Ekotechnika : Financial Statements 30.09.2021

ANNUAL REPORT

from 1 October 2020 to 30 September 2021

Modern equipment for efficient farming

CONTENT

Foreword of the Executive Boards	04
Supervisory Board Report	06
Group Management report	11
Background of the Group	12
Economic report	15
Opportunity and risks report	23
Forecast	28
Financial Statements	33
Consolidated statement of financial position	34
Consolidated statement of comprehensive income	36
Consolidated statement of cash flow	37
Consolidated statement of changes in equity	38
Consolidated Notes to the financial statements	40
Audit opinion	90

4 Foreword of the Executive Board

FOREWORD OF THE EXECUTIVE BOARD

STEFAN DUERR	BJOERNE DRECHSLER
Chairman of the Board	Board member

In the coming years, the expansion of the John Deere sales territories will have a clearly positive impact on the Smart Farming segment.

Foreword of the Executive Boards 5

Dear shareholders and business friends, dear employees,

The 2020/2021 financial year turned out to be much better than originally expected. While the overall conditions for the Russian agricultural market were generally good, crop yields in the individual regions differed substantially last season. In the Chernozem region, yields tended to be below average due to low precipitation, whereas crop yields in Siberia were well above expectations. Demand for agricultural machinery also remains high, with a clear focus on high-tech and efficiency. Consequently, sales of new machines showed a very positive trend in the 2021 season, not least thanks to the fact that we have expanded our John Deere sales territories since late 2019. The total number of tractors sold increased from 245 to 403, and sales of combines and forage harvesters also remained high at 109 machines (2020: 117). Last year saw us step up our activities in the trailed implements segment, where we also recorded significant growth.

Accordingly, revenues from the sale of new machinery rose by 32% to approx. EUR 166 million in the 2020/2021 financial year. Our second mainstay, the spare parts segment, recorded a strong 26% increase in sales revenues to EUR 59 million. Revenues in the after-sales service segment also picked up noticeably. The Ekotechnika Group's total revenues amounted to EUR 244 million, up 26% on the previous year.

In the coming years, the expansion of the John Deere sales territories will have a clearly positive impact on the Smart Farming segment, where we more than doubled our revenues to EUR 2.8 million in the reporting period in spite of supply bottlenecks. While we assume that supply bottlenecks will continue in the current financial year, we also expect a positive effect from the newly introduced service products. In the past season, the first customers already signed contracts for what we call our "digitalization packages". They will pave the way from a product-oriented to a more service-oriented approach in the Smart Farming segment.

In the reporting year, the ruble appreciated from RUB 93/EUR at the beginning of the financial year to RUB 85/EUR on the balance sheet date of 30 September 2021. Earnings before interest, taxes, depreciation and amortization (EBITDA) almost tripled to over EUR 24 million, and the operating result reached EUR 21 million, up from just under EUR 6 million in the previous year. Consolidated net income in the 2020/2021 financial year totaled EUR 14 million.

Another important step was the sale of our Ambitech subsidiary in August 2021, which was responsible for the sale of forestry machinery from Canadian manufacturer Tigercat Industries. The forestry machinery segment most recently represented only around 3% of the Group's total sales revenues and had failed to make a positive contribution to earnings. The sale will allow us to pave the way for the further expansion of our cooperation with John Deere, with whom we have worked successfully for many years.

We project sales revenues of between EUR 255 million and EUR 280 million and gross profit of around EUR 45 million to EUR 55 million for the 2021/2022 financial year. Earnings before interest and taxes (EBIT) will come in at between EUR 15 million and EUR 20 million.

We thank you for your trust and hope you will remain loyal to our company in 2022.

Yours sincerely,

Stefan Duerr

Bjoerne Drechsler