Perčinović Ltd Obilaznica bb - Tomislavgrad Bosnia and Herzegovina

1. PerčinovićLtdObilaznica bb - TomislavgradBosniaandHerzegovina ECONOMIC PROGRAM OF CATTLE BREEDING BASED ON THE „COW-CALF“ SYSTEM • Tomislavgrad – December, 2013

2. Location:BosniaandHerzegovinaTomislavgrad and Kupres municipalityThe location of the implementation of beef cows breeding in the cow-calf system project on the territories of Tomislavgrad and Kupres municipalities (south-east Bosnia and Herzegovina – Kupreško Field and Duvanjsko Field with spacious surrounding mountain pastures) has all the acceptable characteristics and potentials for success in this breeding, which is definitely confirmed by the successfully implemented projects in this area, one of them being the farm of Perčinović Ltd Tomislavgrad which in its breeding has 1,850 head of Angus breed. The territories of Tomislavgrad and Kupres municipalities are located in the south-east Europe in Bosnia and Herzegovina, approximately 100 km far from the Adriatic Sea. TomislavgradMunicipality territory Kupres Municipality territory

3. Basic site information: • The Company Perčinović Ltd Tomislavgrad, with its headquarters at Obilaznica bb – 80240 Tomislavgrad, is registered as a limited liability company and with ownership structure Perica Papić 50%, SlavenPapić 50%. • The activity of the company is cattle breeding based on the „cow-calf” system, with predominant breed of Red Angus. • At the moment, the company carries on the business of breeding cattle for meat production on three locations: EminovoSelo – Tomislavgrad, Pakline – Tomislavgrad and Zvirnjača – Kupres. • One of the most important things in organizing cattle breeding based on the „cow-calf“ system is the good choice of breed because breed is one of determining factors which directly influence the rentability of production. Cattle breeding based on the „cow-calf“ system in this presentation is designed on purchase and breeding of head of ANGUS breed which has demonstrably already adapted well to the life and development on these areas (high altitude, vegetation, cold winters,…). This is the reason why there is neither uncertainty nor potential risk of mistake when choosing which breed to rear. • .

4. Current total number of livestock of the company Perčinović Ltd Tomislavgrad, by type (age) is listed in the following chart: Agricultural land which the company manages is placed in the following locations in the quoted areas and field crops:

5. Investment Breeding of additional 10,000 head by the „cow-calf“ system could be realized with an investment of app 50,000,000 KM (25,564,594 EUR). For the acquisition of the parent herd it is necessary to ensure app € 17.895.000 (10,000 head x 1.790 EUR), and for the construction of buildings, purchase of machinery and food for the first year of breeding app 7,605,000 EUR. It is possible to realize the acquisition of the parent herd by purchase from suppliers from Hungary and partially from the local breeders in Bosnia and Herzegovina. The acquisition of the parent herd would be carried out by buying young cattle which have already been impregnated and which will have calving in the spring season. From the total number of 10,000 head, app 100 of them would be young purebred breeding bulls. For a completely natural reproduction it is necessary to have one breeding bull per approximately 30 cows, which is not economically feasible. Thus, the insemination of cows will be organized by artificial insemination of semen from purebred bulls from the same herd, which would result in better controlled and coordinated calving sessions. Accordingly, from the total number of 10,000 head, there would be 9,900 cows capable of reproducing and with app 9,000 calves in the spring season. The loss of 900 calves is planned according to the average of 1% mortality rate of calves during calving or at the early stage of life. Foreign market (export) is definitely one of the greatest challenges in terms of product placement (cattle, meat, meat products). The reason for this is because the legal regulations defined that the companies with minimum of 30% of the total revenue generated by export are not obliged to pay the tax on net profit, which is, according to the current rate, 10% of net profit. It is necessary to note here that there are state incentives for livestock farming and agricultural production. The example of this is that in cattle breeding based on the „cow-calf“ system the producer gets state incentive at the amount of 500.00 KM (255.64 EUR) for each calved head, and the additional 500.00 KM (255.64 EUR) if that head is intended for fattening

6. Mode of cooperation with potential investor • Contacts: • Owner/Developer: • PerčinovićLtd – Obilaznica bb • 80240 Tomislavgrad • BosniaandHerzegovina • • Magdalena Papić - director; • SelverAladjuz - directorfor development • • Phone: +387 34 356 261; • Cellphone: +387 61 166 055 • • Fax: +387 34 356 261 • • E-mail: farma@percinovic.com • • Company’s Website: www.percinovic.com - Partnership in the form of shares is in proportion to the amount of capital investment to a maximum ratio of 50%: 50%.