Acg Newsletter Q2-09

JULY 2009

CONTENTS: 1. Featured Projects: a. Major Russian Greenhouse Development b. European Telco Software Producer’s Global Expansion 2. Program Highlight: a. International Marketing for U.S. Properties b. Case study on international real estate marketing

Aginsky Consulting Group

Quarterly Newsletter featured projects In this section of the ACG newsletter, we usually present a couple of notable current projects. In this issue, we present one project in Russia and another project in Europe, both of which are with exciting companies that are bound to have a significant impact on the world around us.

3. ACG Nominated for an Award 4. Newest Associates a. Vibhor Gupta b. Noah Wong 5. Recent Publications a. ON TV – Mr. Aginsky makes a guest appearance on TV’s “Money Matters” b. IN PRINT - ACG luxury goods article printed in a premier Asian Magazine c. ONLINE - ACG Company Presentation video is now available online 6. ACG Expansion into the BRIC a. ACG in India b. ACG in Brazil 7. ACG Attends Conferences Around the Globe a. 5th Annual Russian and CIS Private Equity & Venture Capital Forum in Moscow b. 11th Annual Global Private Equity Conference in Washington, DCConference in Washington, DC

MAjor Russian Greenhouse Development In the first quarter of 2009, Aginsky Consulting Group (ACG) was selected from a group of leading advisory firms for an engagement by a major Russian vegetable greenhouse company. ACG was retained to assist the client with an ambitious plan to devise a growth strategy, raise a $60 million round of financing, and assist with the launch of the largest chain of fully-automated industrial vegetable greenhouse complexes in the former Soviet Union. Our team undertook a comprehensive market research study, a complete due diligence of the company, a thorough evaluation of the business model, a competitive landscape analysis, and the development of a detailed business plan. Additionally, the project team was also responsible for converting all Russian financials into US GAAP, creating a dynamic, sophisticated financial model, preparing financial projections and an enterprise valuation, as well as drafting all offering documents for the investor solicitation, such as a term sheet, subscription agreement, and more. The entire set of materials was completed in mid-April and has proven to be an invaluable tool in the ongoing investor solicitation. The first investor meetings have already taken place in Moscow with a number of the leading American, European, and Russian

European Telco Software Producer’s Global Expansion ACG has been retained by a European IT and software development company to assist with its global expansion efforts. The Company has developed a revolutionary rating and promotion engine, combined in a single, real-time, user-friendly platform. In telecommunications  “rating”  is the activity of determining the cost of a particular call. The rating process involves converting call-related data into a monetary-equivalent value. Call-related data may be generated at various points in the network or measurements may be taken by third party equipment such as network probes. Generally, this data is something quantifiable and specific. The usage data gathered is then either packaged by the equipment or it may be sent to a charging gateway. Rating systems typically use some or all of the following types of data for a call: • Time property of the call (day of week, date, time of day)

• Amount of usage (duration of call, amount of data, number of messages, number of songs) • Destination of the call (land line, overseas, etc.) • Origin of call/ location of the caller (for mobile networks) • Premium charges (third party charges for premium content, cost of physical items such as movie tickets) Generally individual calls are rated and then the rated amounts are sent to a  billing system  to provide a bill to the subscriber. Often the rating system will be a module of a larger “Billing System” architecture. A rating system must be adapted to the constantly changing pricing policies, with the strategic goal of stimulating demand. This is precisely what our client’s tool is able to do extremely well and cost-effectively, more so than any other system currently in place. The engine’s

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Private Equity funds. Other investor meetings are currently planned in various locations around the globe and numerous investment offers are being entertained. Russian vegetable production presents a unique and largely untapped business opportunity to capitalize on huge demand for a product that has virtually no domestic suppliers and very impressive margins. Most vegetables are currently being imported from Europe, where the two biggest cost components of greenhouse vegetables production – labor and energy - are substantially higher than they are in Russia. In addition, transportation costs and customs duties add to the cost structure, while the extra pesticides used to extend shelf life for the long travel time only reduce the taste parameters and quality. As a result, vegetables produced outside of Russia have a much higher cost and lower quality as compared to those being produced in Russia, which gives a domestic producer with sufficient economies of scale a superior advantage and an opportunity to swiftly capture a significant percentage of market share. For a complete offering package or additional information about this exciting opportunity, please contact us at [email protected].

architecture is the fastest and most versatile of its kind on the market, and it provides operators with a fully-customizable platform for planning and executing dynamic billing programs. In addition, it allows subscriber-based companies to quickly initiate complex promotional plans on servers, regardless of size. The Client has given our team the mandate to assist them in strategically marketing their solution internationally, with exclusive representation in several markets. The goal is to present this oneof-a-kind solution to banks, satellite television, and telecom companies in Eastern Europe, Asia, the Middle East, and Latin America. We have already set up numerous demos for a number of mid-size and large telecommunications companies around the globe and are now nearing the final stages of negotiations with these companies. For more information about this company and their product, please contact our project team at E4@ aginskyconsulting.com.

July 2009 Issue Page 1

program highlight In this section of our newsletter, we usually discuss one or two of our current programs. In this issue, we will highlight a program launched at the end of 2008 and some of the recent changes that it has undergone, as well as provide a sample case study of one recent project in this program.

Case study on international real estate marketing

To illustrate how our international real estate program works in practice, we will briefly describe the latest addition to our real estate portfolio: a truly one-of-a-kind holding in the State of Georgia. The Diamond C Ranch is a luxurious Italian-style villa sequestered in the rolling farmland of 1,410 acres of buildable land, one of the largest private landholdings in the state. The lavish villa features colossal custom-built mahogany doors, soaring vaulted ceilings, massive crystal chandeliers, unique stained glass windows, imposing pillars, and inspiring murals. Grandeur continues throughout the 18,000 square foot estate with luxurious state-of-the-art amenities. However, the Diamond C Ranch’s principal investment benefit lies in its sprawling territory of land that has already been zoned for immediate development of a residential community with 2,400 homes, a championship golf course, equestrian center, a spa, hotel, retail village, and much more. Our team has prepared a comprehensive package, which includes a detailed 70page property prospectus complete with a demographics study, financial analysis, property valuation, and more. The entire prospectus can be downloaded at http://www.georgialuxuryestate.com/ Prospectus_DCR.pdf or you can visit the property website which contains similar information as is outlined in the prospectus at www.georgialuxuryestate. com. To schedule a private tour of the property, please contact us at info@ aginskyconsulting.com.

INTERNATIONAL MARKETING FOR U.S. PROPERTIES We are proud to showcase our International Real Estate program, which provides a comprehensive set of international marketing services for owners of ultrahigh-end residential properties and large commercial properties. Efforts are aimed at identifying investors for these unique properties in emerging markets, where our firm has established over a decade of expertise and an impressive investor network. In brief, the program entails a selection of elite pieces of real estate across the United States, which experience difficulties being sold domestically due to the recession and credit crunch, and assisting their owners by marketing those properties internationally. The domestic buyers that have the resources are still waiting for the market to hit bottom and are hesitant to pursue large acquisitions, whereas those without the readily available resources are unable to get the necessary debt financing for the acquisition of large real estate assets. This market creates an opportunity for cash-rich investors that want to do more than just take advantage of low U.S. real estate prices, but also have another agenda. For example, foreign investors are interested in the possibility of getting permanent residency status that is made possible with a large real estate acquisition. Some emerging markets, such as Russia, have recently seen huge devaluations in their currencies, and thus it makes sense for foreign investors to keep their capital in dollar-denominated assets like U.S. real estate, as opposed to their local currencies. Many emerging markets are also suffering from double digit inflationary pressures, which can be alleviated by investing in lowinflation environments like the U.S. Since the global recession began, most emerging markets have experienced capital flight, and most overseas investors still consider the United States to be a safe haven. (You can download our firm’s recent white paper on the current demand of overseas investors for U.S. real estate here – http:// www.aginskyconsulting.com/downloads/ ACG%20Industry%20Summary%20Reports%20 -%20Q4-07/ACG_Foreign_Investment_into_ US_Real_Estate_05_2009.pdf.) Hence, many of our clients have recently been inquiring about investing in the U.S. real estate market and we have thus created a program to meet this growing demand. We are looking for properties across the U.S. to add to our portfolio that meet our investors’ criteria and have limited, solely domestic exposure. The properties, which can be either sold by the owners directly or

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through a broker, must be at least $10M+ for residential and $20M+ for commercial. If the property meets our stringent criteria and the owners are willing to bear some of the initial costs associated with translations, website development, etc., our team creates a professional document package in multiple languages (such as English, Russian, Chinese, Arabic, etc.) that includes a demographics study, due diligence report, 50-100 page prospectus with financials, professional photography, stand-alone website, premier advertising (at corporate rates), and much more. These tools are then used to make presentations to international investors in our existing network and through targeted advertising campaigns. Our team is also responsible for handling all client negotiations in the buyers’ native language. This program has already borne fruit, as you will see in the case study section below, and is a win-win for all participants. The buyers benefit for all of the reasons mentioned above: permanent residency possibilities, a hedge against currency devaluation to relief from inflationary pressures, and a safe haven for capital flight. The sellers are now able to markedly expand the visibility and target audience of their properties, thus substantially improving their chances of closing the deal in this difficult environment. They are also able to reduce their overall transaction fees since we do not act as a real estate broker that charges high commissions. Moreover, the sellers also benefit by expediting the process. Lenders are almost always eliminated since foreign investors tend to be cash buyers, assuring a quick closing. The final sales prices also tend to be higher since international investors are motivated by more than just a return on their investment and have other interests at heart. The sales prices can also be driven higher using our effective marketing solution because of the multiple offers that we are often able to procure for the sellers, thereby creating somewhat of an auction style environment. Finally, the cache and international exposure are tremendously enhanced as a result of our efforts. Aginsky Consulting Group is the only company in the U.S. that is currently pursuing this initiative. If you are either a foreign investor looking for advice about the benefits of U.S. real estate, or if you are a property owner interested in learning more about our program, we recommend that you contact us at [email protected] for additional information about this program.

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recent publications ON TV – Mr. Aginsky makes a guest appearance on TV’s “Money Matters” Alexander Aginsky made a guest appearance on the television show, “Money Matters”, filmed in Portland, Oregon in January 2009. Mr. Aginsky, a recognized international business expert and entrepreneur, was invited to speak on the hourlong show on such topics as starting a business, growing a business, and succeeding in today’s evermore competitive global business environment. Mr. Aginsky also discussed key success factors for companies of all sizes, from local “mom and pop shops” to international conglomerates and why immigrants typically tend to possess these success factors that are innate to successful business ownership more so than natural born citizens. The show was aired six times on three different channels and is currently in rotation to air again in the fall. The show was such a success that Mr. Aginsky was invited back to make future appearances in the upcoming year and was even offered an opportunity to have his own local business show. However, he had to decline due to his significant workload and primary responsibilities to clients of Aginsky Consulting Group. For a DVD copy of the show, please contact us at [email protected].

IN PRINT – ACG luxury goods article printed in a premier Asian Magazine An article recently written by Alexander Aginsky about the Russian market for luxury goods was featured in the May/June 2009 edition of Duthuyen Yacht magazine, a premier, largeformat glossy magazine targeted at affluent Asian readers. The bilingual 4-page feature, titled “Russian High-End Market Outlook,” discussed the demographics of a typical high net-worth Russian consumer, their preferences, and purchasing behavior. The article also featured a synopsis of the top ten luxury goods market segments in Russia. Other articles in the magazine cover topics that range from attending prestigious yacht shows to how to buy Cartier watches. The original white paper prepared by our firm, on which this latest article was based can be downloaded for your review here - http://www.aginskyconsulting.com/ downloads/ACG%20Industry%20Summary%20 Reports%20-%20Q4-07/ACG%20Russian%20 luxury%20goods%20market%20overview.pdf.

newest associates Noah Wong

Mr. Vibhor Gupta joined Aginsky Consulting Group in February of 2009 as an Associate in the Portland, Oregon office. Mr. Gupta is currently responsible for managing several projects (including the European Telco Software Producer’s Global Expansion), conducting business development, investor relationship management, and client communication. He is also the liaison for the firm’s Indian partnership.

Mr. Noah Wong also joined Aginsky Consulting Group in February of 2009 in the company’s Portland office. Mr. Wong is currently the Program Manager for the firm’s real estate program (see above) where his responsibilities include project management, business development, market research, and client negotiations.

Mr. Gupta holds a Master of Business Administration degree from the Thunderbird School of Global Management with a specialization in Global Management. Mr. Gupta received his Bachelor’s degrees from the Pennsylvania State University in both Information Systems and International Business. He has lived and worked throughout the United States and in Germany and England.

The long awaited company presentation developed by our HR team for prospective hires and delivered by Mr. Aginsky was finally recorded in a local studio in the first quarter of 2009. It can now be viewed by candidates online here - http://www.aginskyconsulting. com/en.php/company-presentation.html. The video presentation is based on the PowerPoint presentation, which is downloadable from the front page of the ACG website here – http:// www.aginskyconsulting.com/downloads/ACGCompany_Presentation_(eng).pdf. The presentation provides a basic understanding of our firm’s activities, our business model, value proposition, and compensation structure. It takes the viewer on a two-hour tour of the company, sample engagements, and case studies, and offers an inside glimpse into the inner-workings of Aginsky Consulting Group. It also provides the prospective hires with a detailed outline of their responsibilities and explains the hiring process and our stringent guidelines. If you have trouble viewing the video, please contact us at [email protected].

ACG nominated for an award

Vibhor Gupta

Mr. Gupta brings a broad range of experience to the Aginsky Consulting Group team, as he has worked in consulting and finance positions for several Fortune 500 companies and multi-national consulting firms such as Bearing Point, DHL and Accenture. Working as a Financial Consultant at BearingPoint, Mr. Gupta developed proposals for potential clients, one of which led to securing a $3 million client for the company. As an IT consultant at Accenture, he managed a diverse team of 30 members and worked extensively with clients, providing technical and secondary support.

ONLINE – ACG Company Presentation video is now available online

Mr. Wong has over four years of experience living and working in Shanghai, China, where he has developed an in-depth understanding of the business and cultural acumen of the region. Mr. Wong’s career includes managerial roles in the high technology and hospitality industries; ranging from Wicresoft, China’s leading IT and business process service provider, to Motorola, Networks and Infrastructure division. He is an enthusiastic collaborator, with experience in building bridges across the technical and business communities to foster strategy, innovation and product development. He has also served as the Marketing Manager for one of Shanghai’s premier Western restaurants; managing all marketing communications and business development.

We are proud to announce that in May 2009 Aginsky Consulting Group has been recognized for its ongoing successful activities in international business and was nominated for the Mayor’s International Award in Portland, Oregon, as Service-based Exporter of the Year. In the last several years, exports constituted nearly 100% of our firm’s sales, leading to double-digit rates of revenue growth year after year. ACG was nominated for its commitment to ethical global development and progressive corporate policy, teamwork, and continuing education. We are focused solely on international business and believe that it is the only long-term path to peace and prosperity around the globe. Our corporate philosophy coincides with Mr. William Schurz, who said, that “borders frequented by trade seldom need soldiers”.

Mr. Wong holds an MBA from the Thunderbird School of Global Management and received his Bachelor’s degree in International Studies with a concentration in business. Through his broad range of experiences, he has developed a fluency in cross-cultural business management and communication. Noah speaks fluent English and Mandarin Chinese.

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ACG expansion into the BRIC Our firm has long held a belief, that in order to be truly a global partner to our clients, we must ourselves also become more geographically diversified. Hence in the last year we have made an effort to establish a presence in the other BRIC markets, particularly in India, China, and Brazil. We now have either our own staff or solid local partners in each of the four BRIC markets, and in this part of the newsletter we will highlight two of these recent international developments.

ACG in India In the last quarter of 2008, our firm established a strategic partnership agreement with Verge Consulting (www.vergeconsulting. org). This India-based company provides business advisory, turnaround management, business consulting and performance management solutions primarily for Indian clients. This partnership will allow Verge Consulting clients to pursue opportunities internationally, while helping the ACG client base to expand into India. Vibhor Gupta, who

is the partnership liaison, is currently in negotiations with Verge on several new business development and capital fundraising projects in India in industries such as tea production, IT, real estate, and medical tourism. If your company has any interest in doing business in the growing Indian market please contact Mr. Gupta at v.gupta@ aginskyconsulting.com.

ACG in Brazil In the last quarter of 2008, we also added staff on the ground in the bustling city of São Paulo, Brazil, led by Mr. Fabiano Grottoli (regional director for ACG Latin America).  Mr. Grottoli’s extended work experience includes 16 years in marketing, communications, product management, business development and sales in financial services, pharmaceutical, and consumer companies. He has worked for many Fortune 500 companies, including American Express and Bristol-Myers Squibb, as well as Bradesco, the second largest public bank in Brazil. He is also currently a part-time professor in International Business, International Marketing, and Strategic Planning at the prestigious

University Anhembi Morumbi in São Paulo, Brazil. Mr. Grottoli graduated with an MBA from Thunderbird School of Management and speaks fluent Portuguese, English, and Spanish. Currently, Mr. Grottoli is conducting negotiations with several potential clients in Brazil in such sectors as plastics, IT, medical tourism, and biotechnology. If your company has an interest in doing business in the thriving Brazilian market please contact Mr. Grottoli at f.grottoli@ aginskyconsulting.com.

ACG attends conferences around the globe Aginsky Consulting Group regularly attends various conferences and seminars around the globe to promote our clients’ projects, to continue our team’s education, and to build our already broad network of industry professionals and investors. In the second quarter of 2009 members of our team attended two conferences – one in Moscow, Russia and the other in Washington, DC. A brief summary of each conference is provided below.

5th Annual Russian and CIS Private Equity & Venture Capital Forum in Moscow The 5th Annual Forum on Russian and CIS Private Equity and Venture Capital took place in Moscow’s Marriott Grand Hotel on the 23rd and 24th of April, 2009. All of the largest global private equity funds, family trusts, corporate and individual investors which have an active interest in Russia were in attendance. This forum is considered to be the most comprehensive such event in Russia and allows leading investors, advisors, and industry experts to exchange opinions, share experiences, and learn

from each other. Presentations were given by some of Russia’s largest funds on such topics as the latest developments in Russia’s Private Equity and Venture Capital industry, best capital raising strategies, and future outlook. The general consensus among the presenters was that Russia’s future is bright and that a rapid rebound is inevitable as early as 2010. Members of the ACG team attended all of the presentations and took the opportunity to rekindle many existing relationships and develop new ones.

11th Annual Global Private Equity Conference in Washington, DC Two members of the ACG team, Alexander Aginsky and Brinton Reed, attended the 11th Annual Global Private Equity Conference in Washington D.C. on the 13th and 14th of May, 2009, which took place at the RitzCarlton Hotel in the heart of the city. The event was hosted by the International Finance Corporation, a division of the World Bank and the Emerging Markets Private Equity Association. This annual event is the largest and most comprehensive gathering across the globe of practitioners active in emerging markets private equity. The main theme of this year’s event was “Managing Risk and Finding Opportunities amid Uncertain Times”. In-depth panel and break-out sessions examined emerging markets investing opportunities in an increasingly competitive and volatile global environment, identifying which markets present the

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best opportunities and clarifying how investors can effectively navigate in a tumultuous economic landscape. Some of the largest international private equity players and leading industry experts were in attendance. The overall mood in the group was energetic and optimistic about the future of the PE industry and the overall global economy. Our team’s attendance provided us with a unique opportunity to meet with representatives from hundreds of Private Equity funds and other industry leaders. Not only were we able to strengthen and expand our existing network of global investors by participating in the conference, but we uncovered new business opportunities that will be discussed in our next newsletter in more detail.

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