122314567CE6O5’Sfs.rts.ru/content/annualreports/925/2/komos-engl.pdf · Development strategy...

ANNUAL REPORT 2011THE RIGHT DECISIONS

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KOMOS GROUP LLC Annual report 2011Approved by the resolution of the sole member of the CompanyApril 28, 2012

CEO APPROVED Andrey Shutov


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CONTENTS

CEO’S ADDRESS

COMPANY PROFILE

Company structure

Production

Geographic reach

Development strategy

MAJOR BUSINESS DIVISIONS

Milk processing

Poultry farming and poultry meat processing

Poultry farming and egg production

Pig farming and pork processing

Khladokombinat «Icevita»

HR MANAGEMENT

MARKETING AND SALES

Regional development strategy

Development of KOMOS GROUP’s logistics

Company’s brands

CONTACTS

FINANCIAL STATEMENTS

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Dear members and partners!

Today, KOMOS GROUP LLC is one of the largest agri-business companies in Russia. Our major divisions are poultry farming and egg production, pig farming and pork processing, milk processing, poultry farming and poultry meat processing. The company’s dynamic development and business sustainability result from vertical integration of our business as well as gradual implementation of stra-tegic decisions and targeted projects.

Although 2011 was one of the hardest years for the in-dustry, KOMOS GROUP kept demonstrating sustainable operating and financial results in each business area. KO-MOS GROUP’s revenue according to its IFRS financial statements totaled 17,6 billion rubles compared to 13,9 billion rubles in the previous year.

A milestone event of 2011 was setting up a new business division Khladokombinat «Icevita» (it includes Udmurtsky khladokombinat JSC and Permsky khladokombinat «Soz-vezdie» JSC). The new division specializes in production and sales of frozen products. The division’s enterprises have storage facilities with capacity to store over 25 thou-

sand tonnes of products; this makes the new segment strategically important for the company’s development in terms of logistics and distribution. In future, we pursue to further develop this segment in order to form a sustainable distribution channel capable of promoting our products in the Ural regional markets.

Last year we continued implementing the strategy of mem-ber companies’ integration; we joined two poultry meat producing plants into one legal entity as well as combined three egg producing plants. This consolidation targets in-creased operational efficiency and implementation of com-mon production and business process standards. This year was rich in positive events. KOMOS GROUP completed floating its bonds. In July, during her visit to Izhevsk the minister of agriculture of the Russian Fe-deration Elena Skrynnik tried KOMOS GROUP products and was introduced to reconstruction projects of KOMOS GROUP member companies. She highly appreciated the results brought by implementation of our investment pro-gram.

In 2011, our management team focused on improving operational efficiency, which consequently resulted in 26% increase in the company’s revenue followed by 49% in-crease in EBITDA compared to the previous year. I’d like to point out that these indicators were achieved when the prices for raw materials and feeds were high while the end product prices were relatively stable. EBITDA growth out-paced revenue growth in view of increased market share of high margin products as well as increased level of food processing. Direct state subsidies received by our meat and egg producing enterprises contributed greatly to our positive financial performance.

In 2011, the company’s profitability substantially in-creased thus EBITDA was at 13,7% in 2010 and by the end of 2011 it reached 16,1%. EBITDA growth was majorly conditioned by ongoing vertical integration of our business and a substantial market share of high margin products. Meanwhile, the company managed to maintain the cost of borrowing at the same level; by the end of 2011 the ef-fective interest rate on corporate loans totaled 4,6%. We used both debt and equity financing as a source of funding during the year. In 2011, KOMOS GROUP’s credit port-folio increased by 23% thus reaching 12,6 billion rubles. We got substantial support from leading banks of Russia: Gazprombank, Rosselkhozbank, Sberbank, Promsvyaz-bank, and UniCredit Bank. I am delighted to inform you that the Russian financiers recognized agribusiness as the key sector of the national economy and are now aware of its great prospects.

CEO’S ADDRESS


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In 2011, we invested 1 590 million rubles in reconstruc-tion and upgrade of our member companies. Implemen-tation of the investment program enabled us to substan-tially increase production and to upgrade our production technologies in line with the best world practices. While reducing production costs we managed to increase the product quality and competitiveness compared to interna-tional analogues. We work in close cooperation with world market leaders while leading international companies are becoming our customers.

Technology upgrades, implementation of modern pac-kaging solutions, new product launches, and improving product design lead to establishing a portfolio of bestsell-ing brands as well as efficient distribution network, and al-lowed us to substantially expand our geographic reach. Currently, our products are delivered to 44 regions of Rus-sia. KOMOS GROUP cooperates with Russia’s largest retail chains: «Karusel», «Perekrestok», «Lenta», «Py-atyorochka», «Magnit», «Ashan», «Dixi», «The Seventh Continent», and others.

I am sure that our great accomplishments are the result of professionalism and good teamwork skills of all our em-

Chairman of the Management Committee - CEOKOMOS GROUP LLC Andrey Shutov

CEO’S ADDRESS

ployees. KOMOS GROUP is a company with 12 thousand employees producing natural, non-GMO, and healthy food. I would like to express my heartfelt gratitude to all employees, shareholders, creditors and investors as well as to the authorities of all regions of our presence.

We are certain that KOMOS GROUP will enter the inter-national market and prove to be competitive that’s why we investigate the market requirements and pursue to meet them. Our development strategy focuses on improv-ing production efficiency and automation, creating new brands, and dynamic business expansion.

Positive results that we have achieved so far proved viability of the chosen strategy thus balancing business segments and targeted investments ensured sustainable growth of KOMOS GROUP. I believe that in the nearest future we will strengthen our positions in the Russian food market and be recognized as the major Russian agribusi-ness company which in fact KOMOS GROUP truly is.

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KOMOS GROUP COMPANY STRUCTURE AS OF APRIL 3, 2012.

COMPANY PROFILE

Company structure

KOMOS GROUP’s management system is based on interaction between the Management Company and the divisions, which are divided by product type.

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In 2011, KOMOS GROUP gradually expanded production of food products:

PORK (live weight), tonnes

POULTRY MEAT* (live weight), tonnes

MILK PROCESSED, tonnes

EGG*, thousands

2008

2009

2010

2011

2012 (forecast)

2008

2009

2010

2011

2012 (forecast)

2008

2009

2010

2011

2012 (forecast)

2008

2009

2010

2011

2012 (forecast)

33 141

36 000

36 121

38 766

38 941

21 731

27 886

31 201

36 210**

39 927

233 096

251 497

270 301

273 241*

291 902*

732 116

759 835

758 743

845 665**

807 406***

*Including all poultry plants**Output increased consequent to acquisition of Mendeleevskaya poultry plant LLC

* Including all poultry plants** Output increased consequent to acquisition of Mendeleevs-kaya poultry plant*** Reduction of output is conditioned by change in the flock structure and scheduled switching of Glazovskaya poultry plant LLC to broiler meat production

* Including all dairy enterprises

Production

COMPOUND FEEDS*, tonnes

2008

2009

2010

2011

2012 (forecast)

256 241

326 864

369 969

390 280

416 421

*Including all feed producing facilities

FISH PRODUCTS, tonnes

2011

2012 (forecast)

2 456

2 825

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DEBT LOAD

Company profile

SALES REVENUE

KOMOS GROUP’S KEY PERFORMANCE INDICATORS

*A revenue take-off is related to a change in conditions, under which Udmurtskaya poultry plant’s products are sold (commission agreement → purchase and sale agreement)

*Reduction is related to inclusion of a new division «Khladokombinat «Icevita» into KOMOS GROUP’s consolidated financial statements

Source: Management of the company, Financial statements (RAS)


Pig farming and pork processing, million rubles

Milk processing, million rubles

Poultry farming and egg production, million rubles

Food product distribution, million rubles

Fish products, million rubles

Other, million rubles

Sales revenue, million rubles

Production costs, million rubles

Net profit, million rubles

Net assets, million rubles

EBITDA, million rubles

Net debt, million rubles

Average weighted interest rate,%

Net debt/EBITDA

EBITDA,%

Poultry farming and poultry meat processing, million rubles

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INCOME STRUCTURE, million rubles (EBITDA)

Company profile

2010 2011


2008 2009


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KOMOS GROUP’s distribution network covers the major regions of Russia, having a population of over 120 million people or about 80% of Russia’s total population.

The company’s geographic reach is constantly expanding. Today, KOMOS GROUP’s products are delivered to 44 re-gions of Russia.

The company has a branch office in Moscow, the major re-sponsibility of which is to promote the company’s interests at a national level.

COMPANY PROFILE

Geographic reach

Moscow

Izhevsk

44 regionsKOMOS GROUP’s geographic reach

SALES GEOGRAPHY

Delivery regions Other regions


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Development strategy

KOMOS GROUP 2012-2014 development strategy pursues an increase in production efficiency and dynamic business expansion as well as attaining one of the key State objectives i.e. implementation of food security doctrine.

KOMOS GROUP’S strategic planning is guided by experi-enced specialists and pursues continuous improvement of management procedures while implementing up-to-date methods of corporate management, task delegation, sys-

2012-2014 STRATEGIC OBJECTIVES

TACTIC TOOLS FOR ACHIEVING OUR OBJECTIVES

STRATEGIC STRENGTHS

Regional expansion

Increased business capitalization

Increased share of high value added products to diversify income struc-ture and boost operational efficiency

Achieving EBITDA margin compa-tible with that of industry leaders in each business area:•Poultry meat production: 15%•Pork production: 18%•Egg production: 20%•Milk processing: 15%

Retaining leading positions in the lo-cal agricultural products market

Managing a balanced portfolio of re-gional brands

Programs of employee development and improvement of employee moti-vation system

Manufacturing policy Increased production capacity and reduced production costs

Investment policy Ensuring effective use and alloca-tion of investment resources

Corporate policy Increasing KOMOS GROUP share-holder value

Strategic and project management All major strategic projects for deve-lopment and modernization shall be accumulated and managed by the project office of the management company in accordance with the ap-proved procedure

HR policy Developing an employee manage-ment system governed by common corporate standards and pursuing a strong HR brand, recruitment of highly qualified specialists, and de-velopment of KOMOS GROUP em-ployee potential.

Major investments into restructu-ring and expanding production ca-pacity

Distribution network and a diversi-fied client base

A centralized procurement system

Management system based on in-ternational standards of quality and project management

A high brand awareness in the lo-cal market

State subsidies and support

A sustainable financial position

tem of KPI, and installation of state-of-the-art corporate IT-systems aimed at increasing business transparency and efficiency.


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In 2011, the «Milk processing» division rapidly developed while implementing innovative production technologies and packaging solutions at the same time demonstrating sustainable growth. Consequent to implementation of deep raw milk processing technologies we managed to increase production volume and to dramatically improve the division’s work efficiency. The division’s enterprises processed over 272 thousand tonnes of raw milk and 56 thousand tonnes of whey.

5-th

500 millionrubles

10 000 tonnes

20,8 thousand rubles

Russian UHT-milk manufacturer by quantity ofсartons produced *

total investments into the division’s development in 2011

of milk powder products per year capacity

product value out of one tonne of raw milk processed (up 11,3% from 2010)

* according to Tetra Pak experts


Milk processing

This considerable growth was majorly conditioned by suc-cessful implementation of projects related to milk powder product manufacturing for the B2B market. We completed the second stage of reconstruction of the milk powder products manufacturing facility at Glazov-moloko JSC and put into operation the main production line deploying baro-membrane equipment. We invested 177 million rubles into

this project. According to the data provided by GEA Filtra-tion, the leading developer of processes and biotechnolo-gies for food processing industry, Glazov-moloko has the second best equipped whey processing facility in Russia with 10 thousand tonnes of milk powder products per year capacity. In 2011, we doubled production of milk powder products thus increasing our share of the Russian dry whey market to 2,9% and of milk powder product market to 1,8%. The enterprise delivers milk and whey powder to 15 regions of Russia and to some countries of the CIS. In 2012, we pursue to increase our share of milk powder product market up to 6%.

We made a major contribution to further development of the milk powder product segment by launching at Kezsky cheese factory JSC a brand new condensed whey produc-tion line equipped with state-of-the-art nanofiltration units. Kezsky cheese factory daily processes up to 300 tonnes of whey that after condensing is dispatched to Glazov-moloko to be further used as raw material for production of whey powder. Deployment of innovative equipment and implementation of nanofiltration technology dividing the product into concentrate and water allowed Kezsky cheese factory to switch to waste-free manufacturing tech-nology and provided extra amount of refined water totaling 150 tonnes per day. Overall investments into new produc-tion facilities totaled 130 million rubles.

Total investments into the division’s development exceed-ed 500 million rubles by 2011 year end. We carried on im-plementation of investment projects related to introduction of innovative packaging solutions. We launched a new au-tomated curd production line deploying vacuum packaging technology at Izhmoloko JSC; this allowed us to enter the national curd market. Glazov-moloko JSC substantially widened the product variety and launched packaging dairy products into PET-bottles. Startup of high technology Tetra Pak line for manufacturing of products under Selo Zelenoe brand at Sarapul-moloko JSC became the major project in the UHT-dairy product segment. The line has 130 thou-sand packages per day capacity. Selo Zelenoe branded products are delivered to 23 regions of Russia. Tetra Pak


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KEY PERFORMANCE INDICATORS

PRODUCTION DYNAMICS, milk processed, tonnes

Major business divisions

experts ranked Sarapul-moloko JSC the fifth Russian UHT-milk manufacturer by quantity of cartons produced.

In 2011, we dramatically expanded our geographical reach in terms of dairy products thus launching deliver-ies to 9 more regions of Russia including North-western area of Russia and Western Siberia. While increasing

specialization of division’s enterprises we implemented a unified system of sales and product promotion as well as launched «Milk trading company «Milkom» LLC - our own specialized sales and logistics center. Currently, MTC handles 38% of division’s sales and sells over 111 tonnes of products including to major national retail chains «Mag-nit», REAL, «Perekrestok», and others.





EBITDA, %


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In 2011, Glazovsky feed mill LLC was joined to the «Poultry farming and poultry meat processing» division in order to increase poultry farming efficiency. This consolidation enabled us to optimize grain procurement as well as to reduce poultry feed costs.

Glazovsky feed mill is one of the top Russian producers of complete feeds. Its production capacity totals 188 thou-sand tonnes of feeds per annum, this allows not only to

ROSS-308

53 grams

2,9 billion rbls

4%

broiler cross

the average daily weight gain

the cost of the project «Production process upgrading and switching to modern poultry meat production technology»

the share in Russia’s extrudedsoybean production

cover member companies’ demand for feeds, but also to supply compound feeds to 15 regions of Russia. In light of the increase in broiler meat production we made a deci-sion to install an extruded soybean production line with 7,8 thousand tonnes per year capacity. The plant streng-thened its positions in the high- technology feeds for young livestock market while increasing production of starter and prestarter feeds by 6% and 33% correspondingly.

In the framework of the investment project “Production pro-cess upgrading and switching to modern poultry meat pro-duction technology” with the total cost of 2,9 billion rubles we completely switched the division’s production facilities from egg to poultry meat production, and launched recon-struction of parent flock and broiler breeding buildings. In 2011, the production capacity increased dramatically and reached 32,7 thousand tonnes per year (115% increase as compared to the previous year). Currently, according to “Rosptitsesoyuz” Udmurtskaya poultry plant LLC is the 23rd largest poultry meat producer in Russia.

In 2011, to ensure increase in production efficiency we replaced a Russian broiler cross Smena-7 with a British broiler cross ROSS-308 with a potential to increase the average daily weight gain to 64 grams. The new broiler cross will allow broilers to reach 2,5 kg in 42 days with a lower feed conversion rate.

We efficiently deploy cold storage facilities: our own chilled poultry storage facility with 464 tonne capacity, Udmurtsky and Permsky cold storage facilities enable us to ensure safe product storage and sales during the peak demand as well as to expand our geographical reach. Meanwhile, following the market demand in 2011, we doubled produc-tion and sales of chilled poultry semi-finished products.


Poultry farming and poultry meat processing


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PRODUCTION DYNAMICS, poultry (live weight), tonnes

*In 2010, members of the Company rendered financial support amounting to 293 million rubles






EBITDA, %


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In 2011, the «Poultry farming and egg production» division retained its leading positions in the industry. The division’s total egg production increased by 25% and consequently exceeded 800 million eggs. Total annual layer flock reached 3 372 thousand layers. Currently, KOMOS GROUP is in the top 4 Russian egg producers with a 1,5% market share (data provided by Rosptitsesoyuz).

In 2011, we created a substantial basis for further develop-ment of the division by investing 160 million rubles. The major funds were allocated to reconstruction of produc-tion facilities and the division’s consolidation: Izhevskaya poultry plant and Votkinskaya poultry plant were joined to Varaksino poultry plant LLC as its subsidiaries. We envi-sion a considerable increase in efficiency consequent to implementation of common production standards, im-provement of business processes, and specialization of production facilities. We launched reconstruction of the feed mill at Varaksino; the feed mill’s capacity will be in-

4-thegg producer in Russia

creased to reach 100 000 tonnes per year. This will enable us to cover 100% of the division’s feed demand including Izhevsky and Votkinsky subsidiaries, meanwhile reducing production costs and improving the quality of feeds. Con-solidation of production facilities allowed us to optimize the product variety and to launch development of a uni-fied brand portfolio. In 2011, the brand portfolio included three major brands «Varaksino», «Selo zelenoe», and «Solnechny dvorik».

Acquisition of a new asset became an important part of our investments into the division. In the pursuit of outlined objectives we purchased Mendeleevskaya poultry plant in the Perm region; the plant was joined to the division in March of 2011. The production facility was organically integrated into the division: we introduced Mendeleevs-kaya poultry plant to the most state-of-the-art technologies deployed by our other production facilities and switched the poultry plant to a highly productive German cross Lo-mann. These allowed us to increase production volume and production efficiency from 316 to 324 eggs per layer. In light of modernization of production facilities we aim to considerably increase production volume at Mendeleevs-kaya poultry plant and to take a strong position in the local egg market of the Perm region.

We developed popular segments of packaged and en-riched eggs thus considerably increasing sales including to major national chains. Currently, we supply eggs to 29 regions of Russia. In 2011, we launched deliveries to X5 Retail Group, Tander (Magnit), Ashan, and began devel-oping the project of delivering «Varaksino» branded eggs to Moscow premium segment chains «Azbuka Vkusa», «The Seventh Continent», «Zeleny Perekrestok», «Glo-bus Gourmet», «Bakhetle», and others.

800 million eggs

100 000 tonnes

produced by the division in 2011

per year - the division’s feed mill capacityafter reconstruction

* data provided by Rosptitsesoyu


Poultry farming and egg production


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*In 2010, members of the Company rendered financial support amounting to 292,6 million rubles

* Downturn is related to reduction of inefficient production facilities

PRODUCTION DYNAMICS, egg, thousands






EBITDA, %


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In 2011, the pig farming and pork processing division demonstrated sus-tainable growth of production volume and production efficiency. The company went two positions up and took the 8th place in the rating of the largest pork producers of Russia compiled by the National Pig Breeders’ Union of Russia.

8-th

89%

1300 head

pork producer in Russia*

swine safety – one of the best indexes in industry

pedigree piglets sold in 2011

* data provided by the National Pig Breeders’ Union of Russia


Pig farming and pork processing

Joint capacity of Vostochny LLC and Kigbaevsky bacon LLC reached 38,7 thousand tonnes of pork in live weight, that accounts for more than 2 % of pork manufactured in Russia (data provided by the National Pig Breeders’ Union of Russia).A turnkey production cycle is our major competitive edge. The cycle starts with grain and compound feed production, and ends with pig farming and finished product manufac-turing while deploying technologies of deep processing. The division comprises 5 livestock farms with the total cropland area of 28 235 hectares, a grain elevator with 5 thousand tonnes per month capacity covering 45% of the division’s feed demand.

Several years of genetic selection resulted in establish-ing of our own pedigree pig herd. This proved that it was the right decision to start breeding own highly productive

breeds of pigs. In 2011, Vostochny LLC was recognized as the Swine Genetic Selection Centre and became the fourth largest genetic selection centre in Russia. Obtain-ing the status of a genetic selection centre gave us the opportunity to supply pedigree piglets and F1 pigs to 18 regions of Russia. In 2011, sales of pedigree piglets in-creased threefold compared to the previous year and reached 1300 head.

Deploying own pedigree pig herd, thorough selection, and customized feeding programs enabled us to significantly improve productivity and production efficiency while re-ducing the growth period from 205 to 199 days and pre-serving the average weight of 115 kg per pig. We reached a growth period of 188 days with the average weight of 115 kg per pig at Kigbaevsky bacon LLC; this index is substan-tially higher than the industry average. Meanwhile we im-proved the average weight gain, it reached 550 grams (up 0,9%), and pork produced per sow per year in live weight, it totaled 2451 kg (up 10%). Swine safety reached 89% (up 0,3%), this is 25% higher than the industry average.

To further develop this division we intend to deploy in-novative approach to production process and implement state-of-the-art technologies to reduce production costs. In 2011, we launched projects related to cost-effective use of resources and energy efficiency.

We deploy the most state-of-the-art technologies and equipment to ensure high production efficiency while in-vesting into production development. In 2011, overall in-vestments exceeded 190 million rubles. We completed the second stage of meet processing plant modernization at Vostochny LLC, upgraded equipment at canned meet production facility, and put into operation a brand new line for manufacturing mincemeat semi-finished products. We focused on efficient packaging solutions and installed a modern thermoforming machine Variovac to further devel-op the most promising product categories - chilled meat, premium sausages, and deli meats. In 2011, we intro-duced 50 new products to the market.


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* Change in revenue is conditioned by joining the distribution arm of the division to KOMOS GROUP LLC** Change in performance is conditioned by drought-related increase in grain prices


PRODUCTION DYNAMICS, pork (live weight), tonnes






EBITDA, %

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In 2011, we created a new division «Khladokombinat «Ice Vita»; it specializes in manufacturing and sales of frozen and semi-finished products.

The new division includes «Udmurtsky khladokombinat» JSC, «Permsky khladokombinat «Sozvezdie» JSC, «Trad-ing house «Udmurtsky khladokombinat «Ice Vita» LLC, and «OMNI» LLC. The division’s enterprises sell over 30 thousand tonnes of frozen products per year (ice cream, semi-finished and fish products). The division’s enterpris-es have storage facilities with capacity to store over 25 thousand tonnes of products; this makes the new segment strategically important for the company’s development in terms of logistics and distribution. In future, we pursue to further develop this segment in order to form a sustainable food product distribution channel to deliver products from the Udmurt Republic to the Perm market thus making it our «home» market as close to the end consumer as possible. In 2011, we launched investment projects relevant to re-construction of the division’s enterprises. We commenced the project aimed at upgrade and reconstruction of Perm-

25 000 tonnes warehouse capacity

500 tonnes of fish products per month capacity is expected of the new fish processing facility about to be built at «Permsky khladokombinat «Sozvezdie»

sky khladokombinat «Sozvezdie». The first stage of the project covers reconstruction of manufacturing cold stor-age facilities with 9,9 thousand tonne storage capacity and the warehouse which will be reequipped for storage of chilled products. We expect that in 2012 the enterprise will consequently become one of the major food product distributors in Perm region. Currently, the enterprise has its own sales department distributing three types of products: chilled products (poultry meat, pork, eggs, meat semi-finished products and fish products), frozen products (ice cream, meat dumplings, frozen fish products and sea food), wholesales (frozen fish, meat, poultry meat etc.). The reconstruction will enable us to implement energy saving technologies and to substantially improve produc-tion efficiency.

At «Udmurtsky khladokombinat» JSC we launched re-construction of manufacturing facility which has a multi temperature warehouse with 13 thousand tonne storage capacity. During the reconstruction the ammonia refri-geration unit will be replaced with a Freon refrigeration unit. The project’s estimated cost is 60 million rubles. This is one of the major cold storage facilities in the region; it covers four storeys and has 23 departments for storage of chilled, frozen and deep frozen products.

We consider manufacturing ready-made fish products to be a promising area for further development. Currently, Udmurtsky khladokombinat produces over 4 thousand tonnes of fish products per year and delivers products to Chelyabinsk, Sverdlovsk, Ivanovo, Orenburg and Tyumen regions to national retail chains Ashan, METRO, «Mag-nit» and «Monetka». We intend to build a new fish processing facility at Permsky khladokombinat; this will allow us to increase fish product manufacturing by 500 tonnes per month consequently doubling our fish product manufac-turing.


Khladokombinat «Icevita»

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KEY PERFORMANCE INDICATORS PRODUCTION DYNAMICS, tonnes


Fish products

Meat dumplings, vareniki

Ice cream






EBITDA, %


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HR MANAGEMENT

Over 12 thousand employees work at KOMOS GROUP member companies. Our HR management system is based on the principle of partnership and shared values. We believe that this approach will give every employee an opportunity to reach his full potential and to develop professionally.

In 2011, we hired specialists and senior managers of the leading companies in the field to fill the key positions in KOMOS GROUP. We improve processes and technolo-gies, build a professional team, and increase efficiency by recruiting successful employees from international com-panies.

We are positive that it is only possible to implement strate-gic goals of the company if it has a transparent employee evaluation system. We have utilized this approach while launching the project “Milk trading company “Milkom”. The evaluation was conducted to reveal employee potential and development possibilities. We plan to further pass the experience obtained to KOMOS GROUP member compa-nies; this will help us to develop a common employee eva-luation system and the pool of high-potential employees.

Comprehensive approach to employee education enables us to determine key competencies of our employees and to develop education programs meeting company needs. In 2011, KOMOS GROUP hosted a number of corporate seminars conducted by the leading authors, trainers, and consultants having substantial experience in manage-ment; and worked out the Program for developing com-prehensive management skills in senior managers. In 2011, in close cooperation with Izhevsk State Agricul-tural Academy we developed an education project for stu-dents of this higher education institution. The project aims at expanding students’ knowledge of production process-es, and preparing graduates for work at KOMOS GROUP member companies.

Investments into recruitment, development, and education of graduates contribute to building a team of professionals, capable of facilitating further development of the company.

employeesaverage headcount

10 million rblsеmployee education budget totaled in 2011

12 000


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HR management


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MARKETING AND SALES

Regional development strategy

We strengthen our positions in the domestic market while expanding the geographic reach every year at the same time we increase production volume and product variety. We focus on vibrant recognizable brands and state-of-the-art competitive packaging meeting market requirements.

KOMOS GROUP’s sales system covers retail and whole-sale which are conducted by its branches «Trading com-pany» and «Trading house» with a total turnover of 4 bil-lion rubles. In 2011, we further developed our own retail

chain «Tasty house. 2011 annual turnover of the chain ex-ceeded 812 million rubles, 38% of which constituted KO-MOS GROUP member companies’ products and private label products.

KOMOS GROUP PRODUCTS ARE DELIVERED TO RUSSIA’S LARGEST RETAIL CHAINS:

KOMOS GROUP 2011 GEOGRAPHIC REACH, tonnes*

*KOMOS GROUP geographic reach including sales conducted by «Udmurtsky khladokombinat» JSC and «Permsky khladokombinat «Sozvezdie» JSC

While pursuing our strategic objective of regional expan-sion we expanded our geographic reach up to 44 regions of Russia in 2011. Our major markets are the Udmurt Republic (56%), Perm region (11%) and Moscow region (8%). Regional sales of eggs and UHT-milk are the most rapidly developing ones. These products are majorly de-livered to Moscow and Moscow region (UHT-milk – 61%, eggs – 24%).In 2011, we purchased «Permsky khladokombinat «Soz-vezdie» JSC and «Udmurtsky khladokombinat» (Ice Vita) JSC to strengthen our positions in the Perm regional mar-ket.

These enterprises’ storage facilities allow to store over 25 thousand tonnes of products that provides new opportuni-ties for further development of KOMOS GROUP’s logistics and distribution.In 2011, we launched a new dairy product distribution channel and created «Milk trading company Milkom» LLC. Currently, the company cooperates with 900 agents and has 1500 points of sale in the Udmurt Republic, Perm region and other regions of Russia as well as outlets of the major national retailers: «Magnit», «REAL», and «Per-ekrestok».


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In 2011, we increased the company’s logistics efficiency and centralized transportation network. We set up a common transportation company «KOMOS-Logistics» and launched an automated logistics complex with 80 tonnes per day dispatching capacity.

«KOMOS-Logistics» major target is a more efficient use of transportation resulting from common requirements to the structure of fleet vehicles and unified logistics sys-tem. «KOMOS-Logistics» will fully satisfy the company’s transportation needs as well as work with contractors. We intend to increase efficiency of transportation by 20-30% due to implementation of a modern ERP system, a GPS navigation system and a transportation monitoring system.

In 2011, we completed construction of a modern logistics complex deploying «Smart warehouse» technology; the processes of goods registration, moving and dispatch are fully automated. The project was implemented on the ba-sis of LEAD WMS 4.0. System manufactured by Logistix, one of the leading companies in the Russian WMS market. The complex is equipped with loading/unloading convey-ors, weighing units, mobile automated work places for se-lection of small sized products, and sites deploying cross-docking technology for processing of chilled products. The complex specializes in handling of weighted chilled products; each batch is registered taking into account the production date, weight, and the receipt date, that allows us to ensure that the product is sold within the term of its shelf life.

Development of komos group’s logistics


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Company’s brands

This is a regional dairy brand, which is in the upper medium market segment. The product variety includes 14 dairy pro-

ducts packaged in modern Tetra Brik Aseptic Square car-tons with a Stream Cap closure. In 2011, goat and baked milk were added to the product range as well as various new yogurt and whey based drink flavors. In future, the product variety will include «Fresh» dairy products.

Development of «Selo Zelenoe» brand is hugely support-ed by «Tetra Pak Russia» and «Get Brand» Moscow.

«Selo Zelenoe» branded products are delivered to Saint Peterburg, Moscow, the Udmurt Republic, the Republic of Tatarstan, the Republic of Bashkortostan, Murmansk, Sverdlovsk, Samara and other regions. Over 50% of dairy products under this brand are distributed through retail chains.

Regional brand «Molochnaya Rechka» exists since 2006.

In 2011, in cooperation with «Get Brand» Moscow we re-styled this brand in order to make it more competitive. The new design creates positive emotions and associations as well as emphasizes consumers’ life style of work and family; it accentuates buoyancy, comfort and caring for the loved ones.

«Molochnaya Rechka» product variety includes 10 clas-sic dairy products, which are in the lower medium market segment.The brand is meant to be distributed in the regional mar-kets, where consumers tend to appreciate state-of-the-art packaging solutions (TBA, TFA) developed by Tetra Pak. 2011 novelty items include cappuccino milk and curd in vacuum packaging. In future, the product variety will in-clude «Fresh» dairy products.

Milk, dairy products and ice cream

«Selo Zelenoe» «Molochnaya Rechka»«Selo Zelenoe» – in harmony with nature.

«Molochnaya Rechka» tasteful care for the loved ones.

Nowadays active and busy consumers tend to reduce time spent on prepa-ring food. At the same time the consumer prefers natural high quality products. There is an upward trend in the interest to healthy, eco-friendly and easy to use products.

In line with market trends we actively work on creation and promotion of regional and national brands while deploying state-of-the-art technologies and packaging solutions. KO-MOS GROUP’s brand portfolio includes regional brands with a prospect of becoming national ones and strong lo-cal brands. Promising regional brands are «Selo Zelenoe»

(dairy products, eggs), «Molochnaya Rechka» (dairy prod-ucts), «Dalnyaya Usadba» (meat semi-finished products), «Toptyzhka» (dairy products for children), «Dobromya-sov» (meat products and meat semi-finished products) and «Solnechny Dvorik» (eggs).


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Marketing and sales

«Toptyzhka»

«Kezskycheese factory»

«Varvara Krasa»

«Izhmoloko»

«Grow with «Toptyzhka»!

«Kezsky cheese factory» village milk quality.

«Varvara Krasa» milk delicious like a fairytale.

«Izhmoloko» traditions of high quality.

«Toptyzhka» is a dairy brand for children foods; it exists

since 2002. The product range includes various prod-ucts UHT-milk, glazed cheese curds, curd deserts, milk cocktails, yogurts and ice cream. In 2011, we added new cocktail flavors to the product variety including chocolate, vanilla, strawberry and banana. Since 2006 this brand par-ticipates in the state project School Milk. In the framework of this program all school children in the Udmurt Republic from 1st to 5th grade drink «Toptyzhka» milk every day.

Rapid promotion of this brand is facilitated by its state-of-the-art packaging manufactured by Tetra Pak.

«Kezsky cheese factory» brand has the producer’s

name and represents various cheeses and dairy products, which are in the medium market segment. Various semi-hard cheeses and promising soft cheeses are sold under «Kezsky cheese factory» brand. The product range also includes various dairy products such as milk, cream, kefir, ryazhenka (baked milk), yogurt, sour cream and butter. The recipe of cheese «Znatny» was exclusively devel-oped by the enterprise’s technologists; it is an analogue of a famous European cheese Maasdam. Modern vacuum packaging meets retailers’ requirements. State-of-the-art automated equipment manufactured by leaders in cheese production ensures high product quality and safety.

«Kezsky cheese factory» branded products are delivered to the Udmurt Republic, Perm region, Sverdlovsk region and the Republic of Bashkortostan. In future, we plan to expand soft cheeses variety, to implement new packaging solutions and to introduce new trade marks to the market.

«Varvara Krasa» is a region-al dairy brand, which is in the medium market segment. «Varvara Krasa» product range includes 42 products: whole milk and cultured milk products, sour cream, curd and butter. The products are packaged in a handy Tetra Rex packaging with a closure. This brand awakens asso-ciations with a famous Russian Fairytale, which appeals to children and creates an image of fairytale atmosphere of eating dairy products with one’s close family.In early 2011, this brand added products in PET-bottles to its product range. These products are milk «Otbornoe» and 6% fat milk packaged in 1,4 liter PET-bottles, and 2,5% fat kefir in a 0,85 liter PET-bottle. «Varvara Krasa» branded products are delivered to the Udmurt Republic, Perm region, The Republic of Komi and Kirov region.

«Izhmoloko» is the most well-known brand in the Udmurt market, which is in the medium market segment. It exists since 1995. The product variety includes whole milk and cultured milk products, sour cream and curd, deserts, but-ter, cheese, and ice cream.

The products are majorly delivered to The Udmurt Repub-lic, Perm region and The Republic of Tatarstan.

In 2011, in order to freshen the brand and to strengthen its competitive edge we launched package redesign; we de-velop modern designs, test them and conduct focus group research. In June of 2012, we plan to introduce to the mar-ket the first batch of «Izhmoloko» branded products in a new packaging design.


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«Sukharev-moloko» is a brand positioned in the mass-market segment; it was intro-duced to the market in 2006.

The product range includes whole milk and cultured milk products, sour cream and curd, and butter. Milk «Otbor-noe» is the bestselling product and the brand’s best rep-resentation.

«Sukharev-moloko» branded products are distributed in the Udmurt Republic and are delivered to Perm region and The Republic of Tatarstan.

«Ice Vita» is an umbrella brand for products produced by Udmurtsky khladokom-binat. The product variety includes over 50 kinds of ice cream under various sub-brands; the most popular among them are «Izhevskoe morozhenoe», «GOSTovskoe», «Drakosha», «Severnaya Tayna» and «Slivochnoe La-komstvo».

«Dlya Vsej Semji» is a brand positioned in the mass-market segment; it entered the mar-

ket in 2007. Natural quality products at affordable prices. Vibrant pack-aging design in retro style awakens positive associations in consumer’s mind related to dairy products popular in Soviet times, which were natural, tasty and affordable.

Currently, the product variety includes milk, ryazhenka (baked milk), kefir, 15% and 20% fat sour cream, and va-nilla cheese curds. «Dlya Vsej Semji» branded products are delivered to The Udmurt Republic, Perm region, The Republic of Tatarstan, Tyumen region, and The Republic of Bashkortostan.

«Sozvezdie» is an umbrella brand for products produced by Permsky khladokombinat. The product range includes various flavors of ice cream. The products are positioned in the medium market segment and represent a quality product in modern packaging. This brand is well-known in the Perm and Perm regional market.

«Sukharev-moloko»

«Ice Vita»

«Dlya Vsej Semji»

«Sozvezdie»

«Sukharev-moloko» the green quality mark.

Marketing and sales


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In 2011, we developed a new regional brand «Dalnyaya Us-adba», which is in the upper medium market segment. The

brand is meant for health conscious consumers looking for quickly and easy to prepare food. «Dalnyaya Usadba» is a place where we produce eco-friendly products meeting the requirements of the modern market. «Dalnyaya Usadba» product range includes 13 chilled products packaged in modified atmosphere packaging (MAP). This type of packaging ensures product quality and safety with maximum possible shelf life of 10 days. In 2012, we intend to add poultry meat chilled semi-finished products to the product range.A state-of-the-art automated highly productive tray sealer Variovac Linus 560 (Begarat, Germany) deploying pack-aging film manufactured by Cryovac is used to package our products.

«Glazovskaya Ptitsa» brand entered the market in 2008 consequent to rebranding of

«Udmurtskaya poultry plant» products.This is a strong local brand with a 50% market share positioned in the medium market segment. The product range includes over 180 products; among which are broiler chickens and natural semi-finished products, meat products and canned poultry meat. Chilled poultry meat products are packaged in modern vacuum tray packaging that allows to preserve the product quality and safety up to 10 days. The most promising products are chilled broiler chicken, chilled natural semi-finished products and ready made products including ready to cook ones.In 2011, chilled products under «Glazovskaya Ptitsa» brand obtained an environmental compliance certificate.

«Vostochny» is a strong local meat product brand, which is

in the medium market segment; it’s the bestselling brand in The Udmurt Republic. In 2011, we launched the fol-lowing novelty items: cooked-smoked and semi-smoked sausages of the «European» and «Russian» series, sau-sages, deli meats, mincemeat semi-finished packaged products «Domashnyaya Kukhnya», «Zolotaya Seriya» pastes, handmade meat dumplings, «Retro» sausages, and pressed ham. Since 2011, we began to use new pac-kaging solutions for the products under this brand: vac-uum packaging, modified atmosphere and fixed-weight packaging.We consider chilled natural semi-finished products pac-kaged in modified atmosphere packaging, which ensures product quality and safety with maximum possible shelf life of 10 days, to be one of the most promising areas for development. A state-of-the-art automated highly produc-tive tray sealer Variovac Linus 560 (Begarat, Germany) deploying packaging film manufactured by Cryovac is used to package our products.

«Dobromyasov» is a regional meat product brand posi-tioned in the mass-market

segment. Products under this brand were introduced to the market in 2009; first we launched production of qua-lity affordable meat dumplings, then sausages and semi-finished products. High quality of our products is based on craftsmanship, love for his work and good name of «Do-bromyasov» the meat maker.Currently, the product range includes 56 products: sau-sages, ham, mincemeat semi-finished products, meat dumplings and mincemeat. Fixed-weight sausages were recently added to the cooked sausage variety.

«Dalnyaya Usadba»

«Glazovskaya Ptitsa»

«Vostochny»

«Dobromyasov»

«Dalnyaya Usadba» closer to nature.

«Glazovskaya Ptitsa» grown on pure grain and spring water.

«Vostochny» we use fresh meat only.

«Dobromyasov» the meat maker.

Meat, meat products and semi-finished products

Marketing and sales


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Eggs

«Varaksino» is a brand rep-resenting one of the major egg producers in Russia. The products are positioned in the

medium market segment. Currently, under «Varaksino» brand we sell 30-egg packages as well as 10-egg pac-kages. The major products are classic egg GOST and Derevenskoe egg. A rather promising area for develop-ment is promotion of enriched eggs – lutein-, selenium-, iodine-enriched eggs as well as sales of packaged eggs.«Varaksino» branded eggs are delivered to 26 regions of Russia. The sales are conducted by official regional dis-tributors.

A new regional brand posi-tioned in the mass-market segment. Since July of 2011 «Solnechny Dvorik» branded

eggs are sold in 10, 15, 30 - egg shrink plastic packages; it’s a handy and economy packaging that appeals to most consumers.

In 2011, «Selo Zelenoe»brand included packaged eggs to its product range. The pro-

duct variety includes table and enriched (Omega 3, sele-nium, village) eggs packaged in vibrant carton packages manufactured by «Khukhtamaky CIS» located in Moscow region. Apart from local markets (The Usmurt Republic, Perm region) we plan to expand «Selo Zelenoe» egg de-liveries to Moscow and Moscow region, Sverdlovsk and Samara regions. The sales are conducted by official re-gional distributors.

«Varaksino»

«Solnechny Dvorik»

«Selo Zelenoe»«Varaksino» freshness of a village morning.

«Solnechny Dvorik» a sunny mood.

«Selo Zelenoe» in harmony with nature.

Marketing and sales


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Fish, fish products and semi-finished fish products

The «Udmurtryba» brand has been well-known in the Ud-

murt market for over 10 years. This brand is represented by a wide range of canned fish, fish salads, and smoked and cooked fish in a vacuum packaging as well as deli fish positioned in the medium market segment.

A new brand which represents processed fish products posi-

tioned in the medium market segment. «Rybatskie Bayki» branded products appeal to the men, who are fond of fish-ing, and to those, who just love to seat in the company of fellow men and listen to fishermen stories.

«Sozvezdie» is an umbrella brand for products produced by Permsky khladokombi-nat. The product range includes processed fish products positioned in the medium market segment and represent a quality product in modern packaging. The brand is well-known in the Perm and Perm regional markets.

«Izhmoreproduct» brand is positioned in the mass-mar-

ket segment. The product range includes canned herring, sprat and mackerel at affordable prices.

«Udmurtryba»

«Rybatskie Bayki» «Sozvezdie»

«Izhmoreproduct»

Marketing and sales


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11 Pesochnaya Street, Izhevsk426069,The Udmurt Republic, Russia+7 (3412) 905-102, [email protected], www.komos.ru

CONTACTS

Chairman of the Management Committee – CEOAndrey ShutovReception: +7 (3412) 905-102, 905-103, [email protected]

First deputy CEO - CFOAlexey PyankovReception: +7 (3412) 905-050, [email protected] Executive directorSergey Makarov+7 (3412) 905-113, [email protected]

Vice President – Managing Director of «Kezsky Cheese Factory» JSCAnatoly MaximovReception: +7 (34158) 312-81, [email protected]

Vice President – Managing Director of «Varaksino Poultry Plant» LLCDmitry KuznetsovReception: +7 (3412) 545-350, [email protected]

Vice President – Managing Director of «Udmurtskaya Poultry Plant» LLCYury ShvalevReception: +7 (34141) 387-00, [email protected]

Vice President – Managing Director of «Vostochny» LLCAlexey PivovarovReception: +7 (3412) 952-491, [email protected]

Vice President – Managing Director of «Permsky khladokombinat» JSC, «Udmurtsky khladokombinat» JSCSergey ZadorozhnyReception: +7 (3412) 506-102, [email protected]: +7 (342) 241-39-42

Deputy CEO for technical exploitationAlexander Mikhailov+7(3412) 905-112, [email protected]

Deputy CEO – Head of Business Protection DepartmentSergey Biryukov+7(3412) 905-005, [email protected]

Deputy CEO for ProcurementKirill Chechin+7(3412) 905-117, [email protected]

Deputy CEO for internal corporate control Gennady Parkhomenko+ 7 (3412) 905-173, [email protected]

Deputy CEO for Human Resources – Head of HR departmentEkaterina Tikhonova+7(3412) 905-006, [email protected]

Commercial directorDmitry Filinov+7(3412) 905-055, [email protected]

Chief accountantLarisa Fokina+7(3412) 905-020, [email protected]

Head of Finance DepartmentEvgeny Romanenko+7 (3412) 905-058, [email protected]

Head of Agribusiness Development DepartmentEvgeny Rodichkin+7 (3412) 905-015, [email protected]

Head of Strategic Planning and Development DepartmentVyatcheslav Berdov+7 (3412) 905-130, [email protected]

Head of Public Relations Department Natalia Timofeeva+7 (3412) 905-017, [email protected]


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FINANCIAL STATEMENTS (IFRS)

Independent Auditor’s Report

To the Owners and Management of KOMOS GROUP

We have audited the accompanying combined financial statements of entities listed in Note 1 to the combined fi-nancial statements (hereinafter jointly referred to as “KO-MOS GROUP”), which comprise the combined statement of financial position as at 31 December 2011 and combined statement of comprehensive income, combined statement of cash flows and combined statement of changes in eq-uity for the year then ended, and a summary of significant accounting policies and other explanatory notes. The com-bined financial statements of KOMOS GROUP have been prepared by management in accordance with accounting principles of financial reporting substantially based on International Financial Reporting Standards (IFRS), de-scribed in Note 2 to these combined financial statements.

Management’s Responsibility for the Combined Fi-nancial StatementsManagement is responsible for the preparation and fair presentation of these combined financial statements in accordance with the accounting principles of financial re-porting substantially based on International Financial Re-porting Standards, described in Note 2 to these combined financial statements, and for such internal control as man-agement determines necessary to enable the preparation of combined financial statements that are free from mate-rial misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these com-bined financial statements based on our audit. We con-ducted our audit in accordance with International Stan-dards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the combined fi-nancial statements are free from material misstatement.

An audit involves performing procedures to obtain au-dit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditor’s judgment, including the assess-ment of the risks of material misstatement of the com-bined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group’s preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. An audit also includes evaluating the appropriate-

ness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the combined finan-cial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our quali-fied audit opinion.

Basis for Qualified OpinionThe accompanying combined financial statements do not disclose the names of ultimate controlling parties. In our opinion, disclosure of this information is required by IAS 24 «Related Party Disclosures».

Opinion In our opinion, except for the effects of the matter de-scribed in the Basis for Qualified Opinion paragraph, the accompanying combined financial statements of KOMOS GROUP as at 31 December 2011 have been prepared in all material respects in accordance with the account-ing principles of financial reporting substantially based on IFRS, described in Note 2 to these combined financial statements.

Basis of AccountingWithout modifying our opinion, we draw attention to the fact that the accompanying combined financial statements have been prepared in accordance with the accounting principles of financial reporting substantially based on IFRS, described in Note 2 which are not entirely in accor-dance with International Financial Reporting Standards.

ZAO BDO28 May 2012


36

Note 31 December

2011 2010

AssetsNon-current assetsFixed assets 6 7 978 093 6 164 469

Investment property 290 151 131 034

Goodwill 367 245 -

Live stock 165 146 95 643

Investments 7 88 647 21 900

Deferred income tax assets 25 192 065 197 010

Other non-current assets 8 40 353 308 878

Total non-current assets 9 121 700 6 918 934Current assetsInventories 9 2 939 703 2 427 245

Accounts receivable and advances given 10 3 025 240 2 619 744

Feeding animals 11 1 688 895 1 124 364

Short-term loans issued 12 1 988 364 2 030 511

Cash and cash equivalents 13 1 120 013 1 329 133

Total current assets 10 762 215 9 530 997Total assets 19 883 915 16 449 931Equity and liabilitiesEquityShare capital 14 1 500 010 1 500 010

Retained earnings 3 521 895 3 339 265

Total equity attributable to the Group shareholders 5 021 905 4 839 275Non-controlling interest 218 039 94 413

Total equity 5 239 944 4 933 688Long-term liabilitiesLong-term loans and borrowings 16 5 807 013 3 819 829

Long-term financial lease liabilities 25 218 395 279 819

Deferred income tax liabilities 202 584 80 553

Total long-term liabilities 6 227 992 4 180 201Short-term liabilitiesShort-term loans and borrowings and current portion of long-term loans and borrowings

156 835 454 6 460 002

Short-term financial lease liabilities 148 076 146 555

Accounts payable and accrued liabilities 17 1 257 695 625 095

Taxes payable 18 174 754 104 390

Total short-term liabilities 8 415 979 7 336 042Total liabilities 14 643 971 11 516 243Total equity and liabilities 19 883 915 16 449 931

Andrey Shutov,Chief Executive OfficerKOMOS GROUP LLC28 May 2012

Alexey Pyankov,First deputy Chief Executive Officer –Chief Financial Officer KOMOS GROUP LLC28 May 2012

KOMOS GROUPCombined statement of financial position as at 31 December 2011(in thousands of Russian Roubles unless otherwise stated)

Financial statements (IFRS)


37

KOMOS GROUPCombined statement of financial position as at 31 December 2011(in thousands of Russian Roubles unless otherwise stated)

Andrey Shutov,Chief Executive OfficerKOMOS GROUP LLC28 May 2012

Alexey Pyankov,First deputy Chief Executive Officer –Chief Financial Officer KOMOS GROUP LLC28 May 2012

Note Year ended31 December

2011 2010

Revenue 19 17 612 103 13 927 923

Operating expenses 20 (14 728 001) (11 518 510)

Gain from changes in fair value of biological assets 215 878 -

Gross profit 3 099 980 2 409 413Other income 21 1 089 382 641 955

General and administrative expenses 22 (1 410 955) (1 359 925)

Selling and distribution expenses 23 (1 115 181) (830 364)

Operating profit 1 663 226 861 079Finance cost, net 24 (769 947) (616 389)

Profit before income tax 893 279 244 690Current income tax expenses 25 (130 652) (103 696)

Deferred income tax 25 30 594 66 338

Current agricultural tax (6 001) (879)

Profit for the period 787 220 206 453Other comprehensive income - -

Total comprehensive income for the period 787 220 206 453Profit for the year attributable to:Shareholders of KOMOS GROUP 764 395 194 480

Non-controlling interest 22 825 11 973

Profit for the period 787 220 206 453Comprehensive income attributable to:Shareholders of KOMOS GROUP 764 395 194 480

Non-controlling interest 22 825 11 973

Total comprehensive income for the period 787 220 206 453

Financial statements (IFRS)

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