Capitalized terms used in this Prospectus and not otherwise defined herein have the meaning ascribed to such terms in Annex I “Defined Terms”.
This Prospectus has been prepared by the Issuer in connection with the Offering and Admission solely for the purpose of enabling a prospective investor to consider an investment in the Offer Shares. The information contained in this Prospectus has been provided by the Issuer and other sources identified herein.
Prospective investors are expressly advised that an investment in the Offer Shares entails financial risk and that they should, therefore, read this Prospectus in its entirety, and in particular, the section “Risk Factors”, when considering an investment in the Offer Shares. The contents of this Prospectus are not to be construed as legal, financial or tax advice. Each prospective investor should consult his, her or its own legal adviser, independent financial adviser or tax adviser for legal, financial or tax advice and not rely exclusively on the legal, financial or tax information contained in this Prospectus.
Save for the provisions of mandatory laws, no person is or has been authorized to give any information or to make any representation in connection with the Offering and/or Admission, other than as contained in this Prospectus, and if given or made, any other information or representation must not be relied upon as having been authorized by the Issuer, or by the Managers.
The corporate governance structure of the Issuer is set out in its Articles of Association which are available on the Issuer’s website: www.milkiland.nl.
Responsibility for this Prospectus
The Issuer accepts responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the Issuer, which has taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is in accordance with the facts and contains no omission likely to affect its imports.
Neither the delivery of this Prospectus nor any sale made hereby at any time after the date hereof shall, under any circumstances, create any implication that there has been no change in the affairs of the Company or any of its subsidiaries or the Company and its subsidiaries taken as a whole (the “Milkiland Group”, the “Group”) since the date hereof or that the information contained herein is correct as of any date subsequent to the earlier of the date hereof or any date specified with respect to such information.
Neither the Managers nor the legal advisers to the Issuer accept any responsibility whatsoever for the contents of this Prospectus, or for its transaction, or for any other statement made or purported to be made by any of them or on their behalf in connection with the Issuer or the Offering. The Managers and the legal advisers to the Issuer accordingly disclaim all and any liability whether arising in tort or contract which they might otherwise have in respect of this Prospectus or any such statement. No representation or warranty, express or implied, is made by the Manager as to the accuracy or completeness of the information set forth herein and nothing contained in this Prospectus is, or shall be relied upon as a promise or representation, whether as to the past or the future.
Notice to Prospective Investors
The distribution of this Prospectus and the Offering of the Offer Shares in certain jurisdictions may be restricted by law. This Prospectus may not be used for, or in connection with, and does not constitute, any offer to sell, or any solicitation or invitation to purchase, any of the Offer Shares offered hereby in any jurisdiction in which such an offer or solicitation or invitation would be unlawful. Persons in possession of this Prospectus are required to inform themselves about and to observe any such restrictions, including those set out under “Selling Restrictions”. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
As a condition to the purchase of any Offer Shares in the Offering, each purchaser will be deemed to have made, or in some cases be required to make, certain representations and warranties and will be required to
I .1. I 1.2 III 1.1 III 1.2
take certain actions described in particular in “The Offering and Plan of Distribution”, which will be relied upon by the Issuer, the Managers and others. The Issuer and the Selling Shareholder reserve the right, in its sole and absolute discretion, to reject any purchase of Offer Shares that the Issuer, the Selling Shareholder, the Managers or any agents believe may give rise to a breach or a violation of any law, rule or regulation. See, in particular: “Selling Restrictions”.
The Offer Shares have not been approved or disapproved by the United States Securities and Exchange Commission, any State securities commission in the United States or any other Unites States regulatory authority, nor have any of the foregoing passed upon or endorsed the merits of the Offering or the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offence in the United States.
Presentation of Financial and Other Information
In this Prospectus, the terms “Issuer”, “Milkiland Group”, “the Group”, “Milkiland” and similar terms refer to Milkiland N.V. and its direct and indirect consolidated subsidiaries, unless the context requires otherwise. Unless otherwise noted, references to “management” are to the members of the Board of Directors and the Kay Management, and statements as to the Issuer’s beliefs, expectations, estimates and opinions are to those of the Issuer’s management. The term “Operating Companies”, refers to DE – Milkiland Ukraine and its Subsidiaries and term “Group Subsidiaries” refers to any direct or indirect subsidiary of the Company, if the context indicates.
The Company maintains its financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the International Accounting Standards Board (“IASB”), and interpretations, issued by the International Financial Reporting Interpretations Committee (“IFRIC”) and as applicable in the respective years. The financial statements included in this Prospectus comprise: (i) semi annual consolidated financial statement of the Company for first half year of 2010 with comparable figures for first half year of 2009; (ii) audited consolidated financial statement of the Company for the year ended 31 December, 2009; (iii) audited consolidated financial statement of the Company for the year ended 31 December, 2008, (iv) Combined financial statements of Milkiland B.V. and Milkiland Corporation for the years ended 31 December 2007 and 2006; (collectively “Financial Statements”).
The Company believes it has a complex financial history in the meaning as prescribed in the Prospectus Regulation. The Prospectus Regulation stipulates that in case when the issuer’s business is not fully reflected in the historical financial information relating to the issuer and consequently the historical financial information may not constitute sufficient information that allows investors to make informed assessment whether to invest in offered securities, such issuer should consider whether to include other financial information relating to another entity. Since the Company was established in 2007 and had no operation till acquisition of Group Subsidiaries in 2008, the Company’s financial statements covering 2007, namely the audited non-consolidated financial statements of the Company for the year ended 31 December, 2007, does not provide information as to the results of operations of the Group Companies in that year. Starting from 2008, the Company has consolidated its financial results with financial results of other Group Subsidiaries. Therefore the Company decided to include the audited combined financial statements of Milkiland Corporation and Milkiland B.V. for the years ended 31 December 2007 and 2006. In 2007 results of all Ukrainian operations were consolidated under Milkiland Corporation, therefore the combined financial statements comprise financial information on Milkiland Corporation and Milkiland B.V. as a legal predecessor of the Issuer. Combined financial statements for the year ended 31 December 2007 in the Prospectus together with other information contained in the Prospectus should enable investors to make informed assessment whether to invest the Offer Shares.
The auditor’s report on the Issuer’s financial statement for the year ended 31 December 2008 includes qualification regarding cost of property plant and equipment indicated in the consolidated balance sheet, see
Auditor’s Report on the financial statement for the year ended 31 December 2008, p. F – 106.
Financial Statements included in the Prospectus are presented in EUR which is the accounting currency of the Group and of the Company. The Group Subsidiaries maintain their accounting records in local currencies in accordance with the accounting and reporting regulations of the countries of their incorporation. Local statutory accounting principles and procedures may differ from those generally accepted under IFRS.
Accordingly, the Financial Statements which have been prepared based on the Group Subsidiaries’ local statutory accounting records, reflect adjustments necessary for such financial statements to be presented in accordance with IFRS.
Certain figures contained in this Prospectus, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances the sum of the numbers in a column or a row in tables contained in this Prospectus may not conform exactly to the total figure given for that column or row. Some percentages in tables in this Prospectus have also been rounded and accordingly the totals in these tables may not add up to 100 per cent.
Unless otherwise indicated, all references in this Prospectus to “US”, “USD” or “US $” are to the lawful currency of the United States and all references to “EUR” or “€” are to the lawful currency of the European Economic and Monetary Union, of which the Netherlands is a member. References to “UAH” or “Hryvnia” are to the lawful currency of Ukraine, whereas all references to “PLN” and “Polish zloty” are to the lawful currency of Poland, and all references to “RUR” are to the lawful currency of the Russian Federation. Potential investors should consult their own professional advisers to gain an understanding of the financial information contained herein.
Market, Economic and Industry Data
All references to market, economic or industry data, statistics and forecasts in this Prospectus consist of estimates compiled by professionals, state agencies, market and other organizations, researchers or analysts, publicly available information from other external sources as well as the Group’s knowledge of its sales and markets and assessments made by the Group’s management.
Certain statistical data and market, economic or industry information and forecasts relating to the world, Ukrainian and Russian dairy industry have been extracted and derived from reports and analysis produced by, inter alia, the following sources:
• information available on the website owned and operated by the Derzhkomstat (www.ukrstat.gov.ua); • information available on the website owned and operated by the Rosstat (www.gks.ru);
• information available on the website owned and operated by the Belstat (www.belstat.gov.by); • information, reports and analysis available on the website owned and operated by the United States
Department of Agriculture, and its Foreign Agricultural Service (www.usda.gov);
• information available on the website of the Food and Agriculture Organization of the United Nations (www.fao.org);
• information published by the Food and Agriculture Policy Research Institute (FAPRI) (www.fapri.org);
• statistical data of the National Bank of Ukraine (www.bank.gov.ua); • statistical data of the Central Bank of the Russian Federation; • statistical data of the National Bank of Poland (www.nbp.gov.pl);
• information provided by Institute for Economic Research and Policy Consulting; • information provided by Astarta – Tanit; and
• information provided by Amico.
While the Issuer has compiled, extracted and reproduced market or other industry data from external sources, including third parties or industry or general publications, neither the Issuer or the Managers have independently verified that data. The information in this Prospectus that has been sourced from third parties has been accurately reproduced and, as far as the Issuer is aware and able to ascertain from the information
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published by the cited sources, no facts have been omitted that would render the reproduced information inaccurate or misleading. The source for such third party information is cited whenever such information is used in this Prospectus.
Save where required by mandatory provisions of laws, the Issuer does not intend and does not undertake to update market, economic or industry data, statistics and forecasts contained in this Prospectus. Industry trends may change or significantly differ from the one projected in this Prospectus. Therefore investors should be aware that estimates made in this Prospectus may not be relied upon as indicatives of the Group’s future performances and actual trends.
In this Prospectus, the Issuer makes certain statements regarding the Group’s competitive position, growth and market leadership. The Issuer believes these statements to be true based on market data and industry statistics regarding the competitive position of certain of the Group’s competitors. In presenting the overview of the Group’s competitive position in the relevant markets, the Issuer also relied on management’s assessments and analysis of such competitive position. In making such assessments and analysis the management has used market information collected by its own employees and advisors for such purpose, either available on the basis of public information or derivable from the same.
Documents Incorporated by Reference
No documents or content of any website are incorporated by reference in this Prospectus.
Documents Available for Inspection
The following documents will be available free of charge at the registered office of the Issuer during the normal business hours from the date of this Prospectus for a period of one year from the date when the Prospectus was made available to the public:
• Articles of Association of the Issuer,
• copies of the Financial Statements included in this Prospectus;
• copies of the corporate resolutions mentioned in the section General Information on the Issuer; Moreover the following documents through the Issuer’s web site www.milkiland.nl:
• this Prospectus together with its summery translated into Polish language;, • the Articles of Association;
• copies of the documents required to be published on the Company’s website pursuant to the Dutch Corporate Governance Code and the WSE Corporate Governance Rules; and
• statement of the Company’s compliance or non-compliance with the WSE Corporate Governance Rules.
Forward-looking Statements
Some of the statements in some of the sections in this Prospectus include forward-looking statements which reflect the Issuer’s current views with respect to future events and financial performance of its Group. Such forward-looking statements can be identified by the use of forward-looking terminology, including the terms such as “believes”, “expects”, “estimates”, “anticipates”, “intends”, “plans”, “may”, “will”, “should”, “would”, “could” or, in each case, their negatives or other variations or comparable terms. All statements other than statements of historical facts included in this Prospectus are forward-looking statements. Such items in this Prospectus include, but are not limited to, statements under “Risk Factors”, “Business”, “Industry Overview” and “Operating and Financial Review”
By their nature, forward-looking statements involve known and unknown risk and uncertainty, and other factors that may cause the Group’s actual results, performances and achievements to differ materially from any future results, performances, achievements or developments expressed in or implied by such forward-
looking statements. The Management has based these forward-looking statements on numerous assumptions regarding the Group’s present and future business strategies, current expectations and projections about future events and the environment in which the Group will operate in the future. These forward-looking statements are subject to risks, uncertainties and assumptions about the Group, including, among other things:
• the Issuer’s ability to develop and expand its business;
• the Issuer’s ability to keep up with new technologies and expand into new markets; • the Issuer’s and the Group Subsidiaries ability to control their costs;
• the Issuer’s future capital spending and availability of financial resources to finance capital spending; • political and economic conditions in the countries in which the Group Subsidiaries operate;
• volatility in the world’s securities markets; and
• the effects of regulation (including tax regulations) in the Netherlands and other countries in which the Group Subsidiaries operate.
The forward-looking statements speak only as at the date of this Prospectus. The Issuer expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein, whether to reflect any new information, future events, any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statements is based, except as required by law, including under the Dutch Financial Supervision Act and the Polish Public Offerings Act.
In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Prospectus might not occur. Any statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.
Prospective investors are cautioned not to place undue reliance on such forward-looking statements, which are based on facts known to the Issuer only as at the date of this Prospectus.