Consolidated audited annual report 2015 of ROKISKIO SURIS AB 51 TABLE OF CONTENTS 1. REPORTING TERM OF THE SUBMITTED ANNUAL REPORT. ................................................................................................................................ 52 2. KEY INFORMATION OF THE ISSUER: ...................................................................................................................................................................... 52 3. INFORMATION ON THE ISSUER'S DAUGHTER ENTERPRISES AND SUBSIDIARIES .......................................................................................... 52 4. CHARACTERISATION OF THE ISSUER'S BASIC BUSINESS .................................................................................................................................... 53 5. CONTRACTS WITH FINANCIAL BROKERS ............................................................................................................................................................... 53 6. TRADE ON ISSUER'S SECURITIES BY STOCK EXCHANGE AND OTHER ORGANISED MARKETS ..................................................................... 54 7. AUTHORIZED CAPITAL OF THE ISSUER:................................................................................................................................................................ 54 8. LIMITATION ON TRANSFERENCE OF SECURITIES: .............................................................................................................................................. 54 9. SHAREHOLDERS......................................................................................................................................................................................................... 54 10. SHAREHOLDERS’ RIGHTS ....................................................................................................................................................................................... 56 11. SHAREHOLDERS WITH SPECIAL CONTROL RIGHTS AND DESCRIPTION OF THE RIGHTS. .......................................................................... 56 12. OVERALL LIMITATIONS OF VOTING RIGHTS. ...................................................................................................................................................... 56 13. OVERALL AGREEMENTS BETWEEN SHAREHOLDERS. ....................................................................................................................................... 57 14. EMPLOYEES .............................................................................................................................................................................................................. 57 15. PROCEDURE FOR AMENDMENTS OF THE ARTICLES OF ASSOCIATION ......................................................................................................... 60 16. TRANSACTIONS WITH RELATED PARTIES AND SIGNIFICANT AGREEMENTS ................................................................................................. 60 17. KEY CHARACTERISTICS OF THE SECURITIES LAUNCHED TO THE PUBLIC TRADING: ................................................................................ 60 18. SECURITIES LISTED ON THE OFFICIAL TRADING LIST ..................................................................................................................................... 60 19. CAPITALIZATION OF SECURITIES. ........................................................................................................................................................................ 63 20. THE GROUP‘S CONSOLIDATED AND PARENT COMPANY’S AUDITED FINANCIAL ACCOUNTS FOR THE YEAR 2014............................... 65 21. INFORMATION ON PURCHASE OF ISSUER‘S OWN SHARES ............................................................................................................................... 65 22. LEGAL GROUNDS OF THE ISSUER‘S PERFORMANCE ........................................................................................................................................ 66 23. BELONGING TO THE ASSOCIATED ORGANIZATIONS ......................................................................................................................................... 66 24. BRIEF DESCRIPTION OF THE ISSUER‘S HISTORY ............................................................................................................................................... 66 25. PRODUCTION, DESCRIPTION OF PRODUCTION CAPACITIES, AND IMPLEMENTATION OF NEW PRODUCTS ......................................... 69 26. SALES AND MARKETING ......................................................................................................................................................................................... 74 27. PURCHASE OF RAW MILK....................................................................................................................................................................................... 78 28. RISK FACTORS RELATED WITH THE ISSUER‘S PERFORMANCE. ...................................................................................................................... 79 29. KEY ASPECTS OF FORMATION OF CONSOLIDATED FINANCIAL ACCOUNTING RELATED WITH THE SYSTEMS OF INTERNAL CONTROL AND RISK MANAGEMENT ........................................................................................................................................................................... 83 30. FINANCIAL RISK MONITORING .............................................................................................................................................................................. 84 31. INFORMATION ABOUT THE AUTHORIZATION GIVEN BY THE BOARD MEMBERS ......................................................................................... 84 32. KEY RATIOS OF THE COMPANY PERFORMANCE, THEIR DYNAMICS .............................................................................................................. 84 33. INVESTMENT PROJECTS IMPLEMENTED DURING THE LAST 3 FISCAL YEARS: ............................................................................................. 85 34. FUTURE PLANS, FORECASTS AND INVESTMENTS ENVISAGED IN 2016 .......................................................................................................... 87 35. DIVIDENDS PAID...................................................................................................................................................................................................... 88 36. MANAGEMENT BODIES OF THE ISSUER .............................................................................................................................................................. 89 37. COMMITTEES FORMED IN THE COMPANY .......................................................................................................................................................... 91 38. MANAGEMENT BODIES ........................................................................................................................................................................................... 92 39. MEMBERS OF COLLEGIAL BODIES ....................................................................................................................................................................... 92 40. INFORMATION ON OBSERVANCE OF THE COMPANY MANAGEMENT CODEX. .............................................................................................. 95 41. INFORMATION ON THE PUBLICLY ANNOUNCED DATA .................................................................................................................................... 95 42. INFORMATION ON THE PUBLICLY ANNOUNCED DATA AFTER THE END OF FISCAL YEAR ...................................................................... 100 43. INFORMATION ON AUDIT ..................................................................................................................................................................................... 100 44. PERFORMANCE STRATEGY AND EVALUATED CHANGES IN THE NEAREST FISCAL YEAR ......................................................................... 101 Consolidated audited annual report 2015 of ROKISKIO SURIS AB 52 1. Reporting term of the submitted annual report. The consolidated annual report is prepared for the year 2015. 2. Key information of the issuer: Name of the issuer: Rokiskio suris AB Legal base: Public Limited Liability Company Address Pramones str. 3, LT 42150 Rokiskis, Republic of Lithuania Telephone: +370 458 55 200, fax +370 458 55 300 E-mail address: [email protected] Website: www.rokiskio.com Registered in: 28 th February 1992 by the Authorities of Rokiskis region. Re-registered in: 28 th November 1995 by the Ministry of Economy of Lithuania Company code: 173057512 Administration of registry of legal entities: The State Enterprise Centre of Registery VI “Registru centras” The authorized capital of AB ”Rokiskio suris” equals to EUR 10,401,711.30. There are 35,867,970 shares. Nominal value per share equals to EUR 0.29. 3. Information on the issuer's daughter enterprises and subsidiaries As at 31 st December 2015, the consolidated group (hereinafter the “Group”) consists of the Parent Company AB Rokiskio suris, two branches, and five subsidiaries (in 2014: two branches, five subsidiaries). The following table provides information on the subsidiaries and branches included into the consolidated