Disclosure Profit and loss statement The main cost impact results from personnel expenses.

. In order to be consistent with the disclosure of other OCOP in the balance sheet, we have to apply the same process as in the past for personnel expenses for platforms, goods receiving department and strategic purchasing (only MGB strategic costs), and now all purchasing expenses. All personnel expenses for these units (goods receiving department, platforms, now also buying department) have to be reclassified from selling or administration costs into cost of sales. On top all other direct allocatable material costs have to be reclassified for the buying department. The reclassification occurs in three steps: 1. Step Reclassification of personnel expenses Wages and salaries (30X14200/30X14300), Other related levies (30X15700 - social security taxes) Pension expense under direct employer obligations (30X15900).

Personnel expenses for platforms and goods receiving department have to be reclassified from selling or administration expenses to the corresponding cost of sales items. Wages and salaries (30214200/30214300), Other related levies (30215700 - social security taxes) Pension expense under direct employer obligations (30215900).

The following example illustrates the reclassification:

Status quo / Ex penses for platform s, goods receiving, strategic purchasing

30214200

New disclosure as of 31.12.2 005

30214200

Wages Cost of sales Salaries Other related levies Pension expenses Wages Salaries Other related levies Pension expenses Wages Salaries Other related levies Pension expenses 1.200.000 800.000 Selling ex p. 200.000 180.000 20.000 Adm inistration exp.

Wages Salaries Other related levies Pension expenses Wages Salaries Other related levies Pension expenses Wages Salaries Other related levies Pension expenses

800.000 200.000 180.000 20.000

Cost of sales

30214300 30215700 30215900 30514200 30514300 30515700 30515900

30214300 30215700 30215900 30514200 30514300 30515700 30515900 30614200 30614300 30615700 30615900 Total

Selling ex p.

P&L

Adm inistration exp.

30614200 30614300 30615700 30615900 Total

P& L

1.200.000

2. Step Reclassification of personnel expenses to OCOP

All reclassified personnel expenses for platforms and goods receiving department have to be transferred to the new items purchase incidentals merchandise, personnel, Food (30211350) and personnel Non Food (30211850). Divide these expenses 50 % Food and 50 % Non Food. If your sales structure differs significantly from this 50 % / 50 % rule (e.g. 90 % Food 10 % Non Food) you should split these expenses according to your sales structure. As counter-account the new compound-item personnel expenses classified as purchase incidentals merchandise (30216900) has to be used. The following example illustrates the reclassification:
New disclosure as of 3 1.12.2005 before reclassification to OCOP Purchase incidentals merchandise, personnel, FOOD Purchase incidentals merchandise, personnel, NON FOOD Wages Salaries Other related levies Pension expenses Personnel expenses classified as purchase incidentals merchandise 1.200.000 800.000 P&L 200.000 180.000 20.000 Cost of sales N ew disclosure as of 31.12.2005 after reclassification to OCOP
30211350

30211350

Purchase incidentals merchandise, personnel, FOOD Purchase incidentals merchandise, personnel, NON FOOD Wages Salaries Other related levies Pension expenses Personnel expenses classified as purchase incidentals merchandise

600.000

30211850

30211850

600.000 800.000 200.000 180.000 20.000

30214200

30214200 30214300 30215700 30215900

Cost of sales

P&L

30214300 30215700 30215900

30216900 Total

30216900 Total

-1.200.000 1.200.000

3. Step

Disclosure of all other cost of purchase

All other other cost of purchase such as e.g. inbound freight, packaging costs, transport insurance, import duties, external storage costs etc. have to be disclosed as procurement incidentals Food (30211300) and procurement incidentals Non Food (30211800). 4.2.4.2 Disclosure Balance sheet The general capitalization procedure remains unchanged. In order to reflect the new p/l structure other cost of purchase should be calculated by creating a ratio between the total internal other cost of purchase/external other cost of purchase and the merchandise costs food / nonfood. Therefore, a respective adjustment is to be conducted. We refer to Exhibit scheme sheet 5 which shows the specification. The new positions other cost of purchase within the cost of sales reflect the capitalization procedure of other cost of purchase on the balance sheet side and complete the procurement incidentals Food / Non Food. At closing date other cost of purchase has to be capitalized if the goods are still on stock. The following example illustrates the reclassification:
N ew disclosure as of 31.12.2 005 - P & L Purchase incidentals merchandise, personnel, FOOD Purchase incidentals merchandise, personnel, NON FOOD N ew disclosure as of 31.1 2.2 005 Purchase incidentals merchandise, personnel, FOOD Purchase incidentals merchandise, personnel, NON FOOD

30211850 Total

600.000 1.200.000

Cost of sales

Cost of sales

30211350

600.000 P &L

30211350

550.000

P&L

30211850 Total 10211400

550.000 1.100.000

M erchandise

Purchase incidentals merchandise (MFR) Food Purchase incidentals merchandise (MFR) Nonfood

50.000

B / S

10212000

50.000 100.000

Total