sustainability and CSR reports • Establishing a supplier code of conduct • Reporting systems • Supplier risk training • Reporting indicators and dashboard development • Supplier sustainability audits • Integrated reporting framework linking your financial and non- RISK PROFILING financial performance LABOUR PROTECTION AND INDUSTRIAL SAFETY Do you control your company’s risks in a way that satisfies your shareholders and stakeholders? The BDO risk and materiality assessment Implementing proper health and safety (H&S) practices helps your analyses your risks and benchmarks your performance in four areas: business become more resilient to operational risks. Professional H&S business integrity and corruption, the environment, employment and management helps to protect the value of your company and meet the society. expectations of regulators and stakeholders alike. Our method is to evaluate your H&S management system, develop a plan of concrete If new to sustainability, this first step will help you focus time and improvements and assist you with the effective implementation. resources wisely. If your company is more advanced, it is still a good check to ensure that your corporate sustainability profile is where it is OUR SOLUTIONS INCLUDE: supposed to be. • Professional risk and liability analysis of your H&S system OUR SOLUTIONS INCLUDE: • Compliance assessment of your H&S system against national • Risk and materiality assessment regulation and international best practice including OHSAS 18001 • Risk baseline • Integration of H&S in your sustainability and stakeholder • Risk benchmark reporting • Stakeholder risk analysis • Training and development of your staff in H&S risk prevention SUSTAINABILITY AND CSR REPORTING

The number of sustainability reports has increased vastly over the past ASSURANCE few years. In some countries, it’s already mandatory. In other cases, investors are looking for non-financial information in order to estimate Progressive companies today are looking beyond financial statements corporate value. Global initiatives like the Global Reporting Initiative to report on a range of indicators that demonstrate their sustainability (GRI), OECD, UN Global Compact, Carbon Disclosure Project and Dow initiatives and corporate responsibility. They enhance their Jones Sustainability Index are driving the demand for this. transparency and disclosure practices related to their ecological, social and governance initiatives by increasingly turning to external assurance International experiences clearly shows that reporting needs to be providers to verify their sustainability efforts. BDO can help your transparent and detailed on material issues. People should be able company gain additional credibility, increased stakeholder confidence to trust that you report is true, based on facts and figures. BDO can and enhanced regulatory compliance by assuring your sustainability, help you develop a system to ensure relevant and effective reporting CSR and social reports. practices in accordance with international standards. OUR SOLUTIONS INCLUDE: • Assurance according to international best practice standards ISAE3000, AA 1000AS and Global Reporting Initiative (GRI)

WE ADD VALUE AND BRING INSIGHT AND UP TO DATE THINKING TO HELP YOU MEET YOUR OBJECTIVES 10 SERVICES TO AGRICULTURAL AND FOOD INDUSTRY BUSINESSES OUR EXPERIANCE WE CONTINUOUSLY STRIVE TO GIVE OUR INTERNATIONAL CLIENTS THE BEST POSSIBLE SERVICE THROUGH OUR SEAMLESS GLOBAL NETWORK CLIENTS OF BDO IN UKRAINE Agro-holding «KSG Agro» PE "Arcadia" CJSC «Obolon» LLC NIbULoN CJSC «Slavoliya» CJSC "Bashtansky Cheese Factory" MilkiLand Group of companies OJSC "Dnepropetrovsk cold store facility" LLC «Zolotoy Rassvet» LLC "Volshebnyi Rassvet" LLC «Promin Agro» Zaporozhye Oil and Fat Plant LLC «Latagro» LLC "Ukrproduct" (TM "Molochnik") LLC «Hipp Ukraine» JSC "Pology oil extraction plant" State FC «Fishing Company S.A.» CJSC "BAN" SE «Service» "Rusanovsky Meat Processing Plant" OJSC «Interrybflot-Ukraine» LLC "Kraevid-Invest" LLC «Agrokontrakt» OJSC "Karavay" LLC «Bio Agro» CJSC "Marg-West" LLC «Agroholding» (TM «Vovka-morkovka») LLC "Inseko" LLC «Ukragroprom» LLC "Corporation" Agro-Soyuz» CLIENTS OF BDO IN RUSSIA LLC «Iceberry» "Russian Alcohol" Group OJSC «Abrau Durso» Agrokom Group OJSC «RUSSKIY PRODUCT» OJSC «EFKO Foods» LLC «Sugar Alliance» Kuzbass Food Factory LLC "Bravo Premium» AIC "Mosselprom" "Wimm-Bill-Dann" Nizhniy Novgorod Oil and Fat Plant SC "Yug Rusi" Agro-industrial complex "Razgulay" Agroterra Group Beer House "Fifth Ocean" SC "Euroservice" OJSC "SUN InBev" Prodo Group CLIENTS OF BDO IN KAZAKHSTAN Vita Production holding Astana Group PLC JSC "Bayan Sulu" JSC «AsiaAgroFood» LLP «Grain Industry» JSC «Kostanaysky Melkombinat» JSC «Zhelaevsky Bakery» LLP «Novo-Alzhansky Melkombinat» JSC «Тоbolsky Elevator» JSC «Toguzaksky Elevator» JSC «Dzharkulsky Elevator» LLP «Peremetninsky Elevator» LLP «Macaroni Factory Corona» LLP «Aк-Biday-Agro» CLIENTS OF BDO IN GEORGIA Schirnhofer Ecopex LLC Piunik Georgia LLC CLIENTS OF BDO IN AZERBAIJAN Devechi Broiler CLIENTS OF BDO IN CYPRUS Rennos Hadjioannou Farms Limited CLIENTS OF BDO IN ISRAEL Hishtil Ltd. Polybid S.A.E. Aﬁkim Metzerplas Ye’adim Marketing Dan Pal Negev Spices and Sde Eliyahu Spices Plastopil SERVICES TO AGRICULTURAL AND FOOD INDUSTRY BUSINESSES 11 THE SUCCESS OF OUR CLIENTS IS OUR SUCCESS!

KSG AGRO (BDO UKRAINE) MILKILAND (BDO UKRAINE)

KSG AGRO RAISED MILKILAND GROUP N.V. APPROXIMATELY $ 40 MILLION ATTRACTED ABOUT 49.4 MILLION BY PLACING 33% OF THE EUROS BY ISSUING 22.4% OF THE SHARES ON THE WARSAW SHARES ON THE WARSAW STOCK EXCHANGE. STOCK EXCHANGE. KSG agro today is one of the fastest growing agricultural Milkiland is one of the five largest producers of dairy companies of Ukraine. The company is engaged in the sale, products in CIS markets which offers a wide range of dairy storage and processing of agricultural products; it operates products: milk, cheese, butter, meeting the daily needs of in nearly all segments of the agricultural market. customers for healthy and delicious foods. In Ukraine, the company owns ten factories producing a wide range of dairy It was the client of BDO Ukraine for several years. We products including cheese, fresh dairy products and butter, have been conducting audit of the financial statements are sold nationwide under the brand names “Dobryana” of KSG Agro under IFRS from 2009. It took three months and “Kolyada.” In 2010, the Group won the position of from the beginning of negotiations until their final stage. the largest exporter of cheese in the country. We have The company was preparing to submit the statements been conducting the audit of the financial statements of during one year. Milkiland under IFRS beginning from 2007. DEBUT ON THE WARSAW STOCK EXCHANGE - DEBUT ON THE WARSAW STOCK EXCHANGE – 5 MAY 2011. 6 DECEMBER 2010. FEEDBACK FROM THE MANAGEMENT OF THE COMPANY: FEEDBACK FROM THE MANAGEMENT OF THE COMPANY: A critical thing when entering the IPO is the choice of The company “Milkiland” is grateful to BDO for services an audit company. It is believed that when playing big in provided, especially for an individual approach to the international capital markets it is better to work with the assigned tasks. Professionalism and competence of most known audit brands - supposedly this helps to sell employees at BDO in any area - audit, tax advice, accounting, the company better. However, our experience disproves law, and many others - is beyond any doubt. Cooperation this claim. An investment banker will not only assess the with BDO has a positive effect on activities of our company, company based on its statements, but will also ask for which gives us the right to recommend audit and consulting which purpose the money is needed, and what results the firm BDO as a reliable and professional partner. company plans to achieve. When selecting an audit company it is important to pay NCH CAPITAL INC. (BDO UKRAINE) attention to the existence of an office and the company’s ability to carry out an audit in all jurisdictions where assets of the holding company are registered. We were NCH Capital Inc., headquartered in New York, was looking for an experienced company with an extensive founded in the early 1990s. In total NCH Capital manages network of offices. The choice fell on BDO Ukraine for a nine funds with capital under management over $ 3 billion. number of reasons. This company is unique in terms of The Fund owns a majority stake in three Ukrainian joint combining the world’s best auditing practices, as it is a ventures, 35 agricultural enterprises and grain-storing member firm of the international network of BDO, as well companies in Ukraine. as a deep understanding of local conditions, because the FEEDBACK FROM THE MANAGEMENT OF THE COMPANY: roots of Ukrainian office grow in the industrial center of Thank you for your individual approach to solving the Ukraine. The specialists have years of experience in audit problems at hand. We highly appreciate the quality and work and provide all necessary package of services: an efficiency of the professionals at international audit firm international audit, legal services, valuation, and various BDO. Professionalism and competence of the audit firm consulting services, which is very convenient for our group BDO in all issues - tax, accounting, legal, and many other, of companies. as well as high quality of services, allow us to recommend Sergei Kasyanov, owner of KSG Agro BDO as a reliable and responsible partner. KIBBUTZ SHLUHOT (ВDO ISRAEL) GAON AGRO (ВDO ISRAEL)

Kibbutz Shluhot is a customer of BDO Israel, the activity A customer of BDO Israel, the activity was guided by the was guided by the Firm Strauss and Kibbutz Shluhot Firm - Gaon Agro acquired more than a quarter of the shares launched a new product in Israel - carrot bites. The of Metzerplas in consideration of NIS 33.5 million. Pursuant company anticipates annual sales of approximately NIS 12 to the agreement, the company will invest NIS 33.5 million in million. The Shluhot carrot plant, which is located in the Metzerplas based on a value of NIS 100 million for the kibbutz Valley of Springs near Beit She’an, exported an excess of 50 company; in return for the investment, Gaon Agro will receive thousand tons of carrots in 2011, representing about 25% 25.1% of the shares of Metzerplas. Metzerplas, established in of the carrot crop in the State of Israel. 1970, is engaged in the manufacturing of irrigation systems. CONTACTS OUR PEOPLE HAVE EXCEPTIONAL TECHNICAL AND COMMERCIAL SKILLS AND WE HAVE ABSOLUTE CONFIDENCE IN THEIR BUSINESS ETHIC BDO IN UKRAINE BDO IN RUSSIA Nykolay Lysenko Elena Khromova Consulting Partner / BDO Consulting Director Partner, Sector Leader/Consumer Tel: +38 050 335 98 26 Products, Retail and Services Tel: +7 916 443 5614 E-mail: [email protected] E-mail: [email protected]

BDO IN BELORUSSIA BDO IN GEORGIA Alexander Shkodin Ivane Zhuzhunashvili Managing Partner Audit partner Tel: +375 17 210 04 73 Tel: +995 599 977702 E-mail: [email protected] E-mail: [email protected]

BDO IN CYPRUS BDO IN KAZAHSTAN

Panicos Constantinou Alevtina Yanovshenko Audit Partner Audit Partner Tel: +35722 495707 Tel: +7 727 3971248 (ext.193) E-mail: [email protected] E-mail: [email protected]

BDO IN AZERBAIJAN BDO IN ISRAEL Yunis Salayev Ofer Lotker, , C.P.A.(Isr.) M.B.A. Managing Partner, Assurance Partner, Head of Industrial, Commercial and and Advisory Services Partner Settlement Cluster National Director of Risk Tel: +994 12 4045255 Management E-mail: [email protected] Tel: +972-3-6368788 E-mail: [email protected]

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice.

Please, contact BDO LLC to discuss these matters in the context of your particular circumstances. BDO LLC, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

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BDO is the brand name for the BDO network and for each of the BDO Member Firms. BDO is formed from the first letters of the surnames of company founders: Binder, Dijker and Otte.