BDO Ukraine Agro brochure ENG

SERVICES TO BUSINESSES IN AGRICULTURE AND FOOD INDUSTRY

BDO International auditors and consultants

SERVICES TO AGRICULTURAL AND FOOD INDUSTRY BUSINESSES2

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 response to changing market conditions and customer needs. BDO organization was founded in Europe in 1963, when progressive-minded accounting firms in Germany, Great Britain, the Netherlands, the United States and Canada came together to share and expand their knowledge, and to support cross-national operations and customers. We were known as the Binder Seidman International Group, and since 1973 changed the name to Binder Dijker Otte & Co: BDO.

The beginning of the modern world structure of the organization began in 1988 when it was decided to use the acronym in front of the names of local BDO member firms. This, along with the introduction of a new logo and a global brand, clearly demonstrated that the local experience of our member firms has been merged with the international experience and the strength of our international network.

Since then, our network has continued to evolve in response to 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.

We have selected the best of experie g audit and consulting services in different countries and different sectors of the economy. We preach a common approach to service delivery, which also guarantees individuality and professionalism to the customers.

Stake on the local experience of BDO partner firms and their geographical proximity to customers is part of the BDO global strategy. Membership of each member-firm in the global network is a guarantee that the services provided comply with the high standards of BDO. BDO member-firms are active in all regions of the world, and the close cooperation among them made it possible to create a common strategy of the BDO that is targeted at meeting the customer needs.

Our customers see us as their preferred adviser in matters of auditing, while appreciating the constantly high level of service throughout the world.

International executive office is located in Brussels (Belgium).

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

*data for October, 2014

NETWORKS BY FEE INCOME

INTERNATIONAL ORGANISATIONLATEST COMBINED ANNUAL TOTAL INCOME ($M)

PREVIOUS YEARS INCOME ($M) % CHANGE

1 Deloitte 32,400 31,300 3,52 PwC 32,300 31,510 1,83 Ernst&Young 25,829 24,420 5,84 KPMG International 23,420 23,030 1,7

5 BDO 6,453 6,016 7,3

SERVICES TO AGRICULTURAL AND FOOD INDUSTRY BUSINESSES 3

AlbaniaAlgeriaArmeniaAustriaAzerbaijanBelarusBelgiumBulgariaCape VerdeCroatiaCyprusCzech Rep.Denmark & Faroe IslandsEstoniaFinlandFranceGeorgiaGermanyGibraltarGreeceGreenlandGuernseyHungaryIcelandIrelandIsle of ManIsraelItalyJersey

KazakhstanKosovoKyrgyzstanLatviaLiechtensteinLithuaniaLuxembourgMacedoniaMaltaMoldova MongoliaMontenegroMoroccoNetherlandsNorwayPolandPortugalRomaniaRussiaSan MarinoSerbiaSlovak Rep.SloveniaSpainSwedenSwitzerlandTajikistanTunisiaTurkeyTurkmenistanUkraineUnited Kingdom

ArubaBahamasBarbadosBritish Virgin Islands�CanadaCayman IslandsCuraçaoDominican Rep.JamaicaPuerto RicoSt LuciaSt MaartenSt Vincent �Grenadines�SurinameTrinidad & TobagoUSA

ArgentinaBoliviaBrazilChileColombiaCosta RicaEcuadorEl SalvadorGuatemalaMexicoPanamaParaguayPeruUruguayVenezuela

AngolaBotswanaBurundiComorosKenyaMadagascarMalawiMauritius MozambiqueNamibiaNigeriaRwandaSeychellesSouth AfricaTanzaniaUgandaZambiaZimbabwe

AustraliaBrunei DarussalamCambodiaChinaHong KongIndiaIndonesiaJapanKoreaMacaoMalaysiaMyanmarNew ZealandPakistanPhilippinesSingaporeSri LankaTaiwanThailandVietnam

BahrainEgyptJordan KuwaitLebanonOmanQatarSaudi ArabiaUAE

BDO OFFERS SERVICES IN EVERY CONTINENT AND IN ALL ECONOMICALLY SIGNIFICANT REGIONS

BDO IS THE FIFTH LARGEST INTERNATIONAL AUDIT AND CONSULTING NETWORK IN THE WORLD

BDO HAS 60 000 EMPLOYEES AND 1328 OFFICES IN 151 COUNTRIES*


Agricultural complex, indeed, is essential for each particular country and the world as a whole.

If we talk about the current state of the industry, the following should be noted. The perspective of extending areas under cultivation with high probability will be exhausted in the next 40 years. Wider use of water resources is also limited, because today agriculture uses 70% of the global renewable water.

Natural disasters also cause damage to agriculture. Statistics of the last two decades shows that the number of disasters increases, and the total damage to agriculture is becoming more serious. Risk management in emergency situations and adaptation to climate change require new approaches to management, and substantial investment.

Looking to the future, the major source of growth in agricultural production will be the increase of productivity. In all countries, more resources will be spent on the introduction of scientific and technological progress in agriculture, which will increase the efficiency of their use. Economic globalization, with all its contradictions and distortions has the potential for the development of cost-effective and ecology-saving agriculture. This requires elaboration of long-term agricultural complex development programs, when particular value is given to resource-saving technologies in all areas of activities.

Speaking about the dynamics of world prices, it should be noted that the rise in food prices has led to increased investment in the agricultural sector. During the long time the investment in this sector was low-yield. Today, however, the share of agriculture in Official development assistance (ODA) on average increased - from 4.49% in 2008-2009 to 5.63% in 2010. Financial obligations of the World Bank for agriculture and related industries have grown to $ 5.3 billion in 2011, compared to 2.9 billion in 2008. Loans to the International Fund for Agricultural Development (IFAD) for the period 2010-2012 increased by 67% - to 1.05 billion.

FDI in the agricultural sector have increased by 1.5 times from 2008 to 2010. In perspective, the scope of necessary investments for production increase will continue to grow.

OVERVIEW OF THE INDUSTRY

In 2011, BDO in Russia carried out a study of agro industry in Russia, which focused on current situation in the industry, its prospects and state regulation. The study interviewed 27 respondents - representatives of agriculture of the Russian market.

FLASH REPORT ON RESEARCH PROTOCOLS

• Respondents consider that the most effective state support measures are funding and creation of a special tax regime.

• Among the state actions to support the agricultural sector, the most expected are continuing financial support and regulation of prices for resources consumed by the industry, as well as the reduction of administrative burden on business.

• The most likely tool for further development of its company most respondents see the increase of its operational efficiency. They are followed by specialization, vertical integration, mergers and acquisitions, horizontal integration, diversification, and more.

• The consequences of the abnormal heat wave were primarily rated by respondents as negative (large and medium financial loss).

The main problems in the development of agricultural enterprises at present are:

• the lack of working capital and the low working efficiency;

• high debt load and low investment activity;

• low capitalization and lack of available long-term financial resources;

• lack of risk management effectiveness and the low level of corporate governance;

• discrepancy between the plans for business development and opportunities to raise funds from external and internal market;

• flaws in the system of state support for agricultural complex enterprises;

• flaws in the system of legal regulation and control over the activities of the sector enterprises.


Member firms of BDO International in each country are ready to assist agricultural companies to elaborate and implement a competent development strategy in order to provide high performance and sustainable development.

What we can offer to the companies in the sector:

• Assist in forming a strategy to attract funding

• Services for entity restructuring: legal, tax, operational aspects

• Advisory on increasing operational efficiency, improving financial performance and ensuring the growth of the company’s value

• Management consulting, development of management accounting methodology and KPI system to improve accounting efficiency

• Development of models to predict demand (seasonally adjusted)

• Development of strategy for optimal stock replenishment

• Optimization of the transport and warehouse logistics

• Establishment and improvement of risk management systems

•

• 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

THE LEADER FOR EXCEPTIONAL CLIENT SERVICE

WHY THE CLIENTS CHOOSE US

• Single quality standards all over the world due to strict procedures of control and risk-management.

• Global base of knowledge, unique methodology of BDO audit.

• Highly skilled specialists with considerable experience of a particular sector.

• Audit conclusions, given out by our firm, are acknowledged by all foreign and international companies and organizations.

• Combination of the best world practices and deep understanding of local traditions.

• Fixed communication channels, detailed planning during close cooperation with a client.

• Considerable participation of partners in the team work.


BDO provides the following services for enterprises of the agricultural sector and food industry:

AUDIT

We provide clients with a full services in audit of IFRS financial statements, where the main are annual and semiannual audit of consolidated and non-consolidated IFRS financial statements, quarterly reviews of IFRS financial statements, consulting on the transformation and IFRS requirements to the information disclosure.

INTERNATIONAL STRUCTURING

International structuring as a process of legal, economic and operational optimization of business opportunities through the effective combination of different jurisdictions to increase profitability and achieve goals is truly topical for agricultural and food industry enterprises. As part of our services for international structuring we offer:

• legal protection of ownership by beneficial owners of the business by means of 100% corporate control through reliable jurisdictions;

• ensuring the confidentiality of end owners through the use of trust mechanisms OR ensuring transparency of end owners in order to create a positive image, credit history;

• reducing the overall tax burden at the expense of efficient distribution of profits and use of mechanisms for the payment of interest and royalties;

• Providing profiling of the business in certain areas to achieve maximum effectiveness of management, operational processes and cash flows;

• Creating conditions for profitable attraction of debt and shared financing in international capital markets (transparency and structure);

• Creating conditions for efficient going out of the business

TAX ADVICE

We assist clients in solving complex tax issues, given due consideration to objectives and priorities of their business. Basic services in the tax area include:

• Tax optimization and tax structuring advice

• Tax advisory on local issues and cross-border transactions

• Review of tax returns on corporate income tax, VAT, other taxes

• Buy- and Sell-side Tax Due Diligence and deal structuring

• Support in tax disputes

• Transfer Pricing advice

• Developing internal tax accounting policy

• Expatriate tax services (including tax returns preparation)

• Full accounting, tax, payroll and HR outsourcing

• Legal services

LEGAL ADVICE

Our legal experts provide comprehensive protection of business interests in conditions of increasingly complex legislation and economic globalization. In the area of legal advice, we specialize in legal support of anti-crisis measures, corporate law, public-private partnership, support of mergers and acquisitions projects, conclusion of real estate contracts, judicial practice, development of regulations. In agricultural sector, one of the main activities of our company is support of land transactions.

ACCOUNTING OUTSOURCING

• Maintenance of accounting registers of tax accounting procedures in accordance with accounting standards and law.

• Preparation of monthly and quarterly mandatory reporting.

• Preparation of statistical and financial reports.

• Submitting the statements to statistical authorities, social insurance agencies, pension fund and tax inspection office.

• Preparation of tax returns that need to be prepared in accordance with the Tax Code and the Law on Corporate Income Tax and VAT.

• Services for payroll accounting.

• Restoration of accounting data.

• Preparation of source documents in accordance with the requirements of Ukrainian legislation.

• Posting bank payment documents in the “Client-Bank” system.

• Preparation and processing of incoming and outgoing invoices and bills.

Preparation of internal reports in a format prescribed by the parent company.

VALUATION PRACTICE

Experts of BDO carry out valuation as part of projects under IFRS (valuation of assets at transformation, review of valuation results during an audit, etc.), as well as a separate service line. The important directions in valuation activities of the company in relation to relevant sectors are land and biological assets valuation.

Engaging a valuer on projects under IFRS is an added benefit. In assessing the impairment of assets or determining discount rates, involvement of an independent valuer reduces the costs of accounting and auditing. During the first application of IFRS (IFRS 1), valuation of non-current assets usually increases the value of assets of the enterprise and improves its investment appeal.

In some cases, when choosing a model of fair value estimation of assets in the reporting, the involvement of an independent valuer is mandatory.


AUTOMATION

An important tool to improve the efficiency of business management is a unified IT system, which allows for budgeting, management, bookkeeping, tax accounting, and also provides daily monitoring and control over functioning of the business. We offer services in selection and implementation of IT systems on turnkey basis, with due account of industry-specific client, using the most effective solutions that exist in the software market.

RECRUITING OF THE FINANCIAL SPECIALISTS

• Standardized approach to the search and selection of highly qualified financial sector professionals - accountants, auditors, financial advisors, tax professionals, CFOs and other professions

• Objective professional testing and psychological assessment: IFRS, NAS, taxation, etc., tests identifying types of personality, level of intelligence and style of communication / management of applicants in compliance with Client’s requirements

• Confirmation of references (recommendations) and professional achievements of applicants from their previous work places

• Arranging interviews and Client assistance in conducting interviews

• Support the process of firing the approved applicant from the previous work place

PROFESSIONAL DEVELOPMENT PROGRAMS

• International Financial Reporting Standards IFRS (IFA)

• Internal Audit (IFA)

• Strategic Management (IFA)

• Business Performance Management (IFA)

• Financial Management (IFA)

• Prifessional Code of Ethics of Accountants (IFA)

• АССА

• European Business Competence* License (EBC*L)

• Corporate Training

SERVICES IN CORPORATE FINANCE AND BUSINESS CONSULTANCY

Now companies increasingly require assistance in corporate finance and business consulting. Agro-holdings are developing through mergers and acquisitions. Companies need to attract additional investment.

BDO Agroservice package in corporate finance and business consultancy is aimed at providing comprehensive care to our clients in the optimization of enterprise activities, searching sources of financing, substantiation of return on investment projects, designing development strategies, conducting transactions for purchase or sale of business, as well as for mergers and acquisitions of companies and their subsequent restructuring. Our professional consultants will help increase the efficiency of your enterprises by providing a wide range of services in corporate finance and business advisory services, which include:

• Conducting diagnostics of company’s financial situation.

• Optimization of cash flow and working capital management.

• Carrying out Due Diligence procedures.

• Assessment of business value.

• Development of programs of debt restructuring and cost reduction.

• Designing of development strategy and optimization of management structure, including the optimization of the number of production and office personnel.

• Description and optimization of business processes.

• Development of job descriptions (with performance criteria), provisions on units, improvement of organizational structure.

• Optimization of production and office staff number.

• Development of the financial structure of the business.

• Creating a management reporting system (MRS) and key performance indicators (KPI).

• Organization of bookkeeping and tax accounting under national standards.

• Organization of management accounting, IFRS accounting and consolidation of financial statements.

• Implementation of budgeting and plan vs. actual analysis.

• Introduction of a centralized treasury.

• Organization of controls and cost reduction.


Managing sustainability risk while securing consistent business results means dealing with all layers of sustainable business practice: financial, social and ecological.

A fresh sustainability approach offers your company new business opportunities to stay competitive and develop a winning, sustainable business model for the future.

OUR SOLUTIONS:

SUSTAINABILITY FRAMEWORKS A journey of a thousand miles begins with a single step. Whether you are embarking on your unique sustainability journey or are already advanced, we can provide expert assessment and advice on the suitability of available frameworks that will optimise your experience and performance.

OUR SOLUTIONS INCLUDE:

• Initial assessment of your material sustainability risks and opportunities

• Sustainability finance options

• Taylor-made sustainability frameworks addressing your specific needs

• Global Reporting Initiative (GRI) guidelines

• ISO 26000 – social responsibility guidelines (see below for more detail)

• UN Global Compact principles (see below for more detail)

• The Natural Step sustainability framework

SUSTAINABILITY FRAMEWORKS IN FOCUS

ISO 26000 – SOCIAL RESPONSIBILITY

This voluntary standard has received acceptance from over 90 countries worldwide. The standard is flexible, adaptable and applicable to all kinds of organisations. We bring it into practice through an introduction course and tailored workshops. We also check how well you are prepared for the recommendations and support the implementation of systems so that you act in accordance with the standard.


• Training

• Materiality assessment

• Gap analysis

• Improvement programmes

• Reporting requirements

UN GLOBAL COMPACT PRINCIPLES

The UN Global Compact is a global framework for corporate citizenship. By joining, you agree to incorporate ten principles, covеring human rights, labour, environment and corruption, in your company’s strategy and operations. Through our unique expertise, we introduce you to 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.


• Training

• Risk assessment

• Strategy

• Implementation

• Reporting systems

• Communication on progress

CARBON MANAGEMENT

It is the challenge of our times: how to grow and prosper in a carbon constrained world? International carbon frameworks regulate and set requirements that affect a growing number of industries worldwide. How prepared are you for new national and international regulations, competitive pressures in your market and impacts on your operations and infrastructure due to climate change?

We can help you become carbon aware and provide solutions for greater integration of carbon and energy management into your company’s operations with the view to improve your competitiveness and lower your energy related costs.


• Carbon awareness and measurement programmes

• Energy efficiency programs

• Carbon footprinting and reporting

• Reduction and offset solutions

• GHG protocol and Carbon Disclosure Project (CPD)

• Carbon finance options

ENVIRONMENTAL RISK Environmental risks are often downplayed by companies leading to potentially greater risk exposure. We identify potential hazards through an environmental risk assessment; an approach that identifies environmental threats, analyses associated risks and produces a set of procedures to deal with them.


• Risk assessment following best international practice

• Compliance with Ukrainian and international laws

• Improvement programmes based on best practice

SUPPLY CHAIN The global reach and complexity of corporate value chains have resulted in new risks emerging which need a robust, professional response. Risks areas include carbon emissions, working conditions, anti-corruption policies and supplier sustainability audits. BDO will help you get a firm grip on all potential supply chain risk issues, provide a roadmap addressing identified risks and finding cost effective measures to mitigate them.



• Supplier risk mapping

• Establishing a supplier code of conduct

• Supplier risk training

• Supplier sustainability audits

RISK PROFILING

Do you control your company’s risks in a way that satisfies your shareholders and stakeholders? The BDO risk and materiality assessment analyses your risks and benchmarks your performance in four areas: business integrity and corruption, the environment, employment and society.

If new to sustainability, this first step will help you focus time and 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 supposed to be.

OUR SOLUTIONS INCLUDE: • Risk and materiality assessment

• Risk baseline

• Risk benchmark

• Stakeholder risk analysis

SUSTAINABILITY AND CSR REPORTING The number of sustainability reports has increased vastly over the past few years. In some countries, it’s already mandatory. In other cases, investors are looking for non-financial information in order to estimate corporate value. Global initiatives like the Global Reporting Initiative (GRI), OECD, UN Global Compact, Carbon Disclosure Project and Dow Jones Sustainability Index are driving the demand for this.

International experiences clearly shows that reporting needs to be transparent and detailed on material issues. People should be able to trust that you report is true, based on facts and figures. BDO can help you develop a system to ensure relevant and effective reporting practices in accordance with international standards.


• Sustainability and CSR reports

• Reporting systems

• Reporting indicators and dashboard development

• Integrated reporting framework linking your financial and non-financial performance

LABOUR PROTECTION AND INDUSTRIAL SAFETY

Implementing proper health and safety (H&S) practices helps your business become more resilient to operational risks. Professional H&S management helps to protect the value of your company and meet the expectations of regulators and stakeholders alike. Our method is to evaluate your H&S management system, develop a plan of concrete improvements and assist you with the effective implementation.


• Professional risk and liability analysis of your H&S system

• Compliance assessment of your H&S system against national regulation and international best practice including OHSAS 18001

• Integration of H&S in your sustainability and stakeholder reporting

• Training and development of your staff in H&S risk prevention

ASSURANCE

Progressive companies today are looking beyond financial statements to report on a range of indicators that demonstrate their sustainability initiatives and corporate responsibility. They enhance their transparency and disclosure practices related to their ecological, social and governance initiatives by increasingly turning to external assurance providers to verify their sustainability efforts. BDO can help your company gain additional credibility, increased stakeholder confidence and enhanced regulatory compliance by assuring your sustainability, CSR and social reports.


• 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


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

OUR EXPERIANCEWE CONTINUOUSLY STRIVE TO GIVE OUR INTERNATIONAL CLIENTS THE BEST POSSIBLE SERVICE THROUGH OUR

SEAMLESS GLOBAL NETWORK


MILKILAND (BDO UKRAINE) MILKILAND GROUP N.V.

ATTRACTED ABOUT 49.4 MILLION EUROS BY ISSUING 22.4% OF THE SHARES ON THE WARSAW STOCK EXCHANGE.

Milkiland is one of the five largest producers of dairy products in CIS markets which offers a wide range of dairy products: milk, cheese, butter, meeting the daily needs of customers for healthy and delicious foods. In Ukraine, the company owns ten factories producing a wide range of dairy products including cheese, fresh dairy products and butter, are sold nationwide under the brand names “Dobryana” and “Kolyada.” In 2010, the Group won the position of the largest exporter of cheese in the country. We have been conducting the audit of the financial statements of Milkiland under IFRS beginning from 2007.

DEBUT ON THE WARSAW STOCK EXCHANGE – 6 DECEMBER 2010.

FEEDBACK FROM THE MANAGEMENT OF THE COMPANY:The company “Milkiland” is grateful to BDO for services provided, especially for an individual approach to the assigned tasks. Professionalism and competence of employees at BDO in any area - audit, tax advice, accounting, law, and many others - is beyond any doubt. Cooperation with BDO has a positive effect on activities of our company, which gives us the right to recommend audit and consulting firm BDO as a reliable and professional partner.

KSG AGRO (BDO UKRAINE)

KSG AGRO RAISED APPROXIMATELY $ 40 MILLION BY PLACING 33% OF THE SHARES ON THE WARSAW STOCK EXCHANGE.

KSG agro today is one of the fastest growing agricultural companies of Ukraine. The company is engaged in the sale, storage and processing of agricultural products; it operates in nearly all segments of the agricultural market.

It was the client of BDO Ukraine for several years. We have been conducting audit of the financial statements of KSG Agro under IFRS from 2009. It took three months from the beginning of negotiations until their final stage. The company was preparing to submit the statements during one year.

DEBUT ON THE WARSAW STOCK EXCHANGE - 5 MAY 2011.

FEEDBACK FROM THE MANAGEMENT OF THE COMPANY:A critical thing when entering the IPO is the choice of an audit company. It is believed that when playing big in international capital markets it is better to work with the most known audit brands - supposedly this helps to sell the company better. However, our experience disproves this claim. An investment banker will not only assess the company based on its statements, but will also ask for which purpose the money is needed, and what results the company plans to achieve.

When selecting an audit company it is important to pay 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 looking for an experienced company with an extensive network of offices. The choice fell on BDO Ukraine for a number of reasons. This company is unique in terms of combining the world’s best auditing practices, as it is a member firm of the international network of BDO, as well as a deep understanding of local conditions, because the roots of Ukrainian office grow in the industrial center of Ukraine. The specialists have years of experience in audit work and provide all necessary package of services: an international audit, legal services, valuation, and various consulting services, which is very convenient for our group of companies.

Sergei Kasyanov, owner of KSG Agro

THE SUCCESS OF OUR CLIENTS IS OUR SUCCESS!

NCH CAPITAL INC. (BDO UKRAINE)

NCH Capital Inc., headquartered in New York, was founded in the early 1990s. In total NCH Capital manages nine funds with capital under management over $ 3 billion. The Fund owns a majority stake in three Ukrainian joint ventures, 35 agricultural enterprises and grain-storing companies in Ukraine.

FEEDBACK FROM THE MANAGEMENT OF THE COMPANY:Thank you for your individual approach to solving the problems at hand. We highly appreciate the quality and efficiency of the professionals at international audit firm BDO. Professionalism and competence of the audit firm BDO in all issues - tax, accounting, legal, and many other, as well as high quality of services, allow us to recommend BDO as a reliable and responsible partner.

KIBBUTZ SHLUHOT (ВDO ISRAEL)

Kibbutz Shluhot is a customer of BDO Israel, the activity was guided by the Firm Strauss and Kibbutz Shluhot launched a new product in Israel - carrot bites. The company anticipates annual sales of approximately NIS 12 million. The Shluhot carrot plant, which is located in the Valley of Springs near Beit She’an, exported an excess of 50 thousand tons of carrots in 2011, representing about 25% of the carrot crop in the State of Israel.

GAON AGRO (ВDO ISRAEL)

A customer of BDO Israel, the activity was guided by the Firm - Gaon Agro acquired more than a quarter of the shares of Metzerplas in consideration of NIS 33.5 million. Pursuant to the agreement, the company will invest NIS 33.5 million in Metzerplas based on a value of NIS 100 million for the kibbutz company; in return for the investment, Gaon Agro will receive 25.1% of the shares of Metzerplas. Metzerplas, established in 1970, is engaged in the manufacturing of irrigation systems.

CONTACTS

Elena Khromova Partner, Sector Leader/Consumer Products, Retail and Services Tel: +7 916 443 5614 E-mail: [email protected]

Yunis Salayev Managing Partner, Assurance and Advisory Services Partner Tel: +994 12 4045255 E-mail: [email protected]

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

Alexander Shkodin Managing Partner Tel: +375 17 210 04 73 E-mail: [email protected]

Nykolay LysenkoConsulting Partner / BDO Consulting Director

Tel: +38 050 335 98 26

E-mail: [email protected]

Ivane Zhuzhunashvili Audit partner Tel: +995 599 977702 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.

Each of BDO International Limited, Brussels Worldwide Services BVBA and the member firms of the BDO network is a separate legal entity and has no liability for another such entity’s acts or omissions. Nothing in the arrangements or rules of the BDO network shall constitute or imply an agency relationship or a partnership between BDO International Limited, Brussels Worldwide Services BVBA and/or the member firms of the BDO network.

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.

2015 BDO LLC. All rights reserved.

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Economy & Finance

BDO Ukraine Agro brochure ENG