mgm report 2012

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CONTENT

PROMOTION OF SPORTS AND THE CITY OF GORNJI MILANOVAC

80Sports

VIRTUE LAUREATE AWARD

84Awards and recognitions

METALAC AN EXAMPLE ОF GOOD PRACTISE

78The future is happening as we speak

EDUCATION AT ALL LEVELS

68Human resources the greatest power of Metalac

CREATES HEALTHY COMPANIES

60Social responsаbility

GROWTH GENERATED CONTRARY TO THE GENERAL TREND OF SALES

44Trading companies

RECORD YEAR OF EXPORTS28Production companies

THE MOST SUCCESSFULL YEAR FOR METALAC

24Serbia has not missed anything

METALAC SHARES SHOW THE HIGHEST PERFORMANCE STATISTICALLY

9About the Company

WE WERE NOT SURPRISED BY THE SUCCESS

6A wrod from the General Manager

AMONG THE TOP TEN IN SERBIA

4A word from the President

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Mokra Gora School of Management Council has awarded the Virtue Laur-eate 2012 award to Mr. Dragoljub Vukadinovic, president of the Metalac Group, for outstanding contribution to the preservation of the Serbian economy. In the presence of 200 Serbian business and public persons, the award was presented by Slobodan Petrovic, managing director of Danube Food Group and the Virtue Laureate 2011.

Explaining the decision to give award to Vukadinovic, the jоurnalist of Politika daily Aleksandar Apostolovski pointed out that in 1989 Vukadi-novic became managing director of Metalac which was maybe the last oasis of workmen „shareholdership“ in Serbia. In his opinion Serbia would be much welthier if there were more businessmen and visionaries of such kind.

- Mediocracy leads nowhere, only exceptional labor is a guarantee for suc-cess – said Vukadinovic with a message to young businessmen that the best solutions are most probable to come up in times of worst crisis.

For three years Mokra Gora School of Management has been awarding a virtue laureate together with the partners: the Economics Institute, Fac-ulty of organizational Sciences, Serbian Chamber of Commerce, Belgrade Chamber of Commerce, Serbian Business Club „Privrednik“ and Serbian Association of Corporate Directors.

VIRTUE LAUREATE AWARD TO THE PRESIDENT OF THE METALAC GROUPAward for outstanding contribu-tion to preservation of the Serbian economy in a socially accountable and morally credible way.

DRAGOLJUB VUKADINOVICPresident of the Metalac Group

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Today the Metalac Group is one of the best 10 companies in Serbia that employ over 1000 people.

The shareholders, the employees and the managment must be proud of the reputation we enjoy, but we are also worried to have only few sound companies in our country that could keep up with us. One could ask why worry about not having more of them? We can find the answer in the poetry of Petar Petrovic Njegos who in »The Mountain Wreath« metaphoricaly says: » I'am a lone straw tossing in the whirlwind, a sad orphan without friend or kinfolk“. The future of our company is in other words tightly connected to a successful industry and better living standard of the citizens as our consumers.

I can see Metalac as a prosperous company in next 7-8 years at least. I believe in our strenght always to confront changes, to be one step ahead of the others, with the ac-cent on constant investing into knowledge, new programs and products and up-to date process engineering. I will however repeat the many-time-repeated and globally proved fact that the critical or break point in the life of a cookware factory is the moment when the salary average gets over 700 euro. At that point all cookware factories in Europe were getting into difficulties because of high and insupportable share of work costs in the cost of the production. That moment is not too far away, probably in the next 10 years, and this issue has to be considered by the management constantly.

Not to be onesided I would like to point out the results of the Group in 2012 which are absolutely the best in the 53-year history. We will make effort to do it again in 2013 and welcome the two fives anniversary – 55 years of Metalac with best ever results.

So we are successful and proud of the results we obtain, but very well aware that we have to do more to survive and develop on a long-term basis, and space for progress is always there.

10IN SERBIA

AMONG TOP

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Once again we showed with our own work that living and being successful is possible. How fortunate Metalac is with its rooted system of values which for many years have governed its destiny, and that of the community in a way. In our Company the integrated economic, social and ecology objectives are comprehensive to each and every employee: do the good planning, work diligently and behave in the way to make us all proud.

PETRASIN JAKOVLJEVICGeneral manager

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How do you explain such great results against all odds?

It sounds incredible, but the world eco-nomic crisis seems to have pushed Metalac forward?

Metalac has been traditionally focused on exports and that brings success. Are you satisfied with the sales in the local market?

In 2012 despite the cri-sis Metalac Jsc. again managed to invest into new equipment, and also into socially acceptable projects.

What changes need to be made in Serbia to help recover the industry and increase production?

HE SUCCESS

It is about time we change our way of thinking and accept the fact that we can live only from our work. The government should promote that attitude. We can't build the future upon any outside help, or upon loans, if we don't create new value. The whole nation should be mobilized with this new awareness and different quality of values. For many years Metalac has been an example how workable that can be.

Investments are imperative for sustainable development. True, during the years of crisis we in-vested somewhat more into projects that make part of our social responsibility, very aware that society is in deep crisis. Our support to sports, birth rate, young human resources, investment into ecology and similar is only expression of our deepest beliefs that successful ones have to see further and do more, that the lifestyle can't be an excuse for any selfishness.Therefore our biggest investment in 2012 was the modern football stadium constructed in Gornji Milanovac, and we also continued helping almost all sport clubs in the town that gather children and young population, as well as giving greeting cheques from 500 to 4.000 euros to each em-ployee who gets a baby in the family.On the other hand, we invested into new lines and equipment for production of cookware, pack-ing materials and water heaters. Our total investments during 2012 amount to 5 million euro. Moreover, we employed 150 young people meaning that other 150 new families got a basic se-curity.

Our strategy is favoring exports as to increase income constantly: In 2012 share of exports were about 70% in the total income. Russia is still growing, we are seriously developing our business in Ukraine, we are pleased by cooperation with our partners in Finland, after 6 years we are back on English market..., not to mention our traditional presence in Germany, Spain, Italy. Such approach should result in 5% growth in 2013. Our maximum attention will be given to the local market, but we will try even more to increase the sales in the markets where we are tradition-ally present and to search for new ones.

This is another proved view that Metalac has kept - hard times are the best for big and good decisions. In 2009 with initial economic crisis we had a dawn fall, but we recovered very quickly and from 2010 we have been constantly growing. In fact, with exception of 2009, we have been growing since the year 2000. Another and not less important factor are the people - Metalac workers, their trust, loyalty and willingness to work. I mean all the workers, not only bare professionals. And this is not accidental. Metalac takes care of the employees. We are not ready to give up on them with any crisis we en-counter. On the contrary, we keep them all - in good and in evil, however under clear rules that finally bring success to the company and security to the employees, and there are 1.700 of them. Moreover, salaries were increased 16-17% in total and they have been paid out punctually at 10 o'clock every 20th in a month for 20 years now.

Our financial results are beyond expectations, however we are not surprised by the common consistency, discipline and faith in success that are so characteristic for us. In Metalac nothing happens by chance.Decisively the exports helped such good results, such strategy was not only of this year, but the result of a continuous work to penetrate new markets and win bigger share on the markets we entered time ago. The consequent result is 20% increase of exports as a dominant factor of 10% increase in overall sales of the Metalac Group, and of the profit level we had in 2007 before the crisis has started.

WE WERE NOSURPRISED BY

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THE COMPANY

Metalac Group is a share company organized as a holding with 14 subsidiaries. Four of them are pro-ductive, five trading companies in the local market and five companies abroad.

Metalac has been active for 54 years. The Company's head office is in Gornji Milanovac as well as all the factories of the group: Metalac Posudje Ltd. for production of cookware, Metalac Inko Ltd. for production of stainless steel and composite kitchen sinks and Granmatrix composite plates, Metalac Bojler Ltd. for production of water heaters and Metalac Print Ltd. for production of carton packing material and transfers for cookware decoration.

The trading companies on the local market are: Metalac Market Ltd. as a retailer manages 46 special-ized shops throughout Serbia, Metalac Metalurgija Jsc. Novi Sad which places products of Metalac and widest range of household items on the market of Vojvodina and manages 17 specialized shops in Voivodina, Metalac Trade Ltd. is a major wholesaler of imported household items, and Metalac Proleter Jsc. is a major supplier in the province of Gornji Milanovac through 40 points of sale. The company Metpor Ltd. Belgrade acts as an agent of different foreign companies.

All five companies abroad deal with various ranges of Metalac products. The biggest share is from Metrot Ltd. Moscow which operates in Russia for eleven years. The youngest company Metalac Ukraine was founded in 2011. The market of the USA is supplied by Metalac Group USA located in Milwaukee. Promo-Metal Zagreb covers the market of Croatia. In Montenegro products are sold through Metalac Market Podgorica.

Metalac Group shares are quoted on the B List of the Belgrade Exchange. Exchange analysts say that Metalac is one of the “healthiest” Serbian companies.

In 2012 according to the consolidate account Metalac made almost 59 million euros turnover and net profit of 5,2 million euros. Cookware production is core-business and the company Metalac Posudje is one of the major cookware producers in Europe.

Metalac exports its products to 25 countries in all the continents. Except traditional presence in Bosnia and Herzegovina, Croatia, Montenegro, Slovenia and Macedonia, about 5 million product units, mostly cookware, go from Metalac to Russia, France, Italy, Germany, Spain, Sweden, Finland, Denmark, Czech Republic, Ukraine, Georgia, Bulgaria... and as far as USA and Australia.

Metalac Group employs about 1700 people, almost half of them working in Metalac Posudje as the oldest factory. Every tenth employee is with a university degree. There is a trend of continuous educa-tion to improve and update knowledge in all fields.

Metalac Jsc. has integrated Quality Management System ISO 9001 and Environemental Protection Management System ISO 14001 certified by TÜV. The company is dedicated to all aspects of sustaina-ble development.

Metalac has received numerous important recognitions such as: Golden Plate for Corporate and Social Responsability for 2009 from the Club of Business Reporters of Serbia; CSR Serbia Award 2008 – National award for socially accountable behaviour for 2008; Oscar for Quality 2007 for business excellence; Award of the Serbian Chamber of Commerce for contribution to the pro-gress of the Serbian industry in 2006; The Best Serbian Trade Marks in 2004, 2005 and 2006.

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Development, Organization And Qms/Ems Section

Marketing Section

Internal Audit Office

Accounting, Finance And Tax Section

It Section

Safety And Prevention Engineering Section

Human Resources And Legal Section

Restaurant

Services

Logistics Section

METALAC GROUPPRESIDENT

METALAC METALURGIJA Jsc.METALAC Jsc.

ASSEMBLY ASSEMBLYASSEMBLY

Board of Directors Board of DirectorsMONITORING BOARDManaging Director Managing Director

GENERAL AFFAIRS

Ge

ne

ral

Aff

air

s

METALAC PROLETER Jsc.

Audit Commission Secretary

President

Executive Board

Managing Director

SUBSIDIARIES

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METALAC POSUĐЕ Ltd.

METALAC INKO Ltd.

METALAC PRINT Ltd.

METALAC BOJLER Ltd.

METALAC TRADE Ltd.

METALAC MARKET Ltd.

METALAC GROUP USA inc.

METALAC UKRAJINA Ltd.

METPOR Ltd.

METROT Ltd.

PROMO METAL Ltd.

METALAC MARKET PODGORICA Ltd.

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At the end of May Metalac Jsc. held the regular meeting of shareholders in which occasion the Constitutional Act of the Company, the Statute and the Company management system were amended according to the new elect-ed law on enterprises.

Metalac Group introduced a dual system of the company management with the Monitoring Board and the Executive Board as management bodies. As members of the Monitoring Board were elected: Dragoljub Vukadinovic president of the company Metalac Jsc.; Dragan Djuricin, PhD, professor at the Belgrade Faculty of Economics; Goran Pitic, PhD, president of the man-agement Board of the Societe Generale Banka Srbija in Belgrade; Ljubinka Rajakovic, PhD, professor at the Belgrade Faculty of Technology and Met-allurgy; Rajko Tepavac, PhD, member of the Executive Board of the com-pany Dunav osiguranje Jsc. in Belgrade; Mr.Danko Djunic, president of Eki investment Ltd., Belgrade; Goran Petkovic, PhD, professor at the Belgrade Faculty of Economics.

The Monitoring Board and Dragoljub Vukadinovic as the president of the Monitoring Board were elected for a four-year period.

As members of the Executive Board elected were Petrasin Jakovljevic, executive director for development, organization and QMS/EMS; Radmila Todosijevic, executive director for financial affairs, human resources and business logistics; Aleksandar Markovic, executive director for production and IT; Stojan Slovic, executive director for domestic sales and marketing; Goran Mijatovic, executive director for exports and foreign subsidiaries. The members of the Executive Board were elected for a four-year period, and Petrasin Jakovljevic was elected the managing director of the Company.

The former members of the Management Board Nikola Pavicic, honorary president of the Tarkett for Eastern Europe; Vladimir Cupic, president of the executive board of Hypo-Alpe-Adria Bank and MSc Djordje Milosavljevic, consultant at the Centre for Process Engineering of the IHTM Company, were shown utmost gratitude for their knowledge, experience and reputa-tion which they contributed to Metalac in the past.

Dual management system car-ried out through executive and monitoring board. New mem-bers of the monitoring board MSc. Danko Djunic and Goran Petkovic PhD. Petrasin Jakovlje-vic Managing Director of Metalac Jsc. Executive board consisting of 5 members.

VUKADINOVICLEADING THE COMPANY IN THE NEXT 4 YEARS

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EXECUTIVE BOARD

MONITORING BOARD

Dragoljub Vukadinovic, President of the company and Chairman of the Board

Dragan Djuricin, PhDProfessor at the Belgrade Faculty of Economics and Vice president of the Board

Goran Pitic, PhDChairman of the Board of executives of Societe Generale Bank - Serbia

Rajko Tepavac, PhD Member of the Board of executives of Dunav Osiguranje Jsc. - Belgrade

Ljubinka Rajakovic, , PhDProfessor at the Belgrade Faculty of Technology and Metallurgy

Mr Danko Djunic, President Eki - investment Belgrade

Goran Petkovic, PhDProfessor at the Belgrade Faculty of Economics

Aleksandar Markovic, Executive director for production and IT

Petrasin Jakovljevic, General menager andexecutive director fordevelopment, organizationand QMS/EMS

Radmila Todosijevic,

Executive director for finacial af-fairs, human resources and busi-ness logistics

Stojan Slovic, Executive director for domestic sales and marketing

Goran Mijatovic,Executive director for export and foreign affiliates

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STATISTICAL OVERVIEW OF OWNERSHIP STRUCTUREon December 31st 2012

Share capital

Shares in ownership of natural persons Shares in ownership of legal entitiesNominee or custodial accounts

Issuer:METALAC AD GORNJI MILANOVAC - 07177984

Active ISIN (CFI): RSMETAE71629 (ESVUFR)

INVESTOR RELATIONS AWARDFor the third time in a row at the 11th International conference of the Belgrade Stock Exchange the prize was awarded to a company that achieved the best results in investor relations in the current year according to a survey by the Investor Rrelations Commission and the poll on the website of the Belgrade Stock Exchange. Special Award for the high quality of relationships with investors in previous years, this year was presented to Metalac Jsc. As in the last year, this years winner is Naftna industrija Srbije (NIS) whose reporting in the field of investor relations respects the highest international standards.

Shares in ownership of individuals

Shares in ownership of legal entities

Socially owned capital

Nominee or custodial accountConsortium

Type of shareholders

Number of shares

% of total issue

591,950

73,777

0

354,273

0

58.03431

7.23304

0.00000

34.73265

0.00000Total: 1,020,000 100

58.03431%

7.23304%34.73265%

od 0% do 5% od 5% do 10% od 10% do 25% od 25% do 33%od 33% do 50% od 50% do 66% od 66% do 75% od 75% do 100%

Percentage of ownership in capital of shareholders

Number of shareholders

Number of shares

% of total issue

domestic foreign

13594100000

580000000

578306267407174607

00000

266800000000

56.6966726.2163714.47127

00000

2615690.000000.000000.000000.000000.000000.000000.00000

Total: 1.422 1.020.000 100,00000

domestic domesticforeign foreign

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”METALAC“ SHARES SHOW THE HIGHEST PERFORMANCE STATISTICALLY

On March 13th 2013 the shares of the company Metalac Jsc. had the highest price of 2.250 RSD per share in last 18 months. The last time Meta-lac shares had higher price was in August 2011, and their peak of 6.505 RSD per share was in April 2007.

From the beginning of this year the shares of Metalac Jsc. rose for almost 30% and therefore show the highest performance in the Belex 15 index basket. At the last price of 2.244 RSD per share the market capitalization of this company amounts to 2,29 billion RSD (20,4 million euros).

Due to divergence between „the right on the paper“ and actual rights, the shareholders property and rights are effectively unprotected. In the Global Competitiveness Report 2011-2012 published by the World Economic Forum, of 142 countries Serbia was rated 140.

Experts claim there are only few companies that do not violate rights of minor shareholders, and these are Metalac Jsc. from Gornji Milanovac, Galenika Fitofarmacija, Jedinstvo Sevojno, NIS ... In these companies either employees and managers hold important ownership share, or a majority shareholder wants to create a good corporate story. The shareholders of these companies know exactly how the business is doing, they have control over it and could affect upon it, pay out div-idends and make profit. This not only proves that minority shareholders’ rights are protected, but also shows the strenght of a company as shareholders have their yield regardless of the share price oscillations on the exchange.

Despite European legislation, researches in Serbia show rather poor legal protection of local shareholders. Metalac is one of the few companies that represents the oppo-site – positive example, as experts estimate.

PROTECTION OF MINOR SHAREHOLDERSGOOD CORPORATE STORY

MTLC - Metalac Jsc., Gornji Milanovac - 02.04.2012. do 29.03.2013.

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RADMILA TODOSIJEVICExecutive director for finacial affairs, human resources and business logistics

To have reputation of being among the healthi-est Serbian companies for years is probably the biggest compliment that Metalac could get. Even more significant if you know how hard the times in which this reputation was obtained have been, and how much Metalac has grown in every aspect all along.

For 18 years the Metalac financial statements have been made in all relevant aspects according to the Serbian na-tional accounting regulations by auditors' opinion. During all that time all the success measuring parameters have been continuously growing. In its operations the Company has been in different grades exposed to financial, market, credit and solvency risks. The risk management was instruc-ted to minimize potential negative impact to financial con-ditions and operations in the environment of an unpredict-able financial market. The Company also managed well the capital risk and succeeded in keeping its business successful in a foreseeable future. The capital management was aimed to keep the optimum structure and therefore cut the costs of the capital and provide dividends for the shareholders.

These are also the reasons why we are known as a company which business is managed like a household. The reputa-tion of being one of the healthiest Serbian companies for years is probably the biggest compliment that Metalac could get. Even more significant if you know how hard the times in which this reputation was obtained have been, and how much Metalac has grown in every aspect all along.

Again in 2012 the factors like: planning, discipline, respons-ibility, coordinated management of income and cost move-ments, management of currency risks, interest rate changes risks, solvency risks, credit risks and capital risks, were decis-ive. So I have to emphasize that financial health of any seri-ous company and therefore of Metalac arrises from its over-all sound reasoning and business functional organization.

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Operations in 2012.Turnover INCREASE 10%

Export INCREASE 20%

Profit INCREASE 18%

Number of employees INCREASE 9%

INCREASED number of newborns 30%

Investments 5.000.000 euros

Stadium FC Metalac has been completed

Share cost INCREASE 30%

Dividends paid to the shareholders, and premiums to the employees

(first quarter 2013)

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In our opinion, the consolidated financial statements of Metalac Jsc., Gornji Milanovac

for the year ended December 31, 2012 have been prepared, in all material respects, in

accordance with the accounting regulations of the Republic of Serbia.

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2012. 2011.

2012 2011

Non-current assets

Current assets

As at December 31, 2012(Thousand of RSD)

ASSETS

18181819

2021

2223

2525

25

262728

293031

17

32

22,7181,880,635

387,79325,172

1,826,1171,336,473

58, 709327,227694,115

54,495

2,316,318

4,297,136

4,027,771

107,793

767,883

1,764,478

6,613,454

6,613,454

408,00033,899

4,25690,623

04,052

3,379,1483,919,978

176,402591,481

0

663,227772,709237,401

89,2721,869

53,322

102,023

13,5091,926,820

95,86440,412

1,501,2371,220,177

32,757299,539697,034

47,123

2,076,605

3,797,867

3,706,481

263,959

1,866,404

5,874,472

5,874,472

408,00033,899

4,25690,623

1,3702,250

3,057,2203,597,618

108,863

145,972112,875

5,112

971,756602,026207,457

83,0952,070

37,628

173,628

CONSOLIDATED BALANCE SHEET

Capital and reserves

Current liabilities

Long-term liabilities and provisions

TOTAL ASSETS

TOTAL EQUITY AND LIABILITIES

Off-balance-sheet items

EQUITY AND LIABILITIES

Share capitalOther capitalShare premiumReservesUnrealized gains on securitiesTranslation reservesRetained earningsMajority interestsMinority interests

Short-term financial liabilitiesAccounts payableOther current liabilitiesValue added tax and other duties payable and accrualsIncome tax payable

Deferred tax liabilities

Long-term provisionsLong-term borrowingsOther long-term liabilities

InventoriesAccounts receivableReceivables for prepaid income taxShort-term financial placementsCash and cash equivalentsValue added tax and prepayments

Intangible assetsProperty, plant and equipmentInvestment propertyLong term financial placements

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2012. 2011.

Milan Đorđević,Head of Accounting

89

1011

5

7

12131415

17

(1,724,761)(1,725,607)(1,319,656)

(235,557)(565,694)

6,067,46924,77572,975

160,783

274,232(218,552)

44,136(208,880)

(44,492)(15,708)

581,7053,758

(5,571,275)

6,326,002

(109,064)

(60,200)

645,663

754,727

585,463

585,463

570.29

(1,412,500)(1,464,217)(1,074,801)

(200,318)(434,242)

4,971,56414,04258,948

122,423

181,616(174,234)

67,805(132,547)

(26,719)5,022

505,250(3,408)

(4,586,078)

5,166,977

(57,360)

(21,697)

523,539

580,899

501,842

501,842

495.34

CONSOLIDATED BALANCE SHEET

16

CONSOLIDATED INCOME STATEMENT

Year ended December 31, 2012

Basic/diluted earnings per share (in RSD)

These consolidated financial statements were approved by the managment of Metalac Jsc. Gornji Milanovac and filed with the Serbian Business Registeres Agency on April 18, 2013.

Signed on behalf of Metalac Jsc., Gornji Milanovac by:

(Thousands of RSD)

OPERATING INCOME

OPERATING EXPENSES

OPERATING PROFIT

NET PROFIT

PROFIT BEFORE TAX

NET PROFIT/(LOSS) ATTRIBUTABLE TO:

INCOME TAXES

Sales revenuesOwn-work capitalized(Decrease)/Increase in inventoriesOther operating income

Finance incomeFinance expensesOther incomeOther expenses

Current tax expenseDeferred tax benefits

Equity holders of the parent companyMinority shareholders

Cost of goods soldMaterials, fuel and energyStaff costsDepreciation, amortization and provisionsOther operating expenses

Petrasin Jakovljevic, General menager andexecutive director fordevelopment, organizationand QMS/EMS

Radmila Todosijevic,

Executive director for finacial af-fairs, human resources and busi-ness logistics

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From 7,5 million in 2002 Serbia fell to 7,1 million inhab-itants in 2012. Birthrate is going down, average life ex-pectancy is going up, number of household members and number of rural population is falling and this is the population that has kept traditional values and habits including traditional food preparation. Moreover, almost 40% of population has aged over 50, while children aged under 9 make only 10% of the total population.

Almost 45% households in Serbia are with 1-2 members. 10% of the population live under the limit of absolute poverty, meaning they do not have enough resourc-es for food, while only 2,25 million people can provide for food and pay for housing costs, but barely anything more. The greatest problem is that the huge part of pop-ulation is almost in the poverty zone. As poverty grows the researches show that optimism of people is falling. The employment is at historical minimum, only 1,7 mil-lion people are employed, and that is 250.000 employ-ees less than five years ago, most of that were industrial workers.

About 45% of average household income is spent for food, then housing, clothing, education, health... and only 4,5% of the average remains for all other expenses (from cups to locomotive, and therefore also cookware).

The very beginning of 2012 justified all the estimates and worries for the fourth year of the world economic crisis. Serbia hasn't missed anything: further fall of in-dustrial production and buying power, unstable ex-change rates, insolvency, ceased activity by numerous small traders, shortage of capital, uncertainty of trading, worse crediting conditions, unemployment, gray eco-nomy, preelection uncertainty, postelection waiting for a new government... On the top of all that five ice weeks in January and February as a force majeure significantly augmented the costs and made all the sales projections for the first quarter fail.

The world crisis is still going on, social movements in various countries of the European Union are more act-ive, uncertainty and searching for the answer – how to exit the tunnel.

Fortunately, those few things that bring optimism were depending only upon us: positive atmosphere in the company, determination and persistence of employ-ees, careful management of costs, adjustments of sales policy, cautious dealing with small traders, faith in man-agement and workers, new ideas, experience and busi-ness intuition, good teams of associates, clear vision, trust of partners and consumers.

We carried on, but were aware that there were two sides of the medal – limiting factors and our advantages.

When 2012 becomes distant past it will be easier to understand the importance of another good year for Metalac that happened in such hard times.

Even the saying that »Everything is the same only children are growing« unfortunately seems not to be true any more

SERBIA HAS NOT MISSEDANYTHING

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One of the best years for the Metalac Group brought the total sales turnover of 86,1 million euros. Compared to 2011 the growth is 10%. The profit that the Metalac Group made amounted to 6,81 million euros, which was 18% more than in 2011.

The biggest growth of 45% of the sales turnover, made the company Metrot in Russia, then Metalac Print with 33%, while between 10% and 20% growth made Metalac Posud-je and Metalac Inko, and trading companies Metalac Market in Serbia, Metalac Market in Montenegro and Metalac Pro-leter. The factory of water heaters, Metalac Bojler, had 7% higher sales turnover, while Metalac Trade, Metalac Meta-lurgija and Promometal- Zagreb made more or less the same turnover as in 2011. As the youngest subsidiary, Meta-lac Ukraine made its first sales in the second half of 2011, so in 2012 its growth was as high as 325%.

However, for the 2012 balance it is important to mention the growth of the biggest subsidiary and the core business of the group, Metalac Posudje; this company made 30% of the total sales turnover, 90% of the total exports and 50% of the total profit of the Metalac Group.

On December 21st at the meeting held in Gornji Milanovac, the conclusion of the Monitoring Board of Metalac Group was that the year 2012 was very successful and it adopted the Business Plan for 2013 with projected growth of 5%.

THE MOST SUCCESSFULL YEAR FOR METALAC

M E T A L A C G R O U P

T O TA L I N C O M E E B I T D AG R O S S P R O F I T

20122011

ЕUR

20.000.00030.000.00040.000.00050.000.00060.000.00070.000.000

80.000.00090.000.000

10.000.0000

86.097.9047.908.631

8.522.46777.957.166 7.612.286 7.581.928

2.000.000 2.000.0003.000.000 3.000.0004.000.000 4.000.0005.000.000 5.000.0006.000.000 6.000.0007.000.000 7.000.000

8.000.000 8.000.0009.000.000 9.000.000

1.000.000 1.000.0000 0

MGM

REPORT2012

24

ALEKSANDAR MARKOVIC, Executive director for production and IT

STOJAN SLOVIC,Executive director for domestic sales and marketing

GORAN MIJATOVIC, Executive director for exports and foreign affiliates

Our competitive advantage is in our ability to plan the production and produce goods with high qual-ity, strictly respecting all the various requests of the clients, and within the agreed terms, however keeping the costs under control.

Regardless the general downfall of the Serbian industry in 2012 and important decrease in retail-ing, our companies made remarcable results and respectable growth on the local market.

In 2012 about 20 million euros or 32% of the total sales turnover from all the subsidiaries registered in Serbia was from exports. Should we exclude from this analysis the subsidiaries that operate only in the local market, the share of export is even as high as 60% of the sales turnover made.

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25

The strength of Metalac comes from its ability to produce and therefore create a new value. Plus we are known to the clients throughout the world as a reliable manufacturer with standardized quality, ready to respond to very requiring demands and strictly respecting delivery terms at the same time. Since all the phases of the production process, from raw material input to the finished and packed product, are arranged within the Metalac system, the cost control is under control at most. This competence has to be constantly upgraded, so we initiated the projects for efficiency upgrade by the latest methodologies, and we will insist on that in the future.

People say that the ability of a nation to survive on a long term basis is measured by the capability of its industry to make exports. Then we could say that Metalac Posudje business will sustain for long because in 2012 the export made almost 70% of the total sale. The last year however showed us that we have to be prepared for peaks in demand that could happen in a permanent crisis envi-ronment in the whole world. The main weapon for this battle in the market is educated people at all company levels, so our priority will still be to invest into education of our employees. With the inno-vation of the information system for better decision making process management on a speeding market, we have a chance to arrive first and offer innovative products and designs. And the added value comes hand in hand with that.

The production subsidiaries that rely upon the local market made significant sales turnover increase in 2012, so the company Metalac Bojler that made over 70% of the sale on the local market, had the total sales turnover growth of 7% (we could say the growth was almost equal on the local and export levels). The company Metalac Inko, with over 53% of sales made in the local market, had the total sales turnover growth of 15% (better on the local level than from export). Metalac Print, with extraor-dinary sales turnover growth of 33% and with almost 70% of sales made by doing business with the sister companies, showed also the potential to grow selling outside the group. Due to the expansion on the Russian market, as well as on the most export markets, Metalac Posudje somehow put aside local customers so there was a drop in sales on the local market that should not continue in 2013.

The trading companies had good results despite the general problem of slower trading activities, so the 13% of sales turnover growth of Metalac Market means they are going in good direction. Metalac Trade evidenced a slight drop in sales in 2012 with respect to 2011, but a higher end result, things are therefore changing in the market and the changed way of operation in the local market gave results for this company.

We stepped into 2013 with optimism and if the growth forecasts for the Serbian industry are achieved, we are sure that we are going to make good results that we will write about in the next year's edition of the report.

During the last year the subsidiaries abroad made the sales turnover of 13,9 million euros. For 2013 all of them are projected to grow, and the most ambitious figure of 20,5% is planned for the compa-ny in Ukraine. Dominant export item is cookware; the last year's total export of cookware amounted to 16,3 million euros, which is almost 70% of the total sales turnover figure of this subsidiary.

Concerning further export plans, each new market is welcome, but the focus should be to fortify position on the markets we already penetrated and with all product lines of the Company.

For two years now Croatian market has had a downward trend, so for the year 2013 we took steps in order to stop such trend. There is an opportunity for Metalac Inko with the further growth of sales in the Croatian market, but some notions are that the sinks could be marketed in Ukraine as well. With water heaters we are present on the surrounding markets (ex Yu) however each further attempt to win new markets gets us back to the problem of uncompetitive prices of the standard product lines.

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REPORT2012

26

MGM

REPORT2012

27

The four production companies within Metalac Jsc. produce different kinds of cookware, water heaters, stainless steel and granite sinks, Gran-matrix composite materials, transport and gift packing materials. In 2011 Metalac production companies made sales turnover of 36,3 million euros which is 42% of the sales turnover of the Metalac Group. 50% of that was from exports that showed 20% higher mark than in 2011, while the local market showed 4% of growth. The biggest share in the sales turnover of the pro-duction companies i.e. 72% was from Metalac Posudje, core business of the company, and 90% was the share of cookware in the total exports.

PRODUCTION COMPANIES

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28

Occasionally even without enough goods for the local market due to overbooked capacities, the exports rised by 20% while the local market showed 10% of drop in sales. From the total of 22 markets, 11 had better turnover than last year, mostly Russia, then Germany, Italy, Spain, Slovenia, Bosnia & Herzegovina... Rather tense year, unpredictable efforts encountered in developing of a stainless steel cookware collec-tion, equipment for aluminum cookware production moved to another plant, too much pressure upon capacities of the enamel cookware factory.

A RECORD YEAR OF EXPORTS

- I don't know if the 2012 will be remembered by the problems we had to solve, or by the placement that we made, however it was a really turbulent year of day-to-day struggle to fulfill the terms and de-mand. In such unpredictable times, like past years of the world crisis, there is not much space for strict planning, but more flexibility is needed, and I think we succeeded in that, - said Aleksandar Markovic, director of Metalac Posudje.

With 26.164.000 euros Metalac Posudje continued its growth in 2012, this time 10% compared to the previous year, in major part influenced by 20% higher exports, while the local market had drop of sales of 10%. Both for the local and export sales the year was rather turbulent, in constant attempts to fulfill all the agreements including numerous promotional sales that in cer-tain moments required more goods than actually available. Differently from past years, the big pressure was also upon the stainless steel and non-stick cookware factories.

Only to Russia 120 trailers dispatchedHalf of the sales turnover, being almost 70% of the total sales, Metalac Posudje made thanks to exports into 22 countries in 2012. Around 6.6 million euros of export was made in the Russian market where the Metalac affiliate, Metrot, made results almost as in the record year of 2007. Around 120 trailers were shipped out from Metalac Posudje to the Moscow warehouse, and carried about 800.000 cookware units, mostly enamel.Important increase in sales was evidenced in the markets of Germany, Italy, Spain, Ukraine, Bosnia and Herzegovina, Macedonia, Slovenia... Finland has kept the same level as in previous years. After a longer pause we are back to the Eng-lish market. Since the increased demand of foreign clients was a priority with respect to the local market, we could say that for sure the local market would be doing better if there were sufficient goods at every time. Beside the drop in sales of almost 10% in 2012,it seems we had missed a chance to gain bigger share on the Serbian cookware market.

Frequent loyalty campaigns found to be necessaryThe practice of frequent promotional sales continued in 2012, more fre-quently in the last few years both locally and on the markets of ex Yugo-slavian territories. In cooperation with the Merkur, Tempo, Idea and Eco fuel distributor four loyalty promotional campaigns in Serbia were organ-ized, two of them prolonged to first four months of 2013. In Montenegro and Bosnia and Herzegovina the promotional campaigns were carried out through Tempo and Maxi chain of shops, while at the end of the year in Cro-atia through the Konzum points of sale began the loyalty campaign of the Mehrzer stainless steel cookware collection. For the first time in Bosnia and Herzegovina the retail chains Robot of Sarajevo and Bingo of Tuzla made three-day promotions called "Cookware Days".

During the year several promotions of Metalac Posudje were arranged in the shops of the Metalac Market and Metalac Metalurgija. About ten smaller cli-ents throughout Serbia had chance to make one-day promotion "Cookware Day" offering discount prices to their consumers.

ALEKSANDAR MARKOVICManaging Director

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REPORT2012

29

Founded 2006, as a subsidiary of Metalac Jsc.Location: Gornji Milanovac, SerbiaActivity : production of enamel cookware since 1960 production of non-stick cookware since 1994 production of stainless steel cookware since 1999Market: Serbia and 22 countries around the world2012 sales turnover: 26,20 million eurosNumber of employees: 788

Satisfaction of consumers measured for 12th timeFor 12 years Metalac Posudje has been measuring how satisfied the buyers and consumers have been in the lo-cal and foreign markets. In 2012 the local consumer was 2% less satisfied than in 2011. The greatest impact was of the parameters "change in sales volume" and "num-ber of buyers kept", as a number of buyers that were lost due to ceased activity, or changed activity, or inability of liability financing. On the other hand the pools: Sales volume in clients change and researches of buyers' and consumers' satisfaction showed slightly better figures.

The situation is quite opposite if we look how pleased were the clients and consumers in the foreign markets, as the vote rose in 2% compared to 2011. The parameter "sales volume change" had major impact to it.

Frankfurt Ehxibition is a Must!

Appearance at the Frankfurt Fair in February 2012 was a real pleasure for Metalac Posudje and for numerous po-tential partners. Series of new decorations pointed out our innovative authorship approach and therefore our reputation.

Beside the designers from Metalac, after a longer time, a very interesting line of cookware was presented thanks to the cooperation with a local artist, Slobodan Jel-isijevic, professor at the Nis Faculty of Applied Arts. The same exhibition was presented in Chicago. However US market still requires effort and patience.

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REPORT2012

30

Metalac posudje is a unique factory since it produces enamel on steel, stainless steel and aluminum cookware with various non-stick coatings in its plants. In 2012 the pro-duction per piece increased by 9% with respect to the pre-vious year. Due to the increased production volume 76 new workers were temporarily employed and 38 from youth organization. Our biggest subsidiary therefore expanded to 800 employees for indefinite period, which is almost half of the people in the whole Metalac Group.

Technological improvementAmong several investments we would like to single out new press for bakelite and setting-up a new plant for production of aluminum cookware on 1800 sq. m. where the produc-tion started in September. The new automatic line was bought for production of aluminum cookware from discs with the capacity of 300-600 peaces/h. The line makes part of the total investment for modernization of the plant for non-stick cookware of about 500.000 euros. Metalac is now equipped for production of all kinds of aluminum cookware, except cast aluminum, and the capacities are multiplied.

Worth mentioning are the electrical forklift for the ware-house of semi-products and the packing section; machines for stretch wrapping of the pallets for the packing section and the warehouse of finished products, trimming machine for production of so called flat lids; two ex-centric presses of 250 tons; tools for the bakelite handle of the pancake pan with aluminum insert; tools for the bakelite handle de-signed by a student of the Faculty of Applied Arts; renewal of tools for the classic stew pan; tooling for the new Mehrzer stainless steel cookware line and for the new aluminum cookware line with ceramic coating.

The equipment for production of aluminum cookware moved to a new hall; production of cookware with ceramic coating has started; all plants upgraded with new equipment. Due to increased production volume 76 new workers were employed.

New lines developed in stainless steel and aluminum with non-stick coatingThe factory of stainless steel cookware had a very delicate task to develop a new line with Mehrzer private label which was presented to the Croatian market at the end of the year. The capacities were engaged also for the new line Talia meant for the big loyalty promotional program with Tempo points of sale in Serbia and Maxi and Tempo in Montenegro.

Within the aluminum cookware there are three new collec-tions with ceramic non-stick coating: Eco tava Ceramics as a standard offer, one for private label K-home in Croatia and one for the loyalty promotional program with IDEA chain of shops in Serbia.

The oldest factory, that of enamel cookware, mostly worked on further technological upgrade: better quality obtained of a double folded rim on the classic mugs and therefore full compliance to the requests of all customers. Moreover, with the new device for spot welding the stainless steel cook-ware rim is of higher quality now.

The trials were made with the "Lithuanian" oven for decor firing and the obtained quality is now better with signific-antly less pieces that are wasted. In the section of mech-anical processing some organizational improvements are made for material savings, equipment care and mainten-ance, safety at work, a thorough tide-up is done, generally good work example transferred also to other production sections. In 2012 Metalac Posudje has started dealing more seriously with the stock of waste materials which is located in Metalac.

DYNAMICAL YEAR IN ALL THREECOOKWARE FACTORIES

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31

After PTFE, silicon and RealEase coatings, Metalac Posudje has presented a new non-stick line with ceramic coating to the market and therefore fortified the position in the market filled with competitors. Due to the moving of the production into a new hall, there was a gap in supply during July and August. Seven items in the EcoTava Ceramics line of cookware were presented to the local and exYu markets. However the capacities were full mostly because of the promotion called "Idealno - Silver lux" with the IDEA chain of shops at the end of the year.

COOKWARE WITH CERAMIC COATING

500.0000 1.000.000 2.000.000 2.500.000 3.000.0001.500.000

2011 71% 29%

2012 67% 33% 2.828.704 2.828.704

2.476.355 2.476.355

10.000.000

15.000.000

25.000.000

30.000.000

5.000.000

0

26.163.69423.868.957

1.000.000

2.000.000

3.000.000

4.000.000

0

3.656.9663.773.710

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

500.000

0

2.734.861

2.443.897

500.0000 1.000.000 2.000.000 2.500.000 3.000.0001.500.000

2011 31% 46%

2012 31% 44% 24%

23%

M E T A L A C P O S U Đ E

T O TA L I N C O M E

A S S E T S L I A B I L I T I E S

E B I T D AG R O S S P R O F I T

20122011

20122011

Equity Financial liabilities Accounts payableNon current / current Inventories

000 RSD

ЕUR

MGM

REPORT2012

32

Although Metalac has always had the offer of cookware for children, but no sooner then in 2012 that this category became specially important. Beside the increase in sales, a very important marketing objective is positioning in the segment for kids and entering specialized sales channels where Metalac Po-sudje hasn't been present so far.

Using all the advantages of enamel from the health point, functionality and aesthetics, a special collection of items for cooking, serving and preserving food for children is created under the brand name Mini M and the slogan "Grow up healthy".

In October 2012 Metalac obtained the Disney licence, and first small pots with Minnie and Mickey Mouse decorations entered the market in March 2013.

Mini M - COOKWARE FOR CHILDREN WITH DISNEY CHARACTERS

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REPORT2012

33

The story that began in September 2011 has been more and more interesting and challenging trying to get close to the younger generations who use internet as priority communication media. After a year and a half the Facebook page of Metalac Posudje has almost 25.000 fans, 80% of that mostly young women and mothers.

Based on accurate quarterly plans, during this period sev-eral dozens of application were made and there was a suc-cessful open competition for new decoration ideas. During 2012 the cookware factory had been visited few times by the famous cooking bloggers that created a new commu-nication channel on the social networks.

Entering a social network is rather useful as we can in-spire young population of present and future consumers through a two-sense communication. As addition to that we got a compliment at the regional blogger conference that our brand is one of the strongest in Serbia by presence on the social networks and referred to us as "official and un-official cookware of the internet society in Serbia".

Thorough and expensive investing into development and positioning of the brand could have many serious con-sequences with any plagiarism. Except taking over a part of the market in a non-loyal way, a collapse of the brand image is particularly risky. That is why Metalac has decided to take care of its intellectual property and protect it, espe-cially when on the shelves of certain shops Metalac Posudje found plagiarism of its best selling decors.

In cooperation with the Serbian Institute for Intellectual Property necessary steps were made and a complete dia-gnostics of the intellectual property elaborated in two of the Metalac companies: Metalac Posudje and Metalac Bojler. During the procedure and elaboration of necessary documents, the employees of Metalac were instructed how to cooperate with customs officers authorized to prevent imports of goods which could violate the protected rights, as well as with inspection entities that are entitled to confis-cate such goods if found in the market.

The moment we found the first plagiarism of our products in the market, Metalac had decided to protect its intellectual property rights as well as to elaborate all aspects of the process that in this context could be important for the future.

INTELLECTUAL PROPERTY RIGHTS PROTECTION

Blue with dots are constant inspiration (judging by the photos from our fans).

COOKWARE OF THE SOCIAL NETWORKS

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REPORT2012

34

7% total sales growth. 22 new employees. Focus on development projects

- It is important to us that 6 years af-ter the company was founded we are present on all ex Yu markets and in Russia, although we are still not sat-isfied with the placement in the Rus-sian market. Moreover, the important fact is that we are present with the Metalac brand name and persceived as a quality product, which opened space for our serious presence in coming years – briefly commented Goran Mijatović, director of Metalac Bojler.

METALAC BOJLER IN ALL MARKETS OF EX YUTERRITORY

The company Metalac Bojler continued its growth trend and made almost 4 mil-lion euros in 2012, which is 7% higher than in 2011. Growth percentage was sim-ilar in the local market and on exYU markets. With the share of the local market of about 70% the year was particularly successful in the Serbian market. The key to such increased sale was the model ECOnomic which was placed on the mar-ket to fight the competition in the lower price category. Besides, Metalac Bojler added 15 new clients to its portfolio and the sales to construction companies also increased.

As for other markets, the sales in Bosnia went better, while the placement in Slo-venia and Montenegro was stable. Exports to Macedonia were constant and for the first time the Metalac water heaters went to Croatia thanks to a deal with the »Mercator centar tehnike« that started the activity with 14 shops throughout Croatia in 2012.

The managers of the company visited the Milan fair also this year and found out that trends haven't changed in last 2-3 years. The accent is on energetic efficien-cy and that is the direction of our strategy.

As a result of all the activities there is a 4% higher satisfaction of consumers in the local market, while on the foreign markets this parameter fell by 1%. Thanks to increased sales 22 people were employed so there were 79 employees in Meta-lac Bojler as of December.

While satisfied with accomplishment of the plan, director of Metalac Bojler is not pleased with progress of initiated development projects. Focus on sales in hard economic conditions left the initiated projects on hold, so this will be among main tasks in 2013, for which we planned 3,5% growth.

Moreover, to improve the communication with the public and end users, Meta-lac Bojler started its own web presentation end 2012.

GORAN MIJATOVICManaging Director

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35

Founded: 2006 Location: Gornji Milanovac, SerbiaActivity : Production of accumulation and small capacity water heatersMarket: Serbia, ex Yugoslavian republics and Russia2012 turnover: 3,98 million euro Number of employees: 79

M E T A L A C B O J L E R




20122011

20122011

000 RSD

ЕUR

50.000 50.0000 0100.000 100.000200.000 200.000250.000 250.000300.000 300.000350.000 350.000150.000 150.000

2011 201170% 34%30% 10%

2012 201271% 36% 53%

56%

29% 330.704 330.704

308.519 308.519

11%

2.000.000

3.000.000

4.000.000

5.000.000

1.000.000

0

3.984.4563.733.373

100.000

150.000

200.000

250.000

0

204.660234.800

20.000

30.000

40.000

50.000

60.000

10.000

0

57.376

11.917


MGM

REPORT2012

36

With almost 2,1 million euros of sales turnover the growth of 15% was made. Important 2012 mission accomplished - abandoning principle of exclusive distributions and creating stable portfolio of clients, returning to old customers and winning new ones. Customers 13% more satisfied.

RETURN TO DESIRED POSITIONS

Metalac Inko dedicated the 2012 to reposition its products primarly in the Serbi-an market. Long term relation with distributors became insustainable, especially with arrival of the crisis and lower consumption in this segment. Constant pres-ence in the field, follow-up and communication with clients once more proved to be irreplaceable model for bigger chances and less risks, while partnerships are maintained.

The year 2012 finished with 15% growth with respect to the year before. Results were better on the local market which had 53% share in the total sales. Outcome of this approach is 150 active clients, 60 of them new or reacquired in 2012. The total number is even bigger if we take in consideration also Metalac Metalurgija that covers the territory of Vojvodina with 70 customer of its own.

- Thanks to more intens field work and better pricing policy our portfolio of cli-ents developed widely and the sales volume is higher. This will surely bring re-sults next year despite lower demand on the market, big pressure on the prices and increased presence of low-cost and as such low quality sinks – comments Vladan Stojković, director of Metalac Inko. He also considers that in 2012 great improvements were made to internal economy, organizational issues, discipline and efficiency of all 38 employees that most probably had biggest impact on good results.

By the plan the biggest share was of stainless steel sinks in 2012. The program of granite sinks is well accepted on the market and their sales increased. More im-portant fact is that with granite sinks we entered the medium class of consumers and higher price category, so we will work and develop in this direction in 2013.

As for ex YU markets, the sales increased in Croatia, Bosnia and Herzegovina and Montenegro. There is space for better export results, as well as on the markets of Macedonia, Bulgaria and Kosovo which showed a fall in 2012. All these activities should bring us 5% growth in 2013. The most important is that Metalac sinks are perceived as quality products and considered as competitive in price.

Tha marks on consumers' satisfaction were 13% higher, while on the exYU mar-kets the average mark went up by 1%.

VLADAN STOJKOVICManaging Director

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REPORT2012

37

Founded: 2006 as a subsidiary of Metalac Jsc.Location: Gornji Milanovac, SerbiaActivity : Production of stainless steel sinks since 1996 Producion of composite cast polymeres since 2008 Production of granite sinks since 2010Market: Serbia and ex Yugoslavian republics2008 turnover: 2,1 million euroNumber of employees: 38

M E T A L A C I N K O




20122011

20122011

000 RSD

ЕUR

1.000.000

1.500.000

2.000.000

2.500.000

500.000

0

2.072.1051.797.062

50.000

100.000

150.000

200.000

250.000

300.000

0

230.847

87.211

-100.000

-50.000

0

50.000

100.000

-150.000

-200.000

-250.000-300.000

44.048

-177.431

50.000 50.0000 0100.000 100.000200.000 200.000250.000 250.000150.000 150.000

2011 56% 44%

2012 60% 40% 221.897 221.897

215.988 215.9882011 52% 48%

2012 2% 60% 38%


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REPORT2012

38

In 2012 Metalac Print made the total sales turnover of above 4 million euros, in other words 33% more than the year before. The most important growth factor is 20% increased exports of the biggest buyer – Metalac Posudje, for which Metalac Print makes packing material and decor transfers. The total sale of products and services to sister companies increased by 38%, so their share in the total turnover of our packing producer was 70%. The production of decor transfers increased about 50% with respect to 2011. Printing machine was working around the clock. It is also important to mention that the sales to external clients increased by 11%.

The year 2012 in Metalac Print was marked with modernization of equipment aimed to gain competitive advantages on the packing market. A two-colour slot-ter was set up beginning of the year as well as a gluing machine for transport car-tons, then the six-colour offset printing machine with UV lacquering was bought and first performances are expected in the first half of 2013. New upgrades of production are planned for 2013 and additional capacities for decor transfer pro-duction, and purchase of another line for screen printing. With such equipment Metalac Pring will double its production of transfers.

According to the opinion of Mladen Matović, director, these timely investments helped to finish the year with success. The total value of the ivenstments was over 500.000 euros. Without that it would not be possible to respond to an in-creasing demand of decor transfers from Metalac Posudje, and of packing mate-rial from external clients.

Modernized equipment, new slotter and gluing machine for transport packing material, new offset ma-chine for six-colour printing plus UV lacquer. 33% sales growth. 68% of total sales turnover made with sister companies. From 2013 double capacities for production of transfers.

INVESTMENTSBOOSTED THE SALES

MLADEN MATOVICManaging Director

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39

Founded: 2006. as a subsidiary of Metalac J.s.c. Location: Gornji Milanovac, SerbiaActivity : Production of carton packing materials since 1995 Production of decals since 2000 Market: Serbia 2012 turnover: 4 million euroNumber of employees: 72

M E T A L A C P R I N T




20122011

20122011

000 RSD

ЕUR

263.565

179.685

50.000

100.000

150.000

200.000

250.000

300.000

0

1.000.0001.500.0002.000.0002.500.0003.000.0003.500.000

4.000.0004.500.000

500.0000

4.053.878

3.046.436

100.000150.000200.000250.000300.000350.000

400.000450.000

50.0000

50.0000 100.000 200.000 250.000 300.000150.000

2011 77% 23%

2012 80% 20% 246.928 246.928

157.783 157.783

50.0000 100.000 200.000 250.000 300.000150.000

2011 23%

2012 20% 38% 42%

58%19%

397.106

265.557


MGM

REPORT2012

40

The TÜV SÜD team once said that we were far ahead from most of the companies by accessibility and exchange of information, and overall information management system. These facts make part of the strategic approach of our com-pany and the role of the IT sector is of great importance. Up-grades in this field never stop.

Today the Metalac Group has about 500 computer work stations with 4 junction points. The managemet of the com-puter based information system, software applications and hardware is upgraded in all aspects – design, development, implementation, support and service for end users.

In 2012 we had several IT projects, some of them should be mentioned. The company Metalac Metalurgija implemen-ted and started using the business software Upis.NET cov-ering the retail sales net in Vojvodina. Same software was implemented in the company Metalac Trade, while Metalac Proleter started automatic monitoring of the retail sales points also outside of Gornji Milanovac.

The new program UniDocs for document management was implemented to facilitate the work with documents, to have less printing and to provide easier archiving. In the first phase it covered the Development Section of Metalac Po-sudje. The system includes as well professional document scanners for A0 and A4 formats.

Moreover, we made a set-up and started instructing key users for a new version of the ERP platform – ERP LN – and for all production subsidiaries.

The hardware upgrade of the system was made to follow the needs of the mentioned software platform, and one part of the net infrastructure was replaced.

Following the software and hardware policy of the Metalac Group all users of the IS are provided with quick, reliable, continuous and safe access to the information of the business environment.

UPGRADE OF INFORMATION SYSTEM

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Parallel work on new web presentations, entering communication via social networks and precondition-ing for B2B and B2C interaction are simply premises for timely reaction to the existing and expected mar-ket challenges.

From 2012 we completely rely upon ourselves for creation of internet presentations. We made a team consisting of web designers, web programmer and content manager. As suggested by the team, Metalac passed to a unique CMS (Content Management System) platform for all future web presentations.

In 2012 the subsidiaries Metalac Bojler and Metalac Trade got their presentations at: www.metalacbojler.com and www.metalactrade.co.rs. The web site of the Metalac Group is under construction. After that the presentations of other subsidiaries will be redesigned. Also on April 4th 2013 Metalac Market started new web shop.

The first task of a special team of people from Metalac Mar-ket, IT and Marketing department and an external consult-ant is to create higher functionality of the existing internet shop at www.metalacmarket.com in order to increase sales and take better position on the internet market.

Parallel work on new web presentations, entering commu-nication via social networks and preconditioning for B2B and B2C interaction are simply premises for timely reaction to the existing and expected market challenges.

IT CHANNELS INTEGRATION IN THE VIRTUAL WORLD

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42

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43

Five trading subsidiaries in Serbia made the total sales turnover of 26,8 million euros, 31% of the sales achieved by the Metalac Group. The biggest share of 32% in the total sales turnover is from Metalac Market, that runs 47 shops. Right behind and both with 27% each come Metalac Metalurgija, that deals with the market in Vojvodina, and Metalac Proleter, that supplies the residents of Gornji Milanovac with consumer goods, through 40 shops. The last but not least is Metalac Trade, that acts as a whole seller for imported household items, with 11% of the total sales turnover of the trad-ing subsidiaries in Serbia. All these enterprises have similar share of 21 to 27% if we look at the margin. Finally, the company Metpor in Bel-grade with only 4 employees acts as an agent and intermediary in the contact with foreign markets.

Trading companies abroad made the total sales turnover of 13,9 million euros in 2012 - 39% growth compared to the previous year. Their share in the total sales turnover of the com-pany was almost 16%. All of them are dealing exclusively with Metalac products. Absolutely the biggest share in the total sales of foreign subsidiaries was that of Metrot, Moscow - 72%. Behind it are Metalac Market Podgorica with 16% share, then Promometal Zagreb with 6,5% and finally the youngest subsidiary in Kiev with 5%. The company in Milwaukee still gives mod-est results but the activities go on.

TRADING COMPANIES

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REPORT2012

44

In 2012. Metalac Market boosted its optimism with the fact that the consumers were back into Metalac shops and that the suppliers were willing to support planned actions of our retail chain. IS was implemen-ted for higher overall efficiency.

GROWTH GENERATED CONTRARY TO THE GENERAL TREND OF SALES

Despite rather hard conditions for retailers, Metalac Market made total sales turnover of 8,72 million euros in 2012, and exceeded the result of 2011 by 13%. The margin was almost 15% higher than in 2011.

The year was hard for all retailers and the result was obtained mostly due to var-ious actions and promotions in the first half of the year. The second half, though equally active, went by somewhat easier. During 2012 Metalac Market operated through 47 shops. Two non-profitable shops were closed and three new were opened. Having in mind the potential of big cities - Niš and Belgrade will get 4th shop in 2013.

Important result was obtained with household appliances, 29% higher than in 2011. Then the wide range of Metalac Trade items, under the trade name Sigma, with 20% growth in sales. As for Metalac products, only water heaters increased by 8%, while the sale of cookware went 3% below the result of 2011.

- Excellent cooperation with suppliers made all the activities for consumers pos-sible. It was clear that only in support of each other our achievements could be higher in such difficult conditions - commented Stojan Slovic, director of Metalac Market.

In 2012 we made a research on familiarity and perception of shops, as well as a Mystery shopper research, evaluating the set of elements referring to a shop, items positioning, knowledge and behaviour of vendors in 30 points of sale. Both researches are meant to give directions to Metalac Market for further activities in order to promote sales and identity of the shops.

STOJAN SLOVICManaging Director

MGM

REPORT2012

45

Founded 2006 Location: Gornji Milanovac, SerbiaActivity: retailer, with the chain of 47 shopsMarket: Serbia Turnover: 8,72 million eurosNumber of employees: 154

M E T A L A C M A R K E T




20122011

20122011

000 RSD

ЕUR

142.644

5.155

40.000

60.000

80.000

100.000

120.000

140.000

160.000

20.0000

8.716.972

7.724.096

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

0

-268.042

-220.003

-300.000

-250.000

-200.000

-150.000

-100.000

-50.000

0

-350.000-400.000

100.0000 200.000 400.000 500.000 600.000300.000

2011 55% 45%

2012 59% 41% 565.446 565.446

509.310 509.310

100.0000 200.000 400.000 500.000 600.000300.000

2011 10%

2012 11% 18% 71%

76%14%


MGM

REPORT2012

46

POSITIVE RESULTS, BUT NOT IN ACCORDANCE WITH THE PLAN

Metalac Metalurgija is a trading company, dealing with wholesale and retailing of the Metalac products and household appliances of different brand names. Metalurgija covers the market of Vojvodina. The year 2012 ended with sales turn-over level of 2011. i.e. almost 7,4 million euros. Though the margin was much lower than the year before, Metalurgija managed well the situation on Vojvodina market.

The sales made by 17 shops of Metalac Metalurgija was satisfactory, but so called "field sale" failed to achieve planned results. On the other hand, situation in wholesale was even more dramatic, mostly because of strong and not loyal competition, selling at dumping prices.

Managing director of Metalac Metalurgija Marko Sarenac considers the positive result at the end of the year as comforting, mostly due to maximum cost control. Good thing is that the shops were mostly redesigned, which helped the achieve-ment of the final result. In any case, share of retail sales in the total turnover is growing.

Investing into education of personnel, modernization of the shops and IS as well as obtaining more transport vehicles, are some of the objectives for better busi-ness in the coming period.

- The practice shows that in present market conditions we manage the sales in a most stable way through our shops. In 2013 we will, therefore, work more to for-tify our own retail channel, focusing on end users. After the Mystery shopper re-search in cooperation with the Marketing department, we started a new cycle of education on vending skills and product features in cooperation with suppliers. It is our wish and imperative to upgrade all aspects that could guarantee bigger success - said Sarenac.

Metalurgija is relying more and more on its own chain of shops, in order to achieve more efficient sales management and higher margins. Stronger cost control helped positive outcome.

MARKO SARENACGeneral Manager Metalac Metalurgija

MGM

REPORT2012

47

Founded: Since 2004 Metalac Jsc. is a majority owner. Active for 60 years under the name Agrovojvodina Metalurgija Location: Novi Sad, SerbiaActivity: wholesale and retailing of household items, with 17 shops in Vojvodina Market: Vojvodina, Serbia Turnover 2008: 7,36 milion eurosNumer of employees: 101

76.855

157.252

50.000

100.000

150.000

200.000

0

100.000 100.0000 200.000 200.000400.000 400.000500.000 500.000300.000 300.000

2011 88% 12%

2012 84% 16% 469.347 469.347

476.133 476.133

0

2011 45%

2012 45% 55%

48%7%

185.305203.273

50.000

100.000

150.000

200.000

250.000

0

7.360.9687.618.980

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

0

M E T A L U R G I J A

Т О Т A L I N C O M E



20122011

20122011

000 RSD

ЕUR


MGM

REPORT2012

48

Only 10 years ago it seemed that Proleter would vanish from the scene, and today it is one of the trademarks of Gornji Milanovac again, thanks to Metalac, which in 2003 became major owner and started a stressful process of financial consolidation and strategic restructure of this company.

During all that time, not a single part of Proleter was sold and no one was dis-missed. In ten years the company Metalac Proleter made progress in all its as-pects. As the busines is geting better and better every year, today there are 40 points of sale throughout the municipality of Gornji Milanovac, 13 of them in the city. Retail stores were redesigned and reequipped and the consumers remained loyal to their "shop around the corner", as it has been for decades. There are in to-tal 15.650 m2 of sales and warehouse space and about 6.000 items of consumer goods.

Cherishing the habits and emotions of the citizens of Gornji Milanovac, this retail chain has revitalized the identity of Proleter as the first grocery store in the mu-nicipality, founded back in 1946.

The very successful 2012 was not only a result of good sales, but utilization of internal reserves and very brave decisions to enter important investments to up-grade and widen the retail chain. The 40th shop in a row was opened in 2012 with over 3.000 items of consumer goods. The managing director of this compa-ny Slobodan Vukajlovic could not hide how satisfied he was with the outcome in such heavy day-to-day circumstances. He points out that in 2012 new people were employed so there are now 190 employees in total.

All was happening in absolutely unpredictable circumstances with constant fall of purchasing power, monopolistic behavior of certain suppliers, limited margin for basic foodstuffs that take 45% of the total sales ... In such situation Metalac Proleter has been converting threats into chances whole year and gaining its share of the market. The plans for 2013 are again rather ambitious.

Metalac Proleter in Gornji Milanovac marked the end of 2012 by opening a new shop, 40th in a row. In 2012 the total sales turnover was 7,37 million euros – 13% higher than in 2011. Five new shops were opened and 17 people employed.

GOODEXAMPLE OF A LOCAL GROCERY STORE

SLOBODAN VUKAJLOVICGeneral Manager Metalac Proleter

MGM

REPORT2012

49

Founded : Since 2003 Metalca Јsc. is a majority owner. Active for 67 years, trading with consumer goods and supplying the residents of Gornji MilanovacLocality: Gornji Milanovac, SerbiaActivity: Wholesale and retailing of consumer goods Market: Gornji Milanovac municipality 2008 turnover: 7,37 eurosNumber of employees: 190

100.0000 200.000 400.000 500.000300.000

80% 20%

80% 457.789 457.789

436.410 436.410

20%

100.000 200.000 400.000 500.000300.0000

46%

44% 13% 44%

39%15%

-122.854

95.644

-50.000

0

50.000

100.000

150.000

-100.000

-150.000

7.370.761

6.515.922

2.000.000

3.000.000

4.000.000

5.000.000

6.000.000

7.000.000

8.000.000

1.000.0000

50.000

100.000

150.000

200.000

250.000

300.000

0

265.465

109.888

M E T A L A C P R O L E T E R




20122011

20122011

000 RSD

ЕUR


MGM

REPORT2012

50

With the factors that generally made things difficult in the local market, due to the fall of purchasing power and insolvency of certain clients, Metalac Trade was facing constant increase of purchase price of goods, dramatic cost in-crease for sea transport, dollar exchange rate fluctuations, long delivery time... In any case, the year has passed in efforts to balance the input increase and impossibility to rise sales prices.

In such circumstances, Metalac Trade results were like the year before as the total sales amounted to 3 million euros. But due to the unvafourable factors of supply and conditions of the local market, the margin was somewhat lower than in 2011.

The director of the company Dragan Tomic is pretty sure that such negative circumstances are not likely to repeat in 2013, when this company plans to achieve the growth of 5%.

Two thirds of Metalac Trade sales income is made in the local market, while the rest comes from ex Yu markets. About 1700 items for household under the trade name Sigma are present in almost all sales channels, and in 2012 the sales through 64 Metalac shops were improved.

Trying to be evenly present in all distribution channels and to cherish good partnerships with small retailers, Metalac Trade with various activities has de-veloped its portfolio of clients with good and continuous communication at many levels.

With numerous limiting factors affecting importers, Metalac Trade ended the year with symbolic growth compared to 2011. Despite the strong competition, the trade name Sigma is recognized for the quality and wide range of items.

BUSINESS OPTIMIZATIONCURE FOR DISBALANCE

DRAGAN TOMICManaging Director

MGM

REPORT2012

51

Founded: 2003 Location: Gornji Milanovac, SerbiaActivity: wholesale of imported household itemsMarket: Serbia and ex Yugoslav republics2012 turnover: 2,95 million eurosNumber of employees: 25

M E T A L A C T R A D E




20122011

20122011

000 RSD

ЕUR

484.722521.915

150.000

300.000

450.000

600.000

0

583.339

743.533

200.000

400.000

600.000

800.000

1.000.000

0

3.063.0182.953.909

1.000.000

2.000.000

3.000.000

4.000.000

0

2011 60% 40%

2012 59% 41% 292.662 292.662

259.871 259.8712011 70%

2012 68% 12%20%

10%20%

50.000 50.0000 0100.000 100.000200.000 200.000250.000 250.000300.000 300.000150.000 150.000


MGM

REPORT2012

52

In 2012 Metrot became the biggest importer of enamel cookware in Russian Federation. Continuous growth from the stressful 2008 culminated with over achievement of almost 45% compared to 2011.

THE BEST YEAR OF METROT IN RUSSIA

- This is the best results since we founded the company in Moscow. We are the biggest importer and we have the best offer of enamel cookware in the "medium-plus category" segment. Decisive were our dynamism, flexibility to fully adapt to the needs of the highly sophisticated market; the sales pol-icy that had great impact on the quality and durability of our relations with the partners, and of course, wide assortment - as shortly commented by Milan Vujovic, director of the Metrot.

In 2012 Metrot made the total sales of almost 10 million euros, which is 45% more than in 2011, while the margin increased by 56%. Following demands that came from Metrot, there were 18 new decorations, 8 of which were placed on the market and 800.000 cookware units were delivered in 2012. Records say that almost 120 trailers with goods from Metalac went to Russia during that year.

For 2013 Vujovic expects high inflation and currency pressure, and oscilla-tions on the market of consumer goods, with contemporary growth and development of the market. Such premises made base to plan at least 5% increase of physical volume of sale, to prepare new communication with consumers through new decorations and new accessories on the products.

The Metrot also bought one more truck of 115 m3 for more efficient distri-bution of the goods and therefore higher overall competitiveness.

And finally the brand name Metrot with the message ”From Serbia with love” is perceived as the best enamel cookware from Europe. Our company continuously makes research and analysis of consumers' habits and percep-tion, and thus preparing new collections and decorations, which, beside quality, happen to be one of the most important competitive advantages on the Russian cookware market, where you can find both local products and foreign brands.

Asked "What are the previsions for the second half of the year?"Milan Vujovic explicitly responded back in July: "All is clear, we will be the best in offering enamel cookware in the "medium-plus category" segment and the biggest importer of enamel cookware in Russia."

MILAN VUJOVICManaging Director

MGM

REPORT2012

53

Founded: 2001. Locality: Moscow, RussiaActivity: Wholesale of Metalac products Market: Russia 2012 turnover 10 million euroEmployees: 31

M E T R O T




20122011

20122011

EUR

ЕUR

9.985.982

6.877.754

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

0

1.562.030

751.463

400.000600.000800.000

1.000.0001.200.0001.400.000

1.600.0001.800.000

200.0000

1.291.400

697.930

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

200.000

0

2011 90% 10%

2012 91% 9% 2.703.929 2.703.929

2.001.746 2.001.7462011 36%

2012 45%

500.000 500.0000 01.000.000 1.000.0002.000.000 2.000.0002.500.000 2.500.0003.000.000 3.000.0001.500.000 1.500.000

55%

64%

Moscow: Cookware under the brand name ”Metrot” and with the message ”From Serbia with love” has been present in Russia for more than ten years.


MGM

REPORT2012

54

Founded: 2001. Locality: Kiev, UkraineActivity: Wholesale of Metalac products Market: Ukraine 2012 turnover 700.000 eurosEmployees: 7

Presence on the shelves of big international and local trading chains and the sales of 700.000 euros during the first year of business, announce a serious growth in the years to come.

BRILLIANT START OF METALAC IN KIEV

M E T A L A C U K R A I N E




20122011

20122011

EUR

ЕUR

76.650

2.417

20.00030.00040.00050.00060.00070.000

80.00090.000

10.0000

91.226

-6.782

10.000

30.000

50.000

70.000

90.000

110.000

-10.000

695.094

164.070200.000

300.000

400.000

500.000

600.000

700.000

800.000

100.0000

100.000 100.0000 0200.000 200.000400.000 400.000300.000 300.000

2011 201172% 29%28% 71%

2012 201272% 29%28% 71%345.525 345.525

137.005 137.005

In 2011 when Metalac Ukraine as the youngest Metalac subsidiary was founded, first serious sales were made only during the last quarter of the year, but the 2012 is to be considered as a real start of the activity on this market with the popula-tion of 45 million.

In 2012, mostly selling the cookware of the Metrot brand name, Metalac Ukraine made the total sales of 700.000 euros, with 13% over achievement, but with rel-ative growth of 320% - being the first whole year of the activity. The satisfaction is great having in mind all the difficulties of this specific market: frequent and important oscillations of currency exchange rate as well as frequent changes in local regulations, then strong competition.

There are, namely, three local enamel cookware producers in the Ukraine and they keep the leading position, and there is also competition from Russia and Turkey. Deciding to take a regional approach, our company already deals with fifteen clients that have great potential, and our products are on the shelves of the big retail chains in a higher price category.

- The most important fact is that our products are available to end users on the shelves of big international and national retailers as Auchan, Real, MegaMarket, Nova Liniya, Velika Kishenya, Kray, Silpo ... We even made first export for a client in Georgea - said Vladimir Ponjavić, dir-ector of the Metalac company in Kiev, satisfied with the first year of activity.

For the third time also this year the Metalac products were presented at the Prymus Ambiente show in Kiev specialized for cookware. New contacts and part-nerships were made. The plan is to introduce new decorations, to develop new ones with themes from Ukraine, and to offer other products of Metalac factories.

VLADIMIR PONJAVICManaging Director


MGM

REPORT2012

55

Founded: 2006 Locality: Zagreb, CroatiaActivity: wholesale of Metalac productsMarket: Croatia2012 turnover: 900.000 euroNumber of employees 8

It was hard during all four quarters; at the end of the year the sales figures were below the plan, but similar to 2011 achievements. Optimism derives, however, from the fact that portfolio of clients has increased and still includes big chains; also, investments were made in logistics and information system.

ZAGREBCOMPANY BELOW THE PLAN

P R O M O M E T A L




20122011

20122011

EUR

ЕUR

-9.546

-185.064-200.000

-150.000

-100.000

-50.000

0928.349 902.306

200.000

400.000

600.000

800.000

1.000.000

0

87.199

76.841

20.000

40.000

60.000

80.000

100.000

0

2011 80% 20%

2012 65% 35% 712.274 712.274

877.144 877.1442011 17%

2012

200.000 200.0000 0400.000 400.000800.000 800.0001.000.000 1.000.000600.000 600.000

100%

83%

With the total sales of 900.000 euros, Promometal achievement was at 2011 level. Main factors that affected such underachievement of this Metalac subsidiary in Zagreb were a lower demand, the VAT rate in Croatia rised to 25%, the fact that many businesses ceased their activity and general call for saving.

On the other hand, the director of the company in Zagreb Aleksandra Jelić is op-timistic, due to the fact that Promometal kept its share in the big chain stores and further built up the portfolio of clients. Very worth mentioning are the new buyers of kitchen sinks that made important purchases this year, significantly higher than in 2011 when the company intensified placement of this product in the first place.

Moreover, Promometal managed to cut the operational costs, do the IS upgrade and buy another truck for goods distribution. Considering that also the compet-ition is facing big problems and only the strongest players will survive, we could expect from Promometal to obtain better market position, being supported by the strength of the Metalac Group.

ALEKSANDAR JELICManaging Director


MGM

REPORT2012

56

Even though there was no much reason for optimism at the beginning of 2012, Metalac Market Podgorica made the total sales of 2,2 million euros, which was 18% more than in 2011. Both retailing and wholesale had better results.

- All the efforts made during this year and the year before paid off and for the first time since the company in Podgor-ica was founded, our sales went over two million euros. We are pleased to have covered the whole market. We are present in all bigger trades and we have opened one more shop - estimate the director Čedomir Ralević and the com-mercial manager Sanja Dašić.

Metalac Market Podgorica actually has six shops by the same name and with 40% share in the total sale, plus they boost the position of the Metalac brand on this market. The standard was rised with opening of the new shop in Podgorica in October 2012. The luxury concept of this shop was thought to comply with the purchasing power of the people gravitating in that part of the town.

However, the picture is not so nice because of the growing insolvency of the economy and impossibility to have timely insight in solvency of companies. Also, the predictions are that the world crisis is going to last. All these facts are wor-rying us because the market is small and practically there is no industry, everything is about trading and a three-month tourist season. The cookware share in our total turnover has decreased, due to the strong competition, but the sale of sinks, water heaters and Metalac Trade offer has grown.

For the first time the sales of this company went over two million euros. An exclusive shop was opened last October and has been doing very well.

PLANNED FIGURES REACHED IN NOVEMBER

At the opening of the new store in Podgorica: Tamara Djurovic - commercial director of Metalac Posudje, Mari-ja Veselinovic - head of imports and export of Metalac Trade and Sanja Dasic - commercial director of Metalac Market Podgorica.

MGM

REPORT2012

57

Founded 2006. Locality: Podgorica, MontenegroActivity: retail and wholesale of Metalac products Market: Crna Gora2012 turnover: 2,2 million euroBroj radnika: 29

M E T A L A C M A R K E T P O D G O R I C A




20122011

20122011

EUR

ЕUR

64.243

15.23120.000

30.000

40.000

50.000

60.000

70.000

10.000

0

73.920

23.45320.000

30.000

40.000

50.000

60.000

70.000

80.000

10.0000

1.860.7302.187.741

500.000

1.000.000

1.500.000

2.000.000

2.500.000

0

2011 66% 34%

2012 71% 29% 1.076.034 1.076.034

825.667 825.6672011 22%

2012 22%

200.000 200.0000 0400.000 400.000800.000 800.0001.000.000 1.000.0001.200.000 1.200.000600.000 600.000

78%

78%


MGM

REPORT2012

58

SUPPORTINGALL THE SUBSIDIARIES AND THE COMMON GOALS

At the level of general and joint functions the Metalac Group has integrated all the activities that contribute to more efficient operations and cost optimization, as well as centralized management of significant aspects of develop-ment of all its subsidiaries and of the company as a whole: human resources, market research and analysis, corporate brand management and management of product and ser-vice brands, social accountability, system of quality and en-vironmental protection, development and implementation of informational technologies, finances and accounting, lo-gistics, health and safety of employees, etc.

In the Metalac business centre in Gornji Milanovac, respect-ing the formation, a day-to day immediate communica-tion of the executive directors, directors of the subsidiaries and sector managers is seen as big quality. Such business culture is transferred also to lower levels of management providing efficient reaction to swift changes in the environ-ment with coordinated persue of the strategic directions of the Company.

BILJANA CVETICDirector of HR and legal affairs deprtment

DUSAN LAZICDirector of development, organization and QMS/EMS department

NADICA VUJIC MITROVICDirector of Marketing department

DRAGAN ZIVANOVICDirector of IT department

RADMILA TRIFUNOVICDirector of Accounting, financeand taxes department

JOVICA ZDRAVKOVICDirector of Security department

MILAN NOVAKOVICDirector of logistics department

MGM

REPORT2012

59

Basic strategy of Metalac Group is sustainable development of the company with balanced ac-complishment of economic, social and ecology missions. All strategic documents such as the Code of Business Ethics, Code of Corporate Governance, Metalac Holding Development Strategy, Found-ation Act of Metalac Fund, the QMS/EMS acts, ex-pressly contain these elements. In the Company's day-to-day life this formal framework coincides with the specific corporate culture, the system of values and behavior formula, as well as the image that Metalac brand has in public.

SOCIAL RESPONSABILITY CREATES HEALTHY COMPANIES

Both theoreticians and practitioners agree that one of the reasons for the world crisis was absence of socially respons-ible behaviour and business conducting. Such painful ex-perience and vivid examples of downfall of the "big" have shown that financial reports are not sufficient proves of suc-cess anymore, that with socially responsible companies the risk level is lower while motivation of employees is higher, and therefore produce healthy and reliable environment.

The company Metalac allocates 10-20% of the profit for projects in the fields of ecology, education of employees, birthrate boost and development of sports in Gornji Mil-anovac... Roughly, each of about 1700 employees gives 20 to 30 euros a month for the projects that for Metalac have won the name of a nationally responsible and one of the healthiest Serbian companies. In circumstances of the crisis Metalac responsibility is even more respectable, having in mind that the agreement was made with the workers to share the burden of the crisis and no one would be fired.

All the values of corporate socially responsible behaviour are actually working in favor of the primary business lo-gics. Social responsibility does not a priori mean giving, but balancing of various aspects that bring higher profit and augment company's value. Business ethics and transpar-ency, care for people and for the community, protection of human rights, product and service liability, environmental protection, strengthen corporate reputation and relations with inside and outside users and shareholders.

MGM

REPORT2012

60

Considering all Metalac made great success and as a big compliment got awards even three times for socially responsible business conduct, such as 2008 National CSR award. Today affirmations of Metalac achievements show how a set of values, activities and behaviour, economic, social and ecology objectives can be success-fully integrated. This trinity is however integrated into strategic plans and all stra-tegic documents of the Metalac.

When its said in bourse terms that Metalac is one of the healthiest Serbian com-panies, if the word "morality" or the metaphor "Patriot of 21st century" is used as a synonym for Metalac success, if the simple word "trustworthy" can sum opinions of employees about their company, and the president of the company is recognized as "Virtue laureate for for special contributions to the preservation of the Serbian economy in a socially accountable and morally credible way" ... the background is always in balanced achievement of the three mentioned objectives.

Beside business results that brought benefits to the shareholders and employees, it is important to mention that during the fourth year of the economic crisis there were no employees fired, and all the activities to improve quality management system and ecology system, as well as the activities of the Metalac Fund have con-tinued.

THREE RECOGNITIONS FOR ARTISTIC BALANCE OF HIGHER CAUSES

For 25 years Metalac has been showing methodically, systematically, continuously and measurably that the health of employers, protection of consumers, ecology and sustainable development are not only a commitment, but the way of thinking. Metalac have chosen to integrate quality management and ecology management systems, so today over 50 parameters significant for the sustainable development are measured and rationalized.

At the beginning of 2008 Metalac subscribed to the UNIDO project managed by the National Centre for Cleaner Production in cooperation with the Belgrade Fac-ulty of Metallurgy and Technology. The most important aspects are rational use of electrical energy, raw materials and water, reducing enamel waste and con-sequently reducing costs of waste treatment, better work conditions and motiva-tion of employees to integrate into the process.

Overall and automatic process of treatment of waste waters from Metalac pro-duction for the town of Gornji Milanovac means high quality of drained water and safer and better functioning of the communal depurator. Moreover, production of products that could be recycled shows social responsibility of Metalac in the field of ecology. In Metalac special care is taken in provision of raw materials, trying to use mostly natural materials in the production process and to replace old types of raw materials with those containing less hazardous materials.

FRIENDS OF SUSTAINABLE DEVELOPMENT

TRUST IS AN AXIOMThe name Metalac is always connected with socially responsible and moral beha-viour. Metalac is aware of its impact to the community, from benefits that come out and the overall business results, new job positions, fair and secure work conditions, activities directed to environment protection, to the attention paid to social prob-lems, cultural, sports and other needs of the community in which the company exists and operates.

To improve economic efficiency, to make the Company and its competitive advant-ages grow and develop, to earn even more trust, to protect interests of consumers, business partners, shareholders, investors and of the community better - it is clearly emphasized in the Codes of Corporate Governance and of the Business Ethics. These two documents are considered as a must for the management, obliging all the workers of Metalac, and very important for mutual understanding and devel-opment of long term quality relations with all interested parties.

MGM

REPORT2012

61

In 2009 the scorecard team of the Serbian Chamber of Commerce, Belgrade Ex-change and IFC, made an analysis on practices of corporate governance of the company Metalac, upon request of the company itself. The report they delivered showed that the total score of compliance with all the relevant parameters accord-ing to the scorecard was 74,13% which ranked Metalac Group as a company with highly respectable practice of corporate governance. The scorecard team focused on the relevant parameters such as dedication to the principles of corporate gov-ernance, shareholders and their assembly, management board, executive bodies of the company and the company secretary, monitoring activities, control and ex-ternal auditing, transparency and publicity.

GOOD PRACTICES OF CORPORATE

GOVERNANCE

Metalac workers and specialists are highly respected in the business environment because they are developing in a system with deeply rooted values where work, order and discipline are understood and entrepreneurship, honesty and loyalty are highly appreciated. Moreover, Metalac has a consistent team of managers with high ethic principles, as governing example for young people.

Knowledge has become a key resource of development. Its strategic abilities and adaptability to changes Metalac has been upgrading with day-to-day education and instruction in all relevant fields. This practice of constant education is at all levels of production and business process.

THE PEOPLE AND THE COMPANY

LOOK A LIKE

A long term dedication to social issues was brought to a higher level in organiza-tion and management, with foundation of the Metalac Fund in 2006. The Fund was established for „humanitarian and other social purposes, contributions and help in scientific, cultural, artistic fields as well as for sports, and for all other activities of strategic, progressive and social interests“.

Due to devastating statistics on birth rates in Serbia, community of Gornji Milan-ovac and the Company itself, first funds of the Fund were given for the campaign „Children – Our Joy and Future“ stimulating young people to start families. Bene-volence and support which the company offers to the people who want to start or expand families, gives also the sense of security to young people, and that is not a frequent example in the Serbian industry.

VALUABLE ONLY IF OF COMMON BENEFIT

Not even the years of world economic crisis made our company question its beliefs that promotion of sports and education of the youth should be nourished, because young people and their competitive spirit and enthusiasm are the future.

Such consistency expressed with high figures and deep socially responsible philo-sophy, has kept over 600 sports women and men, ages from eight to seniors, gathered in seven clubs within the „Metalac“ Sports Society. Almost 70% of their needs is financed by the Company, which in 2012 for the 50th anniversary of the FK Metalac has built a football stadium in Gornji Milanovac by international standards.

FOR HEALTHY AND SPORTY

YOUTH

The message „Divide to multiply“ and the motto of the corporate jubilee „You can count on us“ express the deepest beliefs of Metalac that there could be prosper-ity only for a company that keeps human features regardless all the imperatives of market struggle, one that is apt and willing to recognize and share certain values with its environment. The important aspect is making profit and growing in a way to make the company proud and benefit recognized. The corporate reputation of Metalac is in fact an expression of well integrated business strategy, corporate cul-ture, ethics and socially responsible behaviour, and all that qualifies for the highest league of companies.

DIVIDE TO MULTIPLY

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Guided by the vision to satisfy completely all requests of our customers and other interested parties, the key to our continuous success is the quality of the product we put on the market, always following the principles of sustainable development.Complying aims of our quality policy and environmental protection policy are:

QUALITY AND ENVIRONMENTAL PROTECTION POLICY

• process and product risk assessment and control from project phase to disposal of products upon ceased use;• reliable and consistent fabrication of products and services;• optimize energy and other natural resources consumption, reduce harmful waste, reduce use of dangerous materials including management of waste collection, classification, dis-posal and of secondary raw materials;• constant process improvement and investing in desings and technologies;• to develop long term partnerships with our clients, consumers and suppliers;• constant education and instruction of all employees and others that work on behalf of the company including counceling service for buyers and consumers;• responding to law requirements and regulations applicable to the products, environment and other segments of the business;• provide internal and external communication with employees and all interested parties,• business costs optimization, and• with our work, quality and profit to provide dividents for shareholders, to increase the capital, and provide protection and higher standard for the employees, to help the society in needs and activities acting as a good neighbor.

It is a responsability of each and every manager in all segments of the Company to follow and improve the quality system. All employees are responsible to perform the undertaken liabilities through the ecology man-agement system, according to their best knowledge, according to the system documentation and providing feed-back. No product and no working act of any affiliate or person, shall spoil with its quality the image of Metalac ad on the market and in the environment.

As we carry out this quality policy we will achieve the objective – higher competitiveness, higher perform-ances in environmental protection, we will produce high quality products with recognized brands which will differ us from competition on the world market, and we will be leaders and name of utmost confidence on the local market.

Petrasin Јakovljevic,Managing Director

2013-02-28Gornji Milanovac

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In June the external assessment team of the TÜV SÜD Ser-bia carried out the fifth audit for ISO 9001:2008 certifica-tion and the third audit for ISO 14001:2004 which have shown full respect of rules and principles of quality man-agement by Metalac.

Bosko Gavovic, director of the TÜV SÜD Serbia handed the extended certificates to the managing director of the Metalac Petrasin Jakovljevic and to the managers of daughter companies Metalac Bojler, Metalac Inko, Meta-lac Posudje, Metalac Print.

- Considering that we are operating in a very difficult branch of industry with low profitability, Metalac is sure-ly one of the most successful companies. What favored our overall success in all these years was that we timely understood how our cycles and processes needed to be managed by world valid standards.

Twenty years ago we already started thinking about that and getting prepared, so in 1994 we were among the first to get the local certificate and then also the international certificate in 1995 – said the Managing Director of Meta-lac pleased with the fact that improvements in this field were proven by the last audit.

During the June audit the external assessment team of the TÜV SÜD Serbia found out that the QMS/EMS im-provements were notable in all the business segments, human resources showed surprisingly high level of the system implementation, as well as information accessibil-ity, availability, efficiency of exchange and management. All these factors characterize Metalac as outstanding if compared to most other companies. The findings also showed different upgrade level between the segments in different daughter companies and therefore general suggestion would be a maximum exchange of positive experiences within the company.

- It is an honor to visit again the company that traditionally cherishes quality and the environment. Such approach favors competitiveness and serves as a mean to fight for better results, which for Metalac is con-sistent even in hard times like we are going through now – said Bosko Gavovic, director of the TÜV SÜD Serbia presenting the certificates to the Metalac Group and daughter companies Metalac Bojler, Metalac Inko, Metalac Posudje, Metalac Print.

RESERTIFICATION FULLY DESERVED

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By the national goals – the Plan for reduction of the packing waste for the period 2010 – 2014, the goal of reduction through secondary usage and the recycling process was 16% in 2012.

As Metalac obligations of packing waste management were transferred to the operator Sekopak doo, during 2012 they provided of 26,225,15 tons of packing waste for recycling, it is to say 17,4% and the goal for 2012 was there-fore achieved.

PACKING WASTE MANAGEMENT

"GREEN POINT" ON THE PACKINGS OF METALAC PRODUCTS

Following the Brussels Pro-Europe regulations, the packing of products from five Metalac subsidiaries wears the "Green Point", meaning that the fee has been paid to the national operator of the packing waste management system .

REPORT ON PACKING MATERIAL PUT INTO CIRCULATION ON THE MARKET OF SERBIA IN 2012

Metalac Bojler Metalac Inko Metalac Posudje Metalac Print Меtalac Trade TOTALPaper/carton 78.909 6.305 167.942 0.022 71.047 324.225Plastics 17.132 1.366 8.857 2.835 0.000 30.190Metal 3.407 0.000 1.889 0.227 0.000 5.523Wood 0.000 1.181 86.362 22.798 14.975 125.316

TOTAL 99.448 8.852 265.050 25.882 86.022 485.254

R

Having previously signed the contracts for transfer of ob-ligations of packing waste management to the operator „Sekopak“, Belgrade, five Metalac subsidiaries made con-tracts on use of the "Green Point" mark ( Der Grüne Punkt- DSD AG - registration nubers 585 714, 585 713, 653 450 i 653 449 ). These are: Metalac Posudje, Metalac Bojler, Metalac Print, Metalac Inko and Metalac Trade.

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Following the legislative regulations the Workers Health Care Institute Novi Sad carried out measuring of hazardous and dangerous substances' emission at the end of March 2012.

After measuring the emitters in the production plants and buildings of Metalac in Gornji Milanovac, and upon comparison of the measured values to the prescribed limit values, and evaluating position of the plants with respect to habitation areas, the conclusion was that the emission of hazardous and dangerous substances from the exhausts DID NOT EXCEED the limit values, and there-fore the Metalac production plants DID NOT ENDANGER the environment by their activity.

100 TONS OF HAZARDOUS WASTE

DISPOSEDPERMANENTLY

EMISSION OF HAZARDOUS AND DANGEROUS SUBSTANCES DOES NOT EXCEED THE LIMIT VALUES

In compliance with the Law on Waste Management, Metalac Posudje Ltd. stipulated a contract on enamel (hazardous) waste takeover, transport and disposal with the company Modekolo Ltd. from Belgrade.During October Metalac Posudje Ltd. in that way dis-posed 101,034 tons of hazardous waste at the cost of 4.618.584 RSD.

20

10

1.500

10

0

0

0

40

30

3.000

20

%

m3

%

30,46

2010. 2011. 2012.

2010. 2011. 2012.

2010. 2011. 2012.

2.845

18,0

29,43

2.395

16,8

28,97

1.951

16,8

Consumption of water

Quantity of waste enamel

Quantity of waste sheet metal

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HR

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OUR GUIDING PRINCIPLES AND RULES

HUMAN RESOURCES ARE THE GREATEST POWER OF METALAC

All employees of Metalac Group operate on values and principles integrated in professional standards and professional rules with ethical norms. In the last 20 years, despite the erosion of a range of values in a broader environment, Metalac unreservedly insisted on the principle that in business, as well as in life, only a fair relationship and accountable behavior may result in mutual trust and respect within the com-pany and in relation to partners and end users.

This is why we are happy and proud to include all the principles we have insisted on in Code of ethics, whether it relates to unwritten but immanent behavior of the Metalac employees, or a part of stipulated standards, policies, rules and behavior.

What Metalac expects from employees is:

Commitment to workOrientation towards customers and permanent growth Orientation towards goalsImpartial and correct relation within the company and with business partnersOpenness in communicationPermanent promotion of knowledge and skillsOrientation towards team work

What Metalac implies is: Working discipline and personal responsibility for the quality of the work doneUndisputed company property Observance of all quality and environmental protection standards Observance of work-related proceduresObservance of laws and regulations, decisions and orders issued by superiorsObservance of provisions from business agreements Observance of business etiquette Democracy in decision-making, dictatorship in implementationTreating employees with respect and in line with principles and protection of human rights

What Metalac especially values is:

Loyalty to the CompanyPermanent improvement and creativityInnovativenessBusiness decisiveness and enterprising spiritPersonal and business integrity of the employee

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The Metalac Group has 1.700 employees, 170 with university degree. In the hierarchy of human resources which are decisive for Metalac business activities, the employees absolutely come first. Following such system of values and, of course, company based agreements, Metalac Fund resolutions... the Company in many ways expresses its responsability and dedication to the people it employs.

EMPLOYEES COME FIRST

• Average salary of the employees is always above the national average, and much higher than the average of the industry branch. For over 20 years the paycheck arrives at 10 o’clock on 20th of the month, not later, only earlier if 20th is a weekend.

• Guarantee that salaries are adjusted to the living costs index plus real growth as by the business results and gross national product growth.

• Premiums for all workers and managerial staff

• Employees’ children which are regular students at university receive Metalac scholarships

• Christmas presents for all employees’ children up to the age of 8

• Each employee for a newborn in the family gets a greeting check of 500 to 4.000 euro from the Metalac Fund, amount depends on which in a row the child is.

• Medical assistance and a dentist are at disposal to each employee within the Company’s medical unit.

• Solidarity and financial aid to employees in case of death of a family member or parent.

• Solidarity aid to families in case of death of an employee.

• Solidarity aid to employees in case of a natural disaster.

• Aid to employees from the Employees’ Prevention and Recreational Vacation Fund

• Scholarships for regular education of children of dead employees.

• Conditions for continuous improvement and education

• Additional voluntary pension fund for 270 employees

• Additional insurance for 36 managers

• Right to anniversary awards

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A long term practice of Metalac to organize educational courses and trainings for the personnel has been one of the most powerful means to face all strategical and every-day problem. During two and a half decades Metalac has been continuously planning and investing into human resources. The list of regular and temporary associates in-cludes famous lecturers of the Adizes Institute in Serbia, Bled School of Management, Mokra Gora School of Man-agement, MNG Centre... Special accent is on the coopera-tion with Belgrade and Kragujevac Universities. Moreover, the Company regularly provides additional education or information to the employees at various specialized sem-inars and conferences.

The internal courses for the employees cover the subjects like: implementation of the integrated QMS/EMS, safety and health at work for employees with higher risk job pos-itions; instruction of the people working in the Accounting Financial and Taxation Sector and in the HR and Legislation Sector... In 2012 around 100 employees attended the planned courses, seminars and management programs apart from regular internal courses.

The importance that is given to the personnel policy – in selecting, educating and upgrading experts’ knowledges, especially of those who hold leading positions in the company – comes from the axiom that people are irreplaceable resource of a company. For 25 years the Metalac has had in-house development of managerial staff which is of great strategic importance.

EDUCATION AT ALL LEVELS

COURSES INSTITUTION ATTENDERS

English/Italian/German Language The house of wordsGornji Milanovac 16

SEMINARS

Arts of Negotiation Mokra Gora school of menagement 26Arts of Presentation Mokra Gora school of menagement 24

Finances for Non-financialists Mokra Gora school of menagement 25

MANAGEMENT PROGRAMSSerbian Mangement Program Mokra Gora school of menagement 2

INDIVIDUAL TRAININGSAccounting practices, subject: Annual financial

reports and taxationTatic, editor in chief of „Racunovod-

stvena praksa“ magazine 2Implementation of the new Litigation law MNG center, Belgrade 3

Stress and Burn-up Sindrom MNG center, Belgrade 1 Fire protection training and exam for employ-

ees of the work safety department1

2012.

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The HR Department follows the careers of the highly educated employees. From the first day at work, through annual evaluation of work performances and creation of HR files.

CAREER MANAGEMENT

Beside the selection system at acceptance of new employ-ees as a complex task, the HR Department once a year makes evaluation report on work performances includ-ing overall work action and behaviour of employees who spend more than a half of the evaluation period at work .

So apart from being evaluated by their immediate super-ior officers, the employees with high education have a self-evaluation reporting.

The superior officer, after evaluation, makes a feedback in-terview which is the main goal of the evaluation process. The purpose of such feedback interview is to compare the two sides (at self-evaluation), explain one's opinion and votes, give constructive and open remarks on what is good, what should be kept and what should be modified.

Career management helps to get higher flow at internal level, sufficient number of employees that could be pro-moted, faster and more efficient replacement of employees that are about to leave, better re-distribution of people – right person at right place and right time. Beside that, the Company has more ways to stimulate people and provide better professional development for them, and thanks to that people become more successful at work.

HR file of an employee includes general information on qualification and skills, data obtained by testing hers or his personality, learning styles and team roles, etc; annual eval-uation of work performances and individual development plan with goals to be reached.

It is therefore an objective data base indispensable for man-agement of employees' professional development.

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The Metalac Group consists of Metalac Jsc. as a con-trolling company and 14 subsidiaries, two of them be-ing share companies where Metalac holds the majority share, while others are with limited responsibility and 100% owned by the Metalac. On December 31st 2012. Metalac Group had 1.702 em-ployees, 9% more than in 2011.

9% MORE EMPLOYEES

Promotion of gender equality is a continuous practice in the Metalac company, as reported to the Gender Equal-ity Directorate.

All jobs in the Company are equally available to women and men. Work conditions are the same and privileges depend only on someone's work results. Due to spe-cific production in certain subsidiaries men are much more present, while the situation is quite opposite in two trading subsidiaries that act as retailers with many points of sale.

There is a good work atmosphere where both women and men could feel equal, that care is taken of their rights and dignity, considering also their differences and needs, that there are conditions to coordinate private and professional life. The Metalac affirmation of it is vis-ible in many aspects like stimulating employees to start families, with financial support and secured job position after a maternity leave.

Lower managerial positions and metalworking jobs are 60% taken by men. From 143 managerial positions wo-men take 50 i.e. 35%; if we look at the mother company Metalac ad, from 7 managerial positions 4 are taken by women.

In 2012 the employees with age average of 39,6 are 3 years younger than a decade before. From 1.700 employees 54% are under the age of 40. The age category 30-40 is the most numerous with around 500 people. Women make 45% of all the employees in all 14 companies.

EQUALIN GENDER

COMPANYES NO. OF EMPLOYEES2011. 2012.

Metalac Jsc. 174 177Metalac Posudje 711 788Metalac Print 66 72Metalac Inko 38 38Metalac Bojler 75 78Metalac Market 146 154Metalac Trade 25 25Metpor 8 4Metalac Metalurgija 98 101Metalac Proleter 171 190Metrot 30 31Promo-metal 7 8Metalac Market Podgorica 22 29Metalac Ukraina 5 7

TOTAL 1576 1702

Age -20 21-30 31-40 41-50 51-60 60+ TOTAL %

Men 45 225 250 208 195 17 940 55

Women 5 151 243 213 149 1 762 45

Total 50 376 493 421 344 18 1702 100

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TRADE UNIONS No. of employees

% of the total

number

Autonomous T.U. 1.053 62%

Independent T.U. 258 15%Total members 1.311 77% Total employees 1.702 100%

By end 2012 there were 126 i.e. 9% employees more in the Metalac group than in 2011. Due to increased volume of work in production sections, the number of employees with III and IV degree of education increased by 13%.Over 10% of the employees in Metalac Jsc. and daughter companies are with university degree, mostly in economy and mechanical engineering, then electronics, chemical engineering, IT and law.

There were 266 new employees within Metalac Group in 2012 - 14% more compared to 2011, while 15% less workers quit their job whether for retirement or disabili-ty pension, the end of the past-time job, transfer to other company, notice or agreed termination of the contract.

In 2012 the Metalac Group gave employment to 261 persons, 12% more than in 2011. There was 15% less re-dundancy; there were only retirements, disability retire-ments, terminated employees, transfers to other sister companies...,

COOPERATION WITH TRADE UNIONS AND SOCIAL SUPPORT

10% WITH UNIVERSITY DEGREE

In the Metalac company operate two trade unions: the majority Confederation of Autonomous Trade Unions of Sebria and the minority Independent Trade Union. 77% of employees has membership in either of the two trade unions. Good communication with employees and therefore cooperation with trade unions as main social partners of the Metalac management are of great importance.

2011 2012.

Employed 233 266

Terminations 159 136 Total employees 1.576 1702

Faculty graduates VII2 VII1 VI V IV III II I TOTAL

No. of employees 2012. 3 171 113 6 550 563 96 200 1702

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Although the statistics in Gornji Milanovac seem sad because for couple of years there are under 300 new-borns yearly, Metalac can be proud of sending a great message not only to its workers but to the whole society.

Metalac babies are an example of responsible behaviour of the Company that in many ways shows respect and promotes rights and position of employees, women and especially children.

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The hall of the House of Culture in Gornji Milanovac was completely full with audience when the managing director and the president of the board of the Metalac Foundation, Petrasin Jakovljevic, presented the greeting cheques to the parents of the babies born in 2012.

First Metalac babies that received the cheques back in 2006 are starting school this year. In seven years of the Metalac Foundation whose major objective is to promote family values, Metalac donated almost 300.000 euros to welcome birth of 290 babies: 500 euros for the first child in a family, 1.000 euros for the second, 2.000 for the third, and fourth and over get 4.000 euros. In these seven years we had twins several times, triples two times, and three families got their fourth child, we had two families with fifth and seventh child.

The traditional New Year Celebration on December 27th gathered all the "Metalac babies" born from the moment the Foundation was established till that day. The presid-ent of the Company Dragoljub Vukadinovic and the Board members of the Foundation attended the celebration.

Only few days before, Metalac sent a Santa Clause to take the presents to the children in kinder-gardens of Gornji Milanovac. On December 25th the Santa gave mugs with famous Disney characters filled with candy to 700 children followed by the Metalac representatives.

With 44 babies we did much much better than the previous year's outcome of only 34. So the growth of Metalac was boosted with 30% more newborns in 2012. In seven years the Metalac Foundation donated 300.000 euros for 290 children. About thirty of them are going to school now.

THE FUTURE IS HAPPENING AS WE SPEAK

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At the Conference “Children's Rights and Busi-ness Principles“ the presentation of the company Metalac was an inspiring example of good prac-tice that integrates the "Principles" in all busi-ness aspects - this was the common conclusion at the clossure meeting - reports "e-kapija" with general impression that we are talking about an autochthonous approach of the local company that leads business in a rather difficult branch of industry

On 7th June 2012 at the Serbian Chamber of Commerce UNICEF, UN Global Compact Serbia and Save the Children held the conference “Children's Rights and Business Prin-ciples“, attended by more than 50 representatives of busi-nesses and the civil sector

During a very active discussion rich examples of good prac-tice were given by the representatives of Telenor, Represent Communications, Metalac, Ikea Srbija, Coca Cola Company, Komercijalna banka, Delhaize Group, and Telekom Srbija

-Children represent one third of the global population, but also 100 percent of future consumers and investors“, said Paul Hohen an international expert in corporate responsib-ility and main consultant at the conference

The discussions were in most part dedicated to a challeng-ing implementation of the Principle No.3 about providing decent work conditions for young workers, parents and caregivers. As stressed, the grade of children' rights perfor-mance is directly dependent from performance of rights of their parents at workplace. Therefore care should be taken of mothers and women discrimination at employment and of parental liabilities of employees. The company Metalac with its autochthonous approach was an inspiring example of good practice that integrates the "Principles" in all busi-ness aspects.

METALAC AN EXAMPLE OF GOOD PRACTISE

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The Metalac Group never stops investing into chil-dren and young people, and promoting sports. Today under the sponsorship of the Company and within the Metalac Sport Society, there are six clubs with about 600 members that compete in first and second leagues. Beside the teams which compete, great number of children and teenagers are training in these clubs. We could say that over a half of all sports people in Gornji Milanovac are practicing sports in the Metalac Sport Sociaty on daily basis.

The Football Club “Metalac” as pride and joy of the sport society with a new modern stadium is highly positioned on the list of the First Serbian League in 2012, with a chance to return to the Super League. Over 207 players are registered in the Football Club “Metalac” from the senior team to the generation of 2002 that are competing successfully in the Regional „cockerel“ league. Beside that around 100 kids ages 6-9 regularly practice in the club.

The Chess club “Metalac – Takovo” managed to enter the Serbian Super League. As debutants among the best teams in Serbia, they ended the season in the middle of the score list and kept the Super League status. Each year a lot of kids attend the chess school held by this club.

BOTH AND

UALITYUANTITYQ

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The Bowling Club “Metalac” is at top positions in the Ser-bian Super League for years. They took third place in this season and that means they could compete in Europe. The bowlers made good results in individual competitions of the Serbian Championship, while the couple Goran Caluković and Ivan Trosic won the national championship in this category. In order to keep the continuum in the senior selection, there is another team competing in the Serbian league.

The Female handball Club “Metalac” also keeps the com-pany in the first league. After some experienced players have left, the team got younger players, and it is among the youngest teams in the First Western League. Beside the competitors there are about 40 girls and boys attending the school of handball.

Once in the first league, today stable in the second league The Club of Small Football “Metalac-Kolorado” finished the season in the middle of the score list. The news in the club are younger players from our town, juniors who are later recruited for the senior team.

The youngest member of the Metalac sports family is the male selection of the Volleyball Club “Metalac-Takovo” which has been active for 2-3 years only finishing seasons at second or third place, just about to reach the First League. Almost all players are from Gornji Milanovac. From this sea-son there is another team included, giving chance to chil-dren to play in the Regional league as juniors and cadets. The volleyball school of the club is very advanced and at-tended by numerous youngsters ages seven to twelve.

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STADIUM FK METALAC - PROMOTION OF SPORTS AND THE CITY OFGORNJI MILANOVACBefore 4000 people that attended the ceremo-ny, FAS president Tomislav Karadzic, manager of the Serbian national team Siniša Mihajlović and president of the Metalac Group and of the FK Metalac Dragoljub Vukadinovic cut the ribbon. The ceremony ended with draw result 2:2 be-tween the local FK Metalac and Serbian national team made up of players from the Jelen League.

Continuing its support mission and promotion of sports in Gornji Milanovac, the company Metalac has built a football stadium in only 11 months. The modern construction of the stadium with 4.400 seats and by all FIFA and UEFA standards for international games is among the best in Serbia.

The inauguration took place on 12th September and way attended by numerous senior officials and representatives and over 4.000 citizens of Gornji Milanovac and football fans of the surrounding, who enjoyed the spectacle un-der reflector lighting. The investment value of about three million euro was divided by the company Metalac 85%, FK Metalac 15% with generous help from the municipality of Gornji Milanovac and FAS.

- The company Metalac has been building new factories for decades. This is one of its factories that produce excel-lent football players - said Tomislav Karadzic pointing out that the completed stadium was built by all European and FIFA standards and could therefore host also international matches.

The Contractor company Amiga from Kraljevo handed the keys of the stadium to Dragoljub Vukadinovic, who in the name of the company Metalac dedicated this big invest-ment to the future of sports in Gornji Milanovac, addressing the guests and spectators of the match between the local FK Metalac and Serbian national team made up of players from Jelen League. that ended with draw result 2:2.

Numerous guests from the FAS, officials, media represent-atives, friends from other clubs were welcomed at the en-trance by president of FK Metalac and of the Metalac Group Drаgoljub Vukadinovic and managing director of Metalac Jsc. Petrasin Jakovljevic.

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The ceremony was attended by FAS (Football Association of Serbia) president Tomislav Karadzic, General Secretary Zoran Lakovic, vicepresidents Ivan Djurkovic and Ratomir Babic, as well as Serbian Club Associ-ation General Secretary Miodrag Jankovic, then people from the Regional football association, presidents of Jelen Super Liga clubs and The first Serbian Liga and also representative of Partizan Dragan Djuric.

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AWARDS AND RECOGNITIONS

Тo Dragoljub Vukadinovic for special contributions to the preservation of the Serbian economy in a socially accountable and morally credible manner. The award given by the Mokra Gora School of Management together with the partners: the Economics Institute, Faculty of organ-izational Sciences, Serbian Chamber of Commerce, Belgrade Chamber of Commerce, Serbian Business Club ”Privrednik“ and Serbian Associa-tion of Corporate Directors.

Municipality of Gornji Milanovac for contribution to overall development of the community 2009.

Second award in the campaign “Loving brand - Living brand”.

For achievements and contribution in the field of corporate accountability by the Regional Chamber of Commerce in Kraljevo.

from the Club of Business Reporters - category Distinguished Companies and Personalities in 2009.

The award for the best corporate brand in the competition THE BEST FROM SERBIA, categоry of Long Life Consumer Goods.

The award in the category of “Furniture, cookware and household appliances” for Metalac cookware, in the campaign “Serbia has Quality”.

By the decision of the Serbian Association of Economists to Dragoljub Vukadi-novic, President of the company Metalac.

To Dragoljub Vukadinovic, President of the company Metalac from the Serbian Chamber of Commerce.

In the campaign serbia has quality Metalac Posudje was presented again with the award in the category of “Furniture, cookware and household appliances” .

National award for socially accountable behavior in the category of big co-panies.

VIRTUE LAUREATE2012

DIPLOMA FOR EXCEPTIONAL CONTRIBUTION TO BUSINESS ECONOMY

2011

THE BEST CORPORATE BRAND2010

2009 CSR SERBIA AWARD 2008

GOLDEN PLATE FOR CORPO-RATE AND SOCIAL RESPONSI-BILITY

THE GOLDEN COIN with the image of the CaptainMisa Anastasijevic

GOLDEN PLATE

BELOVED BRAND

AWARD FOR BUSINESS ACHIEVEMENTS

MY CHOICE

MY CHOICE

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OSCAR FOR QUALITY 2007

2008

FOR CONTRIBUTION TO THE PROGRESS

OF THE SERBIAN INDUSTRY

2006

GOLD MEDAL TAKOVSKI USTANAK

2005

EXPORTER OF THE YEAR - CATEGORY : WINNING

NEW MARKETS

2004

BUSINESSMAN OF THE YEAR

2003

MANAGER OF THE YEAR

2001

The Fund for Quality Culture and Excellence (FQCE) and the magazine ”Kval-itet“ with support of the Serbian Chamber of Industry and the Ministry of Econ-omy and Regional Development.

In the campain”Give advantage to pregnant women”.

For the occasion of 150 years of the Serbian Chamber of Commerce Metalac was among 25 awarded.

For the best quality, by decision of the jury of the Serbian Chamber of Com-merce, the Faculty of Technical Sciences Novi Sad and the Media Invest agency.

Third place for the corporate brand Metalac and first place in the category of household items for the brand Metalac Posudje.

The highest municipal recognition to Dragoljub Vukadinovic, President of Met-alac board.

Committee of the National Organization for Quality (JUSK) awarded METALAC with the.

First place in the category of household items and third place in general category.

Metalac Jsc. EXPORTER OF THE YEAR - CATEGORY : WINNING NEW MARKETS rec-ognition from the SIEPA.

Third place in the BEST CORPORATE BRAND contest for the Best from Serbia campaign.

Metalac Jsc. - awarded for high professional standards and unique business culture.

Award to Dragoljub Vukadinovic, managing director of the Metalac Jsc. voted by the Club of Business Reporters.

Award by the Chamber of Commerce of Voivodina for development and applica-tion of industrial design.

MEDAL of the NGO ”Bebac“

STATUETTE KAPETAN MISA NASTASIJEVIC

THE BEST SERBIAN TRADE MARKS

GOLD MEDAL FOR QUALITY

THE BEST SERBIAN TRADE MARKS

BEST CORPORATE BRAND

BUSINESS PARTNER IN 2004

PLAQUE FOR DEVELOP-MENT AND APPLICA-TION OF INDUSTRIAL

DESIGN

Award to Dragoljub Vukadinovic, managing director of the Metalac Jsc. from the Yugoslav Chamber of Commerce.

MGM

REPORT2012

84

MOŽEŠ DA RAČUNAŠYOU CAN COUNT ON

MGM

REPORT2012

85

METALAC a.d., Kneza Aleksandra 212, 32300 Gornji Milanovac, Srbija, 032 770 300, [email protected], www.metalac.com

Izdavač / Publisher_ METALAC a.d., Gornji Milanovac, Za izdavača / For Publisher_ Dragoljub Vukadinović, Redakcioni odbor / Drafting Committee_ Petrašin Jakovljević, Radmila Todosijević, Nadica Vujić-Mitrović, Dizajn i priprema / Design and prepress_ Dizajn studio Metalac, Fotografije / Photo_ Arhiva Metalac a.d., Prevod / Translation_ Metpor, Beograd, Štampa / Printing_ Stojkov, Novi Sad, Tiraž / Circulation_ 1000, Gornji Milanovac, April 2013.

www.metalacposudje.com www.metalacbojler.comwww.metalacmarket.comwww.granmatrix.comwww.metalac-metalurgija.co.rswww.metalacproleter.co.rswww.promometal.hrwww.fkmetalac.rs

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mgm report 2012

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