BLACK EARTH FARMING LTD.: CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION AS OF AND FOR THE THREE-MONTH PERIOD ENDED 31 MARCH 2007

Contents

Condensed Consolidated Interim Statement of Income 3
Condensed Consolidated Interim Balance Sheet 4
Condensed Consolidated Interim Statement of Cash Flows 5
Condensed Consolidated Interim Statement of Changes in Equity 6
Notes to the Condensed Consolidated Interim Financial Information 7 

(For tables see attached file)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION AS OF AND FOR
THE THREE-MONTH PERIOD ENDED 31 MARCH 2007 

1 Background

(a) Organization and operations 

Black Earth Farming Limited (the "Company") is a limited liability company
incorporated in Jersey, Channel Islands, on 20 April 2005. The Company is the
holding company for a number of legal entities established under the
legislation of Cyprus and the Russian Federation. Those entities are together
referred to as the "Group". 
The Company's registered office is 8 Church Street, St. Helier, Jersey.
The Group is involved in the acquisition and subsequent management of
agricultural assets in Russia. The Company's activities include farming,
production of crops and dairy produce and distribution of products in the
Russian Federation. 
The Group commenced operations in 2005. The majority of the subsidiaries were
established in 2006. Subsidiaries established in 2007 have limited activities
as at 31 March 2007. 

(b) Russian business environment 

The Russian Federation has been experiencing political and economic change that
has affected, and may continue to affect, the activities of enterprises
operating in this environment. Consequently, operations in the Russian
Federation involve risks that typically do not exist in other markets. The
condensed consolidated interim financial information for the three-month period
ended 31 March 2007 reflects management's assessment of the impact of the
Russian business environment on the operations and the financial position of
the Group. The future business environment may differ from management's
assessment. 


2 Basis of preparation

(a) Statement of compliance 

This condensed consolidated interim financial information has been prepared in
accordance with International Financial Reporting Standard IAS 34 Interim
Financial Reporting. 
The condensed consolidated interim financial information as of and for the
three-month period ended 31 March 2007 has been prepared on a condensed basis,
and therefore should be read in conjunction with the consolidated financial
statements as of 31 December 2006 and for the period from 01 January to 31
December 2006, as this financial information provides an update of previously
reported financial information. 
All accounting policies described in the consolidated financial statements as
of 31 December 2006 and for the period from 01 January to 31 December 2006 have
been consistently applied in preparing this condensed consolidated interim
financial information. 

(b) Basis of measurement 

The condensed consolidated interim financial information as of and for the
three-month period ended 31 March 2007 is prepared on the historical cost
basis, except that financial investments classified as available-for-sale are
stated at fair value. 

(c) Functional and presentation currency 

The national currency of the Russian Federation is the Russian Ruble ("RUR"),
which is the Company's functional currency and the currency in which these
condensed consolidated interim financial information are presented. All
financial information presented in RUR has been rounded to the nearest
thousand. 

(d) Use of estimates and judgments 

Management has made a number of judgments, estimates and assumptions relating
to the reporting of assets and liabilities and the disclosure of contingent
assets and liabilities to prepare this condensed consolidated interim financial
information in conformity with IFRSs. Actual results could differ from those
estimates. 


3 Changes in the Group structure

During the period from 01 January to 31 March 2007, the Company established a
number of new subsidiaries in the region of Voronezh. 


4 Revenues

(For table see attached file.) 


5 General and administrative expenses

(For table see attached file.)


6 Warrants granted to personnel

In August 2005, the Company established an instrument creating warrants to
subscribe for 2 059 000 ordinary shares. 1 200 000 have been granted to senior
management in 2005. The subscription price per warrant varies from USD 1.15 to
USD 2. 

(For table see attached file.)


7 Financial income and expenses

(For table see attached file.)


8 Income tax and income tax credit 

The applicable corporate profits tax rate for the Company is 0% (2006: 0%). 
Companies domiciled in Russia that do not have a status of agricultural
producer are subject to a 24% (2006: 24%) corporate profits tax. Companies
domiciled in Russia that do have a status of agricultural producer are exempt
from corporate profits tax on profit realized from sale of agricultural
produce. 

(For full report see attached file.)