Galaxy Group of Companies: Impact Report 2022 EN

2022 SOCIAL & ECONOMIC IMPACT REPORT

The report presents data of 2021.

© GALAXY GROUP OF COMPANIES. ALL RIGHTS RESERVED 2022

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3 GURGEN KHACHATRYAN'S ADDRESS 4 ABOUT THE COMPANY OUR STORY OUR COMPANIES BUSINESS RELATIONS 8

SOCIAL & ECONOMIC IMPACT

EMPLOYEES AND SALARY FUND

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TAXES PAID

ACQUISITIONS FROM LOCAL MARKET

Last year we chose the symbol of stone as the concept for the annual report. Stones are meant to construct the foundation. And to make sure it is strong and resilient, to build on it and to prosper – people are the key.

JOB PROFILE AND SALARY COMPARISON

ECONOMIC ACTIVITY IN NUMBERS

People are the head, heart, and muscles of every business. Its them that make the company work and bring out its uniqueness. Each of us, individually and collectively, contributes to the company, develops new ideas, and overcomes obstacles along the way.

IMPACT: FINANCES AND BANKING

Today’s Galaxy Group is a story of team success, as each and every team member has made sure the foundation of our company is kept intact, with a pursuit of new heights.

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GURGEN KHACHATRYAN'S ADDRESS

“UNION AND DEDICATION TO ENSURE BUSINESS SUSTAINABILITY IN UNCERTAIN TIMES”

As 2020 was one of the hardest years for Armenia, the previous year was all about rising and getting back on our feet. While our nation has been recovering the economy and slowly regaining normalcy, we at Galaxy Group, having accountability towards the community, including our employees, their families and our customers, have been further unified to collaboratively respond to the challenges.

The viable team spirit remained the key for ensuring business continuity, giving us confidence to set ambitious goals. Thus, we added efforts to further consolidate our community to ensure the teams’ synergies are intact and our companies are unified towards the shared purpose.

Another key pillar along the way was the partnership spirit with our local and international partners. We not only advanced our ongoing projects at various stages, but also

created international platforms to initiate strategic projects also of the regional character. It is worth to mention that we diversified our business portfolio by promoting local production.

Yet, the impact of our Group on Armenia’s economy is way beyond the aforementioned numbers, given the fact of providing a uniquely diverse scope of products and services to the population.

Stemming from our strategy, the primary ambition behind each venture remained our duty to contribute to the development of Armenia. And, we succeeded to bring improved social and economic impact, documented in all key directions.

The feeling of the added value in the country’s economy gives new energy to our employees in undertaking their commitments. And, indeed, this Report reflects efforts of each and every employee and the Group’s determination to carve a successful future for the company. Through our union and dedication to the work that we believe in, and our resilience, that we can face challenges, we will continue to move forward.

Particularly, last year Galaxy Group of Companies provided more than AMD 15.2 billion (more than USD 30.2 million) in the form of tax payments to the RA state budget. This is a 31% increase from the previous year. Purchases from the local market amounted to around USD 56 million, indicating a more than 55% increase from the last year. It is noteworthy that the average monthly salary in Galaxy Group is AMD 387,329, and around AMD 2.9 billion were transferred to the state budget as income taxes, which is more than a 34% increase from the last year.

GURGEN KHACHATRYAN Co-Founder and Co-Chairman Galaxy Group of Companies

Galaxy Group of Companies Social & Economic Report 2022

ABOUT THE COMPANY

ABOUT THE COMPANY

SOCIAL & ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

Galaxy Group of Companies Social & Economic Report 2022

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OUR STORY

Galaxy Group serves as the holding company of 15 business units, reserving the role of management and strategic development of its subsidiaries. Offering a completely new culture and innovative products, our companies are all unique in their own right. We are all united around the same purpose, that is to find the best solutions for effective service delivery.

Our corporate history traces back to 1999, from which point on the Galaxy Group of Companies of today has been formed step by step, overcoming multitudes of challenges along the way. In a 22-year span, we have managed to expand and diversify our business portfolio, establish brands beloved by customers, enter and innovate a variety of industries. Our companies have become leaders in their respective industries, setting new benchmarks and standards for others to follow suit, whilst maintaining the characteristics unique to them.

However, among the many feats we have accomplished over the years, what we take the most pride in is the fact that Galaxy Group of Companies is formed with capital of mainly Armenian origin. Our primary objective with each company that we establish is to contribute to the development of Armenia’s economy and to improve the quality of life of our community. It is our belief that the well-being and prosperity of our company is directly correlated with that of our country—therefore, in this mutually symbiotic relationship, we have to ensure that we hold our end of the deal and do our part in developing Armenia.

Our story is not unique by any means. Nor is it an overglorified underdog story. We did not have a sudden rise to the glory, did not experience ups and downs of galactic scale. Our story does not resemble that of a business fairy tale propagated by fictitious literature. Galaxy Group of Companies is just an example of a company operating on a fundamentally sound basis, sticking to its guns through thick and thin without letting external pressure get in the way. We take no shortcuts, do not compromise our quality for short-term gains and, ultimately, never put personal interests above those of the institution. We let our work do the talking—success is merely its by-product.

Galaxy Group of Companies Social & Economic Report 2022

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OUR COMPANIES

Galaxy Group of Companies Social & Economic Report 2022

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BUSINESS RELATIONS

AUSTRIA

BULGARIA

CHINA

DENMARK

FRANCE

GERMANY

GREECE

ITALY

JAPAN

NETHERLANDS

RUSSIA

EU Countries

CIS Countries

USA

ARMENIA

CHINA

JAPAN

UAE

NORWAY

POLAND

RUSSIA

SPAIN

SWEDEN

SWITZERLAND

TAIWAN

UAE

UKRAINE

UK

USA

SOCIAL & ECONOMIC IMPACT

ABOUT THE COMPANY

SOCIAL & ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

Galaxy Group of Companies Social & Economic Report 2022

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EMPLOYEES AND SALARY FUND

2020

2021

RA* 2.870 bln AMD ** Paid income tax 387,329 AMD Average monthly income

204,048 AMD Average monthly income

2,218 Employees

993,700 Employees

2.148 bln AMD ** Paid income tax 364,716 AMD Average monthly income

189,716 AMD Average monthly income

2,209 Employees

1,052,400 Employees

* RA - Republic of Armenia ** AMD - Armenian Dram (currency)

Galaxy Group of Companies Social & Economic Report 2022

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EMPLOYEES AND SALARY FUND

Salary fluctuation dynamics 2019

2020

2021

364,716 AMD 189,716 AMD

387,329 AMD 204,048 AMD

400,000 AMD 300,000 AMD 200,000 AMD 100,000 AMD 0 AMD

376,165 AMD

187,300 AMD

GALAXY

RA

Galaxy Group of Companies Social & Economic Report 2022

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EMPLOYEES AND SALARY FUND

Gender distribution

2,218 employees

51.8%

1,150

Male

1,068

48.2%

Female

Galaxy Group of Companies Social & Economic Report 2022

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JOB PROFILE & SALARY COMPARISON

Salaries based on company size employees 1-9

10 - 49

50 - 249

250 + 0

300,000 AMD

GALAXY

2021

2020

2019

590,246 AMD

229,938 AMD

138,280 AMD

111,868 AMD

103,504 AMD

94,786 AMD

376,664 AMD

252,647 AMD

259,240 AMD

215,088 AMD

192,992 AMD

154,434 AMD

463,729 AMD

297,655 AMD

291,997 AMD

287,358 AMD

262,296 AMD

208,255 AMD

368,194 AMD

394,242 AMD

383,663 AMD

400,889 AMD

329,101 AMD

262,608 AMD

600,000 AMD

RA

Galaxy Group of Companies Social & Economic Report 2022

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JOB PROFILE & SALARY COMPARISON

Employee distribution & average salary comparison per industry industries

2021

2020

2019

1.3%

Construction

271,230 AMD

150,758 AMD

152,434 AMD

2.0%

Consultation

631,530 AMD

343,023 AMD

402,446 AMD

9.4%

Wholesale

367,458 AMD

346,112 AMD

355,515 AMD

3.4%

Hospitality

174,994 AMD

116,547 AMD

94,061 AMD

66.9%

IT & Communication

403,700 AMD

394,242 AMD

431,121 AMD

7.9%

Real Estate Management

382,575 AMD

341,277 AMD

364,234 AMD

7.7%

Retail

349,528 AMD

325,181 AMD

207,791 AMD

1.3%

Security

237,977 AMD

163,828 AMD

131,963 AMD

0

400,000 AMD

700,000 AMD

ECONOMIC ACTIVITIES IN NUMBERS

ABOUT THE COMPANY

SOCIAL & ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

Galaxy Group of Companies Social & Economic Report 2022

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TAXES PAID IN 2021

Taxes paid in the RA 2019

2020

Taxes paid by Galaxy Group 2021

USD 3.2 bln

2019

2020

2021

USD 31,210,558

USD 22,238,602

USD 30,218,211

USD 32 mln USD 30 mln

USD 3.0 bln USD 28 mln USD 2.8 bln

USD 26 mln USD 24 mln

USD 2.6 bln USD 22 mln USD 2.4 bln

USD 20 mln USD 18 mln

USD 2.2 bln USD 16 mln USD 2.0 bln

USD 14 mln USD 3,097,073,179

USD 2,989,249,617

RA

USD 2,752,780,358

GALAXY

Galaxy Group of Companies Social & Economic Report 2022

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ACQUISITIONS FROM LOCAL MARKET IN 2021

≈USD55.8mln

Acquisitions made by Galaxy Group from the local market 2021

Allocations to travel agencies

USD

Services

2020

124,150

2019

79,772

USD

467,707

USD 6,033,222

USD 2,497,270

USD

2,882,771

Fixed assets

USD 14,597,201

USD 9,438,962

USD

9,093,117

Talent development

USD

327,637

USD

183,496

USD

554,100

Office goods & supplies

USD

744,584

USD

568,540

USD

731,889

Transport

USD

782,642

USD

600,118

USD

987,965

Banking and payment

USD 1,667,079

USD 1,828,134

USD

1,395,623

Rent

USD 2,011,584

USD 1,595,632

USD

6,408,999

Bills

USD 4,284,887

USD 3,613,593

USD

4,456,311

Marketing

USD 2,061,057

USD 1,390,186

USD

2,712,790

Commercial

USD 19,968,621

USD 13,094,492

USD 21,697,318

Other

USD 3,175,007

USD

0

USD 10 mln

USD 20 mln

USD

981,981

_

Galaxy Group of Companies Social & Economic Report 2022

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IMPACT: FINANCES & BANKING IN 2021

interest loans Interest on bonds totaled

Galaxy Group’s share in the total loans provided by Armenian banks

2019 2020 2021

2019 2020 2021

USD 207,000 USD 379,000 USD 405,732

3.02 % 2.48 % 2.49 %

Galaxy Group loan statistics

2019

USD 128,044,927 USD 10,505,007 USD 5,521,159

Total loans provided by the banks in RA* 2020

2021

USD 4.8 bln

2020

USD 114,927,237 2019

USD 6,161,255 USD 5,478,927

USD 4.6 bln USD 4.4 bln

USD 109,460,849 2021

USD 4.2 bln USD 4.0 bln

USD 6,686,524

USD 3.8 bln

USD 5,496,820

USD 3.6 bln USD 4,239,168,093

USD 4,625,812,960

RA * Households & non-for-profit organizations’ loans excluded

USD 4,400,808,917

0

20 mln

40 mln

Loans provided

60 mln

80 mln 100 mln 120 mln 140 mln

Interest expense

Bond

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