Mhp Reg S Regulatory News (MHPC)

PRESS RELEASE

April 28 2010, Kyiv, Ukraine

MHP S.A.

New VAT law does not impact on MHP

On 27 April 2010 the Parliament of Ukraine adopted the Law of Ukraine "On the State Budget of Ukraine for 2010" (the "2010 State Budget Law"). While the full text of the 2010 State Budget Law is not yet publicly available, it appears from the draft of the 2010 State Budget Law (the "Draft Budget Law") submitted to the Parliament by the Cabinet of Ministers of Ukraine on 23 April 2010 that, although certain tax benefits for agricultural processing companies related to value added tax (the "VAT") were eliminated, the VAT-related tax benefits applicable to those agricultural producers in Ukraine which are subject to the special regime of VAT taxation provided by Article 8-prime of the Law of Ukraine "On Value Added Tax" (the "VAT Law") (which allows them to retain the difference between the VAT they charge on their agricultural products (currently at the rate of 20 per cent.) and the VAT they pay on items purchased for their operations (rather than remitting such amounts to the state budget)) continue to apply as before. Since all Ukrainian companies in the MHP Group that are involved in agricultural production are subject to the special regime of VAT taxation provided by Article 8-prime of the VAT Law, the MHP Group believes that the new provisions in the Draft Budget Law do not apply to it and will have no adverse affect on the MHP Group.

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About MHP

MHP was admitted to the Official List of the London Stock Exchange in May 2008. It is the leading producer of poultry products in Ukraine, with a 2008 market share for industrially produced chicken meat of approximately 39%, according to the State Committee on Statistics of Ukraine. It's "Nasha Ryaba" brand is the market leader, whilst MHP also has several other national and regional brands for processed meat products.

MHP is fully vertically integrated owning and operating each of the key stages of chicken production processes, from feed grains and fodder production to egg hatching and grow out to processing, marketing, distribution and sales (including through MHP's franchise outlets). Vertical integration reduces MHP's dependence on suppliers and its exposure to increases in raw material prices. In addition to cost efficiency, vertical integration also allows MHP to maintain strict bio-security and to control the quality of its inputs and the resulting quality and consistency of its products through to the point of sale.

MHP also has an important and expanding grain operation, producing and selling sunflower oil as a by-product of its fodder production. MHP also produces and sells beef, sausages, cooked meats convenience food products, goose meat, foie gras and fruit.