FORM 6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer
September 12, 2006

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

Commission file number: 001-31232

WIMM-BILL-DANN FOODS OJSC

(Exact name of Registrant as specified in its charter)

Russian Federation

(Jurisdiction of incorporation or organization)

16, Yauzsky Boulevard

Moscow 109028

Russian Federation

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F x Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

Q U A R T E R L Y R E P O R T

of Issuer of Emissive Securities

for the second quarter of 2006

OPEN JOINT STOCK COMPANY
“WIMM-BILL-DANN FOODS”

Issuer’s code

Location: 109028, Moscow, Yauzsky Boulevard, 16/15, office 306
Postal address: 109028, Moscow, Yauzsky Boulevard, 16/15, office 306

Information contained in the present Quarterly Report is subject to disclosure in conformity with the legislation of Russian Federation relating to securities.

Representative by power of attorney dated 01.07.2005 №01/07-01	/s/ R.V. Bolotovsky

“14” August 2006		R.V. Bolotovsky

Chief Accountant
	/s/ L.N. Bykovskaya
“14” August 2006		L.N. Bykovskaya

(place for stamp)

Contact person: Mukhin Mikhail Mikhailovich

Legal adviser

Tel.: (095) 105-5805 (ext. 1371)
Fax: (095) 733-9736

E-mail: MuhinMM@wbd.ru

Internet page(s) displaying information contained in this quarterly report: http://www.wbd.ru/page_pid_601.aspx /

Table of contents

Introduction

I	Brief data on the persons, members of the Issuer’s executive bodies, information on bank accounts, the
auditor, the appraiser and the Issuer’s financial consultant, as well as on other persons, having signed the quarterly report.
1.1	Persons, members of the Issuer’s executive bodies
1.2	Information on the Issuer’s bank accounts
1.3	Information on the Issuer’s auditor (auditors)
1.4	Information on the Issuer’s appraiser
1.5	Information on the Issuer’s consultants
1.6	Information on other persons having signed the quarterly report

II	Basic information on the Issuer’s financial and economic status
2.1	Indicators of the Issuer’s financial and economic activities
2.2	Issuer’s market capitalization
2.3	Issuer’s obligations
	2.3.1		Accounts payable
	2.3.2		Issuer’s credit history
	2.3.3		Issuer’s obligations from security granted to third parties
	2.3.4		Other Issuer’s obligations
2.4	Objectives of the issue and spheres where funds received from securities issue shall be used
2.5	Risks associated with acquisition of placed securities (securities to be placed)
	2.5.1	Industry risks
	2.5.2	Country and regional risks
	2.5.3	Financial risks
	2.5.4	Legal risks
	2.5.5	Risks relating to the Issuer’s business

III	Detailed information on the Issuer
3.1	Issuer’s background and development
	3.1.1	Data on the Issuer’s firm name (name)
	3.1.2	Data on the Issuer’s state registration
	3.1.3	Data on the Issuer’s creation and development
	3.1.4	Contact information
	3.1.5	INN
	3.1.6	Branches and representations of the Issuer
3.2	Principal economic activities of the Issuer
	3.2.1	Issuer’s industry branch
	3.2.2	Issuer’s principal economic activities
	3.2.3	Main types of products (works, services)
	3.2.4	Raw materials and Issuer’s suppliers
	3.2.5	Markets for products (works, services) of the Issuer
	3.2.6	License information
	3.2.7	Issuer’s joint activities
	3.2.8	Additional requirements to issuers that are investment funds or insurance companies.
	3.2.9	Additional requirements to issuers, whose principal activity is mining operations.
	3.2.10	Additional requirements to issuers, whose principal activity is rendering of communication services.
3.3	Issuer’s planned activities in future
3.4	Issuer’s participation in the industry, banking and financial groups, holdings, concerns and associations
3.5	Subsidiaries and dependent economic entities of the Issuer
3.6	Composition, structure and cost of the Issuer’s fixed assets, information on acquisition, replacement, withdrawal of the fixed assets, as well as on all encumbrances of the Issuer’s fixed assets
	3.6.1	Fixed assets

IV	Information on financial and economic activities of the Issuer
4.1	Results of the financial and economic activities of the Issuer

	4.1.1	Profits and losses
	4.1.2	Factors having affected the amount of the proceeds from sale of goods, products, works, services and the
amount of profits (losses) from the Issuer’s principal business.
4.2 Liquidity of the Issuer and adequacy of the Issuer’s equity and working capital
4.3 Size and structure of the Issuer’s equity and working capital
	4.3.1 Size and structure of the Issuer’s equity and working capital
	4.3.2 Investments of the Issuer
	4.3.2.1 Long-Term Investments
	4.3.2.2 Short-Term Investments
	4.3.3 Intangible Assets of the Issuer

4.4 Information on the Issuer’s R&D Policies and Expenses, Including Licenses, Patents, New Products, and Research
4.5 Tendencies in the sphere of the Issuer’s principal activities and their analysis

V. Detailed information on the persons in the Issuer’s management and its business activities monitoring bodies and brief information on the Issuer’s staff (employees)
5.1 Information on the structure and competence of the Issuer’s executive bodies
5.2 Information on the persons, member of the Issuer’s executive bodies
5.3 Information on remunerations, benefits and/or reimbursements per each management body of the Issuer
5.4 Information on the bodies monitoring the Issuer’s business activities, their structure and powers
5.5 Information on the persons in the bodies monitoring the Issuer’s business activities
5.6 Information on remunerations, benefits and/or reimbursements for the body monitoring the Issuer’s business activities
5.7 Information on the Issuer’s staff (employees), its educational background and structure, and changes in the numbers of the Issuer’s staff (employees)
5.8 Information on any obligations of the Issuer before its staff (employees) related to their possible participation in the Issuer’s authorized stock (share fund)

VI	Information on the Issuer’ participants (shareholders) and interested party transactions it has contracted
6.1 Information on the general number of the Issuer’s shareholders
6.2 Information on the Issuer’s shareholders holding no less than 5% from its authorized stock or no less than 5% of its ordinary shares, as well as the information on the participants (shareholders) of such entities holding no less than 20% of the authorized stock (share fund) or no less than 20% of its ordinary shares
6.3 Information on the state or municipal body’s share in the authorized stock of the Issuer, existence of a special right (“golden share”)
6.4 Information on restrictions to take part in the Issuer’s authorized stock
6.5 Information on changes in the composition and participation shares of the Issuer’s shareholders that possess at least 5% of the Issuer’s authorized stock or at least 5% of the Issuer’s common stock
6.6 Information on the interested parties transactions the Issuer effected
6.7 Information on Accounts Receivable

VII	Issuer’s business accounting and other financial information
7.1 Issuer’s annual accounting reports
7.2 Quarterly accounting reports for the last accomplished quarter ended
7.3 The Issuer’s consolidated accounting reports for the last complete financial year
7.4 The data on Issuer’s accounting policy
7.5 Information on total exports and export share in total sales
7.6 Data on cost of the Issuer’s immovable property and material changes in the Issuer’s property after the end of the last complete financial year
7.7 Information on any court proceedings the Issuer is involved in, in case such court proceedings may affect the Issuer’s business operations

VIII	Additional information on the Issuer and on the placed securities
8.1 Additional information on the Issuer
	8.1.1 Information on the amount, the structure of the authorized stock of the Issuer
	8.1.2 Information on changes in the authorized stock of the Issuer
	8.1.3 Information on formation and use of the reserve fund and other funds of the Issuer

		8.1.4 Information on the convocation and holding procedure for the meeting of the Issuer’s supreme management body
		8.1.5 Information on commercial organizations where the Issuer holds no less than 5% of the authorized stock (share
fund) or no less than 5% of the ordinary shares
		8.1.6 Information on material transactions that the Issuer has contracted
		8.1.7 Information on the Issuer’s credit ratings
8.2 Information on each of the Issuer’s share category (type)
8.3 Information on prior issues of the Issuer’s securities other than the Issuer’s shares
		8.3.1 Information on issues, of which all securities have been redeemed (cancelled)
		8.3.2 Information on the issues, the securities under which still circulate
		8.3.3 Information on issues, for the securities of which the Issuer is in default
8.4 Information on the person(s) having provided security for the bonds of the issue
8.5 Conditions guaranteeing fulfillment of obligations on the bonds of the issue
8.6 Information on the organizations registering rights to issued securities of the Issuer
8.7 Information on legislative acts regulating capital import and export issues, which can affect payment of dividends, interest and other amounts to non-residents
8.8 Procedure for taxation of revenues from the Issuer’s securities placed and in the process of placement
8.9 Information on announced (accrued) and paid dividends on the Issuer’s shares, as well as on income on the Issuer’s bonds
8.10 Other information

*Attachment 1*

*Attachment 2*

INTRODUCTION

Issuer’s full proprietary name.
Open Joint Stock Company “Wimm-Bill-Dann Foods”

Issuer’s abbreviated name
WBD Foods

Issuer’s location
109028, Moscow, Yauzsky Boulevard, 16/15, office 306

Data on Issuer’s contact tel. numbers and email
Tel (095) 105-58-05
Email: MuhinMM@WBD.ru

Internet page(s) displaying information contained in this quarterly report:
http://www.wbd.ru/page_pid_601.aspx

Data on Issuer’s shares.

Category: Common

Form of Shares: Registered, uncertificated

Nominal Price of One Share: 20 rubles

Quantity of Shares placed: 44 000 000

Data on Issuer’s bonds

Series Number: 01

Type: interest-bearing

Category: nonconvertible bearer bonds

Form of Securities: Certificated

Nominal Price of One Security of the issue: 1000 rubles

Quantity of Securities: 1 500 000

Other Material Information on Issuer’s Securities.

None

This quarterly report contains evaluations and forecasts of the Issuer’s authorized executive bodies regarding the future events and/or actions, perspective development in the industry branch where the Issuer carries out its principal business, and the results of the Issuer’s activities, including the Issuer’s plans, probability of certain events and certain actions to be undertaken. Investors should not fully rely on the evaluations and forecasts made by the Issuer’s executive bodies, as the actual results of its activities in future might differ from those forecast due to various reasons. Acquisition of the Issuer’s securities is associated with risks described in this quarterly report.

I BRIEF DATA ON THE PERSONS, MEMBERS OF THE ISSUER’S EXECUTIVE BODIES, INFORMATION ON BANK ACCOUNTS, THE AUDITOR, THE APPRAISER AND THE ISSUER’S FINANCIAL CONSULTANT, AS WELL AS ON OTHER PERSONS, HAVING SIGNED THE QUARTERLY REPORT

1.1 Persons, members of the Issuer’s executive bodies

Board of Directors

Chairman: David Iakobachvili

Born: 1957

Members of Issuer’s Board of Directors:

Dubinin, Mikhail Vladimirovich

Born: 1969

Orlov, Alexander Sergeevich

Born: 1948

Plastinin, Sergei Arkadievich

Born: 1968

Scherbak, Vladimir Nikolaevich

Born: 1939

Tutelyan, Victor Alexandrovich

Born: 1942

Yushvaev, Gavril Abramovich,

Born: 1957

Yasin, Eugeny Grigorievich

Born: 1934

Guy de Selliers

Born: 1952

Michael A. O’Neill

Born: 1945

Ernest Linwood Tipton

Born: 1934

Issuer’s individual and collective administrative/managerial staff.

Individual executive body and members of collective executive body:

Chairman of the Management board

Tony Denis Maher

Born: 1956

Members of the Management Board

Anisimov, Dmitry Aleksandrovich

Born: 1961

Kuzymin Oleg Egorovich

Born: 1969

Eliseeva, Vera Vladimirovna

Born: 1958

Kagan, Marina Gennadyevna

Born: 1968

Kraynov, Gennady Konstantinovich

Born: 1951

Person performing the functions of individual executive body of the Issuer:

Tony Denis Maher

Born: 1956

1.2 Information on the Issuer’s bank accounts

INFORMATION ON RUBLE ACCOUNTS WITH BANKS AND OTHER CREDIT INSTITUTIONS OPERATING IN THE RUSSIAN FEDERATION as of June 30, 2005

No.	Type of Account	Account Number	Name and Location of the Bank
1	2	3	4
1	settlement	Settlement A/C No. 40702 810 1 00700 883 027 Correspondent A/C No. 30101810300000000202 BIC 044252202	COMMERCIAL BANK CITIBANK CJSC 125047 Moscow, Gashek Str. 8-10 INN 7710401987
2	settlement	Settlement A/C No. 40702 810 4 00000 030 108 Correspondent A/C No. 30101810900000000460 BIC 044585460	COMMERCIAL BANK EXPOBANK Moscow, Leontyevsky Per. 21/1, Bldg 1 INN 7729065633
3	settlement	Settlement A/C No. 40702 810 4 00070 027 130 Correspondent A/C No. 30101810900000000466 BIC 044525466	MDM-BANK OJSC 113035 Moscow, Sadovnicheskaya Str. 3 INN 7706074960
4	settlement	Settlement A/C No. 40702 810 7 00070 000 569 Correspondent A/C No. 30101810500000000219 BIC 044525219	BANK OF MOSCOW OJSC 107996 Moscow, Kuznetsky Most Str. 15 INN 7702000406
5	settlement	Settlement A/C No. 40702 810 2 01500 000 016 Correspondent A/C No. 30101810200000000593 BIC 044525593	ALPHA-BANK OJSC 117049 Moscow, Mytnaya Str. 1, Bldg 1 INN 7728168971
6	settlement	Settlement A/C No. 40702 810 6 38360 104 497 Correspondent A/C No. 30101810400000000225 BIC 044525225	SBERBANK OF RUSSIA 117997 Moscow, Vavilov Str. 19 INN 7707083893

7	settlement	Settlement A/C No. 40702 810 9 38000 110 483 Correspondent A/C No. 30101 810 4 00000 000 225 BIC 044525225	SBERBANK OF RUSSIA 117997 Moscow, Vavilov Str. 19 INN 7707083893
8	settlement	Settlement A/C No. 40702 810 6 00090 020 670 Correspondent A/C No. 30101810700000000187 BIC 044525187	Vneshtorgbank OJSC 107996 Moscow, Kuznetsky Most Str. 16 INN 7702070139
9	settlement	Settlement A/C No. 40702 810 4 00010 544 422 Correspondent A/C No. 30101810300000000545 BIC 044525545	International bank of Moscow CJSC 119034 Moscow, Prechistenskaya nab., 9 INN 7710030411
10	settlement	Settlement A/C No. 40702 810 4 00001 401 757 Correspondent A/C No. 30101810200000000700 BIC 044525700	Raiffeisenbank Austria CJSC 129090 Moscow, Troitskaya Str. 17/1

1.3. Data on Issuer’s public accountant / auditor.

Name and abbreviation: Closed Joint Stock Company «Ernst and Young Vneshaudit», ZAO «Ernst and Young Vneshaudit»

Location: 115035, Moscow, Sadovnicheskaya naberegnaya, d.77, str.1

Tel.: (095) 755-97-00

Fax : (095) 755 97-01

E-mail: oksana.krupnova@ru.ey.com

Information on auditor’s license

License number: E 003246

Date of issue of license: 17.01.2003

Period of validity: up to 17.01.2008

Organization that issued the license: RF Ministry of Finance

Financial year (years) in which auditor provided independent analysis of book-keeping and accounting of the issuer: 2004 год

Factors that can influence on the independence of the auditor from the issuer: no such

Measures taken by the issuer to decrease influence of such factors: As long as there are no such factors, that can influence on the independence of the auditor from the issuer, no such measures were taken by the issuer. The internal Independence policy has being established by the auditor, including responsibility of the senior staff to disclose information on any alterations regarding the share holding of public companies owned by such persons and to confirm such share ownership quarterly.

Auditor’s selection procedure:

Presence of tender procedure regarding selection of the auditor and its conditions:

As long as there is no state ownership exceeding 25% of Company’s chartered capital and according item 2 of art. 7 of Federal law “About audit activities” on 07/08/2001 #119-ФЗ the issuer is not obliged to conduct open tender on auditors selection.

Procedure of nomination for auditor of the company and approval of it with the stockholder’s meeting: Pursuant to Federal law “About joint-stock companies” on 24/12/1995 # 208-ФЗ and Charter of WBD Foods auditor should be approved by the stockholder’s meeting, at the suggestion of the Board of directors, after the approval of the nomination of the auditor by the Audit committee of the Board of directors and Internal audit service.

Information on special audit services provided by the auditor: no such

Information on essential interests, connecting auditor (auditor’s officials) with issuer (issuer’s officials): no such

Information on the auditors share interest regarding the issuer: no such

Information on issuer’s loaning the auditor: no such

Information on presence of close connection between auditor and issuer and relationship of auditor’s and issuer’s senior staff: no such

Information on the officials who combine jobs by the issuer and by the auditor: no such

Auditor compensation’s determination procedure : Pursuant to the Charter of WBD Foods the amount of auditor’s compensation should by determined by the Board of directors and assigned in the audit contract. Preliminary such compensation should be approved by the Audit committee of the BOD and by Internal audit service.

Information on unpaid auditor’s compensation for provided services: no such

Name and abbreviation: Closed Joint Stock Company BDO Unicon, ZAO BDO Unicon (further Closed Joint Stock Company «BDO UniconRuf» and Closed Joint Stock Company «Unicon/MS Konsultatsionnaya gruppa»)

Location: 117545, Moscow, Varshavskoye shosse, d.125, str.1, section 11

Tel.: (095) 797-56-65

Fax.: (095) 319-59-09

E-mail: reception@bdo.ru

Information on auditor’s license

License number: E 000547

Date of issue of license: 25.06.2002 г.

Period of validity: дo 24.06.2007г.

Organization that issued the license: RF Ministry of Finance

Financial year (years) in which auditor provided independent analysis of book-keeping and accounting of the issuer: 2003, 2002

Factors that can influence on the independence of the auditor from the issuer: no such

Auditor’s selection procedure:

Presence of tender procedure regarding selection of the auditor and its conditions:

Information on special audit services provided by the auditor: no such

Information on essential interests, connecting auditor (auditor’s officials) with issuer (issuer’s officials): no such

Information on the auditors share interest regarding the issuer: no such

Information on issuer’s loaning the auditor: no such

Information on presence of close connection between auditor and issuer and relationship of auditor’s and issuer’s

senior staff: no such

Information on the officials who combine jobs by the issuer and by the auditor: no such

Information on unpaid auditor’s compensation for provided services: no such

Name and abbreviation: Limited Liability Company «Ernst and Young», OOO «Ernst and Young»

Location: 115035, Moscow, Sadovnicheskaya naberegnaya, d.77, str.1

Tel.: (095) 755-97-00

Fax : (095) 755 97-01

E-mail: oksana.krupnova@ru.ey.com

Information on auditor’s license

License number: E 002138

Date of issue of license: 30.09.2002

Period of validity: up to 30.09.2007

Organization that issued the license: RF Ministry of Finance

Financial year (years) in which auditor provided independent analysis of book-keeping and accounting of the issuer: auditor conducted audit analysis of consolidate financial statements of the issuer (GAAP) for 2004 year,

Factors that can influence on the independence of the auditor from the issuer: no such

Auditor’s selection procedure:

Presence of tender procedure regarding selection of the auditor and its conditions:

Information on special audit services provided by the auditor: no such

Information on essential interests, connecting auditor (auditor’s officials) with issuer (issuer’s officials): no such

Information on the auditors share interest regarding the issuer: no such

Information on issuer’s loaning the auditor: no such

Information on presence of close connection between auditor and issuer and relationship of auditor’s and issuer’s senior staff: no such

Information on the officials who combine jobs by the issuer and by the auditor: no such

Information on unpaid auditor’s compensation for provided services: no such

Name and abbreviation: Ernst and Young (CIS) Limited

Location: 115035, Moscow, Sadovnicheskaya naberegnaya, d.77, str.1

Tel.: (095) 755-97-00

Fax: (095) 755 97-01

E-mail: info@ru.ey.com

Information on auditor’s license:

License is not required for providing the analysis of consolidate financial statements (GAAP) of the issuer

Financial year (years) in which auditor provided independent analysis of book-keeping and accounting of the issuer: auditor provided analysis of the consolidate financial statements (GAAP) of the issuer for 2002 and 2003 years.

Factors that can influence on the independence of the auditor from the issuer: no such

Auditor’s selection procedure:

As long as there are no any legal requirements regarding the procedure of selection of the auditor which will provide analysis of the consolidate financial statements (GAAP) of the issuer, there is no any obligatory procedure.

Information on special audit services provided by the auditor: no such

Information on essential interests, connecting auditor (auditor’s officials) with issuer (issuer’s officials): no such

Information on the auditors share interest regarding the issuer: no such

Information on issuer’s loaning the auditor: no such

Information on presence of close connection between auditor and issuer and relationship of auditor’s and issuer’s senior staff: no such

Information on the officials who combine jobs by the issuer and by the auditor: no such

Information on unpaid auditor’s compensation for provided services: no such

1.4 Information on the Issuer’s appraiser

The appraiser has not been employed in the accounting quarter.

1.5 Information on the Issuer’s consultants

Financial consultants for the purpose of the preparation and signing of the securities prospectus issue and this report were not employed.

1.6 Information on other persons having signed the quarterly report

In relation to other persons having signed the quarterly report and not indicated in the previous articles of this section:

Lydia N. Bykovskaya
Tel: (095) 105 5805
Fax: (095) 105 5805

II BASIC INFORMATION ON THE ISSUER’S FINANCIAL AND ECONOMIC STATUS

2.1 Indicators of the Issuer’s financial and economic activities

Indicators of the Issuer’s financial and economic activities from January 1, 2006 till June 30, 2006.

Indicator		6 moths of 2006
Value of issuer’s net assets, thou. rubles		6218781
Ratio of attracted funds to capital and reserves,%		117.51
Ratio of short-term liabilities to capital and reserves,%		2,00
Coverage of debt service payments, rubles		0,10
Level of overdue debt,%		0
Receivables turnover, times		0,72
Dividend payments as percentage of profits		0
Labor efficiency, thou.RUR per person		1271,35
Depreciation as percentage of earnings,%		0,03

The issuer doesn’t have any overdue debts

2.2 Issuer’s market capitalization

The arranger of the sales at the equity market is the New York Stock Exchange (NYSE). The Issuer’s market capitalization calculated as the derivation of the number of shares expressed in ADRs, and the price of one share (ADR), amounts to:

As of 31.12.2001		RUR 699 085 000 (as of the present date the issue’s market capitalization is calculated as the equivalent
of the issue’ net assets value).
As of 31.12.2002		US$17.95 x 44,000,000 = US$789,800,000
As of 31.12.2003		US$17.00 x 44,000,000 = US$748,000,000
As of 31.12.2004		US$14.31 x 44,000,000 = US$629,640,000
As of 31.12.2005		US$24.03 x 44,000,000 = US$1,057,320,000
As of 31.03.2006		US$28.36 x 44,000,000 = US$1,247,840,000
As of 30.06.2006		US$34.50 x 44,000,000 = US$1,518,000,000

The price of one share (ADR) corresponds to the price of one share (ADR) set within the recent transaction contracted as at the last date of the accounting period.

2.3 Issuer’s obligations

2.3.1 Accounts Payable, thou.rubles

Breakdown of the Issuer’s debt as of 30.06.2006.

Type of debt	Payment date
	Within one year	Within one year
Debt:	65374
Accounts payable to suppliers and contractors, thousand RUR	24247
Including overdue, thousand RUR
Sums payable to the personnel, thousand RUR	25804
Including overdue, thousand RUR
Sums payable to the state budget and off-budget funds, thousand RUR	13476
Including overdue, thousand RUR
Other debts	1847
Including overdue, thousand RUR
Credits, thousand RUR	38715	4061835
Including overdue, thousand RUR
Loans, total, thousand RUR	7546	3112355
Including overdue, RUR thousand
Including bonded debt, thousand RUR		3000000
Included overdue bonded debt, thousand RUR
Total, RUR	111635	7174190
Including overdue, RUR thousand

Of WBD Foods’ accounts payable as at June 30, 2006, Lianozovo Dairy OJSC accounted for 14 469 thousand rubles, or 22,13 % of total accounts payable (65374 thousand rubles).

2.3.2 Issuer’s credit history

Type of liability	Name of the creditor	Principal amount	Term of credit (loan) / maturity date	Overdue liabilities, including overdue principal and/or interest, number of days of delay
Short-term credit, USD	Alfa-Bank OAO	2,920,000	17.04.2003	0
Short-term credit, USD	Alfa-Bank OAO	974,000	07.05.2003	0
Long-term credit, USD	UBS LUXEMBURG SA	150,000,000	2008 г.	0
Bonded debt, thousand RUR	Issue organizer Troyka-Dialog Investment Company ZAO, International Moscow Bank – paying agent	1,500,000	2006 г.	0
Short-term credit, RUR	Raiffeisenbank Austria ZAO	110 000	01.06.2005	0
Short-term credit, RUR	Raiffeisenbank Austria ZAO	197 845	30.12.2005	0
Bonded debt, thousand RUR	Raiffeisenbank Austria ZAO	3 000 000	2010 г.	0

2.3.3 Issuer’s obligations from security granted to third parties

Agreements on granted sureties	Date of agreement	Counter-party	Amount of agreement	Currency of agreement	Sum in thousand rubles as at 30.06.06
RBA/2350-nsk-1/S	21.03.2006	Raiffeisenbank Austria ZAO	16 325	RUR	16 325
RBA/2350-nsk-2/S	17.04.2006	Raiffeisenbank Austria ZAO	76 000	RUR	76 000
83/11-2005	10.11.2005	ELOPAK ZAO	1 134 349	EUR	37 365
84/11-2005	14.11.2005	ELOPAK ZAO	65 800	EUR	2 110
P/43	14.05.2002	Dairy OAO, Timashevsk	2 949 180	EUR	40 558
90/10	01.10.2004	Labinov V.V.	58 000	USD	1 184
P/45	05.06.2002	LMK OAO	2 348 476	EUR	32 297
P/49	28.10.2002	Siberian Milk OAO	2 510 160	EUR	38 836
54	25.03.2002	Siberian Milk OAO	958 466	EUR	4
1895-119006-NKL/P-205	10.05.2006	Sberbank of Russia	154 000	RUR	64 708
879	10.05.2006	Sberbank of Russia	223 044	RUR	4 658
Total					272 481

2.3.4 Other Issuer’s obligations

There are no other Issuer’s obligations.

2.4 Objectives of the issue and spheres where funds received from securities issue shall be used

The aim of bonds series 02 emissions is to refinance of issuer’s current activities and financing of investment program.

Company makes significant capital investments, including investments related to extension of current activity, modernization of equipment and acquisition of new entities. In order to accomplish investment program, including new entities acquisition expenditures, company spent 117,1 mln USD in 2003, 77,9 mln USD in 2004, in 2005 it’s planned to spend approximately 100 mln USD.

On acquisition of entities in Russia and CIS it was invested about 63 mln USD for the period from 2002 to 2005. WBD invests significant amounts on modernization of the acquired assets, conducts reconstruction and extension of productive capacity according to advanced standards of equipment and technology, specifically all diaries are equipped with modern weighing-and-filling and manufacturing equipment. Reconstruction of diaries and installation of new productive capacities allows to increase productions quality.

According to the strategy to produce diary products in the region where they will be consumed, regional production areas are equipped with Tetra Pak (Sweden) production lines. These lines are designed to pack milk, juices, nectars in cardboard packages, as well as yoghurts packages, curd and milk deserts, production of juices and juice containing products packed in plastic bottles.

Capital investments for the recent few years have been planned in the amount of 100 mln USD per year and will be invested in infrastructure, modernization of acquired entities, equipment of warehouses and maintenance of production capacities.

2.5. Risks associated with acquisition of placed securities (securities to be placed)

The issuer describes risks and uncertainties, that our management believes to are essential, but but these risks and uncertainties may not be the only ones we face. Additional risks and uncertainties, including those we currently do not know or deem immaterial, could result in a decline in the price of issuer’s securities.

Due to the specifics of the Issuer’s principal business, its risks, which might lead to reduction of the securities price, are conditional, to a greater extent, on the consolidated risks of the companies controlled by the Issuer directly or indirectly.

For the purposes of this section the terms “Company”, “WBD Group”, “group of companies WBD”, “WBD” shall mean both the Issuer separately, and together with the companies it controls.

2.5.1. Risks Relating to Industry

The influence of the possible depression in the industry and the issuer’s proposed reaction regarding such depression and its obligations under securities:

1. The food industry’s growth potential is constrained by population growth, which has been falling in Russia, and growth in personal income. Our success depends, in part, on our ability to expand our business faster than populations are growing in the markets that we serve, or notwithstanding declines in the populations in those markets. One way to achieve that growth is to enhance our portfolio by adding products and greater production capacity in faster growing and more profitable categories. In the past, we have experienced delays in the installation of new production equipment due to internal technical integration issues as well as delays by vendors and other third-party suppliers in installing and testing new production lines. Future delays in new equipment installation could inhibit our ability to add products and expand our production capacity, cause our output volume to suffer and, consequently, have a material adverse effect on our results of operations.

2. Demand for dairy and certain beverage products depends primarily on demographic factors and consumer preferences, as well as factors relating to discretionary consumer spending, including the general condition of the economy and general levels of consumer confidence. The willingness of consumers to purchase branded food and beverage products depends, in part, on local economic conditions. In periods of economic uncertainty, consumers tend to purchase more economy brands and, to the extent that our business strategy depends on the expansion of the sales of premium brands and value-added products, our results of operations could suffer. Reduced consumption of our products in any of our key markets could reduce our turnover and profitability.

3. Although juice consumption in Russia continues to increase, our juice product sales volume decreased in 2004 and 2005 due to vigorous market competition from other domestic producers and increased activity by foreign producers. Continued and/or increased competition among juice producers in Russia may cause a continued decline in the sales volumes of our juice products, as well as affect our juice prices and profit margins and, consequently, may materially adversely affect our results of operations.

4. We also compete with other brands for shelf space in retail stores and marketing focus by our independent distributors and retailers, and our independent distributors and retailers offer other products, sometimes including their own brands, that compete directly with our products. In addition, retailers in Russia typically charge food and beverage producers, including us and our competitors, for shelf space. If independent distributors and retailers give higher priority to other brands, purchase less of, or even refuse to buy, our products, seek substantial discounts, charge unreasonable prices for shelf space, fail to offer sufficient shelf space, or devote inadequate promotional support to our brands, it could lower our turnover and reduce our competitiveness and profitability.

5. Independent distributors may export our products to countries where such products do not meet the requirements of applicable legislation. The consequent recalls of our products and the associated negative publicity may adversely affect our reputation in the Russian Federation, the CIS and abroad, and materially adversely affect our results of operations. In exporting our products, we attempt to meet the standards and requirements of applicable legislation governing the import of food products into the importing country.

6. New regulations impacting food producers in Russia could cause us to incur substantial additional compliance costs or administrative penalties which may have a material adverse effect on our business and financial results. The regulation of food production and quality has been undergoing a constant reform in the past decade and frequently changes. At the moment WBD complies with all requirements and standards, and in case of their changes and failure to comply with the new legislation, WBD will try to get necessary permissions to extend the period on matching WBD activities in accordance with new legislation.

7. Increased domestic production by our foreign competitors could reduce our competitive advantages against them, which would have a material adverse effect on our market share and results of operations. A number of our foreign competitors, such as Danone, Parmalat, Lactalis, Campina, Ehrmann, Onken and Pascuale, have begun to invest in domestic production facilities, while others, such as Coca-Cola, have acquired domestic producers. These investments and acquisitions reduce the competitive advantages that we have over foreign competitors without domestic production capability. A continuation of this trend may result in increased competition for qualified personnel and higher labor costs, and would have a material adverse effect on our business and results of operations.

In order to minimize possible adverse effect in industry on WBD activities, WBD provides a strategy directed on the expansion of production, proposed to develop new categories of production. The aim of this strategy is to extend consumer’s demand in existing market segments and to develop new market segments. Successful completion of this strategy partially depends on ability to foresee taste and preferences of consumers and to offer production corresponding to consumer’s expectations.

Risks related to possible changes of prices on raw material and services used be the issuer in its activities and influence of these changes on the issuer’s activities and performance of its obligations under securities:

1. Rise in prices and lack of packaging and raw materials.

Our success depends, in part, on our continued ability to be an efficient producer in a highly competitive industry. If we cannot continue to control costs through productivity gains or by eliminating redundant costs resulting from acquisitions, our results of operations will suffer. In particular, price increases and shortages of packaging and raw materials could have a material adverse effect on our results of operations. For example, our results of operations may be affected by the availability and pricing of packaging materials, principally cardboard and plastic containers, and raw materials, principally raw milk and juice concentrate. We are substantially dependent upon one supplier of packaging materials, Tetra Pak, which may make us more vulnerable to changes in global supply and demand and their effect on price and availability of these materials. Additionally, weather conditions and other factors beyond our control significantly influence the price and availability of our raw materials. A number of our raw materials, such as juice concentrate and sugar, are international commodities and are subject to international price fluctuations, and we experienced significant increases in raw milk prices during 2003, 2004 and 2005.

Seasonal difference between the demand for dairy products and the supply of raw milk and the increasing prices of raw milk could result in a significant increase raw milk price. The demand for our dairy products is significantly higher during the winter months, when Russian raw milk production is at its lowest. Conversely, during the summer months we generally experience depressed demand for dairy products in many markets, while raw milk production is at its peak. If we are unable to mitigate this inverse relationship successfully, either through the purchase of raw milk during the winter at commercially competitive prices or through the use of powder milk, our production costs will increase significantly in the winter, reducing our profitability. In addition, the average weighted raw milk purchase price increased for us in ruble terms by approximately 11% in 2003, 17% in 2004 and 14% in 2005. The price increases are due, in part, to the raw milk shortages caused by the ongoing decline of dairy cattle in Russia. These increases adversely affected our dairy product profit margins in 2003, 2004 and 2005, and continued increases in raw milk prices could further reduce our profitability. The shortage of high quality raw milk, coupled with the raw milk price increases, may also limit our ability to expand our production of high margin value-added dairy products.

2. Our substantial reliance on independent retailers and independent distributors for the distribution of our products could lower our turnover and reduce our competitiveness. We sell our products either directly to retailers, including supermarkets, grocery shops and restaurants, or to independent distributors for resale to retail outlets. We expect sales to retailers and independent distributors to continue to represent a significant portion of our revenues. Our operations and distribution costs could be affected by the increasing consolidation of these entities, particularly as these customers become more sophisticated and attempt to force lower pricing and increased promotional programs. For example, in the spring of 2001, several Russian supermarket chains formed a loose alliance which publicly announced its intention not to purchase our products. Although these supermarket chains now purchase our products, they may not continue to do so, and they or other supermarket chains may attempt a

similar consolidation of market power in the future. In addition, we expect the merger of two of Russia’s largest supermarket chains, Perekryostok and Pyatyorochka, announced in April 2006, to further strengthen the negotiating leverage of supermarket chains in their dealings with us. A number of large Western retailers, such as the Turkish retailer Ramenka, the German retailer Metro and the French retailer Auchan, have also opened stores in the Moscow region, and we expect that the presence of these retailers will increase price competition. We also compete with other brands for shelf space in retail stores and marketing focus by our independent distributors and retailers, and our independent distributors and retailers offer other products, sometimes including their own brands, that compete directly with our products. In addition, retailers in Russia typically charge food and beverage producers, including us and our competitors, for shelf space. If independent distributors and retailers give higher priority to other brands, purchase less of, or even refuse to buy, our products, seek substantial discounts, charge unreasonable prices for shelf space, fail to offer sufficient shelf space, or devote inadequate promotional support to our brands, it could lower our turnover and reduce our competitiveness and profitability.

3. Efficient advertising in conditions of advertising service price growth.

Our success also depends on our continued ability to be an effective advertiser in a market where media inflation on leading national television channels exceeded 25% in 2005. A substantial increase in the prices of any of the foregoing, which we may not be able to pass on to customers through price increases, or a protracted interruption in supply with respect to packaging or raw materials, could have a material adverse effect on our financial condition and results of operations.

4. Increasing tariffs and restructuring in the transport sector could have a materially adverse effect on our business.

Railway transportation is one of our principal means of transporting supplies and juice and water products to our facilities and customers, accounting for approximately 62% of our juice transportation expenses in 2005. Currently, the Russian government sets rail tariffs and may further increase these tariffs as it did in 2003, 2004 and 2005. Railroad tariffs increased by approximately 40%, 32% and 18% in ruble terms in 2003, 2004 and 2005. In 2003, legislation was enacted which sets out the framework for the reorganization of the Russian Railways Ministry into OAO Russian Railroads, a joint-stock company, to be followed by the eventual privatization of certain of its functions by 2007. It is currently unclear whether this reorganization and privatization will be completed in accordance with the timetable contemplated in the legislation or at all. If the privatization of Russian Railroads or other factors result in increased railway transport costs, thereby decreasing our profit margins, our results of operations could be materially adversely affected.

Alteration of factors that could not be fully included in production price, as well as frustration of packaging and raw material supply, can have an adverse effect on the financial results of the company. However, taking into consideration, the scale and diversification of business in conjunction with efficient management, the named factors could not exert sufficient influence on WBD operations and its ability to execute its obligations under placed securities.

Risks, related to possible production price changes and/or other services provided by the issuer:

Keen competition between juice and diary producers on internal and external markets, as well as distribution of production by retail and independent distributors, confines our ability to increase prices on our production. Rise of prices along with the growth of process costs and less aggressive price policy of other competitors, may lead to the decrease of demand on the issuer’s production as well as decrease of sales volume. However, WBD does not consider the fact of possible production price changes to be sufficient and influencing the company’s operations and execution of the company’s obligations under its securities because of the active work being held with the purpose of decreasing process costs: optimization of expenses and their structure.

2.5.2. Country and regional risks

Risks, related to political and economical situation in the country (countries) and in the whole region, where the issuer is registered as a tax payer:

· Since 1991, Russia has sought to transform itself from a one-party state with a centrally-planned economy to a democracy with a market economy. As a result of the sweeping nature of the reforms, and the failure

of some of them, the Russian political system remains vulnerable to popular dissatisfaction, including dissatisfaction with the results of privatizations in the 1990s, as well as to demands for autonomy from particular regional and ethnic groups. Current and future changes in the government, major policy shifts or lack of consensus between various branches of the government and powerful economic groups could disrupt or reverse economic and regulatory reforms. In addition, the Russian presidential elections scheduled for 2008 could bring more volatility to the market. Any disruption or reversal of reform policies could lead to political or governmental instability or the occurrence of conflicts among powerful economic groups, which could have a material adverse effect on our business, financial condition, results of operations and prospects and the value of the shares and ADSs.

Regional peculiarities (in the regions where the main daughter companies of WBD are located), exert insufficient influence on the company’s activities, and are taken into consideration by the management of the company in the process of performing the financial and business activities.

Risks, related to possible military conflicts and declarations of state of emergency and strikes: these risks are not significant, as since WBD’s main activity is located in economically and socially stable region far from the regions where military conflicts are possible.

At the moment WBD does not have any program on proposed measures in case of adverse influence of the possible downward situation in the country, taking into consideration positive forecasts, regarding the country’s development and the development of the region as a whole. In case of certain risks related to the adverse influence of thesituation in the country and region on the company’s activity, the company can take specific measures, including crisis management aimed to mobilize the company’s activities and reduce to the maximum such adverse influence of the political situation in the country and region.

Risks related to the geographical position of the country (countries) and region, where the issuer is registered as a tax payer and/or performs its main activities, including possible natural disasters, and possible suspension of transport communications as a result of remoteness:

Russian infrastructure is in a terrible plight, as a result it can lead to the disruption of the company’s normal economic activities . A large number of infrastructure objects was put into operation as far back as the soviet period, and there have not been any investments or technical maintenance regarding these objects over the recent decade. A great part of railroads and roads are in terrible conditions as well as objects of energy industry; communication systems and housing objects. For example, the explosion and fire in May 2005, on one of Moscow electricity substation, which was put into operation in 1963, led to the electricity outage in many districts of Moscow and neighboring regions. As a result underground traffic was paralyzed at many stations, thousands of people were blocked for several hours in the tunnels. The blackout caused problems with electric transport, and as a result led to road and transport incidents and traffic jams, as well as problems with water and energy supply of offices and apartment buildings, affected mobile communication services. Exchange trade, banking activities, as well as activities of many shops and markets were suspended. Roads in Russia are in bad condition;at the same time the quality of many roads does not comply with the minimal quality requirements. The Russian government actively examines the plans on restructuring the railway systems, power networks and telephone lines. Such restructuring may lead to the rise of cost of such services. Aggravation of the condition of infrastructure objects in Russia impairs national economy and may cause the disruption of goods and services delivery , as well as the rise of operating expenses.

In case of force-majeur circumstances, including natural disasters, possible suspension of traffic , acts of terrorism an so on, WBD shall take all measures to minimize losses incurred, recover normal activity of the company, or, in exceptional circumstances, WBD may suspend the operations of the subsidiaries under force-majeur.

2.5.3. Financial risks

Risk, related to ruble exchange rate changes :

WBD activity is subject to the influence of financial risks related to the ruble exchange rate in view of using borrowed capital in foreign currency.

Until recently, the ruble has fluctuated dramatically against the U.S. dollar, in some instances falling in value. A significant portion of our costs and expenditures, including costs of packaging, juice concentrate and certain other raw materials, as well as capital expenditures and borrowings (including our $150 million loan participation notes due 2008), are either denominated in, or closely linked to, the U.S. dollar, while substantially all of our revenues are denominated in rubles. As a result, the devaluation of the ruble against the U.S. dollar can adversely affect us by increasing our costs in ruble terms. Additionally, if the ruble declines against the U.S. dollar and price increases cannot keep pace, we could have difficulty repaying or refinancing our U.S. dollar-denominated indebtedness, including our notes. The devaluation of the ruble also results in losses in the value of ruble-denominated assets, such as ruble deposits. The decline in the value of the ruble against the U.S. dollar also reduces the U.S. dollar value of tax savings arising from the depreciation of our property, plant and equipment, since their basis for tax purposes is denominated in rubles at the time of the investment. Increased tax liability would increase total expenses.

Other financial risks

Our short-term and long-term debt agreements, including the loan agreement relating to our $150 million loan participation notes due 2008, contain covenants that impose operating and financial restrictions on us and our subsidiaries. These restrictions significantly limit, and in some cases prohibit, among other things, our and certain of our subsidiaries’ ability to incur additional debt, provide guarantees, create liens on assets or enter into business combinations. Failure to comply with these restrictions would constitute a default under our debt agreements, including the loan agreement relating to our $150 million loan participation notes due 2008, and any of our other senior debt containing cross-default provisions could become immediately due and payable, which would materially adversely affect our business, financial conditions and results of operations. In addition, some of our debt agreements contain provisions which permit our lenders to require us to repay our debt to them in the event of a deterioration in our financial condition.

2.5.4. Risks Relating to the Russian Legal System and Russian Legislation

Weaknesses relating to the legal system and legislation create an uncertain environment for investment and for business activity in Russia.

Russia is still developing the legal framework required to support a market economy. The following risks relating to the Russian legal system create uncertainties with respect to the legal and business decisions that we make, many of which do not exist in countries with more developed market economies:

· inconsistencies between and among, the Constitution, federal and regional laws, Presidential decrees and governmental, ministerial and local orders, decisions, resolutions and other acts;

· conflicting local, regional and federal rules and regulations;

· the lack of judicial and administrative guidance on interpreting legislation;

· the relative inexperience of judges and courts in interpreting legislation;

· lack of independent judiciary;

· a high degree of discretion on the part of governmental authorities, which could result in arbitrary actions such as suspension or termination of our licenses; and

· poorly developed bankruptcy procedures that are subject to abuse.

Furthermore, several fundamental laws have only recently become effective. The recent nature of much of Russian legislation, the lack of consensus about the scope, content and pace of economic and political reform and the rapid evolution of the Russian legal system in ways that may not always coincide with market developments place the enforceability and underlying constitutionality of laws in doubt and results in ambiguities, inconsistencies and anomalies. In addition, Russian legislation often contemplates implementing regulations that have not yet been promulgated, leaving substantial gaps in the regulatory infrastructure. All of these weaknesses could affect our ability to enforce our rights under our permits and under our contracts, or to defend ourselves against claims by others. We cannot assure you that regulators, judicial authorities or third parties will not challenge our internal procedures and by-laws or our compliance with applicable laws, decrees and regulations.

2.5.5. Risks relating to the Issuer’s Business

Risks relating to the Issuer’s Business, that can influence Issuer’s financial and economic activities are immaterial.

Risks relating to judicial disputes, in which issuer took part:

WBD is not a subject to any judicial disputes, which could affect WBD activities significantly. In the judgment of administration, there are no any possible judicial disputes or claims, that can significantly affect on WBD activities or financial condition of the issuer.

Risks relating to impossibility to extend license period:

These risks are immaterial, as since WBD have all appropriate licenses, that in long term protect its immaterial goods.

At the same time WBD could not be able to protect its immaterial goods properly, and it may affect adversely on the company’s financial condition and hinder the growth of the company. Taking into consideration the importance of firm-names, company took measures to protect its immaterial goods, including registration of trade mark “WBD”. But these measures may be insufficient, company’s immaterial goods rights may be broken and taken for the third party’s own. Besides there are less possibilities to protect immaterial goods in Russia and CIS countries (the places of company’s principal activities) in comparison with countries of Western Europe and North America. In case WBD failed to protect its immaterial goods, it will affect adversely on financial conditions and on possible growth of economic activity.

Inability to protect some of our firm-names and images, apply for registration of which had been taken into consideration, could affect adversely on WBD sales and bring to rise of expenses on advertising and lead to ill-influence on the company’s financial condition. In case of refusal of firm-names registration as a trade mark, WBD will not be able to support the proper protection of these firm-names or images and to prohibit the use of them by the third parties, it’ll decrease benefits of advertisements where such firm-names and images are used. This can influence adversely on our sales, because we are using these firm-names in our production, and it can make us to develop new sales program and cause rise of advertising expenses and influence our financial results adversely.

Risks relating to possible liability of the issuer under the third parties obligations? Including obligations of its subsidiaries:

Russian civil code as well as corporative law determines that shareholders of Russian joint-stock company do not bear any responsibility under the company’s debts and bear only risks of loss of their investments within the limits of their shares. At the same time, there is exception to the rule, when the mother company has a right to give obligatory instructions to its subsidiaries, including contractual relations. Under certain conditions, mother company could bear joint responsibility under deals arranged by its subsidiary in pursuance of such obligatory instruction. Besides, mother company bears vicarious responsibility under the obligations of its subsidiaries in case of subsidiary’s bankruptcy due to mother company’s activities. Accordingly, risks of responsibility of the issuer under obligations of its subsidiaries couldn’t be excepted, because issuer directly or indirectly owns 50% and more percents of charter capital of its subsidiaries and is a mother company. Assignment of responsibility that could be vicarious in case of bankruptcy of the issuer’s subsidiary or joint regarding contractual relations in pursuance of execution by the subsidiary obligatory instructions of mother company, could affect on issuer’s activities adversely.

Risks relating with loss of consumers that purchase production on the sum that is not less then 10% of total revenue should be considered as insignificant.

Various risks factors relating to issuer’s activity:

1. The failure of our geographic expansion strategy could hamper our continued growth and profitability.

Our expansion strategy depends, in part, on funding growth in additional markets, on our ability to identify attractive opportunities in markets that will grow and on our ability to manage the operations of acquired or newly established businesses. Should growth decline in our existing markets, not increase as anticipated in markets in which we have recently acquired or established businesses, or not increase in markets into which we subsequently expand, our geographic expansion strategy may not be successful and our business and profitability may suffer.

Our growth strategy relies on acquisitions and establishing new businesses, and our future growth, results of operations and market share would be adversely affected if we fail to identify suitable targets, outbid competing bidders or finance acquisitions on acceptable terms.

Our strategy depends on us being a large manufacturer in the dairy and juice sectors so that we can benefit from economies of scale, better satisfy customer needs and compete effectively against other producers. Our growth will suffer if we are unable to implement our acquisition strategy, whether because we fail to identify suitable targets, outbid competing bidders or finance acquisitions on acceptable terms or for any other reason. Furthermore, any acquisitions or similar arrangements may harm our business if we are unsuccessful in our integration process or fail to achieve the synergies and savings we expect.

2. The integration of our businesses, as well as of any businesses we may acquire in the future, requires significant time and effort from our senior management, who are also responsible for managing our existing operations. Integration of our businesses may be difficult, as our culture may differ from the cultures of the businesses we acquire or consolidate, unpopular cost cutting measures may be required and control over cash flows may be difficult to establish. Any difficulties encountered in the transition and integration process could have a material adverse effect on our results of operations.

3. Our management information system may be inadequate to support our future growth

Our management information system is less developed in certain respects than those of food producers in more developed markets and may not provide our management with as much or as accurate information as those in more developed markets. In addition, we may encounter difficulties in the ongoing process of implementing and enhancing our management information system.

4. Difficulty in obtaining adequate managerial and operational resources may restrict our ability to expand our operations successfully.

We have experienced rapid growth and development in a relatively short period of time. Management of such growth has required significant managerial and operational resources and is likely to continue to do so. Our future operating results depend, in significant part, upon the continued contributions of a limited number of our key senior management and technical personnel.

We will need to continue to improve our operational and financial systems and managerial controls and procedures to keep pace with our growth. We will also have to maintain close coordination among our logistical, technical, accounting, finance, marketing and sales personnel. Management of growth will require, among other things:

· the ability to integrate new acquisitions into our operations;

· continued development of financial and management systems controls and information technology systems;

· implementation of adequate internal control over financial reporting and disclosure controls and procedures;

· increased marketing activities;

· hiring and training of new personnel; and

· coordination among our logistical, technical, accounting, finance, marketing and sales personnel.

Our success will depend, in part, on our ability to continue to attract, retain and motivate qualified personnel. Competition in Russia, and in the other countries where we operate, for personnel with relevant expertise is intense, due to the limited number of qualified individuals. Although we attempt to structure our compensation packages in a manner consistent with evolving standards of the Russian labor market, we are not insured against damage that may be incurred in case of the loss or dismissal of our key personnel. Departures of senior management may be disruptive to our business and our success will depend, in part, on continuity in our senior management team.

5. Issuer’s operations are based on stable functioning of communication systems and software, used in operations of issuer and subsidiaries. Thus, malfunction in functioning of any of such components could entail certain problems in issuer’s operations.

III DETAILED INFORMATION ON THE ISSUER

3.1. Issuer’s background and development

3.1.1. Data on Issuer’s proprietary name

Issuer’s full proprietary name.

Open Joint Stock Company “Wimm-Bill-Dann Foods”

Abbreviated name.

WBD Foods

Data on Issuer’s name and organizational & legal changes.

Limited liability Company “Wimm-Bill-Dann Foods”

WBD Foods

Introduced: April 16, 2001

Reasons for entity type changes: according to the shareholders general meeting decision on reorganization of Limited liability Company “Wimm-Bill-Dann Foods” by means of transformation in open joint-stock company (proxy of shareholders general meeting on March 23, 2001 #23-04)

The present name introduced: May 31, 2001

In case such proprietary name or abbreviated name of the issuer is similar to proprietary name or abbreviated name of another entity, the issuer should name such entity and give its comments on how they should be identified:

As far as we know our proprietary name or abbreviated name is not similar to proprietary name or abbreviated name of any other entities.

In case the proprietary name of the issuer was registered as a trade mark or service mark, issuer should provide information on such registration.

Proprietary name of the issuer was registered as “Wimm-Bill-Dann” trade mark in different modifications.

Trade mark: Wimm-Bill-Dann

Date of registration: 25.05.1994

Number of registration’s certificate: 117667

Registration’s period of validity: 24.09.2012

Trade mark: Wimm-Bill-Dann and image of small animal with brush

Date of registration: 25.05.1994

Number of registration’s certificate: 117698

Registration’s period of validity: 24.09.2012

Trade mark: WIMM-BILL-DANN is what you want

Date of registration: 28.04.1995

Number of registration’s certificate: 125261

Registration’s period of validity: 31.08.2013

Trade mark: WIMM-BILL-DANN is what you want and image of small animal and oranges

Date of registration: 10.05.1995г.

Number of registration’s certificate: 125307

Registration’s period of validity: 08.02.2014г.

Trade mark: WIMM-BILL-DANN is what you want

Date of registration: 19.05.2000

Number of registration’s certificate: 188686

Registration’s period of validity: 10.11.2008

Trade mark: Wimm-Bill-Dann

Date of registration: 31.08.2000

Number of registration’s certificate: 193409

Registration’s period of validity: 10.11.2008

Trade mark: WIMM-BILL-DANN is what you want

Date of registration: 17.01.2003

Number of registration’s certificate: 235617

Registration’s period of validity: 24.08.2011

Trade mark: WIMM-BILL-DANN is what you want

Date of registration: 05.03.2003

Number of registration’s certificate: 237746

Registration’s period of validity: 24.08.2011

Trade mark: Bio Max + Вимм-Билль-Данн (of red font in circle)

Date of registration: 23.04.2003

Number of registration’s certificate: 244489

Registration’s period of validity: 27.04.2011

Trade mark: WIMM-BILL-DANN is what you want

Date of registration: 18.07.2003г.

Number of registration’s certificate: 251933

Registration’s period of validity: 24.08.2011

Trade mark: Вимм-Билль-Данн

Date of registration: 08.12.2004

Number of registration’s certificate: 279887

Registration’s period of validity: 19.03.2014

Trade mark: ВИММ-БИЛЛЬ-ДАНН то, что ты хочешь

Date of registration: 15.03.2005г.

Number of registration’s certificate: 284154

Registration’s period of validity: 11.12.2013

Trade mark: продукт компании «Вимм-Билль-Данн»

Date of registration: 25.03.2005г.

Number of registration’s certificate: 285116

Registration’s period of validity: 10.03.2014

3.1.2. Data on Issuer’s state registration record

Issuer’s state registration date: May 31, 2001

State registration certificate No. (Or other document verifying Issuer’s state registration) P-15968.16

Organization that performed Issuer’s state registration: State Registration Chamber attached to Ministry of Justice of the Russian Federation, Moscow Registration Chamber

OGRN 1037700236738

The date of entry into the Unified State Register of Legal Entities: 19.02.2003.

The name of the registrar: Inderdistrict Inspectorate of the Ministry of Taxes and Levies No. 39, Moscow

3.1.3. Data on Issuer’s establishment and development.

Term of Issuer’s existence: since 31.05.2003

Issuer is established for an indefinite term

History of the Issuer’s Foundation and Activities.

Open Joint-Stock Company “Wimm-Bill-Dann Foods” (hereinafter referred to as the Issuer or the Company) was registered on May 31, 2001. The purpose of its creation was to consolidate several production and trading companies, whose shares had been privately owned by a group of persons and were transferred to the Company by including them in authorized capital during its creation in 2001. Control over and management of the WBD Group

are the Issuer’s principal areas of activity. In keeping with Article 4 of the Issuer’s Charter, “The main purpose of the Company is to fully satisfy the demand of legal entities and private persons in products (works, services), produced (performed, provided) in accordance with its charter activity, and to receive profits. On February 14, 2002, OJSC Wimm-Bill-Dann Foods completed the public issue of and registered common shares represented by American depositary receipts (ADR) at the New York Stock Exchange under the “WBD” symbol. Each ADR represents one basic common share of the Company.

The story of WBD Group began in 1992, when the first company owned by a group of persons rented a production line at the Lianozovo Dairy and purchased the first lot of juice concentrates and packaging materials. November 25, 1992 WBD Group produced its first pack of juice under the Wimm-Bill-Dann brand. This name had been chosen in order to attract consumers, who at that point preferred imported products due to their novelty to the market, and also because of the prevailing belief in the higher quality of imported goods. From the very first appearance on the market the name Wimm-Bill-Dann turned into a brand, known to and popular among the majority of Russian consumers.

3.1.4. Contact data

Location: 109028, Moscow, Yauzsky Boulevard, 16/15, office 306

Tel.: (095) 105-5805
Fax: (095) 733-9736

E-mail: MuhinMM@wbd.ru

Internet page(s) displaying information contained in this quarterly report: www.wbd.ru

3.1.5. Taxpayer’s identification number.

7709342399

3.1.6. Issuer’s branches and representative offices

Full title: Moscow affiliate of Open Joint-Stock Company “Wimm-Bill-Dann Foods”;

Brief title: Moscow affiliate of WBD Foods OJSC

Location of the representative office: 127591, Russia, Moscow, Dmitrovskoe Street, 108, office 3

The representative office head: Novikov Dmitry Nikolaevich

The term of authority: 16.06.06 – 16.06.09

Full title: Baby Food affiliate of Open Joint-Stock Company “Wimm-Bill-Dann Foods” in Moscow;

Brief title: Baby Food affiliate of WBD Foods OJSC.

Location of the representative office: 127591, Russia, Moscow, Dmitrovskoe Street, 108, build. 3, office 704

The representative office head: Ryazantsev Alexandr Olegovich

The term of authority:16.06.06 – 16.06.09

Full title: Open Joint-Stock Company “Wimm-Bill-Dann Foods” affiliate in Nizhniy Novgorod,

Brief title: Nizhniy Novgorod affiliate of WBD Foods OJSC

Location of the representative office: 603309, Russia, Nizhegorodskiy region, Nizhniy Novgorod, Larina street 19, office 202

The representative office head: Slezko Oleg Mikhailovich

The term of authority: 16.06.06 – 16.06.09

Full title: Open Joint-Stock Company “Wimm-Bill-Dann Foods” affiliate in Timashevsk,

Brief title: Timashevsk affiliate of WBD Foods OJSC.

Location of the representative office: 352700, Russia, Krasnodar region, Timashevsk, Gybridnaya street 2, office 1

The representative office head: Bondarev Sergey Ivanovich

The term of authority: 16.06.06 – 16.06.09

Full title: Open Joint-Stock Company “Wimm-Bill-Dann Foods” affiliate in Volgograd,

Brief title: Volgograd affiliate of WBD Foods OJSC

Location of the representative office: 400120, Russia, Volgograd region, Volgograd, Avtotransportnaya street, 43

The representative office head: Kovalev Denis Fedorovich

The term of authority: 16.06.06 – 16.06.09

Full title: Open Joint-Stock Company “Wimm-Bill-Dann Foods” affiliate in Krasnodar,

Brief title: Krasnodar affiliate of WBD Foods OJSC.

Location of the representative office: 350000, Russia, Krasnodar region, Krasnodar, Vasnetsov street 39, office 39

The representative office head: Rubtsov Dmitry Evgenevich

The term of authority: 16.06.06 – 16.06.09

Full title: Open Joint-Stock Company “Wimm-Bill-Dann Foods” affiliate in Rostov-on-Don

Brief title: Rostov-on-Don affiliate of WBD Foods OJSC.

Location of the representative office: 344090, Russia, Rostov region, Rostov-on-Don, Dovator street, 150

The representative office head: Bass Konstantin Borisovich

The term of authority:16.06.06 – 16.06.09

Full title: Open Joint-Stock Company “Wimm-Bill-Dann Foods” affiliate in St.-Petersburg

Brief title: St.-Petersburg affiliate of WBD Foods OJSC

Location of the representative office: 194292, Russia, St.-Petersburg, production zone «Parnas», 6-th Verkhniy lane 1, office 317

The representative office head: Kotsegubov Aleksey Vladimirovich

The term of authority: 16.06.06 – 16.06.09

Full title: Open Joint-Stock Company “Wimm-Bill-Dann Foods” affiliate in Ufa

Brief title: Ufa affiliate of WBD Foods OJSC

Location of the representative office: 450038, Russia, republic of Bashkortostan, Ufa, International st., 129/3

The representative office head: Kizko Petr Alexandrovich

The term of authority: 16.06.06 – 16.06.09

Full title: Open Joint-Stock Company “Wimm-Bill-Dann Foods” affiliate in Yekaterinburg

Brief title: Yekaterinburg affiliate of WBD Foods OJSC

Location of the representative office: 620055, Russia, Sverdlovsk region, Ekaterinburg, Krasnoarmeyskaya st., 76

The representative office head: Okovity Evgeny Gennadievich

The term of authority: 16.06.06 – 16.06.09

Full title: Open Joint-Stock Company “Wimm-Bill-Dann Foods” affiliate in Vladivostok

Brief title: Vladivostok affiliate of WBD Foods OJSC

Location of the representative office: 690087, Russia, Primorsky region, Vladivostok, Strelochnaya st., 19, office 18

The representative office head: Palagin Alexander Vyacheslavovich

The term of authority: 16.06.06 – 16.06.09

Full proprietary name – Representative office of Wimm-Bill-Dann Foods OJSC in Beijing.

Abbreviated name - Representative office of WBD Foods in Beijing.

Location of the representative office – Chinese Peoples Republic, Beijing

The decision on establishing of the representative office was adopted by the Issuer’s Board of Directors on June 16, 2004 (Minutes No.19-07 as of 19.07.2004).

The representative office head – Song Bin Bin

The term of authority – October 8, 2004 – October 8, 2007

The changes in the amount of Issuer’s brances and representative offices didn’t take place within the reporting quarter.

3.2. Description of Issuer’s primary areas of operations

3.2.1. Issuer’s branch/sectorial affiliation.

OKWED Codes:

15.98, 15.51.13, 15511, 51.34.1, 51.38.22, 74.13.1, 15.32, 55.51, 52.25.2, 15.88, 22.13, 74.14, 74.84.

3.2.2. Issuer’s primary activity

The Company has the following main types of activity:

· Sale of services in respect of granting use of trademarks under license agreements;

· Sale of consulting services;

· Others.

The sales volume of WBD Foods for the 6 months of 2006 is presented in the following table:

6 months of 2006

№	Income	TOTAL, thou. rubles	Share of total revenue, %
1	Sales income, exclusive of VAT	366150	100,00
1.1.	including: sale of services in respect of granting use of trademarks	344928	94,20
1.2.	sale of management consulting services	16224	4,43
1.3.	software implementation services	1682	0,46
1.4.	Leasing of property	3054	0,83
1.5.	other	262	0,08

3.2.3 Main types of products (works, services)

3.2.4 Raw materials and Issuer’s suppliers

Issuer’s Administrative Expenses, thou. rubles

Expense item	2005	6 months 2006
auxiliary materials	1 942	1220
equipment	2
Routine repairs of buildings and structures	251	235
Routine repairs of machinery and equipment	8
Expenses associated with vehicles operations	1 736	1687
Office equipment maintenance and repair	3 119	1944
Salaries	245 094	141128
Other personnel expenses	49 566	31403
Reserves for upcoming leaves	24 073	11927
Payment for initial 2 days of incapacity	289	219
Social insurance	3 358	2160
Pension insurance	14 725	11251
Allocations to the Pension fund	10 883	6810
Obligatory medical insurance	3 110	2479
Accident insurance	574	314
Social allocations from the sum payable for the initial 2 days of incapacity	23	16
Fixed assets depreciation	4 814	2628
Intangible assets depreciation	5 066	2400
Office lease	145 340	73139
Other facilities lease	9 200	5721
Entertainment expenses	5 625	2213
Business trip expenses within standard	8 519	9812
Business trip expenses exceeding standard	2 531	580
Organization management expenses (BoD)	2 160	785
Communication services	7 308	3659
Information and computing services	11 613	7889
Advertising	9 098	4073
Audit services	22 906	9484
Personnel training	1 243	347
Subscription	553	170
Notary and legal fees	15 445	8971
Medical insurance of the personnel	2 505	1338
Other information and consulting services	15 892	7991
Documents drawing up	98	45
Recruitment services	1 208	254
Other services	9 537	3054
Notary and legal fees exceeding standard	27	28
Compensation for use of personal vehicles for business purposes	50	25
TOTAL	639 490	357399

Issuer’s major suppliers within 6 months of 2006

No	Supplier of works, services	2005		6 months 2006
		thousands	%	thousands	%
1	Lianozovo Dairy PJSC	170 546	24.91	87 438	37.08
2	Firm of attorneys “Kuznetskiy most”			35 013	14,85
3	Ernst & Young LLC	27 352	3,99	14 079	5.97

3.2.5. Markets for products (works, services) of the Issuer

Wimm-Bill-Dann Foods Open Joint-Stock Company provides consultation services, as well as grants rights to use trademarks it owns through conclusion of license agreement both in the territory of the Russian Federation and in CIS countries: Kirgyzstan and Ukraine.

Through license agreements, the Issuer grants the right to use:

· trademarks owned by it;

· the RAT and LIASOFT computer programs.

The volume of services rendered by WBD Foods in the 9 months of 2005 is presented by region in the following tables:

6 months 2006

№	Country	Volume of services rendered, thou. rubles	% of total volume of services rendered
1	Russia	359 578	98,20
2	CIS countries, total:	6 538	1,79
	including:
2.1.	Kyrgyzstan	45	0,01
2.2.	Ukraine	6 432	1,76
3.	Orhers	61	0,02
	TOTAL	34	0,01

3.2.6. Data on Issuer’s licences held

Issuer holds no licenses.

3.2.7. Data on Issuer’s joint operation

None during reporting period.

3.2.8. Additional requirements to investment funds and insurance companies acting as an issuer

Not applicable.

3.2.9. Additional requirements to issuers, whose main type of activities is extraction of minerals

Not applicable.

3.2.10. Additional requirements to issuers, whose main type of activities is communication services

Not applicable.

3.3. Plans of the Issuer’s Future Activities.

We aim to retain our position as a leading nationwide producer of quality food and beverage products and to expand our production and sales in order to attain higher revenues, cash flow and earnings. To achieve these objectives, we use the following strategies:

· Expand our geographic reach and production capacity.

· Improve operating efficiencies and reduce costs.

· Brand building and innovation.

· Strengthen human resource capability.

Expand our geographic reach and production capacity. Since 2000, we have acquired production units in various regions of Russia and the CIS. By establishing large production facilities in regions with high population density and available raw materials, we have been able to avoid high transportation costs and take advantage of lower cost labor and milk resources, which can be cheaper in the regions than in Moscow. While we believe that we have achieved national reach and anticipate fewer acquisitions in the future, the fragmented nature of the dairy industry in Russia and the CIS will continue to give rise to opportunities for strategic acquisitions, constructing new capacity and attracting new customers. In turn, we expect these combined factors, along with the geographic expansion of our distribution network, to bring about an increase in our geographic coverage. We intend to continue to implement this strategy through acquisition and construction of production capacity and new equipment, including the selective acquisition of plants,

Improve operating efficiencies and reduce costs. We intend to maintain the high quality of our products, reduce our costs, increase our cash flow and improve employee productivity

Brand building and innovation. In an increasingly competitive marketplace, we believe effective brand management is key to maintaining our leading positions in the market segments where we operate. We have developed key brands in specific segments into umbrella brands. This allows us to launch new products and enter new product niches with recognized and trusted brands. At the same time, we have elevated some strong local brands into regional and national brands. Maintaining long-established regional brands allows us to fit our marketing approach to specific regional tastes and leverage existing brand identities.

Strengthen human resource capability. Operating in both maturing markets, such as Moscow and St. Petersburg, and emerging markets, such as Russia’s regions and CIS markets, we are developing our human resource capability on the central group and regional levels to attract and retain skilled management with global consumer industry experience. At the same time, we believe in promoting talented people within the organization, moving people not only up the career ladder, but also into other parts of the business and other regions. In our production facilities, we have sought to make our existing employees more efficient through installation of new equipment and training.

3.4. Issuer’s participation in industrial, banking and financial groups, holdings, concerns and associations.

On May 12, 2004, the General Meeting of Shareholders of WBD Foods OJSC approved accession of the Issuer to Non-Commercial Organization “German Economic Union in the Russian Federation” (Minutes No. 20-05 dated May 20, 2004) whose Charter envisages such aims and objectives as contribution to economic cooperation

between the Federal Republic of Germany and the Russian Federation in close cooperation with the German Union of Chambers of Commerce and Industry and the Eastern German Economic Union, as well as with its head organizations.

On June 14, 2005, the General Meeting of Shareholders of WBD Foods OJSC approved the accession of the Issuer to Non-Commercial Organization “Russian Marketing Association”.

3.5. Issuer’s Subsidiaries and dependent companies.

The Issuer’s activity is inextricably linked and determined by the needs and requirements of its subsidiaries and dependent companies.

Name: Open Joint-Stock Company “Lianozovo Dairy”

Location: 127591, Moscow, Dmitrovskoe shosse, d.108

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 98.02%

Issuer’s share in the total amount of ordinary shares of the entity: 98.02%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Plastinin, Sergei Arkadievich

Born: 1968

This person’s share in the Issuer’s charter capital: 9.30%

This person’s share in the total amount of Issuer’s ordinary shares: 9.30%

Iakobachvili, David

Born: 1957

This person’s share in the Issuer’s charter capital: 7.76%

This person’s share in the total amount of Issuer’s ordinary shares: 7.76%

Bolotovsky, Roman Viktorovich

Born: 1969

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Davidovsky, Oleg Leonidovich

Born: 1971

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Filatov, Vladislav Stanislavovich

Born: 1971

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Skopinov Viktor Grigorievich

Born: 1944

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Usikova Lyubovy Sergeevna

Born: 1955

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Person performing the functions of individual executive body of the entity:

Usikova Lyubovy Sergeevna

Born: 1955

Share in Issuer’s Authorised Capital Stock: 0%

Share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity (with specification of the year of birth)

The authorities of the collective executive body members have not been extended.

Name: Open Joint-Stock Company “Dairy”

Location: 353760, Timashevsk, Krasnodar Region. ul. Gibridnaya, d. 2

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 70.47%

Issuer’s share in the total amount of ordinary shares of the entity: 70.47%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Bondarev Sergey Ivanovich

Born: 1955

Share in Issuer’s Authorised Capital Stock: 0%

Share in the total amount of Issuer’s ordinary shares: 0%

Orlov, Alexander Alexandrovich

Born: 1976

Share in Issuer’s Authorised Capital Stock: 0%

Share in the total amount of Issuer’s ordinary shares: 0%

Plastinin, Sergei Arkadievich

Born: 1968

This person’s share in the Issuer’s charter capital: 9.30%

This person’s share in the total amount of Issuer’s ordinary shares: 9.30%

Polikarpova, Natalya Leonidovna

Born: 1974

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Iakobachvili, David

Born: 1957

This person’s share in the Issuer’s charter capital: 7.76%

This person’s share in the total amount of Issuer’s ordinary shares: 7.76%

Person performing the functions of individual executive body of the entity:

Bondarev Sergey Ivanovich

Born: 1955

Share in Issuer’s Authorised Capital Stock: 0%

Share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not formed

Name: Closed Joint-Stock Company “Production and Analytical Group Rodnik”

Location: 103009, Moscow, Bryusov per., d. 8/10, str. 2, 2nd floor, room 13а

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 100%

Issuer’s share in the total amount of ordinary shares of the entity: 100%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: sale of juice products.

Members of the Board of directors of the legal entity:

The Board of directors (Supervisory Board) is not provided

Person performing the functions of individual executive body of the entity:

Styazhkin Sergey Vladimirovich

Born: 1972

Share in Issuer’s Authorised Capital Stock: no share

Share in the total amount of Issuer’s ordinary shares: no share

Members of collective executive body of the entity:

Collective executive body is not provided

Name: Closed Joint Stock Company “Wimm-Bill-Dann Trading Company”

Location: 103009, Moscow, Bryusov per., d. 8/10, str. 2, 2nd floor, room 17

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 83.19%

Issuer’s share in the total amount of ordinary shares of the entity: 83.19%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: sale of juice products

Members of the Board of directors of the legal entity:

The Board of directors (Supervisory Board) is not provided

Person performing the functions of individual executive body of the entity:

Mirzoev, David Revazovich

Born: 1980

Share in Issuer’s Authorised Capital Stock: 0%

Share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not formed

Name: Limited Liability Company “Annino Milk”

Location: Russia, Voronezh Obalast, rabochii poselok Anna, ul. Sevastopolskaya, d. 4

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 78.56%

Share of this legal entity in the Issuer’s charter capital: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

The Board of directors (Supervisory Board) is not provided

Person performing the functions of individual executive body of the entity:

Nerovnyi Nikolai Nikolaevich

Year of birth: 1946

Share in Issuer’s Authorised Capital Stock: 0%

Share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not formed

Name: Closed Joint Stock Company “Gulkevichi Creamery”

Location: 352150, Krasnodar Region, Gulkevichi, ul. Korotkova, d. 155

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 52.24%

Issuer’s share in the total amount of ordinary shares of the entity: 52.24%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Kraynov, Gennady Konstantinovich

Born: 1951

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Krupin, Petr Borisovich

Born: 1974

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Plastinin, Sergei Arkadievich

Born: 1968

This person’s share in the Issuer’s charter capital: 9.30%

This person’s share in the total amount of Issuer’s ordinary shares: 9.30%

Sosidka, Evgeny Petrovich

Born: no data

Share in Issuer’s Authorised Capital Stock: 0%

Share in the total amount of Issuer’s ordinary shares: 0%

Iakobachvili, David

Born: 1957

This person’s share in the Issuer’s charter capital: 7.76%

This person’s share in the total amount of Issuer’s ordinary shares: 7.76%

Person performing the functions of individual executive body of the entity:

Kozlikin, Hikolai Parfentyevich

Born: 1954

Share in Issuer’s Authorised Capital Stock: 0%

Share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not formed

Name: Open Joint Stock Company Baltic Milk Dairy

Location: Russia, St. Petersburg, promzona Parnas, 6 Verkhny pereulok, 1

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 100%

Issuer’s share in the total amount of ordinary shares of the entity: 100%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

The Board of directors (Supervisory Board) is not formed

Person performing the functions of individual executive body of the entity:

Kotsegubov Aleksey Vladimirovich

Born: 1955

Share in Issuer’s Authorised Capital Stock: no share

Share in the total amount of Issuer’s ordinary shares: no share

Members of collective executive body of the entity:

Collective executive body is not provided

Name: Limited Liability Company “Wimm-Bill-Dann Mineral Water”

Location: 109028, Moscow, Yauzsky Boulevard, d. 16/15

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 100%

Share of this legal entity in the Issuer’s charter capital: 0%

Description of the principal subsidiary’s activities: sale of mineral water.

Members of the Board of directors of the legal entity:

The Board of directors (Supervisory Board) is not provided

Person performing the functions of individual executive body of the entity:

Mirzoev, David Revazovich

Born: 1980

Share in Issuer’s Authorised Capital Stock: no share

Share in the total amount of Issuer’s ordinary shares: no share

Members of collective executive body of the entity:

Collective executive body is not provided

Name: Closed Joint Stock Company “Buryn Milk powder Plant”

Location: 245710, Ukraine, Sumy Region, Buryn, Konotopske shose, d. 1

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 76%

Issuer’s share in the total amount of ordinary shares of the entity: 76%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Kuzmin, Oleg Egorovich

Born: 1969

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Orlov, Alexander Sergeevich

Born: 1948

This person’s share in the Issuer’s charter capital: 3.47%

This person’s share in the total amount of Issuer’s ordinary shares: 3.47%

Voloshin, Oleg Nikolaevich

Born: 1971

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Person performing the functions of individual executive body of the entity:

Not provided by the constitutive documents of the entity

Members of collective executive body of the entity (with specification of the year of birth)

Lut Ludmila Pavlovna, (Chairman)

Born 1952

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Misevrina Olga Fedorovna

Born 1952

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Sugeyko Grigory Vasilyevich

Born 1952

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Kotsyuba Galina Ivanovna

Born 1950

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Tarasenko Olga Borisovna

Born 1961

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Name: Open Joint Stock Company “Tuimazy Milk Plant”

Location: Republic of Bashkortostan, Tuimazy, ul. Severnaya, d. 9

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 85%

Issuer’s share in the total amount of ordinary shares of the entity: 85%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Kizyko Petr Aleksandrovich

Born: 1978

Share in Issuer’s Authorised Capital Stock: no share

Share in the total amount of Issuer’s ordinary shares: no share

Buryan Aleksandr Ivanovich

Born: 1961

Share in Issuer’s Authorised Capital Stock: no share

Share in the total amount of Issuer’s ordinary shares: no share

Anisimov Dmitry Aleksandrovich

Born: 1971

Share in Issuer’s Authorised Capital Stock: no share

Share in the total amount of Issuer’s ordinary shares: no share

Kuzymin Oleg Egorovich

Born: 1969

This person’s share in the Issuer’s charter capital: no share

This person’s share in the total amount of Issuer’s ordinary shares: no share

Ibragimov Marat Galievich

Born: 1958

Share in Issuer’s Authorised Capital Stock: no share

Share in the total amount of Issuer’s ordinary shares: no share

Person performing the functions of individual executive body of the entity:

Dobrovolskiy Dmitriy Vladimirovich

Year of birth: 1971

Share in Issuer’s Authorised Capital Stock: no share

Share in the total amount of Issuer’s ordinary shares: no share

Members of collective executive body of the entity:

Collective executive body is not formed

Name: Open Joint-Stock Company “Vladivostok Dairy”

Location: 690087, Vladivostok, ul. Strelochnaya, d. 19

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 97.44%

Issuer’s share in the total amount of ordinary shares of the entity: 97.44%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Plastinin, Sergei Arkadievich

Born: 1968

This person’s share in the Issuer’s charter capital: 9.30%

This person’s share in the total amount of Issuer’s ordinary shares: 9.30%

Iakobachvili, David

Born: 1957

This person’s share in the Issuer’s charter capital: 7.76%

This person’s share in the total amount of Issuer’s ordinary shares: 7.76%

Kutuzova, Galina Arkadyevna

Born: 1974

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Palagin, Alexander Vyacheslavovich

Born: 1975

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Novoseltsev, Nikolay Fedorovich

Born: 1959

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Person performing the functions of individual executive body of the entity:

Palagin, Alexander Vyacheslavovich

Born: 1975

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not provided

Name: Foreign entity Limited Liability Company “Vimm-Bill-Dann Toshkent”

Location: Uzbekistan Republic, 700131, Tashkent, Akmaly-Ikramovsky region, massiv Chilanzar, ul. Zargarlik, dom 26

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 100%

This entity’s share in the Issuer’s charter capital: none

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

The Board of directors has not been formed.

Person performing the functions of individual executive body of the entity:

Surmonin, Sergey Borisovich

Born: 1968

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not formed.

Name: Open Joint-Stock Company “Kiev Dairy Plant No.3”

Location: 255500, Ukraine, Kievskaya oblast, Vishnevoe, ul. Promyshlennaya, 7

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 94.88%

Issuer’s share in the total amount of ordinary shares of the entity: 94.88%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Anisimov, Dmitriy Alexandrovich

Born: 1969

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Orlov, Alexander Sergeevich

Born: 1948

This person’s share in the Issuer’s charter capital: 3.47%

This person’s share in the total amount of Issuer’s ordinary shares: 3.47%

Plastinin, Sergei Arkadievich

Born: 1968

This person’s share in the Issuer’s charter capital: 9.30%

This person’s share in the total amount of Issuer’s ordinary shares: 9.30%

Iakobachvili, David

Born: 1957

This person’s share in the Issuer’s charter capital: 7.76%

This person’s share in the total amount of Issuer’s ordinary shares: 7.76%

Kuzymin Oleg Egorovich

Born: 1969

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Person performing the functions of individual executive body of the entity:

Voloshin, Oleg Nikolaevich (Chairman of the Management Board)

Born: 1971

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Voloshin, Oleg Nikolaevich (Chairman of the Management Board)

Born: 1971

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Martynenko, Igor Nikolaevich

Born: 1973

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Name: Limited Liability Company “Valday Sanctuaries”

Location: 174350, Novgorodskaya oblasty, Okulovka, ul. Centralnaya, dom 5

The grounds to consider the company a subsidiary of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 100%

This entity’s share in the Issuer’s charter capital: none

Description of the principal subsidiary’s activities: production and sale of mineral water

Members of the Board of directors of the legal entity:

The Board of directors has not been formed.

Person performing the functions of individual executive body of the entity:

Kharuzin, Vadim Alexandrovich

Born: 1967

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not formed.

Name: Open Joint Stock Company “Obninsk diary”

Location: 2490396, Russia, Kuluzhskaya oblasty, Obninsk, Kurchatova street, d.53

The grounds to consider the company a subsidiary company of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 66.33%

Issuer’s share of the ordinary shares of the subsidiary: 66.33%

This entity’s share in the Issuer’s charter capital: none

This entity’s share of the ordinary shares of the Issuer: none

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Baranov Alexander Igorevich

Born: 1972

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Gorelisheva Ludmila Igorevna

Born: 1958

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Pivikov Sergey Alexandrovich

Born: 1967

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Poletaeva Galina Pavlovna

Born: 1945

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Tsvetkov Alexander Valerievich

Born: 1964

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Person performing the functions of individual executive body of the entity:

Poletaeva Galina Pavlovna

Born: 1945

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not provided

Name: Limited liability Company “Experimental baby food plant”

Location: 307100, Russia, Kurskaya oblasty, Fatezhskiy district, Chermashnoi PST.

The grounds to consider the company a subsidiary company of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 100%

Issuer’s share of the ordinary shares of the subsidiary: 100%

This entity’s share in the Issuer’s charter capital: none

This entity’s share of the ordinary shares of the Issuer: none

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Board of directors is not provided

Person performing the functions of individual executive body of the entity:

Tsarapkin Sergey Fedorovich

Born 1978

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not provided

Name: Limited liability Partnership “Wimm-Bill-Dann-Central Asia-Almati”

Location: 050011, Republic of Kazakhstan, Almati,Turksibskiy district, Burundayskaya street, d.93D

The grounds to consider the company a subsidiary company of the Issuer: prevailing share of the Issuer in the authorized stock of the company

Issuer’s share in the charter capital of the legal entity: 100%

Issuer’s share of the ordinary shares of the subsidiary: 100%

This entity’s share in the Issuer’s charter capital: none

This entity’s share of the ordinary shares of the Issuer: none

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Board of directors is not provided

Person performing the functions of individual executive body of the entity:

Mironov Denis Sergeyevich

Born 1978

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not provided

Dependent companies

Name: Open Joint Stock Company “Tsaritsino Dairy”

Location: 115201, Russian Federation, Moscow, 1st Varshavsky Proezd, d. 6/10

The grounds to consider the company a dependent company of the Issuer: share of the Issuer in the authorized stock of the company exceeds 20%

Issuer’s share in the charter capital of the legal entity: 34.95%

Issuer’s share in the total amount of ordinary shares of the entity: 34.95%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Andreev, Yury Maksovich

Born: 1950

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Vlasenko, Yury Anatolyevich

Born: 1968

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Kuzymin Oleg Egorovich

Born: 1969

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Plastinin, Sergei Arkadievich

Born: 1968

This person’s share in the Issuer’s charter capital: 9.30%

This person’s share in the total amount of Issuer’s ordinary shares: 9.30%

Iakobachvili, David

Born: 1957

This person’s share in the Issuer’s charter capital: 7.76%

This person’s share in the total amount of Issuer’s ordinary shares: 7.76%

Skopinov Viktor Grigorievich

Born: 1944

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Evdokimov Victor Egorovich

Born 1953

This person’s share in the Issuer’s charter capital: 0.34%

This person’s share in the total amount of Issuer’s ordinary shares: 0.34%

Person performing the functions of individual executive body of the entity:

Savenkova Inessa Porfiryeva

Born: 1952

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not formed

Name: Open Joint Stock Company “Children’s Dairy Products Factory”

Location: 127591, Moscow, Dmitrovskoe shosse, d. 108-A

The grounds to consider the company a dependent company of the Issuer: share of the Issuer in the authorized stock of the company exceeds 20%

Issuer’s share in the charter capital of the legal entity: 25.1%

Issuer’s share in the total amount of ordinary shares of the entity: 25.1%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Gagev, Aleksandr Ivanovich

Born: 1952

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Kosulnikova, Regina Alekseevna

Born: 1968

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Orlov, Alexander Sergeevich

Born: 1948

This person’s share in the Issuer’s charter capital: 3.47%

This person’s share in the total amount of Issuer’s ordinary shares: 3.47%

Tsarapkin, Sergey Fedorovich

Born: 1978

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Yudkin, Sergey Ivanovich

Born: 1957

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Iakobachvili, David

Born: 1957

This person’s share in the Issuer’s charter capital: 7.76%

This person’s share in the total amount of Issuer’s ordinary shares: 7.76%

Ryazantsev, Alexander Yurevich

Born: no data

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Person performing the functions of individual executive body of the entity:

Gagev, Aleksandr Ivanovich

Born: 1952

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not formed

Name: Open joint stock company “Ufamolagroprom”

Location: 450038, Ufa, Internationalnaya street, d.129-a

The grounds to consider the company a dependent company of the Issuer: share of the Issuer in the authorized stock of the company exceeds 20%

Issuer’s share in the charter capital of the legal entity: 47.7%

Issuer’s share in the total amount of ordinary shares of the entity: 47.7%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Bolotov, Aleksandr Gennadyevich

Born: 1971

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Kizyko, Petr Aleksandrovich

Born: 1978

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Murtazin, Salavat Rizovich

Born: 1956

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Plastinin, Sergei Arkadievich

Born: 1968

This person’s share in the Issuer’s charter capital: 9.30%

This person’s share in the total amount of Issuer’s ordinary shares: 9.30%

Iakobachvili, David

Born: 1957

This person’s share in the Issuer’s charter capital: 7.76%

This person’s share in the total amount of Issuer’s ordinary shares: 7.76%

Person performing the functions of individual executive body of the entity:

Kizyko, Petr Aleksandrovich

Born: 1978

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Kizyko, Petr Aleksandrovich

Born: 1978

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Popov, Konstantin Ilyich

Born: 1975

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Shtab, Natalya Anatolyevna

Born: 1975

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Shlenev, Vladimir Alekseevich

Born: 1971

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Arhipova, Irina Aleksandrovna

Born: 1960

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Khasiev, Albert Maratovich

Born: 1977

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Gabdulkhakov, Artur Lyabilovich

Born: 1969

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Name: Open Joint-Stock Company “Bishkeksut”

Location: Kyrgyz Republic, Bishkek, Prospekt Chuy, d. 12А

The grounds to consider the company a dependent company of the Issuer: share of the Issuer in the authorized stock of the company exceeds 20%

Issuer’s share in the charter capital of the legal entity: 39.66%

Issuer’s share of the ordinary shares of the subsidiary: 39.66%

This entity’s share in the Issuer’s charter capital: none

This entity’s share of the ordinary shares of the Issuer: none

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Anisimov, Dmitry Aleksandrovich

Born: 1971

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Golikov, Konstantin Sergeevich (Chairman)

Born: 1973

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Kuzymin Oleg Egorovich

Born: 1969

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Plastinin, Sergei Arkadievich

Born: 1968

This person’s share in the Issuer’s charter capital: 9.30%

This person’s share in the total amount of Issuer’s ordinary shares: 9.30%

Iakobachvili, David

Born: 1957

This person’s share in the Issuer’s charter capital: 7.76%

This person’s share in the total amount of Issuer’s ordinary shares: 7.76%

Person performing the functions of individual executive body of the entity:

Rumyantseva, Margarita Nikolaevna

Born: no data

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not provided

Name: Open Joint-Stock Company “Nizhny Novgorod Dairy”

Location: 603309, Nizhny Novgorod, ul. Larina, d. 19

The grounds to consider the company a dependent company of the Issuer: share of the Issuer in the authorized stock of the company exceeds 20%

Issuer’s share in the charter capital of the legal entity: 44.59%

Issuer’s share in the total amount of ordinary shares of the entity: 44.59%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Nechaeva, Olga Igorevna

Born: 1970

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Plastinin, Sergei Arkadievich

Born: 1968

This person’s share in the Issuer’s charter capital: 9.30%

This person’s share in the total amount of Issuer’s ordinary shares: 9.30%

Slezko, Oleg Mikhailovich

Born: 1969

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Styazhkin, Sergey Vladimirovich

Born: 1972

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Iakobachvili, David

Born: 1957

This person’s share in the Issuer’s charter capital: 7.76%

This person’s share in the total amount of Issuer’s ordinary shares: 7.76%

Person performing the functions of individual executive body of the entity:

Slezko Oleg Mikhailovich

Born: 1969

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not provided

Name: Closed Joint Stock Company “Karasuk Milk”

Location: Russia, Novosibirskaya oblasty, Karasuk, Radischeva street, d.16

The grounds to consider the company a dependent company of the Issuer: share of the Issuer in the authorized stock of the company exceeds 20%

Issuer’s share in the charter capital of the legal entity: 37.97%

Issuer’s share of the ordinary shares of the subsidiary: 37.97%

This entity’s share in the Issuer’s charter capital: none

This entity’s share of the ordinary shares of the Issuer: none

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Gofman, Aleksandr Pavlovich

Born: 1956

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Novoseltsev Nikolay Fedorovich

Born 1959

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Kuzmin Oleg Egorovich

Born 1969

This person’s share in the Issuer’s charter capital: 5.71%

This person’s share in the total amount of Issuer’s ordinary shares: 5.71%

Kiba, Victor Ivanovich

Born: 1951

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Plastinin, Sergei Arkadievich

Born: 1968

This person’s share in the Issuer’s charter capital: 9.30%

This person’s share in the total amount of Issuer’s ordinary shares: 9.30%

Person performing the functions of individual executive body of the entity:

Kiba, Victor Ivanovich

Born: 1951

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Name: Opened Joint Stock Company “Nazarovskoe Milk”

Location: Russia, Krasnoyarsk region, Nazarovo, Arbuzova street, d.56

The grounds to consider the company a dependent company of the Issuer: share of the Issuer in the authorized stock of the company exceeds 20%

Issuer’s share in the charter capital of the legal entity: 63.53%

Issuer’s share of the ordinary shares of the subsidiary: 61.96%

This entity’s share in the Issuer’s charter capital: none

This entity’s share of the ordinary shares of the Issuer: none

Description of the principal subsidiary’s activities: production and sale of milk and sour milk products.

Members of the Board of directors of the legal entity:

Vlasenko, Yuriy Anatolevich

Born: 1968

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Erizhenko, Oleg Viktorovich

Born: 1969г.

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Nemirovskiy, Alexander Isidorovich

Born:1962

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Novoseltsev, Nikolai Fedorovich

Born: 1959

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Krivostchapova Larisa Sergeevna

Born: 1964

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Gandga Mikhail Karpovich

Born: 1947

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Lenshin Dmitriy Alexandrovich

Born: 1976

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Person performing the functions of individual executive body of the entity:

Erizhenko, Oleg Viktorovich

Born: 1969г.

This person’s share in the Issuer’s charter capital: 0%

This person’s share in the total amount of Issuer’s ordinary shares: 0%

Members of collective executive body of the entity:

Collective executive body is not provided

3.6. Composition, structure and cost of the Issuer’s fixed assets, information on acquisition, replacement, withdrawal of the fixed assets, as well as on all encumbrances of the Issuer’s fixed assets

3.6.1 Fixed assets

As of 30.06.2006

Group of fixed assets	Initial value, thousand RUR	Accumulated depreciation, thousand RUR
From 1 year to 2 years (incl.)	6	6
Over 2 years to 3 years (incl.)	52	43
Over 3 years to 5 years (incl.)	34 355	24 845
Over 5 years to 7 years (incl.)	6 873	3 442
Over 7 years to 10 years (incl.)	1 517	448
Over 10 years to 15 years (incl.)	31	7
Over 15 years to 20 years (incl.)	3	0
Over 20 years to 25 years (incl.)	30	16
With the value of less than RUR 10000	31	20
TOTAL	42 898	28 827

No revaluation of the fixed assets in the accounting quarter was held.

IV INFORMATION ON FINANCIAL AND ECONOMIC ACTIVITIES OF THE ISSUER

4.1 Results of the financial and economic activities of the Issuer

4.1.1 Profits and losses

Item		6 months of 2006
Revenue, thousand RUR		366150
Gross profit, thousand RUR		352814
Retained (net) profit, thousand RUR		154256
Return on equity, %		2,51
Return on assets, %		1,08
Net profit ratio, %		0,42
Return on products, sales, %		-1,24
Capital turnover		0,06
Uncovered loss as of the reporting date, thousand RUR		0
Uncovered loss as of the reporting date and balance-sheet total ratio		0

4.1.2 Factors having affected the amount of the proceeds from sale of goods, products, works, services and the amount of profits (losses) from the Issuer’s principal business.

Services, thou. rubles (excluding VAT)		6 moths of 2006
Licensing of trademarks under license agreements		344 928
Management consulting services		16 224
Software implementation services		1 682
Property lease		3 054
other		262
Total		366 150

The Issuer’s primary activity is the licensing of trademarks under license agreements. Royalty earnings depend on the total value of goods sold under trademarks owned by WBD Foods. License granting revenue continues to be the most significant part of total sale revenues in the 2 first quarters of 2006. The increase is a result of higher production volumes of dairy and juice products sold under the Issuer’s trademarks.

4.2. Liquidity of the Issuer

The following indicators are given to define the Issuer’s liquidity in the appropriate accounting period:

Item		6 months of 2006
Working capital, thousand RUR		-3 313 434
Non-current assets to net worth		1.53
Current ratio		32,10
Quick ratio		31.82
Debt-to-equity ratio		0,46

4.3. Size, structure and adequacy of the issuer’s equity and working capital

4.3.1. Size, structure and adequacy of the issuer’s equity and working capital

Acct No. old/new	Description, thousands RUR	Balance as per June 30, 2006
1	Authorized stock	880 000
2	Reserve capital	23250
3	Additional capital	4958622
4	Retained earnings in the current year	154256
5	Retained earnings in the previous years	202653
6	Loss in the previous years	0
7	Targeted financing and revenues	0
8	Reserves for deferred expenses and payments	12813
	Total:	6231594

4.3.2. Investments of the Issuer

4.3.2.1. Long-Term Investments

Participatory interests and shares

	Balance as per June 30, 2006
COMPANY NAME	in thousands RUR	Quantity of Securities	Type of Securities	Issuer’s share in the authorized stock, %
1	2	3	4	5
OJSC Bishkeksut	32 007	1 166 480	Shares	39.66
Kharkov Dairy OJSC	556,386	1,501,225,597	shares	99,94
Karasuk Milk CJSC	4 408	350 437	Shares	37,97
Gulkevichsky Maslozavod ZAO”	9 266	1 574	Shares	52.24
Rodnik PAG ZAO	346 108	20 000	Shares	100.00
CJSC Trading Company WBD	240 206	985	Shares	83.19
Burynsky Powdered Milk-Producing Plant OJSC	54 825	13 038 478	Shares	76.00
Vladivostok Dairy OJSC	31 119	670 995	Shares	97.44
ZDMP OJSC	352,526	8,384	Shares	45.10
Lianozovo Dairy OJSC	997 379	203 048	Shares	98.02
Nizhny Novgorod Dairy OJSC	9 417	232 500	Shares	44.59
Dairy OJSC	406 891	1 254 392	Shares	70.47
Baltic Milk dairy OJSC	367 262	2 500 000	Shares	100.00
Tuymazinsky Milk Plant OAO	47 445	40 067 779	Shares	85.00
Ufamolagroprom OJSC	96 062	29 563 200	Shares	47.70
TSMK OJSC	338 952	29 415	Shares	34.95
KGMZ No.3 OJSC	276 487	206 355 896	Shares	94.88
Valdai Sanctuaries Ltd	300 269	0	Contribution to the authorized stock	100.00
Obninsky Dairy Plant OJSC	183 538	109398	Shares	66,33
Kursk experimental baby food plant, OJSC	100114	0	Contribution to the authorized stock	100
LLC “Wimm-Bill-Dann Central Asia-Amity”	50		Contribution to the authorized stock	100
Total:	5,131,417	1,796,798,558

Long-term loans

No.	Company Name	Long-Term Investment Type	Total Loans as per September 30, 2005, in thousands RUR	Amount of interest as per September 30, 2005, in thousands RUR	Repayment Date
1	Kharkov Dairy OJSC	revolving credit	3,274	96	01.07.2008
2	Karasuk Milk CJSC	revolving credit	9698	76	31.12.2008
3	Rubtsovsk Diary CJSC	revolving credit	541,435	23,019	31.12.2008
4	TK Wimm-Bill-Dann CJSC	revolving credit	352,291	3,344	31.12.2008
5	Vimm-Bill-Dann Toshkent Ltd	revolving credit	73,638	410	30.06.2008
6	OJSC “Bishkeksut	revolving credit	0	29	30.06.2008
7	Vladivostok diary OJSC	revolving credit	2,238	12	31.12.2008
8	Vladivostok diary OJSC	revolving credit	5,370	49	31.05.2007
9	OJSC “Zavety Ilicha”	revolving credit	69,345	3,550	31.12.2009
10	OJSC “Kiev city diary plant #3”	revolving credit	0	153	01.07.2008
11	OJSC “Lianozovo diary”	revolving credit	1,198,758	11,686	31.12.2008
12	“Nizhegorodskiy” Diary OJSC	revolving credit	0	0	31.12.2008
13	“Baltic milk” diary OJSC	revolving credit	572,609	109	31.12.2008
14	Diary OJSC	revolving credit	370,800	3,456	31.12.2008
15	Novokuibyshevskmoloko OJSC	revolving credit	16,546	4,283	31.12.2008
16	“Za mir I trud” OJSC	revolving credit	49,804	389	31.12.2009
17	Siberian milk OJSC	revolving credit	356,467	90,448	31.12.2008
18	Trud OJSC	revolving credit	12,000	197	31.12.2009
19	Tuimazy diary OJSC	revolving credit	2,429	22	31.12.2008
20	Ufamolagroprom OJSC	revolving credit	64,292	469	31.12.2008
21	Tsaritsino diary OJSC	revolving credit	0	0	31.12.2008
22	Atamanskoe LLC	revolving credit	114,829	5,777	31.12.2009
23	WBD Mineral water LLC	revolving credit	14,713	598	31.12.2007
24	Valdai sanctuaries LLC	revolving credit	482,730	3,769	31.12.2008
	TOTAL:		4,313,266	151,940

Total amount of Issuer’s Long-Term Investments (thou. RUR): 9 444 684

4.3.2.2. Short-term investments (debt securities)

No.	Company Name	Long-Term Investment Type	Total Loans as per June 30, 2006, in thousands RUR	Quantity of notes
1	Fruktopak CJSC	promissory note	690,000	69
	TOTAL:		690,000	69

Loans granted

Long-term loans under revolving credit (short-term part) thousands RUR	Long-Term Investment Type	Total Loans as per June 30, 2006, in thousands RUR	% Amount of interest as per June 30, 2006,	Repayment Date
1	3	4	5	6
Fruktopak CJSC (short-term)	revolving credit	39,335	0	31.12.2006
Ramenskiy diary CJSC (short-term)	revolving credit	406,293	932	31.12.2006
Valdai sanctuaries LLC (short-term)	revolving credit	23,297	109	31.12.2006
Baby food experimental plant LLC	revolving credit	13,500	686	31.12.2006
OJSC “Zavety Ilicha”	revolving credit	4,500	62	31.12.2006
“Za mir I trud” OJSC	revolving credit	1,500	32	31.12.2006
Atamanskoe LLC	revolving credit	4,500	62	31.12.2006
Total		492,925	1,883

Deposit balances

	Investment Type	Total Investments as per September 30, 2005, in thousands RUR	Date of grant	Repayment Date
Dated 28.12.05	deposit	0	28.12.05	06.02.2006
Dated 06.02.06	deposit	0	06.02.06	07.02.2006
Dated 07.02.06	deposit	0	07.02.06	09.03.2006
Dated 28.12.05	deposit	0	29.12.05	07.02.2006
Dated 17.03.06	deposit	0	17.03.06	10.05.2006
Dated 03.04.06	deposit	0	03.04.06	10.05.2006
Dated 04.04.06	deposit	0	04.04.06	10.05.2006
02/01 (frame agreement)	deposit	0	07.02.2006	09.03.2006
No 2150	deposit	0	28.12.2005	28.03.2006
No 2151	deposit	0	28.12.2005	28.03.2006
No 2170	deposit	0	14.04.2006	15.05.2006
No 2178	deposit	0	11.05.2006	29.05.2006
No 2184	deposit	0	17.05.2006	19.06.2006
No 2186	deposit	0	29.05.2006	19.06.2006
No 2195	deposit	200,000	27.06.2006	02.11.2006
31-007/07/68-06	deposit	800,000	30.05.2006	03.07.2006
31-007/07/282	deposit	0	28.12.2005	04.04.2006
31-007/07/283	deposit	0	28.12.2005	04.04.2006
810/77/52	deposit	300,000	29.06.2006	08.12.2006
14-D	deposit	0	28.12.2005	04.04.2006
46.D07/05.274	deposit	0	28.12.2005	09.03.2006
05.D07/06.22	deposit	0	31.01.2006	02.03.2006
317	deposit	300,000	27.06.2006	04.10.2006
Total		1,600,000

Total short-term investments of the issuer: 2 782 925 thousands RUR

4.3.3. Intangible Assets of the Issuer

As of June 30, 2006

No.	Intangible Assets	Original Cost of Intangible Assets, thousand rubles	Depreciation of Intangible Assets, thousand rubles	Depreciated Cost of Intangible Assets, thousand rubles
1	Exclusive rights on trademarks	23 753	5 953	17 800
2	Exclusive rights on automated information system RAT	6 716	6 716	0
3	Exclusive rights on automated information system LIASOFT	7 710	7 490	220
4	Annual report copyright	625	92	533
5	Internal website	206	23	183
6	Exclusive right for graphic presentation and design logo	658	92	566
7	Others	160	0	160
	Total	39 828	20 366	19 462

4.4. Information on the Issuer’s R&D Policies and Expenses, Including Licenses, Patents, New Products, and Research

We invest significant financial and human resources in new product development, focusing on long-term strategic development projects that are expected to create innovative products and technologies. As of December 31, 2004, our product and technologies development departments located at Lianozovo Dairy Plant had 41 employees and our new juice product and quality department at the Ramenskiy Plant had 31 employees. These departments often cooperate with third parties such as Russian research institutions, specialized research firms and suppliers. In 2005, 2004 and 2003 we spent approximately $1.3 million, $0.6 million and $1.2 million on activities associated with new product development.

We keep track of our intellectual property and monitor the protection of our brand names and instances of copyright infringement in Russia and the CIS. The extent to which we seek protection of our trademarks outside of Russia and the CIS depends on the significance of the brand and jurisdiction concerned.

Protection of intellectual property rights is one of the key elements of the Issuer’s R&D policies.

1. Information on the creation of intellectual property within the 2 quarter of 2005

1.1. Applications for trademarks filed :

· trademarks filed within Russia – 7

trademarks filed within Ukraine – 2

· Applications for patent for industrial design filed within Russia – 1;

· International applications for patent for utility models filed – none.

2. Information on legal protection obtained for intellectual property

2.1. Trademarks

No	Certificate No	Date of registration	Country of filing	Description of trademark	Valid Until
0	303934	30/03/06	Russia	NEO (liter.)	20/02/13
1	303935	30/03/06	Russia	NEO (comb.)	03/03/13
2	305416	24/04/06	Russia	J-7 Exotic (comb.)	22/07/14
3	305475	25/04/06	Russia	Agumama (lit.)	11/02/15
4	305601	26/04/06	Russia	Bio Max FreeLAKT (three-diment.)	07/09/14
5	305602	26/04/06	Russia	Bottle (square buttom) (three-diment.)	22/09/14
6	305613	26/04/06	Russia	Vitamin complex (comb.)	16/03/15
7	305783	27/04/06	Russia	NEO (comb.)	26/03/14
8	305784	27/04/06	Russia	Chudo shoko (lit.)	20/07/14
9	305796	27/04/06	Russia	J-7 Bio (comb.)	08/04/15
10	306314	05/05/06	Russia	Melnichka (lit.)	31/05/14
11	306460	10/05/06	Russia	Bio Max (comb.)	18/04/15
12	307167	24/05/06	Russia	Double advantage of biofiber’s bioculture (comb.)	18/04/15
13	308311	08/06/06	Russia	Live! Play! (lit.)	28/03/15
14	308809	20/06/06	Russia	Chudo (glazed cheese curd) (comb.)	17/06/15
15	308810	20/06/06	Russia	Mama’s health – baby’s health (lit.)	27/06/15
16	308811	20/06/06	Russia	apishariki (lit.)	27/06/15
17	308921	21/06/06	Russia	Agu, mama! (lit.)	11/02/15
18	884763	12/01/06	WIPO	Lamber (lit.)	12/01/16
19	61682	15/05/06	Ukraine	NEO Bio Vit (comb.)	24/03/14
20	3955097	28/01/06	China	Transcription hieroglyph of “Wimm-Bill-Dann” 30 class (lit.)	27/01/06
21	3955098	14/01/06	China	Transcription hieroglyph of “Wimm-Bill-Dann” 29 class (lit.)	13/01/16
1.	3955107	14/01/06	China	Articulation hieroglyph “Wimm-Bill-Dann” 29 class (lit.)	13/01/16
2.	3955109	14/01/06	China	Transcription hieroglyph of “Wimm-Bill-Dann” 32 class (lit.)	13/01/16
3.	3955802	28/01/06	China	Transcription hieroglyph of “J-7” 32 class (lit.)	27/01/16
4.	3955803	28/01/06	China	Transcription hieroglyph of “J-7” 30 class (lit.)	27/01/16
5.	3955805	28/01/06	China	Articulation hieroglyph “Wimm-Bill-Dann” 32 class (lit.)	27/01/16
6.	3955806	28/01/06	China	Articulation hieroglyph “Wimm-Bill-Dann” 30 class (lit.)	27/01/16
7.	3,056,053	31/01/06	USA	WIMM-BILL-DANN is what you want 32 class (comb.)	23/10/11
8.	3,068,524	14/03/06	USA	Chudo-Yagoda (lit.)	12/02/11

Patents for industrial designs received in the reporting quarter.

No		Patent #		Registration date		country		Description of the object		Valid through
1		59099		16/05/06		Russia		Bottle (2 types)		08/06/14

2.2. Patents for inventions and utility models were not received in the reporting period.

3. Information on issue of licenses for intellectual property in the second quarter of 2006.

No	Licensee	TM quantity	Contract registration #	Contract registration date	Comments
1	Kharkov Dairy OJSC	2	No 4037	17/04/06	Valid in Ukraine
2	Vimm-Bill-Dann Toshkent Ltd	7	No RD0008202	14/04/06
3	Rubtsovsk Diary CJSC	6	No SMG25/2006	06/06/06	Valid in Uzbekistan
4	Experimental baby food plant LLC	3	No RD0008266	18/04/06

4. Information on extension of the validity of title of protection for intellectual property in the second quarter of 2006.

The inquiry for patent’s No 27316 validity period extension for utility model was submitted in Rospatent.

4.5. Analysis of the trends of development in the area of primary activity of the Issuer.

Markets

The Russian economy continues to experience growth, with gross domestic product growing at rates of 6.4%, 7.1% and 7.3% in 2005, 2004 and 2003, respectively. Disposable income also continues to grow, although disposable income levels in the regions will continue to lag behind Moscow levels. We believe these macroeconomic improvements in Russia are supporting the favorable industry trends we have seen. Dairy consumption is shifting towards packaged products whereas the share of unpackaged dairy products is steadily decreasing. In addition, consumers in Russia have, in recent years, been demanding more juice-containing, dessert and enriched products. We expect the increasing preference for juice over fresh fruit, which generally accompanies increased incomes, will result in the consumption of vitamin-rich products with different tastes and nutritional characteristics, including increased demand for juice-containing beverages. However, both the dairy and juice markets will continue to become more competitive, with producers engaging in aggressive advertising and marketing strategies, as well as making substantial investments in modernizing packaging and manufacturing equipment. The dairy industry is also seeing the stronger presence of small regional producers. In 2005, demand for baby food products increased significantly and, as a result, we created a separate baby food segment. Prior to 2005, baby food was part of our dairy segment. We believe that the baby food market, which increased by 29% in terms of value in 2005, will continue to grow in 2006 driven mainly by stronger sales in the regional markets. However, we also expect that the baby food market will become more competitive in the near future, which could negatively impact our profit margins.

Dairy Segment

In 2005, raw milk prices increased by approximately 14% in ruble terms, which is 12% in dollar terms. We expect the price for raw milk to continue to increase albeit at a lower pace in ruble terms in 2006. If we are unable to increase the selling prices of our dairy products, raw milk prices could negatively impact our profit margins. We believe the higher raw milk prices are due to increasing demand for raw milk from national and regional dairy producers, coupled with the low levels of dairy cattle stock in Russia. However, we expect that the differences in seasonal prices of raw milk in 2006 will be lower than in previous years. As in previous years, domestic dairy production in Russia suffered a year-on-year slump in 2005. The general decline was partly due to the reduction of dairy cattle in Russia but, in the first quarter of 2006, we witnessed an increase in the domestic production of raw milk compared to the same period in 2005. As the number of dairy cattle in Russia increases, we expect domestic dairy production to stop declining or even increase slightly. Although domestic raw milk production declined in 2005, dairy product sales increased in 2005. The most significant growth was seen in milk, kefir and curd dessert, as well as in the sale of cheese. Industry experts estimate that the Russian dairy market grew by 5.3% in 2005 and will grow by 4.2% in 2006, and that, due to inflation, growth will be higher in monetary terms than in actual volumes. The regional structure of Russia’s dairy market continued to shift in 2005, with dairy product sales increasing in regional markets at a more rapid rate than in Moscow and the Central region of Russia. We expect that the growth in regional dairy sales will continue to outpace growth in Moscow during 2006. Milk and kefir continue to be key drivers of the volume growth in our dairy segment. At the same time yogurts, dairy desserts and juice containing dairy drinks grew at a lower pace than we initially anticipated. However, we believe that the consumption of these higher margin products will continue to increase in 2006.

Market trends and competition. Overall, the Russian dairy market has been growing over the last three years. According to our estimates, the total market for packaged dairy products in Russia was 7.9 billion liters in 2003, 8.4 billion liters in 2004 and 8.7 billion liters in 2005. We believe that consumption may continue to increase at a more moderate pace, as rising household incomes in Russia may tend to bring about higher protein consumption and preferences for value-added products. In particular, Russian households have proven receptive to yogurt, enriched dairy products and dessert dairy products. Given the existing low per capita consumption, we see this market segment as providing an opportunity for growth. We also expect continued growth in the consumption of products with long shelf lives, including sterilized milk. Though some measure of consolidation is occurring in the Russian dairy industry, the milk processing sector in Russia remains fragmented and currently includes over 1,500

large, medium and small enterprises, according to IKAR. Due to the high degree of fragmentation, the market is very price competitive. In 1999, we responded to this competitive challenge by holding our prices constant in an inflationary environment. In addition, from 2000 to the present, we have expanded our distribution service, reduced our sales to wholesalers, increased our sales to retailers and increased advertising. We also remain committed to our regional expansion strategy and are constantly widening our regional product offerings as consumer spending is growing steadily in the regions. For example, in order to increase our market share in regional markets for our new premium segment yogurts and dairy desserts, we began selling these products during 2004 in several regions at introductory prices, making them more attractive both to distributors, retailers and final consumers. We believe that these strategies have increased public awareness of our products and helped us to continue to expand our market share without aggressive pricing. In the traditional dairy product markets, we compete primarily with local producers, such as Unimilk and Ochakovo Dairy Plant, as well as with a number of smaller producers in other regions of Russia. In the enriched dairy product market, we compete primarily with Groupe Danone, the Ochakovo Dairy Plant and Petmol. In the yogurt and desserts market and, to some extent, in the children’s product market, we compete with foreign producers such as Danone, Campina, Onken and Ehrmann who continue to invest in their businesses in Russia. We view the following producers as our primary competitors:

· Groupe Danone, a French company which is the most active foreign producer in Russia and aggressively promotes its products. It has a dairy plant in the Volga region where it produces yogurt, fruit yogurts and kefirs, as well as a dairy plant in the Moscow region. Its domestically produced and imported products are sold under the Danone brand name across Russia through its own distribution network. According to the 24 city AC Nielsen study, in 2005, Danone had a 25.8% market share in yogurt and dessert dairy products and a 14.3% overall market share in the Russian dairy product market in terms of value. Danone owns 9.9% of our outstanding shares in the form of ADSs.

· Unimilk, the second largest dairy holding company in Russia, founded in 2002 as a dairy division of Planeta Holding, controlled by Millhouse Capital. Unimilk has 17 dairy production facilities in Russia and two in Ukraine. Its largest production facility, St. Petersburg-based Petmol, produces a wide range of dairy products. According to the 24 city AC Nielsen study, in 2005, Unimilk had a 8.9% market share in traditional dairy products, a 2.3% market share in yogurt and dessert dairy products and a 6.7% overall market share in the Russian dairy product market in terms of value.

· Ochakovsky Dairy Plant, a Moscow based company and one of the largest dairy plants in Russia. It produces traditional dairy products and yogurts and desserts. According to the 24 city AC Nielsen study, in 2005, the Ochakovsky Dairy Plant had a 6.0% market share in traditional dairy products, a 2.3% market share in yogurt and dessert dairy products and a 4.5% overall market share in the Russian dairy product market in terms of value.

· Ehrmann, a German company producing yogurt products at its plant located in the Moscow region. Its brand names Ehrmigurt, Yogurtovich, Fruktovich and Uslada were developed specifically for Russian consumers. According to the 24 city AC Nielsen study, Ehrmann had an 8.2% market share by sales in yogurt and dessert dairy products in 2005 in terms of value. We believe that we generally have several advantages over other Russian producers, including a larger production capacity and higher quality products, as well as greater innovation, new product development, geographical coverage, centralized management and marketing capabilities. However, many other domestic producers tend to benefit in comparison to us from lower cost bases, including lower advertising and distribution costs, and, for certain consumers, a preferred image.

Beverage Segment

At the end of 2005, we witnessed price increases in juice concentrate and other ingredients resulting, in part, from bad harvests and poor weather conditions in juice-concentrate producing regions. We expect substantial price increases for juice concentrate and other materials during 2006, which would have a negative impact on our profit margins in the beverage segment. Also, as the ruble has appreciated against the euro in 2005 and a significant part of our concentrate and packaging material prices are denominated in euros, such costs of juice production were lower in 2005 than in 2004. Average selling prices of our juice products increased during 2005. We expect further increases in juice sales prices in rubles terms in 2006. In 2005, in order to increase our presence in the regions and to bolster market share among lower-middle income consumers, we successfully re-launched the “Lovely Garden” brand. We sponsored and promoted the brand through television commercial and print advertisements, which resulted in steady sales growth of the “Lovely Garden” juices and nectars. Although we expect further growth of juice sales to the lower-middle segment, which currently comprise 60% of the total market share, we believe that average selling prices in the regions will generally continue to be lower than average selling prices in Moscow and St. Petersburg due to the consumer preferences in the regions, where household incomes are typically lower, for lower price products, which have a negative effect on our gross margin. For the Central region of Russia where incomes are higher, we are focusing our efforts on providing beverage products that appeal to the upper-middle

and premium segment. We entered the mineral water market in 2003. We estimate that the mineral water market in Russia is growing at approximately 10% in volume a year. Our water division, which merged with our juice segment into a new beverage segment, in part, to diversify our range of product offerings to include lower-priced brands catering to the mass market. However, we still bottle premium brand water under the “Essentuki” brand, which is traditionally known to be used for medical purposes. The increase in cost of raw material and packaging is predicted to be substantial in 2006. These increased costs coupled with an increase in transportation and promotional and marketing expenses could negatively impact our profit margins and operating income in the beverage segment.V. Detailed information on the persons in the Issuer’s management and its business activities monitoring bodies and brief information on the Issuer’s staff (employees).

Market trends and competition. The Russian juice market grew steadily from the time of the dissolution of the Soviet Union until the 1998 financial crisis, following which there was a significant decrease in consumption from which the market had substantially recovered by 2000. The total market for juice products, defined as the total consumption of domestically produced and imported products, increased to 2,270 million liters in 2005, according to Business Analytica, from 2,030 million liters in 2004. We believe that rising household incomes in Russia and the increasing preference for juice over fresh fruits, which generally accompanies increased incomes, will encourage the consumption of vitamin-rich, value-added products with different tastes and nutritional characteristics. For example, according to the Business Analytica survey, in Moscow, which enjoys higher average per capita incomes than most other parts of Russia, the average consumption of juice in 2005 was approximately 40 liters per capita, as opposed to national per capital consumption of approximately 16 liters per capita. The most dynamic growth in recent years has been in the lower-middle price bracket, which we expect will continue to drive market growth in the foreseeable future.

The markets for juice products in Moscow, the Moscow region and St. Petersburg are relatively mature compared to other regions of Russia, and are expected to exhibit relatively modest growth rates in the future, with particular growth expected in the upper-middle product segment. We believe that growth opportunities lie in the regions of Russia with lower fresh fruit availability or rising household income, where we expect particular growth in the lower-middle product segment. We also believe that potential for growth lies in other CIS countries, which are relatively undeveloped in terms of juice consumption, such as Ukraine and countries in Central Asia. Given these market characteristics, we are pursuing a marketing strategy aimed at promoting juice drinking habits by emphasizing the health benefits. The operating environment has been challenging since the 1998 financial crisis. Competitive pressures have intensified because of the low purchasing power of households outside of Moscow and St. Petersburg and the rising number of domestic producers. We initially responded to this competitive challenge by holding our prices constant in an inflationary environment, as well as by introducing two new brands, one targeted at the middle-market price segment and the other at the mass-market price segment. In addition, we have been revising our juice distribution network, reducing the number of distributors we work with and maintaining relationships with distributors having direct distribution capabilities. We believe that, together with the launch of new products, the increased share of higher-priced products in our product mix, increased advertising, new packaging and increased production capacity, these strategies will increase public awareness of our products and our sales, which will allow us to expand our market share at acceptable prices. At the same time, however, while our profit margins on our beverage products increased in 2003, 2004 and 2005, our sales volumes decreased during these periods due to vigorous market competition from domestic and foreign producers and our ongoing overhaul of our juice distribution network. Increased competition among juice producers in Russia has caused our sales volumes in our beverage segment to decline, which has adversely affected and may continue to adversely affect our results of operations and Consumer preference for low-price juice products and the volatility of certain raw materials required for juice production may cause our profit margins to decline and have a material adverse affect on our results of operations. Our principal competitors in the Russian juice market include the following companies:

· Multon is a St. Petersburg-based company that, according to the Business Analytica survey, had a 23.3% market share in Russia during 2005. Its “Rich,” “Kind” and “Niko” brands entered the Moscow market in 1998 and since then have gained significant market shares primarily through aggressive pricing policies and advertising. Multon was purchased by Coca-Cola in 2005.

· Lebedyansky is based in the Lipetsk region and, according to the Business Analytica survey, had a 27.6% market share in Russia during 2005. Its “Tone,” “I,” “Fruit Garden” and other brands have become well-known among Russian consumers. Lebedyansky recently acquired a majority stake in Progress, a juice concentrate producer. Lebedyansky raised over $150 million in its initial public offering in Russia in 2005.

·Nidan is a Novosibirsk-based Russian company that, according to the Business Analytica survey, had a 15.4% market share in Russia during 2005.

Several foreign companies invested in domestic production facilities during 2001, including Coca-Cola, which purchased local producer Multon, one of our primary competitors, in 2005. During 2004, PepsiCo aggressively entered the Russian market with its “Tropicana” brand juices, which it produces domestically at the Nidan plant in the Novosibirsk region. Domestic production by foreign producers in Russia reduces the competitive advantages that we have over foreign competitors without domestic production capability. However, we believe that we can compete successfully against foreign producers. We offer our customers quality juice products with a range of different tastes and nutritional characteristics. Further, we have a quality brand portfolio which ranks highly in almost all market segments, and we plan to continue to devote significant resources to advertising and marketing our leading brands. The market for mineral water is characterized by rising consumption, as well as many local brands that are strong in their respective home regions. According to Business Analytica, the total market for bottled water in Russia increased to approximately 2,237 million liters in 2005 from 2,033 million liters in 2004. Russian bottled water producers dominated the market, with a 68.5% market share in terms of value, while the share of the two market leaders, PepsiCo and Coca-Cola, accounted for 31.5%, according to a Business Analytica survey of Russia’s 10 largest cities in September through October 2005. According to the same survey, we were among the top ten water producers in Russia, with a 3.2% market share by value. The market growth in recent years has been driven mainly by the increased consumption of bottled water sold in large packaging, which is consumed for drinking, as well as cooking purposes. We believe that this market will continue to expand in the coming years due to the growing income per capita in Russia and increasing concern among the population regarding food and water quality.

Baby food products

In 2005, we created a separate baby food segment. Prior to 2005, baby food was part of our dairy segment. We are currently developing our baby food division by focusing on the regional expansion of our sales and increased production, including through co-packing arrangements with certain third-party facilities. We also plan to launch new products, as well as expand the range of our existing products. To further our development strategy, we acquired the Experimental Baby Food Plant in the Kursk region in July 2005 and are currently modernizing the facility. The plant sources certain of its raw materials from its own fruit orchards, and our acquisition of the plant will allow us to expand our baby food product range to include fruit and vegetable purees.

Market trends and competition. The baby food market in Russia has been experiencing dynamic growth in recent years, supported by improved market conditions, including rising average incomes, more stringent government regulation of baby food production and the introduction of various state-supported social programs aimed at improving domestic birth rates and providing maternity assistance. As a result of these improved conditions and increased consumer demand, domestic production of baby food products has increased over the last few years, with certain of Russia’s major juice and dairy producers increasing their production capacity and introducing new baby food brands. Foreign producers are also active in the market and, similar to the dairy and juice markets, several such producers have begun to focus on establishing local production capacity in Russia. We believe that market consolidation is likely over the next several years, with the largest foreign and domestic baby food producers acquiring smaller regional producers in order to increase their production capacity. In addtion, we believe continued market growth will lead to the emergence of product price segments similar to those in the juice and dairy markets. Overall, the Russian baby food market has been growing over the last three years. According to our estimates, the total market for baby food products in Russia was 803,000 tons in 2003, 842,000 tons in 2004 and 869,000 tons in 2005. Given the existing low per capita consumption of products specifically produced for babies and the fact that spending on such products increases as family incomes grow, we see this market segment as providing an opportunity for growth. Another factor driving the growth of the Russian baby food market is the increase in the number of infants aged four and under by 4% in 2005. We were the market leader in liquid dairy products for infants in Russia in 2005, with an approximately 56% market share, followed by Unimilk with an approximately 14% market share. Nestle and Nutricia were the market leaders for powdered formula and cereals, with approximately 50% and 25% market shares, respectively. The preceding market data, in each case, is according to MEMRB. Local producers of baby food products are also active in regional markets, the largest of which are the Zelenodolsk Baby Food Dairy Plant, Ekaterinburg Dairy No. 1, Novosibirsk Dairy and Ratmir Tver Dairy. According to a consumer study conducted in August 2004 by GfK Rus, a marketing research institute, price is currently not the main factor considered by purchasers of baby food products when it comes to choosing brands and forming brand loyalties. Rather, the main factors influencing consumer decisions are quality, brand image, product uniqueness, convenience, availability of desired flavors and product hypoallergenicity. In addition, as competitoin within the market has increased, factors such as flavor and product innovations, beneficial additives and package formats have also begun to influence consumer choice. Among the leading producers of baby food products in Russia are foreign producers such as Nestle, Nutricia, Heinz and Hipp, which generally operate in all of the main baby food categories, as well as domestic producers such as us, Azov KDP, MK Tikhoretsky and Lebedyansky, which generally operate in select baby food product categories. According to MEMRB, the

foregoing producers held an approximately 78% market share in the Russian baby food market during 2004 in terms of value. According to our estimates, the market share of foreign producers declined in 2004 and 2005, while the market share of domestic producers increased. However, sales of baby food products in Russia increased during this period for both foreign and domestic producers due to the overall growth in the market. In addition to our “Agusha” brand, other brands competing in the infant liquid dairy products market include baby food brands “Rastishka,” “Prince,” “Skeletony,” “Erelash” and others, although our main competition in this category consists of adult dairy products. In the supplemental infant foods category, we compete with brands including “Azov,” “Vinni” and “FrutoNyanya.” In the cereals category, our main competitors consist of brands from foreign producers, including Nutricia, Kolinska, Podravka and Heinz. The main producer of baby drinking water is Zelnogradsky Istochnik, producing under the “Malyshka” brand.

5.1. Data on structure and authority of Issuer’s management/administration

Structure of Issuer’s management / administration.

1. General Meeting of Shareholders;

2. Board of Directors;

3. Chairman of the Management Board;

4. Management Board

Competence of the Issuer’s general meeting of shareholders (participants) pursuant to its charter (constituent documents):

…. The following are assigned to the competence of the General Meeting of Shareholders:

1) amendment of the Company’s charter or approval of a restated version of the Company’s charter;

2) reorganization of the Company;

3) liquidation of the Company, appointment of a liquidation committee, and approval of interim and final liquidation balance sheets;

4) determination of the number of seats on the Board of Directors, election of its members, and early termination of their powers;

5) determination of the number, par value, and category (class) of authorized shares and the rights granted by such shares;

6) increasing the charter capital by means of an increase in the par value of shares or by means of placement of additional shares, unless increases in the charter capital by means of placement of additional shares are assigned by this charter in accordance with the JSC Law to the competence of the Board of Directors;

7) decreasing the charter capital by means of a decrease in the par value of shares, by acquisition of some shares by the Company for the purpose of reducing their total number, or by cancellation of shares acquired or redeemed by the Company;

8) election of members of the Audit Committee and early termination of their powers;

9) approval of the Company’s auditor;

10) approval of annual balance sheets and annual financial statements, including reports on profits and losses (profit and loss statements) of the Company; distribution of profits, including payment (declaration) of dividends, and losses of the Company on the basis of results of the fiscal year;

11) determination of the procedure for holding the General Meeting of Shareholders;

12) election of members of the Counting Committee and early termination of their authorities;

13) splitting and consolidation of shares;

14) adoption of resolutions approving transactions in the cases provided for by article 83 of the JSC Law;

15) adoption of resolutions approving major transactions in the cases provided for by article 79 of the JSC Law;

16) acquisition by the Company of placed shares in the cases provided for by the JSC Law;

17) adoption of resolutions concerning participation in holding companies, financial-industrial groups, associations, and other unions of commercial organizations;

18) approval of internal documents regulating the activity of the Company bodies;

19) decision of other questions provided for by the JSC Law.

Competence of the Issuer’s Board of Directors pursuant to its charter (constitutive documents):

…… The following are assigned to the competence of the Board of Directors (Supervisory Board) :

1) determination of the priority directions of the Company’s activities;

2) calling of annual and extraordinary General Meetings of Shareholders , except in the cases provided for by article 55.8 of the JSC Law;

3) approval of the agenda of the General Meeting of Shareholders;

4) determination of the date of preparation of the list of persons entitled to participate in the General Meeting of Shareholders, and other issues, assigned to the competence of the Board of Directors in accordance with the provisions of chapter VII of the JSC Law and associated with preparation for and holding of the General Meeting of Shareholders;

5) placement of bonds and other issued securities by the Company in the cases provided for by the JSC Law;

6) determination of the price (monetary value) of property and the price of placement and redemption of issued securities in the cases provided for by the JSC Law;

7) acquisition of shares, bonds, and other securities placed by the Company in the cases provided for by the JSC Law;

8) formation of the executive bodies of the Company and early termination of their authorities—election of the Chairman of the Management Board and appointment of the members of the Management Board,

9) determination of the amounts of compensation and reimbursement to be paid to the executive bodies of the Company—the Chairman of the Management Board and the members of the Management Board;

10) recommendations on the amounts of compensation and reimbursement to be paid to members of the Audit Committee and determination of the amount to be paid for the services of the auditor;

11) recommendations on the amount of the dividend on shares and the procedure for its payment;

12) utilization of the reserve fund and other funds of the Company;

13) approval of internal documents of the Company, with the exception of internal documents whose approval is assigned by the JSC Law to the competence of the General Meeting of Shareholders or assigned by this Charter to the competence of the Company’s executive bodies;

14) creation of branches and opening of representative offices of the Company;

15) approval of major transactions in the cases provided for by chapter X of the JSC Law;

16) approval of the transactions provided for by chapter XI of the JSC Law;

17) approval of the Company’s registration body and the terms of the contract with the registration body, and termination of the contract with the registration body;

18) other issues provided for by the JSC Law and Company’s charter….

Competence of the Issuer’s individual and collective executive bodies in accordance with its charter (constitutive documents):

“ 17.1. Management of the Company’s current activities shall be carried out by the individual executive body of the Company— the Director (Chairman of the Management Board)—and by the collective executive body of the Company—the Management Board. The executive bodies of the Company (the Chairman of the Management Board and the Management Board) shall be accountable to the Board of Directors and the General Meeting of Shareholders.

17.2. The Chairman of the Management Board shall perform the functions of Director of the Company and chairman of the collective executive body of the Company (the Management Board). The Chairman of the Management Board shall be the manager of the Company.

17.3. Assigned to the competence of the individual executive body of the Company are all issues of management of the Company’s current activities, with the exception of issues assigned to the competence of the General Meeting of Shareholders and the Board of Directors. The individual executive body of the Company shall organize the fulfillment of resolutions of the General Meeting of Shareholders and the Board of Directors.

17.4. The Chairman of the Management Board without a power of proxy shall act on behalf of the Company, including:

1) carry out operative management of the Company’s activities;

2) have the right of first signature on financial documents;

3) direct and dispose of the Company’s property for the purpose of assuring its current activity, within the limits established by this charter and current Russian legislation;

4) represent the Company’s interests both in the Russian Federation and elsewhere, including in foreign states;

5) approve staff lists, conclude employment contracts with the Company’s employees, and offer incentives to and impose penalties on the Company’s employees;

6) direct the work of the Management Board and preside at its meetings;

7) recommend candidates for the Management Board to the Board of Directors for approval;

8) complete transactions in the Company’s name, except in the cases provided for by the JSC Law and the Company’s charter;

9) issue powers of attorney on in the Company’s name;

10) open bank accounts of the Company;

11) organize the Company’s accounting and reporting;

12) issue orders and instructions binding upon all employees of the Company;

13) perform other functions necessary for achievement of the goals of the Company’s activities and assurance of its normal operation in accordance with current legislation and the Company’s charter, with the exception of the functions assigned by the JSC Law and the Company’s charter to other management bodies of the Company.

The Chairman of the Management Board shall be elected by the Board of Directors at its first meeting (after the election of a new Board of Directors at the annual General Meeting of Shareholders) for a term of 3 (three) years.

The term of office of the Chairman of the Management Board shall be counted from the time of his election by the Board of Directors to the time of election (reelection) of the Chairman of the Management Board three years later at the first meeting of the new Board of Directors (after the election of a new Board of Directors at the annual General Meeting of Shareholders).

In the event of early termination of the powers of the Chairman of the Management Board, the powers of the newly elected Chairman of the Management Board shall be effective until the election (reelection) of the Chairman of the Management Board at the first meeting of its new Board of Directors (after the election of a new Board of Directors at the annual General Meeting of Shareholders) 3 (three) years after the meeting of the Board of Directors at which the Chairman of the Board of Directors whose powers were terminated was elected.

The Management Board shall be the collective executive body of the Company and under the direction of the Chairman of the Management Board shall make decisions on the following issues pertaining to current management of the Company’s activities in the period between General Meetings of Shareholders and meetings of the Board of Directors:

· organization of the Company’s accounting and reporting, preparation and submission of annual reports and balance sheets of the Company to the Board of Directors for approval;

· decisions on issues pertaining to interaction with suppliers of goods and services for the Company and with consumers of its products;

· establishment of prices, rates, and commissions under contracts with suppliers and consumers;

· ensuring supplies of materials and equipment to the Company and supporting the sale of its products and services;

· keeping personnel records in accordance with current Russian legislation;

· monitoring the condition of buildings, premises, and equipment of the Company, as well as the movement of tangible and monetary valuables;

· the book-keeping of the Company’s archives, ensuring clerical work and the work of the Company’s office, and organization of document storage at the Company in accordance with current legislation;

· providing organizational and technical support for the activities of the General Meeting of Shareholders, the Board of Directors, and the Audit Committee;

· organizing the fulfillment of resolutions of the General Meeting of Shareholders and the Board of Directors;

· performance of orders and/or instructions of the Chairman of the Management Board in other matters associated with the current activities of the Company….”

The Issuer’s Corporate Governance Code – a document aimed at the regulation of Issuer’s corporate conduct was adopted by the Issuer’s Board of directors on December, 17 2004 (Minutes No.17-12, dated December 20, 2004).

Internet page to get access to the full text of the said document: http://www.wbd.ru/content/files/17012005/release-2-ru.pdf

Internet page to get access to the full text of the current wording of the Charter and internal documents, governing the activity of Issuer’s bodies:

http://www.wbd.ru/wbd/charter/

5.2. Information on the persons in the Issuer’s management bodies

Board of Directors

Chairman: David Iakobachvili

Members of Board of Directors:

Dubinin, Mikhail Vladimirovich
Born: 1969
Education: high

Positions over past 5 years:

Period: 2001-Present
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Member of Board of Directors

Period: 1997 - 2004
Organization: OJSC “Lianozovo Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1997 - 2003
Organization: OJSC “Ramenskoye Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1997 - 2002

Organization: ZAO “Grande-V”

Area of Operations: Production and sale of foods, juices and beverages
Position: Member of Board of Directors

Period: 1997 - 2005
Organization: OJSC “Tsaritsino Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1997 - 2005
Organization: OJSC “Children’s Dairy Products Factory”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1998 - 2001
Organization: CB “Expobank” LLC
Area of Operations: Banking services
Position: Member of Board of Directors

Period: 1998 - 2003
Organization: OJSC “Nizhny Novgorod Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1998 - 2003
Organization: OJSC “Vladivostok Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1998 - 2005
Organization: OJSC “Siberian Milk”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2000 - 2003
Organization: OJSC “Volga Brewery”
Area of Operations: Production and sale of low alcohol content products

Position: Member of Board of Directors

Period: 2000 - 2002

Organization: OJSC “Beer Industry of Primorie”

Area of Operations: Production and sale of beer, malt and kvass

Position: Member of Board of Directors

Period: 2000 - 2004

Organization: OJSC “Kiev City Dairy No. 3”

Area of Operations: Production and sale of dairy products

Position: Member of Supervisory Board

Period: 2000 - 2001

Organization: OJSC “East-European Insurance Agency”

Area of Operations: Insurance services

Position: Member of the Board of Directors

Period: 2001 - 2003

Organization: OJSC “Ufamolagroprom”

Area of Operations: Production and sale of dairy products

Position: Member of Supervisory Board

Period: 2001 - 2003

Organization: OJSC “Moskvoretsky Brewery”

Area of Operations: Production and sale of beer and malt

Position: Member of the Board of Directors

Period: 2001 - 2003
Organization: OJSC “Lianozovo Dairy”
Area of Operations: Production and sale of dairy products
Position: Adviser to Executive Director

Period: 2001 - 2005
Organization: OJSC “Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - 2005
Organization: DZAO “Karasuk Milk”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - 2004
Organization: ZAO “Rubtsovsk Dairy”
Area of Operations: Production and sale of dairy products and consumer goods
Position: Member of Board of Directors

Period: 2001 - 2005
Organization: OJSC “Bishkeksut”
Area of Operations: Production and sale of dairy products
Position: Member of the Board of Directors

Period: 2001 - 2004
Organization: “Central European Brewing Company” LLC
Area of Operations: Production and sale of beer, low alcohol content and alcohol-free beverages
Position: Member of Board of Directors

Period: 2002 - 2005
Organization: ZAO “Gulkevichi Creamery”

Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2002 - 2004
Organization: ZAO “Buryn milk powder factory”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2002 - 2003
Organization: OJSC “Novokubyshevsk Milk”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2004 - 2005
Organization: OJSC “TOSHKENT SUT”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2004 - Present
Organization: “Istrinskiye ruchyi”
Area of Operations: no data
Position: Member of Board of Directors

Period: 2004 - Present
Organization: “Nadegnyi fundament”
Area of Operations: no data
Position: Member of Board of Directors

Period: 2004 - Present
Organization: “S-trading”
Area of Operations: no data
Position: Member of Board of Directors

Period: 2004 - Present
Organization: “Petri-trade”
Area of Operations: no data
Position: Member of Board of Directors

Period: 2004 - Present
Organization: “Cliff-nedvighimosty”
Area of Operations: no data
Position: Member of Board of Directors

Period: 2004 - Present
Organization: “Nonprofit partnership “Residences of Benilux”
Area of Operations: no data
Position: Member of the Management Board

Period: 2004 - Present
Organization: “Autonomous nonprofit organization “International community council on awarding of “Golden falcon” medal”
Area of Operations: no data
Position: Member of the Management Council

The person’s share in the authorized capital stock of the Issuer: 5.71%
The person’s share of the Issuer’s common stock: 5.71%
The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of subsidiaries/dependent companies of the Issuer (the share in common stock of subsidiaries/dependent companies, belonging to such a person):

Name: Lianozovo Dairy OAO
Share: 0.049%
The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Orlov, Alexander Sergeevich
Born: 1948
Education: higher

Positions over past 5 years:

Period: 2001-Present
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Member of Board of Directors

Period: 1997 - 2005
Organization: OJSC “Tsaritsino Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1997 - 2003
Organization: OJSC “Ramenskoye Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1997 - Present
Organization: Children’s Dairy Products Factory
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1997 - 2004
Organization: OJSC “Lianozovo Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1997 - 2002
Organization: ZAO “Grande-V”
Area of Operations: Production and sale of foods, juices and beverages
Position: Member of Board of Directors

Period: 1998 - 2005
Organization: OJSC “Nizhny Novgorod Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1998 - 2001
Organization: CB “Expobank” LLC
Area of Operations: Banking services
Position: Member of the Board of Directors

Period: 1998 - 2003
Organization: OJSC “Vladivostok Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1998 - 2002
Organization: ZAO “PTG WBD”
Area of Operations: management and consulring services
Position: General Director

Period: 1998 - 2005
Organization: OJSC “Siberian Milk”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1998 - Present
Organization: OJSC “Kiev City Dairy No. 3”
Area of Operations: Production and sale of dairy products
Position: Supervisory Board Member

Period: 2000 - 2002
Organization: OJSC “Beer Industry of Primorie”
Area of Operations: Production and sale of beer, malt and kvass
Position: Member of Board of Directors

Period: 2003 - 2004
Organization: OJSC “Beer Industry of Primorie”
Area of Operations: Production and sale of beer, malt and kvass
Position: Member of Board of Directors

Period: 2000 - 2004
Organization: OJSC “Volga Brewery”
Area of Operations: Production and sale of low alcohol content products
Position: Member of Board of Directors

Period: 2001 - 2004
Organization: OJSC “Moskvoretsky Brewery”
Area of Operations: Production and sale of beer and malt
Position: Member of Board of Directors

Period: 2004 - 2004
Organization: OJSC “Kombinat of beer and non alcohol beverages “Shikhan”
Area of Operations: Production and sale of beer and malt
Position: Member of Board of Directors

Period: 2001 - 2003
Organization: OJSC “Lianozovo Dairy”
Area of Operations: Production and sale of dairy products
Position: Adviser to Executive Director

Period: 2001 - 2003
Organization: OJSC “Ufamolagroprom”
Area of Operations: Production and sale of dairy products
Position: Member of Supervisory Board

Period: 2003 - 2005
Organization: OJSC “Ufamolagroprom”
Area of Operations: Production and sale of dairy products

Position: Member of Supervisory Board

Period: 2001 - 2005
Organization: OJSC “Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - 2004
Organization: ZAO “Rubtsovsk Dairy”
Area of Operations: Production and sale of dairy products and consumer goods
Position: Member of Board of Directors

Period: 2001 - 2003
Organization: OJSC “Bishkeksut”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2002 - 2003
Organization: DZAO “Karasuk Milk”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2002 - Present
Organization: ZAO “Buryn milk powder factory”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2002 - 2005
Organization: ZAO “Gulkevichi Creamery”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2002 - 2005
Organization: OJSC “Novokubyshevsk Milk”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2004 - 2006
Organization: OJSC “TOSHKENT SUT”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2004 - Present
Organization: “Nonprofit partnership “Residences of Benilux”
Area of Operations: real estate
Position: Member of the Management Board

The person’s share in the authorized capital stock of the Issuer: 3.47%
The person’s share of the Issuer’s common stock: 3.47%
The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of subsidiaries/dependent companies of the Issuer (the share in common stock of subsidiaries/dependent companies, belonging to such a person):

Name: Lianozovo Dairy OAO
Share: 0.028%
The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Plastinin, Sergei Arkadievich
Born: 1968
Education: higher

Positions over past 5 years:

Period: 2001-2006
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Chairman of the Management Board

Period: 2001-Present
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Member of Board of Directors

Period: 1993 - 2005
Organization: OOO “Experimental association “Issa”
Area of Operations: Production and sale of consumer goods, food products, and products intended for manufacturing purposes
Position: General Director

Period: 1996 - 2004
Organization: ZAO “Production and Analytical Group “Rodnik”
Area of Operations: Production and sale of foods
Position: Executive Director

Period: 1997 - Present
Organization: OJSC “Tsaritsino Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1997 - 2002
Organization: ZAO “Grande-V”
Area of Operations: Production and sale of foods, juices and beverages
Position: Member of Board of Directors

Period: 1997 - Present
Organization: OJSC “Ramenskoye Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1997 - Present
Organization: OJSC “Lianozovo Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1998 - 2002
Organization: ZAO “PTG WBD”
Area of Operations: Managerial and consulting services
Position: Deputy General Director

Period: 1998 - 2001
Organization: CB “Expobank” LLC
Area of Operations: Banking services
Position: Member of Board of Directors

Period: 1998 - Present
Organization: OJSC “Vladivostok Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1998 - Present
Organization: OJSC “Siberian Milk”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 1998 - Present
Organization: OJSC “Nizhny Novgorod Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2000 - 2002
Organization: OJSC “Beer Industry of Primorie”
Area of Operations: Production and sale of beer, malt, and kvass
Position: Member of Board of Directors

Period: 2000 - 2004
Organization: OJSC “Volga Brewery”
Area of Operations: Production and sale of low alcohol content products
Position: Member of Board of Directors

Period: 2001 - 2004
Organization: OJSC “Moskvoretsky Brewery”
Area of Operations: Production and sale of beer and malt
Position: Member of Board of Directors

Period: 2001 - 2004
Organization: OOO “Central European Brewery”
Area of Operations: Production and sale of beer, low alcohol and alcohol-free beverages
Position: Member of Board of Directors

Period: 2000 - Present
Organization: OJSC “Kiev City Dairy No. 3”
Area of Operations: Production and sale of dairy products
Position: Member of Supervisory Board

Period: 2001 - Present
Organization: OJSC “Ufamolagroprom”
Area of Operations: Production and sale of dairy products
Position: Member of Supervisory Board

Period: 2001 - Present
Organization: OJSC “Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - Present
Organization: OJSC “Bishkeksut”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - Present
Organization: OJSC “Lianozovo Dairy”
Area of Operations: Production and sale of dairy products
Position: Adviser to Executive Director

Period: 2001 - 2004
Organization: ZAO “Rubtsovsk Dairy”
Area of Operations: Production and sale of dairy products and consumer goods
Position: Member of Board of Directors

Period: 2002 - Present
Organization: ZAO “Gulkevichi Creamery”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2002 - Present
Organization: DZAO “Karasuk Milk”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2002 - Present
Organization: OJSC “Novokubyshevsk Milk”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2004 - Present
Organization: “PIK Centre” Ltd
Area of Operations: Production and sale of dairy products
Position: General Director

Period: 2004 - 2005
Organization: “Agro-industrial holding company “Region development”
Area of Operations: Production and sale of dairy products
Position: General Director

Period: 2004 - 2006
Organization: “TOSHKENT SUT”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

The person’s share in the authorized capital stock of the Issuer: 9.30%
The person’s share of the Issuer’s common stock: 9.30%
The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of subsidiaries/dependent companies of the Issuer (the share in common stock of subsidiaries/dependent companies, belonging to such a person):

David Iakobachvili
Born: 1957
Education: higher (unfinished)

Positions over past 5 years:

Period: 2001-Present
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Chairman of Board of Directors

Period: 2001 - Present
Organization: OJSC “Vladivostok Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - Present
Organization: OJSC “Ramenskoye Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - Present
Organization: OJSC “Tsaritsino Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - 2003
Organization: OJSC “Lianozovo Dairy”
Area of Operations: Production and sale of dairy products
Position: Adviser to Executive Director

Period: 2001 - Present
Organization: OJSC “Lianozovo Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - Present
Organization: OJSC “Nizhny Novgorod Dairy”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - Present
Organization: OJSC “Children’s Dairy Products Factory”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - Present
Organization: OJSC “Siberian Milk”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - Present
Organization: OJSC “Bishkeksut”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2001 - Present
Organization: OJSC “Dairy”
Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2000 - 2001
Organization: OJSC “East-European Insurance Agency”
Area of Operations: Insurance services
Position: Member of Board of Directors

Period: 2000 - 2001
Organization: CB “Expobank” LLC
Area of Operations: Banking services
Position: Member of Board of Directors

Period: 2000 - 2004
Organization: OJSC “Volga Brewery”
Area of Operations: Production and sale of low alcohol products
Position: Member of Board of Directors

Period: 2000 - 2001
Organization: OJSC “Beer Industry of Primorie”
Area of Operations: Production and sale of beer, malt, and kvass
Position: Member of Board of Directors

Period: 2001 - 2005
Organization: OJSC “Moskvoretsky Brewery”
Area of Operations: Production and sale of beer and malt
Position: Member of Board of Directors

Period: 2004 - Present
Organization: OJSC “Kombinat of beer and non alcohol beverages “Shikhan”
Area of Operations: Production and sale of beer and malt
Position: Member of Board of Directors

Period: 1997 - Present
Organization: Airport Financial Services Limited
Area of Operations: Financial services
Position: Director

Period: 1997 - 2002
Organization: OOO “Trinity”
Area of Operations: Servicing and maintenance of machinery and equipment
Position: Member of Board of Directors

Period: 1999 - 2003
Organization: OJSC “Prospect”
Area of Operations: Catering
Position: Member of Board of Directors

Period: 2001 - 2002
Organization: ZAO “Metelitsa-Club”
Area of Operations: Organization and running of public catering establishments
Position: Member of Board of Directors

Period: 2002 -Present
Organization: OOO “Metelitsa-Club”

Area of Operations: Organization and running of public catering establishments
Position: Member of Board of Directors

Period: 2003 - 2005
Organization: ZAO “Auto-Sorok”
Area of Operations: Transport and expeditionary services
Position: Member of Board of Directors

Period: 2004 - Present
Organization: ZAO “RusAgroProject”
Area of Operations: Intermediate services
Position: Member of Board of Directors

Period: 2004 - Present
Organization: ZAO “Agrocomplex Gorky-2”
Area of Operations: production of agricultural production
Position: Member of Board of Directors

Period: 2004 - Present
Organization: ZAO Breeding farm “Naro-Osanovsky”
Area of Operations: production of agricultural production
Position: Member of Board of Directors

Period: 2001 - Present
Organization: OJSC “Ufamolagroprom”
Area of Operations: Production and sale of dairy products
Position: Member of Supervisory Board

Period: 2001 - 2004
Organization: ZAO “Rubtsovsk Dairy”
Area of Operations: Production and sale of food products and consumer goods
Position: Member of Board of Directors

Period: 2002 - Present
Organization: ZAO “Gulkevichi Creamery”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2002 - Present
Organization: OJSC “Novokubyshevsk Milk”
Area of Operations: Production and sale of dairy products
Position: Member of Board of Directors

Period: 2000 - Present
Organization: OJSC “Kiev City Dairy No. 3”
Area of Operations: Production and sale of dairy products
Position: Member of Supervisory Board

The person’s share in the authorized capital stock of the Issuer: 8.33%
The person’s share of the Issuer’s common stock: 8.33%
The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of subsidiaries/dependent companies of the Issuer (the share in common stock of subsidiaries/dependent companies, belonging to such a person):

Name: Lianozovo Dairy OAO
Share: 0.026%

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Yushvaev, Gavril Abramovich
Born: 1957
Education: higher

Positions over past 5 years:

Period: 2005-Present
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Member of Board of Directors

Period: 2004 - Present
Organization: ZAO “RusAgroProject”
Area of Operations: Intermediate services
Position: Member of Board of Directors

Period: 2004 - Present
Organization: ZAO “Agrocomplex Gorky-2”
Area of Operations: production of agricultural production
Position: Member of Board of Directors

Period: 2004 - Present
Organization: ZAO Breeding farm “Naro-Osanovsky”
Area of Operations: production of agricultural production
Position: Member of Board of Directors

The person’s share in the authorized capital stock of the Issuer: 17.13%
The person’s share of the Issuer’s common stock: 17.13%
The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of subsidiaries/dependent companies of the Issuer (the share in common stock of subsidiaries/dependent companies, belonging to such a person):

Name: Lianozovo Dairy OAO
Share: 0.076%
The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Scherbak, Vladimir Nikolaevich
Born: 1939
Education: higher

Positions over past 5 years:

Period: 1996 - 1999
Organization: Ministry of Agriculture and Food of the Russian Federation
Area of Operations: Management in the sphere of the agro industrial complex and food supplies
Position: First Deputy Minister

Period: 1999 - 2000
Organization: Government of the Russian Federation
Area of Operations: Executive functions

Position: Minister, Deputy Chairman of the Russian Federation Government

Period: 2001 - 2003
Organization: OJSC “Lianozovsky Dairy”
Area of Operations: Production and sale of dairy products
Position: Adviser to Executive Director

Period: 2001-Present
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Member of Board of Directors

Period: 2004-Present
Organization: AKB “Tusar”
Area of Operations: banking
Position: Chairman of the Board of Directors

The person’s share in the authorized capital stock of the Issuer: none
The person’s share of the Issuer’s common stock: none
The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none
The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none
The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Tutelyan, Victor Alexandrovich
Born: 1942
Education: higher

Positions over past 5 years:

Period: 1980 - 1999
Organization: Institute of Nutrition of the Russian Academy of Medical Sciences
Area of Operations: scientific research
Position: Deputy Director

Period: 2000 - Present
Organization: Institute of Nutrition of the Russian Academy of Medical Sciences
Area of Operations: scientific research
Position: Director

Period: 2001-Present
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Member of Board of Directors

Yasin, Eugeny Grigorievich
Born: 1934
Education: higher

Positions over past 5 years:

Period: 1998 - Present
Organization: State University - Higher School of Economics
Area of Operations: Teaching
Position: Scientific adviser

Period: 2001-Present
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Member of Board of Directors

Period: 2006-Present
Organization: Sever-Stal OJSC
Area of Operations: Production and sale of cars
Position: Member of Board of Directors

Period: 2006-Present
Organization: Otkrytie investitsii OJSC
Area of Operations: real estate
Position: Member of Board of Directors

Period: 2006-Present
Organization: Echo of Moscow CJSC
Area of Operations: broadcasting company
Position: Member of Board of Directors

Period: 2006-Present
Organization: NBF Expert insitute
Area of Operations: education
Position: President

Guy de Selliers
Born: 1952
Education: higher

Positions over past 5 years:

Period: 1999 - 2000

Organization: Fleming, Investment Bank
Area of Operations: Banking
Position: Head of European Department

Period: 2001 - 2003
Organization: Leader Capital
Area of Operations: Private stock fund
Position: Chairman

Period: 2001-Present
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Member of Board of Directors

Period: 2002 - Present
Organization: Norilsk Nickel
Area of Operations: Metallurgy
Position: Member of the Board of Directors

Period: 2003 - Present
Organization: HB Advisers (UK)
Area of Operations: Consulting services
Position: Chairman of the Board of Directors

Period: 2003 - Present
Organization: Chatura Furniture
Area of Operations: production and sale of furniture
Position: Member of the Board of Directors

Period: 2004 - Present
Organization: Solvey S.A.
Area of Operations: no data
Position: Member of the Board of Directors

Period: 2004 - Present
Organization: Apprion Group, Ltd
Area of Operations: no data
Position: Chairman of the Board of Directors

Period: 2004 - Present
Organization: Fortis Group
Area of Operations: no data
Position: member of the International supervisory board

Period: 2005 - Present
Organization: Partners in Hope (Charity)
Area of Operations: charity
Position: member of supervisory board

Period: 2006-Present
Organization: Allied Resources Inc
Area of Operations: mining
Position: Member of Board of Directors

Michael A. O’Neill
Born: 1945
Education: higher

Positions over past 5 years:

Period: 2000 - 2004
Organization: The Coca-Cola Icecek (Turkey)
Area of Operations: soft drinks
Position: Consultant

Period: 2002 - Present
Organization: EFES Breweries International (Holland)
Area of Operations: production and sale of beer
Position: Member of the Board of Directors

Period: 2002 - 2003
Organization: ZAO Torgoviy Dom Perekriostok
Area of Operations: retailing
Position: Member of the Board of Directors

Period: 2001-Present
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Member of Board of Directors

Period: 2003 - 2004
Organization: EFES Invest
Area of Operations: soft drinks
Position: Member of the Board of Directors

Period: 2003 - present
Organization: Coca Cola Icecek (Turkey)
Area of Operations: soft drinks
Position: Member of the Board of Directors

Ernest Linwood Tipton
Born: 1934
Education: higher

Positions over past 5 years:

Period: 1987 - 2003

Organization: International Dairy Foods Association
Area of Operations: Agriculture
Position: President

Period: 2002-Present
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Member of Board of Directors

Individual executive body and members of collective executive body:

Plastinin, Sergei Arkadievich
Born: 1968
Education: higher

Positions over past 5 years:

Period: 2001-2006
Organization: Wimm-Bill-Dann Foods OJSC
Area of Operations: Production and sale of foods, juices, and beverages
Position: Chairman of the Management Board

Period: 2001-Present

Organization: Wimm-Bill-Dann Foods OJSC

Area of Operations: Production and sale of foods, juices, and beverages

Position: Member of Board of Directors

Period: 1993 - 2005

Organization: OOO “Experimental association “Issa”

Area of Operations: Production and sale of consumer goods, food products, and products intended for manufacturing purposes

Position: General Director

Period: 1996 - 2004

Organization: ZAO “Production and Analytical Group “Rodnik”

Area of Operations: Production and sale of foods

Position: Executive Director

Period: 1997 - Present

Organization: OJSC “Tsaritsino Dairy”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 1997 - 2002

Organization: ZAO “Grande-V”

Area of Operations: Production and sale of foods, juices and beverages

Position: Member of Board of Directors

Period: 1997 - Present

Organization: OJSC “Ramenskoye Dairy”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 1997 - Present

Organization: OJSC “Lianozovo Dairy”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 1997 - 2005

Organization: OJSC “Children’s Dairy Products Factory”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 1998 - 2002

Organization: ZAO “PTG WBD”

Area of Operations: Managerial and consulting services

Position: Deputy General Director

Period: 1998 - 2001

Organization: CB “Expobank” LLC

Area of Operations: Banking services

Position: Member of Board of Directors

Period: 1998 - Present

Organization: OJSC “Vladivostok Dairy”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 1998 - Present

Organization: OJSC “Siberian Milk”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 1998 - Present

Organization: OJSC “Nizhny Novgorod Dairy”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2000 - 2002

Organization: OJSC “Beer Industry of Primorie”

Area of Operations: Production and sale of beer, malt, and kvass

Position: Member of Board of Directors

Period: 2000 - 2004

Organization: OJSC “Volga Brewery”

Area of Operations: Production and sale of low alcohol content products

Position: Member of Board of Directors

Period: 2001 - 2004

Organization: OJSC “Moskvoretsky Brewery”

Area of Operations: Production and sale of beer and malt

Position: Member of Board of Directors

Period: 2004 - 2004

Organization: OJSC “Kombinat of beer and non alcohol beverages “Shikhan”

Area of Operations: Production and sale of beer and malt

Position: Member of Board of Directors

Period: 2001 - 2004

Organization: OOO “Central European Brewery”

Area of Operations: Production and sale of beer, low alcohol and alcohol-free beverages

Position: Member of Board of Directors

Period: 2000 - Present

Organization: OJSC “Kiev City Dairy No. 3”

Area of Operations: Production and sale of dairy products

Position: Member of Supervisory Board

Period: 2001 - Present

Organization: OJSC “Ufamolagroprom”

Area of Operations: Production and sale of dairy products

Position: Member of Supervisory Board

Period: 2001 - Present

Organization: OJSC “Dairy”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2001 - Present

Organization: OJSC “Bishkeksut”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2001 - Present

Organization: OJSC “Lianozovo Dairy”

Area of Operations: Production and sale of dairy products

Position: Adviser to Executive Director

Period: 2001 - 2004

Organization: ZAO “Rubtsovsk Dairy”

Area of Operations: Production and sale of dairy products and consumer goods

Position: Member of Board of Directors

Period: 2002 - Present

Organization: ZAO “Gulkevichi Creamery”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2002 - Present

Organization: DZAO “Karasuk Milk”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2002 - Present

Organization: OJSC “Novokubyshevsk Milk”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2004 - Present

Organization: “PIK Centre” Ltd

Area of Operations: Production and sale of dairy products

Position: General Director

Period: 2004 - 2005

Organization: “Agro-industrial holding company “Region development”

Area of Operations: Production and sale of dairy products

Position: General Director

Period: 2004 - 2006

Organization: “TOSHKENT SUT”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

The share of this person in the authorized capital stock of subsidiaries/dependent companies of the Issuer (the share in common stock of subsidiaries/dependent companies, belonging to such a person):

Name: Lianozovo Dairy OAO

Share: 0.049%

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Kagan Marina Gennadyevna

Born: 1968

Education: higher

Positions over past 5 years:

Period: 1998 -2001

Organisation: Gavin Anderson&Company

Area of Operations: Consulting services

Position: Member of the Board of directors

Period: 2002-2004

Organisation: Shared value

Area of Operations: Consulting services

Position: Partner

Period: 2004 -2004

Organisation: Wimm-Bill-Dann Foods OJSC

Area of Operations: Production and sale of foods, juices, and beverages

Position: Head of the public relations Department

Period: 2004 -Present

Organisation: Wimm-Bill-Dann Foods OJSC

Area of Operations: Production and sale of foods, juices, and beverages

Position: Head of the public and investor relations Department, Member of the Management board

The person’s share in the authorized capital stock of the Issuer: none

The person’s share of the Issuer’s common stock: none

The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none

The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none
The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Kuzymin Oleg Egorovich

Born: 1969

Education: higher

Positions over past 5 years:

Period: 1997 - 2001

Organization: OJSC “Lianozovo Dairy”

Area of Operations: Production and sale of dairy products

Position: Director of the Strategic development service

Period: 2001 - 2004

Organization: OJSC “Lianozovo Dairy”

Area of Operations: Production and sale of dairy products

Position: Director of the raw materials division

Period: 2003 - Present

Organization: OJSC “Kharkov Dairy”

Area of Operations: Production and sale of milk and dairy products

Position: Member of Board of Directors

Period: 2004 -2005

Organization: OJSC “Vladivostok Dairy”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2004 - Present

Organization: OJSC “Kiev City Dairy No. 3”

Area of Operations: Production and sale of dairy products

Position: Member of Supervisory Board

Period: 2004 - Present

Organization: OJSC “Lianozovo Dairy”

Area of Operations: Production and sale of dairy products

Position: Director of the Strategic development service

Period: 2004 - Present

Organization: OJSC “Tuymazinsky Dairy Plant”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2004 - 2005

Organization: OJSC “Ufamolagroprom”

Area of Operations: Production and sale of dairy products

Position: Member of Supervisory Board

Period: 2005 - Present

Organization: OJSC “Tsaritsino Dairy”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2005 - Present

Organization: OJSC “Siberian Milk”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2005 - Present

Organization: OJSC “Bishkeksut”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2005 - Present

Organization: Wimm-Bill-Dann Foods OJSC

Area of Operations: Production and sale of foods, juices, and beverages

Position: Member of the Management board

Period: 2005 - Present

Organization: Karasukskoye milk CJSC

Area of Operations: Production and sale of dairy products

Position: Member of the Management board

The person’s share in the authorized capital stock of the Issuer: none

The person’s share of the Issuer’s common stock: none

The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none

The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Anisimov, Dmitry Aleksandrovich

Born: 1971

Education: higher

Positions over past 5 years:

Period: 1997 - 2003

Organization: Moscow representative office of Motorola GMBH in Rissia

Area of Operations: trading

Position: Corporate financial manager, Regional corporate financial manager

Period: 2003 – 2005

Organization: OJSC “Vladivostok Dairy”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2003 - Present

Organization: OJSC “Kharkov Dairy”

Area of Operations: Production and sale of milk and dairy products

Position: Member of Board of Directors

Period: 2003 - 2005

Organization: OJSC “Novokubyshevsk Milk”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2004 - Present

Organization: OJSC “Tuymazinsky Dairy Plant”

Area of Operations: Production and sale of dairy products

Position: Member of Board of Directors

Period: 2004 - 2005

Organization: OJSC “Ufamolagroprom”

Area of Operations: Production and sale of dairy products

Position: Member of Supervisory Board

Period: 2005 - Present

Organization: Wimm-Bill-Dann Foods OJSC

Area of Operations: Production and sale of foods, juices, and beverages

Position: Chief Financial Officer, member of the Management Board

The person’s share in the authorized capital stock of the Issuer: none

The person’s share of the Issuer’s common stock: none

The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none

The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Eliseeva, Vera Vladimirovna

Born: 1958

Education: higher

Positions over past 5 years:

Period: 1999 -2003

Organisation: CJSC Investment Company Troika-Dialog

Area of Operations: consulting services

Position: Head of the human resourses department

Period: 2003 -2003

Organisation: CJSC BDO – Junikon-Ruf

Area of Operations: auditor services

Position: deputy general director – director of the human resourses dept

Period: 2003 -2004

Organisation: CJSC Passways

Area of Operations: consulting services

Position: director

Period: 2004 - 2005

Organisation: Lianozovo Dairy, OJSC

Area of Operations: Production and sale of dairy production

Position: Head of the Human resourses division

Period: 2005 -Present

Organisation: Wimm-Bill-Dann Foods OJSC

Area of Operations: Production and sale of foods, juices, and beverages

Position: Director of the Human resourses division, member of the Management Board

The person’s share in the authorized capital stock of the Issuer: none

The person’s share of the Issuer’s common stock: none

The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none

The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Kraynov, Gennady Konstantinovich
Born: 1951
Education: higher

Period: 1975 –2003

Organisation: Federal Security Service of Russia

Area of Operations: state service

Position: General-major

Period: 2003 -Present

Organisation: Wimm-Bill-Dann Foods OJSC

Area of Operations: Production and sale of foods, juices, and beverages

Position: Director of the Information, evaluation and control division

Period: 2005 -Present

Organisation: Wimm-Bill-Dann Foods OJSC

Area of Operations: Production and sale of foods, juices, and beverages

Position: Member of the Management Board

The person’s share in the authorized capital stock of the Issuer: none

The person’s share of the Issuer’s common stock: none

The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none

The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Person performing the functions of individual executive body of the Issuer:
Tony Denis Maher

5.3. Information on remunerations, benefits and/or reimbursements per each management body of the Issuer

Total remunerations paid to the Board of Directors members in the 2005 financial year amounted to 26 593 475,90 RUR (exclusive of income tax).

Total remunerations paid to the members of the collective executive body (Management Board) in the 2005 financial year amounted to: 42 887 216,03 RUR (exclusive of income tax).

5.4. Information on the bodies monitoring the Issuer’s business activities, their structure and powers

The structure and powers of the bodies monitoring the Issuer’s business activities under the Issuer’s Article of Association (constitutive documents).

Internal Audit Committee

Auditor

Audit committee of Board of directors

As per Art. 21 of the Issuer’s Charter the Company’s business activities shall be monitored by an Internal Audit Committee.

The Internal Audit Committee shall be elected at annual general meetings of the Company shareholders for a period of 1 (one) year and shall include at least 7 (seven) members. The shares of the BOD members and the officers in the Company management bodies cannot vote for election of the Internal Audit Committee members. The term of the Internal Audit Committee shall start at the moment it is elected by the annual general meeting of the Company shareholders and shall expire at the moment the following annual general meeting of Company shareholders elects (re-elects) the Audit Committee.

The powers of individual Internal Audit Committee members or of the whole of it can be terminated by the general meeting of the Company shareholders on the grounds and according to the procedure provided for by the internal documents of the Company.

In case the number of the Internal Audit Committee members is less than that twice as small as provided for in the Company Charter, then the Board shall convene an extraordinary general meeting of the Company shareholders for the purpose of electing a new Internal Audit Committee. The remaining Internal Audit Committee members shall fulfil their functions until a new Audit Committee is elected at an extraordinary general meeting of the Company shareholders.

In case the powers of the Internal Audit Committee are terminated, the term of the new Internal Audit Committee shall expire at the moment the following annual general meeting of the Company shareholders elects (re-elects) the Audit Committee.

A shareholder or any person nominated by a shareholder can be a member of the Internal Audit Committee. Members of the Company Internal Audit Committee can not simultaneously act as the Company BOD members, a solely independent executive body, Management Committee and Liquidation Committee members.

The Internal Audit Committee shall elect Chairman and Secretary.

The Company’s business activities shall be audited on the basis of the Company performance within appropriate year.

An audit of the Company’s business activities shall be initiated at any time:

by the Internal Audit Committee of the Company itself;

upon the decision of the shareholders’ general meeting;

by the Board of Directors of the Company;

upon decision of the Chairman of the Company Management Committee;

upon demand of Company shareholder (shareholders) who, as per the date the demand is submitted, owns in total at least 10% of the shares that can vote on any issues within the competence of the General Shareholders’ Meeting.

Upon the request of the Company Internal Audit Committee officers in the Company management bodies shall provide documents on the Company’s business activities.

The Internal Audit Committee of the Company can convene an extraordinary General Shareholders’ Meeting according to the procedure set by the Articles of Association of the Company.

Proceeding from the results yielded by an audit of the Company’s business activities the Internal Audit Committee of the Company shall make a report, which shall:

confirm that data contained in the reports and other financial documents of the Company are true;

contain information on violations of the accounting and financial reporting procedures set by legal acts of the Russian Federation and of other legal acts of the Russian Federation regulating business activities.

Upon decision of the General Shareholders’ Meeting the Internal Audit Committee members, within their term, may be paid remunerations and/or have the expenses incurred in connection with the fulfillment of their duties reimbursed. The amount of such remunerations and reimbursements shall be determined by the general meeting of shareholders.

The procedures the Internal Audit Committee shall follow when acting on other issues not provided for in these Articles may be set by the internal documents of the Company.

As per Art. 22 of the Issuer’s Articles of Association the Auditor effects the revision of the Issuer’s business activities according to the legal acts of the Russian Federation and on the basis of an appropriate contract concluded with the Issuer.

The Company auditor shall be approved by the General Shareholders’ Meeting. The remuneration payable shall be determined by the Board of Directors.

Proceeding from the results yielded by an audit of the Company’s business activities the Company auditor shall make a report, which shall:

confirm that data contained in the reports and other financial documents of the Company are true;

22.4. An internal audit of the Company shall be carried out by the Company Internal Audit Committee.

Information on Internal Audit Service, its Working Period, and Key Personnel

The Internal Audit Service and the Company Audit Committee are responsible for internal control of the Company’s business operations.

The Internal Audit Service is a structural division of the Issuer.

The Internal Audit Service shall report to the Chief Financial Director, and the Audit Committee shall report to the General Shareholders’ Meeting of the Issuer.

The Head of the Internal Audit Service shall be solely independent in managing the Service.

As per the end of the accounting quarter, the Internal Audit Service has, apart from its head, a staff of 7 employees, who have an extensive audit experience.

The staff of the Service have been working since January 1, 2003.

Basic Functions of the Internal Audit Service

Make all necessary arrangements for establishment and implementation of an effective internal control system in the group of enterprises, which are directly or indirectly controlled by the Issuer (hereinafter referred to as the Group) and in certain enterprises and divisions, which meets the development goals of the said group and legal requirements

Make all necessary arrangements for and carry out audits of the divisions and enterprises of the Group

Create and implement a single corporate procedure for assessment of the internal control system and components thereof

Make all necessary arrangements for optimization of the internal control system and components thereof

Accountability of the Internal Audit Service, Cooperation with the Issuer’s Executive Bodies and Board of Directors (Supervisory Board)

The Head of the Internal Audit Service shall be appointed and dismissed by the Chairman of the Management Committee subject to approval of the Chairman of the Board of Directors.

The Head of the Service shall be subordinate and accountable directly to the Chief Financial Officer.

The Internal Audit Service shall, within the time limits set, prepare an overall annual plan for development of internal control systems and an annual report on the existing internal control systems and submit the said documents to the Chief Financial Officer and the Management Board for their approval.

The Internal Audit Service shall discuss with the BOD Audit Committee issues related to functioning of internal control tools, development of rules and procedures for business risks assessment and coordination.

Cooperation with Executive Bodies

The Internal Audit Service shall receive from the divisions of the enterprises:

quarterly and annual accounting reports in the form approved by the regulation of the Ministry of Finance of the Russian Federation, basic documents; statements on the production cost of the products, sale thereof, etc.

monthly and quarterly reports of the enterprises in the form developed by the Service; other data upon requests;

approved financial plans and budgets of the divisions; reporting on execution thereof;

improvement plan for the internal control systems; report on execution thereof.

The Internal Audit Service shall prepare and send to the enterprises and divisions of the Group:

· recommendations on implementation of internal control in the enterprises and the divisions;

· information on methods of initial assessment of the internal control systems and individual control tools.

Cooperation between the Internal Audit Service and the Issuer’s External Auditor

The Internal Audit Service shall receive from the auditors audit reports, statements and recommendations on individual issues, materials on new legislations and auditing standards.

The Internal Audit Service shall, in cooperation with other divisions, participate in the development of plans aimed at eliminating the drawbacks identified by the auditors, monitoring execution thereof and notifying the auditors of the implementation results.

The Issuer has also established an Audit Committee consisting of three independent members of the Company’s Board of Directors.

The Audit Committee assists the Issuer’s Board of Directors in the exercise of its supervisory functions in the following areas:

· Financial statements of the Issuer and their preparation;

· Internal accounting and financial controls;

· Monitoring of key risks;

· Operation of the Internal Audit Service and independent auditors;

· Qualification and extent of independence of independent auditors;

· Issuer’s compliance with business ethics requirements;

· Legislative and regulatory compliance.

In 2004 a new department was created; the main goal of this department had been improvement of internal audit system and ensuaring compliance to Rule 404 of Sarbanes-Oxley Act. This Department consists of five employees, who are responsible for exposure, assessment, and if needed, modification or implantations of internal audit procedures as well as business process. This Department works under collective executive body’s control and under control of Internal audit committee. We plan that department’s work will be done by the middle of 2006.

Key personnel of Department of Internal audit :

Kuznetsova E.B. (director)

Romanova N.V. (deputy),

Kolesnikova N.N. (deputy)

Rules on use of internal information contained in section 5 of the Ethic code, approved by Board of directors of the issuer (minutes 18.07.2005 #15-07). You can find it on our site: http://www.wbd.ru/wbd/regulations/wbd_pp/

5.5. Information on the persons in the bodies monitoring the Issuer’s business activities

The Internal Audit Committee:

Elena B. Kuznetsova

Year of birth: 1955

Education: higher

Positions over past 5 years:

Period: 1997 - 2002

Organization: PTG WBD ZAO

Area of Operations: Production and sale of juice products

Position: Head of the Internal Control and Analysis Department

Period: 2002 - 2002

Organization: Tsaritsino Dairy, OJSC

Area of Operations: Production and sale of dairy products

Position: Director of the Internal Control Department

Period: 2003 - Present

Organization: Wimm Bill Dann Foods OJSC

Area of Operations: Production and sale of dairy, juice products and mineral water

Position: Head of the Internal Audit Service

The person’s share in the authorized capital stock of the Issuer: none

The person’s share of the Issuer’s common stock: none

The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none

The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Natalia V. Romanova

Year of birth: 1962

Education: higher

Positions over past 5 years:

Period: 1995 - 1999

Organization: Moscow State Industrial University of the State Committee for Higher Education of the Russian Federation

Area of Operations: education services

Position: senior instructor

Period: 1999 - 2002

Organization: PTG WBD ZAO

Area of Operations: Production and sale of juice products

Position: economist, analyst, Managerial Accounting and Analysis Department

Period: 2002 - 2002

Organization: Tsaritsino Dairy, OJSC

Area of Operations: Production and sale of dairy products

Position: financial and business analyst, Internal Control Department

Period: 2003 - Present

Organization: Wimm Bill Dann Foods OJSC

Area of Operations: Production and sale of dairy, juice products and mineral water

Position: Deputy Head of the Internal Audit Service

The person’s share in the authorized capital stock of the Issuer: none

The person’s share of the Issuer’s common stock: none

The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none

The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Natalia N. Kolesnikova

Year of birth: 1973

Education: higher

Positions over past 5 years:

Period: 1997 - 2002

Organization: PTG WBD ZAO

Area of Operations: Production and sale of juice products

Position: economist, analyst, Managerial Accounting and Analysis Department

Period: 2001 - 2002

Organization: Tsaritsino Dairy, OJSC

Area of Operations: Production and sale of dairy products

Position: financial and business analyst, Internal Control Department, economist, analyst, General Department (part-time)

Period: 2003 - Present

Organization: Wimm Bill Dann Foods OJSC

Area of Operations: Production and sale of dairy, juice products and mineral water

Position: Deputy Head of the Internal Audit Service

The person’s share in the authorized capital stock of the Issuer: none

The person’s share of the Issuer’s common stock: none

The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none

The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Marina A. Naumova

Year of birth: 1977

Education: higher

Positions over past 5 years:

Period: 2000 - 2001

Organization: ZAO Insuarance company “Megapolis-reserv”

Area of Operations: Production and sale of juice products

Position: economist, analyst, Managerial Accounting and Analysis Department

Period: 2001 - 2002

Organization: PTG WBD ZAO

Area of Operations: Production and sale of juice products

Position: economist, analyst, Managerial Accounting and Analysis Department

Period: 2002 - 2002

Organization: Lianozovo dairy, OJSC

Area of Operations: Production and sale of dairy products

Position: financial and business analyst, Internal control division

Period: 2003 - Present

Organization: Wimm Bill Dann Foods OJSC

Area of Operations: Production and sale of dairy, juice products and mineral water

Position: financial and business analyst, Internal audit service

The person’s share in the authorized capital stock of the Issuer: none

The person’s share of the Issuer’s common stock: none

The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none

The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Julia A. Chudina

Year of birth: 1975

Education: higher

Period: 1996 - 2001

Organization: Design-Moda, OOO

Area of Operations: Production and sale of clothes

Position: accountant, chief economist

Period: 2001 - 2002

Organization: PTG WBD ZAO

Area of Operations: Production and sale of juice products

Position: economist, analyst

Period: 2002 - 2003

Organization: Lianozovo dairy, OJSC

Area of Operations: Production and sale of dairy products

Position: financial and business analyst

Period: 2003 - 2004

Organization: Trading Company WBD, ZAO

Area of Operations: Sale of juice products

Position: economist

Period: 2004 - Present

Organization: Wimm Bill Dann Foods OJSC

Area of Operations: Production and sale of dairy, juice products and mineral water

Position: financial and business analyst, Internal audit service

The person’s share in the authorized capital stock of the Issuer: none

The person’s share of the Issuer’s common stock: none

The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none

The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Bogutskaya V. Evgenya

Year of birth: 1971

Education: higher

Period: 2000 - 2000

Organization: PriceWaterHouse Coopers, ZAO

Area of Operations: consulting services

Position: accountant of the financial dept

Period: 2001 - 2002

Organization: Interdin AO, ZAO

Area of Operations: no data

Position: Deputy chief accountant

Period: 2002 - 2004

Organization: Tsaritsino Dairy, OJSC

Area of Operations: Production and sale of dairy products

Position: financial and business analyst, economist

Period: 2004 - 2004

Organization: Lianozovo dairy, OJSC

Area of Operations: Production and sale of dairyproducts

Position: financial and business analyst

Period: 2004 - Present

Organization: Wimm Bill Dann Foods OJSC

Area of Operations: Production and sale of dairy, juice products and mineral water

Position: financial and business analyst, Internal audit service

The person’s share in the authorized capital stock of the Issuer: none

The person’s share of the Issuer’s common stock: none

The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none

The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

Vasin A. Ilya

Year of birth: 1980

Education: higher

Period: 2002 - 2004

Organization: Moscow south customs terminal

Area of Operations: state service

Position: serviceman

Period: 2004 - Present

Organization: Wimm Bill Dann Foods OJSC

Area of Operations: Production and sale of dairy, juice products and mineral water

Position: financial and business analyst, Internal audit service

The person’s share in the authorized capital stock of the Issuer: none

The person’s share of the Issuer’s common stock: none

The number of Issuer’s shares, which can be acquired by this person upon exercising of the Issuer’s option, belonging to such a person: 0 shares.

The share of this person in the authorized capital stock of Issuer’s subsidiaries/dependent companies: none

The share in common stock of Issuer’s subsidiaries/dependent companies, belonging to such a person: none

The number of shares of the Issuer’s subsidiary, which can be acquired by this person upon exercising of the subsidiary’s option, belonging to such a person: 0 shares.

5.6. Information on remunerations, benefits and/or reimbursements for the body monitoring the Issuer’s business operations

The amount of remunerations to be paid to Internal Audit Committee members for the 2005 financial year was not determined by the Issuer’s General shareholder’s meeting and therefore within 2005 financial year the remuneration wasn’t paid to these persons for performance of their functions of Internal Audit Committee members.

Total size of remuneration paid to the Issuer’s Auditor (CJSC “BDO Unikon Ruf”) within 2004 financial year amounted to RUR 587 375.06.

Total size of remuneration paid to the Issuer’s Auditor (CJSC Ernst and Young Vneshaudit), appointed by the Issuer’s General shareholders’ meeting on June 22, 2004 within 2005 financial year amounted to USD 29500.

Total size of remuneration paid to the current Issuer’s Auditor (LLC Ernst and Youngt), appointed for the 2005 fiscal year by the Issuer’s General shareholders’ meeting on June 14, 2005 amounted to 861 000 USD. No remuneration agreements with this auditor were concluded.

5.7. Information on the Issuer’s staff (employees), its educational background and structure, and changes in the numbers of the Issuer’s staff (employees)

Item		Second quarter of 2006
Staff on the payroll (number of persons)		278
The share of personnel having specialized higher education, %		72,2
Labor compensation, RUR (paid in cash or transferred to personal bank accounts)		116 631 612
Contributions to social security funds, RUR		127 835 612
Total sum, RUR		244 467 224

5.8. Information on any obligations of the Issuer before its staff (employees) related to their possible participation in the Issuer’s authorized stock (share fund)

There are no obligations and agreements of the kind.

There are no data to testify to the fact that the Issuer’s staff were provided or may be provided with the Issuer’s options.

VI. Data on Issuer’s shareholders and on the interested party transactions been made.

6.1. Data on the amount of Issuer’s shareholders

Total number of persons, being registered in the share register as of the last date of the reporting quarter: 15

Total number of nominee holders: 7

6.2. Shareholders, owning not less than 5% of Issuer’s charter capital and/or not less than 5% of it’s outstanding ordinary shares and data on shareholders (participants) owning not less than 20% of charter capital and/ or 20% of total amount of outstanding ordinary shares of such Issuer’s shareholders.

Name: Deutsche Bank Trust Company Americas

Location: 60 Wall street, New York, NY 10005

Share of the Issuer’s charter capital: 39.99%

Share of Issuer’s ordinary shares owned: 39.99%

The aforementioned equity stake is registered in the Register of Shareholders in the name of the following nominee holder.

Name: Limited Liability Company “Deutsche Bank”

Location: 129090 Moscow, ul. Schepkina, 4

Tel: +7 (095) 7975000

Fax: +7 (095) 7975017

Email: db.moscow@db.com

Lisence on depositary activity: No. 177-05616-000100 dated September 4, 2001

The state body having issued the license – Federal service on financial markets

Shareholders owning not less than 20% of the Issuer’s shareholder’s charter capital and/or 20% of total amount of outstanding ordinary shares of such Issuer’s shareholder:

No data available

Yushvaev, Gavril Abramovich

Share of the Issuer’s charter capital: 17.13%

Share of the Issuer’s ordinary shares held: 17.13%

Plastinin, Sergey Arkadievich

Share of the Issuer’s charter capital: 9.30%

Share of the Issuer’s ordinary shares held: 9.30%

Iakobachvili, David

Share of the Issuer’s charter capital: 8.33%

Share of the Issuer’s ordinary shares held: 8.33%

Dubinin, Mikhail Vladimirovich

Share of the Issuer’s charter capital: 5.71%

Share of the Issuer’s ordinary shares held: 5.71%

Name: Depositary Clearing Company CJSC (nominee holder)

Location: Russia, 115162 Moscow, Shabolovka Street, 31-B

Lisence on depositary activity: No. 177-06236-000100 dated October 10, 2002

The state body having issued the license – Federal service on financial markets

Tel: +7 (095) 956-0999

Fax: +7 (095) 232-6804

Email: dcc@dcc.ru

Percent of Issuer’s charter capital held: 9.12%

Percent of Issuer’s ordinary shares owned: 8.75%

Shareholders (members) holding at least 20% of the Issuer’s shareholder (member) charter capital and/or 20% of total amount of outstanding ordinary shares of such Issuer’s shareholder:

No data available

6.3. Data on the Participation of the State (Municipal Formation) in the Issuer’s Charter Capital.

Share of the Issuer’s Charter Capital belonging to the State (Municipal Formation):

None

Share of Issuer’s Stock Belonging to the State (Municipal Formation):

None

Existence of the Special Right of the Russian Federation, its Subjects and Municipal Formations to participate in the Issuer’s Management (“golden share”):

Not provided for

6.4. Data on the restrictions on participation in the Issuer’s charter capital.

There are no limitations as to the number of shares belonging to one shareholder and/or their total nominal value, and/or maximum number of votes, provided to one shareholder.

There are no limitations on foreign participation in the authorized capital stock. There are no other limitations related to participation in the Issuer’s authorized capital stock.

6.5. Information on changes in the composition and participation shares of the Issuer’s shareholders that possess at least 5% of the Issuer’s authorized stock or at least 5% of the Issuer’s common stock

· The meeting was held on September 7, 2001

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on August 28, 2001

The persons, who as per the date the said list was compiled possessed at least 5% of the Issuer’s authorized stock and/or at least 5% of the Issuer’s common stock) (for the persons given below, the share in the authorized stock shall be equivalent to the share of the common stock that belongs to the persons):

Dubinin, Mikhail Vladimirovich – 17.13%

Orlov, Alexander Sergeevich – 9.68%

Plastinin, Sergey Arkadievich – 17.13%

Timohins Alexanders – 9.79%

Yushvaev, Gavril Abramovich: 26.48%

Iakobachvili, David – 8.89%

· The meeting was held on December 7, 2001

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on November 28, 2001

Dubinin, Mikhail Vladimirovich – 17.13%

Orlov, Alexander Sergeevich – 9.68%

Plastinin, Sergey Arkadievich – 17.13%

Timohins Alexanders – 9.79%

Yushvaev, Gavril Abramovich: 26.48%

Iakobachvili, David – 8.89%

· The meeting was held on January 14, 2002

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on January 03, 2001

Dubinin, Mikhail Vladimirovich – 17.13%

Orlov, Alexander Sergeevich – 9.68%

Plastinin, Sergey Arkadievich – 17.13%

Timohins Alexanders – 9.79%

Yushvaev, Gavril Abramovich: 26.48%

Iakobachvili, David – 8.89%

· The meeting was held on May 31, 2002

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on April 16, 2002

The persons, who as per the date the said list was compiled possessed at least 5% of the Issuer’s authorized stock and/or at least 5% of the Issuer’s common stock) (for the persons given below the shares in the Issuer’s charter capital are specified according to Issuer’s constitutive documents; the share of the ordinary shares shall be equivalent to the share of the common outstanding stock that belongs to the persons):

Deutsche Bank Trust Company Americas

Share of this legal entity in the Issuer’s charter capital– 0%

Share of the Issuer’s common stock owned by this entity – 27.76%

Dubinin, Mikhail Vladimirovich

Share of this person in the Issuer’s charter capital– 15.29%

Share of the Issuer’s common stock owned by this person – 12.16%

Orlov, Alexander Sergeevich

Share of this person in the Issuer’s charter capital– 8.64%

Share of the Issuer’s common stock owned by this person - 6.87%

Plastinin, Sergey Arkadievich

Share of this person in the Issuer’s charter capital– 15.29%

Share of the Issuer’s common stock owned by this person – 12.16%

Timohins Alexanders

Share of this person in the Issuer’s charter capital– 8.74%

Share of the Issuer’s common stock owned by this person – 6.95%

Yushvaev, Gavril Abramovich:

Share of this person in the Issuer’s charter capital– 23.64%

Share of the Issuer’s common stock owned by this person – 18.8%

Iakobachvili, David

Share of this person in the Issuer’s charter capital– 8.05%

Share of the Issuer’s common stock owned by this person – 6.41%

· The meeting was held on December 03, 2002

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on April 18, 2002

Deutsche Bank Trust Company Americas – 27.65%

Dubinin, Mikhail Vladimirovich – 12.16%

Orlov, Alexander Sergeevich – 6.87%

Plastinin, Sergey Arkadievich – 12.16%

Timohins Alexanders – 6.95%

Yushvaev, Gavril Abramovich: 18.8%

Iakobachvili, David – 6.41%

· The meeting was held on January 31, 2003

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on December 16, 2002

Deutsche Bank Trust Company Americas – 28.29%

Dubinin, Mikhail Vladimirovich – 12.16%

Orlov, Alexander Sergeevich – 6.87%

Plastinin, Sergey Arkadievich – 12.16%

Timohins Alexanders – 6.95%

Yushvaev, Gavril Abramovich: 18.8%

Iakobachvili, David – 6.41%

· The meeting was held on April 24, 2003

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on March 23, 2003

Deutsche Bank Trust Company Americas – 28.24%

Yushvaev, Gavril Abramovich: 18.8%

Dubinin, Mikhail Vladimirovich – 12.16%

Plastinin, Sergey Arkadievich – 12.16%

United Burlington Investments Limited, a private company limited by shares – 6.95%

Orlov, Alexander Sergeevich – 6.87%

Iakobachvili, David – 6.41%

· The meeting was held on June 18, 2003

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on April 30, 2003

Deutsche Bank Trust Company Americas – 28.20%

Yushvaev, Gavril Abramovich: 18.8%

Plastinin, Sergey Arkadievich – 12.16%

Dubinin, Mikhail Vladimirovich – 10.16%

United Burlington Investments Limited, a private company limited by shares – 6.95%

Iakobachvili, David – 6.41%

Orlov, Alexander Sergeevich – 6.22%

· The meeting was held on March 24, 2004

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on February 20, 2004

Deutsche Bank Trust Company Americas – 32.70%

Yushvaev, Gavril Abramovich: 18.8%

Plastinin, Sergey Arkadievich – 12.16%

Dubinin, Mikhail Vladimirovich – 8.19%

Iakobachvili, David – 7.19%

“I.M.ARTEKS HOLDINGS LIMITED”– 5.29%

Orlov, Alexander Sergeevich – 5.22%

· The meeting was held on May 12, 2004

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on April 06, 2004

Deutsche Bank Trust Company Americas – 32.70%

Yushvaev, Gavril Abramovich: 18.8%

Plastinin, Sergey Arkadievich – 12.16%

Dubinin, Mikhail Vladimirovich – 8.19%

Iakobachvili, David – 9.465%

I.M. ARTEKS HOLDINGS LIMITED LLC – 5,29%

· The meeting was held on June 22, 2004

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on May 05, 2004

Deutsche Bank Trust Company Americas – 32.70%

Yushvaev, Gavril Abramovich: 18.8%

Plastinin, Sergey Arkadievich – 12.16%

Dubinin, Mikhail Vladimirovich – 8.19%

Iakobachvili, David – 9.465%

I.M. ARTEKS HOLDINGS LIMITED LLC – 5.29%

· The meeting was held on September 10, 2004

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on July 09, 2004

Deutsche Bank Trust Company Americas – 40%

Yushvaev, Gavril Abramovich: 16.57%

Plastinin, Sergey Arkadievich – 10.72%

Dubinin, Mikhail Vladimirovich – 6.02%

Iakobachvili, David – 7.76%

· The meeting was held on December 10, 2004

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on October 22, 2004

Deutsche Bank Trust Company Americas – 39.98%

Yushvaev, Gavril Abramovich – 16.57%

Plastinin, Sergey Arkadievich – 10.72%

Dubinin, Mikhail Vladimirovich – 6.02%

Iakobachvili, David – 7.76%

· The meeting was held on June 14, 2005

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on April 26, 2005

Deutsche Bank Trust Company Americas – 39.99%

Yushvaev, Gavril Abramovich – 16.57%

Plastinin, Sergey Arkadievich – 9.30%

Iakobachvili, David – 7.76%

Dubinin, Mikhail Vladimirovich – 5.71%

· The meeting was held on September 05, 2005

The list of the persons who have the right to participate in the General Shareholders’ Meeting was complied on July 19, 2005

Deutsche Bank Trust Company Americas – 39.99%

Yushvaev, Gavril Abramovich – 16.57%

Plastinin, Sergey Arkadievich – 9.30%

Iakobachvili, David – 7.76%

Dubinin, Mikhail Vladimirovich – 5.71%

WBD Foods didn’t issue preference shares, so all shares should be considered as ordinary equity shares.

6.6. Information on the transactions the Issuer effected and had an interest in

The total amount of transactions with interested parties approved by the General shareholders’ meeting during the reporting quarter amounts to: 74 987 000 hryvna as well as the sum of loan agreement^

The sum of the loan at any time of the loan period may not exceed the sum of 300 000 000 RUR, including the previously approved by the BoD sum of 38 000 000 RUR.

The total amount of transactions with interested parties approved by the Board of Directors during the reporting quarter comprises the following amounts:

· The Issuer approved a license agreement, with the monthly amount (fee) determined in accordance with the following procedure: from 1 to 1000 RUR (including VAT) of proceeds from the sale of each 1000 packs of product, but at least 120 rubles (including VAT) for using of trademark.

· The Issuer approved a license agreement for the right to use the program complex, with the monthly amount (fee) determined as 8000 RUR (exclusive VAT).

· The Issuer approved 12 license agreements for the right to use the program complex, with the monthly amount (fee) determined as 8000 RUR (exclusive VAT) inclusive technical support. Introduction of automated complex determined as 1 hour salary of the specialist in the amount of 4000 RUR (transportation, living costs and daily allowance determined in the amount of 17 USD daily)

· The Issuer approved a license agreement, with the monthly amount (fee) determined in accordance with the following procedure: from 0.01% to 10% (excluding VAT) of proceeds from the sale of products, but at least 120 rubles (including VAT) for using of each of 2 trademarks.

· The Issuer approved the loan agreement on the following conditions: The sum of the loan at any time of the loan period may not exceed the sum of 11 500 000 RUR, including the previously approved by the BoD sum of 2 500 000 RUR.

Transactions (groups of related transactions) in the accounting quarter, which exceed 5% of the book value of the Issuer’s assets determined according to its accounting reporting as per the last accounting date before date the transaction was effected:

· Such transactions were not effected in the accounting quarter.

Transactions (groups of related transactions), which the Issuer had an interest in and which were not approved by the Board of Directors (Supervisory Board) or the general meeting of the Issuer’s shareholders (participants), when such approval is required according to the legislation of the Russian Federation:

· Such transactions were not effected in the accounting quarter.

6.7. Information on Accounts Receivable

The Issuer’s accounts receivable breakdown as of 01.07.2006.

Type of accounts payable		As of 30.06.2006
Buyers’ and customers’ accounts payable, thousand RUR.		156 064
Including overdue, thousand RUR		0
Notes receivable, thousand RUR		0
Including overdue, thousand RUR		0
Contributions to the authorized capital stock to be paid by the members (founders), thousand RUR		0
Including overdue, thousand RUR		0
Advances to be repaid, thousand RUR		49 403
Including overdue, thousand RUR		0
Other accounts payable, thousand RUR		317 595
Including overdue, thousand RUR		0
Total, thousand RUR		523 062
Including overdue, thousand RUR		0

VII. Issuer’s financial statements and other financial data.

7.1. Annual financial statements of the Issuer

Not provided in the reporting period

7.2. Quarterly financial statements of the Issue for the latest finished reporting period

See Attachment 2 (Forms 1, 2).

7.3. Consolidated financial statements of the Issue for the latest finished financial year

See consolidated financial statements prepared in accordance with US GAAP, and the auditor’s report to these statements – Attachment 2.

7.4. Data in the Issuer’s accounting policy

See below the Issuer’s accounting policies for 2005 fiscal year for the purposes of accountancy and taxation.

Accounting Policy for 2006

This accounting policy shall come into effect on January 1, 2006.

1. general provisions

1. “Wimm-Bill-Dann Foods”, OJSC shall maintain accounting records in accordance with the provisions of the following regulatory documents stipulating fundamental methodological principles and procedures for the organization of accounting and maintenance accounting records:

· Federal Law of November 21, 1996, No. 129-FZ “On Accounting”,

· Regulations No. 34n “On Maintenance of Accounting Records, Preparation and Submission of Accounting Statements in the Russian Federation” dated July 29, 1998,

· “Accounting Chart of Accounts for the Maintenance of Accounting Records of Financial and Business Operations by Corporate Entities” approved by Order of the Ministry of Finance of the Russian Federation No. 94n, dated October 31, 2000, other accounting regulations,

· Other regulatory documents and methodological guidelines and materials on accounting matters, subject to any subsequent amendments and additions thereto.

2 Accounting records of assets, liabilities and business operations shall be maintained on the basis of in-kind measurement units expressed in monetary terms by means of comprehensive ongoing registration thereof in interrelated documents.

3. The maintenance of accounting records shall pursue the following aims and objectives:

· Generation of complete and reliable information about business processes and results of the operations of the Company;

· Control over availability and movement of assets, utilization of material, labor and financial resources;

· Early prevention of negative developments in the financial and business operations of the Company;

· Identification and mobilization of internal resources.

4. The accounting policy of the Company shall be consistent with the following requirements applicable to accounting in general:

· Completeness;

· Reliability;

· Promptness;

· Prudence;

· Priority of content over form;

· Consistency;

· Rationality,

and shall be based on the following assumptions:

· Assumption of separate existence of assets;

· Assumption of temporal determinacy of business operations;

· Assumption of consistent application of the accounting policy.

5. Responsibility for the organization of accounting shall be borne by the General Manager of the Company.

6. The Chief Accountant of the Company shall ensure that all business operations are reflected on the appropriate accounts, and that all such accounts are maintained in accordance with the existing legislation of the Russian Federation.

7. The Chief Accountant of the Company shall sign, jointly with the General Manager of the Company, the documents which serve as the basis for the business operations involving the movement of inventories, cash, credit and financial obligations of the Company.

8. The Chief Accountant of the Company may not accept and post documents which are in any way related to operations inconsistent with the existing legislation and being executed in violation of contractual and financial obligations (job descriptions of Accounting Department personnel).

2. Administrative and Technical Issues

1. Accounting records of the Company shall be maintained by the Accounting Department, an independent structural unit headed by the Chief Accountant of the Company. In all their activities, employees of the Accounting Department shall be guided by accounting regulations, Regulations on the Accounting Department, and their job descriptions.

2. The Company shall have a representative office in the People’s Republic of China (Beijing) operating in accordance with the provisions of the Regulations on the Representative Office.

The representative office shall not keep a separate balance sheet, nor shall it be an independent payer of taxes and duties.

The assets transferred or attached to the representative office shall be the property of the Company in accordance with the applicable existing legislation of the Russian Federation.

3. The Company shall generate internal and external accounting statements. External accounting statements shall include the following:

1) Accounting balance sheet;

2) Profit and loss statement;

3) Attachments to the accounting balance sheet;

4) Auditor’s opinion certifying accuracy and reliability of accounting statements;

5) Notes.

The list of internal reports, their forms, periodicity and submission deadlines, as well as the list of persons responsible for the preparation, and potential users, of internal reports shall be approved by the Company.

3. Selected Accounting Methods

1. The Company shall maintain accounting records using computer equipment, based on special accounting software, in accordance with the detailed Chart of Accounts (Attachment 1). Accounting registers shall be maintained in machine-readable data carriers within the limits determined by the functionality of the accounting software.

2. The Company shall maintain accounting records on the basis of source documents. The Company shall use, as source documents, unified forms approved by the State Statistical Committee of the Russian Federation. In addition to the foregoing, the Company shall use source document forms developed in-house (Attachment 2) approved by local regulations and containing mandatory requisites as described below.

All records in accounting registers shall be based on source documents which shall be prepared at the time of completion of the appropriate business operations, or immediately thereafter, and contain the following mandatory requisites:

· Name of the document (form);

· Unified form code;

· Completion date;

· Name of the entity on whose behalf the document is prepared;

· Brief description of the business operation;

· Units of measurement of the business operations (in-kind and cash);

· Names of the officers responsible for the execution of the business operation and the accuracy of its registration in the appropriate documents;

· Individual signatures and names of the aforementioned officers.

3. All corrections of errors identified in source documents and accounting registers shall be confirmed by signatures of the persons signing the relevant documents, with an indication of the dates on which such corrections were made. No corrections shall be allowed in cash and banking records.

4. Source documents, accounting registers, and accounting statements shall be mandatorily retained in accordance with the established procedure and for approved periods of time. Responsibility for the preservation thereof during their utilization periods, and for the prompt return thereof to the archive, shall be borne by the Chief Accountant of the Company.

4. Evaluation of Assets, Liabilities and Business Operations

1. The Company shall conduct evaluation of liabilities and business operations in monetary terms by summing of all practically incurred expenses.

2. The Company shall conduct evaluation of assets, liabilities and business operations in the currency circulating in the Russian Federation, namely, in Russian rubles.

3. Accounting entries posted to foreign currency accounts of the Company, as well as entries related to the operations of the Company denominated in foreign currencies, shall be made in the currency circulating in the Russian Federation, the amounts thereof being determined by converting amounts denominated in foreign currencies at the exchange rates of the Central Bank of the Russian Federation in effect on the relevant dates. Concurrently therewith, such entries shall be made in the currency in which the payments were made. At the time of generation of accounting statements, the value of assets and liabilities shall be converted into rubles at the exchange rate of the Central Bank of the Russian Federation in effect on the reporting date.

5. Inventory Taking

1. To ensure reliability of accounting records and statements, the Company shall inventory its assets and liabilities. During each such inventory, the Company shall verify availability, state of repair and evaluation of such assets and liabilities, and examine the documents evidencing the same. Inventories shall be taken in accordance with the provisions of Order of the Ministry of Finance of the Russian Federation No. 49 “On Approval of Methodological Recommendations on Inventorying Assets and Financial Liabilities” dated June 13, 1995.

2. The number of inventories taken during each reporting year, their dates, and the lists of assets and liabilities audited during each such inventory shall be determined by the Company, except when any such inventory is mandatory, to wit:

· Prior to the preparation of the annual accounting statements, with the exception of the assets inventoried not earlier than October 1 of the reporting year. Fixed assets shall be inventoried at least one time every three years;

· After the replacement of the relevant accountable officer (on the date of such officer’s first day in office);

· In the event of detection of any theft, abuse, or impairment of assets;

· In the event of fire or another natural disaster;

· In other situations stipulated by the existing legislation of the Russian Federation.

The results of each inventory shall be reflected in the minutes signed by the members of the inventory committee and approved by the management of the Company.

3. If in the course of the inventory there emerge differences between the actually available assets and those shown in the Company’s accounting records, they shall be dealt with as follows:

· Fixed assets, tangible assets, cash and other assets found to be in excess shall be properly registered and credited to the financial results of business operations;

· Loss of assets within the approved statutory limits shall be written off and, by order of the General Manager of the Company, charged to production (distribution) costs;

· Shortages of tangible assets, cash and other assets, as well as losses exceeding normal wastage, shall be covered by the persons responsible therefor. If no such persons have been identified, or if the court declines to have them cover such losses, the relevant shortages and losses shall be debited from the financial results of business operations;

· The General Manager of the Company may order excesses and shortages to be set off against each other, provided that such excesses and shortages occur during the same period, are the responsibility of the same person, and relate to similar assets.

All differences identified in the course of an inventory shall be posted to the accounting registers during the month in which the inventory was finished.

Rules for Evaluation of Individual Accounting Items

6. Investments into Non-Current Assets

1. Capital investments shall include the costs associated with erection and construction works, acquisition of equipment, instruments, tools, and other capital works and expenditures. Capital investments shall be posted to the balance sheet at actual cost.

2. Provisionally operated capital construction facilities shall not be classified as fixed assets until they are commissioned and operated on a permanent basis. The costs associated with such facilities shall be posted to the accounting records and statements as unfinished capital investments.

7. Financial Investments

1. Financial investments shall include securities, including debt securities, contributions to charter capitals of other entities, loans extended to third parties in the territory of the Russian Federation and abroad, deposit accounts with credit institutions, accounts receivable acquired by assignment of claims, etc.

2. In accounting statements, financial investments shall be divided, depending on their effective terms (maturities), into short-term financial investments (with maturities of less than one year) and long-term financial investments (with maturities of more than one year).

Long-term financial investments with maturities under 365 days shall be posted to a separate Sub-Account 58.03 “Long-Term Financial Investments (Short-Term Portion)”.

3. Accounting for financial investments shall comply with the requirements of Accounting Standard PBU 19/02 approved by Order of the Ministry of Finance of the Russian Federation No. 126n dated December 10, 2002. Financial investments shall be posted to the appropriate Sub-Accounts of Account 58.

4. Interest accrued on debt securities and loans extended by the Company shall be posted to the debit of Account 76-03.

5. Financial investments with respect to which it is possible to determine their current fair market value shall be posted to accounting records at the end of each reporting period at such current fair market value by adjusting the value as of the previous reporting date. Such adjustment shall be made by the Company on a quarterly basis.

The difference between the current fair market value of financial investments as of the reporting date and the value as of the previous reporting date shall be posted to the financial results as part of operating income or expense.

6. Upon disposal of financial investments, their value shall be estimated on the basis of the unit value method.

8. Fixed Assets

1. Classification of assets as fixed assets and their registration for accounting purposes shall be contingent upon concurrently meeting the following conditions:

· The relevant assets shall be used for manufacture of products, performance of works, provision of services, or management of the affairs of the Company;

· The assets in question shall be so used for an extended period of time, i.e. for their entire useful life which shall exceed 12 months or the duration of one operating cycle, if such the duration of such cycle exceeds 12 months;

· The Company shall have no plans to subsequently resell such assets;

· The assets shall be capable of generating economic benefits (income) for the Company in the future.

2. The following assets shall be classified as fixed assets: land plots and natural facilities (water, soil and other natural resources) owned by the Company.

3. Separable improvements to leased fixed assets shall be classified as separate fixed assets, while inseparable improvements for which the lessor pays no compensation to the Company shall be charged to other expenses during the period in which they are incurred.

4. Accounting for fixed assets shall comply with the requirements of Accounting Standard PBU 6/01 “Fixed Assets Accounting” approved by Order of the Ministry of Finance of the Russian Federation No. 26n dated March 30, 2001 (as amended and supplemented), “Methodological Recommendations for Fixed Assets Accounting” approved by the Order of the Ministry of Finance of the Russian Federation No. 91n dated October 13, 2003, and other relevant regulations.

5. Fixed assets shall be posted to the Company’s accounting records at acquisition cost. Acquisition cost shall be defined as the amount of expenses actually incurred in connection with the acquisition, construction or manufacture of such assets, with the exception of value added tax and other reimbursable taxes (except when otherwise stipulated by the existing legislation of the Russian Federation). Expenses actually incurred in connection with the acquisition, construction or manufacture of fixed assets shall include the following:

· Amounts paid under the appropriate contracts to suppliers (sellers);

· Amounts paid to contractors under construction and other contracts;

· Amounts paid to various entities for provision of information and consulting services in connection with the acquisition of fixed assets;

· Registration duties, stamp duties and other similar payments made in connection with the acquisition (receipt) of the title to fixed assets;

· Customs duties;

· Non-reimbursable costs paid in connection with the acquisition of fixed assets;

· Remuneration paid to the intermediary entity through which fixed assets were acquired;

· Other costs directly related to the acquisition, construction or manufacture of fixed assets. This item includes, in particular, the interest accrued on loans received in connection with the acquisition, construction or manufacture of fixed assets prior to the registration thereof for accounting purposes.

General overheads and other similar expenses shall not be classified as expenses actually incurred in connection with the acquisition, construction or manufacture of fixed assets, except when they are directly attributable thereto.

6. Expenses actually incurred in connection with the acquisition and construction of fixed assets shall be determined subject to the foreign currency translation gains or losses arising prior to the posting of fixed assets to Account 01 (commissioning of fixed assets) in situations where the payment is made in rubles for an amount equivalent to the amount denominated in foreign currency (conventional unit). Foreign currency translation gains and losses arising after fixed assets have been posted to Account 01 (commissioned and put into operation) shall be classified as non-operating income (expense) items and posted to Account 91 “Other Income and Expense Items”.

7. Acquisition cost of fixed assets received as contributions to the charter capital of the Company shall be their cash value estimate as agreed with the founders (members) of the Company, unless otherwise provided by the existing legislation of the Russian Federation.

8. Acquisition value of fixed assets received under agreements envisaging discharge (payment) of obligations in-kind shall be the value of the assets transferred or due to be transferred by the Company. The value of the assets transferred or due to be transferred by the Company shall be determined based on the price which the Company usually assigns to similar assets under similar circumstances.

9. Acquisition value of fixed assets received under donation agreements (free of charge) shall be the current fair market value of such assets as of the date when they are posted to the balance sheet to account 08.

10. Valuation of capital construction facilities whose value at the time of acquisition thereof was denominated in a foreign currency shall be made in rubles by converting the amount in the relevant foreign currency at the exchange rate of the Russian Federation in effect on the date of execution of the transaction denominated in such foreign currency. The date of execution of the transaction denominated in such foreign currency shall be the date when the title to the assets passes from the seller to the Company.

Valuation of fixed assets whose value at the time of acquisition thereof was denominated in a foreign currency shall be made in rubles by converting the amount in the relevant foreign currency at the exchange rate of the Russian Federation in effect on the date of registration of such assets for accounting purposes to account 08 (commissioning of such assets).

11. Capital expenditures regarding long live plantations and land plot improvement are included into fixed assets on the annual basis in expenditures, related to space received for accounting purposes in the reporting year, regardless of the deadline of all works.

12. If fixed assets are acquired as described in paragraphs 6, 7 and 8 hereof, their acquisition cost shall include the expenses actually incurred by the Company in connection with the delivery of such assets and their preparation for operation.

Modification of acquisition value shall of fixed assets be allowed in the event of completion of construction works, installation of additional equipment, reconstruction and partial liquidation of such fixed assets.

13. The Company may conduct revaluation of groups of homogenous fixed assets in accordance with the existing legislation of the Russian Federation, but not more frequently than one time each year.

Revaluation of fixed assets shall be conducted by recalculation of their acquisition value and current (replacement) value, if such assets were previously revalued, and depreciation accumulated since the commencement of utilization of such assets.

The results of revaluation of fixed assets conducted as of the first day of the reporting year shall be shown separately in the Company’s accounting records. The results of such revaluation shall not be included into the accounting statements for the previous reporting year, and shall be used to form the balance sheet as at the beginning of the current reporting year.

The amount by which the value of fixed assets is increased as a result of revaluation shall be debited from Account 01 “Fixed Assets” and credited to Account 83 “Additional Capital”. If the amount by which the value of fixed assets is increased as a result of revaluation is equal to the amount by which it was reduced as a result of revaluation during any previous reporting period and which was debited from Account 91 as an operating expense, it shall be credited to Account 91 as an operating income.

The amount by which the value of fixed assets is decreased as a result of revaluation shall be classified as undistributed profit (uncovered loss) and debited from Account 84 “Undistributed Profit (Uncovered Loss)”.

The amount by which the value of fixed assets is decreased shall decrease the additional capital (Account 83) consisting of the increases of the value of fixed assets as a result of revaluation during any previous reporting year. The excess of the amount by which the value of fixed assets is decreased as a result of revaluation over the amount by which it was increased as a result of revaluation during any previous reporting period, such amount having been credited to the additional capital account, shall be posted to the undistributed profit account (Account 84).

If the relevant fixed asset has been disposed of, the amount by which its value was increased as a result of revaluation shall be transferred from the additional capital account (Account 84) to the undistributed profit account (Account 84).

14. The value of the Company’s fixed assets shall be gradually reduced by accumulating depreciation. The Company shall use the linear depreciation method. Fixed assets shall be depreciated using the norms based on their useful lives. Useful lives of fixed assets put into operation after January 1, 2004, shall be determined in accordance with the order of the General Manager of the Company approving useful lives for each type of fixed assets based on the Uniform Russian Classification of Fixed Assets, taking into consideration the depreciation classes specified in Order of the Government of the Russian Federation No. 1 dated January 1, 2002. Rates of depreciation of fixed assets which were put into operation prior to January 1, 2004, shall be determined in accordance with the provisions of Decree of the Government of the Russian Federation No. 1072.

15. In the Company’s accounting records, fixed assets accumulated depreciation shall be shown on the debit side of expense accounts in correspondence with the credit side of the depreciation account.

As concerns fixed assets leased to third parties, accumulated depreciation shall be shown on the credit side of the depreciation account (Account 02) in correspondence with the debit side of expense accounts.

16. Fixed assets whose value does not exceed RUR 20,000 per unit shall be charged to production (distribution) costs by fully depreciating them as they are being put into operation. Acquired books, brochures and other similar publication shall be charged to production (distribution) costs as they are being released into operation.

17. Useful lives of acquired second-hand fixed assets shall be defined as the difference between the useful lives approved by the appropriate order of the General Manager of the Company with respect to new fixed assets of the same type, and duration of actual operation of such assets by their previous owners.

If duration of actual operation of any such asset by its previous owner(s) proves to be equal to, or exceeds, its useful life approved by the appropriate order of the General Manager of the Company, the Company shall determine its useful life independently, subject to safety requirements and other factors.

18. Pursuant to the existing legislation, the following fixed assets shall not be depreciated:

· Fixed assets whose consumer properties do not change with time (land plots and natural facilities);

· Fixed assets temporary closing-down;

· Fixed assets that are temporary closing-down in accordance with Russian legislation on preparedness activity and mobilization;

Residential real properties, real property improvements, perennial plants and breeding stock which have not attained the age of gainful exploitation shall be amortized at approved rates at the end of the reporting year. Amortization of these assets shall be posted to a separate off-balance sheet account.

19. Depreciation shall be accrued on a continuing basis throughout the duration of the useful lives of fixed assets, with the exception of situations where the General Manager of the Company authorizes the transfer of any

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fixed asset into long-term storage for more than three months, and during any restoration period, if its duration exceeds 12 months.

Upon completion of reconstruction, refurbishment or modernization, the funds invested may increase acquisition value of the appropriate fixed asset if its original parameters have been improved, in which case during the month following the month in which acquisition value was increased as described above depreciation charges shall be based on the replacement value of such fixed asset, but its original useful life shall not be deemed to have been increased.

20. Depreciation accruals shall start on the first day of the month following the month in which the appropriate fixed asset was registered for accounting purposes, and shall continue until the value of such fixed asset is fully depreciated, or until it is written off the Company’s balance sheet. Depreciation accruals shall cease on the first day of the month following the month in which the value of the appropriate fixed asset is fully depreciated, or the fixed asset is written off the Company’s balance sheet or transferred into long-term storage.

21. To account for disposal of fixed assets (sale, write-off, partial liquidation, etc.), there shall be a special Sub-Account 03 “Disposal of Fixed Assets” of Account 01 “Fixed Assets” in the Chart of Accounts. The debit side of this sub-account shall be used to post the value of disposed fixed assets, while its credit side shall be used to post accumulated depreciation from Account 02 “Fixed Assets Depreciation”. Residual value of the disposed fixed asset shall be transferred from the credit side of Account 01.03 to the debit side of Account 91 “Other Income and Expense Items”.

22. Costs associated with all types of repairs (current, interim, capital repairs) of production fixed assets shall be charged to the relevant expense items comprising production costs, without establishing any special repair funds.

23. Fixed assets which require installation and are in transit, even though the title thereto has already vested in the Company, shall be posted to Account 07-04 “Titles to Equipment” corresponding with Account 60 at the estimated value specified in the appropriate supply agreement, with subsequent adjustment to bring this value into conformity with the actual value.

24. If, with respect to any real estate property, all capital investments have been made, all source documents evidencing its transfer to, and acceptance by, the Company have been filed, title documents have been submitted for state registration, and the property, de facto, has been into operation, depreciation shall accrue in accordance with the general rule starting with the first day of the month following the month in which the property was put into operation. After such properties are posted to the Company’s balance sheet as fixed assets following completion of their state registration, the previously accrued amount of depreciation charges shall be adjusted accordingly.

9. Intangible Assets

1. Accounting for intangible assets shall comply with the requirements of Accounting Standard PBU 14/2000 approved by Order of the Ministry of Finance of the Russian Federation No. 91n dated October 16, 2000.

Intangible assets shall be defined as assets meeting the following conditions:

· Lack of material (physical) structure;

· Ability to be identified (segregated, separated) by the Company as existing independently of other assets;

· Ability to be used for manufacture of products, performance of works, provision of services, or management of the affairs of the Company;

· Utilization for an extended period of time (useful lives in excess of 12 months);

· Ability to generate economic benefits (income) for the Company in the future;

· Availability of properly made documents evidencing the existence of the assets and the fact that the Company has exclusive title to the fruit of intellectual activity related thereto (patents, certificates, other title documents, etc.).

Intangible assets shall include the following objects of intellectual property (exclusive title to the fruit of intellectual activity):

· Exclusive title of the patent holder to inventions, production prototypes, models;

· Exclusive copyright to computer software and databases;

· Exclusive title of the owner to trade marks;

· Business reputation of the Company;

· Administrative expenses (expenses incurred in connection with the establishment of a legal entity which, pursuant to the constitutive documents of the Company, are recognized as contributions of the members to the charter (unit) capital);

· Other assets listed in PBU 14/2000.

2. Intangible assets shall be shown in the accounting records and statements at the actual cost of acquisition, creation, manufacture, and preparation for utilization for intended purposes.

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Acquisition value of intangible assets received as contributions to the charter capital shall be determined based on their estimated cash value agreed with the founders (members) of the Company, except when otherwise stipulated by the existing legislation of the Russian Federation.

The value of intangible assets at which they were registered for accounting purposes shall not be subject to change, with the exception of situations stipulated by the existing legislation of the Russian Federation.

3. Intangible assets shall be posted to the debit side of Account 04 in correspondent with Account 08.

4. Intangible assets shall be depreciated using the linear method, based on their acquisition value and depreciation rates which shall depend on the duration of their useful lives.

5. Useful lives of intangible assets shall be determined by the Company at the time when they are registered for accounting purposes. If it proves impossible to determine the useful life of any intangible asset, it shall be depreciated over a period of time equal to twenty years.

6. Depreciation of intangible assets shall be posted to the credit side of Account 05 in correspondence with the production (distribution) cost accounts.

7. Upon disposal of intangible assets, their value as posted on Account 04 “Intangible Assets” shall be reduced by the amount of accumulated depreciation (from the debit side of Account 05 “Intangible Assets Depreciation”. Residual value of disposed intangible assets shall be transferred from the credit side of Account 04 to the debit side of Account 91 “Other Income and Expense Items”.

8. In case the intangible assets are not used in production assets shall be posted to Account 97.

10. Acquisition, Procurement, Accounting and Write-Off of Inventories

1. Accounting for inventories shall comply with the requirements of Accounting Standard PBU 5/01 “Accounting or Inventories” approved by Order of the Ministry of Finance of the Russian Federation No. 44n dated June 9, 2001.

Inventories shall include the following items:

· Raw and other materials which are used for production or management needs or scheduled for sale;

· Finished products (see Section 13 for description of the rules applicable to accounting for the manufacture of finished products);

· Goods;

· Containers and packaging materials.

2. Production stock, containers, packaging materials and goods shall be shown in the accounting records and statements at actual cost.

3. For the purposes of accounting of different groups of inventory holdings there are special control accounts. Index of inventory holdings accounted on special control accounts is attached to the given accounting policy (attachment #).

4. Actual cost of the aforementioned items shall be determined on the basis of their acquisition cost:

· Amounts paid to the sellers under the appropriate contracts, without taking into consideration value added tax and other reimbursable taxes;

· Amounts paid to various entities for provision of information and consulting services in connection with the acquisition of inventories;

· Customs duties;

· Expenses incurred in connection with the procurement and delivery of inventories to the place of their utilization, including insurance costs;

· Remunerations paid to intermediaries through which inventories were acquired;

· Non-reimbursable taxes paid in connection with the acquisition of inventories;

· Costs incurred in connection with the preparation of inventories for being used for intended purposes;

· Other costs directly associated with the acquisition of inventories.

General overheads and other similar expenses shall not be classified as actual costs incurred in connection with the acquisition of inventories, except when they are directly attributable thereto.

5. Actual costs of acquisition of inventories shall be determined subject to the foreign currency translation gains or losses arising prior to the registration of inventories for accounting purposes in situations where the payment is made in rubles for an amount equivalent to the amount denominated in foreign currency (conventional unit). Foreign currency translation gains and losses arising after inventories have been registered for accounting purposes shall be classified as non-operating income (expense) items and posted to Account 91 “Other Income and Expense Items”.

6. The cost of inventories and goods shall also include the costs incurred in connection with the acquisition of related containers and packaging materials. If the cost of containers and packaging materials received from

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suppliers together with inventories is included into the price of such inventories, such cost may be, if necessary, deducted from total costs to the extent that such containers and packaging materials may be put to new use.

7. Actual cost of inventories received under agreements envisaging discharge (payment) of obligations in-kind shall be the value of the assets transferred or due to be transferred by the Company. The value of the assets transferred or due to be transferred by the Company shall be determined based on the price which the Company usually assigns to similar assets under similar circumstances. If it proves impossible to determine such value, the cost of received inventories shall be determined based on the price of acquisition of similar inventories.

8. The actual cost of inventories at which they were registered for accounting purposes shall not be subject to change, with the exception of situations stipulated by the existing legislation of the Russian Federation.

9. The actual cost of inventories being released into production, or otherwise disposed of, shall be determined based on the average unit cost of each type of inventories which, in its turn, shall be calculated as the quotient of total cost of the relevant type of inventories by the quantity of such inventories consisting, respectively, of the cost and quantity balances at the beginning of the appropriate month and the cost and quantity of inventories received as of the date of such release or disposal. Average cost shall be calculated for each type of inventories taking into consideration all analytical data related to the accounts used for inventory accounting.

10. Responsibility for maintaining records of fuel and lubricants shall be borne by the person appointed by the General Manager of the Company. Such person shall submit to the Accounting Department monthly reports on the consumption of fuel and lubricants based on the data contained in trip tickets.

11. The cost of consumed fuel and lubricants shall be charged to the cost of products (works, services) at the rates approved by the General Manager of the Company.

12. The cost of inventories with respect to which supply contracts stipulate that the title thereto passes to the Company at the time of shipment, and inventories which, at the end of the month, are in transit or have not been collected from supplier warehouses shall be posted to the debit side of Account 10 “Materials” or Account 41 “Goods”, respectively, and to the credit side of Account 60 “Settlements with Suppliers and Contractors” (without being registered as having been delivered to the warehouse of the Company), at the value stipulated by the appropriate supply contracts with subsequent adjustment to the actual cost (if no shipment documents are available), or at actual cost (if shipment documents or facsimile copies thereof are available).

13. Upon disposal of inventories (whether by release into operation or otherwise), their cost shall transferred from the credit side of Account 10 “Materials” to the debit side of Account 91 “Other Income and Expense Items”; upon sale or gratuitous transfer of inventories, their cost shall be posted to the debit side of Account 90-02 “Cost of Sales”.

14. Goods acquired by the Company for resale shall be posted at acquisition value. The purchase price of such goods shall include all costs listed in paragraph 10.3. If it proves impossible to allocate by individual goods expenses incurred in connection with the their procurement and delivery to central warehouses (bases) prior to their resale, such costs shall be classified as distribution expenses.

11. Protective Clothes and Special Accessories

To ensure efficient accounting, all protective clothes and special accessories shall be divided into the following three groups:

1) Protective clothes and special accessories with useful lives not exceeding 3 months, regardless of their value.

These assets shall be posted to accounts 10-07-03,10-07-04,10-07-05 and 10-07-06 similarly to materials, with more than one unit per each classification number.

The cost of protective clothes with useful lives of less than 3 months shall be charged to production costs in terms of both amount and quantity at the time when they are issued to the appropriate employee (released into operation).

Release of protective clothes and special accessories into operation shall be reflected in the accounting records by making the following entries: Dt Account 10-07-04 “Protective Clothes in Use” – Ct Account 10-07-03 “Protective Clothes at Warehouse”, and Dt Account 10-07-06 “Special Accessories in Use” – Ct Account 10-07-05 “Special Accessories at Warehouse”. Concurrently therewith, the cost of protective clothes and special accessories shall be charged to costs by debiting expense accounts and crediting Account 10-07-04 “Protective Clothes in Use” and Account 10-07-06 “Special Accessories in Use”. As a result, no protective clothes shall remain of the balance sheet of the Company.

2) Protective clothes and special accessories with useful lives ranging from 3 months to 12 months, regardless of their value, and protective clothes and special accessories with useful lives exceeding 12 months and a value of less than RUR 10 thousand.

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These protective clothes shall be posted to Account 10 similarly to materials, with more than one unit per each classification number.

To ensure preservation of such types of protective clothes, at the time when they are issued to the appropriate employee (released into operation) they shall be charged to production costs only in terms of amount.

Release of protective clothes and special accessories into operation shall be reflected in the accounting records by making the following entries: Dt Account 10-07-04 “Protective Clothes in Use” – Ct Account 10-07-03 “Protective Clothes at Warehouse”, and Dt Account 10-07-06 “Special Accessories in Use” – Ct Account 10-07-05 “Special Accessories at Warehouse”. Concurrently therewith, the cost of protective clothes and special accessories shall be charged to costs by debiting expense accounts and crediting Account 10-07-04 “Protective Clothes in Use” and Account 10-07-06 “Special Accessories in Use” only in terms of amount, without indicating the quantity. As a result, such protective clothes shall be reflected on the balance sheet in the appropriate quality at zero cost.

3) Protective clothes and special accessories with useful lives exceeding 12 months.

Such protective clothes and special accessories shall be posted to Account 10 similarly to fixed assets, with individual inventory number being assigned to each item.

Release of protective clothes and special accessories into operation shall be reflected in the accounting records by the following entries: Dt Account 10-07-04 “Protective Clothes in Use” – Ct Account 10-07-03 “Protective Clothes at Warehouse”, and Dt Account 10-07-06 “Special Accessories in Use” – Ct Account 10-07-05 “Special Accessories at Warehouse”. These assets shall be depreciated by using the linear method throughout their useful lives as determined by applicable special standards. The appropriate accounting entry shall be as follows: Dt Expense Accounts – Ct Account 10-07-04 “Protective Clothes in Use” and Account 10-07-06 “Special Accessories in Use”.

Depreciation charge = acquisition value * monthly depreciation percentage rate.

As a result, such protective clothes and special accessories shall be reflected on the balance sheet in the appropriate quality at residual value.

14. Calculation of production expenditures, distribution of expenditures and calculation of cost price.

1. For the purposes of common activities production costs calculation the following accounts are foreseen:

20 «Production»

21 «In-house semi-manufactured goods»

23 «Auxiliary production»

25 «Field costs»

28 «Defective goods»

2. Calculation of production costs should be carried out according to normative method.

3. The rate of primary and auxiliary raw material expenses and losses should be approved by senior officer’s order.

4. Factor costs should be accumulated within a month on accounts 20 «Production», 21 «In-house semi-manufactured goods», 23 «Auxiliary production». Sum of expenditures regarding objects of calculation is accumulated on account 20-01 “In-house manufactured goods”

5. Salary of main production workers, related to account 20, should be distributed to objects of calculation pro rata labour-intensivness.

6. Auxiliary production expenditures should be copied from on accounts 20,23,25,26,44,90 in accordance with received report on actually completed works.

7. Field costs are accumulated on account 25 «Field costs»

8. Field costs should be copied from production and distributed regarding production types pro rata to factor cost of production. Among the factor costs of production are: raw material costs, main and auxiliary material costs, package costs, fuel and energy pended for technological purposes, salary costs, social expenses.

15. Production in Progress and Deferred Expenses

1. Products (works) which have not passed through all stages envisaged by the technological process, and products which have not passed quality assurance, shall be classified as production in progress.

2. Production in progress shall be shown on the balance sheet at production cost.

3. Expenses incurred during the reporting period, but related to future reporting dates, shall be shown in accounting records as a separate item (deferred expenses), and shall be charged to production and distribution costs (or to the appropriate sources of funding used by the Company) in equal installments throughout the period to which they relate.

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Deferred expenses shall include licenses for the conduct of certain types of operations, which shall be depreciated throughout the effective terms of such licenses.

16. Income and Expense Accounting

1. Accounting for the Company’s income and expenses shall comply with the requirements of Accounting Standard PBU 9/99 “Corporate Income” approved by Order of the Ministry of Finance of the Russian Federation No. 32n dated May 6, 1999, and Accounting Standard PBU 10/99 approved by Order of the Ministry of Finance of the Russian Federation No. 33n dated May 6, 1999.

13.2. The income of the Company shall be defined as the increase of economic benefits as a result of receipt of assets (cash, other property) and/or discharge of obligations, having the net effect of increasing the capital of the Company other than the contributions of the members (owners of property).

13.3. The following items received from legal entities and individuals shall not be classified as the income of the Company:

· Value added tax, excise duties, export duties and other similar mandatory payments;

· Amounts received under commission agreements, agency agreements and other similar agreements by the commissionaire, principal, etc.;

· Amounts received as prepayments for products, goods, works, services;

· Amounts received as advance payments for products, goods, works, services;

· Down payments;

· Pledged assets, if the appropriate pledge agreements envisage that such pledged assets should be in the custody of the pledgee;

· Amounts received in repayment of credits, loans extended to borrowers.

4. The income of the Company shall be divided into:

(a) Income from routine operations;

(b) Operating income;

(d) Extraordinary income.

5. Routine income of the Company shall include the following items:

· Proceeds from the sale of products, goods, inventories;

· Proceeds related to the performance of works and provision of services;

· Proceeds related to the transfer, for a fee, of the assets of the Company into temporary possession and temporary use;

· Proceeds related to the granting, for a fee, of rights arising out of patents to inventions, production prototypes and other types of intellectual property (hereinafter collectively referred to as the “proceeds”).

The amount of the proceeds shall be determined taking into consideration foreign currency translation gains or losses emerging when the payment is made in rubles for an amount equivalent to the amount denominated in foreign currency (conventional unit), such gains and losses increasing or decreasing the amount of the proceeds, respectively. Foreign currency translation gains and losses shall be defined as the difference between the ruble value of an asset denominated in foreign currency (conventional units) which has actually been received a part of the proceeds, such value being calculated at the official or another agreed exchange rate as of the date when such asset is registered for accounting purposes, and the ruble value of such asset calculated at the official or another agreed exchange rate as of the date of recognition of such proceeds. The proceeds shall be posted to Account 90 “Sales”.

6. Operating income of the Company shall include the following items:

· Proceeds related to equity participations in other entities (including interest and other income on securities);

· Profit received by the Company from joint operations (under ordinary partnership agreements);

· Proceeds from the sale of fixed assets and other assets not listed in paragraph 14.5;

· Interest received on the cash transferred by the Company into temporary use, and interest received from the bank for the use by the latter of the cash deposited by the Company with such bank;

· Proceeds from the sale of foreign currency.

7. Non-operating income of the Company shall include the following items:

· Fines, penalties and forfeits paid to the Company for violation by the counterparties of the terms and conditions of their agreements with the Company (these items shall be posted in the amounts awarded by courts or recognized by debtors);

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· Assets received on a gratuitous basis, including assets received under donation agreements (these items shall be posted at their market value). The market value of assets received on a gratuitous basis shall be determined by the Company based on the prices for the same or similar assets in effect as of the date when they are registered for accounting purposes. The information about the prices in effect as of such date shall be supported by the appropriate documents or the findings of expert evaluation. Assets received on a gratuitous basis, including assets received under donation agreements, shall be classified as deferred income and posted to the credit side of Account 98 “Deferred Income” in correspondence with the appropriate asset accounts. Depreciation of gratuitously received assets shall be posted to the credit side of Account 02 “Fixed Assets Depreciation” in correspondence with the appropriate production and distribution costs accounts. Concurrently with the accrual of depreciation of fixed assets and release of inventories, amounts posted to Account 98 with respect to gratuitously received assets shall be transferred to the credit side of Account 91 “Other Income and Expense Items”;

· Amounts received as indemnification of losses sustained by the Company (these items shall be posted in the amounts awarded by courts or recognized by debtors);

· Profits of past period identified during the reporting year;

· Accounts payable and deposits payable with expired periods of limitations (these items shall be posted in the amounts in which they were reflected in the accounting records of the Company);

· Translation adjustments;

· Amounts by which the value of assets is increased as a result of revaluation (these amounts shall be determined in accordance with the approved assets revaluation procedure);

· Other non-operating income items (these items shall be posted in their actual amounts);

· Budget allocations received by the Company as partial coverage of interest payments under credit agreements.

8. Operating income, non-operating income and extraordinary income shall be posted to Account 91 “Other Income and Expense Items”.

9. Expenses of the Company shall be defined as the decrease of economic benefits as a result of disposal of assets (cash, other property) and/or assumption of obligations, having the net effect of decreasing the capital of the Company other than the reduction of contributions of the members (owners of property).

10. The following asset dispositions shall not be classified as expenses of the Company:

· Amounts related to acquisition (creation) of non-current assets (fixed assets, construction in progress, intangible assets, etc.);

· Contributions to charter (unit) capitals of other entities, acquisition of shares of joint stock companies and other securities not for resale (sale);

· Amounts paid under commission agreements, agency agreements and other similar agreements to the commissionaire, principal, etc.;

· Amounts paid as prepayments for inventories and other goods, works, services;

· Amounts paid as advances for inventories and other goods, works, services;

· Amounts paid as repayment of credits, loans received by the Company.

11. Depending on their nature, conditions in which they are incurred, and related areas of operations of the Company, the expenses of the Company shall be divided into:

(a) Expenses related to routine operations;

(b) Operating expenses;

(d) Extraordinary expenses.

12. Expenses of the Company related to routine operations shall include the following items:

· Expenses related to production and distribution of its products;

· Expenses related to purchase and sale of goods;

· Expenses related to manufacture, acquisition and sale of inventories;

· Expenses related to performance of works and provision of services;

· Expenses related to the transfer, for a fee, of the assets of the Company into temporary possession and temporary use;

· Expenses related to the granting, for a fee, of rights arising out of patents to inventions, production prototypes and other types of intellectual property.

The amount of the expenses shall be determined taking into consideration foreign currency translation gains or losses emerging when the payment is made in rubles for an amount equivalent to the amount denominated in foreign currency (conventional unit), such gains and losses increasing or decreasing the amount of the expenses, respectively. Foreign currency translation gains and losses shall be defined as the difference between the ruble value of an expense denominated in foreign currency (conventional units) which has actually been incurred, such

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value being calculated at the official or another agreed exchange rate as of the date when the appropriate account payable is registered for accounting purposes, and the ruble value of such expense calculated at the official or another agreed exchange rate as of the date of recognition of such expense.

Expenses related to routine operations shall also include replacement of the value of fixed assets, intangible assets and other depreciable assets in the form of depreciation charges.

13. Expenses of the Company related to routine operations shall comprise:

· Expenses related to acquisition of raw and other materials, goods and other inventories;

· Expenses incurred directly in the course of processing (finishing) of the inventories with a view to manufacture products; performance of works/provision of services and sale thereof; and sale of the goods (expenses related to the maintenance and operation of fixed assets and other non-current assets, expenses related to the keeping of such assets in good operating order, as well as commercial, administrative and other expenses).

14. Expenses of the Company related to routine operations shall be grouped as follows:

· Material costs;

· Labor costs;

· Social benefits;

· Depreciation;

· Other costs.

For accounting purposes, the Company shall organize the maintenance of accounting records with respect to expenses with a breakdown by cost items. Cost accounts shall be maintained in accordance with the provisions of Section 12 of this Policy.

15. With a view to arrive to the financial result of routine operations, the Company shall determine the cost of sold goods, products, works and services which shall be based on expenses related to routine operations, whether the same are recognized during the current or any previous reporting period, and unexpired expenses related to receipt of income during any subsequent reporting period, subject to adjustments to account for the differences inherent in manufacture of products, performance of works and provision of services, as well as in the sale thereof and in the sale (resale) of goods.

Commercial and administrative expenses shall be fully recognized during the reporting period in which they were recognized as expenses related to routine operations of the Company.

16. Administrative expenses shall be posted to the debit side of Account 26 “General Overheads” in correspondence with the accounts related to inventories, payment of wages and salaries to employees, settlements with other entities (individuals), etc. Administrative expenses shall include the following items: administrative management expenses; expenses related to the maintenance of managerial personnel not directly associated with the production process; expenses related to depreciation and repair of administrative and general fixed assets; expenses related to the payment of rent for general premises; expenses related to the payment of land taxes and vehicle taxes; expenses related to the payment for information, audit, consulting and other services; other similar administrative expenses.

At the end of each reporting period, administrative expenses shall be charged to products sold (debit of Account 90).

Administrative expenses shall be allocated among various types of operations in proportion to the proceeds (without tax) from the sale of products (works, services) received from such types of operations.

The basis for the allocation of such expenses among various types of operations shall be the gross pre-tax income from sales, based on applicable selling prices.

For the purposes of commercial operations, gross income shall be defined as the difference between the income received and the cost of goods sold.

19. Operating expenses of the Company shall include the following items:

· Expenses related to equity participations in charter capitals of other entities;

· Expenses related to the sale, disposal and other withdrawal of fixed assets and other assets not listed in paragraph 14.12;

· Interest paid by the Company for cash credits and loans received by it;

· Expenses related to the payment for the services provided by credit institutions;

· Allocations to valuation reserves established in accordance with the applicable accounting rules (loan loss provisions, securities impairment provisions, etc.), and to reserves established in connection with the recognition of contingent commitments of the Company;

· Expenses related to the sale of foreign currencies;

· Other operating expenses.

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21. Extraordinary expenses of the Company shall include expenses incurred as a result of the operation of force majeure circumstances (natural disasters, fires, accidents, nationalization of property, etc.).

22. Operating expenses, non-operating expenses and extraordinary expenses shall be posted to Account 91 “Other Income and Expense Items”.

17. Income and Expense Recognition

1. Proceeds shall be recognized, if the following conditions are satisfied:

· The Company has the right to receive such proceeds, such right arising from a specific agreement or another document similar to an agreement, or being otherwise properly confirmed;

· The amount of the proceeds can be quantified;

· There exists certainty that a specific operation shall result in an increase of economic benefits to the Company. Certainty that a specific operation shall result in an increase of economic benefits to the Company exists when the Company has received certain assets as payment, or when eventual receipt of such assets causes no doubts whatsoever;

· The title to (the right to possess, use and dispose of) the products (goods) has passed from the Company to the buyer, and the work has been accepted by the customer (the services has been provided);

· Expenses that have been, or shall be, incurred in connection with the operation can be quantified.

If at least one of the above conditions is not satisfied with respect to cash or other assets received or to be received by the Company as payment, the appropriate item shall be recognized in the Company’s accounting records as accounts receivable, and not as proceeds.

2. If the proceeds from the sale of products, performance of works, provision of services cannot be quantified, it shall be registered for accounting purposes in the amount equal to the amount of recognized expenses related to the manufacture of such products, performance of such works or provision of such services which shall subsequently be reimbursed to the Company.

3. Other receipt shall be recognized as follows:

· Receipts from the sale of fixed assets and other assets other than cash (with the exception of foreign currency), products and goods, as well as interest received from the loans extended by the Company and income from equity participations in other entities shall be recognized in accordance with the procedure similar to that described in paragraph 15.1 of this Policy. For accounting purposes, interest shall accrue for each complete reporting period in accordance with the terms and conditions of the appropriate agreements; fines, penalties and forfeits for contractual defaults and indemnification of the losses sustained by the Company shall be recognized during the reporting period in which they were awarded by courts or recognized by debtors;

· Accounts payable and deposits payable with expired periods of limitations shall be recognized during the reporting period in which periods of limitations have expired;

· Amounts by which the value of assets is increased as a result of revaluation shall be recognized during the reporting period in which there occurs the date as of which revaluation was performed;

· Other receipts shall be recognized as they are being received (identified).

4. Expenses shall be recognized, if the following conditions are satisfied:

· The appropriate expense is made in accordance with the provisions of a specific agreement or another document similar to an agreement, or subject to the requirements of applicable laws and regulations or prevailing business customs;

· The amount of the expense can be quantified;

· There exists certainty that a specific operation shall result in a decrease of economic benefits to the Company. Certainty that a specific operation shall result in a decrease of economic benefits to the Company exists when the Company has transferred certain assets, or when eventual transfer of such assets causes no doubts whatsoever.

If at least one of the above conditions is not satisfied with respect to any expense incurred by the Company, the appropriate item shall be recognized in the Company’s accounting records as accounts payable.

Linear depreciation charges shall be recognized as expenses.

5. Expenses shall be recognized during the reporting period in which they were incurred, regardless of when the cash was actually paid, or when the expense was otherwise made (assumption of temporal determinacy of business operations).

6. Revenue and losses of the company should be calculated in the reporting period in which the primary documents verifying such revenue and losses have been singed. In case primary documents, relating to previous periods, will be presented in the reporting period, revenues and loses originated according these documents should be calculated in the period such documents have been presented. Previous periods should not be adjusted.

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15. Capital and Reserve Fund

1. The Company’s accounting records shall show the amount of charter capital registered in the constitutive documents of the Company as the sum total of contributions (units, shares at par value, installments) made by the founders (members) of the Company.

2. Amounts by which the value of non-current assets is increased as a result of revaluation conducted in accordance with the established procedure shall be shown as additional capital.

3. The amount of the difference between the selling price and the par value of shares emerging in the course of formation or increase of the charter capital shall be shown in accounting records as issuance income, such income being one of the components of additional capital.

4. The Company shall create a reserve fund, the amount thereof being as stipulated by the charter of the Company, but at least 5 percent of the amount of the charter capital. The reserve fund shall be formed by mandatory annual contributions, such contributions to be made until the fund attains the amount stipulated by the charter of the Company. The amount of the annual contributions shall be provided by the charter of the Company, but may not be less than 5 percent of net profit of the Company until the fund attains the amount stipulated by the charter of the Company.

16. Deferred Charges Reserve

1. To ensure continuous steady inclusion of expenses into production costs, the Company shall create a reserve covering deferred charges and vacation allowances. The amounts so reserved shall be posted to the credit side of Account 96 “Deferred Charges Reserves” in correspondence with production and distribution cost accounts.

2. The reserve shall be created in accordance with the following procedure:

1. The Company shall determine the anticipated payroll for the reporting year, including the uniform social tax (UST).

2. The Company shall determine the aggregate amount of expenses related to the payment of vacation allowances during the reporting year, including UST, and the amount of additional expenses covering vacation allowances not used during the preceding reporting year, including UST. These expenses shall be calculated as the product of the number of vacation days (including those not used during the preceding reporting year) and the average daily salary paid to the employees of the Company. To calculate the average daily salary, the anticipated payroll shall be divided by the expected number of employees, then by 12, and then by 29.6 (average number of calendar days in a month for the purposes of calculation of vacation allowances).

3. The rate of contributions to the reserve shall be calculated in accordance with the following formula: Contribution rate = paragraph 2 / paragraph 1 * 100. The contribution rate shall be rounded to the second decimal place using standard rounding rules.

4. The rate of contributions to the reserve, as well as the amount of the reserve should be confirmed by the Company’s CEO order.

5. The amount of monthly contribution to the reserve shall be calculated in accordance with the following formula: Monthly contribution = actual payroll (including UST) per month * contribution rate, and shall be posted using the following accounting entry: Dt Accounts 20, 23, 25, 26, 44, 91 – Ct Account 96-01.

6. The amount of vacation allowances actually accrued and payable to the employees shall be posted by using the following accounting entry: Dt Account 96-01 – Ct Accounts 70, 69.

7. On the last day of the current reporting year, the Company shall audit the reserve (compare the amount of funds transferred to the reserve with the actual amount of paid vacation allowances).

The amount of deferred charges related to the payment to the employee of vacation allowances shall be adjusted to take into consideration the number of unused vacation days, the average daily labor expenses (subject to the approved methodology for the computation of the average salary), and mandatory UST payments.

8. In case the account policy for the next tax period contains provisions regarding forming of reserve for forthcoming leave expenditures, sums of untapped reserve should be endured to the next tax period.

3. No other deferred charges reserves shall be created by the Company.

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20. Reserve for dubious debts.

1. Reserve for dubious debts shall not be created.

21. Property Insurance Payments

1. The Company shall voluntarily execute insurance agreements, with all expenses related thereto being charged to production costs.

2. Accrued insurance payments shall be posted to the credit side of Account 76/1 “Property and Personal Insurance Premiums” in correspondence with production cost accounts (Accounts 20, 23, 25, 26, 44, 91, and 97).

3. The aforementioned insurance payments shall be transferred from the credit side of cash accounts (Accounts 51, 52, 50) to the debit side of Account 76/1.

4. If the insurance agreement envisages that the insurance premium should be paid in one installment for the entire effective term thereof (or for a portion of such term), the relevant expenses shall be recognized gradually throughout the effective term of such agreement (or throughout the appropriate portion of such term). If that is the case, insurance payments shall be posted to the credit side of Account 76-01 “Property and Personal Insurance Premiums” in correspondence with the debit side of Account 97 “Deferred Expenses”, and then gradually written off in equal installments throughout the effective term of the insurance agreement to Accounts 25, 26, 44, and 91.

5. If the insurance agreement envisages that the insurance payment should be paid in monthly installments, the relevant expenses shall be recognized during the month in which the Company, acting in accordance with the provisions of such agreement, transferred (released) the cash required for the payment of insurance premiums. If that is the case, accrued insurance payments shall be posted to the credit side of Account 76-01 “Property and Personal Insurance Premiums” in correspondence with Accounts 25, 26, 44, and 91. The aforementioned insurance payments shall be posted to the credit side of cash accounts (Accounts 51, 52, 50) in correspondence with the debit side of Account 76-01.

6. Losses of insured inventories shall be transferred from the credit side of Accounts 10, 12, and 40 to the debit side of Account 76/1.

7. Insurance benefits received by the Company from insurance companies shall be posted to the debit side of cash accounts (Accounts 51, 52, 50, 55) and to the credit side of Account 76/1.

8. To the extent that losses resulting from the occurrence of insured events are not compensated by insurance benefits, they shall be transferred from the credit side of Account 76/1 to the debit side of Account 91.

9. Analytical accounting records on Account 76/1 shall be maintained with a breakdown by insurers and individual insurance agreements.

22. Profits (Losses), Funds, Profit Distribution

1. Profit (loss) shall be defined as the net financial result (profit or loss) of the reporting period, as determined on the basis of accounting records reflecting all business operations of the Company, and shall be posted to Account 99 “Profits and Losses”.

The net financial result shall consist of the financial result of routine operations and other income and expense items, including extraordinary income and extraordinary expense. The losses (expenses) and profits (income) of the Company shall be posted to the debit and credit sides of Account 99, respectively.

2. When accounting statements are prepared at the end of the reporting year, Account 99 “Profits and Losses” shall be closed by the last December entry, and the balance thereof shall be transferred to the credit (debit) side of Account 84 “Undistributed Profit (Uncovered Loss) of the Reporting Year”.

3. Profits and losses which have been identified during the reporting year, but are related to operations of past years, shall be included into the financial result of the reporting year.

4. Income which has been received during the reporting year, but is related to subsequent reporting periods, shall be shown in accounting records and statements as a separate item on Account “Deferred Income”. Such income shall be included into the financial result upon the occurrence of the reporting period to which it is related.

5. The profit remaining at the disposal of the Company shall be distributed in accordance with the appropriate resolution of the general meeting of shareholders.

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23. Exchange Rate Gains and Losses and
Foreign Currency Translation Gains and Losses

1. Exchange rate gains and losses arising in connection with the fluctuation of the official exchange rates of foreign currencies vis-à-vis the Russian ruble during the reporting year shall be classified as non-operating income and expense items, and posted to Account 91 “Other Income and Expense Items”.

2. Foreign currency translation gains and losses arising as a result of recognition of the income (proceeds) of the Company during the reporting period when such income (proceeds) is posted to the accounts of the Company shall be classified as part of such income (proceeds).

3. If foreign currency translation gains and losses arise during the reporting year following the year during which the income (proceeds) of the Company was posted to the accounts of the Company, they shall be classified as non-operating income (expense).

4. Foreign currency translation gains and losses arising in connection with the acquisition of fixed assets and inventories after such fixed assets and inventories are registered for accounting purposes shall be classified as non-operating income (expense).

5. Foreign currency translation gains and losses arising after the acceptance of services provided to the Company shall be classified as expenses related to routine operations, and posted to the same expense accounts as those used for posting the cost of such services. If foreign currency translation gains and losses arise during the reporting year following the year during which the services provided to the Company were accepted and posted to the accounts of the Company, they shall be classified as non-operating income (expense).

25. Credits and Loans, Composition and Procedure
for the Recognition of Credit and Loan Losses

1. Accounting for amounts owed under credits and loans received by the Company, and for expenses related to the discharge of obligations under credits and loans, including commodity and commercial loans and loans, obtained by issuance of notes and issuance and distribution of bonds, shall comply with the requirements of Accounting Standard PBU 15/01 “Credits and Loans Accounting” approved by Order of the Ministry of Finance of the Russian Federation No. 60n dated August 2, 2001.

2. Credits and loans, as well as interest payable to creditors and lenders, shall be posted to Account 66 “Settlements under Short-Term Credits and Loans” and Account 67 “Settlements under Long-Term Credits and Loans”, with the principal and interest payable being posted to separate sub-accounts. Analytical accounting records for credits and loans received, including loan commitments assumed by the Company, shall be maintained with a breakdown by types of credits and loans, credit institutions and other lenders extending such credits and loans, and individual credits and loans (types of loan commitments).

3. The principal amount of the debt (hereinafter referred to as the “indebtedness”) owed to the creditor or lender under the appropriate credit or loan agreement shall be posted in accordance with the terms and conditions of such credit or loan agreement in the amount equal to the amount of cash actually received by the Company, or to the cash value of other property received by the Company under the agreement, at the time when such cash or property is actually received by the Company, as part of accounts payable.

4 Indebtedness of the Company under credits and loans received shall, for accounting purposes, be divided into short-term indebtedness and long-term indebtedness. Short-term indebtedness shall be defined as indebtedness under credits and loans received with contractual maturities not exceeding 12 months; long-term indebtedness shall be defined as indebtedness under credits and loans received with contractual maturities exceeding 12 months.

5. The Company shall reclassify long-term indebtedness as short-term indebtedness. Reclassification of long-term indebtedness under credits and loans received as short-term indebtedness shall be performed by the Company at the time when, in accordance with the terms and conditions of the appropriate credit agreement and/or loan agreement, there remains 365 days to the date of repayment of the principal.

6. In situations stipulated by the existing legislation, the Company may engage in borrowing by issuance of notes, and by issuance and distribution of bonds (hereinafter referred to as the “outstanding loan commitments”).

7. The indebtedness under credits and loans received which is denominated in foreign currency or conventional units shall be posted by the Company in rubles, the amount thereof being converted at the exchange rate of the Central Bank of the Russian Federation in effect as of the date of the operation (extension of credit or loan, issuance of loan commitments) or, if no such exchange rate is quoted by the Central Bank of the Russian Federation, at the exchange rate determined by mutual agreement of the parties.

8. Return by the Company of credits or loans received, including outstanding loan commitments (principal amount), shall be shown in the accounting records of the borrower as reduction (repayment) of the appropriate accounts payable.

9. Expenses related to the receipt and utilization of credits and loans shall include the following:

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· Interest payable to creditors and lenders on the credits and loans received from them;

· Interest and discounts on due and payable notes and bonds;

· Additional costs incurred in connection with the receipt of credits and loans, issuance and distribution of loan commitments;

· Exchange rate gains and losses and foreign currency translation gains and losses related to due and payable interest on credits and loans received and denominated in foreign currency or conventional units, such gains and losses accruing from the date of accrual of interest in accordance with the terms and conditions of the appropriate agreements to the date of the actual payment (transfer) of such interest.

10. Expenses related to credits and loans received shall be recognized during the period in which they are incurred (hereinafter referred to as the “current expenses”), with the exception of the portion of such expenses to be included into the cost of the appropriate investment assets.

Accrued interest shall be posted to separate sub-accounts. Interest accrued under short-term and long-term credit and loan agreements and payable within 365 days after the reporting date shall be posted to Sub-Account 66-02 “Interest on Short-Term Credits and Loans”. Interest accrued under short-term and long-term credit and loan agreements and payable within more than 365 days after the reporting date shall be posted to Sub-Account 67-02 “Interest on Long-Term Credits and Loans”. Interest posted to Account 67-02 and payable within more than 67-02 days after the reporting date shall be transferred to Sub-Account 66-02 “Interest on Short-Term Credits and Loans”.

11. Investment assets shall be defined as fixed assets, real properties and other similar assets whose acquisition and/or construction require significant time and expenses. Such assets shall be classified as goods and not as investment assets, if they are acquired expressly for the purpose of subsequent resale.

12. Expenses related to credits and loans shall be included into current expenses in the amounts due under the appropriate credit and loan agreements executed by the Company, regardless of the form and the date which the relevant payments are actually made.

13. Interest on credits and loans received shall be accrued by the Company in accordance with the procedure established by the appropriate credit and loan agreements.

14. Indebtedness under credits and loans received shall be shown in accounting records and statements so as to include the interest payable under the terms and conditions of the appropriate credit and loan agreements at the end of the reporting period.

15. Interest and discounts on due and payable notes and bonds and other outstanding loan commitments shall be shown by the Company in its accounting records and statements in accordance with the following procedure:

(a) with respect to outstanding notes – the note issuer shall classify the amount indicated on the note (hereinafter referred to as the “note principal amount”) as accounts payable.

If any interest accrues on the note principal amount of outstanding notes, indebtedness related to such notes shall be shown by the note issuer so as to include the interest due and payable on such notes in accordance with the terms and conditions of the note issue agreement at the end of the reporting period.

If the note is issued with a view to obtain a cash loan, the amount of the interest or discounts due and payable to the note holder shall be classified by the note issuer as operating expenses.

(b) with respect to outstanding bonds – the bond issuer shall classify the par value of the bonds issued and distributed as accounts payable.

If any interest accrues on the bonds, the bond issuer shall post the indebtedness related to distributed bonds so as to include the interest due and payable on such bonds at the end of the reporting period.

If there is any income (interest or discount) due and payable on outstanding bonds, the bond issuer shall classify and post it as operating expenses during the reporting periods to which the relevant income relates.

Interest on other loan commitments due and payable to the lender shall be accrued by the Company in equal (monthly) installments and classified as operating expenses during the reporting periods to which the relevant accruals relate.

16. Additional costs incurred in connection with the receipt of credits and loans, issuance and distribution of loan commitments, may include expenses related to the following:

· Provision of legal and consulting services to the borrower;

· Provision of copying and duplication services;

· Payment of taxes and duties (in situations stipulated by the existing legislation);

· Expert evaluations;

· Consumption of communication services;

· Other expenses directly related to the receipt of credits and loans and distribution of loan commitments.

17. Additional expenses related to receipt of credits and loans and distribution of loan commitments shall be included into current expenses during the reporting period in which they were recognized. Additional expenses

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shall be first recorded as deferred expenses, and then reclassified as operating expenses over the duration of the period of repayment of the aforementioned loan commitments.

18. Accrued interest on due and payable credits and loans denominated in foreign currency or conventional units shall be recorded in rubles, the amount thereof being converted at the exchange rate of the Central Bank of the Russian Federation in effect on the date when such interest was actually accrued in accordance with the terms and conditions of the appropriate agreement or, in the absence of such official exchange rate, at the exchange rate mutually agreed by the parties.

19. Expenses related to credits and loans directly associated with the acquisition and/or construction of investment assets shall be included into the value of such assets and depreciated over time. Expenses related to non-depreciable credits and loans directly associated with the acquisition and/or construction of investment assets shall not be included the value of such assets, being instead classified as operating expenses.

20. Inclusion of expenses related to credits and loans received into the acquisition value of investment assets shall be discontinued on the first day of the month following the month when such assets are recorded for accounting purposes as fixed assets or asset groups (with a breakdown by the types of assets comprising such groups).

21. If any investment assets are not recorded for accounting purposes as fixed assets or asset groups (with a breakdown by the types of assets), but the Company has actually started to use them for manufacture of products, performance of works or provision of services, inclusion of expenses related to credits and loans received into the acquisition value of such investment assets shall be discontinued on the first day of the month following the month when the operation of such assets actually started.

26. Amendments and Additions to Accounting Policy

1. This Accounting Policy may be amended in the following situations:

· Reorganization of the Company;

· Change of the owner of the Company;

· Modification of accounting laws and regulations;

· Development of new accounting methodologies (either by the Ministry of Finance of the Russian Federation or by the Company);

· Material changes in the conditions in which the Company conducts its operations;

· Other situations stipulated by the Law “On Accounting”.

2. To ensure comparability of data, all changes to this Accounting Policy shall come into effect as of the beginning of a new fiscal year. Exclusions from this rule shall be possible, if the relevant accounting regulations allow retroactive use of new standards.

3. Approval of new methods to be used for the maintenance of accounting records of business operations of the Company which are different from those conducted earlier, or are entirely new, shall not be deemed to be a change to this Accounting Policy.

4. All changes to this Accounting Policy shall be well substantiated and confirmed by appropriate orders or instructions.

Chief Accountant of the Company

I.V. Plekhanova

Accounting Policy for Taxation Purposes in 2006

1. General

1. Tax accounting of Wimm-Bill-Dann Foods, OJSC shall be performed in accordance with the Tax Code of the Russian Federation.

2. Head of the Company shall be liable for organization of tax accounting.

3. Chief Accountant of the Company shall be liable for maintenance of tax records.

4. Tax accounting data shall reflect the procedure for establishing the amounts of proceeds and expenses, the procedure for establishing the share of expenses to be included into the reported period expenses, the balance of expenses (losses) to be recorded as deferred expenses, as well as the amount of indebtedness to the state budget in relation to the profit tax.

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5. Analytical tax accounting registers shall mean consolidated forms for systematizing the tax accounting data.

6. Tax accounting registers shall be maintained in electronic form based on the software operated be the Company.

2. Date of acknowledgment of proceeds and expenses

1. Company’s proceeds shall be acknowledged in the reported (tax) period in which they were accrued, notwithstanding the actual receipt of cash, other property (works, services) and(or) proprietary rights (accrual method shall apply in compliance with Article 271 of the Tax Code of the Russian Federation).

2. Company’s expenses related to several reported periods shall be recorded as expenses evenly during the above periods. For the purpose of the value added tax calculation in accordance with clause 1 sub-clause 1 of Article 167 of the Tax Code of the Russian Federation, the sales proceeds shall be acknowledges at the moment of the shipment (transfer) of the goods (works, services).

3. Expenses determined in Article 252 of the Tax Code of the Russian Federation shall be acknowledged in the reported (tax) period, to which they are related, notwithstanding the time of the actual payment of cash (accrual method shall apply in accordance with Article 272 of the Tax Code of the Russian Federation) and shall be determined taking into account the provisions of Articles 318-320 of the Tax Code of the Russian Federation.

4. Company’s additional expenses connected with credits and loans, shall be acknowledged as such in the reported period of their occurrence.

3. VAT

1. For VAT calculation purposes in accordance with clause 1 of the art. 167 of the Tax code the tax base calculation moment is set as the day of goods transfer (service render).

2. Upon goods transfer, which passing of property is determined by agreement conditions and takes places on the date of material transfer, VAT should be deducted in accordance with clause 1 of the art. 167 of the Tax code.

3. Upon acquisition of fixed assets, VAT is calculated at the moment of acquisition of fixed assets of the account 01,07.

1. Upon acquisition of intangible assets, VAT is calculated at the moment of acquisition of intangible assets of the account 04.

2. VAT accrued for building and assembly jobs, billed by contractors should be deducted at the moment of calculation of these jobs on the basis of primary instrument.

3. VAT accrued for building and assembly jobs, performed by economic method, should be accrued at each tax period. The tax base is defined as the cost of building and assembley jobs performed by economic method during the tax period. The sum of tax deduction, accrued for building and assembley jobs, should be made after its payment in the budget in accordance with art. 173 of the Tax code.

8. In case the sum of costs of operations under art. 170 not taxable for VAT exceeds 5% in the aggregate amount of expenses, organization should calculate it separately in accordance with appropriate statute (Exhibit 1). Export operations are considered to be VAT taxable.

9. VAT is deducted evenly in the 6 months period, stipulated in law 119-FZ on 22.07.05, regarding products (services, works), rights of property.

10. Upon using of souvenir or advertising products during the advertisement campaign VAT should be calculated in the period of such campaign based on balance value of such products.

1. In accordance with Article 170 of the Tax Code of the Russian Federation, if the amount of the Company’s expenses in relation to activities not subject to VAT in accordance with the Tax Code of the Russian Federation, exceeds 5% of the total amount of expenses, the Company shall maintain separate records in accordance with the approved Regulation (Annex 1). Activities in connection with export sale of goods (works, services) shall be subject to VAT.

2. The procedure of allocation of VAT redeemable from the state budget, for inventories, works and services used in product manufacturing intended for sale at the domestic market as well as for export shall be performed in compliance with the approved Procedure (Annex 2).

4. Proceeds and expenses

1. Company’s proceeds shall included proceeds related to production and sales, as well as non-sales proceeds.

2. Sales proceeds shall include proceeds determined in accordance with Article 249 of the Tax Code of the Russian Federation.

3. Company’s expenses shall be divided into:

· expenses related to production and sales

· material costs

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· labor costs

· accrued depreciation

· other expenses

· non-sales expenses

4. Average value assessment method shall apply to writing-off of stock and raw materials used in the manufacturing (production) of goods (performance of works, provision of services), taking into account all analytical data used on accounts for the record of stock and raw materials (clause 8, Article 254 of the Tax Code of the Russian Federation).

5. Redeemable expenses shall be assessed at the reduced value, approved by the Head of the Company, and shall be deducted from the amount of the material costs.

5. Depreciation

1. The original (replacement) value of the property to be depreciated shall be redeemed using the linear method, based upon the standards calculated taking into account the service life of the property in accordance with articles 258, 259 of the Tax Code of the Russian Federation.

The custom duties payable in case of the fixed assets purchase shall be included into the original value of the fixed assets.

2. The service life of the fixed assets shall be determined on the basis of the Order of the Head of the Company, establishing the service life for each article of the fixed assets in accordance with the All-Russian Classifier of Fixed Assets (OKOF) in accordance with depreciation groups approved by the Regulation of the Government of the Russian Federation dated 01.01.2002 No.1.

4. Fixed assets which depreciated cost is zero, depreciation is not accrued.

5. Cars and passengers microbuses, which value do not exceed 300 thou. and 400 thou. rubles respectively, the norm of depreciation is used with coefficient 0,5.

6. For objects that were in use, organization should define norm of depreciation of such objects taking in account term of its use decreased on the term of its use by other owners.

7. If the term of actual use by previous owner of such objects is equal ar exceeds the term of its yield, stipulated by classification of fixed assets defined by government of RF, organization itself should define the term of such object’s yield in accordance with safety measures and other factors.

7. Record of exchange rate and total settlement differences.

1. Should the settlement date under the contractual terms differ from the sales date (record date) of the goods (works, services), the total settlement difference shall be included into the non-sales proceeds or expenses (articles 250, 265 of the Tax Code of the Russian Federation).

2. Exchange rate differences resulting from reappraisal of property in the form of currency valuables and receivables (liabilities), which value is expressed in a foreign currency, including currency accounts with banks, to be performed in connection with the fluctuations of the official foreign currency exchange rate to the Russian ruble rate established by the Central Bank of the Russian Federation, shall be included into the non-sales proceeds or expenses accordingly (articles 250, 265 of the Tax Code of the Russian Federation).

3. Securities nominated in foreign currency should not be overestimated according to the change of the rate of exchange.

4. Positive exchange rate should be included in the list of expenses by the borrower, according to sec. 1 art.269 of the Tax Code. Negative exchange rate should be included by the borrower in the list of non operational revenues. Positive exchange rate should be included in the list of non operational revenues by the lender. Negative exchange rate is considered by the Lender as losses and do not reduce tax base.

7. Reserves

1. In accordance with Article 324.1 of the Tax Code of the Russian Federation, the Company shall form the reserve of future expenses for paid leaves.

2. The above reserve shall be formed as follows:

1. The pay roll planned for the reported year shall be determined taking into account the Single Social Tax.

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2. The amount payable in connection with the employees’ paid leaves in the reported year shall be determined taking into account the Single Social Tax, as well as additional amounts payable in connection with the paid leaves not used in the previous reported period (taking into account the respective Single Social Tax). The above expenses shall be determined as production of the number of paid leave days (included the non-used leaves) and the average daily wages for the Company. To determine the average daily wages of the company the planned payroll shall be divided by the planned number of employees, then by 12 and 29.6 (average number of calendar days per month for the purpose of the leave pay calculation).

3. The percentage of allocations to the reserve shall be calculated using the following formula: % of allocations = cl.2/cl.1*100. The allocation percent shall be rounded to the second digit in accordance with the rounding rules.

4. The amounts of monthly allocations to the above reserve shall be calculated using the formula: amount of monthly assignment = actual payroll (including Single Social Tax) per month * percentage of assignments.

5. The reserve assessment (its comparison with the amounts actually spent for the paid leaves) shall be performed on the last day of the current reporting year.

The reserve of future expenses for paid leaves should be adjusted taking into account the number of days of the non-used leaves, average daily wages (on the basis of the established method for the average wages calculation) and obligatory payments of the single social tax.

8. Securities accounting

1. Accounting of securities, both traded in the organized securities market and non-tradable, shall be performed in accordance with Article 280 of the Tax Code.

2. The cost of withdrawn securities in case of their sale or otherwise shall be written off at their unit value.

9. Direct and indirect costs (article 318 of the Tax Code)

1. In accordance with Article 318 of the Tax Code of the Russian Federation, direct costs shall include:

· Labor costs of personnel directly involved in goods production, performance of works, rendering of services.

· Traveling and hospitality costs of the employees providing services to third parties.

· Other expenses related to service rendering.

2. Evaluation of the unfinished goods shall be performed in the amount of direct costs related to the unfinished services.

3. Indirect costs shall be included into the production and sales costs of the given reported (tax) period in full.

12. Accounting of fixed assets repair costs

1. In accordance with Article 260 of the Tax Code of the Russian Federation, repair costs shall be acknowledged for the taxation purposes in the reported period when actually paid, in the amount of actual costs.

13. Interests on debt liabilities

1. The marginal rate of interest on debt liabilities to be included into the expenses shall be deemed equal to the discount rate multiplied by 1.1 in case of a debt liability in Russian rubles, and equal to 15 percent in case of a foreign currency liability.

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14. Payment of profit tax

1. On the basis of articles 286, 287 of the Tax Code of the Russian Federation, the Company shall calculate and pay the profit tax by monthly advance payments based upon actual profit subject to taxation, calculated as progressive total.

Chief Accountant

I.V. Plekhanova

7.5. Information on total export and export share in total sales

The Issuer doesn’t export its production.

7.6. Information on cost of the Issuer’s immovable property and on material changes in the Issuer’s property after the end of the last complete financial year

The Issuer owns no immovable property.

In the said period there were no material changes in the Issuer’s property.

7.7. Information on any court proceedings the Issuer is involved in, in case such court proceedings may affect the Issuer’s business operations

No such court proceedings were initiated.

VIII Additional data on the Issuer and its outstanding securities.

8.1. Data on the Issuer’s charter capital.

8.1.1 Information on the amount, the structure of the authorized stock (share fund) of the Issuer

Amount of the Issuer’s charter capital (RUR.): 880,000,000

Charter capital Breakdown by Share Category:

Common Shares:

total amount (RUR.): 880,000,000

share of the charter capital: 100%

Preferred Shares:

total amount (RUR.): 0

share of the charter capital: 0%

Part of the Issuer’s stock circulates outside the Russian Federation by force of circulation in accordance with the foreign right of foreign Issuers’ securities, which confirm rights in relation to the said stock of the Issuer.

Category (type) of stock circulating outside the Russian Federation – common stock, registered, non-documentary;

Share of stock circulating outside the Russian Federation in the total stock of the said category: 39.99%

Name and location of the foreign Issuer whose securities confirm rights for the Issuer’s stock of the appropriate category (type)

Name: Bankers Trust Company (currently, Deutsche Bank Trust Company Americas)

Location: 60 Wall Street, New York, NY 10005

Brief description of program (program type), which authorizes issue of a foreign Issuer’s securities to confirm rights for the stock of the appropriate category (type)

In January 2002, the Issuer concluded a deposit agreement with Bankers Trust Company. Under the said Agreement, the latter company agreed to accept the Issuer’s securities (shares) to be deposited by the Issuer and, consequently, to issue American Depository Shares (ADSs). The rights for ADSs were confirmed by American Depository Receipts (ADRs) issued for the owners of the ADSs.

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Information on obtaining the Federal Commission’s permission for circulation of the Issuer’s shares of the relevant category (type) outside the Russian Federation;

The Issuer received the following permissions from the FCSM of Russia.

Notification of 26.12.2001 No. DG-04/8750 (permission for circulation of shares under the issue reg. number 1-01-06005-A of 15.06.2001; number of securities permitted for circulation – 573,001).

Notification of 01.11.2001 No. DG-04/7424 (permission for circulation of shares 1) under the issue reg. number 1-01-06005-A of 15.06.2001; number of securities permitted for circulation – 2,640,000, and 2) under the issue reg. number 1-02-06005-A of 30.10.2001, number of securities permitted for circulation – 9,000,000).

Notification of 06.11.2002 No. DG-04/12514 (permission for circulation of shares under the issue reg. number 1-01-06005-A of 15.06.2001; number of securities permitted for circulation – 2,200,000).

Notification of 16.03.2004 No.04-DG-04/4634 (permission for circulation of shares under the issue reg. number 1-01-06005-A of 15.06.2001; number of securities permitted for circulation – 3,186,999)

Name of foreign trade arranger through which the foreign Issuer’s securities certifying the rights in regard to the Issuer’s shares are circulating;

New York Stock Exchange (NYSE)

8.1.2. Information on changes in the authorized stock (share fund) of the Issuer

Size and structure of the authorized stock (share fund) of the Issuer as of the starting date of the said period

The authorized stock before change (RUR 700,000,000) was made up of 35,000,000 ordinary nominal uncertified shares (issue reg. number 1-01-06005-A of 15.06.2001),

Name of the Issuer’s management body having decided on changes in the Issuer’s authorized stock;

General meeting of the Issuer’s shareholders

Compilation date and number of the minutes of the meeting of the Issuer’s management body, where the decision on changes in the size of the Issuer’s authorized stock was taken;

Minutes No. 2 of September 7, 2001.

Size of the Issuer’s authorized stock after change.

RUR 880 000 000.

8.1.3. Information on formation and use of the reserve fund and other funds of the Issuer

Fund title – reserve fund;

Size of the fund set up by the association documents

….Article 11 of the Charter:

11.1. The Company will have a reserve fund in the amount of 5% (five percent) of the Company’s authorized stock.

Cash size of the fund as of the ending date of the accounting quarter –

RUR 17,334,498.19 (1.97% of the Issuer’s authorized stock)

Size of provisions to the fund in each completed financial year – the Company’s reserve fund will be formed from mandatory annual provisions until it reaches the amount stipulated by the Company’s Charter. The size of the annual provisions shall not be less than 5% of the net profits until the fund reaches the amount stipulated by the Charter.….

Size of the provisions to the fund within reporting period - none.

Size of the fund resources used during the accounting quarter, and areas of usage thereof - in the reporting quarter the resources of the reserve fund were not used (spent).

8.1.4. Information on the convocation and holding procedure for the meeting of the Issuer’s supreme management body

Title of the Issuer’s supreme management body;

General Shareholders’ Meeting

Procedure for notification of the shareholders about the meeting of the Issuer’s supreme management body;

Within the statutory terms, a notice of convocation of the General Shareholders’ Meeting shall be sent to each person included in the list of persons entitled to participating in the General Shareholders’ Meeting by registered mail, or delivered personally to each of such persons with receipt confirmation, as well as published in Wall Street Journal, New York, USA.

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The persons (bodies) that have the right to convene (demand convocation of) an extraordinary meeting of the Issuer’s supreme management body, and procedure for filing (presentation) of such demands;

….The extraordinary General Shareholders’ Meeting will be held upon decision of the Company’s Board of Directors on its own initiative, a demand of the Company’s Audit Committee, or shareholder(s) owning at least 10 percent of the Company’s voting shares as of the demand date.

The extraordinary General Shareholders’ Meeting at the demand of the Company’s Internal Audit Committee or shareholder(s) owning at least 10 percent of the Company’s voting shares will be convened by the Board of Directors of the Company. The extraordinary General Shareholders’ Meeting convened at the demand of the Company’s Internal Audit Committee or shareholder(s) owning at least 10 percent of the Company’s voting shares shall be held within 40 days of the filing of the demand regarding convocation of the General Shareholders’ Meeting.

If the proposed agenda of the extraordinary General Shareholders’ Meeting contains the item of electing members of the Company’s Board of Directors who shall be elected by a cumulative vote, such General Shareholders’ Meeting shall be held within 70 days of the filing of the demand regarding convocation of such extraordinary General Shareholders’ Meeting.

When, in accordance with Articles 68 - 70 of the Federal Law “On Joint-Stock Companies”, the Company’s Board of Directors must take a decision on holding an extraordinary General Shareholders’ Meeting, such General Shareholders’ Meeting shall be convened within 40 days of the date the decision of holding such a meeting is taken by the Board of Directors.

When, in accordance with the Federal Law “On Joint-Stock Companies”, the Company’s Board of Directors must take a decision on holding an extraordinary General Shareholders’ Meeting for electing members of the Board of Directors to be elected by a cumulative vote, such General Shareholders’ Meeting shall be convened within 70 days of the date the decision of holding such a meeting is taken by the Board of Directors.

The demand for holding of an extraordinary General Shareholders’ Meeting shall contain the issues to be included in the agenda of the meeting. The demand for holding of an extraordinary General Shareholders’ Meeting may contain the wording of the resolutions on each of such questions, as well as the proposed form of holding such General Shareholders’ Meeting.

The Company’s Board of Directors may not make any changes in the wording of agenda items, the wording of the resolutions to be taken on such items, or change the proposed form of holding of the General Shareholders’ Meeting convened at the demand of the Company’s Internal Audit Committee, the Company’s Auditor, or shareholder(s) owning at least 10 percent of the voting shares of the Company.

In case the demand for convocation of an extraordinary General Shareholders’ meeting is filed by shareholder(s), it should contain the name(s) of the shareholder(s) demanding convocation of such meeting and the number and category (type) of the shares held by them.

The demand for convocation of an extraordinary General Shareholders’ Meeting will be signed by the person(s) demanding convocation of such General Shareholders’ Meeting.

Within five days of the date of filing of the demand by the Company’s Internal Audit Committee, the Company’s Auditor or shareholder(s) owning at least 10 percent of the voting shares of the Company for convocation of an extraordinary General Shareholders’ Meeting the Company’s Board of Directors shall resolve on convocation of such extraordinary General Shareholders’ Meeting or deny such convocation.

Procedure for defining the date of meeting of the Issuer’s supreme management body;

The date of holding of the General Shareholders’ Meeting will be defined by the Issuer’s Board of Directors.

Persons entitled to proposing agenda items for the meeting of the Issuer’s supreme management body and procedure for making such proposals;

The shareholder(s) owning collectively at least two percent of the Company’s voting shares can propose items for the agenda of the annual General Shareholders’ Meeting and candidates to the Company’s Board of Directors, the collective executive body, the Audit Committee (Auditors) and the Counting Commission of the Company, the number of which cannot exceed the authorized number of members of the relevant body, as well as a candidate for the position of the sole executive body. Such proposals shall be filed with the Company within 30 days of the end of the financial year.

In case the proposed agenda of the extraordinary General Shareholders’ Meeting contains the item of election of the Company’s Board of Directors (if they are elected by a cumulative vote), the shareholder(s) owning collectively at least two percent of the Company’s voting shares can propose candidates for the Company’s Board

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of Directors, the number of which cannot exceed the authorized number of members of the Board of Directors. Such proposals shall be filed with the Company not later than 30 days before the date of the extraordinary General Shareholders’ Meeting.

Proposals of the agenda items for the General Shareholders’ Meeting and the candidates shall be made in writing and state the name(s) of the proposing shareholder(s), the number and category (type) of the shares held, and shall be signed by the shareholder(s).

Proposals of the agenda items for the General Shareholders’ Meeting shall contain the wording of each proposed item, and the proposal of candidates shall contain the name of each proposed candidate, the name of the body the candidate is proposed for, and other details in accordance with the Company’s Articles of Association. Proposals of the agenda items for the General Shareholders’ Meeting may contain the wording of the resolution for each proposed item …..

Persons entitled to access the information (materials) provided for preparation and holding of the meeting of the Issuer’s supreme management body, and the procedure for accessing such information (materials).

Any persons entitled to participating in the General Shareholders’ Meeting can have access to the information (materials) provided for preparation and holding of the General Shareholders’ Meeting within 20 days, and in case of such General Shareholders’ Meeting of which the agenda contains the item of the company’s reorganization, within 30 days before the General Shareholders’ Meeting.

8.1.5 Information on commercial organizations where the Issuer holds no less than 5% of the authorized stock (share fund) or no less than 5% of the ordinary shares

Name: Open Joint-Stock Company “Lianozovo Dairy”

Location: 127591, Moscow, Dmitrovskoe shosse, d.108

Issuer’s share in the charter capital of the legal entity: 98.02%

Issuer’s share in the total amount of ordinary shares of the entity: 98.02%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Name: Open Joint-Stock Company “Dairy”

Location: 353760, Timashevsk, Krasnodar Region. ul. Gibridnaya, d. 2

Issuer’s share in the charter capital of the legal entity: 70.47%

Issuer’s share in the total amount of ordinary shares of the entity: 70.47%

Share of this legal entity in the Issuer’s charter capital: 0%

Share of this legal entity in the total amount of Issuer’s ordinary shares: 0%

Name: Closed Joint-Stock Company “Production and Analytical Group Rodnik”

Location: 103009, Moscow, Bryusov per., d. 8/10, str. 2, 2nd floor, room 13a