1. PwC Proposal to Polesye Agro
Providing audit and advisory services to help
the client move business on a higher level
Made by Benchmark Company exclusively for CL Cup Moscow’12 >>
5 December 2012

2. 1-year
action
plan
2Source: Benchmark company analysis, companies data, case data.
We recommend rapid business expansion through foreign
credit and IPO with PwC audit and advisory support
 Invest $8.4B in Kursk
project
 Finance it through
foreign credit and
reinvested profits
Perspective Action PwC Support
Long-term
initiatives
 Invest $6-7B in M&A
deals and greenfield
 Finance it through IPO
in 2015 and reinvested
profits
 IPO audit
(detail auditing of company
reports and prospectus)
 Advisory services
(helping the client with
business expansion)
 Compulsory audit
(required to obtain loan
and to provide the base for
the further IPO in 2015)
By the end of 2015: $15B investments in business expansion (Foreign loan, IPO)
$1.4M for PwC audit and advisory services
2013
2014-15

3. 1. Industry analysis and competitors comparison
2. Choosing the right option for business
3. PwC Offer: services description and its rationale
4. Final recommendations
3
Agenda

4. Pork consumption 2011-2015
Millions of tons
The growing pork market will be driven by domestic top-
players with government support and shifts in consumption
4Source: Benchmark company analysis, companies data, case data, Euromonitor, Russian Meat Union.
42% 40% 37% 34% 30%
22% 20% 18% 16% 15%
36% 40% 45% 50% 55%
2015F2014F2013F2012F2011
Other domestic
Import
Domestic Top-10
2,9 3,0 3,1 3,3 3,4
2015F
+17%
2011 2014F2013F2012F
The pork market will grow by 17% by
the end of 2015
Agroholdings will capture 10-15% of
market from import and small players
35 35 35 36 36
Pork share of meet consumption
Percent
Pork market breakdown 2011-2015
Percent
 Meet consumption will continue to switch from beef to
pork and poultry
 According to Russian Meat Union, the market leaders will
build additional 0.8M capacities by the end 2015
 Import will continue to decrease through strong govern-
ment support of the industry due to WTO transition period
 Market leaders have super-ambitious plans to expand its
business in all segments of value chain

5. Net Margin
Percent (2011)
Conservative growing policy allowed Polesye Agro to be
strongly competitive with top-players performance…
5Source: Benchmark company analysis, companies data, case data.
Net Margin CAGR
Percent (2009-2011)
Net Debt/EBITDA
(2011)
15,5
6,0
10,6
22,3
-0,3
-14,2
-6,0
35,0
3,4
20,6
2,9
2,4
Cherkizovo
Rusagro
Miratorg
Polesye Agro
Key competitors proactively used borrowed capital and government subsidies
that hugely affected its indicators, allowing Polesye Agro to be at the top
 Polesye Agro 3 segments of value chain are also efficient separately comparing with scarce industry
data (based on findings of some Cherkizovo and Rusagro indicators of piggery and processing
business units).
 The competitors huge debt mainly consists of borrowings and subsidized loans, other financing was
IPO or owners money.

6. 6Source: Benchmark company analysis, companies annual reports, case data.
…However, the company has to respond to the aggressive
rivals’ moves by expanding its business
Polesye Agro
Cherkizovo
Rusagro
Miratorg
KoPITANIYA
Agro Belgorye
Vertical Integration
Polesye Agro is the only company that is represented in half of the value chain with modest investment plans.
Grain
Feed-
stuff
Piggery
Proces-
sing
Distri-
bution
Retail Investment plans in all segments
Investment position
3 projects in piggery and feedstuff are taken
into consideration (1-8B rub by 2015)
Aggressive M&A strategy (Mosselprom in 2011)
Active capacity increasing (20B rub by 2015)
Distribution development
Aggressive growth in piggery, grain &
feedstuff (3x increase by 2015)
Launching of new capacities (4,3B rub by 2013)
Distribution & Retail Excellence
Aggressive growth in piggery & processing
(100B rub in 3 years)
Value chain further development
Piggery & processing investments (20B rub
in the mid-term perspective)
15B rub investments in mid-term range
Included
Not included

7. 1. Industry analysis and competitors comparison
2. Choosing the right option for business
3. PwC Offer: services description and its rationale
4. Final recommendations
7
Agenda

8. 8Source: Benchmark company analysis.
The proposed aggressive expansion can be done only by
non-organic growth of Polesye Agro
Non-organic growth
Organic growth
Sell business
Selection factors (key findings from first part)
Steady industry
growth
Company strong
competitiveness
Huge competitors
expansionBusiness Options
1
2
3
Client weak
vertical integration
 Non-organic growth seems like the only available option in the client situation that needs
huge investments to response to the competitors
 Organic growth is an open issue in the long-term perspective after the proposed expansion
 Client can sell its business, but it makes more sense to retain control and develop the business
Fits the option
Doesn’t fit the option

9. 9Source: Benchmark company analysis, case data.
Among company investment projects the 3rd one will provide
maximum synergy, but additional expansion is needed
Current
investment
projects
Project 1
Expansion of
piggery current
capacities
Project 2
New feed mill
plant and piggery
in Chelyabinsk
district
Project 3
New feed mill
plant and piggery
in Kursk district
Non-organic growth
+
Non-organic growth
Non-organic growth
The cheapest option
-
+ -
+ -
Full grain supply of piggery
Capacities will grow by 2.5x
No vertical synergy due to
remoteness of main capacities
No working experience and
own processing in the region
Overpayment (4B higher than
3rd option)
Doesn’t provide rapid growth
No vertical synergy since
processing is fully loaded
New capacities won’t work on
the own processing
 The projects provide expansion of capacities only in current segments of value chain
 To be more efficient and completely vertically integrated the company should enter grain,
distribution and retail businesses
Capacities will grow by 2.5x
Great vertical synergy due to
closeness to current facilities
No overpayment, average
investments
Only 50% feedstuff supply of
piggery

10. Short-term perspective
10Source: Benchmark company analysis, case data, Warsaw Stock Exchange, LSE.
Chosen project should be financed by foreign loan, while
further expansion will be based on IPO in long-term range
Eurobonds
Required
Time
Key benefits
Price or %
Rate
Control
Maintenance
Maximum Sum,
$ mlnOptions
Foreign credit
Domestic credit
IPO
Strategic Investor
Finance Investor
No
1
year
Long-term perspective
12-13%
10-11%
150
130
 Fast deal speed
 No reports transform
12-13%+
currency risk
IFRS
Need
1
year
1
year
1
year
3
years
>150
100
100
50
5 mln
2 mln
1 mln
 Long-term range
 Cheaper than domestic
 Large financial support
 Long-term range
 Raising company`s brand
 Future financing through
add.emission
 Large sums of money
 Independent company
strategy

11. New feed mill plant
and piggery
in Kursk district
2013-15
11Source: Benchmark company analysis, companies data, case data.
We recommend to invest in Kursk project through foreign
loan and M&A expansion by IPO with profits reinvestments
$8.4B
Expansion
Required
investments
Preferred type of financing
 5-year foreign credit in 2013
(4B rub, IFRS and good debt position
will allow to borrow at the lower level
for 5 years)
 Retained earnings 2012-2013 (help
to start project in 2013 immediately:
2B rub annually, if client will generate
the same profits)
Further aggressive
growth (Greenfield
and M&A deals)
2014-15
$5-7B
 IPO in early 2015
(10-20% free float will provide
approximately 3B rub)
 Retained earnings 2014-2015
(despite the loan profits will grow,
especially when the new capacities in
Kursk will start work)

12. 1. Industry analysis and competitors comparison
2. Choosing the right option for business
3. PwC Offer: services description and its rationale
4. Final recommendations
12
Agenda

13. PwC offers annual audit services including the pre-IPO audit
in 2015 and strategy consulting service
2012 2013 2014 2015
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
5.12.12
Investment project
IPO
1st year audit
Foreign loan
Advisory services
Activities
M&A
IPO audit
Annual audit
Compulsory audit in long-term starting from
2013 (in 2013 to gain a foreign credit)
Acting as the IPO auditor in 2014
Transaction support, Strategy Development,
Assistance in getting state benefits,
Market Sounding
Audit
services
Advisory
services
2m 2013
3 m 2014-15
3 m 2014
2 m 2015
Description LengthService Price
$770K
$600K
13
1-yearLong-term
Source: Benchmark company analysis, companies data, case data.
Company’ activities PwC Support

14. Thousand $
Source: Benchmark company analysis, companies data, case data.
The fee for audit services is almost the same as the one for
advisory and in total the fee equals $1.4M
200
40
4
20
264
Technical questions
Additional manager
Basic rate
Total fee
Jan-March period
2 $146K
Audit with pre-IPO audit service will be held
in 2013-2015 and cost $770k
Length of audit
period, months
Audit
period
Total fee
1st year
2nd year
3rd year
3 Mar-May 2013 $264K
2 $160KJan-Feb 2014
Jan-Feb 2015
IPO audit ? Sep-Dec 2014 $200K
Thousand $
200
300
0
600
Market Sounding
Assistance in getting
state benefits
100
Transaction Support
Strategy Development
Total fee
14
The total advisory fee consists of 3
components
Following services will optimize the future
performance of the company
Strategy
Development
Transaction
Support
Assistance in get-
ting state benefits
Marketing
Sounding
Develop strategy and plans
for future, identify priorities
Pre-deal preparations & ne-
gotiations, analyzing options
Support to get tax benefits,
direct government financing
Analyzing players, potential
collaborators
The total audit fee for the 1st year consists
of 4 components

15.  Closeness to the clients
 Transportation and labor cost savings
 No main competitors in the region
 Wide opportunities identification for
the growth of the company
 The best possible advice on long-term
strategy
 Effective and efficient audit services
 High commitment to the company
 Providing services in correspondence
with the company’s goals
Additional services
and support
New PwC office
in Voronezh
Top service value
for competitive fee
 Clear understanding of the
company’s business framework
 Top-clients in agribusiness
Extensive experience
in agribusiness audit
15Source: Benchmark company analysis, case data, PwC site.
PwC has a range of competitive advantages to beat the
competitors and exceed the client’s expectations

16. 16Source: Benchmark company analysis, companies data, case data.
PwC beats its main competitors in terms of geographical
benefits and significant experience in agribusiness
Geography closeness*
Agribusiness experience **
IFRS experience
Report reliability
Additional Services
* Based on the analysis of companies’ offices in Russia.
** Valuation is based on the analysis of Ukrainian and Russian agricompanies’ auditors.
BIG-4
Competitors
BDO, Grant
Thornton
Small Russian
audit firms
PwC
worse better
PwC is far better to Polesye Agro than its direct competitors by geography closeness and
agribusiness experience that allow to be with client in touch and provide best experienced teams

17. 17Source: Benchmark Company analysis, case data.
Customer sees no
potential return
 PwC audit service is essential for successful
achieving of the long-term goals.
 Advisory services will help to consider deeply the
business expansion options needed for success
Risk of price
issue importance
Risk elimination
Customer will pay attention primarily to the value of service
as the risk of the competition based solely on price is not high
Customer is not
able to pay
Dumping by
competitors
The customer has an ability to pay the amount
needed due to the good company’s performance
 BIG-4 competitors have the comparable price and
are not likely to dump
 Second-tier competitors provide limited range of
services at lower price with poor quality

18. 1. Industry analysis and competitors comparison
2. Choosing the right option for business
3. PwC Offer: services description and its rationale
4. Final recommendations
18
Agenda

19. 1-year
action
plan
19Source: Benchmark company analysis, companies data, case data.
PwC audit and advisory support will help Polesye Agro grow
rapidly and strengthen its market leader position
 Invest $8.4B in Kursk
project
 Finance it through
foreign credit and
reinvested profits
Perspective Action PwC Support
Long-term
initiatives
 Invest $6-7B in M&A
deals and greenfield
 Finance it through IPO
in 2015 and reinvested
profits
 IPO audit
(detail auditing of company
reports and prospectus)
 Advisory services
(helping the client with
business expansion)
 Compulsory audit
(required to obtain loan
and to provide the base for
the further IPO in 2015)
By the end of 2015: $15B investments in business expansion (Foreign loan, IPO)
$1.4M for PwC audit and advisory services
2013
2014-15

20. Great case cracking track
 Semifinal of McKinsey&Co BD
Championship’12
 3rd place at Microsoft Case
Competition’11
 Semifinal of CL Cup Russia’11
Excellent academic study
 High achievers of Finance
University, top-5% of course rating
 Grants from Russian Economy
Fund, Potanin Foundation, Lukoil,
Gazprombank, Vozrozhdenie
Unique working experience
 Worked in PwC, JTI, MCG
 Organized Fincontest’12, Russian
Innovation Convention’11
 Participated in student consulting
project with BCG ad-hoc support
Sergey
Slutskiy
Mark
Khlynov
Maria
Kochmola
Elizaveta
Ivahnenko
Benchmark Company
high-experienced team of fellows with strong
spirit that study and work together for 4 years
Thanks for your attention! Any questions?