CENTOS Central Logistics Warehouse Operation & Transportation Services

Facilities Overview - Financial Statement - Global Logistics Network - CENTOS Hamburg, Germany - CENTOS Hamina, Finland - CENTOS Moscow, Russia - CENTOS Saint Petersburg, Russia - CENTOS Kiev, Ukraine

Facilities Overview (Financial statement) CENTOS Sales Revenue Development The growth rate of CENTOS was increased sharply over the Year 2011. Positive growth rate of sales revenue can make more stable service to Clients.

Unit : Million Euro

Year

Sales Revenue

Unit : Million Euro

Annual Sales revenue & growth rate

Growth rate Yearly

25%

2011 2010

€ 94.23 € 80.61

16.9 %

90

16.9%

10.4 %

15%

70

2009

€ 72.45

7.3 %

20%

10.4% 7.8%

7.3%

10%

50

2008

€ 67.95

7.8 %

 Excluding Ocean Freight amounts  Source from CENTOS Central logistics Annual report

5%

0

0%

2008

2009

2010

2011

3

Facilities Overview (Global Logistics Network) GLOBAL Logistics NETWORK CENTOS Central Logistics, founded in 1998, is one of Europe’s fastest growing, integrated, end-to-end logistics companies and warehouse provider. Headquartered in Germany with global presence across Eastern Europe and CIS countries. CENTOS central Logistics is today the preferred logistics and SCM partners for leading international companies. Beginning from its roots as a service oriented Warehouse solution providing company, CENTOS Central logistics over the past few years has added significant competencies to become an integrated logistics player with global and local reach. The company has invested in own assets-led business service such as truck, equipment and warehouses.

St.Petersburg Hamina . .

.

London .

Wroclaw Kiev . . Hamburg .

Moscow

      

CENTOS CENTOS CENTOS CENTOS CENTOS CENTOS CENTOS

Winsen, Germany Hamina, Finland Kiev, Ukraine Moscow, Russia St.Petersburg, Russia Wroclaw, Poland London, UK

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Facilities Overview ( CENTOS Germany 1-5 ) CENTOS Hamburg, GERMANY (1-5) Section

Description

Location

Hamburg, Germany (32 Km from Hamburg Terminal)

Capacity

Total : 42,000 sqm of Centos Owned Warehouse

Container Yard

Total : 125,000 sqm of Centos Owned Land

Trucks quantity

65 Trucks ( Owned + Chartered)

Years in Operation

since Year 1998

Feature

Customs Bonded Warehouse

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Facilities Overview ( CENTOS Germany 2-5 ) CENTOS Hamburg, GERMANY (2-5)  Centos Central Logistics Germany W/H is located outskirt of Hamburg Seaport and Airport which allows us a quick transportation of all sea & Airfreight cargoes.  All warehouse buildings-including the entire containerare registered as a customs bonded warehouse. Due to our long-term experience in customs related-work, and by using online-customs-system (ATLAS), we provide the most reliable handling solution for im/export cargo as well as transportation and custom clearance service.

• Location : CENTOS Warehouse located in Winsen(Luhe)

• Distance : 32 km, 25 minutes by car from Hamburg Port Terminal to Centos WH

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Facilities Overview ( CENTOS Germany 3-5 ) CENTOS Hamburg, GERMANY (3-5) CENTOS WH 3

CENTOS WH 2

CENTOS WH 1

7

Facilities Overview ( CENTOS Germany 4-5 ) CENTOS Hamburg, GERMANY (4-5)

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Facilities Overview ( CENTOS Germany 5-5 ) CENTOS Hamburg, GERMANY (5-5)

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Facilities Overview ( CENTOS Hamina 1-5) CENTOS Hamina, Finland (1-5) Section

Description

Location

Hamina, Finland

Storage Capacity

Total 20,000 sqm of Centos owned Warehouse

Depot Capacity

Total 6,000 TEUs

Years in Operation

since Year 1999

10

Facilities Overview ( CENTOS Hamina 2-5 ) CENTOS Hamina, Finland (2-5)

From Hamina to => Kotka, Finland : 22 km => Vaalimaa, Finland : 35 km => Kouvola, Finland : 51 km => Saint Petersburg : 230 km => Moscow, Russia : 942 km 11

Facilities Overview ( CENTOS Hamina 3-5 ) CENTOS Hamina, Finland (3-5) T/S Point from/To

Liner

Frequency

MAERSK SEALAND

Feeder

BREMERHAVEN BREMERHAVEN

CMAG

1 /week 1 /week

connection

BREMERHAVEN

MSC BALTIC SERVICE

1 /week

To KOTKA

BREMERHAVEN/ HAMBURG

UNIFEEDER

5 /week

BREMERHAVEN/ HAMBURG

TEAM LINES

3 /week  11 /week

Total

Feeder

LUEBECK

COMBISPED

HAMBURG

CMA-CGM

3 /week 1 /week

connection

BREMERHAVEN/ HAMBURG

UNIFEEDER

1 /week

To HAMINA

BREMERHAVEN/ HAMBURG

TEAMLINES

1 /week

OOCL

2 /week

ANTWERP / ROTTERDAM

Total

 8 /week

< Express COMBISPED Service > Ex LUBECK / HAMBURG to HAMINA : 38 hours transit time (3 times service a week) (in case of normal carrier service  4-5 days transit time)

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Facilities Overview ( CENTOS Hamina 4-5 ) CENTOS Hamina, Finland (4-5) Identification, scaling and 3D measurements of vehicle and container while in motion through the gate frame with speed of 20 km/h. The licence plate number, access and driving information to just this particular vehicle is displayed in a matter of one second (1s) at information board before the actual gate, 35 m from measurement frame.

13

Facilities Overview ( CENTOS Hamina 5-5 ) CENTOS Hamina, Finland (5-5)

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Facilities Overview ( CENTOS Moscow 1-6 ) CENTOS Moscow, RUSSIA (1-6) Section

Description

Location

Dorokhovo, Ruza city, Moscow region. (86 km from M KAD)

Storage Capacity

New Building: 65,000 sqm , Old Building : 10,995 sqm (Rented)

Container Yard

Total 40,000 sqm of Centos CY

Parking Area / CY

34,000 sqm, 300 FEUs capacity

Gate qty

73 gates (loading/unloading)

Years in Operation

since Year 2007

15

Facilities Overview ( CENTOS Moscow 2-6 ) CENTOS Moscow, RUSSIA (2-6) Installation for Racking System Description Installation Company

FZM STOCKER SYSTEM

Occupied Space

4,032 SQM (out of 35,000 sqm )

Available storage Volume

6,000 CBM

Installation Period

30 working days planned to install from 11th of JAN. 2012

4,032 SQM 6,000 CBM

4,300 SQM New constructed

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Facilities Overview ( CENTOS Moscow 3-6 ) CENTOS Moscow, RUSSIA (3-6)  Additional Space for High season in Krekshino Logistics Park (54km from LGE RA)  24 km from MKAD between Kievskoe and Minskoe highways Description Warehouse Size

9 053 SQM (Without Mezzanine)

Storage Capacity

12,000 CBM

Rental commencement Date

1st AUG. 2012

Class

“A”

Gate

8 Gates

Current Krekshino W/H [8 779 SQM]

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Facilities Overview ( CENTOS Moscow 4-6 ) CENTOS Moscow, RUSSIA (4-6)

18

Facilities Overview ( CENTOS Moscow 5-6 ) CENTOS Moscow, RUSSIA (5-6)

19

Facilities Overview ( CENTOS Moscow 6-6 ) CENTOS Moscow, RUSSIA (6-6) CENTOS Germany Supervising : Periodical monitoring,

Total 425 staffs

Technical support, Minimizing operational risk Kim Hee Won (MD Of CENTOS Moscow)

Administration

Account

W/H Operation

Logistics

Olga Kuznetsova

Iv an Demyanyuk

Evgeny Kim (Chief of W/H operation)

Kim Sang Tai (Chief of Sales)

Nicolai Petrovich

Natalia Shabanova

SQUAD 24

Transportation

Viloletta Novikova

1- Squad consists of 6 persons

Irina Khapaeva (Chief of Logistics)

Alexander Litovchenko (Chief of C/C )

Anna Konovalova

Dimity Plitko

Victoria Choi

Elena Savanova

Alesya Valguzova

Liza Olisova

Anna Vlasenkova

IT

1 - CONTROLLER

Dmitry Lee

1- F/DRIVER

Vladimir Kondrasov

4 -HANDYMEN

Quantity of inbound/outbound squad can be decided upon cyclical fluctuation of volume Flexibly and efficiently.

   

C/Clearance

Trouble Shooter Claim management Dispatching operator Controlling Delivery tracing

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Facilities Overview ( CENTOS St.Petersburg 1-3 ) CENTOS St.Petersburg, RUSSIA (1-3) Section

Description

Location

8.Polsilkovaya street, Pashollok (13.7 km from Saint Petersburg Terminal)

Storage Capacity

W/H space: 15,429 sqm (Rented)

CY Capacity

2 200 TEUs

Floor load, Ceiling Height

7 tons/sqm , 10.5 m

Gate qty

14 gates (loading/unloading)

Years in Operation

since Year 2009

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Facilities Overview ( CENTOS St.Petersburg 2-3 ) CENTOS St.Petersburg, RUSSIA (2-3)

13.7 km from STB Port

[CONTAINER Yard Area]  Location : 6 KM from City center on crossroad Federal Highway M10(MOSCOW-SPB)  9 KM From Airport (Pulkovo)  13.7 KM From St.Petersburg trade PORT  18-24 KM From Ugolnaya Gavan( Harbour)  Address: Dom 8.Polsilkovaya street, Pashollok Shushari, St.Petersburg,Russia  Contact Points: Mr. Shawn Lee M.P./+7.921.945.2490, Office/+7.812.324.8848 e-mail: [email protected]

▶ Storage space 2,200 TEUs ▶ Railway in W/H area: 3 ways, 2.5 km ▶ Equipments: 2 reach stackers ▶ Nearby railway station Kupchino

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Facilities Overview ( CENTOS St.Petersburg 3-3 ) CENTOS St.Petersburg, RUSSIA (3-3)

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Facilities Overview ( CENTOS Kiev 1-6 ) CENTOS Kiev, Ukraine (1-6) Section

Description

Location

31 km from Kiev center

Storage Capacity

W/H space: 15,429 sqm , Office space : 1,216 sqm (Rented)

Floor load, Ceiling Height

7 tons/sqm , 12 m

Gate qty

14 gates (loading/unloading)

Years in Operation

since Year 2007

24

Facilities Overview ( CENTOS Kiev 2-6 ) CENTOS Kiev, Ukraine (2-6)

The facility is just 31 km from Kiev with direct access from the major E-40 / M-06 highway. The only complex on E-40 (Zhytomir) highway With roundabout next to it. Through close to Kiev, it is far enough outside the city to be economical and avoid heavy urban traffic. Warehouse constructed to a class A warehouse Standard and offers operational efficiencies that order facilities cannot.

CENTOS

Центральна та Західна Європа

25

Facilities Overview ( CENTOS Kiev 3-6 ) CENTOS Kiev, Ukraine (3-6) Mezzanine areas for GSM and Valuable goods

WH 7,171 SQM Office 608 SQM

WH 8,258 SQM Office 608 SQM

26

Facilities Overview ( CENTOS Kiev 4-6 ) CENTOS Kiev, Ukraine (4-6)

27

Facilities Overview ( CENTOS Kiev 5-6 ) CENTOS Kiev, Ukraine (5-6)

28

Facilities Overview ( CENTOS Kiev 6-6 ) CENTOS Kiev, Ukraine (6-6) Total 48 staffs

Gulak Anna (General Director)

Simchich V. (General Manager)

Administration

Vorobyants E. (Office Manager )

Controller

Vorobyants N.

W/H Operation

Shepel M.

Stolyar I

(Manager)

(Chief of W/H)

Shepel M.

Dryga E.

J. H. Park M.D. of CENTOS Germany H.W. Kim, M.D. of CENTOS Moscow Supervising : Periodical monitoring, Minimizing operational risk

(GSM Manager)

Irina Khapaeva (Chief controller)

F/L Driver (4) -Vizir V. -Kravchenko A -Bogush V. -Orlyk A

1- Squad consists of 6 persons 1 - CONTROLLER

-Yovenko Y. -Kozachek A. -Landarenko I.

Accountant Sirotenko I. Hryshchenko O.

   

Trouble Shooter Claim management Dispatching operator Controlling Delivery tracing

Handymen (14) -Potapenko A. -Maksimenko Y -Solomenko A. -Babok Y. -Flora A. -Shmygora A. -Oleynic A. -Maluk N. -Boysev O. -Kovalchuk A. -Kovtonyk V. -Chumalk O. -Bondarev D. -Radchenko V.

1- F/DRIVER 4 -HANDYMEN

We will have 10 Squads up to 12 depends on handling volume. Quantity of In & Out bound squad can be decided upon cyclical fluctuation of Volume flexibly & efficiently.

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Management Summary - Overview - TQL/ Logistics Process - Logistics Scheme - Competitive Advantages of CENTOS

Management Summary - Overview Overview

Looking back at the performance of Europe & CIS Region over the last 15 years, Logistics service is experiencing a dynamic growth in terms of trading volume and we are as a matter of fact proud that we have provided the logistics service for customers during the period of such growth. Of course this period for Customers was far from easy, and it was an equally challenging task for us to adapt to dynamic changes in politic situations, a rapid increase of sales volumes as well as the end of the month spot volume handling. However, we believe we have proved that we have managed to provide the following for Customers:

While we were providing total warehouse logistics services for customers, we realized the importance of Logistics theory. Additionally, understanding, experiencing and improving our service from real-life situations was even more important in the European market especially for the CIS operation. After 15 years of handling experience for customers therefore, we are still ready as ever to face all the new challenges and unpredictable situations that may crop up. CENTOS can only provide LOYAL and diligent service to customer and we must admit we proudly use the word LOYAL as it stems not from one day's of service but after providing.

 High on time dispatch ratio, but Minimum dispatch Error 6 Sigma  Providing/improving warehouse service/good dispatch solutions after discussing with Customers front staff;

 Flexible Warehouse operations catering for Customers sales managers' needs;

 Immediate action/Responsive and responsible problem solving. A 24 hours/day direct communication channel between Customers and CENTOS operation team

 No warehouse fee increase after contract, a service which included the high warehousing market price, labor costs and demand years.

Management Summary - TQL/Logistics Process Progress review

Plan implementatio n Action plan

Cycle n

Logistics critical process review Plan implementatio n

Progress review

Cycle 2

Logistics requirement determination

Action plan

Logistics critical process review

Progress review Logistics requirement determination

Plan implementatio n

Cycle 1 Logistics requirement determination Logistics critical process review

Action plan

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Management Summary - Current Logistics scheme Our point of view, baring in mind the changes in the current Logistics scheme We believe that the current WH as well as the operation which is provided by CENTOS has reached a steadily reasonable level. This is not only limited to WH charges but also on time dispatch/delivery as well as the system integration between CUSTOMERS & CENTOS. Allow us however to express our concern about future developments in the logistics operations. Logistics is the final step in sales process and can affect sales volume if logistics are problematic. Establishing a new partnership requires time for both parties to understand each other and obviously, cost will be an issue, apart from countable fees such as stock moving, system set up and consulting cost. Unfortunately, one may not possible to predict future sales and additional costs as the expenditure level will only be decided by Customers’ future partners' willingness and flexibility. Here is brief consideration factor in case of having partnership with Global Company in general.    

Union interruptions which can lead to working hours control as well as Union action; Hierarchy structure of communication channel; Long time requirement in system error correction as correction is required from the main server; Security and confidential information breaches as a global logistics operator can be involved in business activities and relationships with Customer's competitors in the market;  Shared warehouse space with goods from competitors;  Insurance claims based on weight rule instead of actual price;  Request for changes in the initial contract and conditions after building a dominant market share;

33

Management Summary - Competitive Advantages of CENTOS (1-2) ITEM Warehouse rent tariff transparency & steady management

CENTOS

Other Warehouse

In the case of Centos, we started warehouse construction in cooperation with a Western investor so that we can provide a steady and competitive rent tariff for our customers which is based on the following mutual agreement with the investor:

Logistics providers have signed contracts with already existing warehouses rather than constructing their own warehouse. However, due to limited contract term period between final user and logistics’ provider, as well as the burden from the high deposit of a long term lease, logistics providers have signed contracts with for short periods. Obviously, they are not able to provide steady contract terms to the final user.

 Transparency in the calculation of the total incurred cost  Reasonable tariff setting on a long term basis  In case of a market downturn, the fixed long term contract may look disadvantageous for our customer, however: vice versa

Handling Fee Competitiveness

During the last years of operation for various valuable customers, we have changed our organisational structure to meet customers needs. In fact we have minimised the management team to confirm with the Customers communication channels while increasing numbers of experienced workers were hired. As a result, we were be able to maximise handling hours by developing an IT management system as well as a rapid internal decision making channel. At the same time, CENTOS is offering a competitive package to front line workers resulting to a low job turnover ratio. We calculated that we are able to hire 6 handymen when we reduce one office manager baring in mind that experienced handymen can work 150% more efficiently than newly employed staff.

The hierarchy structure of the management system requires long decision making and/or trouble shooting time while other Western or Asian logistics providers suffer high manpower cost due to providing for the cost of living of their representatives. As a result the handling fee may increase accordingly.

Experienced Full Load Driver and Supervisor

Trucks are generally used for many years and as a consequence often are faced with stability and centre of gravity problems during cargo loading. Therefore a carefully thought of loading plan is required before loading. Experienced CENTOS F/L drivers & supervisors will be dealing with loading on the truck.

According to Loading plan simply without deep consideration for customers’ inconvenient matters.

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Management Summary - Competitive Advantages of CENTOS (2-2) ITEM

CENTOS

Other Warehouse

Customer Service

CENTOS’ optimum target is to add its contribution to maximising Customers sales increases we are therefore ready to accept comments from Dealers. An example is that we accept same day order dispatch and/or arranging loading even when there was no booking in advance.

Order dispatch based on the deadline which is stipulated in the contract. Customers could be subject to either declining the order or being requested for an additional surcharge

Night time or weekend operation

Flexible working hours based on customer needs

Denying operations is possible even if there was a booking and especially operations may not be possible during golden holiday.

Human Power Excellence

No strike has taken place during the last 15 years of Logistics service for over all CENTOS’s organizations.

Strike on every April and high job turnover ratio which affects operational continuity

IT system stability

The IT system established & currently provides reliable operations. CENTOS WMS System is connected with Customers system by EDI. Thus, CENTOS’ many experts is able to launch the system in any location immediately without any modification in Customers & CENTOS side.

System development is required with a corresponding development cost. Possible glitches during the system testing period can be an additional issue.

Customer oriented flexibility in claim handling as well as taking under account Customers requests

Handling based on contract as well as insurance policy.

Communication during out of office hours, and Trouble shooting

The communication channel is open 24 hours a day/ 7 days a week. The final decision maker is ready to communicate, discuss and implement solutions in anytime for any issues whatsoever.

Possible but only on a case by case basis. Decision to be made after internal discussion plus contract term reviewing. Troubleshooting may therefore require much long periods.

Database

The accumulated database for Customers is offering itemised, seasonal, customer characteristics’ views and categorisations which are being used for customer service.

Goods’ dispatch based on loading instructions and own manual

Flexibility in additional charge and claim

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Equipment Overview

Equipment Overview Possess Handling Equipment for handling

Model name

Daewoo Doosan – G15S5 (Gas F/Lift)

Height

4.5 – 6 m.

Capacity

1.5 – 2.0 t.

Length of fork

1200 mm.

Total qty

18 ea.

Years in use

3 months ~ 2 years ( Owned)

Model name

Nichiyu – FTB15P-70C (Electric F/Lift)

Height

4.5 – 5 m.

Capacity

1.5

Length of fork

1200 mm.

Total qty

10 ea.

Years in use

3 months ~ 2 years (Owned) 37

Equipment Overview Possess Handling Equipment for handling

Model name

Nichiyu – FTB15T-75BO(Electric F/Lift)

Height

12 m.

Capacity

2.5 t.

Length of fork

1200 mm.

Total qty

2 ea.

Years in use

2 years ( Owned)

Model name

Hand cart - Rocla

Height

-

Capacity

2.5 t.

Length of fork

1150 mm.

Total qty

14 ea.

Years in use

3 months ~ 2 years (Owned) 38

Equipment Overview Possess Handling Equipment for handling

Model name

Symbol MC 9090

CPU

Xs cale PXA255 processor 400 Mhz

Display

3.8 in ¼ VGA (Color)

Memory

G:Win. CE:32/32 MB64/64, K.S

Total Qty

46 ea.

Years in use

0 month ~ 2 years ( Owned)

Model name

KALMARDRS 4531 Container Lifter

Net weight

55,000 kg

Pumping head

15.1 m

Height

4.6 m

Total Qty

3 ea.

Years in use

~ 5 years ( Owned)

39

Equipment Overview Using Plan of High-Technologies at CENTOS W/H (in order) 1-1 Aiming to optimized W/H operation and continues developments for LGE, new Equipments are on order based on best – experiences & specific know-how which only Centos can have. Reducing the operating time of cargo handling and increasing the accuracy of loading operations, significantly improve performance quality of logistic service for LGE. Model name

CFS (2,3,5 Ton)

1 click

2 ton/1 kg, 3.5 ton/2 kg

Capacity

2, 3, 5 t.

Voltage

DC 12v [Battery for F/Lift]

Indicator

CI-2400BS

Road cell

BSA-3.5

Total qty

12 ea.

Years in use

New products will be delivered in 1 month (Owned)

Technical Features

 Scales designed for weighing cargo which is located on standard F/L  Weighing of cargo placed on the forks occurs right after the lifting of pallet automatically  Indication of the weight occurs at the indicator screen located in front of forklift operator

40

Equipment Overview INDIGATOR

CFS

Type of Effect Accuracy

Lead time

Description CFS fully excludes any cases of incorrect loading. CFS will provide us with strong proof of correct loading. If pilferage happens during transportation Centos would be able to prove loading of full qty by printed weight label on the box. The goods can be weighed without using floor scales, therefore the verification of the integrity of cargo on the pallet speeds up greatly. Previously TV&MNT transferred from LGE Factory to Centos W/H were checked manually box by box. With CFS they will be checked automatically. The TV&MNT unloading will be 10 times faster at least.

Ultimately, CFS can make claim rate decreased. 41

Equipment Overview Using Plan of High-Technologies at CENTOS W/H (in order) 1-2 [ Pallet Scale Cart ]

Designed for static weighing of cargo stored on standard Euro pallets. Model name

CPS plus - 2

1 click

1 kg

Capacity

2 t.

Voltage

DC 12v

Indicator

25 mm LED

Over load protection

2500 kg

Using Hours

30 hours

Charging hours

12 hours

Temperature

-10 ℃~ 40 ℃

Total qty

12 ea.

Years in use

New products will be delivered in 1 month (Owned)

Technical Features

 Weighing can be done any time when the pallet is on CPS  Application of CPS will allow us to abandon the organization of permanent weight spot  CPS using allows us to reduce the time in the operating activities of the warehouse, which improves the performance quality of logistic service

42

Equipment Overview [ Pallet Scale Cart ] [ Pallet Scale Cart ]

LED display ( Height : 25mm, 6 digits )

Built-in printer allows us to mark each weighed element, which makes receiving and shipping of goods quite precise and excludes errors of any kind (shortage, overage and empty box)

43

Equipment Overview Using Plan of High-Technologies at CENTOS W/H (in order) 1-3 It is used for the most efficient and reliable performance in GSM operational works at Centos W/H. The exact dynamic weighing and identification of products of unsuitable weight provides excellent speed in GSM operational works. By virtue of its technical superiority and flexibility chekweigher provides the best performance of the GSM operating handling at Centos W/H.

[Check-Scale for GSM Operation]

Model name

CCK5500-20K

Size

(W)270mm x (L)750mm x (L) 250mm

Capacity

20 kg

Throughput seep

30 ea/min.

Resolution

5g

Precision

± 10 g

Gross weight

8 kg

Temperature

-5 ℃~ 40 ℃

Total qty

1 SET

Years in use

New products will be delivered in 1 month (Owned)

44

Equipment Overview Plan for Centos W/H

Type of Effect

Video information

Description

Accuracy of GSM Operation Reduce Lead time of GSM Operation

Fast automatically checking of GSM master cases

Proof of correct GSM loading

Weight label on the master cases. Any disputes about empty box revealed at Customer’s W/H are excluded Misleading cases such as shortage or overage are excluded by 100%.

45

Equipment Overview Security Facilities for GSM storage & Handling  Introduction of High-Technology System –Finger print Authentication - into Valuable goods- Zone.  Only squad for goods can be allowed to access to valuable goods –zone by these security system..  Guarded and fenced Territory. Model Name

Card Reader AC-1000

Sensor type

RFID

Purpose

GSM entrance checking

Technology

RS-232, RS-485, keyboard, electric lock

Model Name

Vird AC 2000

Sensor type

RFID

Purpose

GSM Entrance checking

Technology

Finger Print Authentication

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Scenarios for using Warehouse Service

Scenarios for using warehouse service Process CENTOS WH and Yard

Sealing and Night time guard

Customers Factory

LTL dispatch

Cntr Truck

Terminal CY and Inland depot CENTOS WH Picking then loading cargo into Chassis for next morning delivery which can be applied for dispatch’ truck arrangement cargo. In addition, space can be used as a finished goods storage place

Box Trailer Trucking

Dealers promise

Bulk cargoes from Europe

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Scenarios for using warehouse service Aluminum Safety Box Trailer

49

Scenarios for using warehouse service VAS (Value Added Service) Whatever your shipping requirements, CENTOS provides a wide range of value added services to arrange the proper equipment and vehicles necessary to get your shipment to its destination on time. We offer a variety of specialized equipment and flexible service options to meet your domestic or international freight needs. Value Added Service Options

Key Benefits

 Packaging, unpacking and labeling operations for existing products  Repair service for brown, white and grey goods  Multiple pickup and delivery  Delivery appointment scheduling  Freight recovery  Oversize/overweight /Hazardous cargo handling  Special permit requirements  Customs clearance and document preparation  Air-ride suspension  Flatbeds or step decks

     

Reduce the need to hold inventory near assembly Increase speed to market Improve inventory fill rates Increase supply chain flexibility for special orders Enhance customization capabilities Reduce customer charge backs

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Continuous Improvement - Success of Service Level Agreement - Infrastructure Improvement plan - Operational Improvement plan - Environmental friendly program - Pricing strategy

Continuous improvement (CI) Success of Service Level Agreement CENTOS has implemented service Level Management system for management of Quality of the Service for Customers goods. Service Level Management involves comparing actual performance with pre-defined expectations, determining appropriate actions, and producing meaningful reports. Implementation of Service Level Agreement will describes the core service provided to customers and details both parties responsibilities in making sure that every concept is met in accordance to SLA. However, by considering market situation where dynamic changes- a rapid increase of sales volume as well as the end of the month spot volume handling situation, binding all scenarios in agreement may not be possible which may lead less flexible in term of our operation process. Specified Service Level Objectives How are to be delivered Monitoring & Measuring Problem Management

Identifying SLA Target

KPI

WH Operator

Customer

DB Development WMS

Maximise Effective use of Space, Equipment, Labour

Management Efficiency

Flexible Operation Process

Customer Satisfaction

Customer Duties & Responsibilities Continuous Improvement Security: Confidentiality of Information

Incentive & Penalty

SLA Control Team WH Operator & Customer

Based on Performance

Increase Productivity

Building a Service Catalogue Service Level improvement program

Customer

Win / Win Partnership

Fast Reliable Service

52

Continuous improvement (CI) Infrastructure Improvement Plan

1 WMS Warehouse Management System A real-time management and control operation system for CENTOS Warehouse that by as a product, provide base of data for all warehouse transaction.

2 WEIS

3 VMS

Warehouse Executive Information System

Visual Management System

Daily updated summary of Warehouse performance and activities. A measure of warehouse performance.

A communication and information centre for all employees to understand CENTOS management strategic direction performance, and a process of improving performance.

A performance measurement system will be based upon a WMS, reporting to management by a WEIS, and summarised to all CENTOS employees via a VMS.

53

Continuous improvement (CI) Operational Improvement Plan We currently have a plan for a Continuous Improvement Coordinator to join our organization.

Facilitation of CI and Lean projects across the site and responsible for managing and continually improving logistics processes. This role is highly proactive and will focus heavily on ensuring 'right first time' i.e. preventing faults from happening and making sure that 'slip through' faults are not repeated. Control of records to ensure that future controls are relevant, completed and stored for trace book and future reference. Stimulating, encouraging and coaching plant operators to devise process and logistics improvements through face to face. Lead, facilitate and support the implementation of a CI environment.

Interfacing with all functional groups throughout the business to apply best practices and execute change that links continuous improvement opportunities with short-term tactical and long-term strategic initiatives.

Key Accountabilities for CI team  Responsible for implementing a sustainable continuous improvement culture through the engagement of project teams to improve efficiency, quality and process.  Lead CI project teams directed at strategic process or quality projects within the enterprise.  Analyses business processes using established continuous improvement and Lean tools to optimize process, people and machine performance and establish benchmarks, tracking systems, timelines, and procedures for implementation of best practices.

Examples of Continuous Improvement  Cleanness and tidiness, self discipline, sorting, systematic placing.  Deployment of experience employees and management.

 Job audits detect opportunities to improve productivity, quality and safety.  Employee suggestion program.  Improvement is a never-ending pursuit of perfection.

 Engagement with and relationship management of external stakeholders to support supply chain process.

54

Continuous improvement (CI) Environmental Friendly Program We believe that environmental responsibility is not a choice, but a necessity. Therefore, we continue to strive for increasingly environmentally-friendly practices in our daily operation. For an example of CENTOS HQ, we are installed/operated with solar equipped energy efficient green Warehouse, usage of white tire to reduce industrial dusts, usage of E-Forklift to reduce CO2, operating with Euro Five class environmental friendly truck, and maintaining 20% of yard area as a green field. We challenge the sustainability of our planet's natural resources and how to use and our business practices to execute the necessary changes to show the determination and imagination to overcome by changing attitudes.

Solar Energy

Green Field

White Tire 55

Continuous improvement (CI) Pricing strategy We understand that there is no ONE pricing program that will meet the needs of Customer. Therefore, our pricing idea is formed based on the following criteria. 1. Simple to understand and apply. 2. Price stability for the customer for an established period of time.

3. Volume stability to Warehouse Service Provider for an established period of time. 4. Ability to integrate with EDI system. 5. Easy conversion with CUSTOMERs system.

WH Service Contract Customer

 Service Level Agreement  Operational Level Agreement  Statement of WH Operation  Service Level Requirement

56

Human Resource Recruiting &Training Process

Main function - Describing the overall responsibilities

Advertising Duties - Listing the tasks Physical demands - Identifying any special physical requirements of the work

or

Skills - Identifying the knowledge and abilities needed to do the work well Education and experience - A how-to guide for deciding what background the person in the job should have Work description form - A sample form to use to put together a work description

Contact Agency Requesting Recruiting Agency to test necessary skills as well as aptitude and attitude before arranging interview with us

Step 3. Screening & Interviewing

Designing the job

Step 2.

Step 1. Consideration Stage

HR - Recruiting Process

Screening the applications Deciding who to interview Testing - When and why to use tests to screen applicants

Interviews

Questions that work - How to develop questions that find out what you need to know

Questions you can’t ask Steering clear of problem questions

Checking reference

58

HR - Recruiting Process. Step 3. Screening & Interviewing Screening the applications - Deciding who to interview

Testing - When and why to use tests to screen applicants

Interviews

Review each application to see if the applicant meets the requirements for the job. Does the applicant have the education and experience you asked for? Does he or she have the skills you need? Does the person seem to understand the duties of the position? If we may not be able to answer all of the questions we have about each applicant. Make a note, so that we can ask the applicant directly during an interview.

Whether an applicant is going to be able to do the job. Job skills and aptitudes may be tested better through a simple test than through interviewing or checking references. Here are some examples

 Take the time to prepare carefully for the interviews.  Decide on the questions you need to ask to find the candidate with the right knowledge and skills.  Review the applications carefully to see if there is anything else we want to know from individual candidates.

Skills

Tests

Office Staff

Data entry and spreadsheet skills tested for speed and accuracy

Language

Free discussion and/or simple writing request

Problemsolving

Ask an individual to solve a problem

Writing

 give the applicant a typical work-related document to write computer programming  write or correct some code to carry out a function for a typical situation personality or temperament personality or temperament test  job specific skills for example, for a forklift driver candidate for test empty pallet storage

Do’s and don’ts for interviews Do's:  Do prepare a list of interview questions and ask every candidate these questions.  Do prepare any special questions you want to ask individual applicants to help you understand their experience or knowledge.  Do focus on learning about the person’s experience, ability and personal qualities that will directly affect how he or she will do the critical parts of the job.  Do make sure you ask questions that show a person’s attitude. Don’ts:  Don’t talk too much during the interview.  Don’t make a decision too early. Listen carefully to what the candidate has to say through the whole interview.  Don’t be too concerned if the applicant is nervous, unless it is really relevant to whether the applicant can do the job.  Don’t ask leading questions, which tell the applicant what answer you want to hear.  Don’t use stress interviews, designed to see if you can upset the applicant.

Option One: try to interview from two to four candidates. Option Two: Only interview people who we would want to hire.

Questions that work - How to develop questions that find out what you need to know

Questions you can’t ask - Steering clear of problem questions

Ask questions that directly relate to what the person will need to know or do in the job.  Make a list of the key things the person will need to do on the job and the skills and the attitude they need to have. Ask questions that tell us what the applicant has really done in the past or what they would do in a situation they would encounter in the job.

 age  ancestry/aboriginal  ancestry/other  family status  mental disability  physical disability

Checking reference

 religion  sexual harassment  pregnancy  sex  sexual orientation

59

HR-Training Process Training & Education Program 1

Target

Purpose

Description

2 Weeks

New Staff

Mutual Understanding Thoroughly explained company history, policy and social benefit system. Nature of Work which incl. client company profile. Tasks involved in individual job prescription

Individual personal

Duration

Initializing period

Program

Centos developed Staff training and education program which has improved during the since Year 1998. Purpose of the program is to develop a company-minded highly skilled workers.

4 Weeks After completion of 2 weeks training Skill Learning

Intensive course of required skills learning which incl. equipment usage, i.e. Forklift Driver: Mechanics & maintenance issue as well as Forklift Driving license

60

HR-Training Process

Target

Purpose

2 Months After completion of 4 weeks Training Acceptance of Working environment

Description Carry on daily task together with Foreman or Supervisor which to be evaluated in personal chart

Constant development

Duration

Working practice

Program

Training & Education Program 2

Continuous

All Staff

Further Development

Continuous development program result will be evaluated in personal chart. Successful staff will be promoted which incl. job rotation

61

Disaster Recovery/Business Continuity 1 Natural Disaster Definition: The natural disasters mentioned in the Guideline refer to floods, earthquakes and other natural disasters defined by the EMERCOM of Russia (МЧС).

Insured with Property, Goods and Human etc in vast scale.

Communication Channel:

Continuity Planning:

Emergency preparedness information in newsletters, periodic employee emails and Telephone calling Tree.

Review business process flow chart. Identify operations critical to survival and recovery. Establish procedures for succession of management.

Fire Safety Check point:

Continuity Planning:

Facility inspected for fire safety; ensure compliance with fire codes and regulations. Install smoke detectors and fire extinguishers in appropriate locations. Consider an automatic sprinkler system, fire hoses and fire-resistant doors and walls. Establish a system for warning. Plan how to communicate with people with hearing impairments or other disabilities and those who do not speak Russian or English. Put a process in place for alerting the fire department. Plan and practice how people will evacuate in a fire.

Defined plan how to ensure best possible salvation of goods, security of goods, operations re-start soonest stage and continuance of operations. This plan is individual in each Centos locations and it is done with co-operation of local fire and rescue departments as well as with security provider.

Labour Stoppage & Information System Outage

Labour Stoppage

Definition: Any interruption of work by employees

Caused by Owned staff

Implement Contingency Plan in case of stoppage for more than 12 hours

Setting up Contingency Plan of labour replacement

Not Possible due to separate agreements made with Centos, employees and labor unions

62

Gathering basic data - from labor (or driver) and POD/IOD - Tracking & Tracing

Gathering basic data from labor (or driver) and POD/IOD From Warehouse Labor Receiving

Put away

Inspection S/N scan or Qty enter Pallet ID

Rule engine Pallet ID or S/N ‘To’ location scan

Move ‘From’ location scan Pallet ID or S/N ‘To’ location scan

Picking Pick release Rule engine ‘From’ location scan Pallet ID or S/N ‘To’ location scan

Loading Container seal # enter Truck number enter Load confirm

Return  RMA Check  Receiving & S/N Scan  Put away

Warehouse Information flow From CY

From Factory

Stationary or mobile in registration

    

Registration Identification control Order comparing Destination Storage location

 

Automatic WH administration Terminal controlled order picking

Automatic comparison of the delivery note Manual check by supervisor

64

Gathering basic data from labor (or driver) and POD/IOD From Truck Driver currently GPS TRUCK Dealers Truck

No need to involve

Truck arranged by Customer

No need to involve

Truck arranged by Centos

Tel. & E-mail & System

GPS Development plan by CENTOS CENTOS can provide a special GPS truck subject to service contract. Customer can receive a truck information on time by system i.e. routing, driving time, POD/IOD and all necessary documents:  Effective: 4 weeks after Customer’s confirmation for system setting in the Customers promise.

POL

IOD

Tracing

Driving time

65

Information Technology EDI Technology between Clients & Centos 66

Logistics System To provide efficient and accurate logistics service for our customer, Centos has extensive internal know-how and experience and base on this Centos developed in house warehouse and distribution management system.

WMS System name:

CWMS (In House Developed)

Evaluation version:

V.1.44.4.6

Database:

Oracle 10

Online access:

Client

Connectivity:

Direct line, VPN

Developer:

Outsourcing company (Comicon in Germany)

Office software:

Microsoft Office Basic

Interface:

EDIFACT, VDA, Odette etc

Network Provider Company & Bandwidth:

Deutsche Telekom, 2Mb/s

67

WMS & EDI WMS/EDI Implementation Process There are two possibilities to use WMS. One is to use Clients WMS and another is to use Centos WMS with EDI. Both case Centos has lots of experiences with many clients and already using the system in several countries. System implementation take maximum 2 months.

Week CASE

Clients WMS

STAGE

Clients Internal

Centos Activity

W1

W2

W3

W4

W5

W6

PREPARATION

W7

W8

W9

W10

UAT Integration Test

STABILIZATION

User Acceptance Test

GO LIVE

Integration Test

GO LIVE

Define W/H Property , Process & Development Regional Functions Clients Network Installation (WAN) LAN Installation (AP, RF Eqiup.)

Centos WMS

Clients Internal Centos Activity

Define EDI Scope, Process & MIG Distribution Centos WMS Installation

EDI Installation

68

EDI Scope & Functions Since Centos has many EDI tasks with many clients, Centos is the master hand of EDI with any clients.

Clients

1. Product Model Master ( PRICAT )

Centos

2. Purchase, Return, Internal Order, Others Receiving Instruction (DESADV)

3. Purchase, Return, Internal Order, Others Receiving Confirmation (RECADV) 4. Sales, Internal, Memo billing, Others, Ship back Picking Instruction (ORDERS) 5. Sales, Internal, Memo billing, Others, Ship back Shipping Confirmation. (ORDRSP)

Warehouse

6. Sub-Inventory Movement Instruction.( INVRPT )

Clients System

7. Sub-Inventory Movement Confirmation. (INVRPT) 8. Inventory Balance Report. ( INVRPT ) Transportation 9. Appointment Date.(DELFOR) 10. Proof of Delivery (IFTMAN) 11. GLAP Shipment

69

Purchase Interface Process

Data Flow From Client To Centos

Factory

Data Flow From Centos To Client

3

Sales Order (Shipping Request)

4

5

Stuffing

Auto Process

B/L Confirm

Optional Process

GTN(GERP) 2

CLIENT 1

P/O Tran

Create Purchase Order

6

7

S/A Confirm

Auto S/A 9 Bond Confirm

10 W/H Confirm

(deleted) EDI(RECADV) 944

EDI(DESADV) 856

Centos

8

S/A Confirm

9

W/H Confirm

70

Purchase Interface Process

Purchase Interface Process Business Rules 1. Purchase Receiving Interface Rules 1) Centos should to send total receipt qty , Sub-Inventory Code(GOODSET,UNITDMG,BOXDMG) and each qty(Good set qty, Unit damage qty, Box Damage Qty. 2) Create a receiving result regarding Full instruction quantity. (Do not create a receiving result regarding some part of an instruction quantity) 2. Composition of a receiving result record according to a receiving purchase type 1) Affiliate company or import purchase receiving (AFFILIATE_FLAG = ‘Y’ OR IMPORT_FLAG = ‘I’ of a receiving instruction) • Good Qty : normal receiving quantity Wrong Model Qty : Wrong Model quantity.  Unit Damage Subinv : Sub-inventory that Unit Damage quantity will be received in (ex. ‘UNITDMG’)  Unit Damage Qty: Unit Damage quantity  Box Damage Subinv : Sub-inventory that Box Damage quantity will be received in (ex. ‘BOXDMG’)  Box Damage Qty : Box Damage quantity Source Header No

Source Line No

Invoice No

INV Org

Model

Ship Qty

Recei pt Qty

Subinventor y

GOODS ET Qty

U/D Subinv

U/D Qty

B/D Subinv

B/D Qty

Wrong model Qty

20505153

1 307CNZ0061-001 E01

LGVX7000VRZBIC

800

800 GOODSET

700 UNITDMG

100 BOXDMG

0

20505153

2 307CNZ0061-001 E01

LGVX7001VRZBIC

800

800 GOODSET

700 UNITDMG

0 BOXDMG

100

20505153

3 307CNZ0061-001 E01

LGVX7001VRZBIC

800

700 GOODSET

700

2) A Local purchase receiving of Non affiliate (AFFILIATE_FLAG = ‘N’ AND IMPORT_FLAG = ‘L’ of a receiving instruction)  Good Qty : normal receiving quantity (it must to be the same as an instruction quantity)  Wrong Model Qty,Unit Damage Subinventory, Unit Damage Qty, Box Damage Subinventory and Box Damage Qty is N/A.

0 0 100

71

Purchase Interface Process Purchase Interface Process ▶ Outbound Transaction Types

▶ Inbound Transaction Types

① Shipping Advice Confirm ☞ASN (Advance Shipping Notice) ② Cancellation Shipping Advice

①Warehousing Confirm

Purchase Warehousing Cases ▶Case 1. Full Warehousing (Ship Qty = Receipt Qty) Source Header No

Source Line No

Invoice No

BL No

Inv Org

Subinvento Container ry No

Model

Ship Qty

Receipt Qty

20505153

1

307CNZ0061-001

F991230497

E01

GOODSET

MAEU2440

LGVX7000VRZBIC

800

800

20505153

2

307CNZ0061-001

F991230497

E01

GOODSET

CAXU7110

LGVX7000VRZBIC

800

800

▶Case 2. Shortage Warehousing (Ship Qty > Receipt Qty) Source Header No

Source Line No

Invoice No

BL No

Inv Org

Subinvent Container ory No

Model

Ship Qty

Receipt Qty

20505153

1

307CNZ0061-001

F991230497

E01

GOODSET MAEU2440

LGVX7000VRZBIC

800

700

20505153

2

307CNZ0061-001

F991230497

E01

GOODSET CAXU7110

LGVX7001VRZBIC

800

500

Step ① Centos sends Receipt Qty based on real qty that is physically warehoused as Subinventory ‘GOODSET’ Step ② Client system uses Ship Qty for Warehousing Confirm instead of real Receipt Qty Step ③ Client system creates Standard Purchase Order Type as Subinventory ‘VR-POSH’ for the shortage qty (Ship Qty – Receipt Qty) automatically

72

Facilities Overview Mega Process of INBOUND Operation START

PIC (INBOUND)

System

PIC(INBOUND)

CENTOS

Bond Confirm

Unloading Information

Request of Delivery

Inspection cargo & Documents

Unloading Date & W/H instruction

Q’ty/Model Confirm

Y

CENTOS Unloading & Allocation

N CENTOS Sending information To Customer

System

Shortage

CENTOS

System

Unloading & Storage

Unloading Confirm

Overage

Unloading Confirm

Claim Process (Insurance)

 Q’ty of shortage will be transferred to Claim location

CENTOS

System

Unloading & Storage

Unloading Confirm

END

 Q’ty of overage will be transferred to ‘Other in’ location Wrong Model

CENTOS

System

CENTOS

PIC (INBOUND)

CENTOS

Unloading & Storage

Unloading Confirm

Transfer to Reservation Location

Instruction – Model change

Model Change

73

Facilities Overview Mega Process of OUBOUND Operation(Customer Pick-up)

START

Sales Person

Sales Person

Sales Order Open

Pick Instruction

Request Ship date

Sales Person

Pick-Up information To Logistics  Order No.  Truck No.  Truck Arrival time

Load Planner Load Plan

CENTOS

CENTOS

CENTOS

CENTOS

Picking

Dock Assign & Picking instruction

Registration of Truck Arrival

Allocation& Issue Picking list

• signed by driver/Security on Picking list

• indicate lead/time , Seal no.

P.O.Attorney  Passport Truck no.

Stuffing instruction Issue Picking list Pre-picking

• Sealing /Dock-out CENTOS

CENTOS

CENTOS

Load Confirm

Ship Confirm

Documentation

END

Invoice/TTN/TN Copy of GTD

74

Facilities Overview Mega Process of OUBOUND Operation(Regular Delivery)

START

Sales Person

Sales Person

Sales Person

Load Planner

Sales Order Open

Pick Instruction

Pick-Up information To Logistics

Truck arrangement

 Order No.  Truck No.  Truck Arrival time

Load Planner

Request Ship date

Load Plan

CENTOS

CENTOS

CENTOS

CENTOS

Picking

Dock Assign & Picking instruction

Registration of Truck Arrival

Allocation& Issue Picking list

• signed by driver/Security on Picking list

• indicate lead/time , Seal no.

P.O.Attorney  Passport Truck no.

Stuffing instruction Issue Picking list Pre-picking

• Sealing /Dock-out CENTOS

CENTOS

CENTOS

Load Confirm

Ship Confirm

Documentation

END

Invoice/TTN/TN Copy of GTD

75

Contact

76

Contact

Company Name

CENTOS Hamburg

CENTOS Hamina

CENTOS Moscow

CENTOS Kiev

Centos Central Logistics Oy Satamantie 4, 49460 Hamina, Finland Tel: +358-5-230 9017 Fax: +358-5230 9077

LLC Centos Central Logistics

Address

CENTOS GmbH Karl-Ferdinand-Braun-str.16, 21432 Winsen (Luhe), Germany Tel: +49-4171-5945 11 Fax: +49-4171-5945 79

Tel: +7495-783 1360 Fax: +7495-783 1367

CENTOS Kiev 1A apt, Lybidska Street, 01032 Kiev, Ukraine Tel.: +38 044 585 15 98 Fax: +38 044 585 15 97

Mr. Jae Hyung Park M.P. +49-172-425 9936 [email protected]

Mr. Tommi Laaksonen M.P. +358-50-403 9303 tommi.laaksonen @centosfinland.com

Ms. Hee Won Kim M.P. +7903-961 7002 Heewon.kim @centosmoscow.com

Ms. Anna Gulak M.P. +38-095-813 9318 anna.gulak@ centoskiev.com

Mr. Michael Schwarz M.P. +49-160-9387 0518 [email protected]

Ms. Leena Kokkomaki M.P. +358-50-4039302 leena.kokkomaki @centosfinland.com

Ms. Novikova Violetta M.P.+7903-290-4197 violetta.novikova @centosmoscow.com

Ms. Irina Sirotenko M.P. +38-066 029 1374 irina.sirotenko @centoskiev.com

Mr. Stephan Menzel M.P. +49-160-9386 8534 [email protected]

Ms. Satu Hannola M.P. +358-50-4039318 [email protected]

Mr. Alexander Kim M.P. +7916-416 1026 alexander.kim @centosmoscow.com

Mr. Volodymyr Pleshakov M.P. +380 99 235 8819 vladimir.pleshakov @centoskiev.com

Managing Director

Administration & Financing Director

Sales Director

Russia, 143160, Moscow region, Ruza area, v. Schelkovka, Alkonovskaya str., 1

Handling Volume for Year 2011

77

Thank You.

www.centos.com