"MEKOM" AD: Investment Presentation

1. "MEKOM" AD: Investment Presentation January 2008

2. Table of contents • Executive Summary 3 • "Mekom" AD’s Products and Markets 5 • "Mekom" AD’s History and Performance 20 • Development Plan and Financial Projections 28 • Investment Case 33 • Public Offering Details 37 • Contacts 39

3. Executive Summary

4. 5.2 • Executive Summary • "Mekom" AD is the biggest and most modern meat producer in Bulgaria • "Mekom" AD is the only Bulgarian company with all feasible certificates for exports to the EU. "Mekom" AD is the biggest Bulgarian meat exporter and sells its products in 11 European countries • On the domestic market, "Mekom" AD is a market leader in the upper meat product segments – boiled-smoked and raw-dried sausages • The company is fully integrated – from breeding of its own products to slaughtering and meat processing • "Mekom" AD is known for its innovative products, such as products from ostrich, buffalo, or rabbit meat • The company recently consolidated ownership in 12 daughter companies in order to simplify organizational structure and eliminate inter-company dealing • "Mekom" AD has the ambition and the potential to become a regional leader – the proceeds from the IPO will support its regional expansion plans and continued development of the Bulgarian market • "Mekom" AD aims to raise a minimum of BGN 22 million through its IPO in order to support its investment program • The expected free-float of the company after the IPO is 16.67% 4

5. II. "Mekom" AD’s Products and Markets

6. 5.2 "Mekom" AD is a leading meat producing and meat processing company in Bulgaria and one of the biggest and most modern on the Balkans • "Mekom" AD was established in 1906 in the town of Silistra, north-east Bulgaria • "Mekom" AD is the largest integrated meat processing company in Bulgaria • The company is the only Bulgarian meat producer certified in category "A" for export to EU countries and has some of the largest and most modern production facilities on the Balkans • The company has a closed production cycle – from supply of live animals, to own breeding farms, slaughter houses, and processed meat production lines • The company has experienced management and specialists and employs more than 500 people "Mekom" AD’s main plant in Silistra 6

7. 5.2 "Mekom" AD is the only Bulgarian company with certificate type "A" for export to the EU • "Mekom" AD is the first meat company in Bulgaria to introduce the HACCP system for quality control in 2002 • The company has introduced a system for full traceability of products – any product on the shelves can be traced back to the original live animal source • "Mekom" AD is the only Bulgarian producer with type "A" export license – for all kinds of meat (except pigs), durable boiled-smoked sausages, raw-dried sausages, and delicatessen • The only exception is pigs due to EU ban on pig export from the region "Mekom" AD’s main licenses Source: "Mekom" AD, EU Legend: CP: Cutting plant; CS: Cold store; SH: Slaughterhouse; B: Bovine meat; C: Caprine meat; O: Ovine meat; P: Pig meat; R: Ratites; E: Equidae; Rba: Rabbit 7

8. 5.2 "Mekom" AD has a well-diversified product portfolio • "Mekom" AD has a diversified product portfolio in three basic lines of products – processed meat products, meat carcasses, and live animals • "Mekom" AD produces an entire range of processed meat products: • Short-lived products – sausages, frankfurters, minced meats, etc. ("Kamchia", "Hamburgski") • Durable boiled-smoked sausages – various kinds of salami ("Durostorum", "Bourgas", "Bai Ganyo") • Raw-dried sausages – different kinds of loukanka and sudzuk ("Karlovska", "Srebarna", "Trapezitsa") • Hams, delicatessen, others • Chilled/Frozen meat and meat carcasses • Lamb, pork, buffalo, beef, cow, rabbit, ostrich • Live animals • The company breeds and sells its patented breed of pigs called "Silistra Hybrid" • "Mekom" AD is also exclusive distributor for Bulgaria for the products of Italian company "Montana" for proscuitto and other specialized raw-dried products, which the company does not produce itself 8

9. 5.2 "Mekom" AD is the biggest Bulgarian exporter of meat and meat products • "Mekom" AD is Bulgaria’s largest exporter of meat and meat products. The company has the following export market shares for Bulgaria: • More than 55% of the total sheep and goat export • More than 85% of the total beef and buffalo export • More than 90% of the total rabbit meat export • More than 60% of sub-products and delicatessen • 100% of ostrich meat • The company exports its products to 11 European countries • As of mid 2007, "Mekom" AD is the only Bulgarian meat company licensed to export cold-cuts, ostrich, rabbit and beef meat to EU countries • "Mekom" AD’s processed meat products are sold in supermarkets in Germany, Spain, Switzerland, Romania, and the U.K. "Mekom" AD’s European markets 9

10. 8 In Bulgaria, "Mekom" AD is positioned in the upper segments for processed meat products Relative price index of processed meat products in Bulgaria BGN/kg • "Mekom" AD has a market share of more than 14% in the most expensive segment of durable raw-dried products (lukanka, sudzhuk) • The company has a market share of more than 10% in the segment of boiled-smoked sausages • "Mekom" AD has an approximate market share of 4% in the segment of short-lived sausages products • "Mekom" AD is a leading supplier of chilled and frozen meat and carcass meat for the Bulgarian market • The company is an absolute leader in the segment for chilled/frozen lamb meat • "Mekom" AD is also the key producer for Billa’s range of "Clever" meat products Short-lived products Durable boiled-smoked sausages Raw-dried sausages Source: "Mekom" AD; Bulgarian Association of Meat producers 10

11. 5.2 "Mekom" AD has invested in world-class production capacity • "Mekom" AD has world-class slaughter lines with below capacities: • Lamb – 500 lambs/hour • Pigs – 150 pigs/hour • Calves – 40 calves/hour • Buffaloes – 40 buffalos/hour • Rabbits – 600-1,000 rabbits/hour • Ostrich – 35-45 ostriches/hour • "Mekom" AD has a full equipment line for the production of all types of sausages with daily capacity of 150 tons • The company has freezers with total capacity of 3,200 tons • "Mekom" AD also has its own electricity supply units, as well as a new waste disposal and management unit "Mekom" AD’s slaughter-lines and processed meat facilities 11

12. 5.2 "Mekom" AD has developed a patented breed of pigs called "Silistra Hybrid" • "Mekom" AD has developed a patented unique breed of pigs, called "Silistra Hybrid" • The synthetic line is created under the method of the complex, reproducing, politype cross-breeding. This type of breeding combines the positive qualities of four breeds, with the maximum participation of Pietrain breed • The breed has the following characteristics: • High fertility – 12-15 pigs per delivery • Relatively large size at birth – 1.4-1.5 kg/pig at birth • Low level of fat – 8% • Large amount of red meat – 75-80% of body mass • Quick growth – age of reaching 100 kg is 5.5 months • The breed "Silistra Hybrid" has won several gold medals at various national and international fairs and competitions The patent for "Silistra Hybrid" 12

13. 5.2 "Mekom" AD breeds its own animals and has well-established relationships with suppliers, which minimizes raw-materials risk • Pigs – "Mekom" AD has its own complex with 35,000 pigs capacity and 2,000 sows "Silistra Hybrid". Currently, "Mekom" AD imports pig meat from the EU and has a developed network in Bulgaria • Sheep/lamb – "Mekom" AD breeds on average 35,000-45,000 animals and has a developed sourcing network in Bulgaria, Romania and Macedonia • Calves and buffaloes – "Mekom" AD breeds approximately 2,000 buffaloes and 3,000-4,000 calves • Rabbits – "Mekom" AD buys rabbits from private local producers in Bulgaria and Romania • Ostriches– "Mekom" AD buys ostriches from private local producers in Bulgaria and Romania Buffaloes bred in "Mekom" AD’s buffalo complex 13

14. 5.2 "Mekom" AD has an extensive distribution network in Bulgaria and abroad • "Mekom" AD owns 85 specialized freezer trucks and 24 trucks for the transportation of live animals Distribution channel "Mekom" AD’s advantages • "Mekom" AD has long-term contracts with the biggest retail chains in Bulgaria – Billa, Kaufland, Picadilly, Hit, etc. • On the Romanian market, "Mekom" AD works with Metro, Billa, Real, G Market. Recently, "Mekom" AD was selected to supply the entire OMV petrol retail network in Romania with meat products Retail Chains • In Bulgaria, "Mekom" AD has distributors in all major Bulgarian cities who deliver to smaller stores, restaurants, hotels, others • "Mekom" AD also works with distributors in Spain, Germany, Switzerland, France, England, and other countries Distributors • "Mekom" AD has exclusive own stores in Silistra and Sofia and rents stores in Blagoevgrad and Plovdiv Own stores • "Mekom" AD sells directly to certain large customers in Bulgaria and abroad Direct sales to customers • The company is in the process of developing an online store that will serve customers in Bulgaria and abroad Online store 14

15. 5.2 "Mekom" AD has an experienced management team • Stefan Raichev is the President of the company and the major shareholder. He has worked in the company since 1980, starting as a production engineer and rising to a CEO position. Mr. Raichev privatized the company in 1998. In 2005, he was chosen for the Businessman of the Year in Bulgaria • Margarita Stoyanova is a member of the Board of Directors and an executive director. She has extensive financial and accounting experience and is in charge of the overall financial and strategic management of the company • Ivelin Nikolov is a member of the Board of Directors and in charge of marketing and trade activities. Mr. Nikolov has prior experience with multinational FMCG companies in Bulgaria • Daniel Krumov is a member of the Board of Directors with prior experience in banking. Mr. Krumov is responsible for capital budgeting and financial management • Dragomir Dimitrov is a member of the Board of Directors and an executive director. He has good knowledge in the field of national and international business 15

16. 44 The Bulgarian meat market has a significant growth potential The Bulgarian meat market grew by ~14% in the last few years… …and is expected to continue to grow due to low starting base of meat consumption Meat product sales in Bulgaria Thousands of tons Per capita meat consumption In kg per person (2005) 85 +14% 75 64,766 59,854 65 50,729 44,244 Short-lived products 46,757 40,783 33,486 Pork 11 28,554 Durable boiled- Smoked products 24 9 6 Beef 15 2 Lamb 4 Durable boiled- Smoked and Smoked products 4 9,350 22 22 8,005 8,001 2 8,027 12 Poultry 8 10,004 9,721 9,242 7,663 Bulgaria Romania Czech Republic Serbia 2002 2003 2004 2005 Source: Bulgarian Association of Meat Producers Source: CEEC Agri Policy Report; USDA Foreign Agri Service • Consumption of meat products in Bulgaria will continue to grow on the basis of increasing purchasing power of the population and shift to processed meat products 16

17. The number of meat processing companies on the Bulgarian market is decreasing • Recently, a lot of meat processing companies in Bulgaria have been closed due to their inability to meet EU production requirements • Since 2004, the number of meat producing and meat processing companies has decreased almost two-fold • "Mekom" AD is well-positioned to capitalize on the trend of meat factories closure in Bulgaria Number of meat processing companies in Bulgaria Source: Bulgarian Association of Meat Producers 17

18. 5.2 The Romanian meat market holds significant growth potential • Meat producing and processing has increased on average by 4.2% per year from 2000 to 2005 and reached 1.5 million tons – 40.1% is pork, 26.6% is poultry, 25.3% is beef, and 7.5% is lamb • The Romanian market is relatively consolidated as the five biggest producers form 40% of the sales • In 2005, per capita meat consumption was 64.6 kg (10% more than in 2004) • Consumption of pork is the biggest – 32 kg/person, followed by poultry with 21.2 kg/person, lamb with 1.8 kg/person. Consumption of meat products is 8-9 kg/person • In 2007, there is an increased demand for more expensive products of better quality • It is expected that the Romanian meat market will continue to grow with the general increase of purchasing power in the country • "Mekom" AD is well positioned to grow its sales on the Romanian market: • The company already sells in Metro, Real, Billa, and other chains • "Mekom" AD recently signed an agreement to supply all OMV petrol stations in Romania with meat products • "Mekom" AD has strong positions in the upper segments of meat products, where there is less competition from local and international producers • "Mekom" AD’s geographic position in Silistra provides it with a logistical advantage 18

19. 5.2 • "Mekom" AD is well positioned to exploit the trends in the EU lamb market • The EU is a net importer of lamb with average imports of 260,000 tons per year • Consumption is unlikely to see high increases, but the demand in Southern European countries (Italy, Greece, Spain, Croatia) cannot be met with local production • Lamb production in countries, such as France, Ireland and England has decreased in recent years • Southern countries do not import lamb from producers like the UK and France, because of the method of lambs slaughtering • Local production is insufficient to meet demand • "Mekom" AD is the largest exporter of lamb in the region and will continue to hold strong positions Lamb Consumption Forecast for EU - 25, 2007 – 2012 Kg/person *EU-N10 10 New Member states; Source: Directorate General for Agriculture and Rural Development 19

20. III. "Mekom" AD’s History and Performance

21. 5.2 • "Mekom" AD completed consolidation of 12 related companies to become a fully integrated meat producer • Previously, the operations of the company were spread among 12 different companies for administrative reasons. Still, "Mekom" AD was the holder of all patents and trademarks • With the legal restructuring, the daughter companies will be a part of the "Mekom" AD, so that the company operates as a whole and inter-company dealings are eliminated Galina Raicheva Stefan Raichev Margarita Stoyanova 99% 0.5% 0.5% Mekom AD 99% 98% Agrospektar Invest AD Interfoods AD 99% 97.32% Kremonini AD Mekom OOD 80% 98% Silistra Hybrid OOD DMK 2003 OOD 80% Rusgal OOD 99.33% Ronex 2000 OOD 99% OMV OOD 99% Drustar BV OOD 88% SVI OOD 96% Select OOD 21

22. 36,270 "Mekom" AD’s sales have doubled in the past three years ~70% of "Mekom" AD’s sales are from exports… The company has managed to diversify its sales …The company has a diversified sales portfolio Sales and Exports* BGN ‘000 Sales portfolio, end 2006 % Total Sales Exports Processed products (export) Live animals (export) +44% Processed products (BG) 5% 20% 1% Chilled/frozen meat (BG) 9% 4% Live animals (BG) Chilled/ frozen meat (export) 2004 2005 2006 Source: "Mekom" AD Source: "Mekom" AD • "Mekom" AD has well-diversified product portfolio across products and geographic markets • The established products and markets base provides for further diversified growth * All results are on pro-forma, consolidated basis 22

23. 5.2 "Mekom" AD has grown significantly in the past few years "Mekom" AD’s pro-forma consolidated Income Statement • "Mekom" AD’s revenues have almost doubled in the past three years • Net profit has increased more than 2.5x by end of 2006 • Results for the 9 months of 2007 are with more than 10% better than forecasted for the period 23

24. 5.2 "Mekom" AD’s balance sheet "Mekom" AD’s pro-forma consolidated Balance Sheet 24

25. 5.2 Description of companies controlled by "Mekom" AD Company Brief Description • The company buys and slaughters cattle, horses and ostriches. It produces short-lived products, raw-dried and durable smoked-boiled products, as well as fresh and frozen meat • The company was founded in 1998. It realized BGN 372,000 net profit in 2006 Interfoods AD • The company’s main activities are sheep and goat slaughtering, and lamb export • The company was founded in 2001. It realized BGN 94,000 net profit in 2006 Mekom OOD • The company’s main activity is transport. It owns 99 distribution trucks, 85 of which are specially equipped to transport frozen meat products. The company also has 24 vehicles for transporting live animals • The company was founded in 1999. It realized BGN 470,000 net profit in 2006 DMK 2003 OOD • The company breeds and fattens sheep. It imports lamb from Romania and exports to the EU • The company was founded in 1999. It realized BGN 70,000 net profit in 2006 Ronex 2000 OOD 25

26. 5.2 Description of companies controlled by "Mekom" AD Company Brief Description • The company breeds and fattens sheep and calves. It also breeds buffaloes for milk • The company was founded in 2002. It realized BGN 78,000 net profit in 2006 Rusgal OOD • The breeds and fattens sheep. It buys and slaughters sheep, and sells lamb meat • The company was founded in 2004. It realized BGN 8,000 net profit in 2006 Drustar BV OOD • The company’s main activity is pig breeding • The company was founded in 1992. It realized BGN 177,000 net profit in 2006 Kremonini AD • The company’s main activity is pig breeding • The company was founded in 2000. It realized BGN 256,000 net profit in 2006 Agrospektar Invest AD 26

27. 5.2 Description of companies controlled by "Mekom" AD Company Brief Description • The company breeds its special brand of pigs called "Silistra Hybrid" • The company was founded in 2001. It realized BGN 89,000 net profit in 2006 Silistra Hybrid OOD • The main activity of the company is pig breeding. Currently, it is also investing in a facility for breeding milk buffaloes • The company was founded in 2002. It realized BGN 10,000 net profit in 2006 SVI OOD • The company’s main activity is sheep and goat breeding. It exports lamb meat to the EU • The company was founded in 2003. It realized BGN 341,000 net profit in 2006 Select OOD • The company buys, fattens and sells lamb • The company was founded in 2003. It realized BGN 55,000 net profit in 2006 OMV OOD 27

28. IV. Development Plan

29. 5.2 In Bulgaria, "Mekom" AD will invest in marketing, distribution, and internal improvements • The company’s investments in Bulgaria will be in three main directions: • Additional investment in sausage production facilities (processing, drying facilities) • Increased investment in marketing and trade • Investment in distribution to enable better reach of furthest parts of Bulgaria • Internal operations improvements (ERP system, process improvements, personnel training, organizational changes) 29

30. 5.2 "Mekom" AD is well-positioned to enter the Romanian market • "Mekom" AD is located within 200 km of 10 million Romanian consumers (Brasov, Bucharest, Constanta, Brailla, other) • The company has established relationships with retail chains in Romania, which will ease the distribution of its products on the Romanian market • Most Romanian meat producers have difficulties meeting EU requirements, which creates a market niche that "Mekom" AD can take an advantage of. Recently, "Mekom" AD has been selected to supply all OMV stations in Romania • "Mekom" AD has an established brand name in the cold-cuts segment in Romania, where it has been present for 2 years already • The company will invest in additional marketing and distribution to establish a stronger presence on the Romanian market "Mekom" AD’s geographic positioning relative to the Romanian market Braila Brasov 200 km Bucharest Constanta Silistra 30

31. 5.2 "Mekom" AD has the opportunity to acquire a smaller meat producer in the Western Balkans • "Mekom" AD sells its products in Croatia and has an established supplies network in Macedonia • An acquisition in Macedonia or Serbia will allow the company to: • Acquire local brands and expands its sales presence • Find additional placement for some of its existing processed meat products and "Silistra Hybrid" pigs • Expand its supply network for lamb • Avoid duties for sales to Croatia and other Western Balkan countries "Mekom" AD’s presence and potential markets in South East Europe Markets, where "Mekom" AD is present Target priority market Potential market 31

32. 5.2 "Mekom" AD’s base investment plan • "Mekom" AD investment plan will enable it to strengthen its position on the Bulgarian market, as well as establish itself as a regional leader 32

33. V. Investment Case

34. 5.2 "Mekom" AD foresees strong income and balance sheet growth on the basis of regional expansion (1/2) "Mekom" AD forecast Income Statement • "Mekom" AD is on track to beat its 2007 forecasts 34

35. 5.2 "Mekom" AD foresees strong income and balance sheet growth on the basis of regional expansion (2/2) "Mekom" AD forecast Balance Sheet 35

36. 5.2 Key assumptions for the forecast financial statements Bulgarian market Export markets • The Bulgarian meat market is expected to continue to grow at 10-15% per year in the next 3 years and to slow down to the level of GDP growth thereafter • "Mekom" AD’s market share in the short-lived products segment is expected to stay constant i.e. the company will target to grow with the market at a minimum • "Mekom" AD’s market shares in the boiled-smokedand raw-dried segments are expected to rise by 3% per year for the next few years on the basis of: • Increased marketing and trade • Introduction of new products • Further penetration of the retail chains in Bulgaria (where "Mekom" AD is traditionally strong) • Improved distribution and allowances for main distributors • Decrease of the number of meat processing factories, due to EU requirements • Sales of live "Silistra Hybrid" pigs are expected to grow by 20% annually for the next 4 years, based on additional investments and possibility to export to EU countries • Romania • "Mekom" AD’s sales are expected to grow relatively fast on the basis of investment in marketing and distribution. Overall sales are expected to reach ~50% of Bulgarian levels by the year 2012 Other Exports • Lamb exports are expected to continue to grow strongly by 20-30% for the next 2-3 years and then subside to growth levels of 5 10%. The growth will be on the basis of increased supply of own and purchased lambs • Exports of meat products are expected to rise by 100-200% (starting from low levels) as the company continues to invest in trade spend in Western Europe Western Balkans • The revenue forecast assumes the acquisition of a meat producer in the Western Balkans 36

37. VI. Public Offering Details

38. 5.2 Public offering details • The number of shares offered for sale – 10,682,800 shares with BGN 1nominal value; all of the shares are ordinary, dematerialized, freely transferable, registered in the Central Depositary • Each ordinary share gives its holder the right to 1 (one) vote in the General Meeting of Shareholders, as well as right to dividend upon profit distribution and right to liquidation quota • Minimum issue value per share – BGN 2.20 • The final offering price per share will be determined by the "book building" method • The period, when purchase orders could be submitted – January 21, January 22, January 23, 2008 from 9.00h t0 16.00h • The purchase orders are to be sent in sealed envelope to UBB on the following address: 5 Sveta Sofia Str and in Microsoft Excel format to the following e-mail:stambolieva_a@ubb.bg • Announcement date of the final offering price and allocation – January 24, 2008, till the end of the day • Date of payment– January 29, 2008 38

39. VII. Contacts

40. Contact Details United Bulgarian Bank AD 5 Sveta Nedelya Street 1040 Sofia Contact person: Ms. Svetlana Koeva Telephone: +359 2 8113756 Fax: +359 2 8113759 E-mail: koeva_s@ubb.bg Allianz Bulgaria AD 79 Mariya Louiza Boulevard 1202 Sofia Contact person: Mr. Georgi Kisov Telephone: +359 2 9215405, 481 Fax: +359 2 9818564 E-mail: g.kissov@bank.allianz.bg 40