annual report

ANNUAL REPORT
2012
Mission and Vision
Mission
We make eating healthier, tastier and easier.
Vision
INDYKPOL is a uniform, vertically integrated poultry company,
supplying food which the customer loves.
We are the major poultry products supplier in Central Europe.
INDYKPOL brand is a European symbol of quality.
Foundations of our activity:
Customer orientation, openness and reliability are
the base of our sales expansion
Constant improvement guarantees us a technological
and quality advantage
Everybody’s focusing on the accomplishment of our
vision is the guarantee of the growth of productivity
and effectiveness
Following these values, we improve ourselves, our tools
and organization – this is how we define professionalism
we aim at.
1
Selected Consolidated Financial Information
Concerning the Capital Group of Indykpol S.A.
(in PLN ‘000)
Net revenue from the sale of products, goods and materials
(Profit) loss on operating activity
Gross profit (loss)
Total net profit per:
- shareholders of the holding company
- minority shares
Total assets
Shareholders’ equity allocated to the shareholders of the holding company
Shareholders’ equity allocated to minority shares
Share capital
Number of shares (units)
Profit (loss) per one ordinary share (in PLN)
Book value per share (in PLN)
2012
986 679
7 292
(3 516)
2011
978 419
13 526
5 348
2010
854 239
16 118
6 413
(3 306)
12
459 480
160 572
384
15 623
3 124 500
(1,06)
51,51
8 631
(1)
462 242
165 235
399
15 623
3 124 500
2,76
53,01
4 733
(17)
391 909
158 393
584
15 623
3 124 500
1,51
50,88
TABLE OF CONTENTS
1
Selected Consolidated Financial Information Concerning
the Capital Group of Indykpol S.A.
2
The President’s Message to the Shareholders
3
Financial Results
3
The poultry market in Poland
4
Changes in the raw materials area
5
Domestic sale and export
6
Commerce and Marketing
7
Quality for the customers
8
Production stage
9
Indykpol Capital Group
10
Shareholders and Investors
11
Company’s Governing Bodies
12
Financial Statements of the Indykpol Capital Group
13
Consolidated Global Income Statement
14
Consolidated Statement on the Financial Standing
15
Consolidated Cash Flow Statement
17
Consolidated Statement of Changes in Shareholders’ Equity
18
Global Income Statement of Indykpol S.A.
19
Statement on the Financial Standing of Indykpol S.A.
20
Independent Auditor’s Report
21Timeline
2012
ANNUAL REPORT
2
The President’s Message
to the Shareholders
Dear Sirs,
I hereby submit the Indykpol Capital Group Annual
Report for 2012. Last year was the second in
nearly 20 years of the Group’s operation, which
ended with a loss. Year 2012 was not favourable
for the poultry industry, it is mainly associated
with financial crisis in Europe and deteriorating
economic trends in Poland. The situation on the
grain market also affected the financial results,
as it caused increase of the manufacturing costs
of poultry livestock, the basic raw material in the
poultry activities. Despite difficult conditions, the
Group’s income increased by 1 per cent and reached
nearly PLN 1 billion.
In 2012, the Group increased its slaughter
production by over 7 per cent and also increased
sales of processed products: by 12 per cent on
the domestic market and by almost 40 per cent
on the foreign markets, therefore locating about
20 per cent of its production on the foreign markets.
Our products are appreciated among the customers
in Poland and abroad. In order to extend its export
capabilities, last year the Group obtained export
rights to the Chinese and Russian markets.
In the recent year, the Indykpol Group expanded its
offer by a product addressed to the most demanding
customers, that is children, the Jedyneczki sausages.
They are manufactured of highest quality meat,
do not contain monosodium glutamate or phosphates
and contain less salt.
The Indykpol Group has been a leader in taking
care about safety and quality of the product for
years. In the recent year, as the first manufacturer
in Poland, it implemented the QAFP system (Quality
Assurance for Food Products). It ensures stable high
quality of meat by means of continuous control of
the manufacturing process. The production of poultry
livestock in the Indykpol Group is based on hatchlings
and feed originating from precisely defined and
controlled source.
Last year, the composition of the Capital Group
has not changed, but certain decisions were made
in order to increase effectiveness of its operation.
As the business expectations were not met,
the Management Board of Indykpol decided
to dispose of shares in foreign companies,
liquidate companies that brought losses and verify
the directions of operation of the remaining
companies, supporting those with activities
consistent with the main tasks of the Capital Group.
The Indykpol Group is among the largest companies
of the poultry industry in Poland. It utilises extensive
knowledge and experience of nearly one hundred
managers and over one thousand employees.
The Group holds modern plants creating a vertically
integrated organisation. It also applies development
strategy proven in various market conditions, is open
for new ideas and eager to reach for state-of-the-art solutions. Because of these advantages, it has
been a leader on the poultry market in Poland for
nearly twenty years. This is also the best approach
to further development and increasing the share
on the domestic market of poultry products in the
following years.
Last year, the Group began the restructuring process
of the operating section management system in
order to use the manufacturing potential even
better. Improvement of work organisation and
implementation of modern management standards
should contribute to improvement of effectiveness
in the following years. I am convinced that
the restructuring activities will bring good results for
Indykpol S.A. and its affiliates.
Yours faithfully,
Piotr Kulikowski
President of the Management Board – Chief Executive
Officer of Indykpol S.A.
2012
ANNUAL REPORT
3
Financial Results
The Indykpol Group closed the year 2012 with a revenue from sales of PLN 987 million. Gross profit
on sales amounted to PLN 141 million. The Capital
Group generated profit on operating activities
in the amount of PLN 7.3 million and net loss
of PLN 3.3 million.
In 2012, the revenues of Indykpol S.A. exceeded the
amount of PLN 1,012.8 million and were by 3.8 per
cent higher than in the previous year. The Company
generated loss on operating activities in the amount
of PLN 2.3 million and net loss of PLN 9.5 million.
Despite negative economic trends, in 2012
the Company increased the scale of production and
revenue from sales, which exceeded the amount
of PLN 1 billion. However, the profitability of the
Company’s activities was lower than in the previous
year.
The largest share in the costs of poultry production
is the cost of raw material. Breeding of poultry is
based on complete feed mixtures, with the main
ingredients being grains and soya. The prices of
grain and other feed ingredients were very high
already at the beginning of the year and still increased. Moreover, against the expectations, they
did not decrease after the harvests. High feed
prices caused high costs of poultry livestock production.
This situation was not reflected in the sales
prices, because the economic crisis already visible
in Poland, as well as decreasing demand, prevented transfer of the increasing costs to the consumers.
Regardless of the increase of poultry consumption
observed in Poland in the recent years, high production costs, decreasing poultry prices and low
trade margins negatively affected profitability
of production.
The poultry market in Poland
For many years, the Polish poultry production has
exceeded the demand on the domestic market and
over 30 per cent of domestic production is exported
to foreign markets. The main receiver is the European
Union. Smaller amounts are sent to the Far and
Middle East countries. The crisis in many European
Union countries, which increased in the recent year,
caused also increased competition. It was reflected
in prices and profitability of sales, also of exported
Polish poultry products exported. The export was
also negatively affected by gradual strengthening of
the Polish currency. Despite disadvantageous conditions, the Polish poultry sector increased its sales
volume on foreign markets by about 20 per cent in
2012. The value of Polish poultry export increased by
about 18 per cent in PLN and by 13 per cent in EUR.
Regardless of holding export rights, the Polish poultry manufacturers had limited access to the Russian
and Chinese market in 2012. The sanitary and veterinary requirements for the Russian market require
detailed and long-term veterinary examination for
every batch of products. Therefore, the export of
fresh meats is not possible and the offer of Polish
poultry companies is limited. The export rights granted
to the Polish manufacturers with respect to the
Chinese market did not include the product groups
usually searched by the Chinese customers and
therefore the access to this market did not increase
significantly.
By the end of 2012, the regulations preventing ritual
slaughter of animals expired in Poland. The Constitutional Tribunal stated that the applicable regulations
are against the Constitution and inconsistent with the
act on protection of animals. Pursuant to the data of
the National Poultry Council– Chamber of Commerce,
the Polish companies exported about 50 thousand
tonnes of poultry to the Muslim countries. Until
the moment new regulations are issued, allowing
ritual slaughter, the Muslim markets will be closed for
Polish meat and poultry products.
In general, the forecasts for the poultry market are
better than for other branches of the meat industry.
The United States Department of Agriculture forecasts that the production of poultry in the European
Union in 2012-2013 is going to increase. The poultry
meat is very popular, the consumers appreciate its
taste and dietary values, as well as easy and quick
dishes that can be prepared of it. Continuation of
economic slowdown is going to contribute to increased consumption, because the consumers will
choose cheaper poultry meat over more expensive
red meat.
2012
ANNUAL REPORT
4
Changes in the raw materials area
In 2012, the raw material section was subject
to general restructuring. It focuses all activities of
the Capital Group connected with production and
purchase of poultry livestock, from production of
feed and hatchlings, own poultry farm, to purchase of live birds. Its activities also include cooperation with the contractors delivering feed components and grain, hatching eggs, live chickens
and turkeys.
This has also been the first complete year, when the
feed manufacturing plant functioned in the Group.
Nutripol Sp. z o.o. delivered feeds for all poultry farms
owned by the Group and a number of poultry farms
owned by the contractors. It also introduced a line
of feeds designated for more demanding breeding flocks in the Turkey Breeding Centre in Frednowy.
Close cooperation with farms and flexible responding
to the needs of the birds guaranteed good breeding
results. Good manufacturing results of own flocks,
including breeding flocks, confirm high quality of
feeds manufactured by Nutripol.
Production of turkey livestock in the Indykpol Group
is based on the hatchlings originating from the Turkey Breeding Centre in Frednowy. Last year, the Centre delivered over 5.2 million hatchlings. It improved
its production ratios again: the fertilisation ratio increased by 0.12 pp, the clutch of set eggs increased
by 0.76 pp. The production of hatchlings performed
in Frednowy is based on hatching eggs originating
from the reproductive flocks bred in the Centre. Own
breeding flocks and reproductive material from the
best breeding farms around the world together with
strict observation of sanitary and veterinary requirements brought the expected results, meaning healthy
and strong hatchlings, which have a very good opinion among the breeders.
The Turkey Breeding Centre holds facilities with total space of 40.5 thousand sq. m. It raises parent
hatchlings in six spatially isolated farm facilities and
six sectors house flocks at the egg yield stage. Spatial isolation of specific sectors allows maintaining
proper veterinary and zootechnical conditions, as
well as keeping parent flocks in various age at the
same time. Therefore, continuity in production of
hatchlings and high quality of the offered breeding
material are guaranteed.
In the recent year, the Group conducted hatching of
chicks in two hatching facilities. The poultry hatching
facility in Turka has been supplying chicks to the
Branch in Lublin for many years. The poultry hatching facility located in Brzesko, which was acquired at
the end of 2011, supplemented the Group’s capacity
with respect to chicks. Both facilities closely cooperate with poultry breeders both within the scope of
obtaining hatching eggs and the sale of produced
hatchlings.
In 2012, the Indykpol Group increased its slaughter
production by 7.1 per cent, up to 115.5 thousand
tonnes. In comparison to the previous year, the purchase of turkey livestock increased by 3.2 per cent
and chicken livestock – by 10.1 per cent. Own farms
delivered 19.6 thousand tonnes of poultry livestock.
Own farms supply approximately 27 per cent of processed turkey livestock and 26 per cent of chicken
livestock to the Olsztyn facility. Slaughter production
in the Branch in Lublin is entirely based on chicken
livestock obtained from the independent poultry
breeders. Indykpol has been engaged in production
of turkey livestock at its own farms for 20 years. Two
years ago, it started production of chicken livestock.
Presently, poultry is raised in 13 farm facilities with
the total space of 120 thousand sq. m.
2012
ANNUAL REPORT
5
Domestic sale and export
Indykpol operates in two basic segments of the poultry products market, offering meats and processed
poultry products. It is the largest manufacturer of
turkey meat and processed products in Poland. The
trade offer of Indykpol contains carcasses, meats
and elements of turkeys, chickens and goose.
The Company offers a wide range of processed
products made of turkey meat, including: hot-dog
sausages ("Jedynki", the most popular on the Polish market), meat pies, hams, smoked meats, grill
sausages, sandwich sausages, cold meats etc. High
quality guaranteed by application of HACCP, ISO 9001
and QAFP norms, as well as dietary and taste values
of the offered products, result in loyalty of the customers and consumers towards the Company.
Processed products made of turkey meat manufactured by Indykpol are characterised by high amount
of easily digested and assimilated proteins, low fat,
low calorific value, low cholesterol level and high
content of B group vitamins. Besides, the products
have delicate taste and are easy to prepare. Because
of dietary advantages, the turkey meat products are
recommended for children and convalescents, as
well as in anti-cholesterol diet.
Meats and meat products manufactured by Indykpol
are available in the majority of hypermarkets, supermarkets and discount stores networks in Poland.
They are also available in recognised general and
specialised stores. In the recent year, the Biedronka
network joined the group of Indykpol’s partners.
A special offer containing selected processed products and packed meats was prepared for the customers of this network.
The Group offers its products all around Poland, while
about 20 per cent of its production is exported
abroad. It holds a stable position on the European
Union market, selling poultry meats and processed
products. In 2012, Indykpol S.A. obtained the export
rights to the Chinese and Russian markets. Both
markets offer good potential and positive perspectives. This year, the Company is going to take actions
aimed at using these rights to the widest possible
extent. In order to learn more about expectations of
the contractors on the foreign markets, the Company
representatives participated in various fairs and economic missions organised by the Polish Information
and Foreign Investment Agency.
2012
ANNUAL REPORT
6
Commerce and Marketing
Indykpol regularly develops its product offer based
on the acquired knowledge, consumer research and
innovative manufacturing technologies.
In February 2012, the Jedyneczki sausages were introduced on the market – with high nutrition values,
recommended for children. Their market debut was
accompanied by promotional campaign emphasising
unique features of the product, including significantly lowered content of salt. The advertising campaign
included among others: TV campaign, adverts on LED
screens, POS materials, tasting and animations in
sales points, PR and advertising activities, as well as
campaign in the Internet.
In the second half of the year, the Jedynki family was
expanded by Jedynki Italiano and Jedynki sausages,
which are made of highest quality meat, without
monosodium glutamate or phosphates, similarly
as other products from this group. Jedynki Italiano
is a new taste version based on dried tomatoes,
basil and oregano, while Jedynki sausage links are
thin, meat links without casings, naturally smoked.
Presently, the Jedynki family constitutes an unique
offer of premium products, where all customers may
find something for themselves.
Indykpol and its products were awarded in many
recognised competitions. In 2012, Indykpol was
awarded the "Superbrand" title and therefore entered the group of the strongest brands on the Polish
market. Jedynki hot-dog sausages were awarded
in the "Golden Paragon" competition organised by
"Hurt & Detal" monthly, in the category of the SALES
LEADER – cold meats, processed meats and meat
pies. Jedyneczki sausages were awarded the title
of the Hit of FMCG 2012 in the competition organised by "Życie Handlowe" and received a distinction
in the Cold Meats Competitions, which took place as
accompanying events at the Cold Meats and Butchery
Forum at the International Trade Fair for Food
POLAGRA 2012.
Indykpol builds good relations with the contractors,
supports its business partners with knowledge and
experience, among others in the Eurocash Competence Academy, whose educational assumptions are
compliant with the philosophy of Indykpol S.A.
The company has been participating in projects
promoting proper nutrition habits for many years.
While cooperating with diet experts, Indykpol
spreads the knowledge about proper nutrition
among adults and children (Super Preschooler
Academy).
Indykpol supports Polish volleyball by sponsoring the
Indykpol AZS Olsztyn from Olsztyn, which plays in
Plus Liga (Polish top league).
Today, Indykpol is a strong and recognised brand,
constituting a guarantee of highest quality products
for the customers and reliable, stable cooperation for
the business partners.
2012
ANNUAL REPORT
7
Quality for the customers
Care about high quality and safety of the products
constitutes a basis of the activities of Indykpol Group.
Since the half of 1999, the plants belonging to the
Group apply the procedures of HACCP system and
since the beginning 2004 – the quality assurance system ISO 9001. The scope of both procedures includes
all production phases, from purchase and acceptance
of poultry livestock, through the distribution system,
to the external customers, including monitoring of
their satisfaction level. Observance of the norms
is supervised by the quality department separated
from the Company’s structure. These systems constituted the basis for implementation of additional
systems norms: IFS and BRC.
In 2012, Indykpol, as the first manufacturer in Poland,
implemented production of the goods in the Quality
Assurance for Food Products system (QAFP). It ensures stable, high quality of meats by means of
continuous control of the production process:
hatchlings, farms, slaughtering facilities, boning
and packing, sales points. The control is conducted
regularly by the manufacturers and randomly by the
independent auditors. Poultry meat manufactured in
accordance with the QAFP system is sold only in the
form of packed products, usually in MAP. Therefore,
its utility period is longer and the meat is protected
against secondary contamination in the distribution
and sales process. No additives may be added to the
meat. It is also not allowed to use ingredients negatively affecting organoleptic features of the meat
in the feeds. The QAFP system is promoted by the
National Poultry Council and high quality meats manufactured pursuant to its standards are promoted in
the media (TV campaigns).
The starting point for ensuring safety and high quality
of the products is restrictive approach to the hygiene and zoohygiene rules. The production of poultry livestock in the Indykpol Group is based on
hatchlings and feed originating from precisely defined
and controlled source. Raising of poultry is conducted in
closed facilities, under constant supervision of veterinary doctors. Modern production lines guarantee
safety of the products and allow tracking of product
batches at every stage of the manufacturing process.
Therefore, the company can determine the source of
birds for every batch of the products, including their
feed and the origins of hatchlings.
For over 20 years, Indykpol has been implementing
vertically integrated organisation of production. Only
this form of organisation guarantees achievement
of satisfactory effectiveness and allows taking full
responsibility for safety and quality of the products.
Presently, it covers the following levels: feed production, hatchlings production, poultry livestock production at own farms, slaughter, processing, distribution
system, sale and marketing. The Group’s products
are available on the market as one market offer.
Indykpol realises the high quality programme by means
of everyday care for hygiene and microbiology at
all production stages. Proper meat processing, observing technological processes and proper packing
with respect to weight, tightness and labelling constitute other elements of this process. Continuous supervision of state sanitary and veterinary authorities
with respect to the poultry livestock raising process,
slaughtering, cutting and processing constitutes an
additional guarantee of high quality.
2012
ANNUAL REPORT
8
Production stage
The Indykpol Group conducts slaughtering and processing production in three plants located in Olsztyn
and Lublin and in a plant belonging to its subsidiary,
Eldrob S.A., located in Świebodzin.
In order to achieve the best manufacturing and economic results, the Group continued the process of
integration and specialisation of plants. The Group
structure comprises the operating activities area with
the three production plants and the departments
providing services to these plants, that is production
procurement, technique and quality. The plants
were subjected to further specialisation with respect
to the manufactured meats and groups of processed
products.
The plant in Olsztyn is equipped with two specialised
slaughtering lines: one adjusted to slaughtering of
turkeys and the other – to slaughtering of chickens.
The poultry processing activities are continued at two separate butchery lines adjusted to the
species of poultry. The plant manufactures meats for
processing and high quality packed meats, including
production in QAFP system. In the recent year, it increased slaughtering ratio of turkeys by over 3 per
cent and chickens by over 7 per cent. The second
significant area of operation is manufacturing of processed poultry products. Considering increasing numbers of orders and wide range of offered hot-dog
sausages, the plant is specialising in manufacture of
hot-dog sausages and meat pies.
The production plant in Lublin manufactures chickens
and conducts slaughtering of goose seasonally, in
the second half of every year. The plant is equipped
with modern chicken slaughtering and butchering
lines and it increased its production by further
12 per cent.
The plant in Świebodzin specialises in manufacturing of processed products. It manufactures wide
range of poultry cold meats offered by the Indykpol
Group, such as: dried sausages, hams, smoked
meats, sausage lines, sandwich sausages and convenience type products. It is also a manufacturer of
products designated for export.
In 2012, the investment activities in the operating
area referred mainly to raising standards concerning quality and safety of the products. The Group
implemented production in the QAFP system. The
main target of the Group was also restructuring of
the management system of the operating section so
that the manufacturing potential could be used more
effectively by means of improved work organisation
and implementation of modern management standards, which should result in improvement of effectiveness in the following years.
2012
ANNUAL REPORT
9
Indykpol Capital Group
In the recent year, the composition of the Indykpol
Capital Group did not change. Indykpol did not establish or liquidate its subsidiaries and did not participate in acquisitions of other companies from the
poultry sector. The branches satisfied the manufacturing needs of the Capital Group.
In the largest subsidiary – Lubuskie Zakłady Drobiarskie "Eldrob" S.A. the proceedings connected with
forced buyout of minority shareholders was conducted. The certified auditor appointed by the general
meeting of shareholders specified the buyout price
for the shares of "Eldrob" S.A. to be PLN 11.95. This
price was questioned by a group of minority shareholders. The evaluation of another certified auditor,
appointed by the District Court in Zielona Góra, on
request of the minority shareholders, amounted
to PLN 30.73 per share. By the decision of 20 July
2012, the District Court in Zielona Góra, Division VIII
Commercial of the National Court Register, specified
the buyout price to be PLN 25.81. Due to the fact that
the price specified by the court was significantly different from the market price and the accounting
evaluation, Indykpol S.A. withdrew from forced buyout of
minority shareholders. At the end of 2012, Indykpol S.A.
held 98.8 per cent of shares in "Eldrob".
At the beginning of 2012, Indykpol S.A. raised
the share capital of "Ozkom" Sp. z o.o. by PLN 2,375
thousand to PLN 3,985 thousand by creating 2,375
new shares with nominal value of PLN 1,000. All
newly created shares in the increased share capital
were acquired by the only shareholder, Indykpol,
and paid in cash.
In January 2013, the authorities of Indykpol S.A.
made a decision on liquidation of Eurolab GmbH with
its registered office in Guben. For a few years, the
company attempted to conduct business in various
areas and did not reach satisfactory financial results.
The principle of free circulation of products and services on the European Union market allows direct exchange of goods by Polish companies, so the agency
of a German company became unnecessary.
The Composition of the Indykpol S.A. Capital Group
as on 31 December 2012
Dominant entity – Indykpol S.A.
Polish Subsidiaries:
Lubuskie Zakłady Drobiarskie "Eldrob" S.A.
with its registered office in Świebodzin
98,78%
"Futbolnet.pl" Sp. z o.o.
with its registered office in Olsztyn
96,67%
"Ozkom" Sp. z o.o.
100,00%
with its registered office in Olsztyn
"Indykpol Brand Management" Sp. z o.o.
100,00%
with its registered office in Warsaw
"Indykpol Brand Management"
Sp. z o.o. Sp. k. with its registered office
in Warsaw
99,99%
Nutripol Sp. z o.o.
100,00%
with its registered office in Olsztynek
Foreign Subsidiaries:
"Eurolab" GmbH
with its registered office in Guben 100,00%
(Germany)
"Wołżańskie Delikatesy" Sp. z o.o.
with its registered office
100,00%
in Verkhny Uslon in the Republic
of Tatarstan (Russian Federation)
Local branches:
The local branch in Lublin
Frednowy Turkey Breeding Centre
2012
ANNUAL REPORT
10
Shareholders and Investors
In 2012, significant packages of the Company’s shares
were held by three shareholders. Rolmex S.A.
together with the subsidiary – Warmińsko-Mazurski
Handel Międzynarodowy Sp. z o.o. – held 1,958,009
shares in the Company, which entitled it to 82.59
per cent of votes at the general meeting. The third
shareholder holding more than 5 per cent of the
votes at the general meeting was Legg Mason
Zarządzanie Aktywami S.A. As announced by the
shareholder, the accounts of its customers held
388,680 shares of Indykpol S.A., which represented
5.80 per cent of the overall number of votes at the
general meeting. Compared to last year, Legg Mason
slightly decreased its involvement.
Shareholding Structure as on 31 December 2012
Legg Mason
Zarządzanie Aktywami S.A.
Shares held: 399 905 | 12,80%
Other
Shares held: 766 050 | 24,52%
In January 2013, Legg Mason Towarzystwo Funduszy
Inwestycyjnych S.A., acting as the legal successor of
Legg Mason Zarządzanie Aktywami S.A., announced
a change of shareholding in the overall number of
votes at the general meeting of Indykpol S.A. resulting from transformation of a part of the investment
funds managed by Legg Mason TFI on 18 January
2013 into an open investment fund with separated
subfunds, operating under the name Legg Mason
Parasol Fundusz Inwestycyjny Otwarty. As of the
date of announcement, the funds managed by Legg
Mason Towarzystwo Funduszy Inwestycyjnych S.A.
held 399,905 shares of the Company, constituting
12.80 per cent of the Company’s share capital and
authorising to 399,905 votes on those shares, that is
5.97 per cent of votes at the general meeting.
The share capital of Indykpol S.A. amounted to PLN
15,622,500 and was divided into 3,124,500 shares
with a nominal value of PLN 5.00 each. The Company’s share capital comprises of two issues:
a.2,224,500 shares from the founders' issue of AA
series shares
b.900,000 shares from a second issue of BB series
shares
WMHM Sp. z o.o.
(subsidiary of Rolmex S.A.)
Shares held: 154 416 | 4,94%
Rolmex S.A.
Shares held: 1 804 129 | 57,74%
WMHM Sp. z o.o.
(subsidiary of Rolmex S.A.)
Number of votes: 634 416 | 9,47%
Other
Number of votes: 766 050 | 11,44%
The Company’s share capital is composed of
2,231,125 ordinary bearer shares and 893,375 registered preferred shares (five votes on each share). All
shares in total provide 6,698,000 votes at the general meeting. In the recent year, Indykpol did not
issue any new shares and did not purchase its own
shares for redemption.
The shares of Indykpol S.A. have been listed on
the Warsaw Stock Exchange since 12 October
1994, and are currently listed on the primary
market in the Plus 5 segment. All of the shares
in the Company are admitted to trading on the stock
exchange. 2,231,125 ordinary bearer shares, marked
as PLINDKP00013 at the National Depository for
Securities, were subject to trading. In 2012, the price
of Indykpol S.A. shares decreased by 13.3 per cent
from PLN 41.20 to PLN 35.70. On 31 August 2012,
the Company paid dividend for 2011. The dividend
amounted to PLN 0.48 per share.
Legg Mason
Zarządzanie Aktywami S.A.
Number of votes: 399 905 | 5,97%
Rolmex S.A.
Number of votes: 4 897 629 | 73,12%
2012
ANNUAL REPORT
11
Company’s Governing Bodies
In the recent year, one general meeting of the Company was held. The Ordinary General Meeting of
Shareholders of the Company held on 29 May 2012,
reviewed and approved the Management Board report on the operations of Indykpol S.A. in 2011, the
Company’s financial statements for the 2011 financial year, the Capital Group's consolidated financial
statements and the Management Board report on
the Capital Group operations in the previous year and
acknowledged fulfilment of the duties by the members of the Company's governing bodies. The general
meeting also made decisions to distribute the 2011
profits and allocated PLN 1,499,760 for dividend payments. Each of the 3,124,500 shares in the Company
carries a dividend of PLN 0.48. The dividend record
date was determined to be 16 August 2012, while
the dividend payment date was 31 August 2012.
The Ordinary General Meeting also elected the Supervisory Board for the 8th term of office, composed
of the following six members:
• Alfred Sutarzewicz – President of the Supervisory
Board
• Feliks Kulikowski – Vice-President of the
Supervisory Board
• Andrzej Dorosz – Member of the Supervisory
Board
• Dorota Madejska – Member of the Supervisory
Board
• Roman Malinowski – Member of the Supervisory
Board
• Stanisław Pacuk – Member of the Supervisory
Board
The Supervisory Board appointed two committees
– the Audit Committee and the Nominations and
Remuneration Committee. The former was composed of the following members: Stanisław Pacuk,
Andrzej Dorosz and Dorota Madejska. The latter was
composed of the following members: Alfred Sutarzewicz and Roman Malinowski. The Audit Committee
was chaired by Stanisław Pacuk, while the Nominations and Remuneration Committee was chaired
by Alfred Sutarzewicz.
In 2012, the Management Board of Indykpol S.A.
was composed of one member. Piotr Kulikowski performed the role of the President of the Management
Board and the CEO.
The efforts of the Management Board were supported by seven authorised signatories, acting on
behalf of the Company in pairs under joint authorisation.
In the recent year, the functions of the authorised
signatories were performed by:
• Halina Gajdzińska – Quality Director
• Halina Kirejczyk – Sales and Distribution Manager
• Leszek Krzewicki – Technology and Investment
Director
• Waldemar Połucha − CFO – Chief Accountant
• Maciej Sośnicki – Indykpol Group Raw Material
Managing Director
• Mirosława Żejmo – Staffing and Organisation
Manager
During the year, Ryszard Waśniewski – the Managing
Director of the Indykpol Group Activities was appointed an authorised signatory.
2012
ANNUAL REPORT
12
Financial Statements of the Indykpol
Capital Group
13
14
15
17
18
19
20
Consolidated Global Income Statement
Consolidated Statement on the Financial Standing
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Shareholders’ Equity
Global Income Statement of Indykpol S.A.
Statement on the Financial Standing of Indykpol S.A.
Independent Auditor’s Report
2012
ANNUAL REPORT
13
Consolidated Global Income
Statement
(in PLN ‘000)
Continued operations
Revenues from the sale of products
Revenue from the sale of goods and materials
Revenue from sales
Manufacturing cost of products sold
Value of goods and materials sold
Prime cost of sale
Gross profit (loss) on sales
Cost of sales
Cost of general management and administration
Other operating revenue
Other operating costs
(Profit) loss on operating activity
Net financial costs
Gross profit (loss)
Income tax
Net profit (loss) on continued operations
Discontinued operations
Net profit (loss) for the period
Other total net income
TOTAL INCOME FOR THE FINANCIAL YEAR
Total profit per:
- shareholders of the holding company
- minority shares
Combined total income per:
- shareholders of the holding company
- minority shares
Net profit (loss) per share
- basic earnings for the period
- basic earnings on continued operations
- diluted earnings for the period
- diluted earnings on continued operations
1 Jan 2012-31 Dec 2012
1 Jan 2011-31 Dec 2011
897 705
88 974
986 679
759 200
86 402
845 602
141 077
105 792
30 350
5 822
3 465
7 292
(10 808)
(3 516)
(198)
(3 318)
883 203
95 216
978 419
743 790
90 986
834 776
143 643
95 500
33 360
6 268
7 525
13 526
(8 178)
5 348
(2 740)
8 088
(3 318)
–
(3 318)
8 088
–
8 088
(3 306)
12
(3 318)
8 089
(1)
8 088
(3 306)
12
(3 318)
8 089
(1)
8 088
(1,06)
(1,06)
(1,06)
(1,06)
2,59
2,59
2,59
2,59
2012
ANNUAL REPORT
14
Consolidated Statement
on the Financial Standing
(in PLN ‘000)
ASSETS
Fixed (non-current) assets
Tangible fixed assets
Investment properties
Intangible assets
Goodwill
Other financial assets
Trade and other receivables
Deferred tax assets
Current assets
Inventory
Trade and other receivables
Cash and cash equivalents
Other financial assets
Prepayments and accruals
TOTAL ASSETS
LIABILITIES
Shareholders’ equity allocated to the shareholders of the holding
company
Share capital
Other capitals
Retained earnings
Shareholders’ equity allocated to minority shares
Total shareholders’ equity
Non-current liabilities
Loans and borrowings
Non-current provisions
Trade and other liabilities
Subsidies
Provisions for deferred income tax
Short-term liabilities
Loans and borrowings
Trade and other liabilities
Short-term provisions
Subsidies
Total liabilities
TOTAL LIABILITIES
31 Dec 2012
228 534
211 758
532
2 342
1 103
81
1 541
11 177
230 946
90 598
135 937
2 425
35
1 951
459 480
31.12.2012
31 Dec 2011
233 113
216 866
532
2 431
1 103
39
1 727
10 415
229 129
72 141
151 552
4 047
60
1 329
462 242
31.12.2011
160 572
165 235
15 623
107 815
37 134
384
160 956
82 426
42 569
1 145
10 543
15 884
12 285
216 098
120 961
89 880
2 606
2 651
298 524
459 480
15 623
104 421
45 191
399
165 634
143 174
104 570
1 008
7 533
17 784
12 279
153 434
57 382
91 808
1 578
2 666
296 608
462 242
2012
ANNUAL REPORT
15
Consolidated Cash Flow Statement
(in PLN ‘000)
1 Jan 2012-31 Dec 2012 1 Jan 2011-31 Dec 2011
Operating cash flow
Net profit (loss)
(3 306)
8 630
Total adjustments
21 693
(22 183)
Depreciation
16 988
15 238
Profit for minority shareholders
(12)
1
Currency exchange profit (loss)
130
(857)
Interest and share in profits (dividends)
11 229
7 653
Profit (loss) on investment activity
(698)
4 327
Changes in provisions
1 553
(786)
Changes in inventory
(18 457)
(21 458)
Changes in receivables
18 042
(27 966)
Changes in short-term liabilities, other than loans and borrowings
(2 577)
8 224
Changes in pre-payments and accruals
(4 687)
(7 354)
Other adjustments
182
795
Net operating cash flow
18 387
(13 553)
Investment cash flow
Proceeds
2 070
12 653
Sale of intangible assets and fixed assets
1 817
4 313
Sale of property investments and intangible assets
–
–
From financial assets, of which:
59
8 230
in affiliates
–
8 164
- sale of financial assets
–
5
- dividends and shares in profits
–
1
- repayment of long-term loans granted
–
7 129
- interest
–
1 029
- other proceeds from financial assets
–
–
in other entities
59
66
- sale of financial assets
–
–
- dividends and shares in profits
–
–
- repayment of long-term loans granted
59
66
- interest
–
–
- other proceeds from financial assets
–
–
Other investment proceeds
194
110
2012
ANNUAL REPORT
16
Consolidated Cash Flow Statement
(in PLN ‘000)
Expenditures
Purchase of intangible assets and fixed assets
For financial assets, of which:
in affiliates
- purchase of financial assets
- long-term loans granted
in other entities
- purchase of financial assets
- long-term loans granted
Repayment of liabilities under financial instruments
Net investment cash flow
Financial cash flow
Proceeds
Net proceeds from the issue of shares and other equity
instruments and additional payments to share capital
Loans and borrowings
Payments received under leasing agreements
Other proceeds from financial assets
Expenditures
Purchase of own shares
Dividends and other disbursements to owners
Expenditures under profit distribution other than disbursements
to owners
Repayment of loans and borrowings
Purchase of debt securities
Under other financial obligations
Payment of liabilities under financial leasing agreements
Interest
Other financial expenditures
Net financial cash flow
Total net cash flow
Balance sheet change in cash flow, of which:
- changes in cash due to currency exchange
Cash at the beginning of the period
Cash at the end of the period, of which:
- limited disposal
Additional cash flow information
Income tax paid
9 420
9 344
76
–
–
–
76
–
76
–
(7 350)
12 358
36 133
28 981
7 152
7 117
6 492
625
35
–
35
–
(23 480)
67 732
–
–
11 063
859
436
25 050
–
1 500
66 470
935
327
28 579
–
1 055
–
–
9 486
–
–
2 919
11 145
–
(12 692)
(1 655)
(1 622)
(33)
4 047
2 425
–
308
17 156
–
–
1 748
8 620
–
39 153
2 120
2 093
27
1 954
4 047
–
74
2012
ANNUAL REPORT
17
Consolidated Statement of Changes
in Shareholders’ Equity
(in PLN ‘000)
Per shareholder of the Company
Share
capital
As on 1 January 2011
Exchange rate differences on
consolidation
Profit (loss) from previous years
Profit (loss) for the year
Consolidation differences
Dividend disbursement
Share of shareholders holding
minority shares
As on 31 December 2011
As on 1 January 2012
Corrections of errors from
previous years
Creation of reserve for deferred
tax
Dissolution of reserve for income
tax
As on 1 January 2012
Dissolution of reserve for income
tax
Exchange rate differences on
consolidation
Profit (loss) from previous years
Profit (loss) for the year
Consolidation differences
Dividend disbursement
Share of shareholders holding
minority shares
As on 31 December 2012
Other
capitals
Retained
earnings
Held by
Total
minority
shareholders’
shareholders
equity
Total
15 623
100 794
41 976
158 393
584
158 977
–
–
247
247
–
247
–
–
–
–
4 658
–
–
(1 031)
(4 716)
8 630
(945)
–
(58)
8 630
(945)
(1 031)
–
–
–
–
(58)
8 630
(945)
(1 031)
–
–
(1)
(1)
(185)
(186)
15 623
15 623
104 421
104 421
45 191
45 191
165 235
165 235
399
399
165 634
165 634
–
–
–
(962)
(962)
–
(962)
–
–
803
803
–
803
15 623
104 421
45 032
165 076
399
165 475
–
–
417
417
–
417
(65)
(65)
–
(65)
–
–
–
–
–
6 296
–
(1 402)
(1 500)
(8 088)
(3 306)
1 644
1 500
(1 792)
(3 306)
242
–
–
–
–
–
(1 792)
(3 306)
242
–
–
–
–
–
(15)
(15)
15 623
107 815
37 134
160 572
384
160 956
2012
ANNUAL REPORT
18
Global Income Statement
of Indykpol S.A.
(in PLN ‘000)
Continued operations
Revenues from the sale of products
Revenue from the sale of goods and materials
Revenue from sales
Manufacturing cost of products sold
Value of goods and materials sold
Prime cost of sale
Gross profit (loss) on sales
Cost of sales
Cost of general management and administration
Other operating revenue
Other operating costs
(Profit) loss on operating activity
Net financial costs and revenues
Gross profit (loss)
Income tax
Net profit (loss) on continued operations
Discontinued operations
Net profit (loss) for the period
Other total income
Other total net income
TOTAL INCOME FOR THE FINANCIAL YEAR
Net profit (loss) per share
- basic earnings for the period
- basic earnings on continued operations
- diluted earnings for the period
- diluted earnings on continued operations
1 Jan 2012-31 Dec 2012
1 Jan 2011-31 Dec 2011
904 309
108 484
1 012 793
787 055
106 218
893 273
119 520
99 561
23 805
3 525
1 957
(2 278)
(7 820)
(10 098)
(614)
(9 484)
848 063
127 844
975 907
718 930
124 270
843 200
132 707
98 521
24 780
4 388
4 815
8 979
(6 639)
2 340
(3 010)
5 350
(9 484)
–
–
(9 484)
5 350
–
–
5 350
(3,04)
(3,04)
(3,04)
(3,04)
1,71
1,71
1,71
1,71
2012
ANNUAL REPORT
19
Statement on the Financial Standing
of Indykpol S.A.
(in PLN ‘000)
ASSETS
Fixed (non-current) assets
Tangible fixed assets
Investment properties
Intangible assets
Shares and stock
Other financial assets
Trade and other receivables
Deferred tax assets
Current assets
Inventory
Trade and other receivables
Cash and cash equivalents
Other financial assets
Prepayments and accruals
TOTAL ASSETS
LIABILITIES
Shareholders’ equity
Share capital
Other capitals
Retained earnings
Non-current liabilities
Loans and borrowings
Non-current provisions
Trade and other liabilities
Subsidies
Provisions for deferred income tax
Short-term liabilities
Loans and borrowings
Trade and other liabilities
Short-term provisions
Subsidies
Total liabilities
TOTAL LIABILITIES
31 Dec 2012
230 321
173 367
532
2 307
40 787
5
1 541
11 782
204 591
65 446
136 280
2 059
35
771
434 912
31 Dec 2011
228 346
173 636
532
2 174
39 415
39
1 665
10 885
224 689
59 933
158 853
3 013
2 025
865
453 035
149 995
15 623
105 095
29 277
78 450
42 569
950
10 543
13 046
11 342
206 467
78 322
124 663
2 194
1 288
284 917
434 912
159 759
15 623
101 245
42 891
127 685
92 808
892
7 397
14 309
12 279
165 591
37 569
125 733
985
1 304
293 276
453 035
2012
ANNUAL REPORT
20
Independent Auditor’s Report
for the General Meeting and Supervisory Board of the Indykpol S.A.
We have audited the attached consolidated financial statements of the Indykpol Capital Group in which the dominant
entity is Indykpol S.A. with its registered office in Olsztyn
at ul. Jesienna 3, composed as follows:
• statement on the financial standing as on 31 December 2012, which shows total assets and liabilities
at PLN 459,480,000;
• consolidated global income statement for the period from
1 January to 31 December 2012, showing a total loss in the
amount of PLN (3,318,000);
• consolidated statement of changes in shareholders’ equity
for the accounting year from 1 January to 31 December
2012, showing a decrease in shareholders’ equity by the
amount of PLN (4,519,000);
• consolidated Cash Flow Statement for the financial year
from 1 January to 31 December 2012, showing a decrease
in net cash of PLN (1,655,000);
• and additional information and clarifications.
The Management Board of the Dominant Entity is reponsible
for the preparation of consolidated financial statements and
a statement on the operations of the Capital Group in accordance with the applicable laws.
The Management Board and the Supervisory Board members
of the Dominant Entity must ensure that the consolidated financial statements and the statement on the operations of
the Capital Group meet the requirements set out in the Accounting Act of 29 September 1994 (Journal of Laws of 2009,
No. 152, item 1223, as amended), hereinafter referred to as
the "Accounting Act".
Our task was to audit and express our opinion on the conformity with the mandatory accounting principles (policy) of
the Capital Group of these consolidated financial statements
and whether it is an accurate and clear representation, in all
material aspects, of the assets and financial standing and
financial performance of the Capital Group.
This audit was conducted in accordance with:
1.Chapter 7 of the Accounting Act,
2.the Polish financial review standards, issued by the National Board of Auditors in Poland.
We had planned and conducted the audit of the consolidated
financial statements to ensure reasonable confidence that
would allow us to express our opinion thereon. In particular,
the audit involved verifying the correctness of the accounting
principles (policy) applied by the dominant entity and the
subsidiaries and verifying – largely at random – the grounds
for the figures and information contained in the consolidated
financial statements, as well as an overall assessment of the
consolidated financial statements.
We believe the audit provided sufficient grounds to express
a reliable opinion.
In our view, the audited consolidated financial statements,
which included numerical data and verbal clarifications:
• accurately and clearly presents all the information that is
materialfor the assessment of the assets and financial standing of the Indykpol Capital Group as on 31 December 2012,
as well as its financial performance for the financial year
from 1 January to 31 December 2012;
• were prepared in accordance with the International Accounting Standards, International Financial Reporting Standards and the associated interpretations announced in
the form of regulations of the European Commission, and
to the extent not governed by these standards, in accordance with the requirements of the Accounting Act and any
executive regulations issued thereunder;
• complies with the legislation governing the financial statements and applicable to the Capital Group.
The Management Board report on Group operations is complete, as defined in Article 49 of the Accounting Act and takes
into account the provisions of the Regulation of the Minister
of Finance of 19 February 2009 on current and periodic information provided by issuers of securities and the conditions for
the equivalent treatment of information required under the
legislation of non-member states (Journal of Laws of 2009,
No. 33, item 259, as amended), and the information from
the audited financial statements contained therein conforms
therewith.
Poznań, 21 March 2013
BDO Sp. z o.o.
Postępu 12, 02-676 Warsaw
Entity authorised to audit financial statements
No. 3355
Key auditor conducting the audit:
Michał Włodarczyk
Auditor, reg. No. 12436
Acting on behalf of BDO Sp. z o.o.:
dr André Helin
President of the Management Board, Auditor,
reg. No. 90004
2012
ANNUAL REPORT
21
Timeline
1951
the Branch of the Egg and Poultry Central Office in Olsztyn was established
1964
establishment of the Olsztyn Poultry Company
1980
the first Polish poultry production plant – the Turkey Breeding Centre of Frednowy – started
its activity
1985
a new production plant was started in Olsztyn
1991
the Olsztyn Poultry Company State Enterprise was transformed into a private company
Indykpol, the company gained a strategic investor – Rolmex S.A.
12 October 1994
the first quotation of Indykpol stock at the Warsaw Securities Exchange
14 June 1995
gaining of an industry shareholder, Jerome Foods Inc.
17 May 1996
the Company authorities and major shareholders adopted Indykpol Charter, in which
the mission, vision and critical success factors were defined
30 March 1998
Indykpol purchased blocks of Eldrob S.A. and Lubdrob S.A. shares, thus forming a capital group
of poultry companies
1 August 1999
Indykpol completed implementations of the HACCP system
1 July 2000
Indykpol – Lubdrob fusion
15 August 2003
Indykpol gained the position of the dominant investor in Eldrob S.A.
2004
commencement of implementation of a new marketing strategy based on "Indykpol" brand
16 April 2004
the Company obtained certificates of IFS (International Food Standard) and BRC (British Retail
Consortium) systems
11 May 2004
the Company obtained a certificate of the ISO 9001:2000 system
1 July 2004
fusion of Indykpol and the Turkey Breeding Centre Frednowy
31 July 2006
opening of a new hall and starting a hot-dogs flow production line
15 October 2006
introduction of the new line of Jedynki branded hot-dogs into the market
1 July 2007
implementation of the management analysis system SAS
June 2008
introduction of a new group of products to the market – noble dried processed meat
2 January 2009
launching a modern line for slaughter and butchery of chickens in the Lublin plant
1 April 2009
launching the production of heat in a new ecological biomass-fuelled boiler room,
at the Olsztyn butchery plant
24 May 2009
launching Jedynak kabanos sausage, an innovative snack, in the Polish market
15 February 2010
launching a modern line for slaughter and butchery of chickens in the Olsztyn plant
30 November 2010 merger of Indykpol S.A. with "Biokonwersja" Sp. z o.o.
30 March 2011
acquisition of Wytwórnia Pasz w Olsztynku Sp. z o.o. – currently Nutripol Sp. z o.o.
31 August 2011
transformation of "Indykpol Brand" Sp. z o.o. into a limited partnership
20 January 2012
launching the production of chicks in the Poultry Hatching Plant (ZWD) in Brzesko
31 August 2012
obtaining the QAFP Certificate
2012
ANNUAL REPORT
INDYKPOL S.A.
Jesienna 3, 10-370 Olsztyn, Poland
Head Office tel. + 48 89 52 62 222
Reception tel. + 48 89 52 62 200, fax + 48 89 52 62 223
Customer Service Office tel. + 48 89 52 62 100, fax + 48 89 52 62 110
Purchase Logistics Department tel. + 48 89 52 62 301
Contracts Departament tel. + 48 89 52 62 235
Press Spokesman tel. + 48 89 52 62 315
Office in Warsaw
Olkuska 7, 02-604 Warsaw
Reception tel. + 48 22 54 28 280, fax + 48 22 54 28 282
e-mail: [email protected]
www.indykpol.pl