OFFERING MEMORANDUM CONFIDENTIAL - Coca Cola İçecek

or lack of availability of hard currency, restrictions on repatriation of capital, changes with respect to taxes, and nationalizationor expropriation of property. The occurrence of any of these factors could have a material adverse effect on our business,financial condition and results of operations in Kazakhstan. There can be no assurance that political, legal, economic, social orother developments in Kazakhstan will not have an adverse effect on our business in Kazakhstan.Kazakhstan is in the process of moving from a command to a market-driven economy. Kazakhstan has actively pursueda program of economic reform and inward foreign investment designed to establish a free market economy, but there can be noassurance that such reforms and other reforms will continue in the future.Under President Nazarbayev's leadership, the foundations of a market economy have taken hold, includingprivatization of state assets, liberalization of capital controls, tax reforms and pension system development. PresidentNazarbayev was re-elected in December 2005 for an additional seven-year term. Should a new president be elected in the future,the pro-business atmosphere in Kazakhstan could change. Changes to Kazakhstan's property, tax or other regulatory regimes, orother changes that affect the pro-business atmosphere in Kazakhstan, could negatively affect the Group's business, financialcondition and results of operations.Since the breakup of the Soviet Union, a number of former Soviet republics have experienced periods of politicalinstability, civil unrest, military action or incidents of violence. Kazakhstan has not experienced any such unrest and, to date, thisregional instability has not affected Kazakhstan or our operations in Kazakhstan. However, future political instability, civilunrest or continued violence in the region could affect the political or economic stability of Kazakhstan, and could have anadverse effect on our business, financial condition, results of operations or prospects in Kazakhstan.We ship our products using the national railway system operated by the Kazakh government and if there is a change in theavailability or reliability of this rail system, our results of operations, financial condition and prospects could be adverselyaffected.Kazakhstan covers a large geographic region which is roughly equivalent in size to Western Europe. In addition, thehighway infrastructure in Kazakhstan is unreliable and, due to severe weather conditions in winter, often inaccessible. As aresult of these factors, we use rail transportation for the distribution of our products in Kazakhstan outside of Almaty. The railsystem in Kazakhstan is operated by the Kazakh government. Any reduction or cessation in the availability of the railroads to usor a significant increase in the tariffs for railroad transportation could have a material adverse effect on our business, financialcondition and results of operations in Kazakhstan.The taxation system in Kazakhstan is at an early stage of development and experience. The interpretation and application oftax laws and regulations are evolving, which significantly increases the risks with respect to our operations and investment inKazakhstan.As tax legislation in Kazakhstan has been in force for only a relatively short time, tax risks in Kazakhstan aresubstantially greater than typically found in countries with more developed tax systems. Tax legislation is evolving and issubject to different and changing interpretations, as well as inconsistent enforcement. Tax regulation and compliance is subjectto review and investigation by the authorities who may impose extremely severe fines, penalties and interest charges.Kazakhstan's tax laws are not always clearly determinable and have not always been applied in a consistent manner. Inaddition, the tax laws continue to evolve. The uncertainty of application and the evolution of tax laws create a risk of additionaland substantial payments of tax by CC Kazakhstan, which could have a material adverse effect on its financial position andresults of operations. The tax authorities are able to raise additional tax assessments for taxes for five years after the end of therelevant tax period, and the calendar years 2001 to 2005 remain open. For all taxes, the fact that the tax authorities haveconducted an audit of a particular period does not prevent them from revisiting that period and raising an additional assessment.In addition, Kazakhstan's tax system does not have the concept of the tax authorities giving legally binding rulings on tax issuesthat are put to them.The legal system in Kazakhstan is in the process of development, and the application of laws and regulations may beunpredictable.Risks associated with the legal system in Kazakhstan include: inconsistencies between and among laws, presidentialdecrees, edicts and governmental and ministerial orders and resolutions; conflicting local, regional and national rules andregulations; the lack of judicial or administrative guidance on interpreting the applicable rules; the untested nature of theindependence of the judiciary and its immunity from economic or political influence; the relative inexperience of jurists, judgesand courts in interpreting recently enacted legislation and complex commercial arrangements; a high degree of discretion on the