company presentation novorossiysk grain plant · bm 117% 70% 74% 1,788 3,090 306 984 1,942 2013...

Moscow

17 November 2015

Company Presentation

Novorossiysk Grain Plant

2

Disclaimer

These materials are being supplied to you solely for your information and for use at a presentation by Public Joint Stoсk Сomрanу

“Novorossiysk Grain Plant” (the “Company” or “NGP”). These materials may not be reproduced, redistributed or passed on, directly or indirectly,

to any other person or published, in whole or in part, by any medium or for any purpose.

These materials do not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe

for, or any offer to underwrite or otherwise acquire any securities of the Company, or any inducement to enter into investment activity in any

jurisdiction nor shall they or any part of them nor the fact of their distribution or communication form the basis of, or be relied on in connection

with, any contract, commitment or investment decision in relation thereto.

These materials includes forward-looking statements that reflect the Company's intentions, beliefs or current expectations. Forward-looking

statements involve all matters that are not historical fact. The Company has tried to identify those forward-looking statements by using the

words "may", "will", "would", "should", "expect", "intend", "estimate", "anticipate", "project", "believe", "seek", "plan", "predict", "continue" and

similar expressions or their negatives. Such statements are made on the basis of assumptions and expectations which, although the Company

believes them to be reasonable at this time, may prove to be erroneous. These forward-looking statements are subject to risks, uncertainties

and assumptions and other factors that could cause the Company's actual results of operations, financial condition, liquidity, performance,

prospects or opportunities, as well as those of the markets it serves or intends to serve, to differ materially from those expressed in, or

suggested by, these forward-looking statements. Important factors that could cause those differences include, but are not limited to: changing

business or other market conditions, general economic conditions and political and social developments in Russia, the European Union, the

United States and elsewhere, and trends in, and the Company's ability to respond to trends in, its industry and in the markets in which it and its

subsidiaries operate or plan to operate; the Company’s business and growth strategies; planned acquisitions or development projects, or any

other projects in the Company’s investment pipeline; the Company’s expansion into other geographic regions or market segments; the effects

of legislation, regulation, bureaucracy or taxation on the Company’s business; and the Company’s anticipated future revenues, capital

expenditures and financial resources. Additional factors could cause actual results, performance or achievements to differ materially. The

Company, its subsidiaries and each of its and their directors, officers, employees, affiliates and advisors expressly disclaim any obligation or

undertaking to release any update of or revisions to any forward-looking statements in these materials and any change in the Company’s

expectations or any change in events, conditions or circumstances on which these forward-looking statements are based, except as required

by applicable law or regulation. By attending this presentation or by accepting any copy of the materials presented, you are taken to have

represented and warranted that you agree to be bound by the foregoing limitations.

3

Company’s history – more than 120 years of consistent growth

1882 – 1893

Construction of Novorossiysk

silo barn-elevator

− the largest in Europe,

the second largest in the

world with total storage

capacity of 49kt

The necessity to build the

facilities was explained by the

state’s economic needs

Construction of grain conveyor

gallery from storage facilities to

berth with productivity of 400t per

hour

1928 – 1930

1943 – 1958

1943-1950 – recovery of the Terminal after the

Great Patriotic War, construction of two mills

1956-1958 – growth of export operations caused

the construction of:

− new grain elevator №1 with storage capacity

of 100kt

− grain conveyor gallery to berth with

productivity of 1,000t per hour

To satisfy the USSR’s need in grain,

necessary infrastructure was build to

facilitate import:

− grain elevator №2 for loading grain

into rail wagons with storage capacity

of 44kt

− two grain receiving machines Buhler

brand were installed

1980 – 1984

Terminal’s modernization(1) :

− Installation of two NEUERO ship

loaders with total productivity of

1,800t per hour

− Conveyor gallery expansion to

increase ship loading productivity to

1,600t per hour

2007 – 2010

1994 – 1996

Start of a new era of the Russian grain

export, reconstruction of all equipment

used for grain import to facilitate export

As of 1H 2015, the Company holds

the leading position among its

competitors – the deep-sea ports in

the South Federal District (SFD)(2)

Notes:

(1) In 2003, mill equipment was completely replaced by Italian equipment of OCRIM brand with total productivity of 150t per day

(2) By grain transshipment volume

30%

26%

19%

15%

11%NGP

NGT

KSK

TCSP

TGTC

4

NGP – the leading deep-sea grain terminal in Russia

NGP was the leading Russian grain terminal in 1H15

Strategic locationSummary overview

Unique asset base

Public Joint Stoсk Сomрanу “Novorossiysk Grain Plant” (the

“Company” or “NGP”) is the largest deep-sea terminal located on the

Black Sea coast in Krasnodar region

NGP’s key business segments include:

− grain transshipment

− trading (mainly resale of grain)

− own production

Main export destinations include the Middle East (mainly Egypt, Saudi

Arabia, Iran, Libya, among others)

Handling terminal Production facilities Infrastructure

2 elevators with total

capacity of 140kt

3 grain loaders

Auto and railway grain

receiving equipment

Conveyor gallery

Milling plant with daily

productivity of 150t

Finished products

storage facilities with

total capacity of 3,810t

Transportation facility

Power facility

Mechanical facilities

Other infrastructure

objects

Source: IKAR

Port Novorossiysk (74%)

Port Taman

Port Tuapse

Turkey

Ukraine

Black Sea

Russia

Georgia

Romania

Bulgaria

Novorossiysk

Terminal(1) Shareholder

NGP

NCSP

Delo Group

UCL Holding

Glencore, Kernel

Source: Company data

Notes: (1) NGT – “Novorossiysk Grain Terminal”, KSK – “Kombinat “Stroykomplekt”, TCSP – “Tuapse Commercial Sea Port”, TGTC – “Taman Grain Terminal Complex”; (2) JSC “OZK” is controlled

by the Russian Federation (50% + 1 share) and Summa Group (50% - 1 share); (3) Controlled by Ziyavudin Magomedov

5

Section 1

NGP – unique investment opportunity

6

Key investment highlights

Significant market growth potential and

demand increase on NGP’s services

The leading deep-sea grain

terminal in Russia

Diversified business model resilient to

market fluctuations

Dynamically growing business with high

performance results

Experienced and highly professional

management team

Clear business development strategy

26.729.4

32.335.4

38.942.2

2015F 2017F 2019F 2021F 2023F 2025F

mt

102104

107

110

113115

2015F 2016F 2017F 2018F 2019F 2020F

mt

1,976

2,670

2014/15А 2030F

mt

7.0

9.2

2015A 2050F

bn p

pl

7

Significant market growth potential and demand increase on NGP’s services

…to facilitate accelerated growth in grain export due to limited reserves

in the rest of the world…

…inevitably stimulate growth in grain harvest in Russia…World population growth and global grain consumption…

…which increases demand for NGP’s services, inter alia as a result

of unique expertise

World population Grain consumption(1)

Located in the deep-sea port with the possibility to serve vessels

with carrying capacity of over 70kt

Notes: (1) Including wheat and feed grain

Ability to work with a wide range of crops

Growth: 58%

Increased throughput from railway, ensuring acceptance of the

whole grain volume in one terminal

Provision of trade loans to exporting companies

Source: International Grains Council, Company’s annual report 2014 Source: Rosstat, Ministry of Agriculture, Ministry of Economic Development

Source: International Grains Council

Growth: 13 mt

8

Potential of increase in NGP’s freight base

Growth potential of

freight

Increase in grain export

Growth drivers Comments

Expansion of handled cargo

Russian grain exports by 2023 are expected to reach up to 40mt – resulting in an increase of

+10mt when compared to current reported levels

Based on NGP’s share of transshipment capacity in Russia, potential increase in export

volume attributable to NGP will amount up to 1.5mt

From June 2013 to June 2014 corn export volume increased by 1.5mt

Until recently, corn was transshipped mainly in shallow-water ports during the harvest

season, while in deep-sea ports corn was transshipped during off-season and in small

amounts (due to the lack of adequate storage capacity during the harvest season)

Potential increase in corn transshipment volume is estimated at up to 1.5mt

1.5mt

1.5mt

Attracting volumes from

deep-sea terminals

Due to a lack of storage facilities, exporters have to load one ship at multiple terminals in

Novorossiysk

Up to 35% of NGP’s transshipment is carried out by exporters with subsequent loading in

other terminals in Novorossiysk

Potential to increase cargo base through reallocation from other deep-sea terminals is

estimated at up to 0.5mt

0.5mt

Due to the lack of deep-sea terminals’ capacity, significant grain volume is exported through

shallow-water ports with subsequent transshipment at anchorage

Current volume of transshipment at anchorage equates to c.5mt. Taking into account NGP’s

share in deep-sea grain transshipment, potential growth of cargo base is estimated at up to

0.5mt

Volume shifting from

shallow-water ports

0.5mt

Potential to increase NGP’s cargo base is sufficient to utilise new capacities and is estimated at c.4mt by 2018

1.4

1.2

0.9

0.7

0.5

NGP NGT KSK TCSP TGTC

mt

30% 26% 19% 15% 11%

9

The leading deep-sea grain terminal in Russia

…and having unique competitive advantages

…with a growing market share by transshipment capacity

in deep-sea ports of the Azov-Black Sea basin…The leading deep-sea grain terminal in Russia…

Source: (1) Without taking into account deep-sea ports in Kerch and Sevastopol, transshipped in total 32kt of grain in 1H 2015; (2) NGT – “Novorossiysk Grain Terminal”, KSK – “Kombinat “Stroykomplekt”, TCSP

– “Tuapse Commercial Sea Port”, TGTC – “Taman Grain Terminal Complex”; (3) By the range of handled crops as well as by business segments

1H 2015A 2018F

21%

21%

21%

25%

12%

29%

24%16%

22%

9%

Advantage NGP NGT KSK TGTC TCSP

Business scale expansion

Diversified business model(3)

Competitive technical and infrastructural

features of the Terminal

Access to debt financing

Source: IKAR Source: IKAR

Source: Company analysis

(2)

Grain transshipment volume Market share

21%

21%

21%

25%

12%

NGP NGT KSK TGTC TCSP

10

Diversified business model

Revenue structure by segment (2014)

…allows the Company to diversify its operations

in a dynamic market environmentNGP’s business model…

Grain transshipment Trading Own production

Exporters / Traders / Consumers

Grain

transshipment

Transshipment of grains for export is the

Company’s main business segment

Due to high seasonality of this segment, the

Company expands a range of handled cargo

Trading

The aim of NGP’s trading business segment is

to attract additional volume for the main activity

– grain transshipment

Trading allows the Company to maintain high

inventory turnover and to reduce vessels’ idle

time, both of which make NGP more competitive

among other terminals

Own production

Production of finished goods allows the

Company to receive additional cash flows

The segment has large growth potential due to

increasing export of flour in containers to South-

East Asia

RUB

3,090m


RUB

2,335m

76%

13%

11%

Grain transshipmentTradingOwn production

56%39%

5%

WheatBarleyCorn

774

398

973

2012 2013 2014

RU

Bm

117% 70% 74%

1,788

3,090

306

984

1,942

2013 2014 2015

RU

Bm

1H

25%

22%

30%

2013 2014 1H 2015

11

Dynamically growing business with high performance results

Excellent operating results

Comments

Successful implementation of intermediary objectives within the long-term development strategy allowed NGP to become the leader in the

Russian market of deep-sea port grain transshipment in 1H 2015

Trading results of 1H 2015 significantly exceeded the budget, which allow the Company to expect further growth in financial results at the

end of the year and beyond

The Company’s capital structure and consistently sustainable financial position are the basis of NGP’s attractive investment history

Market share(1) Revenue

31%

46%

55%

2012 2013 2014

EBITDA margin Dividends(2)

As % of net income

Source: Company data, NGP’s audited IFRS financial statements for 2012-14, NGP’s unaudited IFRS financial statements for 1H 2014 and 1H 2015, IKAR

Notes: (1) Grain transshipment share in deep-sea ports of the Azov-Black Sea basin; (2) Announced dividends during the year. Percentage ratio is calculated based on net profit for the same year

+8 p.p.+24 p.p.

3,160

1,903

3,258 3,400

4,500

5,300

6,140

2012A 2013A 2014A 2015F 2016F 2017F 2018F

kt

Transshipment

90% 54% 93% 89% 90% 90% 94%

12

Investment project of the Terminal – foundation for future business growth

…resulting in improved productivity and quality of

the Terminal’s infrastructureThe Company is implementing the large-scale investment project…

Comments

Source: Company data Source: Company data

The Company’s strategy is based on the investment project which would allow it to significantly increase grain transshipment volume up to

6,140kt per year as a result of infrastructure modernisation and construction of additional infrastructure

NGP’s strategy assumes that upon completion of the reconstruction the Company will be the absolute leader among grain terminals in the

Azov Black Sea basin by transshipment capacity and quality of the infrastructure, allowing NGP to serve vessels with deadweight of 80kt

Parameter Unit 2015A 2018F(2)

Transshipment volume(1) kt per year 3,400 6,140

Storage capacity kt 140 250

Capacity of grain receiving

from railt per day 10,350 14,500

Productivity of conveyor

gallery (by sea)t per hour 1,600 3,500

Ability to receive wagons

without sorting routes-

Possibility of simultaneous

storage of different cropscrops 4 8

Maximum deadweight of

served shipst 72,000 80,000

Notes: (1) Forecasted transshipment volume for full year 2015; (2) Upon completion of the investment project

Utilisation

13

Strategy of growth and efficiency improvement


Key meansKey strategic goals

Compliance with government strategy on

agricultural industry

Significant increase of stake in

deep-sea grain transshipment

Technical and technological support of anticipated grain export

growth (by 55% compared to 2015)1

Achievement of the state’s goals on efficient grain transshipment2

Significant grain transshipment expansion to facilitate further

growth of grain and legume export3

Organic growth by implementing large-scale modernisation

programme of the existing terminal (grain transshipment volume

growth of 83% by 2018)4

Non-organic growth by acquiring nearby terminals (if possible)5

EBITDA maximisation by offering

new in-demand services

Maintaining margin by providing a wide range of services (one-

stop approach)6

Client base diversification7

Operating efficiency improvement8

14

Experienced and highly professional management team

Key management

Management team…

Has extensive experience in the industry

Has developed and actively implementing the investment project, which would allow to increase grain transshipment volume up to 6,140kt

by 2018

Achieves excellent financial and operating results, despite difficult macroeconomic conditions: revenue in 1H 2015 is 97% higher than

revenue in 1H 2014

Has diversified the Company’s business due to provision of quality

Maintains and develops long-term partnerships with key customers

Alexey Chemerichko Yuri Medvedev Evgeny Sutchenko Denis Guev Alexey Borisenko Olga Vodzinskaya

CEO First Deputy CEO,

Economics and Finance

Deputy CEO,

Manufacturing

Commercial Director Chief Engineer Chief Accountant

Working experience:

10 years

Working experience:

22 years

Working experience:

13 years

Working experience:

11 years

Working experience:

4 years

Working experience:

30 years

Working at NGP:

2 years

Working at NGP:

22 years

Working at NGP:

5 years

Working at NGP:

2 years

Working at NGP:

4 years

Working at NGP:

30 years


15

Corporate governance and Board of Directors composition

Corporate governanceNGP’s Board of Directors composition

Stefan Frappa

Chairman of the Board of Directors

Independent Director

Chairman of the Audit committee

Member of the Remuneration and

Nomination Committees

Alexander Potapushin

Independent Director

Chairman of the

Remuneration and

Nomination committees

Member of the Audit

Committee

Artem Tkachev

Non-executive

Director

Member of the Audit,

Remuneration, and

Nomination

committees

Yuri Sakunov

Non-Executive

Director

Andrey Titov

Non-executive

Director

Evgeniya Tyurikova

Non-Executive

Director

Board of Directors Consists of 7 members: 2 Independent

Directors and 5 Non-Executive Directors

Audit Committee

Consists of 3 members of the Board, 2 of

which are represented by Non-Executive

Directors

Remuneration and

Nomination

committee

Consists of 3 members of the Board, 2 of

which are represented by Independent

Directors

Audit

Audit of the Company is held in accordance

with IFRS since 2012

Audit is performed by PwC

Andrey Melnikov

Non-Executive

Director

16

Section 2

The Company’s Financial Position Overview

661568

1,319

195

763

22%

32%

43%

20%

39%

2012 2013 2014 1H 2014 1H 2015

RU

Bm

Net income Net income margin

953830

1,713

287

1,114

31%

46%

55%

29%

57%

2012 2013 2014 1H 2014 1H 2015

RU

Bm

EBITDA EBITDA margin

3,044

1,788

3,090

984

1,942

2012 2013 2014 1H 2014 1H 2015

млн. р

уб.

17

Robust financial performance of NGP

EBITDA dynamics

Revenue dynamicsComments

Net income dynamics

In 1H 2015, NGP’s revenue amounted to c.RUB1.9bn (almost doubled

compared to the respective period in 2014)

Factoring in approved and being implemented investment programme,

revenue is expected to increase due to port infrastructure development

and transshipment volumes build-up

Over the last few years, the Company has been enhancing its

efficiency, which resulted in stable growth of EBITDA and net income

margins

The Company plans to achieve and maintain EBITDA margin of c.60%

by 2018

Source: Audited IFRS financial statements for 2012-14, unaudited IFRS financial statements for 1H 2014 and 1H 2015

Growth: 97%

3,044

1,788

3,090

984

1,942

2,779

2,260

3,109

725

1,091

2012 2013 2014 1H 2014 1H 2015

RU

Bm

Actual Budget

953830

1,713

287

1,114

805

954

1,178

67

326

2012 2013 2014 1H 2014 1H 2015

RU

Bm

Actual Budget

18

NGP has been outperforming budgets

Sales dynamicsComments

EBITDA dynamics

Despite unstable macroeconomic situation, over the last few years the

Company outperforms budget targets

− NGP consistently ramps up volumes and enhances its efficiency,

which results in both revenue and EBITDA growth

− underperformance in 2013 was caused by a bad harvest year.

Notwithstanding that, the Company managed to maintain EBITDA

at 2012 level

− unique expertise of NGP, coupled with a streamlined management

process, enabled the Company to achieve financial results in 1H

2015 which significantly exceeded those of 1H 2014, while 2014

was a record year in terms of grain crop

In 2014, the Company’s budget assumed transshipment volumes of

3mt, while actual volumes amounted to 3.3mt

− budget targets were also met due to an increase of average

transshipment rates for barley and corn from RUB629/t in 2013 to

RUB806/t in 2014

Investment programme, which is currently being implemented by the

Company, will allow NGP to maintain leading positions in the maritime

grain transshipment segment, and at the same time, provide future

growth of financial results

Source: Audited IFRS financial statements for 2012-14, unaudited IFRS financial statements for 1H 2014 and 1H 2015, company data

1,5831,230

2,335

544

1,445

1,073

174

415

303

288

384

376

339

136

208

4

8

2

1

1

3,044

1,788

3,090

984

1,942

2012 2013 2014 1H 2014 1H 2015

RU

Bm

Grain transshipment Trading Own production Other

19

Segment breakdown of key financial metrics of NGP

Sales breakdown by segmentComments

EBITDA margin by segment

Segment 2012 2013 2014 1H 2014 1H 2015

Grain transshipment 60% 66% 72% 49% 75%

Trading 2% 3% 6% 5% 11%

Own production (5%) 4% 1% 2% 2%

NGP 31% 46% 55% 29% 57%

Historically, grain transshipment has accounted for the majority of the

Company’s income flows:

− in 2014, grain transshipment revenue contributed 76% of NGP’s

total revenue

− grain transshipment is the most profitable segment. EBITDA

margin of the segment increased from 60% in 2012 to 75% in 1H

2015

Currency breakdown of NGP’s revenue:

− grain transshipment – US Dollar

− trading and own production – Russian Ruble

The Company plans to achieve the following target revenue breakdown

structure:

− grain transshipment – around 70%

− trading – around 25%

− own production – around 5%

The Company plans to achieve an EBITDA margin of c.60% by 2018and maintain this level going forward

Source: Audited IFRS financial statements for 2012-14, unaudited IFRS financial statements for 1H

2014 and 1H 2015

Source: Audited IFRS financial statements for 2012-14, unaudited IFRS financial statements for 1H

2014 and 1H 2015

35%49% 52%

47% 15%25%

19%

35%23%

1%

2012 2013 2014

Grain transshipment Trading Own production Other

2,248 1,097 1,534RUBm

Fixed costs Variable costs

20

Operating costs breakdown

Costs breakdown and dynamicsComments

Company’s main costs are personnel costs (c.70% of which are

variable), purchases of grain for sale and raw materials for own

production

Transshipment segment accounts for half of Company’s costs

− segment’s share in total costs increased due to grain

transshipment volumes expansion

Due to the implementation of the modernisation programme, NGP

enhances its efficiency, which results in optimisation and costs

reduction along with sales growth

− growing scale of business enables the Company to reduce unit

costs per tonne of handled goods

Since July 2014, all grain transshipment contracts of NGP are

denominated in US$, while the majority of costs remain RUB-

denominated. This factor represents a natural hedge during high

volatility in the currency market

Reconstruction of current facilities and construction of new facilities will

allow the Company to enhance its efficiency, which results in a

significant rise in EBITDA margin

Source: Audited IFRS financial statements for 2012-14

RUBm 2012 2013 2014 2012 2013 2014

Personnel costs 483 285 429 22% 26% 28%

Purchases of grain for sale 1,031 166 383 46% 15% 25%

Raw materials 374 334 305 17% 30% 20%

Depreciation of PPE 150 138 125 7% 13% 8%

Electricity and public utilities 38 31 42 2% 3% 3%

Provision for unutilised

vacations26 11 27 1% 1% 2%

Taxes 27 26 28 1% 2% 2%

Transportation costs 22 14 25 1% 1% 2%

Surveyor services 4 5 28 0% 0% 2%

Repair and maintenance costs 75 35 51 3% 3% 3%

Other costs 17 51 91 1% 5% 6%

Total 2,248 1,097 1,534 100% 100% 100%

Costs breakdown by segment

774

398

973

2012 2013 2014

RU

Bm

Dividends announced during the year

117% 70% 74%

21

Working capital and dividends

Dividend payment historyWorking capital dynamics

CommentsComments

Company has negative working capital due to high dividend payables

− as of 31 December 2014, dividend payables reached RUB475m

Normalised turnover targets, which the Company plans to achieve by

2016:

− inventories: 20 days

− accounts receivable: 40 days

− accounts payable: 60 days

Historically, the Company paid out a significant portion of net income in

the form of dividends (see graph above)

Going forward, the Company’s management plans to adhere to its

historically established dividend policy adjusted for investment

programme financing needs partially funded by NGP’s own funds

% of net income(1)

Source: Audited IFRS financial statements for 2012-14

Notes: (1) Ratio of announced dividends during the year to the net income for the same year

RUBm 2012 2013 2014

Inventories 135 102 307

Raw materials 113 71 288

Finished goods 22 26 18

Goods available for resale 0 5 0

Accounts receivable 73 302 432

Trade receivables 32 66 84

Advances to suppliers 8 214 260

Other 34 22 88

Accounts payable 345 426 803

Dividend payables 269 334 475

Trade payables 0 1 57

Other 76 92 271

Working capital (137) (22) (65)

400

2,1001,100

2,500

2015F 2016F 2017F 2018F

RU

Bm

Tranche 1 Tranche 2

30.3%

69.7%

Own capital

Debt capital

51266

1,854

2,668

198 132

2012 and 2013 2014 2015 2016 2017 2018

RU

Bm

22

Investment project financing

Capital expenditures dynamicsComments

Loan drawdownFinancing structure

In order to finance the investment project, the Company will use both its own

funds as well as debt capital

− debt capital will cover 69.7% of the financing needs of the investment

project

Loan will amount to RUB3.6bn

− drawdown: from December 2015 to July 2016; loan maturity: 5 years

− accrual of interest (at an annual rate of 13.9%): monthly; interest

payment: quarterly

− debt repayment: quarterly starting since April 2018 for Tranche 1 and

since November 2018 for Tranche 2

Management expects that net debt/EBITDA ratio will not exceed 2.5x

RUB5.2bn(1)

Notes: (1) Financing structure based on capital expenditures of RUB5.2bn (excluding VAT) and loan of RUB3.6bn


23

Annex I

Market overview

24

Fundamental attractiveness of the Russian grain export market

Potential for Russian grain export growth

Growing world population twinned with increasing urbanisation and

popularisation of western foods (larger share of protein products) in developing

countries helps drive growth in world grain consumption, which is forecast to

increase by 30-40% by 2030

Russia possesses significant potential to increase grain supply to the world

market. Key growth drivers of Russian grain export include:

− vast unutilised land plots

− improvements in crop yield to the level of developed countries

According to the Russian Ministry of Economic Development, potential of

Russian grain export is forecast at over 30mt by 2020

Comments

World grain consumption dynamics (mt)(1)

CAGR ’06-’16F: 2.3% Growth ’06-’16F: 23%

Growth by 2030F: 30-40%

Notes: (1) Including wheat and feedgrain

5%

Current share in world

grain production

14%

Potential by

cultivation area

Internal factors

Russia: c.40% of world black soil area and 13.8m ha of

unutilised cultivation area

Improvements in crop yield to the level of developed countries

2.2 3.04.7 5.3

External factors

Growth of Russian grain export

World population growth Growing urbanisation

+30-40%

+31% +31%

Source: International Grains Council Source: International Grains Council, Company annual report 2014

1,6101,690 1,720 1,750 1,790 1,850 1,818

1,936 1,976 1,978

06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16F … 2030F

7.09.2

2015A 2050F

50% 70%

2015A 2050F

83%94% 94% 98% 97% 96% 95% 93% 99%

17%6% 6% 2% 3% 4% 5% 7% 1%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Export Import

13.7

18.0

15.1

22.7

14.5

19.9

23.8

20.6

30.1

2006 2007 2008 2009 2010 2011 2012 2013 2014

mt

86% 86%

70%

48%

38%32% 32% 31% 30% 28%

Share of Russia in grain import in 2014/15

740 1,575 5,947 940 1,785 1,161 11,063 1,523 2,632 1,487

25

Export – the most important direction of grain transshipment in Russian ports

Volume of grain foreign trade in Russia(1) (mt)

Russia possesses significant potential to increase grain supply to the

world market

Volume of grain foreign trade in Russia has been demonstrating

positive dynamics from 13.7mt in 2006 to 30.1mt in season 2014

(representing a CAGR of 10%)

In the structure of grain foreign trade, an export / import imbalance

exists whereby exports account for the overwhelming majority of trade

Russia imports such grain crops as rice (less than 5% in the structure

of grain transshipment). However, these crops are not transshipped at

Novorossiysk Grain Plant

Comments

Notes: (1) Including grain transshipment from Russia and Kazakhstan

Structure of grain foreign trade in Russia

Source: FAOSTAT, Rosstat, Federal Customs Service

Source: USDA

Russia – one of the world’s leading grain suppliers

Source: Federal Customs Service, USDA

Volume of grain import in 2014/15

26

Azov-Black Sea basin – the main Russian grain export channel

Structure of grain transshipment in Russian ports

Grain terminals of the Azov-Black Sea basin Comments

Ports of the Azov-Black Sea basin are dominant in Russia and

facilitate 97%(1) of grain transshipment in Russia

− deep-sea ports handle over 60%(1) of total grain transshipment

volumes in the Azov-Black Sea basin

NGP’s share in grain transshipment structure in deep-sea ports of the

Azov-Black Sea basin reached 30% in 1H 2015

Major growth in grain transshipment capacity in the Azov-Black Sea

basin is expected from deep-sea ports (mainly NGP) in order to meet

exporters’ demand on vessels of larger sizes

Azov-Black

Sea basin:

97%

Baltic basin:

0%

Caspian basin:

3%Far East basin:

0%

Arctic basin:

0%

ktCapacity

(1H 2015)

Transshipment

2013 2014 1H 2015

Deep-sea terminals(2) 16,500 7,917 14,666 4,575

NGP 3,500 1,940 3,258 1,355

NGT 3,500 2,163 4,221 1,179

KSK 3,500 1,277 3,027 852

TGTC (Taman) 4,000 1,694 2,653 486

TCSP(Tuapse) 2,000 843 1,507 704

Shallow-water terminals(3) 16,048 8,643 10,348 2,364

Rostov-on-Don 7,098 2,974 3,508 600

Eysk 1,100 1,508 1,281 329

Azov 5,510 3,361 4,209 988

Taganrog 1,040 417 598 173

Temryuk 650 96 130 42

Kavkaz 650 286 621 231

TOTAL (market) 32,548 16,560 25,014 6,939

Notes: (1) In 1H 2015; (2) Not taking into account deep-sea ports of Kerch and Sevastopol, which jointly handled 32kt of grain in 1H 2015 (constituting less than 0.6%);

(3) Not taking into account other shallow-water terminals, which account for less than 5% of grain transshipment capacity in ports of the Azov-Black Sea basin. In any given location there are several

grain terminals (for instance, there are 6 grain terminals in the port of Rostov-on-Don, and 5 in Azov)

Structure of grain transshipment

in the ports of the Azov-Black

Sea basin in 1H 2015

Structure of grain transshipment in the

deep-sea ports of the Azov-Black Sea

basin in 1H 2015(2)

Source: IKAR

Source: IKAR, Company data

Source: IKAR

66%

34% Deep-seaterminals

Shallow-waterterminals

30%

26%

19%

15%

11%NGP

NGT

KSK

TCSP

TGTC

160

192

255

326

223 224

316 313 312285

227

111

141

247 245

160174

244

279

249235

207

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H 2015

US

$/t

World prices Russian prices

16 1422 20 21 22 23 24 25 26 27 28 29 30

33

3 4 4 4 5 5 5 6 6 6 7 7

22

4 3 3 3 3 4 4 4 4 5 5 5

2219

2927 28 29 31 32 34 35 37 39

41 42

2012A

2013A

2014A

2015F

2016F

2017F

2018F

2019F

2020F

2021F

2022F

2023F

2024F

2025F

mt

Wheat Corn Barley

27

Grain price dynamics

Russian grain export dynamics(2)Comments

Overview of key market data(1)

World grain market is controlled by five exporters (USA, Canada,

Australia, Argentine and EU), which are represented by several of the

largest international grain companies

− total supply of the five exporters provides over 84% of world grain

trade volume

Main consumers of grain are countries of the Asia-Pacific region

An important factor affecting the equilibrium of the world grain market,

is the grain carryover inventory of the largest grain exporters

Over the last few years, demand on grain has been growing, which

makes sustainable supply and accessibility to grain an important

element of social and economic development for many developing

countries

− in accordance with the world trend, Russian grain exports are

expected to grow to in excess of 40mt by 2024

− Russian grain is traditionally imported by countries of the Middle

East, North Africa and Turkey

Russian grain prices are historically lower than world prices. However,

the spread achieved in 1H 2015 (US$20/t) represents the minimum

level seen since 2007

Notes: (1) Such grain crops as rice and flax are exported from Russia. However, shares of these crops are negligible; (2) Includes transshipment via railway (not only maritime transshipment) that accounts for

less than 1% of total grain export

Source: IKAR

Source: FAOSTAT, UN Comtrade, Rosstat, Federal Customs Service

28

Annex II

Overview of Company’s business and assets

29

Company overview

Terminal layoutSummary overview

The terminal is located on the Black Sea coast in Krasnodar region

NGP is currently one of the most promising and dynamically

developing grain terminals in Russia, providing a wide range of

services associated with grain transshipment

The terminal is equipped with hi-tech modern equipment of leading

international companies (BUHLER, NEUERO, OСRIM etc.), which

helps to ensure the reliability of all operations: from grain receiving to

vessel loading

NGP’s production facility occupies 14.54ha and is comprised of 71

buildings equating to a total area of 44,022 sqm

NGP’s infrastructure includes

− railways and roads

− transportation facility

− mechanical facilities

− power facility

− administrative building

− laboratory

− other facilities (including canteen)

Strategic location (aquatic area of the largest non-freezing port in

Russia) helps facilitate continuous transshipment operations for 365

days a year

30

Overview of key production facilities

Storage facilities

12 granaries(1)

− total area: 16,756 sqm

2 grain elevators

− storage volume: 140kt

2 Milling plant

Product: wheat flour

Equipment: OСRIM

Productivity: 150t per day

Capacity of finished products storage

facilities: 3,810t

4

Handling terminal

Grain receiving equipment:

− simultaneously from 5 wagons

− simultaneously from 6 cars

1

Grain loaders:

− quantity: 3 units

− equipment: BUHLER, NEUERO

− productivity: 2,200t per hour

Conveyor gallery:

− length: 1.6km

− capacity: 1,600t per hour

− 4 conveyors with 400t per hour capacity

each

Berth

Length: 268.5m

Handled vessels:

− deadweight: 72,000t

− draft: 13.1m

− length: 229m

3

3

4

2

21

1

12

1

Notes: (1) Storage yards

31

Comparison to main competitors

After completion of the modernisation initiatives, the Company is expected to outperform all of its competitors in terms of both infrastructure quality and transshipment capacity

Indicator Metrics 2018(1) 1H 2015 NGT(2) KSK GTCT TCSP

Location (port) Novorossiysk Novorossiysk Novorossiysk Taman Tuapse

Total area ha 14.5 14.5 7.2 12.6 3.6 part of TSCP

Capacity of grain receiving from:

railway t per day 14,500 10,350 12,560 6, 900 Not available 7,590

auto t per day 9,800 9,800 11,200 12,600 18,000 n/a

Grain transshipment capacity (3) kt per year 6,500 3,500 3,500 3,500 4,000 2,000

Productivity of conveyor gallery t per hour 3,600 1,600 1,600 1,600 1,500 1 400

Ability to receive wagons without sorting routes Yes No No No No No

Total storage capacity in grain elevators t 250,000 140,000 120,000 115,600 192,000 98,000

Possibility of simultaneous storage of different crops Crops 8 4 3 3 6 3

Features of served vessels

maximum deadweight t 80,000 72,000 65,000 45,000 45,000 50,000

maximum draft m 13.1 131 13.1 11.8 12.8 12.5

maximum length m 240 229 229 225 230 230

Milling plant

Notes: (1) After modernization; (2) NGT – “Novorossiysk Grain Terminal”, KSK – “Kombinat “Stroykomplekt”, TCSP – “Tuapse Commercial Sea Port”, TGTC – “Taman Grain Terminal Complex”;

(3) Capacity of competitors as of 2015

Source: Company analysis, public sources

1.7 1.72.2 2.1 2.4

1.8 1.62.3

1.0

2.0

0.8 0.6

0.5 0.2

0.60.3

0.9

0.4 0.6

0.8

0.9

1.3

0.3 0.8

2.22.0

2.82.5

3.3

2.2 2.2

3.2

1.9

3.3

1.11.4

6.1

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

1H

201

4

1H

201

5

Tar

get

level

mt

Wheat Barley and corn

493

662

658

1 083

538

629

806

1 112

2012 2013 2014 2015

RU

B


15.9/17.3 20.8/19.7 17.0/20.9 19.0/19.5

21%

20%

8%8%

5%

5%

33%

Egypt

Saudi Arabia

Jordan

Turkey

Nigeria

Libya

Other

32

Grain transshipment for export – the main business segment of NGP

Transshipment structure by direction (2014)

Transshipment dynamicsBusiness overview

Weighted average transshipment rate dynamics

Grain transshipment for export is the main business segment of NGP

(historically it comprised c.70% of total revenue)

Currently the Company is implementing a large-scale investment

programme that seeks to increase transshipment volume to 6.1mt due to

modernisation and construction of additional infrastructure

NGP mainly exports to Middle Eastern and African countries

As a result of high demand for grain transshipment, the Company

managed to increase rates(1) c.2x compared with 2012 rates (RUB-

denominated)

Since June 2014, all transshipment rates have been denominated in US$




(2)

Notes: (1) Weighted average rates for grain transshipment are in RUB; (2) Will be achieved by 2018; (3) Based on 9m 2015 actual data and current contracts. Tariffs are calculated based on an average

US$/RUB exchange rate for the corresponding period: average exchange rate for the period since January to August 2015 is RUB58.12

(3)

Transshipment rate in US$ for

wheat / barley and corn

1,4141,630

306

1,482

984

2,1061,942

1H 2012 2H 2012 1H 2013 2H 2013 1H 2014 2H 2014 1H 2015 2H 2015

RU

Bm

0.10.0

0.90.8

0.6

0.5

1.1 1.1

0.8

0.6

0.9

1.1

1Q2013

2Q2013

3Q2013

4Q2013

1Q2014

2Q2014

3Q2014

4Q2014

1Q2015

2Q2015

3Q2015

4Q2015

mt

33

Seasonality in grain transshipment for export

Grain harvest

NGP’s transshipment volume dynamics Comments

NGP’s revenue dynamics

NGP’s seasonal business model is a reflection of its dependence on

harvest and weather (including “cold period”)

− agricultural season starts in June, with peak harvest season

occurring between July to October

− shallow-water ports, serving ships when deep-sea ports are

loaded, significantly reduce activity during cold weather periods

Thus, between December to February NGP has an opportunity to

increase transshipment rates

Historically, Q3 is the most productive season for grain transshipment

in Russia

Jan

uary

Feb

ruary

Marc

h

Ap

ril

May

Ju

ne

Ju

ly

Au

gu

st

Sep

tem

ber

Octo

ber

No

vem

ber

Decem

ber

Wheat

Barley

Corn


Source: Company data, 3Q 2015 – actual, 4Q 2015 – Company’s budget

Source: Company’s management accounts, unaudited IFRS financial statements for 1H 2015

16.6%

15.3%

13.4%

10.4%

7.5%

7.1%

6.6%

5.5%

3.2%

2.6%

12.0%

OZK Olam Int.

Louis Dreyfus Glencore

Vitol Artis

Cargill Miro Group

TD RIF KZP

Other

585 541 473367

266250 233

888

1,615

1,291

2,538

389

764

2,142

OZK Olam Int. Louis Dreyfus Glencore Vitol Artis Cargill

kt

Grain transshipment volume through NGP Total grain transshipment volume in Russia

34

Diversified and reliable customer base

Reliable customer baseComments

The Company has established long-term relationships with its

customers:

− NGP’s largest customer with a 17% share is OZK that collaborates

with the Company since its establishment

− with such clients as Glencore and Louis Dreyfus, NGP cooperates

for the last 20 years

For many customers NGP is the main partner for grain transshipment.

For instance, OZK’s transshipment volume share through NGP

amounts to 66%, Vitol’s – 68%, Louis Dreyfus’ – 37%, Olam’s – 33%,

etc.

Typical transshipment agreement is signed in June for a year and

gives the Company sufficient flexibility in choosing clients

Largest NGP’s customers by transshipment volume

in season 2014–2015Key transshipment contract terms

Agricultural year (from July to June)Term

NGP has an option to increase tariffs following a 30-

day client notification periodChange in terms

US$ denominated

(since July 2014 all contracts are US$ denominated)Currency

Fines can equate to 50% of the cost of service in

case of failure to meet a plan (agreed on a monthly

basis)

Fines, sanctions


Source: Company dataSource: Company data

Notes: (1) During 2014-2015 ; (2) Krasnodarzernoprodukt

(2)

(1) (1)

8,445

7,577

8,534

9,293

13,092

7,909

5,6175,939 5,832

10,122

2012 2013 2014 1H 2014 1H 2015

RU

B/t


128.2

12.634.1 22.0 12.5

225.53.3

15.5

20.816.9

12.2

14.5

131.5

28.1

54.938.9

24.7

240.0

2012 2013 2014 1H 2014 1H 2015 Target level

kt


35%

10%

13%

31%

15%

2012 2013 2014 1H 2014 1H 2015

35

NGP’s trading

Trading’s share in revenue

Trading volume dynamicsBusiness overview

Weighted average grain resale price

Trading mainly involves resale

Key objective of the trading business segment is to expand a customer

base rather than generate income

− in the long-term, average trading mark-up will not exceed 2-3%

Main NGP’s clients are the same as those who the Company provides

transshipment services to

In a period of stable grain prices trading will generate c.25% of total

revenue

Notes: (1) Will be achieved by 2016, suppose the structure of transshipment in 2016 as in 2015 (c.90% of transshipment volume is attributable to wheat, 10% - to barley and corn;

(2) Includes insignificant transshipment volume of chickpeas and flax



(1)

(2)

Source: Audited IFRS financial statements for 2012-14, unaudited IFRS financial statements for

1H 2014 and 1H 2015

13%

21%

11%

14%

11%

2012 2013 2014 1H 2014 1H 2015

8,897

10,988

10,278

11,708

14,877

2012 2013 2014 1H 2014 1H 2015

RU

B/t

43

34 33

13

17

44

2012 2013 2014 1H 2014 1H 2015 Target level

kt

90% 71% 69% 91%

36

Own production

Contribution of own production to NGP’s revenue

Own production dynamicsOverview

Sale price of finished goods dynamics

Production of finished goods (flour and bran as a byproduct) is one of the three

business segments of NGP

The purchasing of raw materials and sale of finished goods are based on

market terms

− main suppliers: OZK, TD “Rif”, Miro Group and Petrokhleb-Kuban

− main customers: Confectionery plant “Kuban”, Slavyansky

khlebokombinat, Afipsky khlebokombinat, consumers from South-East

Asia and Middle East

Existing technological capabilities will enable own production to increase c.2x

without significant costs. Given the focus attributed to the modernisation of the

core business segments, the Company does not see the need to increase the

production of finished goods in the mid-term(2)

Notes: (1) Since preventive maintenance of the milling plant was carried out in 1H 2015, no production shutdowns are expected to happen in 2H 2015; (2) Will be achieved by 2016

Utilization rateOwn production

volume

(1)



Source: Audited IFRS financial statements for 2012-14, unaudited IFRS financial statements for

1H 2014 and 1H 2015

37

Government support of NGP’s business development

Tax preferences

Granting investment tax credit in relation to income tax attributable to regional

budget

Exemption from tax on new property of an organization for the period less than 3

years (“tax holidays”)

Subsidising interest

expense

The Company expects to receive subsidies in the amount of 2/3 of the Russian

Central Bank’s refinancing rate for payment of interest expenses on loans obtained

to finance the investment programme (applies to financing of the grain elevator

construction)

Subsidies will be granted from federal and regional budgets

Attracting investment for the implementation of strategic investment projects in the agricultural sector, as well as

the development of infrastructure in the grain market of Krasnodar region in particular, is one of the major

priorities of social and economic development of the region

Source: Company data, Government Resolution, as of 28 December 2012 № 1460, the law of Krasnodar region, as of 2 July 2004 N 731–KZ «On incentivising investment activity in Krasnodar region»

38

Annex III

Investment project

3,160

1,903

3,258 3,400

4,500

5,300

6,140

2012A 2013A 2014A 2015F 2016F 2017F 2018F

kt

Transshipment

90% 54% 93% 89% 90% 90% 94%

49%47%

4%

Equipment (with delivery)

Construction and installation

Other

39

Investment project of terminal reconstruction

Terminal layoutComments

Capacity expansion scheduleStructure of capital expenditure

RUB5.2bn(1)

Lack of receiving, storage and handling capacity constrains NGP’s

transshipment ability

Expansion of storage capacity will improve the Company’s

competitiveness and increase its market share of growing grain export

volumes

Investment project of terminal reconstruction and construction of new

facilities would help facilitate an increase in the average annual

transshipment volumes to 6,140kt by 2018

According to the Company’s management, the project is investment-

attractive and economically efficient

Utilisation rate

Notes: (1) Capital expenditure (excluding VAT)


40

Strategic goals and visualisation of the investment programme


Visualisation of the investment programme(1)High demand for technical modernisation…

During the peak harvest season the Terminal is not able to handle all

volumes requested by clients due to limited storage capacity for vessel

parties. Historically, these volumes were handled by other deep-sea

and shallow-water terminals

During the wheat harvest season, due to storage capacity constraints it

is impossible to accumulate vessel parties of 50-60kt of corn and

barley, export of whose has been growing during last years

Vessel delay or bad weather conditions for a few days stop grain

receiving, which cause a number of claims from clients and railway

Storage capacity expansion to accumulate additional vessel parties

Increase of grain receiving capacity from railway

Increase of vessel loading capacity

…underlied key strategic goals of the investment project

Notes: (1) Black colour denotes existing facilities, orange – facilities that will be reconstructed or built

Grain elevator #1

(96kt)

Grain elevator #2

(45kt)

Receip

t from

auto

Receip

t from

rail

Receipt from rail

Receipt from

auto and rail

Grain warehouse

(100kt)

Receip

t from

rail

Construction of

new grain railway

receipt

Construction of the 1st line of new

grain conveyor gallery

(to berth №21)

Construction of the 2nd line of new

grain conveyor gallery

(to berth №22)

21 berth reconstruction

Reconstruction of current

grain conveyor lines

Reconstruction

of current rail

receipt facilities

New grain

elevator

construction

2х350t per hour

2х500t per hour

2х500t per hour

2х350t per hour

2х350t per hour

41

Key milestones of the investment programme

Investment programme(1)

(RUBm)

Stage Scope of work Total amountUtilised as of

30 June 2015

2014A 2015A/F 2016F 2017F 2018F

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

1

Modernisation of auto and railway grain

receiving equipment

Modernisation of grain elevator and berth

Automation of processes

821 406

2 Reconstruction of internal railways

Reconstruction of Verhny park273 18

3

Construction of granary with capacity of 100kt

Construction of railway grain receiving

equipment connected to existing conveyor

gallery and elevators

2,330 42

4 Reconstruction of berth

Installment of new vessel loading machine569 1

5

Construction of new conveyor gallery from

grain storage facilities to berth

Installment of new vessel loading machine

1,136 -

6 Installment of mooring post to accommodate

vessels with deadweight of 80kt38 -

Total: 5,168 468

Notes: (1) Investment programme amount excluding VAT


42

NGP’s infrastructure development


Indicator Before reconstruction (2015) After reconstruction (2018)

Layout

Transshipment volume

(kt per year)3,400 6,140

Storage capacity

(kt)140 250

Capacity of grain receiving from railway

(t per day)10,350 14,500

Conveyor gallery productivity

(t per hour)1,600 3,500

Ability to receive wagons without sorting routes No Yes

Possibility of simultaneous storage of different crops

(crops)4 8

Maximum deadweight of served vessels

(t)72,000 80,000

43

Annex IV

Legal structure and financial statements

44

NGP’s ownership structure

Summa Group

Public Stock Company “Novorossiysk Grain Plant”

Ziyavudin

Magomedov

Ivianto Services

LimitedJSC “OZK”

Belcarra Services

Limited

Other individuals

and legal entities

(total ca. 370)

Russia

100%

100%

50% - 1 share 50% + 1 share

18.4890% 50.9993% 10.7860% 19.7257%


45

Income statement


Notes: (1) Other operating income (net) in 1H 2014 and 1H 2015

‘000 RUB 2012 2013 2014 1H 2014 1H 2015

Revenue 3,043,774 1,787,835 3,090,273 983,841 1,942,375

Cost of goods sold (1,995,495) (915,665) (1,211,748) (617,007) (702,361)

Gross profit 1,048,279 872,170 1,878,525 366,834 1,240,014

Selling expenses (35,470) (24,366) (84,339) (26,438) (22,444)

Administrative expenses (200,120) (117,620) (189,874) (90,442) (138,157)

Other operating expenses(1) (17,150) (38,874) (48,314) (19,668) (28,881)

Other operating income 7,070 454 31,961 - -

Operating profit 802,609 691,764 1,587,959 230,286 1,050,532

Interest income 25,706 23,734 61,327 19,586 60,937

Profit before tax 828,315 715,498 1,649,286 249,872 1,111,469

Income tax expense (167,782) (147,668) (329,855) (55,294) (348,324)

Profit attributable to Company shareholders 660,533 567,830 1,319,431 194,578 763,145

Comprehensive income attributable to Company

shareholders660,533 567,830 1,319,431 194,578 763,145

46

Balance sheet


‘000 RUB 31 December 2012 31 December 2013 31 December 2014 30 June 2015

Assets

Non-current assets

Property, plant and equipment 1,429,983 1,313,960 1,321,867 1,379,167

Advances for property, plant and equipment 20,004 23,907 191,384 222,710

Other non-current assets - 1,711 4,630 1,199

Total non-current assets 1,449,987 1,339,578 1,517,881 1,603,076

Current assets

Inventories 135,084 101,599 306,625 170,412

Trade and other receivables 31,970 62,606 83,736 1,252,053

Advances 40,942 239,772 347,786 225,269

Short-term investments 73,219 325 30,745 60,006

Cash and cash equivalents 496,118 729,137 905,059 1,040,442

Other current assets - 89 507 230

Total current assets 777,333 1,133,528 1,674,458 2,748,412

TOTAL ASSETS 2,227,320 2,473,106 3,192,339 4,351,488

EQUITY

Share capital 67,597 67,597 67,597 67,597

Retained earnings 1,724,224 1,893,580 2,240,140 2,653,611

TOTAL EQUITY 1,791,821 1,961,177 2,307,737 2,721,208

Liabilities

Non-current liabilities

Deferred tax liabilities 90,727 85,867 81,949 202,540

Total non-current liabilities 90,727 85,867 81,949 202,540

Current liabilities

Trade and other payables 332,142 398,511 712,392 1,383,587

Current income tax liabilities 176 21,389 64,854 19,308

Other taxes payables 12,454 6,162 25,407 24,845

Total current liabilities 344,772 426,062 802,653 1,427,740

TOTAL LIABILITIES 435,499 511,929 884,602 1,630,280

TOTAL LIABILITIES AND EQUITY 2,227,320 2,473,106 3,192,339 4,351,488

47

Cash flow statement (1/2)


Notes: (1) Change in provisions for revaluation of inventories in 1H 2014 and 1H 2015; (2) Unrealised gain from foreign exchange differences in 1H 2014 and 1H 2015

‘000 RUB 2012 2013 2014 1H 2014 1H 2015

Cash flows from operating activities

Profit before tax 828,315 715,498 1,649,286 249,872 1,111,469

Adjusted for:

Depreciation of property, plant and equipment 150,376 138,090 124,753 56,602 63,060

Loss from investments revaluation - - 325 - 325

Change in provisions for trade and other receivables, revaluation of trade and other

receivables8,673 5,170 1,295 (53) (810)

Proceeds from disposal of property, plant and equipment (net) (23,906) (523) (4,385) 4,759 7,820

Interest income (25,706) (23,734) (61,327) (19,586) (60,937)

Revaluation of inventories(1) 4 366 486 - 209

Change in provisions for law suits and similar expenses 104 - (1,804) - 98

Net profit from foreign exchange differences(2) (7,174) (454) (30,157) (386) (1,627)

Net loss from foreign currency purchases - - 9,749 - -

Cash flows from operating activities before changes in working capital 930,686 834,413 1,688,221 291,208 1,119,607

Change in trade and other receivables 186,384 (233,212) (123,964) 73,207 (1,045,123)

Change in inventories (69,272) 33,119 (205,512) 28,369 136,004

Change in trade and other payables (60,072) (4,357) 185,767 214,790 781,381

Change in other current assets and liabilities 1,373 (1,800) (1,533) 317 3,610

Cash flows from operating activities before tax 989,099 628,163 1,542,979 607,891 995,479

Income tax paid (194,986) (131,314) (291,969) (297,520) (293,700)

Cash flows from operating activities 794,113 496,849 1,251,010 310,371 701,779

48

Cash flow statement (2/2)


‘000 RUB 2012 2013 2014 1H 2014 1H 2015

Cash flows from investing activities

Purchases of property, plant and equipment (69,690) (25,447) (295,752) (30,515) (159,506)

Return of funds from deposit accounts - 72,894 - (30,746) 30,420

Allocation of funds on deposit accounts (72,894) - - - -

Purchases of financial assets - - (30,745) - (60,006)

Interest received 22,839 22,580 58,220 16,541 61,675

Net cash inflow (outflow) used in investing activities (119,745) 70,027 (268,277) (44,720) (127,417)

Cash flows from financing activities

Dividends paid (646,309) (334,041) (823,850) (294,973) (440,000)

Net cash used in financing activities (646,309) (334,041) (823,850) (294,973) (440,000)

Net increase in cash and cash equivalents 28,059 232,835 158,883 (29,322) 134,362

Effect of translation into presentation currency on cash and

cash equivalents4,678 184 17,039 266 1,021

Cash and cash equivalents at the beginning of the period 463,381 496,118 729,137 729,137 905,059

Cash and cash equivalents at the end of the period 496,118 729,137 905,059 700,081 1,040,442

company presentation novorossiysk grain plant · bm 117% 70% 74% 1,788 3,090 306 984 1,942 2013...

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