Agroton Public Limited

Interim / Quarterly Report • Sep 13, 2021

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

For the six months ended 30 June 2021

C O N T E N T S

Officers and Professional Advisors	1
Declaration of the Members of the Board of Directors and the Company official responsible for the preparation of the condensed consolidated interim financial statements	2
Condensed consolidated statement of profit or loss and other comprehensive income	3
Condensed consolidated statement of financial position	4
Condensed consolidated statement of changes in equity	6
Condensed consolidated statement of cash flows	7
Notes to the condensed consolidated interim financial statements	8 - 28

OFFICERS AND PROFESSIONAL ADVISORS

Board of Directors	Iurii Zhuravlov - Chief Executive Officer
	Tamara Lapta - Deputy Chief Executive Officer
	Larysa Orlova - Chief Financial Officer
	Borys Supikhanov - Non-Executive Director
	Volodymyr Kudryavtsev - Non-Executive Director
Audit Committee	Borys Supikhanov (Head of the Committee)
	Volodymyr Kudryavtsev
Remuneration Committee	Borys Supikhanov (Head of the Committee)
	Volodymyr Kudryavtsev
Secretary	Inter Jura Cy (Services) Limited
Legal Advisors	K. Chrysostomides & Co LLC
Registered office	1 Lampousas Street 1095 Nicosia Cyprus

DECLARATION OF THE MEMBERS OF THE BOARD OF DIRECTORS AND THE COMPANY OFFICIAL RESPONSIBLE FOR THE PREPARATION OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

In accordance with article 10 of the Transparency Requirements (Securities Listed for Trading on a Regulated Market) Law of 2007 (the "Law"), as amended from time to time, we, the Members of the Board of Directors and the Company official responsible for the preparation of the condensed consolidated interim financial statements of Agroton Public Limited (the "Company") for the six months ended 30 June 2021, confirm that to the best of our knowledge:

• (a) The condensed consolidated interim financial statements presented on pages 3 to 28:
• (i) Have been prepared in accordance with the International Accounting Standard (IAS) 34 "Interim Financial Reporting" and the provisions of Article 10, Section (4) of the Law, and
• (ii) Give a true and fair view of the assets and liabilities, the financial position and the profits or losses of Agroton Public Limited and of the entities included in the condensed consolidated interim financial statements. as a whole.
• (b) The condensed consolidated interim financial statements contain a fair review of the information required by the provisions of Article 10, Section (6) of the Law.

Members of the Board of Directors:

Iurii Zhuravlov	signed
Tamara Lapta	signed
Larysa Orlova	signed
Borys Supikhanov	signed
Volodymyr Kudryavtsev	signed

Company official responsible for the preparation of the condensed consolidated interim financial statements of the Company for the six months ended 30 June 2021:

Larysa Orlova	signed
---------------	--------

Nicosia, 30 August 2021

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)
	Note	30 June 2021	30 June 2020
Continuing operations
Revenue	4	17 145	13 849
Cost of sales	5	(16 097)	(12 576)
Net change in fair value less cost to sell of biological assets and
agricultural produce		293	7 072
Gross profit		1 341	8 345
Other operating income	6	31	91
Administrative expenses	7	(2 666)	(1 226)
Distribution expenses	8	(23)	(22)
Other operating expenses	9	(1 603)	(1 327)
Operating profit		(2 920)	5 861
Impairment losses on loans, trade and other receivable		-	(6)
Fair value losses on financial assets at fair value through profit
or loss		(396)	590
		(3 316)	6 445
Finance income	10	2 077	87
Finance costs	10	(1 741)	(10 103)
Net finance (costs)/income		336	(10 016)
Profit before taxation		(2 980)	(3 571)
Taxation		-	(23)
Profit for the period		(2 980)	(3 594)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Effect of translation into presentation currency		6 782	2 817
Total comprehensive income/(expense)		3 802	(777)
Profit attributable to:
Owners of the Company		(2 973)	(3 602)
Non-controlling interests		(7)	8
		(2 980)	(3 594)
Total comprehensive income attributable to:
Owners of the Company		3 827	(768)
Non-controlling interests		(25)	(9)
		3 802	(777)
Profit per share
Basic and fully diluted profit per share (USD)		0,175	(0,040)
Profit per share – continuing operations
Basic and fully diluted profit per share (USD)		0,175	(0,040)

The notes on pages 8 to 28 are an integral part of these condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2021

(in USD thousand, unless otherwise stated)

	Note	30 June 2021	31 December 2020
Assets
Property, plant and equipment	11	24 604	18 111
Right-of-use assets	12	12 055	13 351
Intangible assets		19	26
Biological assets	13	939	903
Total non-current assets		37 617	32 391
Inventories	16	4 877	16 067
Biological assets	13	23 505	7 272
Investments designated at fair value through profit or loss	14	14 794	15 195
Trade and other receivables	17	3 099	5 791
Loans receivable	15	18 549	18 549
Assets held for sale		13	17
Cash and cash equivalents	18	19 757	25 055
Total current assets		84 594	87 946
Total assets		122 211	120 337
Equity
Share capital		661	661
Share premium		88 532	88 532
Retained earnings		519	3 492
Foreign currency translation reserve		15 384	8 620
Total equity attributable to owners of the Company		105 096	101 305
Non-controlling interests		239	264
Total equity		105 335	101 569
Liabilities
Lease liabilities	19	7 548	9 019
Total non-current liabilities		7 548	9 019
Lease liabilities		5 927	5 697
Loans and borrowings	20	128	128
Trade and other payables	21	2 766	3 418
Income tax liability		507	506
Liabilities held for sale		-	-
Total current liabilities		9 328	9 749
Total liabilities		16 876	18 768
Total equity and liabilities		122 211	120 337

On 30 August 2021 the Board of Directors of Agroton Public Limited approved and authorised these condensed consolidated interim financial statements for issue.

signed signed

Tamara Lapta Larysa Orlova Deputy Chief Executive Officer Chief Financial Officer

The notes on pages 8 to 28 are an integral part of these condensed consolidated interim financial statements.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

	Attributable to owners of the Company
	Share capital	Share premium	Retained earnings	Foreign currency translation reserve	Total	Non controlling interests	Total equity
Balance at 1 January 2020	661	88 532	(8 253)	5 595	86 535	274	86 809
Total comprehensive income
Profit for the period	-	-	11 744	-	11 744	15	11 759
Other comprehensive income/(expense)	-	-	-	3 050	3 050	(25)	3 025
Total comprehensive income for the period	-	-	11 744	3 050	14 794	(10)	14 784
Balance at 31 December 2020	661	88 532	3 491	8 620	101 304	264	101 568
Balance at 1 January 2021	661	88 532	3 491	8 620	101 304	264	101 568
Total comprehensive income
Profit for the period	-	-	(2 973)	-	(2 973)	(7)	(2 980)
Total comprehensive income for the period	-	-	-	6 764	6 764	(18)	6 746
Total comprehensive income for the period	-	-	(2 973)	6 764	3 791	(25)	3 766
Balance at 30 June 2021	661	88 532	518	15 384	105 095	239	105 334

The notes on pages 8 to 28 are an integral part of these condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (cont.)

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

• In accordance with the Cyprus Companies Law, Cap. 113, Section 55 (2) the share premium reserve can only be used by the Company in (a) paying up unissued shares of the Company to be issued to members of the Company as fully paid bonus shares; (b) writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the Company; and (c) providing for the premium payable on redemption of any redeemable preference shares or of any debentures of the Company.
• Companies which do not distribute 70% of their profits after tax, as defined by the SpecialContribution for the Defence of the Republic Law, during the two years after the end of the year ofassessment to which the profits refer, will be deemed to have distributed this amount as dividend.Special contribution for defence at 17% will be payable on such deemed dividend to the extent that theowners (individuals and companies) at the end of the period of two years from the end of the year ofassessment to which the profits refer are Cyprus tax residents. The amount of this deemed dividenddistribution is reduced by any actual dividend paid out of the profits of the relevant year at any time. This special contribution for defence is paid by the Company for the account of the owners.

The above requirement of the Law is not applied in the case of the Company due to the fact that its owners are not residents in Cyprus for tax purposes.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

	Note	30 June 2021	30 June 2020
Cash flows from operating activities:
Profit/(Loss) for the period		(2 980)	(3 594)
Adjustments for:
Depreciation		1 028	1 209
Fair value gain on financial assets at fair value through profit
or loss		396	(590)
Impairment of inventories	9	1 414	1 288
(Gain)/Loss from changes in fair value less cost to sell of
biological assets and agriculture produce		(293)	(7 072)
Net impairment of trade and other receivables	9	-	6
Interest income	10	(103)	(87)
Income from reversal of impairment of PPE	10	-	-
Interest expense	10	1 741	1 733
Loss on disposal of property, plant and equipment	9	-	-
Loss/(income) on disposal of current assets		-	8
Foreign exchange gain	10	(1 992)	8 370
Income tax expense		-	23
Cash flow from operations before working capital changes		(789)	1 294
Change in inventories		9 961	14 674
Change in biological assets		(16 157)	(16 600)
Change in trade and other receivables		2 696	2 194
Change in trade and other payables		(102)	555
Income tax paid		-	-
Net cash from operating activities		(4 391)	2 117
Cash flow from investing activities
Acquisition of property, plant and equipment		(4 117)	(1 041)
Acquisition of financial instruments at FVTPL		-	-
Proceeds from sale of financial instruments at FVTPL		-	500
Net cash used in investing activities		(4 117)	(541)
Repayment of loans and borrowings		-	-
Interest on Notes paid		-	-
Repayment of principal portion of lease liabilities		(1 795)	-
Repayment of interest portion of lease liabilities		(1 741)	(449)
Net cash used in financing activities		(3 536)	(449)
Net decrease in cash and cash equivalents		(12 044)	1 127
Cash and cash equivalents at the beginning of the period		25 055	11 938
Effect from translation into presentation currency		6 746	(2 824)
Cash and cash equivalents at the end of the period	18	19 757	10 241

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

1. GENERAL INFORMATION

Country of incorporation

Agroton Public Limited (the "Company") was incorporated in Cyprus on 21 September 2009 as a public company with limited liability under the Cyprus Companies Law, Cap. 113. The Company was listed at the main market of Warsaw Stock Exchange on 8 November 2010.

The Company's registered office is at 1 Lampousas Street, 1095 Nicosia, Cyprus.

Principal activities

The principal activities of the Group are grain and oil crops growing, agricultural products storage and sale, cattle breeding (milk cattle-breeding, poultry farming) and milk processing. The poultry farming business has been temporarily abandoned due to the military clashes and armed conflict in Eastern Ukraine.

The Group's subsidiaries, country of incorporation, and effective ownership percentages are disclosed below:

Company name	Country of incorporation	Ownership Interest 30.06.2021	Ownership Interest 31.12.2020
Living LLC	Ukraine	99,99 %	99,99 %
PE Agricultural Production Firm Agro	Ukraine	99,99 %	99,99 %
Agroton PJSC	Ukraine	99,99 %	99,99 %
LLC Belokurakinskiy Elevator	Ukraine	99,99 %	99,99 %
Agro Meta LLC (i)	Ukraine	99,99 %	99,99 %
Rosinka-Star LLC	Ukraine	99,99 %	99,99 %
Etalon-Agro LLC (i)	Ukraine	99,99 %	99,99 %
ALLC Noviy Shlyah	Ukraine	99,99 %	99,99 %
ALLC Shiykivske	Ukraine	94,59 %	94,59 %
Agro-Chornukhinski Kurchata LLC	Ukraine	99,89 %	99,89 %
Agro-Svinprom LLC (ii)	Ukraine	99,89 %	99,89 %
Agroton BVI Limited	British Virgin Islands	100,00 %	100,00 %
Gefest LLC (i)	Ukraine	100,00 %	100,00 %
LLC Lugastan	Ukraine	99,99 %	99,99 %
LLC Siverskiy Elevator	Ukraine	100,00 %	100,00 %

(i) Agro Meta LLC, Etalon-Agro LLC, and Gefest LLC are in the process of liquidation. (ii) In July 2011 the management of Living LLC resolved to dispose subsidiary of the Group namely Agro-Svinprom LLC engaged in the pig-breeding.

The parent company of the Group is Agroton Public Limited with an issued share capital of 21 670 000 ordinary shares with nominal value € 0,021 per share.

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

1. GENERAL INFORMATION (cont.)

The shares at 30 June 2021 and as at the date of issue of these condensed consolidated interim financial statements were distributed as follows:

	30 June	31 December 2020
Shareholder	Number of Shares	Ownership interest, %	Number of Shares	Ownership interest, %
Mr. Iurii Zhuravlov	18 306 665	84,48 %	16 851 979	77,77 %
Others	3 363 335	15,52 %	4 818 021	22,23 %
	21 670 000	100,00 %	21 670 000	100,00 %

2. BASIS OF PREPARATION

The condensed consolidated interim financial statements of the Company as at and for the six months ended 30 June 2021 comprise the financial statements of the Company and its subsidiaries (together with the Company, the ''Group'').

2.1 Statement of compliance

These condensed consolidated interim financial statements for the six months ended 30 June 2021 have been prepared in accordance with International Accounting Standard (IAS) 34 ''Interim Financial Reporting'' and were not audited by the external independent auditors of the Group. These condensed consolidated interim financial statements do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2020.

2.2 Basis of measurement

These condensed consolidated interim financial statements have been prepared under the historical cost convention except for the following:

• Biological assets and agricultural produce, which are stated at fair value less costs to sell (agricultural produce is measured at fair value at the point of harvest)
• Debt securities which are stated at amortised cost
• Investments designated at fair value through profit or loss.

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

2 . BASIS OF PREPARATION (cont.)

2.3 Functional and presentation currency

The functional currencies of the companies of the Group are the Ukrainian Hryvnia (UAH) and United States Dollar (USD). The currency of Cyprus is Euro, but the principal exposure of the parent undertaking is in US dollars, therefore the functional currency of the Company is considered to be USD. Transactions in currencies other than the functional currency of the Group's companies are treated as transactions in foreign currencies. The Group's management decided to use US dollar (USD) as the presentation currency for financial and management reporting purposes. Exchange differences arising are classified as equity and transferred to the translation reserve.

The exchange rates used in preparation of these condensed consolidated interim financial statements, are as follows:

Currency	30 June 2021	Average for the	31 December	Average for the	31 December
		six months ended 30 June 2021	2020	six months ended 30 June 2020	2019
US dollar - UAH	27,1763	27,7788	28,2746	25,9834	23,6862

2.4 Going concern basis

These condensed consolidated interim financial statements have been prepared under the going concern basis, which assumes the realisation of assets and settlement of liabilities in the course of ordinary economic activity. Renewals of the Group's assets, and the future activities of the Group, are significantly influenced by the current and future economic environment in Ukraine. The Board of Directors and Management are closely monitoring the events in the current operating environment of the Group as described in note 25 to the condensed consolidated interim financial statements and has assessed the current situation and there is no indication of adverse effects while at the same time are taking all the steps to secure Group's short and long term viability. To this effect, they consider that the Group is able to continue its operations as a going concern.

2.5 Standards and interpretations

Adoption of new and revised International Financial Reporting Standards and Interpretations

As from 1 January 2021, the Group adopted all changes to International Financial Reporting Standards (IFRSs) as adopted by EU which are relevant to its operations. This adoption did not have a material effect on the condensed consolidated financial statements of the Group.

A number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2021 and earlier application is permitted; however, the Group has not early adopted them in preparing these condensed consolidated interim financial statements. Their adoption in the next reporting periods is not expected to have a material impact on the Group.

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied in these condensed consolidated interim financial statements are the same as those applied in the Group's annual consolidated financial statements as at and for the year ended 31 December 2020.

4. REVENUE

	30 June 2021	30 June 2020
Sales of goods	17 100	13 496
Rendering of services	45	353
Total	17 145	13 849

Revenue generated from sale of goods was as follows:

	30 June 2021	30 June 2020
Livestock and related revenue	1 395	1 213
Winter wheat	33	32
Sunflower	15 630	12 139
Corn in grain	3	60
Vegetable oil and protein meals	11	-
Other agricultural crops	28	52
Total	17 100	13 496

Sales volume for main agricultural products in tonnes was as follows:

	30 June 2021	30 June 2020
Winter wheat	171	225
Sunflower	18 267	37 461
Corn in grain	24	572
Vegetable oil and protein meals	-	-
Total	18 462	38 258

Sales volume for milk yield for the six months ended 30 June 2021 was 2 761 tonnes (30 June 2020: 3 097 tonnes).

Revenue generated from rendering of services relates to storage and handling services provided to third parties.

Livestock and related revenue includes revenue from poultry and other livestock related products.

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

5. COST OF SALES

	30 June 2020
1 556	1 216
14 181	11 079
-	-
360	281
16 097	12 576
	30 June 2021

6. OTHER OPERATING INCOME

	30 June 2021	30 June 2020
Government grants	-	21
Reversal of provision for bad debts	-	12
Income from reversal of impairment of PPE	-	-
Other income	31	58
Total	31	91

7. ADMINISTRATIVE EXPENSES

	30 June 2021	30 June 2020
Personnel expenses	2 239	867
Amortisation of intangible assets	-	5
Depreciation charge	45	23
Transportation expenses	-	51
Materials	74	3
Insurance	1	1
Professional fees	46	115
Communication services	3	30
Other expenses	258	131
Total	2 666	1 226

8. DISTRIBUTION EXPENSES

	30 June 2021	30 June 2020
Transportation expenses	23	22
Other expenses	-	-
Total	23	22

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

9. OTHER OPERATING EXPENSES

	30 June 2021	30 June 2020
Depreciation charge	1	8
Loss on disposal of property, plant and equipment	-	-
Loss on disposal of land lease rights	-	-
Impairment of inventories	1 414	1 288
Fines and penalties	-	1
Other expenses	188	30
Total	1 603	1 327

10. NET FINANCE COSTS

	30 June 2021	30 June 2020
Interest income	103	87
Profit on foreign exchange differences	1 974	-
Finance income	2 077	87
Finance costs on lease liabilities	(1 741)	(1 733)
Interest on non-bank loans	-	-
Interest on notes	-	-
Loss on foreign exchange differences	-	(8 370)
Finance costs	(1 741)	(10 103)
Net finance (costs)/income	336	(10 016)

11. PROPERTY, PLANT AND EQUIPMENT

During the six months ended 30 June 2021, the Group acquired items of property, plant and equipment with a cost of USD 4 117 thousand (the six months ended 30 June 2020: USD 1 041 thousand).

12 RIGHT-OF-USE ASSETS

The Group's right-of-use assets represent leases of plough-land from individuals. The total size of leased plough-land at 30 June 2021 is 94 thousand hectares (31 December 2020: 94 thousand hectares).

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

13. BIOLOGICAL ASSETS

Biological assets were presented as follows:

	30 June 2021	30 December 2020
Crops under cultivation	23 168	6 702
Animals in growing and fattening	337	570
Total current biological assets	23 505	7 272
Cattle	939	903
Total non-current biological assets	939	903
Total	24 444	8 175

13.1 Crops under cultivation

At 30 June 2021 and 31 December 2020 the crops under cultivation were presented as follows:

	30 June 2021		30 December 2020
	Thousands of hectares	Carrying values	Thousands of hectares	Carrying values
Winter wheat plantings	26	8 023	38	6 694
Corn plantings	1	135	-	-
Sunflower plantings	27	12 877	-	-
Winter rape plantings	1	-	-	-
Other plantings	1	2 133	-	8
Total	56	23 168	38	6 702

The main crops harvested and the fair value at the time of harvesting was as follows:

	30 June 2021			30 December 2020
	Volume, tonnes	Amount, USD thousand	Volume, tonnes	Amount, USD thousand
Winter wheat	60	11	162 271	30 429
Sunflower	-	-	74 531	28 595
Corn	-	-	9 144	409
Other sowing	1 930	121	13 839	865
Total	1 990	132	259 785	60 298

Other sowing mainly includes grass plants for production of animal feed.

Expenses capitalised in biological assets mainly include fertilisers, fuel, seeds and labour.

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

13. BIOLOGICAL ASSETS (cont.)

13.2 Non-current biological assets and animals in growing and fattening

Non-current biological assets:

	30 June 2021		30 December 2020
	Number, heads	Fair value	Number, heads	Fair value
Cattle	1 035	939	1 020	903
Total	1 035	939	1 020	903

Animals in growing and fattening:

	30 June 2021		30 December 2020
	Number, heads	Fair value	Number, heads	Fair value
Cattle	1 005	476	1 204	570
Horses	2	1	-	-
Total	1 007	477	1 204	570

Expenses capitalised in biological assets of animals include mixed folder, electricity, labour, depreciation and other.

14. INVESTMENTS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS

	30 June 2021	31 December 2020
US Treasury notes	14 722	15 123
Bank of Cyprus Holdings Plc	72	72
Total	14 794	15 195

15. LOANS RECEIVABLE

	30 June 2021	31 December 2020
Current assets
Loans to related parties	18 549	18 549
Loans to third parties	5 767	5 767
Provision for impairment	(5 767)	(5 767)
Total	18 549	18 549

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

15. LOANS RECEIVABLE (cont.)

• On 29 June 2012, the Company has entered into a loan agreement with Stimi Agri Limited amounting to USD 2 million. The loan bears interest of 20% per annum and expired on 29 June 2013. On 28 June 2013 the two parties agreed to postpone the repayment date to 31 December 2014. During 2014 thetwo parties agreed to further postpone the repayment date to 31 December 2015. During 2015 the two parties agreed to further postpone the repayment date to 31 December 2016. During 2016 the two parties agreed to further postpone the repayment date to 31 December 2017. During 2017 the two parties agreed to further postpone the repayment date to 31 December 2018. The above loan is unsecured.
• On 29 June 2012, the Company has entered into a loan agreement with Stiomi Agri Limited amounting to USD 2 million. The loan bears interest at a rate of 10% per annum and expired on 29 December 2013. On 28 June 2013 the two parties agreed to postpone the repayment dates to 31 December 2014. During 2014 the two parties agreed to further postpone the repayment to 31 December 2015. During 2015 the two parties agreed to further postpone the repayment date to 31 December 2016. During 2016 the two parties agreed to further postpone the repayment date to 31 December 2017. During 2017 the two parties agreed to further postpone the repayment date to 31 December 2018. The above loan is unsecured.
• On 4 March 2013, the Company has entered into a loan agreement with Agriland Trading Limited amounting to USD 10 million. The loan bears interest at a rate of 20% and expired on 4 March 2014. During 2014 the two parties agreed to further postpone the repayment to 31 December 2015. During 2015 the two parties agreed to further postpone the repayment date to 31 December 2016. During 2016 the two parties agreed to further postpone the repayment date to 31 December 2017. During 2017 the two parties agreed to further postpone the repayment date to 31 December 2018. The above loan is unsecured.
• On 1 October 2013, the Company has entered into a loan agreement with Hoyt Network Limited amounting to USD 10 million. The loan bears interest at a rate of 10% and expired on 1 October 2014. During 2014 the two parties agreed to further postpone the repayment to 1 October 2015. During 2015 the two parties agreed to further postpone the repayment date to 31 December 2016. During 2016 the two parties agreed to further postpone the repayment date to 31 December 2017. During 2017 the two parties agreed to further postpone the repayment date to 31 December 2018. The above loan is unsecured.

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

16. INVENTORIES

	30 June 2021	31 December 2020
Raw materials	3 076	2 074
Work-in-progress	1 289	3 184
Agricultural produce	433	9 811
Other	79	998
Total	4 877	16 067

Agricultural produce

The main agricultural produce was as follows:

	30 June 2021	30 December 2020
Winter wheat	5	34
Sunflower	148	9 202
Corn	4	4
Other agricultural crops	276	571
Total	433	9 811

The main agricultural produce volume in tonnes was as follows:

	30 June 2021	30 December 2020
Winter wheat	32	197
Sunflower	472	20 067
Corn	41	25
Total	545	20 289

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

17. TRADE AND OTHER RECEIVABLES

	30 June 2021	31 December 2020
Trade receivables	488	2 787
Provision for impairment of receivables	(2)	(2)
Trade receivables, net	486	2 785
Prepayments to suppliers	758	1 570
Other receivables	34 306	33 852
Provision for impairment of prepayments and other
receivables	(33 140)	(33 140)
VAT recoverable	689	724
Total	3 099	5 791

On 29 June 2012, the Company entered into a preliminary agreement with Stiomi Agri Limited ('Seller') for the acquisition of 100% of the issued share capital of Private Enterprise 'Peredilske'. The partiesagreed that the price for transfer of the company's shares amounting to USD 23 080 000.

On 26 December 2012, the Company entered into a preliminary agreement with Stiomi Agri Limited ('Seller') for the acquisition of 100% of the issued share capital of Limited Liability Company 'Skhid Potencial-Resurs'. The parties agreed that the price for transfer of the company's shares shall amount to USD 10 000 000.

On 3 September 2013 both agreements for the acquisition of PE "Peredilske" and of LLC "Skhid- Potencial-Resurs" have been cancelled. The parties agreed that the whole amount paid should be returned to the Company within twelve months of the signing of the cancellation agreements, either in cash and/or an equivalent market value's worth of agricultural goods.

Due to political and economic developments and military conflict in Eastern Ukraine, Stiomi Agri Limited is currently unable to repay this amount to the Group. It is highly probable that this amount will never be recovered, therefore an impairment loss for USD 33 080 thousand was recognised in 2014.

18. CASH AND CASH EQUIVALENTS

	30 June 2021	31 December 2020
Fixed deposit	-	50
Cash at bank - USD	19 227	22 974
Cash at bank - UAH	530	2 030
Cash at bank - Euro	-	1
Cash in hand		0
Total	19 757	25 055

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

19. LEASE LIABILITIES

	30 June 2021	31 December 2020
Non-current liabilities
Lease liabilities	7 548	9 019
	7 548	9 019
Current liabilities
Lease liabilities	5 927	5 697
	5 927	5 697
Total lease liabilities	13 475	14 716

Lease liabilities represent Group's obligations recognised in respect of the Group's right-of-use assets in respect of operating leases of plough-land from individuals.

20. LOANS AND BORROWINGS

	30 June 2021	31 December 2020
Current liabilities
Loan from owner	128	128
Total loans and borrowings	128	128

21. TRADE AND OTHER PAYABLES

	30 June 2021	31 December 2020
Trade payables	985	637
Payroll and related expenses accrued	1 706	1 790
Advances received	3	16
Liabilities for other taxes and mandatory payments	62	134
VAT payable	-	756
Accrued expenses	2	25
Other provisions	-	-
Other liabilities	8	60
Total	2 766	3 418

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

22. RELATED PARTY BALANCES AND TRANSACTIONS

As at 30 June 2021 and the date of this report, the Company is controlled by Mr. Iurii Zhuravlov, who holds directly 77,77% of the Company's share capital. The remaining 22,23% of the shares is widely held.

For the purposes of these condensed consolidated interim financial statements, parties are considered to be related if one party has the ability to control the other party, is under common control, or can exercise significant influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form.

According to these criteria the related parties of the Group are divided into the following categories:

• a. Companies in which Group's companies have an equity interest;
• b. Companies in which key management personnel has an equity interest;
• c. Key management personnel;
• d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies.

Salary costs of key management personnel for the six months ended 30 June 2021 and 30 June 2020 were as follows:

	30 June 2021	31 December 2020
Wages and salaries	2 864	3 639
Contributions to social funds	24	30
Total	2 888	3 669

Key management personnel include Directors (Executive and Non-Executive), the Chief Financial Officer, the Chief Agronomist, the Head of the Food Production Division and the Head of the Livestock Division.

	30 June 2021	30 June 2020
Number of key management personnel, persons	10	11

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

22. RELATED PARTY BALANCES AND TRANSACTIONS (cont.)

Outstanding balances with related parties:

	30 June 2021	31 December 2020
Loans receivable
d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies Mr Iurii Zhuravlov - Chief Executive Officer Total	18 549 18 549	18 549 18 549
Loans payable
d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies Mr Iurii Zhuravlov - Chief Executive Officer Total	128 128	128 128
The Group's transactions with related parties: Finance income	30 June 2021	31 December 2020
d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies Mr Iurii Zhuravlov - Chief Executive Officer
Total	- -	- -
Expenses
c. Key management personnel	2 888	3 669
Total	2 888	3 669

23. OPERATING SEGMENTS

A reportable segment is a separable component of a business entity that produces goods or provides services to individuals (or groups of related products or services) in a particular economic environment that is subject to risks and generates revenues other than risks and income of those components that are peculiar to other reportable segments.

Reportable segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. All reportable segments' results are reviewed regularly by the Group's CEO to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

The operating businesses are organised and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

23. OPERATING SEGMENTS (cont.)

For the six months ended 30 June 2021 the Group identified the following reportable segments, which include products and services, that differ by levels of risk and conditions of generation of income:

• Plant breeding
• Livestock
• Vegetable oil and protein meal
• Other
• (i) Plant breeding segment raises and sells agricultural products and renders accompanying services. The main types of agricultural produce which are sold in this reportable segment are wheat, rye, barley, sunflowers, rape and sunflower oil. The main services which are sold in this reportable segment are ploughing, handling and grain storage services.
• (ii) Livestock segment raises and sells biological assets and agricultural products of cattle breeding. The main biological assets and agricultural products which are sold in this reportable segment are poultry, cattle, pigs and milk.
• (iii) Vegetable oil and protein meal is a new segment the Group started disclosing in 2017. It represents the processing of own sunflower seeds into sunflower oil and protein meal using outsourced production facilities.

No operating segments have been aggregated to form the above reportable operating segments.

Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties.

Management monitors the operating results of each of the unit separately for the purpose of making decisions about resources allocation and evaluation of operating results.

Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the condensed consolidated interim financial statements. Group financing (including finance expense and finance income) and income taxes, are managed on a group basis and are not allocated to operating segments.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2020

(in USD thousand, unless otherwise stated)

23. OPERATING SEGMENTS (cont.)

Information by reportable segment is presented as follows:

For the six months ended 30 June 2020	Livestock	Plant breeding	Vegetable oil and protein meal	Other	Group level	Total
Total revenue	1 679	19 171	-	8 078	-	28 928
Inter-segment sales	(466)	(6 888)	-	(7 725)	-	(15 079)
External revenues	1 213	12 283	-	353	-	13 849
Net change in fair value less cost to sell of biological assets and agricultural produce	(309)	7 381	-	-	-	7 072
Expenses (excluding depreciation and amortisation	(2 136)	(20 660)	-	(482)	-	(23 278)
Profit for the period (excluding depreciation and amortisation)	(1 232)	(996)	-	(129)	-	(2 357)
Depreciation and amortisation	(124)	(987)	-	(103)	-	(1 214)
(Loss)/profit before taxation from continuing operations	(1 356)	(1 983)	-	(232)	-	(3 571)
Reportable segment assets	4 091	74 727	-	5 413	27 887	112 118
Reportable segment liabilities	572	24 734	-	167	613	26 086

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

23. OPERATING SEGMENTS (cont.)

For the six months ended 30 June 2021	Livestock	Plant breeding	Vegetable oil and protein meal	Other	Group level	Total
Total revenue	1 654	15 744	15	614	-	18 027
Inter-segment sales	(260)	(51)	(3)	(569)	-	(883)
External revenues	1 395	15 693	12	45	-	17 145
Net change in fair value less cost to sell of biological assets and agricultural produce	282	11	-	-	-	293
Expenses (excluding depreciation and amortisation	(1 779)	(17 210)	-	(402)	-	(19 390)
Profit for the period (excluding depreciation and amortisation)	(102)	(1 506)	12	(357)	-	(1 952)
Depreciation and amortisation	(105)	(836)	-	(87)	-	(1 028)
(Loss)/profit before taxation from continuing operations	(207)	(2 342)	12	(444)	-	(2 980)
Reportable segment assets	4 459	81 454	-	5 900	30 398	122 211
Reportable segment liabilities	370	16 001	-	108	397	16 876

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

24. SEASONALITY OF OPERATIONS

The Group's operations are subject to seasonal fluctuations as a result of weather conditions. In particular, the cultivation of crops is adversely affected by winter weather conditions, which occur primarily from January to March. The first half of the year typically results in lower revenues and results for cultivations.

As a result of the annual cycle of crops producing and the Group's attempts to take an advantage of seasonal price changes by managing inventory in its storage facilities, the Group's Plant breeding segment is subject to seasonal fluctuations. Profits of this segment tend to be higher in the first half of a year.

25. OPERATING ENVIROMENT

Cyprus economic environment

The Cyprus economy has been adversely affected during the last few years by the economic crisis. The negative effects have to some extent been resolved, following the negotiations and the relevant agreements reached with the European Commission, the European Central Bank and the International Monetary Fund (IMF) for financial assistance which was dependent on the formulation and the successful implementation of an Economic Adjustment Program. The agreements also resulted in the restructuring of the two largest (systemic) banks in Cyprus through a "bail in".

The Cyprus Government has successfully completed earlier than anticipated the Economic Adjustments Program and exited the IMF program on 7 March 2016, after having recovered in the international markets and having only used €7,25 billion of the total €10 billion earmarked in the financial bailout. Under the new Euro area rules, Cyprus will continue to be under surveillance by its lenders with bi- annual post-program visits until it repays 75% of the economic assistance received.

Although there are signs of improvement, especially in the macroeconomic environment of the country's economy including growth in GDP and reducing unemployment rates, significant challenges remain that could affect the estimates of the Company's cash flows and its assessment of impairment of financial and non-financial assets.

Ukrainian economic and political environment

The Group conducts its operations mainly in Ukraine. Ukraine's political and economic situation has deteriorated significantly since 2014. Following political and social unrest in early 2014, in March 2014, various events in Crimea led to the accession of the Republic of Crimea to the Russian Federation, which was not recognised by Ukraine and many other countries. This event resulted in a significant deterioration of the relationship between Ukraine and the Russian Federation. Following the instability in Crimea, regional tensions have spread to the Eastern regions of Ukraine, primarily Donetsk and Lugansk regions. In May 2014, protests in those regions escalated into military clashes and armed conflict between supporters of the self-declared republics of the Donetsk and Lugansk regions and the Ukrainian forces, which continued throughout the date of these financial statements. As a result of this conflict, part of the Donetsk and Lugansk regions remains under control of the self-proclaimed republics, and Ukrainian authorities are not currently able to fully enforce Ukrainian laws on this territory.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

25. OPERATING ENVIROMENT (cont.)

Ukrainian economic and political environment (cont.)

During 2015 and 2016 the anti-crisis measures undertaken by the Ukrainian government and NBU as well as financing through the extended fund facilities (EFF) agreed with International Monetary Fund (IMF) enabled the country to achieve a certain level of economic and political stability and provided the basis for economic recovery on the territory controlled by Ukraine. In 2016 and 2017 Ukraine's GDP grew by 2.3% and 2.1% respectively. This allowed NBU to ease some foreign exchange restrictions imposed since 2014, including a decrease in the share of the mandatory foreign currency conversion to 65% andpermission of dividends remittance. However, certain other restrictions were prolonged.

Signs of economic recovery demonstrated in prior year continued in 2018, with inflation reducing to 9.8% from 13.7% in 2017 and GDP showing a gradual growth of 3.4% (2017: 2.5%), level of deposits in the banking sector growing, losses of the corporate and banking sectors decreasing. During 2019 the Ukrainian economy continued its growth with GDP increasing by 3.2%, inflation being 4.1% and Ukrainian Hryvnia appreciating against US Dollar by 14.5% on annual average basis. In view of these developments and in order to support international investments and trade, NBU withdrew all its requirements on mandatory sale of foreign currency proceeds and removed all its restrictions on remittance of dividends.

During 2018 the Ukrainian economy proceeded with recovery from the economic and political crisis of previous years and demonstrated a sound GDP growth of 3.4% (2017: 2.5%), decline in annual inflation of 9.8% (2017: 13.7%), and relatively stable foreign exchange rate of Ukrainian national currency.

On 11 March 2020, the World Health Organisation declared the Coronavirus COVID-19 outbreak to be a pandemic in recognition of its rapid spread across the globe. Many governments are taking increasingly stringent steps to help contain, and in many jurisdictions, now delay, the spread of the virus, including: requiring self-isolation/ quarantine by those potentially affected, implementing social distancing measures, and controlling or closing borders and "locking-down" cities/regions or even entire countries. These measures have slowed down both the broader Cyprus and world economies and the operations ofthe Group. As at the date of release of the consolidated financial statements the Group continues its operating activities without major disruptions: sowing campaign has been performed as planned, new volumes of agroproduce have been contracted with customers, the harvesting has commenced and is ongoing as expected. Therefore, unless the situation changes, the Group does not plan any significant adjustments to its annual budgeted numbers for the year ended 31 December 2020.

The final resolution and the effects of the political and economic crisis are difficult to predict but may have further severe effects on the Ukrainian economy.

Whilst management believes it is taking appropriate measures to support the sustainability of the Group's business in the current circumstances, a continuation of the current unstable business environment could negatively affect the Group's results and financial position in a manner not currently determinable. These consolidated financial statements reflect management's current assessment of the impact of the Ukrainian business environment on the operations and the financial position of the Group. The future business environment may differ from management's assessment.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

25. OPERATING ENVIROMENT (cont.)

Going concern basis following the economic and political environment

The dangers which may arise from unexpected external factors such as competition, and the further deterioration of the market conditions cannot be ignored. All these factors were analysed above. Having regard to the fact that the Company has fully settled its obligations on the Notes without incurring any additional liabilities, the Board of Directors believes that the Group will remain a going concern and that no indications of any kind of threat of liquidation exists in the foreseeable future.

The condensed consolidated interim financial statements do not include any adjustments that would be necessary in case the Group was not able to continue operating as a going concern.

26. CONTINGENT AND CONTRACTUAL LIABILITIES

Economic environment

The exposure of the Group to the economic environment and possible impact is disclosed in note 25 to the condensed consolidated interim financial statements.

Taxation

As a result of unstable economic environment in Ukraine, tax authorities in Ukraine pay more and more attention to the business cycles. In connection with this, tax laws in Ukraine are subject to frequent changes. Furthermore, there are cases of their inconsistent application, interpretation and execution. Non- compliance with laws and regulations may lead to severe fines and penalties.

The Company operates in the Cypriot tax jurisdiction and its subsidiaries in tax jurisdiction of the respective countries of incorporation. The Group's management must interpret and apply existing legislation to transactions with third parties and its own activities. Significant judgment is required in determining the provision for direct and indirect taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The Group's uncertain tax positions are reassessed by management at every reporting period end. Liabilities are recorded for income tax positions that are determined by management as more likely than not to result in additional taxes being levied if the positions were to be challenged by the tax authorities.

The assessment is based on the interpretation of tax laws that have been enacted or substantively enacted by the reporting period and any known court or other rulings on such issues. Liabilities for penalties, interest and taxes other than on income are recognised based on management's best estimate of the expenditure required to settle the obligations at the reporting period.

The Group considers that it operates in compliance with tax laws of Ukraine, although, a lot of new laws about taxes and transactions in foreign currency have been adopted recently, and their interpretation is rather ambiguous.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2021

(in USD thousand, unless otherwise stated)

26. CONTINGENT AND CONTRACTUAL LIABILITIES (cont.)

Legal matters

In the course of its economic activities, the Group is involved in legal proceedings with third parties. In most cases, the Group is the initiator of such proceedings with the purpose of preventing or mitigating of economic losses.

The Group's management considers that as at the reporting period end, active legal proceedings on such matters will not have any significant influence on its financial position.

Pension and other liabilities

Most employees of the Group receive pension benefits from the Pension Fund, a Ukrainian Government organisation in accordance with the applicable laws and regulations of Ukraine. The Group is obliged to deduct and contribute a certain percentage of salaries to the Pension Fund to finance the benefits. The only obligation of the Group with respect to this pension plan is to make the specified contributions from salaries.

At 30 June 2021 and 31 December 2020 the Group's entities had no liabilities for any supplementary pensions, health care, insurance benefits or retirement indemnities to its current or former employees.

27. EVENTS AFTER THE REPORTING PERIOD

Events referred to in note 25 to the condensed consolidated interim financial statements will continue to influence the Group's operations in 2021. While management believes it is taking all necessary measures to maintain the sustainability of the business in the current circumstances, a further deterioration of economic and political conditions in Ukraine could adversely affect the Group's results and financial position, so that it is currently impossible to predict.

On 30 August 2021 the Board of Directors of Agroton Public Limited approved and authorised these condensed consolidated interim financial statements for issue.