REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

Officers and Professional Advisors	Sues
Declaration of the Members of the Board of Directors and the Company official responsible for the preparation of the consolidated financial statements	2
Management Report	3 - 7
Independent Auditors' Report	8-12
Consolidated statement of profit or loss and other comprehensive income	13
Consolidated statement of financial position	14
Consolidated statement of changes in equity	15 & 16
Consolidated statement of cash flows	17 & 18
Notes to the consolidated financial statements	14-40

OFFICERS AND PROFESSIONAL ADVISORS

Board of Directors	lurii 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
Independent Auditors	KPMG 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 CONSOLIDATED FINANCIAL STATEMENTS

In accordance with article 9(3)(c) and (7) 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 Members of the statements of Agroton Public Limited (the "Company") for the year ended 31 December 2017, confirm that to the best of our knowledge:

a) the annual consolidated financial statements presented on pages 13 to 90:
- i) have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union and the provisions of article (9), 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 entitles included in the consolidated financial statements, as lossess
  a whole and a whole and
b) the Management Report provides a fair review of the developments and performance of the business as well as the position of Agroton Public Limited and of the entities included in the consolidated financial statements, as a whole, together with a description of the major risks and uncertainlies that they face.

Members of the Board of Directors:

Iurii Zhuraviov
Tamara Lapta
Larysa Orlova
Borys Supikhanov	SKiftelecede
Volodymyr Kudryavtsev

Company official responsible for the preparation of the consolidated financial statements of the Company
for the year ended 31 December 2017for the year ended 31 December 2017:

Larysa Orlova
Alexand 19 4 - 11 4 0 1 0

Nicosia, 23 April 2018

MANAGEMENT REPORT

The Board of Directors of Agrolon Public Limited (the "Company") presents to the members its annual report together with the consolidated financial statements of the Company and of its annual of the group while the Concal Consonuated Timential statements of the Company and of
companies (together with the Company, the "Group") for the year ended 31 December 2017,

INCORPORATION AND PRINCIPAL ACTIVITIES

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

The principal activities of the Group which remained the same as in the previous year, are grain and oil crops growing, agricultural products storage and sale, catle breeding (milk cattle-breading, poulty faming). The poultry farming business has been temporarily abandoned in the military online
faming). The poultry farming business has been temporarily abandoned due to the mi armed conflict in Eastern Ukraine.

FINANCIAL RESULTS

The financial results of the Group for the year ended 31 December 2017 are set out in the consolidated statement of profit or loss and other comprehensive income on page 13 to the consolidated financial

The profit for the year attributable to the owners of the Company amounted to USD 8 299 thousand
(2016: USD 21 755 thousand). (2016: USD 21 755 thousand).

EXAMINATION OF THE DEVELOPMENT, POSITION AND PERFORMANCE OF THE

The Group recorded a profit of USD 8 322 thousand compared to USD 21 781 the previous year.

The net asset position of the Group has increased from USD 71 075 thousand as at 31 December 2016 to
USD 79 768 thousand as at 31 December 2017. USD 79 768 thousand as at 31 December 2017.

The financial position of the Group for the year, as presented in the consolidated financial statements is

DIVIDENDS

The Board of Directors does not recommend the payment of a dividend (2016: USD nil).

FUTURE DEVELOPMENTS

The Board of Directors does not expect major changes in the principal activities of the Group in the

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties faced by the Group and the steps taken to manage these risks are described in note 36 to the consolidated financial statements.

MANAGEMENT REPORT (cont.)

PRINCIPAL RISKS AND UNCERTAINTIES (cont.)

The Group conducts its operations mainly in Ukraine's political and economic situation has delections ince operative mailly in Ukraine Ukraine's political and conmic situation has in
various events in Crime 2014. Following political and social unrest in early 2 secondes againted.in Crime and the Republic of Crimes to the Russian on early 2014, in March 2014, in March 2014,
was not recognised by Ukraine and many other counties. This was not recognised by Ukraine and many other countries. This event resulted in a significant delection, which
of the recognised by Ukraine and the Russian Fell of the relationship between Ukraine and the Russian Federation Following the instability in Crimention
regional tensions have spread to the Russian Federation. Following the regional tensions have spread to the Kissan regions of Ukraine, primatily Donesk and Lugansk regions.
In May 2014, protests in the Eastern regions of Ukraine, primatiy Donesk In May 2014, prolests in the Easten regions of Ukraine, primarily Donesk and Lugansk regions.
In May 2014, prolests in those regions escalad inno military clashes and amed co supporters of the self-declared republics of the Donesk and Lugansk regions and the Ukraining forces, which continued throughout the date of these financial statements. As a result of this conficit, fores,
which continued throughout the date of these financial states of the c Donetsk and Lugansk regions remains under control of the self-proclaimed republics, par of the
authorities are not currently under control of the self-proclaimed republics, a authorities are not currently able to fully enforce Ukrainian laws on this territory.

Political and social unrest combined with the military conflict in the Donesk regions has deepened the ongoing economic crisis, contici in the Donesk and Lugansk and Lugarsk gegons has
trade deterioration in state finances, deneting of the Matings, Bross domestic trade, deterioration in slate finances, depletion of the National Bank of Ukraine's foreign and foreign
reserves, significant devaluation of the national currency, and a furk reserves, significant devaluation of the national currency and a further downgrading of the Ukraining sovereign debt credit ratings. Following the devaluation of the national currency, the Ukrainnian
Ukraine introduced certain administrative restrictions on ourcesses the Nati Ultraine introduced certain administrative restrictions on currency the National Bank of
Oltraine introduced certain administrative restrictions on currency conversion intra others included restrictions on purchases of foreign currency by individuals and company.
others included restrictions on purchases of foreign currency and companies, the requirement of dividends on purchases of noreign curency proceeds to local currences. Che
payment of dividends abroad, a ban on early proceeds to local currency, a ban on payment of dividends abroad, a ban on early repayment of Coreign Indana and restrictions on casting withdrawals from banks. These events had a megative effect on Ukrainin companies and cash
significantly limiting their ability to obtain financing and banks, significantly limiting their ability to obtain financing on domestic and international markets.

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 have further severe effects on the Ukrainian economy.

Whilst management believes it is taking appropriate measures to support the sustanability of the Group's business in the current circumstances, a continuation of the current unstable business environment could ness were the Group's results and financial position in a maner not currently deless envolment copy of
economic affect the Oroup's results and financial position in a manner consolidated financial statements reflect management of the impet of the impact of the impact of the Unimaly. These
business environment on the financial section and the impo business environment on the financial position of the impact of the impact of the impact of the impact of the United in intern environment may differ from management's assessment.

SHARE CAPITAL

There were no changes in the share capital of the Company during the year.

STATEMENT ON CORPORATE GOVERNANCE

The Board of Directors has adopted the Code of Corporate Governance (the "Code") of the Warsavy Stock
Exchange ("WSE") which is available in the WSE website Exchange ("WSE") which is available in the WSE website.

At present, the Corporate Governance Code is not fully implemented. There are specific provisions of the and contain in Cerporate Covernales Cole not and rally implement of the provisions of the the Articles of Association of the Company, or they candor do not accord with the provisions of
the Articles of Association of the Company, or they cannot be adopted by the the neves of risseelandir of the Company, or they cannot be adopted due to the recent atever.
Eastern Ukraine. The Board of Directors will endeavour to remedy these as soon a

MANAGEMENT REPORT (cont.)

STATEMENT ON CORPORATE GOVERNANCE (cont.)

The Board of Directors ensures through effective internal audit and risk management procedures the collection of the necessary items for the preparation of the periodic reporting required for listed companies.

The Company is governed by the Board of Directors. Companies formed under the Cyprus Companies Law, Cap. II 3, do not have supervisory board and management board companies have a Board of
Directors, 113, do not have supervisory board and management board of Directors, members of which are appointed to fill certain executive and non-executive positions. The management of the business and the conduct of the Company are vested in the Board of Directors. The Board of Directors comprises five members, three of which are non-independ of
remaining two are independent. This is in compliance with the non-independent and remaining wo are independent. This is in compliance with the provisions of the Articles of Association and the e
the Company, which requires that the Board of Directors of th the Company, which requires that is in comprise by at least two Directors of Association of Association of Association of which

Directors are appointed at general meetings. There is no requirement in the Articles of Association for the received of Directors by rolein itemigs. I nete is no requirement in the Articles of Association for the
retirement of Directors by rolation, thus all Directors continue in o ordinary resolution from the Company shareholders.

The Company has an Audit Committee and a Remuneration Committee. Both committees comprise two ment of the en route committee and a Remuneration Committee, Both committees comprise two and

The emoluments and other benefits of Directors of the Company are presented below:

Iurii Zhuravlov	Emoluments USD	Total USD
Tamara Lapta	745 684 10 150	7-5 684
Larysa Orlova Borys Supakhanov	8 247	20 150 8 247
Volodymyr Kudryavtsev

The interest in the Company's share capital held directly by each member of the Board of Directors at 31 December 2017 and at 18 April 2018 (5 days before the Bard of
Directors at 31 December 2017 and at 18 April 2018 (5 days before the date consolidated financial statements by the Board of Directors) are disclosed belov.

The owners holding directly or indirectly more than 5% interest in the Company's share capital at 31
December 2017 and at 18 April 2018 (5 days before the date of the December 2017 and at 18 April 2018 (5 days before the Connects) in the Conpany's share capital at 31
December 2017 and at 18 April 2018 (5 days belove the date of approval of statements by the Board of Directors) are disclosed below.

There are currently no shares in issue holding special or limited rights.

The Board of Directors can proceed with the issue of shares following an ordinary resolution from the Company owners. For the can procedurer shares following an ordinary resolution from the Company of the more of the company's the first in the 10th 1 of the reparentase of the Company shares a special resolution from the companies Law.

The Report on Corporate Governance has been prepared in accordance with the provisions of the Code and includes the Serverlance has been prepared in accordance with the provisions of the Code
and includes the above mentions, as well as the information required by the relev

MANAGEMENT REPORT (cont.)

OWNERS HOLDING MORE THAN 5% OF THE COMPANY'S SHARE CAPITAL

The owners holding directly or indirectly more than 5% interest in the Company's share capital at 31 December 2017 and at 18 April 2018 (S days before the date of approval of the copital at 31
December 2017 and at 18 April 2018 (S days before the date of approval of the cons statements by the Board of Directors) were as follows:

lurii Zhuravlov	31 December 2017 96	18 April 2018 S
Other	74.01 25,99	75.53 24.47

On 30 January 2018 Mr. Zhuravlov acquired 329 233 shares.

DIRECTORS' INTEREST IN THE COMPANY'S SHARE CAPITAL

In accordance with Article 4(b) of the Cyprus Securities and Exchange Commission Directive the interest in the Company's share co (c) of the cypras siccinites and Exchange of the Board of Directors the Interest
December 2017 and at 18 April 2018 (5 days before the due of the Bo December 2017 and at 18 April 2018 (5 days before the Board of the Board of Directors at 31
December 2017 and at 18 April 2018 (5 days before the date of approval of the cons statements by the Board of Directors) were as follows:

	31 December 2017 8	18 April 2018
lurii Zhuraviov		8
Tamara Lapta	74,01	75.53
Larysa Orlova
Borys Supikhanov
Volodymyr Kudryavisev

BOARD OF DIRECTORS

The members of the Board of Directors at 31 December 2017 and at the date of this report are presented

There is no requirement in the Company's Articles of Association for the retirement of Directors by rotation, thus all Directors presently members of the Board continue in office.

There were no significant changes in the assignment of responsibilities and remuneration of the Board of

AUDIT COMMITTEE AND REMUNERATION COMMITTEE

The Directors are responsible for formulating, reviewing and approving the Company's and its subsidiary
Companies strategies, budgets, certain items of canilal experditures a companies strategies, budgets, certain items of capital exproving the Company's and its subsidiary
Being a company listed on the Warsaw Slock Exchange Being a company listed on the Warsaw Stock Exchange, the Directors have established studients.
Being a company listed on the Warsaw Stock Exchange, the Directors have establi remuneration committees to improve corporate governance.

The Audit Committee and Remuneration Committee, were established on 4 May 2010 both of which were in force during the vehicleration Continued in force at the date of the base of this report.

MANAGEMENT REPORT (cont.)

AUDIT COMMITTEE AND REMUNERATION COMMITTEE (cont.)

The Audit Committee assists the Company's Board of Directors in discharging its responsibilities with regard to financial statemate soli and internal audits and controls, including reviewing the annual consolidated financial statements, reviewing and monitoring the extent of the non-audit work undertaken by external audit activities, interal controls and included and reviewing the effectiveness of the internal audit activities internal controls and risk management systems. The ultimate responsibility for reviewing and approving the annual consolidated financial statements and the half yearly financial statements remains with the Board of Virectors. The Audit Committee of the Company, comprising of Mr. Borys Supikhanov and Mr. Volodymyr Kudryavstev and is chaired by Mr. Borys Supikhanov.

The Remuneration Committee assists the Board of Directors in discharging its responsibilities in relation to remuneration, including making recommendations to the Board of Directors and/or the general meeting of the shareholders of the Company of the policy on executive remuneration, determining the individual remuneration and benefits package of ach of the Executive Directors and recommending and monitoring the remuneration of senior mage on the esteditive Directors and recommending and monitoring
Company, comprising of Mr. Bore Sunikhease Board level. The Remuneration Committee Company, comprising of Mr. Borys Supikhanov and Mr. Volodymyr Kudryavisev (both Non-Executive Directors', and is chaired by Mr. Borys Supikhanov and sets and review the scale and structure of the Executive Directors' remuneration packages, including share options and the lerms of their service

EVENTS AFTER THE REPORTING PERIOD

Any significant events that occurred after the reporting period are described in note 38 to the consolidated financial statements.

BRANCHES

The Group did not operate through any registered branches during the year ended 31 December 2017.

RELATED PARTY BALANCES AND TRANSACTIONS

Disclosed in note 32 to the consolidated financial statements.

INDEPENDENT AUDITORS

The independent auditors of the Company, KPMG Limited, have expressed their willingness to continue proposed at the next Annual General Median of Directors to fix their remuneration willingess to continue proposed at the next Annual General Meeting of the Company.

By order of the Board of Directors.

Larysa Orlova Director

Nicosia, 23 April 2018

KPMG Limited Chartered Accountants 14 Esperidon Street, 1087 Nicosia, Cyprus P.O. Box 21121, 1502 Nicosia, Cyprus T: +357 22 209000, F: +357 22 678200

Independent Auditors' report

to the Members of

AGROTON PUBLIC LIMITED

Report on the audit of the consolidated financial statements

Opinion

We have audited the accompanying consolidated financial statements of Agroton Public Limited (the "Company") and its subsidiaries (the "Group"), which are presented on pages 13 to 90 and comprise the consolidated statement of financial position as at 31 December 2017, and the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2017, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS-EU) and the requirements of the Cyprus Companies Law, Cap. 113, as amended from time to time (the "Companies Law, Cap. 113").

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Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the "Anditors' responsibilities for the financial statements" section of our report. We are independent of the Group in accordance with the Code of Ethics for Professional Accountants of the International Ethics Standards Board for Accountants ("IESBA Code"), and the ethical requirements in Cyprus that are relevant to our audit of the consolidated financial statements, and we have fulfilled our other chical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Mnterial uncertainty relating to going concern

We draw attention to notes 2.4, 4.10 and 34 to the consolidated financial statements, which discuss the political and economic environment in Ukraine, the country in which the Group mainly operates, and Management's assessment that the Group will continue as a going concern. As stated in notes 2.4, 4.10 and 34, the impact of these events on the Ukraine economy cannot be determined and may adversely affect the operations of the Group. This indicates that an uncertainty exists which may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the "Material uncertainty related to going concern" sections, we have determined the matters described below to be the key audit matters to be communicated in our report.

Valuation of biological assets

Refer to Notes 7, 19 (biological assets) and to Note 37 (fair values) to the consolidated financial statements.

The key audit matter	How the matter was addressed in our audit
agricultural crops and animals in growing and fattening, which are measured at fair value less estimated costs to sell. Estimating the fair value involves a number of judgments and estimates regarding various inputs and the valuation model. Due to the nature of the asset, the valuation technique includes a number of inputs both from internal and external sources. Consequently, we have determined the valuation of biological assets to be a key audit matter.	The Group's biological assets consist of Our audit approach in this area included, among others: · Considering the appropriateness of the valuation methodology by reviewing the valuation expert's report on the methodology used by the Group and agreeing its consistency with IFRS. The competencies of the expert were also assessed. Challenging the inputs used by the Group in calculating the cost of agricultural crops and assessing the sources used to determine their fair values: testing the mathematical accuracy of the model;
	evaluating the adequacy of the consolidated financial 0 statements disclosures, including disclosures of key assumptions, judgments and sensitivities.

Other information

The Board of Directors is responsible for the other information comprises the Management Report and the corporate governance statement, but does not include the consolidated financial statements and our auditors' report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon, except as required by the Companies Law, Cap. 113.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

With regards to the management report and the corporate governance statement, our report is presented in "Report on other legal and regulatory requirements" section.

Responsibilities of the Board of Directors for the consolidated financial statements

The Board of Directors is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with IFRS-EU and the requirements of the Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless there is an intention to either liquidate the Group or to cease operations, or there is no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Group's financial reporting process.

Auditors' responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

· Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
· Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

Auditors' responsibilities for the audit of the consolidated financial statements (cont.)

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.
· Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves a true and fair view.
· Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters.

Report on other legal and regulatory requirements

Other regulatory requirements

Pursuant to the requirements of Article 10(2) of EU Regulation 537/2014 we provide the following information in our Independent Auditors' Report, which is required in addition to the requirements of ISAs.

Date of our appointment and period of engagement

We were first appointed auditors of the Company by the General Meeting of the Company's members on 10 August 2012. Our appointment has been renewed annually by shareholder resolution. Our total uninterrupted period of engagement is 6 years covering the periods ended 31 December 2012 to 31 December 2017.

Consistency of the additional report to the Audit Committee

Our audit opinion is consistent with the additional report presented to the Audit Committee dated 20 April 2018.

Report on other legal and regulatory requirements (cont.)

Other regulatory requirements (cont.)

Provision of non-audit services ("NAS")

We have not provided any prohibited NAS referred to in Article 5 of EU Regulation 537/2014 as applied by Section 72 of the Auditors Law of 2017, L.53(1)2017, as amended from time ("Law L53(1)/2017').

Other legal requirements

Pursuant to the additional requirements of law L.53(1)2017, and based on the work undertaken in the course of our audit, we report the following:

· In our opinion, the management report, the preparation of which is the responsibility of the Board of Directors, has been prepared in accordance with the requirements of the Companies Law, Cap. 113, and the information given is consistent with the consolidated financial statements.
· In the light of the knowledge and understanding of the business and the Company's environment obtained in the course of the audit, we have not identified material misstatements in the management report.
In our opinion, the information included in the corporate governance statement in accordance with the . requirements of subparagraphs (iv) and (v) of paragraph 2(a) of Article 151 of the Companies Law, Cap. 113, and which is included in the Group's Annual Report has been prepared in accordance with the requirements of the Companies Law, Cap, 113, and is consistent with the consolidated financial statements.
· In our opinion, the corporate governance statement includes all information referred to in subparagraphs (i), (ii), (iii), (vi) and (vii) of paragraph 2(a) of Article 151 of the Companies Law, Cap. 113.

Other matter

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Section 69 of Law L53(1)/2017, and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.

The engagement partner on the audit resulting in this independent auditors' report is Maria A. Papacosta.

Maria Papacosta, FCC/ Ceriffied Public Accountant and Registered Auditor for and on behalf of

KPMG Limited Certified Public Accountants and Registered Auditors 14 Esperidon Street 1087 Nicosia Cyprus

23 April 2018

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

	Nole	2017	2016
Continuing operations
Revenue	5	51 785	44 227
Cost of sales	6	(59 334)	(48 491)
Net change in fair value less cost to sell of biological assets and
agricultural produce	7	23 914	30 952
Gross profit		16 365	26 688
Other operating income	8	636	1 749
Administrative expenses	9	(2 642)	( 535)
Distribution expenses	10	(1 360)	(867)
Other operating expenses	11	(476)	(2718)
Operating profit	13	8 573	23 317

Impairment losses	12	(29)	(53)
Gain on repurchase of notes	20		7 172
Fair value losses on financial assets at fair value through profit or
loss		1	(20)
		8 495	30 -116
Finance income
Finance costs	14	2 488	2 331
Net finance costs	14	(2 620)	(10 963)
		(132)	(8 632)
Profit before taxation
Taxation		8 365	21 784
Profit from continuing operations		(41)
		8 322	21 784
Discontinued operations
Loss from discontinued operations	27
Profit for the year			(3)
		8 372	21 7:31
Other comprehensive income
Items that are or may he reclassified subsequently to profit or loss
Effect of translation into presentation currency		371	3 278
Total comprehensive income		8 693
			25 054
Profit attributable to:
Owners of the Company		8 209	21755
Non-controlling interests		23	26
		8 3922
			21 781
Total comprehensive income attributable to:
Owners of the Company		8 674	25 039
Non-controlling interests		19	। 5
		A 698	25 054

Profit per share
Basic and fully diluted profit per share (USD)	31	0.38	1.00

Profit per share - continuing operations
Basic and fully diluted profit per share (USD)	31	0.38	1.00

The notes on payes 19 to 90 are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2017

(in USD thousand, unless otherwise stated)

Assets	Note	2017	2016
Property, plant and equipment
Intangible assets	17	9 022	6 056
Biological assets	18	4 693	6 261
Non-current assets	। ਕੇ	1 480	1 840
		15 195	14 157
Inventories	ਡ ਤੇ	27 177
Biological assets	1 6	6 610	29 010
Investments designated at fair value through profit or loss	20	236	5775
Trade and other receivables	24	5 055	235
Loans receivable	21	19 720	4 204
Assets held for sale	27	17	16 762
Cash and cash equivalents	26	17 481	17
Current assets		76 296	11 674
Total assets			67 677
		91 491	81 834
Equity
Share capital
Share premium	28	661	66 :
Retained earnings	28	88 532	88 532
Foreign currency translation reserve		(18 465)	(26 764)
Equity attributable to owners of the Company		8 806	8 431
Non-controlling interests		79 534	70 860
Total equity		234	215
		79 768	71 075
Liabilities
Loans and borrowings	29	9 807
Non-current liabilities		9 807	9 357
Loans and borrowings			9 357
Trade and other payables	29	ਉਦੇ	74
neome tax liability	30	1 666	1 207
Liabilities held for sale		152	112
Current liabilities	27	9	9
		1 916	1 437
Total liabilities
		11 723	10 750
Total equity and liabilities		91 491	81 834

On 23 April 2018 the Board of Directors of Agroton Public Limited approyed and authorised these
consolidated finapeial statements for issue. consolidated financial statements for issue.

Tamara Lapta

Deputy Chief Executive Officer

Larysa Orlova

Chief Financial Officer

The notes on pages 19 to 90 are an integral part of these consolidated financial statements.

AGROTON PUBLIC LIMITS B

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

	equity Total	46021	21 781	3 273	25 054	71 075	71 075	8 322	371	693 8	79 768
	controlling interests Non-	200	26		15	215	215	23	(4)	19	234
	Trotal	45 82	21 755	3 284	25 039	70 860	0 860	8 799	375	674 8	79 534
	translation currency Forcign reserve	5 147		3 284	3 284	8 431	8 431		375	375	8 806
Attributable to owners of the Company	Retained earnings	(48 519)	21 755		21 755	(26 764)	(26 764)	8 299		8 299	(18 165)
	premium Share	88 232			t	88 232	88 532		œ		88 532
	Share capital l	661 -		-		661 l	661 1		- 1	I	661 -
	Other comprehensive income Total comprehensive income Other comprehensive income Balance at 1 January 2016 Profit for the year				Balance at 31 December 2016	Balance at 1 January 2017	Total comprehensive income Profit for the year	Other comprehensive income	Total comprehensive income for the year	Balance at 31 December 2017

The notes on pages 19 to 90 are an integral part of these consolidated financial statements,

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (cont.)

For the vear ended 31 December 2017

(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 connission 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 Special Contribution for the Defence of the Republic Law, during the two years after the end of the year of assessment 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 the owners (individuals and companies) at the end of the period of two years from the end of the year of assessment to which the profits refer are Cyprus tax residents. The amount of this deemed dividend distribution is reduced by any actual dividend paid out 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.

The notes on pages 19 to 90 are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

	Note	2017	2016
Cash Nows from operating activities:
Profit for the year		8 372	21 781
Adjustments for:
Depreciation	। ୧	1 102	976
Amortisation	16	1 149	1 244
Gain on repurchase of notes			(7 172)
Fair value losses on financial assets at fair value through profit
or loss		(1)	20
Wastages and impairment of inventories	11,12	3 446	1 835
Gain from changes in fair value less cost to sell of biological
assets and agriculture produce	7	(23 914)	(30 952)
Impairment of trade and other receivables	11.12	122	149
Impairment of property, plant and equipment	17	29	8
Reversal of provision for bad debts	25	(32)	(416)
Reversal of impairment of PPE	17	(4 4)	(308)
Interest income	14	(2 488)	(2331)
Interest expense	। ਪੰ	વરિણ	1 306
Trade payables written-off	00	(50)	(5)
Loss on disposal of property, plant and equipment		64	13
Loss on disposal of current assets		17	10
Loss on disposal of land lease rights	11	300	40%
Foreign exchange loss	14	2 154	9 657
Income tax expense		বা ।
Cash Now used in operations before working capital
changes		(9 687)	(3 787)
Decrease in inventories		22 891	16 980
Decrease in biological assets		(2 198)	(2012)
Increase in trade and other receivables		(1 113)	(818)
Increase in trade and other payables		507	168
Net cash from operating activities		10 400	10 531
Income tax paid
Net cash from operating activities		10 400
			10 531
Cash flow from investing activities
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment		(4 (18)	(1716)
Loans granted
Loans repayment		(613)	(110)
Interest received		113
			5
Net cash used in investing activities		(4 618)	(1 821)

The notes on pages 19 to 90 are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS (cont.)

For the vear ended 31 December 2017

(in USD thousand, unless otherwise stated) Note 2017 2016 Cash flows from financing activities Repayment of loans and borrowings (5 291) Net cash used in financing activities (5 291) Net increase in cash and cash equivalents 5 782 3 419 Cash and cash equivalents at the beginning of the year 11 674 8 575 Effect from translation into presentation currency 25 (320) Cash and cash equivalents at the end of the year ટેર 17 481 11 674

The notes on payes 19 to 90 are an integral part of these consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(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 lipted 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 helnw

Company name	Country of incorporation	Ownership Interest 31.12.2017	Ownership Interest 31.12.2016
Living LLC	Ukraine	99.99 %	99.99 %
PE Agricultural Production Firm Agro	Ukraine	99.99 %	99.99 %
Agroton PISC	Ukraine	99,99 %	99,99 %
OJSC Belokurakinskiy Elevator	Ukraine	99.99 %	99.99 %
Agro Meta LLC (i)	Ukraine	99.99 %	99.99 %
Rosinka-Star LLC	Ukraine	99.99 %	09,99 %
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	Ükraine	addid and	99.99 %

(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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

GENERAL INFORMATION (cont.) 1.

The shares at 31 December 2017 and as at the date of issue of these consolidated financial statements were distributed as follows:

	31 December 2017		18 April 2018
Sharcholder	Number of	Ownership	Number of	Ownership
	Shares	interest, %	Shares	interest, %
Mr. Jurii Zhuravlov	16 038 746		74.01 % 16367 979	75.53 %
Others	2 631 254		25,99 % 5 302,021	24.47 %
	21 670 000		100,00 % 21 670 000	100.00 %

2. BASIS OF PREPARATION

These consolidated financial statements of the Company as at and for the year ended 31 December 2017 comprise the financial statements of the Company and its subsidiaries (together with the Company, the "Group").

The Company has subsidiary undertakings and according to 142(1)(b) of the Cyprus Companies Law Cap. I 3 is required to prepare consolidated financial statements and present them before the members of the Company at the Annual General Meeting.

2.1 Statement of compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS'), as adopted by the European Union ('EU'), and the requirements of the Cyprus Companies Law, Cap. 113, and are for the year ended 31 December 2017.

2.2 Basis of measurement

These consolidated 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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(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.

2.4 Going concern basis

These consolidated 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 challenging conditions in the domestic markets as described in note 34 to the consolidated 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 fong 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 2017, 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 financial statements of the Group.

The Company is required to adopt IFRS 9 "Financial Instruments" and IFRS 15 "Revenue from Contract with Customers" from 1 January 2018. The Company has preliminarily assessed the estimated impact that the initial application of these standards will have on its consolidated financial statements. The actual impact of adopting the standards at 1 January 2018 may change because the new accounting policies are subject to change until the Group presents its first consolidated financial statements that include the date of initial application ("DIA").

The following Standards, Amendments to Standards and Interpretations have been issued but are not yet effective for annual periods beginning on I January 2017. Those which may be relevant to the Group are set out below. The Group does not plan to adopt these Standards early.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

2 BASIS OF PREPARATION (cont.)

2.5 Standards and interpretations (cont.)

Adoption of new and revised International Financial Reporting Standards and Interpretations (cont.)

(i) Standards and Interpretations adopted by the EU

· IFRS 9 "Financial Instruments" (effective for annual periods beginning on or after 1 January 2018).
· IFRS 15 "Revenue from contracts with customers" (effective for annual periods beginning on or after 1 January 2018).

The Group is currently evaluating the expected impact of adopting the standard on its financial statements. As such, the expected impact of the standard is not yet known or reasonably estimable.

· IFRS 15 (Clarifications) "Revenue from Contracts with Customers" (effective for annual periods beginning on or after I January 2018) The Group is currently evaluating the expected impact of adopting the standard on its financial
statements. As such, the expected impact of the standard is not yet known or reasonably estimable. · IFRS 16 "Leases" (effective for annual periods beginning on or after I January 2019). The Group is currently evaluating the expected impact of adopting the standard on its financial
statements. As such, the expected impact of the standard is not yet known or reasonably etting him · IFRS 4 (Amendments) "Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts" (effective for annual periods beginning on or after 1 January 2018).
Annual Improvements to IFRSs 2014-2016 Cycle (effective for annual periods beginning on or after I January 2018 (IFRS 1 and IAS 28)).
· IFRS 2 (Amendments) "Classification and Measurement of Share-based Payment Transactions" (effective for annual periods beginning on or after 1 January 2018).
· IAS 40 (Amendments) "Transfers of Investment Property" (2010) or after 1 January 2018).
· IFRS 9 (Amendments) "Prepayment Features with Negative Compensation" (effective for annual periods beginning on or after I January 2019).
· IFRIC 22 "Foreign Currency Transactions and Advance Consideration" (effective for annual periods beginning on or after 1 January 2018).

Preliminary impact of IFRS 9 on the Group

IFRS 9 "Financial Instruments" sets out requirements for recognizing and measuring financial assets and financial liabilities and some contracts to buy or sell non-financial items. This standard replaces 1AS 39 "Financial Instruments: Recognition and Measurement".

The new impairment requirements are expected to have an impact on the Group's consolidated financial statements from the implement is not an implet of the Croups consolved quantitative information about the expected impact since the Group is in the process of building and testing models, assembling data and calibrating the impairment stage transfer criteria. The impact is also dependent on finalizing the classification assessment and the current circumstances. Management expects loss allowances under IFRS 9 to be at the same level as IAS 39.

IFRS 9 Implementation Programme

The Group expects that it will be in a position to provide quantitative information on the impact of the transition to IFRS 9 on its financial position and performance in its next reported consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

2. BASIS OF PREPARATION (cont.)

2.5 Standards and interpretations (cont.)

Adoption of new and revised International Financial Reporting Standards and Interpretations (cont.)

(ii) Standards and Interpretations not adopted by the EU

· IFRIC 23 "Uncertainty over Income Tax Treatments" (effective for annual periods beginning on or after I January 2019).
· IAS 28 (Amendments) "Long-term Interest in Associates and Joint Ventures" (effective for annual periods beginning on or after I January 2019).
· Annual Improvements to IFRSs 2015-2017 Cycle (effective for annual periods beginning on or after 1 January 2019).
· IAS 19 (Amendments) "Plan Amendment, Curtailment" (effective for annual periods beginning on or after 1 January 2019).
· "Amendments to References to the Conceptual Framework in IFRS Standards" (effective for annual periods beginning on or after 1 January 2020).
· IFRS 10 (Amendments) and IAS 28 (Amendments) "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture" (effective date possponed indefinitely).

The Board of Directors expects that the adoption of these financial reporting standards in the future periods will not have a material effect on the financial statements of the Group.

3. SIGNIFICANT ACCOUNTING POLICIES

The Group has consistently applied accounting policies set out in this note to all years presented in these consolidated financial statements. Accounting policies of subsidiaries have been changed where necessary to achieve consistent application of the accounting policies applied by the Group.

3.1 Basis of consolidation

Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists where the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The financial statements of subsidiaries acquired or disposed during the year are included in the consolidated statement of profit or loss from the date that control commences until the date control ceases.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring them in line with the accounting policies of the Group.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

SIGNIFICANT ACCOUNTING POLICIES (cont.)

Basis of consolidation (cont.) 3.1

Changes in the Group's ownership interests in existing subsidiaries

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity as transactions with owners acting in their capacity as owners. No adjustments are made to goodwill and no gain or loss is recognised in profit or loss.

When the Group loses control of a subsidiary, the resulting profit or loss is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair relained interest and (i) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. The resulting profit or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

Business combinations

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit or loss as incurred.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assels acquired and the liabilities assumed. If, after reassessment, the nequisition-date amounts of the identifiable assess acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the acquisition date, except that:

· deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively :
· liabilities or equily instruments related to share-based payment arrangements of the acquiree or sharebased payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 Share-based Payment at the acquisition date; and
· assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the vear ended 31 December 2017

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.1 Basis of consolidation (cont.)

Business combinations (cont.)

Non-controlling interests that are present ownership interests and entitle their holders to a proportionale share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another IFRS.

When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the 'measurement period' (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with IAS 39, or IAS 37 Provisions. Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.

When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date when the Group obtains control) and the resulting gain or loss,if any,is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed.

If the initial accounting for a business combination is incomplete by the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date.

Non-controlling interest (NCI)

NCI is represented by interest in the subsidiaries not owned by the Group. It is determined at the reporting period as interest in the fair value of identified assets and liabilities of the subsidiary at the date of acquisition or creation of a new subsidiary, as well as interest in change in net assets of a subsidiary after the acquisition or creation of a new subsidiary.

The Group provides information on NCI in net assets of subsidiaries and companies not connected with formal structure and not having a common parent company separately from items of equity attributable to the owners of the parent company.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.2 Foreign currency translation

(a) Transactions and balances

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction.

Monetary assets and liabilities are translated into the functional currency of each company included into the Group, at the rates ruling at the reporting period. Foreign exchange gains and losses, arising from transactions in foreign currency, and also from translation of monetary assets and liabilities into the functional currency of each company included into the Group at the rate ruling at the end of the year, are recognised in profit or loss.

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

Currency	31 December	Weighted	31 December	Weighted	31 December
	2017	average for the	2016	average for the	2015
		year 2017		year 2016
US dollar - UAH	28,0672	26,5947	27,1909	25.5458	24,0007

The empowerment of the USD against UAH has resulted in the reduction of various values disclosed in the consolidated financial statements of profit or loss and financial position. This reduction is applicable only in case of translation into presentation currency.

The foreign currencies may be freely convertible to the territory of Ukraine at the exchange rate which is close to the exchange rate established by the National Bank of Ukraine. At the moment, the Ukrainian Hryvnia is not a freely convertible currency outside the Ukraine.

(b) Presentation currency

The financial results and position of cach subsidiary are translated into the presentation currency as follows:

· At each reporting period of the consolidated financial statements all the assets and liabilities are translated at the exchange rate of the National Bank of the European Central Bank at that date:
· Income and expenses are translated at the average exchange rates (except for the cases when such average exchange rate is not a reasonably approximate value reflecting cumulative influence of all exchange rates prevailing at the date of transaction, in which case income and expenses are translated at the exchange rates at the date of transaction);
· All exchange differences are recognised in other comprehensive income.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.3 Property, plant and equipment

Initial recognition of property, plant and equipment ("PPE") Property plant and equipment is recognised by the Group as an asset only when:

· it is probable that the Group will receive certain future economic benefits;
· the historical cost can be assessed in a reliable way;
· it is intended for use during more than one operating cycle (usually more than 12 months).

Expenses after the initial recognition of property, plant and equipment

Any subsequent expenses, increasing the future economic benefits from the asset. are treated as additions. Otherwise, the Group recognises subsequent expenses to profit or loss of the year, in which they are incurred. The Group divides all expenses, related to the property, plant and equipment, into the following types:

· current repairs and expenses for maintenance and technical service;
· capital impairment, including modernisation.

Subsequent measurement of property, plant and equipment

After initial recognition as an asset, the Group applies the model of accounting for the property, plant and equipment at historical cost, net of accumulated depreciation and any accumulated losses from impairment, taking into account estimated residual values of such assets at the end of their useful lives. Such cost includes the cost of replacing significant parts of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of pregerly, plant and equipment are required to be replaced from time to time, the Group recognises such parts as individual assets with specific estimated useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying value of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs equipment as a in the profit or loss of the year in which they are incurred.

Depreciation of property, plant and equipment is calculated using the straight-line method over the estimated useful lives agreed upon with the technical personnel of the Group.

The estimated useful lives of property, plant and equipment are as follows:

Construction in progress	Not depreciated
Buildings	10-75 years
Machinery and equipment	2-30 years
Vehicles	2-15 years
Computers and office equipment	1-10 years
Instruments, tools and other equipment	1-10 years

Residual values and useful lives of assels are reviewed at each reporting period and adjusted if appropriate.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.3 Property, plant and equipment (cont.)

The acquired asset is depreciated starting from the following month of the date of placing into operation and depreciation is fully accumulated when useful life ends.

Derecognition

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying value of the asset) is included in profit or loss of the year in which the asset is derecognised.

Impairment

At each reporting period the Group evaluates whether ony indicators of possible impairment of an asset exist. If the recoverable value of an asset or a group of assets within property, plant and equipment is lower than their carrying (residual) value. the Group recognises such asset or group of assets as impaired, and accrues a provision for impairment of the amount of excess of the carrying value over the recoverable value of the asset. Impairment losses are recognised immediately in profit or loss.

Assess under construction

Assets under construction comprise costs directly related to construction of property, plant and equipment including an appropriate allocation of directly attributable variable overheads that are incurred in construction. Construction in progress is not depreciation of the construction in progress, on the same basis as for other property, plant and equipment items, commences when the assets are available for use, i.e. when they are in the location and condition necessary for them to be capable of operating in the manner intended by the management.

3.4 Intangible assets

For the purpose of preparation of the consolidated financial statements, the Group defines the following groups of the intangible assets: computer software and land lease rights.

Computer softvare

Costs that are directly associated with identifiable and unique computer software products controlled by the Group and that will probably generate economic benefits exceeding costs beyond one year are recognised as intangible assets. Subsequently computer software is carried at cost less any accumulated amortisation and any accumulated impairment losses. Expenditure which enhances or extends the performance of computer software programs beyond their original specifications is recognised as a capital improvement and added to the original cost of the computer software. Costs associated with maintenance of computer software programs are recognised in profit or loss of the year in which they are incurred. Computer software are amortised on a straight-line basis over their useful lives, usually 5 years. Amortisation starts from the following year of the date of placing into operation and is fully accumulated when useful life ends.

Amortisation methods, useful lives and residual values are reviewed at each reporting period and adjusted accordingly.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.4 Intangible assets (cont.)

Land lease rights

Land lease rights acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Land lease rights acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost), Subsequent to initial recognition. Iand lease rights acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment fosses, on the same basis as land lease rights acquired separately.

Amortisation of land lease rights is recognised on a straight-line basis over their estimated useful lives. For land lease rights, the amortisation period is 10 years.

The amortisation period and the amortisation method for land lease rights are reviewed at least at the end of each reporting period, with the effect of any changes in estimate being accounted for prospectively.

Derecognition of intangible assets

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss of the year in which the asset is derecognised.

3.5 Financial instruments

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument.

(i) Trade and other receivables

Trade and other receivables are initially recognised at fair value and are subsequently measured at amortised cost using the effective interest rate method. Trade and other receivables are stated after deducting the appropriate allowances for any impairment.

(ii) Prepavments from clients

Payments received in advance on sale contracts for which no revenue has been recognised yet, are recorded as prepayments from clients as at the reporting date and carried under liabilities.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.5 Financial instruments (cont.)

(iii) Loans granted

Loans originated by the Group by providing money directly to the borrower are categorised as loans and are carried at amortised cost. This is defined as the fair value of cash consideration given to originate those loans as is determined by reference to market prices at origination date. All loans are recognised when cash is advanced to the borrower.

An allowance for loan impairment is established if there is objective evidence that the Group will not be able to collect all amounts due according to the original contractual terms of loans. The amount of the provision is the difference between the carrying amount and the recoverable amount, being the present value of expected cash flows including amounts recoverable from guarantees and collateral, discounted at the original effective interest rate of loans.

(iv) Investments

Investments in securities are classified as financial assets at fair value through profit or loss and are presented at their fair value at the reporting period.

The fair value for investments in listed securities is considered to be the current bid prices and is calculated in accordance with the prices published by the Stock Exchange at the reporting period.

Realised and unrealised gains and losses arising from the change in the fair value of investments are recognised in profit or loss.

(v) Borrowings

Borrowings are recorded initially at the proceeds received, nel of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(vi) Trade pavables

Trade payables are initially recognised at fair value and are subsequently measured at amortised cost, using the effective interest rate method.

Derecognition of financial assets and linbilities

Finemoint assets

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:

· the contractual rights to receive cash flows from the asset have expired:
· the Group retains the right to receive cash Nows from the assemed an obligation to pay them in full without material delay to a third party under a 'pass through' arrangement; or
· the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor relained substantially all the risks and rewards of the asset, but has transferred control of the asset,

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.5 Financial instruments (cont.)

Any interest in such derecognized financial assess that is created or retained by the Group is recognised as a separate asset or liability

Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the consolidated statement of financial position.

3.6 Inventories

The Group identifies the following types of inventories:

· raw and other materials (including principal and auxiliary industrial raw and other materials; agricultural purpose materials);
· work-in-progress (including semi-finished products);
agricultural produce; ●
finished goods;
· goods in stock;
· other inventories (including fuel, packaging, construction materials, spare parts, low value items, other materials and consumable supplies).

Work in progress includes the costs incurred during the period, but relating to the preparation of crop areas under sowing for future reporting periods.

Agricultural products derived from biological assets are measured at fair value less costs to sell at the point of harvest. Profit or loss arising upon initial recognition of agricultural products at fair value less estimated costs to sell is recorded in profit or loss as goin((loss) from changes in value of biological assets and agricultural produce.

Inventories are measured at the lower of cost and net realisable value.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.6 Inventories (cont.)

The cost of inventories is based on the first-in first-out (FIFO) principle and includes all expenses for acquiring the inventories, conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of work in progress and finished goods, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realisable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and preliminary estimated distribution and selling costs.

The Group regularly reviews inventories to determine whether there are any indicators of damage, obsolescence, slow movement, or a decrease in net realisable price. When such events take place, the amount by which inventories are impaired, is reported in profit or loss.

Impairment of inventories

Cost of inventories may be irrecoverable if the realisable value for such inventories has decreased due to their damage, whole or partial obsolescence or resulting from changes in market prices. Cost of inventories may be irrecoverable if possible costs for completion or sale have increased.

Raw and other materials in inventories are not written-off below cost, if finished goods, in which they will be included, will be sold at cost or above. However, when decrease in price for raw materials indicates that cost of finished goods will exceed the net realisable value, raw materials are written off to the net realisation value.

At each reporting period the Group analyses inventories to determine whether they are damaged, obsolete or slow-moving or whether their net realisable value has declined. If such situation occurred, the amount by which inventories are impaired is recorded in profit or loss.

3.7 Biological ussets

The following groups of biological assets are distinguished by the Group:

(a) current - with useful life of I year, including:

· agricultural crops (winter crops, spring crops and industrial crops);
· animals in growing and fattening (cattle);
(b) non-current with useful life over I year:
· work and productive livestock (cattle, etc.).

Biological asset is an animal or plant which in the process of biological transformations can create agricultural products or additional biological assets, as well as bring economic benefits in other ways.

Biological assets are measured at fair value less estimated costs to sell, except in case where fair value cannot be determined reliably. Costs to sell include all costs that would be necessary to sell the assets. including transportation costs.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

SIGNIFICANT ACCOUNTING POLICIES (cont.)

Biological assets (cont.) 3.7

If there is an active market for a biological asset or agricultural produce, the Group determines the fair value of assets based on their quoted price in the market. If the Group has access to several markets, the definition of fair value is based on the market, which may be used by the Group with the highest probability.

In the absence of an active market, the Group uses one or more of the following indicators to determine the fair value of biological assets:

· price of the most recent transaction in the market, provided that in the period between the date of the transaction and the reporting date there were no significant changes of economic conditions;
· market prices for similar goods;
sectorial indices.

In case where there are no market prices or other value indicators to determine the fair value in respect of the biological asset at a particular time, the Group uses the discounted value of the asset's expected net cash flows, while applying a discount coefficient, calculated on the basis of current market conditions for cash flow before tax.

Where there is no information about market prices upon the initial recognition of biological asset, and alternative estimates of fair value are clearly unreliable, such biological asset is volued at cost lass accumulated depreciation and impairment losses. Once there is the possibility to decemine the fair also of biological assets with reasonable reliability, the biological asset is revalued as factoring the rail value less estimated costs to sell (this principle applies only at initial recognition of the biological asset). If the Group nas previously valued the biological asset at fair value less estimated costs to sell, this biological asset is recorded at fair value less estimated costs to sell up to the moment of its disposal.

The difference between the fair value less estimated costs to sell and production cost of biological assets is recorded in profit or loss as gain((loss) from changes in value of biological assels and griculural products.

Biological assets and future harvest costs

Cost of crops for future harvest consists of actual costs incurred in growing harvest (including lease expenses, costs of land preparation, planting, fertilising, processing, collection, storage). The fault of winter crops at the end of the year is approximate to its cost due to a minor biological transformation of seeds at the end of the year, significant impact of cultivation quality, weather condition and promition on future harvest, variations in market demand for future harvest. Crops for future harvest an measured al cost.

3.8 Cash and cash equivalents

Cash and cash equivalents include cash at banks and in hand, cash in transit, issued letters of credit and cali deposits.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.9 Impairment of non-current assets

The Group assesses at each reporting period the carrying value of its non-current assets to delermine whether there is any objective evidence that non-current assets are impaired. If any such evidence exists, the recoverable amount of the asset is estimated in order to determine the extent of the imparment foss (if any). If it is not possible to estimate the recoverable amount of the individual asset, the Gour shall delermine the recoverable amount of the cash-generating unit to which the asset beforge (the assel salageneraling unit).

The expected recoverable amount of a cash-generating unit is the highest of the cash-generating unit's selling value and its value in use. In estimating until 15 the future cash flows are discounted to present value using a discount rate before taxation which reflects current market assessments of the time value of money and the risks specific to the asset.

If the expected recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying value, the carrying value of the asset (or cash-generating unit) shall be reduced to its recoverable impoint. That reduction is an impairment loss, unless the asset is carried at revalued amount. Any impairment loss of a revalued asset shall be treated as a revaluation deficit. If the impairmum. Ioss is and assimpled amount of the carrying value of an asset (or cash-generating unit) increases to the revised and estimated amount of its recoverable amount, where increased carrying value does not exceed the carrying value which could be determined only in that case if impairment loss for an assess (or cashgenerating unit) was not recognised in the previous years. Reversal of the impairment loss is recognised in profit or loss.

3.10 Advances issued and other accounts receivable which are not financial assets

Advances issued are recorded at nominal value less value added tax and any accumulated impairment losses. Other current assets are recorded at nominal cost less accumulated impairment losses.

Impairment of advances issued if there is objective evidence that repayment of the full amount of the debt does not as within the contract tems, including the incoming information about substantial financial difficulties of the debtor, the metally necognition a debtor as a bankrupt, or probability of debtor's reorganisation, in case of refusal from delivery, etc. Impairment of advances issued and other non-financial current assess is reflected according to order described in subparagraph 'Impairment of Assets' of Note 12.

Advances issued under the contracts for the purchase of property, plant and equipment are recorded in section 'Other non-current assets' of consolidated statement of financial position.

3.11 Value added tax (VAT)

In Ukraine VAT standard rate is 20% on imports and sale of goods and services in the territory of Ukraine and 0% rate for all exports and services rendered outside Ukraine.

The VAT liability is equal to the total amount of VAT accrued during the reporting period and arises at the earlier of goods shipment to the customer or at the date of receipt of payment from the client.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.11 Value added tax (VAT) (cont.)

VAT credit is the amount by which a taxpayer is entitled to reduce his/her VAT liabilities in the reporting period. The right to VAT credit arises on the earlier of the date of payment to supplier or the date of receipt of goods by the Company.

· the value added tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the value added tax is recognised as part of acquisition of the asset or as part of the expense item as applicable;
· receivables and payables are stated including the value added tax.

For the Cyprus Company VAT of 19% applies on expenses.

The Group classifies VAT recoverable arising from its operating activities and its capital expenditures. The balance of VAT recoverable may be realised by the Group either through a cash refund from the state budget or by sett off against VAT liabilities with the state budget in future periods.

The net amount of VAT recoverable from, or payable to, the faxation authority is included as part of receivables or payables in the consolidated statement of financial position.

3.12 Income tax

Current income tor

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax used to compute the amount are those that are enacted or substantively enacted, by the reporting period in the countries where the Group operates and generates taxable income.

Current income tax relating to items recognised directly in recognised in equity and not in the statement of profit or loss and other comprehensive income. Management period includes positions taken in the tax returns with respect to situations in which applicable tax regulations are publications are publications are publications are publications are publications interpretation and establishes provisions where appropriate.

The majority of Groups entities are registered as tax payers of fixed agricultural tax and therefore are not payers of corporate tax.

3.13 Revenue recognition

Revenue comprises the invoiced amount for the sale of goods and services net of Value Added Tax, returns, volume rebates and trade discounts. Revenues carned by the Group are recognised on the following bases:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

SIGNIFICANT ACCOUNTING POLICIES (cont.) 3.

Sale of Goods

Revenue is recognised when significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs of possible return of gods can be estimated reliably, there is no continuing management with the goods, and the goods, and the mount of revenue can be measured reliably.

Services

Sales of services are recognised in the accounting period in which the services are rendered by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.

3.14 Finance income and costs

Finance income comprises of interest income is recognised as it accrues in profit or loss, using the effective interest method.

Finance costs comprise interest expense on borrowings and bank charges.

Borrowing costs that are not directly attributable to the acquisition, construction of a qualifying asset are recognised in profit or loss using the effective interest method.

Borrowing costs that are directly attributable to the acquisition or production of a qualifying intention fecessarily requires significant time to be prepared for use in accordance with the Group's intentions or for sale, are capitalised as the part of initial value of such asset. All other borrowing costs are expensed in profit or loss in the period they were incurred. Borrowing costs include interest payments and other expenses incurred by the Group related to borrowings.

Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position,

3.15 Assets held for sale or distribution

Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered distribution, but a distribution rather than through continuing use, are classified as held for sale or distribution. Immediately before classification as held for sale or distribution, the assets, or components of a disposal group, are remeasured in accordance with the Group's accounting policies. Thereafler generally the assets, or disposal group, see measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining defensions and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, investment property or biological assets, which continue to be measured in accordance with the Group's accounting policies. Impairment losses on initial classification as held for sale or distribution and subsequent gains and losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

Once classified as held for sale or distribution. intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity-accounted investee is no longer equility accounted.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.16 Leases

At inception of an arrangement, the Group determines whether an arrangement is or contains a lease.

At inception or on reassessment of an arrangement that contains a lease, the Group separates payments and other consideration required by the arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and liability are recognised at an amount equal to the fair value of the underlying asset, subsequently, the liability is reduced as payments are made and to ime name finance cost on the liability is recognised using a Group's incremental borrowing rate,

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Finance leases - The Group as lesee

The leases of the Group are classified as finance leases, if they transfer to the Group substantially all the risk and rewards incidental to ownership of an asset. The Group recognises a finance lease as asset and liability at the lower of the fair value of the leased asset and the present value of minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy applicable to that asset.

The payments are appointed between the finance expenses and the decrease of the finance lease obligations based on the effective interest method.

Operating leases

Rentals payable under operating leases are charged to profit or foss on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease and a spread on a straight-line basis over the lease term.

3.17 Distribution of dividends

The amount payable to the Owners of the Company in the form of dividends is recognised in the financial statements of the Group in the period the dividends were approved by the Owners of the Company.

3.18 Contingent assets and liabilities

Contingent liabilities represent the possible commitments of the Group arising from past events, which existence will be confirmed only as a result of occurrence or non-occurrence of one or more fullier, which that are not under the full control of the Group, or current liabilities arising from past evenss not recognized in the financial statements in connection with the Group does not consider the outflow of resources providing economic benefits and required for liabilities settlements as expected ones, or the amount of liabilities cannot be reliably measured.

The Group does not recognize contingent liabilities in financial statements. The Group discloses information about contingent liabilities in the financial statements unless the probably of outflow of resources required to settle the liability, is unlikely.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

3. 3.18 Contingent assets and liabilities (cont.)

Contingent assets represent the possible assets of the Group arising from past events, which existence will be confirmed only as a result of occurrence or non-occurrence of one or more future events that are not under the Group director of the Group does not recognize contingent assets in the financial statements. The Group discloses information about contingent assels in the financial statements, if the flow of economic benefits is likely 10 occur.

3.19 Provisions

A provision is a liability of uncertain amount or timing. Provisions are recognised if as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably and it is obligation. What an outflow of resources embodying economic benefits will be required to settle the incurance contract the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimble under an is virually certain. The expensent is tecognised is a separate in the consolidated statument of profit or loss and other comprehensive income net of any reimbursement. If the time value of money is material, provisions are discounted using a current pre-ax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

3.20 Operating segments

Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate asses, head office expenses and tax assets and liabilities.

The Group is organised by reportable segments and this is the primary format for segmental reporting. Each reportable segment provides products or services which are subject to risks and rewards that are different than those of other reportable segments.

The Group present its geographical analysis for segments.
hased on the assets location The Genus counter revise in the interior in the interior in the interior in the interio based on the asset's location. The Group operates mainly in Uraine.

3.21 Discontinued operations

Classification as a discontinued operation occurs on disposal or when the operation meets the criteria to be classified as held for sale (see note 3.1.5), if earlier. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative year

3.22 Share capital

Ordinary shares are classified as equity. The difference between the fair value of the consideration received and the nominal value of share capital issued is taken to share premium. Incremental costs directly attributable to the issue of ordinary shares premium. Increments costs from equity.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.23 Employee benefits

Post employee benefits

The Group contributes to the State Pension Fund of Ukraine and the social insurance funds for the benefit of its employees (defined benefits). The Group's contributions are expensed as incurred.

Current employee benefits

Employee salaries are expensed in the reporting period in which such work is performed.

3.24 Events after the reporting period

The Group adjusts the consolidated financial statements amounts if events after the reporting period demand adjustments. Events after the reporting period requiring adjustments of the consolidated figancial statements amounts relate to the confirmation of the circumstances prevailing at the reporting period, as well as estimates and judgments of management, which are made under conditions of uncertainty and incompleteness of information at the reporting period.

If non-adjusting events that occurred after the reporting period are significant, non-disclosure of information about them may affect the economic decisions of users which are made on the basis of these consolidated financial statements. Accordingly, the Group discloses the nature of such events and estimates of their financial effect or states the impossibility of such estimate for each material category of non-adjusting events that occurred after the reporting period.

SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES ব

The preparation of the consolidated financial statements in accordance with IFRS requires from management to exercise judgment, to make estimates and assumptions that influence the repplical of accounting principles and the reported amounts of assets, liabilities, income and expenses. The estimates and underlying assumptions are based on historical experience and various other factors that are certail. to be reasonable based on knowledge available at that time. Actual results may devince from such estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognised in the consolidated financial statements are described below:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

4. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (cont.)

4.1 Useful life of property, plant and equipment

The Group estimates the remaining useful life of property. plant and equipment at least once a year at the end of the fiscal year. Should the expectations differ from previous estimates, changes are accounted for a changes in accounting estimates in accordance with IAS 8 'Accounting Policy, Changes in Accounting Estimates and Error'. These estimates may have a significant effect on the carrying value of property, plant and equipment and depreciation recognised in profit or loss.

4.2 Impairment of non-financial assets

An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable to sell goleylation is beard on workly by the less costs to sell and its value in use. The fair value in use. The fair value in use. The fair value less costs of similes researces as abound a suallable data from binding sales transactions in an arm's length transaction of similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include estructuring activities that the Group is not yet committed to or significant future investment will enhance the asset's performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows and the growth rate used for extrapolation purposes

4.3 Impairment of receivables

The Group reviews its trade and other receivables for evidence of their recoverability. Such evidence includes the customer's payment record and the customer's overall financial position.

The Group provides for doubtful debts to cover potential losses when a customer may be unable to make necessary payments. In assessing the adequacy of provision for doubtiful debts, management considers the current economic conditions in general the age of accounts receivable, the Group's experience in writing off of receivables, solvensy of customers and changes in conditions of settlements. Economic changes, industry situation or financis position of separate customers may result in adjustments . Economic changes, amount of provision for doubtful debts reflected in the consolidated financial statements as impairments of receivables.

Additionally a general provision for doubtful debts is provided on all receivables due for more than 365 days.

Bad debts which maturity has already expired are written-off from the consolidated statement of financial position along with a corresponding adjustment to the provision for doubtlil lebts.

Bad debts which are subsequently recovered are reversed in the consolidated financial statements through profit or loss.

The Group does not accrue provisions for doubtful debts on balances with related parties regardless of the origin date of current debt.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (cont.) প

4.4 Legal proceedings

The Group's Management applies significant assumptions in the measurement and recognition of provisions for and risks of exposure to continent liabilities related to existing legal proceedings and other the probability of a supportule it sentingent liabilities. Management's judgment is required in estimating the probability of a successful claim angainst the Group or the crystallising of a material obligation, and in determining the probable amount of the final settlement or aniterial obligation. Due in uncertainly inherent to the process of estimation, actual expenses may differ from the initial estimates. Such preliminary estimates may aller as new information is received, from internal specialists within the Group, if any, or from third parties, such as lawyers. Revision of such estimates may have a significant effect on the future results of operating activity.

4.5 Impairment of obsolete and surplus inventory

At each reporting period the Group assesses the necessity to impair obsolete and surplus inventory. The their not realizable when her the whether they are damaged, obsolete or slow-moving or whether their net realisable value has declined. If such necessity exists, the reserve is calculated and necessary adjustments are made.

Inventories are measured at the lower of cost and net realisable value. The cost of inventories comprises all costing and conversion and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is determined as the estimated selling price in the and reline assess. The Mess less the estimated costs of completion and preliminary estimated distribution and selling costs. The Management estimates the net realisable values of inventories, taking inno account the most reliable evidence available at each reporting period.

4.6 Taxation

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of fiture and encome with of suiten the wide range of intenational business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions. could necessitate future adjustments to lax income for neasible annoses and the Group establishes provisions, based on reasonable estimates, The amount of any with by the tax authorities of the respective regions in which i operates. The amount of such provisions is based on various factors, such as experience of previous tax awheesive Such differing interpretations of tax regulations by the taxable entity and the responsible lax authority. Such differences of internetation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group companies' domicile.

Cyprus taxes

Significant judgment is required in determining the provision for Cyprus direct and indirect taxes. There are Iransactions and calculations for selection to Cypius direct and indirect and indiness. Incertain during the ordinary course of business. The Company receinst 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 lax and deferred tax provisions in the period in which such determination is made.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

+ SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (cont.)

4.6 Taxation (cont.)

In Management's opinion, the Company is in substantial compliance with the tax laws governing its operations. However, the risk remains that the relevant authorities could take different positions with regard to interactive issues and the effect could be significant.

The Company met the tax filing in Cyprus. To the best of Management's knowledge, no breaches of tax law have occurred. Thus, the Company has not recorded any provisions for potential impact of any such breaches at the reporting period.

4.7 Contingent liabilities

Contingent liabilities are determined by the occurrence of one or more fulure events. Measurement of contingent liabilities is based on management's judgments and estimates of the outcomes of such future events. In particular, the tax laws in Ukraine are complex and significant management judgement is required to interpret those laws in connection with the tax affairs of the Group, which is open to challenge by the tax authorities. Additionally, the economic and political situation in Ukrainemaly have an impact (note 34 to the consolidated financial statements).

4.8 VAT

Management classified VAT recoverable balance as current based on expectations that will be realised within twelve months from the reporting period. In addition management assessed whether the allowance for irrecoverable VAT needs to be created.

In making this assessment, management considers past history of receiving VAT refunds from the state budget. For VAT recoverable expected to be set off against VAT liabilities in future periods, management based its estimates on detailed projections of expected excess of VAT input over VAT ourput in the normal course of business.

4.9 Measurement of fair values

A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the CFO.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified.

Significant valuation issues are reported to the Board of Directors.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

ন SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (cont.)

4.9 Measurement of fair values (cont.)

When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierachy based on the inputs used in the valuation techniques as follows.

· Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities.
· Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
· Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the earne level of the fair value hierarchy as the last theasarences is the entire measurement. The Group recognises transfers between levels of the fair is significan to the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the relevant notes.

4.10 Ukrainian business environment

The Group conducts its operations mainly in Ukraine's political and economic situation has verious events in Crimes Ind as 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 moster of the repaired in a significant delevinal, which of the relationship between Ukraine and the Russian Federation. Following the instability in Crientiality in Crimea, regional tensions have spread to the Eastern regions of Ukraine, primarily Donetsk and Lugansk regions. In May 2014, protests in the regions escalated into military clashes and armed conflict between supporters of the self-declared republics of the Donesk and anned contined between 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.

പ്പ

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

এ ব SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (cont.)

4.10 Ukrainian business environment (cont.)

Political and social unrest combined with the military conflict in the Donetsk and Lugansk regions has deepened the ongoing economic crisis, caused a fall in the country's gross domestic product and foreign trade, deterioration in state finances, depletion of the National Bank of Ukraine's forcign currency reserves, significant devaluation of the national currency and a further downgrading of the Ukrainian sovereign debt credit ratings. Following the devaluation of the national currency, the National Bank of Ukraine introduced certain administrative restrictions on currency conversion transactions, which among others included restrictions on purchases of foreign currency by individuals and companies, the requirement to convert 50% (2016: 65%) of foreign currency proceeds to local currency, a ban on payment of dividends abroad, a ban on early repayment of foreign loans and restriction, or wash withdrawals from banks. These events had a negative effect on Ukrainian companies and banks, significantly limiting their ability to obtain financing on domestic and international markets,

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 fiture business environment may differ from management's assessment.

5. REVENUE

Vegetable oil and protein meals

Other agricultural crops

Com in grain

Totul

	2017	2016
Sales of goods	51 368	43 734
Rendering of services	47	493
Total	51 785	44 227
Revenue generated from sale of goods was as follows:
	2017	2016
Livestock and related revenue	3 951	2 759
Winter wheat	23 198	15 874
Sunflower	5 735	له ان

17 093

51 368

830

561

4 810

993

182

43 734

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

5. REVENUE (cont.)

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

	2017 tonnes	2016 fonnes
Winter wheat	170 937	135 658
Sunflower	18 001	57 555
Vegetable oil and protein meals	37 701	15 695
Corn in grain	6 688	7 8921
Total	233,327	216 729

Sales volume for milk yield for the year ended 31 December 2017 was 11 370 tonnes (2016: 10 973)
tonnes ( tonnes).

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

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

6. COST OF SALES

	2017	2016
Livestock and related operations Plant breeding and related operations Vegetable oil and protein meals Other activities	3 ਦਿਖਾ 38 601 15 875 1 64	2 639 40 266 4 768 818
Total	59 334	48 491

NET CHANGE IN FAIR VALUE LESS COST TO SELL OF BIOLOGICAL ASSETS AND 7. AGRICULTURAL PRODUCE

	2017	2016
Non-current biological assets Current biological assets Total	(209) 24 123	293 30 €59
	23 914	30 952

The net change in fair value less costs to sell per type of biological asset was:

	2017	2016
Animals in growing and fattening Crops under cultivation (Note 19) Tota	(1 445) 25 359	(131) 31 083
	23 914	30 952

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

8. OTHER OPERATING INCOME

Note	2017	2016
25 17	92 32 414 50 48 636	1 002 416 308 5 18 1749

Note	2017	2016
15 16 16	448 38 208 14 ਨਾ 266 র ন	668 2 25 110 14 3 305 42

10.

	Note	2017	2016
Personnel expenses Transportation expenses Utilities	15	ﻟﻠﺒﺎ 1 133	রী 716 8
Other expenses		224	139
Total		1 360	867

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

11. OTHER OPERATING EXPENSES

Note	2017	2016

ાર Depreciation charge	42	12
25 Impairment of trade and other receivables	122	136
Loss on disposal of property, plant and equipment	હવે	13
Loss on disposal of land lease rights	300	408
Loss on disposal of current assets	17	10
Wastages and impairment of inventories	3 446	1793
Fines and penalties	178	19
Donations	20	14
Other expenses	287	313
Total	4 476	2 718

12. IMPAIRMENT LOSSES

The Group's assets were impaired due to the military conflict in Eastern Ukraine. As a result, the Group has tested the related product lines for impairment and has recognised impairment losses for the following assets:

	Note	24917	2016

Impairment of property plant and equipment	17	20	8
Impairment of trade and other receivables	ਹੈ ਤੇ		13
Impairment of inventories	23		32
Total		29	53

13. OPERATING PROFIT

Operating profit is stated after charging the following items:

	Note	2017	2016
Depreciation of property, plant and equipment	17	1 102	976
Amortisation of intangible assets	18	1 149	1 244
Loss on disposal of property, plant and equipment	11	હન	13
Personnel expenses	15	7 075	ને જિલ્લ
Independent auditors' remuneration for the statulory audit of annual accounts		51	41

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

14. NET FINANCE COSTS

	2017	2016
Interest income	2 488	2331
Finance income	2 488	2 331
Interest on non-bank loans	(15)	(198)
Interest on notes	(451)	(1 (08)
Loss on foreign exchange differences	(2 154)	(9 657)
Finance costs	(2 620)	(10 963)
Net finance costs	(132)	(862)

PERSONNEL EXPENSES 15.

	2017	2016
Wages and salaries Contributions to state funds Total	5 976 099	4 033 836
	7 075	4 860

Payroll and related taxes were presented as follows:

	Note	2017	2016
Production personnel Administrative personnel Distribution personnel lotol	0 10 13	5 624 1 448 7 075	4 197 668 4 869

The number of employees were presented as follows:

	6018	2016
Average number of employees, persons Key management personnel	2 009	2 053 17

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

16. DEPRECIATION AND AMORTISATION

	Note	2017	2016
Depreciation charge:
Depreciation of production property, plant and equipment		1 022	039
Administrative expenses	9	38	25
Other expenses		42	12
Total	17	1 102	976
Amortisation charge:
Amortisation of land lease rights		1 149	1 242
Amortisation of intangible assets	9		2
Total	18	1 149	1 244
Total depreciation and amortisation		2 251	2 220

AGROTON PUBLIC LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

PROPERTY, PLANT AND EQUIPMENT 17.

Cost	Construction in progress -	Buildings	Equipment	Vehicles	Computers and office equipment	Instruments. tools and other	Total
Balance at 1 January 2016						cquinment
Additions	રતેર gg	12 428 44	10 571	2 366	તેર		26 268
Siesousils		ાં ૦૨	451	109	6		716
Reclassification Transfers	(67	66	(72	125	17	S	(21)
		(41)	272	(213)	1	-
Effect from translation into presentation currency Bulance at 31 December 2016	(83 I	410	371	(261	13	(રે
	હનેક -	10 982	0 852	976	77	4	(3 150)
Balance at 1 January 2017						16	24 623
Additions	હ્મુર	10 982	10 823	976
Disposals	69	47	835 ਸ	125	77 રેક	91	24 623
Transfers	(50)	( 23	(୧୧	(11)	ี้ไ	g	4 118
Effect from translation into presentation currency	(31)	30				ਹ	(184)
Balance at 31 December 2017	(20	(344)	(536)	(୧୫	- L	1
	613 1	0 662	14 086	2 022	98	క్ 102	(974)
Iha rooloccitires - C 1							27 583

The reclassification of depreciation was made in order to disclose the property, plant and equipment groups more properly.

AGROTON PUBLIC LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the vear ended 31 December 2017

(in USD thousand, unless otherwise stated)

PROPERTY, PLANT AND EQUIPMENT (cont.) 17.

15 5 79 16 equipment વેરુ 79 9 12 ్రా U tools and ਦੇ 81 other equipment 14 70 26 and office र्म 58 58 62 19 g - તા ১। 00 - (384) (1) (રેરે) 016 663 663 (11 55 ( 350 65 313 661 C (128) (64) (68) (836) (63) 158 રિક 8 223 ﻟﺴﻨﺎ 798 798 29 2 413 804 (281 3 054 L 8 (180) ીવરો (୧।) (06) 815 246 6-0 (33) (277) 640 219 ન કિલ્લ 2613 2 342 6 8 8 8 (288) in progress (43) नह 316 372 329 320 324 S ============================================================================================================================================================================== 1 ll

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

17. PROPERTY, PLANT AND EQUIPMENT (cont.)

The property, plant and equipment were impaired due to the military conflict in Eastern Ukraine. As a result, the Group has tested the nelated product lines for intrinent and has recognised an impairaent loss for property, plant and equipment of USD 29 thousand (2016: USD 8 thousand),

Due to political and conomic developments and military conflict in Eastern Ukraine, the Group has temporarily suspended the investment plan for the upgrading of SISC Khib Ukraine Novoaydarskyy Elevator. The management has the intention to resume with the investment plan as soon as the conditions in Eastern Ukraine allow this. The total amount spent up to 31 December 2014 for the upgrading of the elevator amounted to USD 961 thousand.

Additionally, during 2015 due to raider attack the Group lost control over Novoaydarskyy Elevator, which has been lawfully rented by the Group inst control over Novel Novol, Novalley, New York, NY (10)
ungesding was imporced upgrading was impaired.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

18. INTANGIBLE ASSETS

	Computer	Land lease	Total-
	software	rights
Cost
Balance as at I January 2016	12	15 698	15 710
Disposals		(814)	(814)
Effect from translation into presentation currency	( )	(1 793)	(1 794)
Balance as at 31 December 2016	】【	13 091	13 102

Balance as at 1 January 2017	11	13 091	13 102
Disposals		(660)	(660)
Effect from translation into presentation currency		(374)	(374)
Balance as at 31 December 2017	11	12.057	12 068

Accumulated amortisation and impairment losses
Balance as at 1 January 2016	10	6 840	€ 859
Amortisation charge	2	1 242	244
Disposals		(406)	(406)
Effect from translation into presentation currency	(1)	(855)	(856)
Balance as at 31 December 2016	11	6 830	6 841

Balance as at 1 January 2017		6 830	6 84
Amortisation charge		1 149	1 49
Disposals		(360)	(360)
Effect from translation into presentation currency		(255)	(255)
Balance as at 31 December 2017	11	7 364	7375

Carrying amounts:
As at 1 January 2016	2	8 849	8 851
As at 31 December 2016		6 261	6261
As at 31 December 2017		1 693	4.693

The ownership of land lease rights previously held by subsidiary companies Gefest LLC, Alinco PE, Tais-Abb PE and LLC Lugastan have been transferred to Agroton PJSC and PE Agricultural Production Firm Agro.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

19. BIOLOGICAL ASSETS

Biological assets were presented as follows:

	2017	2016
Crops under cultivation	ર્ડ રેલ્ડ	4 395
Animals in growing and fattening	045	1 380
Total current biological assets	6 610	5 775
Cattle	1 478	1 838
Other	7	P
Total non-current biological assets	1 480	1 840
Total	8 090	7 615

19.1 Crops under cultivation

At 31 December 2017 and 31 December 2016 the crops under cultivation were presented as follows:

	31 December 2017		31 December 2016
	Thousands of hectares	Carrying values	Thousands of hectares	Carrying values
Winter wheat plantings	36	રે રીતે	36	ને 355
Other plantings		51		40
Total	37	કે કેલ્ડી	37	4 395

The reconciliation of crops under cultivation carrving value was presented as follows:

	2017	2016
At 1 January Increase in value as a result of capitalisation of cost Decrease in value as a result of harvesting Gain from presentation of biological assets at fair value (note 7) Other changes (including impairment of harvest failure) Effect from translation into presentation currency	4 395 30 642 (54 622) 25 359 (209)	3 7392 26 007 (55 890) 31 083 (28) (509)
At 31 December	રી રહેરાર	4 395

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

19. BIOLOGICAL ASSETS (cont.)

19.1 Crops under cultivation (cont.)

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

		31 December 2017		31 December 2016
	Volume. lonnes	Amount. USD thousand	Volume. tonnes	Amount. USD thousand
Winter wheat Sunflower Corn Other sowing llotal	177 234 74 119 6 768 66 074	27 011 24 853 952 1 806	160 270 91 786 12 851 97 002	21 065 30 844 1 838 2 143
	324 190	54 622	361 909	55 890

There was an impairment of harvest failure in 2016 in the amount of USD 32 thousand included in "Other operating expenses" (2017: nil) (Note 11). The impairment was the result of bad weather conditions.

Expenses capitalised in biological assets mainly include fertilisers, fuel, seeds, labour and the operating
Iease rentals. lease rentals.

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

Non-current biological assets:

		31 December 2017		31 December 2016
	Number, heads	lonir value	Number, heads	Fair value
Cattle Horses Total	2 176	478	2 431	838
		1 480		1 830

Animals in growing and fattening:

		31 December 2017		31 December 2016
Cattle	Number, hends	lair value	Number. heads	lair value
Totol	2 822	045 । ਹੈ। ਹੈ। ਹੈ। ਹੈ। ਹੈ। ਹੈ ਹੈ। ਹੈ ਹੈ	3 067	08861 1380

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

19. BIOLOGICAL ASSETS (cont.)

19.2 Non-current biological assets and animals in growing and fattening (cont.)

Reconciliation of non-current hiological assets carrying value was presented as follows:

	2017	2016
At 1 January
	1 840	1 521
Increase in value as a result of capitalisation of cost	2 829	2 408
Decrease in value as a result of harvesting agricultural products	(2 999)	(2 268)
Gain/(loss) from presentation of biological assets at fair value	(209)	203
Other changes	58	78
Effect from translation into presentation currency	(39)	(212)
At 31 December	1 480	1 840

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

Reconciliation of animals in growing and fattening carrving value was presented as follows:

	2017	2016
At I January	1 3:0	1 354
Increase in value as a result of capitalisation of cost	1412	તેવુદ
Decrease in value as a result of harvesting agricultural products	(II)	(10)
Decrease in value as a result of sale of assets	(410)	(286)
Other changes	(60)	(79)
Gain from presentation of biological assets at fair value	(1 237)	(424)
Effect from translation into presentation currency	(29)	(171)
At 31 December	1 045	1 380

20.

Financial assels designated at fair value through profit or loss represent equity securities of Bank of Cyprus converted into shares after the decree issued by Central Bank of Cyprus on 29 March 2013. Based on that decree and the measurements for recapitalization of Bank of Cyprus, 47,5% of the uninsured deposits of the affected deposits have been converted into Bank of Cyprus shares.

In August 2013, pursuant to the above measurements, Bank of Cyprus, has issued to the Company I 591 105 shares with nominal value E1,00 each. These shares have been identified, classified and measured according to the relevant provisions of IAS 39 "Financial instruments: Recognition and Measurement" and IFRS 13 "Fair Value Measurement".

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

20.

The Company held I 591 105 shares with fair value £0,140 cents. In January 2017, the shares in Bank of Cyprus Public Company Limited were exchanged with new shares of Bank of Cyprus Holding Plc listed in both London Stock Exchange and in Cyprus Stock Exchange with nominal value of E0.10 cents each. At 31 December 2017 the Company held 79 555 shares in Bank of Cyprus Holding Plc with fair value €2,47 each.

The exposure of the Company to market risk in relation to financial assets is reported in note 36 to the consolidated financial statements.

21. LOANS RECEIVABLE

Current assets	Note	20117	2016
Loans to related parties Loans to third parties Total	32	14 884 4 836	12 594 4 168
		19 720	16 762

· On 29 June 2012, the Company has entered into a loan agreement with Stimi Agri Limited amounting a to USD 2 million. The loan bears interest of 20% per annum and expired on 29 June 2013. On 28 June 2013. On 28 June 2013. On 28 June 2013. On 28 June 2013. On 28 June 2013 the two parties agreed to postpone the repayment date to 31 December 2014. During 2014 the two parties agreed to further postpone the repayment date to 31 December 2014. 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. 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 posizione the repayment dates to 31 December 2014. During 2014 the two parties agreed to further postponent to 31 December 2015. During 2015 the two parties arreed to further postpone the repayment date to 31 December 2015. During 2016 the two parties agreed to further postpone the repayment date to 31 December 2017. 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 postoon it inte of 207 and expired on 4 March 2014.
2015 the two parties arread to further postpone the repayment to 31 December 2015 the two parties agreed to further postpone the repayment date to 31 December 2015. During 2016 the two parties agreed to further postpone the repayment date to 31 December 2017. The above foan 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 2014.
The two parties agreed to further postpone the repayment to 1 October 2015. During 201 the two parties agreed to further postpone the repayment date to 31 December 2016. During 2016 the itive parties agreed to further posipone the repayment date to 31 December 2017. The above loan is unsecured.

The exposure of the Group to credit risk is reported in note 36 to the consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

22. OTHER NON-CURRENT ASSETS

Prepayments:	2017	2016
Prepayments for the immediate right to use the elevator Less: Provisions for impairment Less: amortisation Prepayments for the immediate right to use elevator	10 000 (7 922) (2 078)	10 000 (7 922) (2 078)
Total

On 20 July 2011, PE Agricultural Production Firm "Agro" entered into an investment agreement with SISC Khib Ukraine Novoaydarshys Elevator, in respect of the Novoaydarskyy Elevator. Based on the ageement PE APF "Agro" underakes to invest USD I 155 thousand for the upgrading of the elevalor until 20 July 2021 and upon completion of the poject, "Ago" will become the 54% owner of the elevator while the remaining 46% will continue to be owned by the existing owner. of the clevator
additional amounts in the vooradine of the existing owner. In case "Algo" invest The grain elevator with a toral stores associated in the owner. In case "Ago" invested The grain elevator with a total storage capacity of the ownership rights will increase.
The grain elevations, part of its operations.

During the year 2011, Agroton Public Lid made a prepayment of USD 10 000 thousand in relation to this investment agreement specifically for its rights to secure use of this elevator. The fair value of there rights was evaluated at USD 6 928 thousand hence an impairment loss of USD 3 072 these nghts for in the consolidated statement of profit or loss.

The total amount spent by PE Agro for the upgrading of the elevator amounted to USD 961 thousand. The cost is included in construction in progress in property, plant and equipment.

Following the development in Eastern Ukraine, due to raider attack during 2015, the Company lost the control of the elevator, he case in USD 4 850 thousand (representing the net book value) in the was recognised in profit or loss.

INVENTORIES 23.

	2017	2016
Raw materials Work-in-progress	3 002 3 106	1 988 2 352
Agricultural produce Finished goods	19931 9	23 433
Other Total	1 129	। 1 233
	27 177	29 010

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

23. INVENTORIES (cont.)

Work-in-progress

Work in progress includes expenditure capitalised in respect of 61 thousand hectares (2016: 58 thousand hectares) of plough land prepared for sowing in the current or following year.

Agricultural produce

The main agricultural produce was as follows:

	2017	2016
Winter wheat	421
Sunflower	18 464	2 807 19 068
Corn	388	633
Other agricultural crops	658	925
Total	19 931	23 433

As at 31 December 2017 and 31 December 2016 the main agricultural produce volume in tonnes was as follows:

	2017	2016
Winter wheat	3 217
Sunflower	58 114	22 488 60 432
Corn	3 119	5 034
Total	64 450	87954

At 31 December 2017 there were no loans secured by inventories (2016: nil).

During the year inventory of USD 3 446 thousand was included into other operating expenses as waslage due to mandatory clearing and drying processes in the elevators (2016: USD 1 793 thousand).

Inventories were impaired due to the military conflict in Eastern Ukraine, with the main impact being additional observer was researcing in 2017 (2017 ) 1978) 1978 (1978) 1988) 1988 (1998) 1998) additional charge was recognized in 2017 (2016: USD 32 thousand).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

24. TRADE AND OTHER RECEIVABLES

	Note	2017	2016
Trade receivables	25	2 995	673
Provision for impairment of trade receivables		(258)	(332)
Trade receivables, net		2 737	341
Prepayments to suppliers		1 725	2 692
Other receivables		33 343	34 017
Provision for impairment of prepayments and other receivables 25		(33 210)	(33 227)
VAT recoverable		460	381
Total		5 035	4 204

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 appital of Private Enterprise "Pereditske". The parties agreed 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 'Skhi 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 easil 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 curently 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.

Additionally, the trade and other receivables were impaired due to the military conflict in Eastern UKraine. As a result, the Group has recognised an impairment loss for the infraint in bastern Ukrain.
in 2016 in 2016.

The exposure of the Group to credit risk and impairment losses in relation to trade and other receivables is reported in note 36 to the consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

25.

The movement in the provision for doubtful debts in respect of trade and other receivables was as follows:

	Note	2017	2016
At 1 January		33 559	33 999
Provision for the year	11	122	136
Impairment losses	12		13
Reversal of provision for bad debts	00	(32)	(416)
Write-off of provision for bad debt from receivables		((୧୯୬)	(28)
Effect of translation into presentation currency		(12)	(145)
At 31 December	24	33 468	33 559

26. CASH AND CASH EQUIVALENTS

	2017	2016
Cash at bank - USD	17 086	11 133
Cash at bank = UAH	384	503
Cash at bank - Euro	10	8
Cash in hand		30
Tota	17 181	11 674

The exposure of the Group to credit risk and interest rate risk in relation to cash and cash equivalents is reported in note 36 to the consolidated financial statements.

27. Discontinued operations

The assets and liabilities of subsidiary company Agro-Svinprom LLC, operating in pig-breeding, has been presented as held for sale following the Management decision in July 2011 to dispose the company.

In this respect the Management of the Group has advertised their intention for the sale of the subsidiary to the public media, for attraction of prospective new investors.

Results of discontinued operations

2017	Agro- Svinprom LLC
Operating loss for the vear Loss for the year

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

27.

2016

	Agro- Svinprom LLC
Administration expenses	(3)
Operating loss for the year
	(3)
Loss for the year	(3)

Held for sale

At 31 December 2017 the disposal group comprised the following assets and liabilities:

	Agro- Svinprom LLC
Assets classified as held for sale
Property, plant and equipment
Total	17
	17
Liabilities classified as held for sale
Trade and other payables
Total	(9)
	(9)
Net assets
	8

At 31 December 2016 the disposal group comprised the following assets and liabilities:

Assets classified as held for sale	Agro-Svinprom LLC
Property, plant and equipment
Total	17
	17
Liabilities classified as held for sale
Trade and other payables
Total	(a)
	(9)
Net assets
	8

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

28. SHARE CAPITAL AND SHARE PREMIUM

	2017 Number of spares	2017 Nominal value, USD	2016 Number of shares	2016 Nominal value, USD
Authorised share capital
Ordinary shares of EUR 0,021 cach	476 19 048	1 321 500	47 619 048	132 500
Issued and fully paid	Number of shares	Nominal valuc. USD	Share premium, USD	Total. DSD
At January 2016	21 670 000	661 128	88 531 664	89 192 792
At 31 December 2016	21 670 000	661 128	88 231 664	89 192 792
A131 December 2017	21 670 000	66 128	88 231 664	89 192 792

Issued share capital

Upon incorporation on 21 September 2009, the Company issued to the subscribers of its Memorandum of Association 12 000 000 ordinary shares of nominal value EUR0,021 each, amounting to EUR 252 000 (USD equivalent of USD 370 591).
in a November 2009 the Company issued 4 000 000 additional ordinary shares of nominal value EUR 0,021 each, amounting to EUR 84 000 (USD equivalent of USD 123 715), at a premium of EUR 6,93 per share, amounting to a total share premium of EUR 27 720 000 (USD equivalent of USD 38 791 285).

Global Depositary Receipts "GDRs" were issued against the 4 000 000 new shares by "The Bank of New York Mellon" for USD 9,72875 per each new share. The total consideration of the share capital issued was USD 38 915 000 out of which USD 123 715 is the total nominal value credited to the share capital account and USD 38 791 285 is the share premium reserve. Share issue expenses of USD 317 154 were deducted from the share premium reserve. GDRs are traded on the Open Market of the Frankfurt Stock Exchange since 12 November 2009.

iii authorized and approved the increase of the issued share capital of the Company from 16 000 000 ordinary shares of EUR 0,021 each amounting to EUR 336 000 (USD equivalent of USD 494 306) to 21 670 000 ordinary shares of nominal value of EUR 0.021, by the creation of 5 670 000 ordinary shares of a nominal value of EUR 0,021 each, ranking pari pasu with the existing shares of the Company.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

28. SHARE CAPITAL AND SHARE PREMIUM (cont.)

Issued share capital (cont.)

On 29 October 2010 the Company proceeded and issued 5 670 000 ordinary shares of nominal value EUR 0,021 each, amounting to EUR 119.00 (equivalent to USD 166 822), at a premium of EUR 6,7595 per share amounting to a lotal share premier of EUR 38 36 365 (USD equivalent of USD 54 222 634). The issue price for shares in the Company's public offering was set at PLN 27 per share. The Company raised total gross proceeds of PLN 153 090 (USD equivalent of USD 54 389 456) from the public offering, Share issue expenses of USD 4 165 101 vere deducted from the share premium reserve.

Listing of the Company to the Warsaw Stock Exchange

During the year 2010, the Board of Directors of the Company resolved to proceed with the initial public offering of 5 670 000 new ordinary shares of the Company and the initial publication for the initial public entire issued share capital of the company including the upprication for the admission of the regulated market of the Warsaw Stock Exchange.

29. LOANS AND BORROWINGS

Non-current liabilities	Note	2017	2016
Notes		9 807	9 357
Current liabilities		9 807	9 357
Loan from owner	32	89	74
		89	74
Total loans and borrowings		0 896	9 431

Notes

On 14 July 2011, the Company's issued USD 50 000 000 12,50% Notes due on 14 July 2014, have been admitted to the official List of the UK Listing authority and to the Mores due on 14 July 2014, have been
on the London Slock Exchange's reasurad macket on the London Stock Exchange's regulated market.

The Notes bear interest at a rate of 12,50% per annum payable semi-annually in arrears on 14 January and 14 July in each year, commencing on 14 January 2012.

The Notes are recognised initially at fair value USD 50 000 000 net of issue costs equal to USD 2 777 014. The difference between the proceeds (net of issue costs) and the redemption value as at 14 July 2014 is recognised in the proceeds (nel of issue costs) and the redemption values over the issue.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

LOANS AND BORROWINGS (cont.) 29.

Notes (cont.)

On 8 August 2013 with the consent of the Noteholders the Company has amended the terms and conditions of the Notes as follow:

· Extend the maturity of the Notes by 60 months to 14 July 2019 in order to lengthen the average maturity of the Groups funding sources;
· Postpone the interest payment that was due for payment to Noteholders on 14 July 2013 to 14 January 2014:
· Decrease the interest rate with effect from 14 January 2013 from 12,5% to 8% per annum;
· Amend the definition of Leverage Ratio Exception so that the maximum Consolidated Leverage Ratio would be 4,0 rather than 3,0; and
· Amend the definition of Permitted Indebtedness so that Additional Indebtedness is not to exceed USD 20 million (rather than USD 5 million) at any time outstanding.

On 18 December 2013 the Company has secured a second consent of the Noteholders to amend the terms and conditions of the Notes as follow:

· Postpone to 14 January 2015 the interest payments that was due for payment to Noteholders on 14 January 2014 (including the postponed 14 July 2013 Interest Payment) and the one that would be due for payment to Noteholders on 14 July 2014;
· Further decrease the interest rate with effect from 14 January 2013 from 8% to 6%;
· Permit the Issuer, the Sureties and any of their respective subsidiaries to re-purchase Notes, which they may at their option hold, re-sell or surrender for cancellation;
· Remove the augmented quorum requirement for any Noteholders' meeting the business of which includes any Reserved Matter(s), so that the quorum requirement for any Noteholders' meeting or passing an Extraordinary Resolution (whether or not the business of such meeting includes any Reserved Matter(s) shall henceforth be two or more persons present in person holding Notes or being proxies or representatives and holding or representing in the aggregate more than half of the principal amount of the Notes for the time being outstanding;
· Reduce the proportion of votes required to pass an Extraordinary Resolution from not less than threequarters in principal amount of the Notes owned by the Noteholders who not not the may in man mice represented by proxy or representative at the relevant Noteholders' meeting to more than believe of the principal amount of such Notes:
· Reduce the principal amount of Notes required to be held by Noteholders in order to pass an Extraordinary Resolution by way of electronic consent or written resolution from not less than hreequarters in principal amount of the Notes outstanding to more than half of such principal anount, and
· Remove restrictions on the Issuer's ability to declare or pay dividends to shareholders.

On 19 April 2014 the Company has purchased Notes in an aggregate principal amount of USD 22 100 000.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

LOANS AND BORROWINGS (cont.) 29.

Notes (cont.)

On 15 December 2014 the Company has secured a third consent of the Noteholders to amend the terms and conditions of the Notes as follow:

· Postpone to 14 January 2016 the interest payments that was due for payment to Noteholders on 14 January 2015 (including the postponed 14 July 2013, 14 January 2014 and 14 July 2014 (incress Payments) and the interest payment that will be due for payment to Noteholders on 14 July 2015; and
· Waive any Event of Default or Potential Event of Default arising as a result of the Issuer's failure to deliver and publish its audited annual financial statements and accompanying certificate for the financial year ended 31 December 2014 within the period stipulated therefor in breach of Condition 3.2(n) (Financial Information) of the terms and conditions of the Notes.

On 28 October 2015 the Company has purchased Notes in an aggregate principal amount of USD 10 350 000.

On 12 January 2016 the Company has secured a fourth consent of the Noteholders to amend the terms and conditions of the Notes as follow:

· Postpone 10 14 January 2017 the interest payments that was due for payment to Noteholders on 14 January 2016 (including the postponed 14 July 2013, 14 January 2014 and 14 July 2014 11terst Payments) and the interest payment that will be due for payment to Noteholders on 14 July 2016; and
· Waive any Event of Default or Potential Event of Default arising as a result of the Issuer's failure o deliver and publish its audited annual financial statements and accompanying certificate for the financial year ended 31 December 2015 within the period stipulated therefor in breach of Condition 3.2(n) (Financial Information) of the terms and conditions of the Notes.

On 26 October 2016 the Company has purchased Notes in an aggregate principal amount of US\$10 000 000.

On 17 January 2017 the Company has secured a fifth consent of the Noteholders to postpone to 14 January 2018 the interest payments that was due for payment to Noteholders on 14 January 2017

The following subsidiaries are acting as surety providers:

· Living LLC
PE Agricultural Production Firm Agro ●
Agroton PJSC
Agro Meta LLC
ALLC Noviy Shlyah
ALLC Shiykivske
· Agro Svynprom LLC
· Agro Chornukhinski Kurchata LLC
· Rosinka-Star LLC

The exposure of the Group to interest rate risk in relation to loans and borrowings is reported in Note 36 to the consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

30. TRADE AND OTHER PAYABLES

	2017	2016
Trade payables
Payroll and related expenses accrued	466	454
Advances received	765 3	330
Liabilities for other taxes and mandatory payments	ರಿರ	196 85
VAT payable	76	45
Payable for operating lease of land	157	11
Accrued expenses	53	32
Other provisions	12	12
Other liabilities	35	42
Total	1 666	1 207

The exposure of the Group to liquidity risk in relation to trade and other payables is reported in Note 36 to the consolidated financial statements.

31. PROFIT PER SHARE

Basic profit per share

The calculation of basic profil((loss) per share was based on the profit(loss) attributable to the owners of the Company, and a weighted average number of ordinary shares as follows:

	2017	2016
Profit uttributable to the owners of the Company (in USD'000):
Profit from continuing operations attributable to the owners of the Company Loss from discontinued operations attributable to the owners of the	8 299	21 758
Company		(3)
Total profit attributable to the owners of the Company	8 299	21 755
Weighted average number of ordinary shares:
Weighted average number of ordinary shares at 31 December	21 670 000	21 670 000
Profit per share from continuing operations (USD per share)	0.38	1.00
Total basic profit per share (USD per share)	0,38	1,00

Profit per share is the profit for the year after taxation attribulable to the owners of the Company divided by weighted average number of shares in issue for each year.

There were no options or instruments convertible into shares and so basic and diluted carnings per share are the same.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

RELATED PARTY BALANCES AND TRANSACTIONS 32.

As at 31 December 2017 and the date of this report, the Company is controlled by Mr. lurii Zhuravlov, who holds directly 74,01% of the Company's share capital. The remaining 25,99% of the shares is widely held.

For the purposes of these consolidated financial statements, parties are considered to be related if one influence over the other party in ender common control, or can exercise if one influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention of operational decisions. In considerning each possible form 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 years ended 31 December 2017 and 31 December 2016 were as follows:

	2017	2016
Wages and salaries Contributions to social funds Total	771 10 781	25 30 .

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,

	2017	2016
Number of key management personnel, persons

notes to the consolidated financial statements

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

32.

Outstanding halances with related parties:

Loans receivable	2017	2016
d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies
Mr Iurii Zhuravlov - Chief Executive Officer	14 884	12 594
Total	14 884	12 594
Loans payable
d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies
Mr lurii Zhuravlov - Chief Executive Officer Total	80	74
	80	74
The Group's transactions with related parties:
Finance cost, net	2017	2016
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	। ୧୦୯୩	1 477
	1 694	1 477
Expenses
c. Key management personnel	781	30
Total	781	31

33. OPERATING SEGMENTS

A reportable segment is a separable component of a business entity that produces goods or provides services to individuals (or groups of celated products or services) in a particular economic environment that is subject to risks and geomes 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 decisions and resortable segments' results are reviewed regularly by the chief
make decisions about resources to he alleagued 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 CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

OPERATING SEGMENTS (cont.) 33.

For the year ended 31 December 2017 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
Livestack .
Vegetable oil and protein meal
· Other
(i) The main types of agricultural produce which are sold in this reportable segment are when , rye, barley, sunflowers and rape. 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 maal issing 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 lo 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 were and fire or loss in the consolidated financial statements. Group financing (including finance expense and finance income taxes, are managed on a group basis and are not allocated to operating segments.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

33.

Information by reportable segment is presented as follows:

2017	Livestock	Plant	Vegetable of	Other	Group	Total
		breeding	and protein mes		level
Total revenue	ાંદા	30 246	17 093	759		52 259
Inter-segment sales	(210)			(87		(474)
Net change in fair value less cost to sell of External revenues	3 તેરા	30 069	17 093	672		51 785
biological assets and agricultural produce	(1 445)	રૂટ રેરેતે				23 914
Expenses (excluding depreciation and amortisation	(4 507)	(43 553)	5 875)	121)		(65 056)
Impairment losses				(29		(29)
(Loss)/profit for the year (cxcluding depreciation and amortisation)	(2 001)	11 875	1 218	(478)	B	10 614
Depreciation and amortisation	(103)	019 (2)		(129)		(2 251)
(Loss)/profit before taxation from continuing operations	(2 104)	9 856	218	(607		8 363
Reportable segment assets	7 007	60 433	360	3 738	19 953	91 491
Reportable segment liabilities	191	452		73	10 007	77.3

AGROTON PUBLIC LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

33.

2016	Livestock	brecding Plant	Vegelable oil and protein	Other	Group level	Total
			meal
Total revenue	2901	31 301	4 810	8 236		47 548
Inter-segment sales	(142)	(102)		(3 077)		(3 321)
External revenues	2 759	31 199	10 8	રે ને રેતે		44,227
0 Net change in fair value less cost to sel	(1 034)	085		90		30 952
biological assets and agricultural produce
Expenses (excluding depreciation and amortisation)	(2 622)	(40 692)	(4 768)	(3 040)		(51 122)
Impairment losses				(23		(53)
(Loss)/profit for the year (excluding depreciation and amortisation)	(897)	21 592	42	3 267		24 004
Depreciation and amortisation	(રેર્	877		(287)		(2 220)
(Loss)/profit before taxation from continuing operations	(953	715 ਹੈ	42	2,980		21 784
Reportable segment assets	6 0727	54 383		4 4271	16 997	81 834
Reportable segment liabilities	85	963		16:1	0 6.17	10 750

10 759

9 213

ારિયા

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

OPERATING SEGMENTS (cont.) 33.

Geographical information

Reportable segment information related to geographical for the year ended 31 December 2017 and 31 December 2016 is presented below. Sales revenue analysis was based on the geographical local of delivery destination.

Ukraine	2017	2016
	33 929	39 777
India	5 393	1 145
Spain	3 197	273
China	3 490	395
ran	1713
Other countries	4 063	2 637
	51 785	44 227

34. 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 crisis. The relevant agreements reached with the European Commission, the European Central Bank and the relevant and (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 JMF program on 7 March 2016, after having recovered in the international markets and having only used €7,25 billion of the total E10 billion earmarked in the financial bailout. Under the new Euro area ries, Cyprus will continue to be under surveillance by its lenders will 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 memployment rates, significant challenges remain that could affect the estimates of the reducing unenployinent challenges remain that have and non-financial assets.

Ukrainian economic and political environment

The Group conducts its ponealins mainly in Ukraine. Ukraine's political and economic situation has deteriorated significantly since 2014. Following political and social unrest in carly 2014, in March 2014, in March 2014, in March 2014, various events in Crimea led to the Republic of Crimea to the Russian arrive 2014, in March 2014, in March 2014, 10:14
was not recognised by I Jiraine and manus ather countin was not recognised by Ukraine and many other countries. This event resulted in a significant delection, which of the relationship between Ukraine and the Russian Federalion. Following the instability in Crimention
regional tensions have spread to the Russian Federalion. Following the regional tensions have spread to the Rassan Federanon. Following the instability in Crime,
In May 2014, protest in the Eastern segons of Uknine, primarily Donetsk and Lugansk In May 2014. protests in those regions escalaed into military clashes and armed conflict between supporters of the self-declared republics of the Donelsk and Lugansk regions and the Ultveen Willet Weltveen Willier Belween which continued throughout the date of the Dollers' regions and the Ukrainian forces, Donetsk and Lugansk regions remains under control of the self-proclaimed republics, and of the authorities are not currently able to fully enforce Ukrainian laws on this territory,

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

34. 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 (1) as well
enabled the country to activis level of economial of economial Mon end (1) and excelled the natin lacinties (cr. ) agreed with hilemational Monetary Fund (1)MF)
economic recovery on the level of controlled by Likes in and political stability economic recovery on the territory controlled by Ukraine. In 2016 and 2017 Ukraine's Gorials
economic recovery on the territory controlled by Ukraines ODP 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 mandeste for executive crescrictions impose including a decrease in this shower vereign corrency conversion to 65% and permission of dividends remittance. However, certain other restrictions were prolonged.

In September 2017, Ukraine successfully issued USD 3 billion of Eurobonds, of which USD 1.3 billion is new financing, with the remaining amount aimed to refinance bonds due in 2019.

The ongoing unstable situation in the Eastern Ukraine and the annesstion of Crimea continue to have a negative effect on the ability to obtain financing on domestic and international markets. Further on have a
recovery and political stabilization depend to a lornational marke recovery and political stabilization of domestic and international markets. Further economic
recovery and political stabilization depend, to a large extent, upon success of t

Whilst management believes it is taking appropriate measures to support the sustainability of the Group's business in the current circumstances, a continution of the current unstablity of the Group's
negatively affect the Group's results and Grancial position instable business en negatively affect the Group's results and financial position in a manner not currently determinable. These consolidated financial statements reflect mangements current of the impact of the Ultrainian in business environment on the financial position of the Group. The Ukrainian
environment on the operations and the financial position of the Group. The fiture business environment may differ from management's assessment,

Going concern basis following the economic and political environment

The dangers which may arise from unexpected external factors such as competition, and the further delection of the market conditions cannot be ignored. All these factors were analysed above. Here forther regard to the fact that with the consent of the Notebolders, the Company has amended the tems and conditions of the Notes with an extension of the Northolders, the Company has amended the terms and
conditions of the Notes with an extension of maturity data and postponents Board of Directors believes that the Group will remain a going concern and that not to the states. Inc.
of threat of liquidation exists in the Group will remain a going conce of threat of liquidation exists in the foreseeable future.

The consolidated 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 which could include:

1. The ability of the Group to repay its Noteholders
The ability of the Group's repay in release to repay the amounts due to the Group កi 3.
The cash flow forecasts of the Group and the assessment of impairment of other financial and
The cash flow forecasts of the Group and the assessment of impairment of other fi ની .
The ability to realize the current assets held for sale บา
The ability of the Group to repay its loans 6.
The ability of the Group to repay its foalis
The ability of the Group to meet its obligations towards its customers

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

35. CONTINGENT AND CONTRACTUAL LIABILITIES

Economic environment

The exposure of the Group to the economic environment and possible impact is disclosed in note 34 to the consolidated 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 of their inconsistent application, interpretation and execution. Noncompliance with laws and regulations may lead to severe fines and penatives,

The Company operates in the Cypriot tax jurisdiction and its subsidiaries in tax jurisdiction of the respective courses 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 delermining the provision for direct and indirect last its own activities. Sightings for which the ultimate tax delemination is uncertain during the ordinary course of business. The Group recognises Where the final tax and and 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 defered tax provisions in the period in which such determination is made.

The Group's uncertain iax positions are reassessed by management at every reporting period end. not to result in additional laws has positions that are determined by management as more likely than not to result in additional lawsessions were to be challenged by the last likely than The assessment is based on the interpretation of tax laws that have been enacted or substantively enacted interest and taxes other than on income or other rulings on such issues. Liabilities for penalties, interest and taxes other than on income and recognised based on management's best estimate of the expenditure required to settle the obligations at the reporting period.

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 of miligating of economic losses.

The Group's management considers that as at the reporting period, 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 declude and contribute a certain na specific laws and regulations of Urcainer (1986).
The only obligation of the Group with respect to this pension plan is to make the specified contributions from the salaries.

At 31 December 2017 and 31 December 2016 the Group's entities had no liabilities for any supplementary pensions, health care, insurance benefits or retirement indemnities to its current or former employees.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless other vise stated)

35. CONTINGENT AND CONTRACTUAL LIABILITIES (cont.)

Prises

The Group had the following contractual obligations under land operating lease agreements as at 31 December 2017 and 31 December 2016:

	2017	2016
Less than I year	6 76	3 570
Between I to 5 years	8 440	8 794
More than 5 years	11 006	3 774
Total	35 622	16 138

Plough-land is leased by the Group from individuals. The total size of leased plough-land at 31 December 2017 is 120 thousand hectares (2016: 117 thousand hectares). The average rental payment for I cased plough-land in the year ended 31 December 2017 ranges between 6% - 9% (year ended 31 December 2016: 3% - 6%) from the normative value of land.

36. FINANCIAL RISK MANAGEMENT

The Group has exposure to the following risks arising from the use of financial instruments: (a) Credit risk (b) Liquidity risk (c) Market risk (d) Operational risk

Risk Management fromework

The Company's Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management activities and systems are regularly to reflect changes in market conditions and the Group's disciplined, and processioning and management standards and procedures and the Undividual a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group is not a finance company, thus it uses financial instruments as may be necessary in order to obtain finance for its activities, not for the purpose of receiving income. In the process of its activities the Group uses the following financial instruments cash and cash equivalents, bank deposits, account receivable, accounts payable.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

Risk Management framework (cont.)

The Group is exposed to the following risks resulting from use of financial instruments: credit risk, liquidity risk and market risk (including foreign currency risk and interest rate risk of fair value) and operation risk. This explanation information relating to the Group's exposure to each of the risk types mentioned above, Group's objectives, its policy and procedures of the risks measurement and management.

Additional disclosures of quantitative information are presented in mulliple other sections of these financial statements. including:

· information on finance income and expenses is disclosed in Note 14 (all finance income and expenses are recognised as a part of profit or loss for the year);
· information on cash is disclosed in Note 26;
· information on trade and other receivables is disclosed in Note 24;
· information on loans receivable is disclosed in Note 21;
· information on trade and other payables is disclosed in Note 30;
· information on significant terms of borrowings and loans granted is disclosed in Note 29.

a) Credit risk

Credit risk is the risk of financial loss for the Group in case of non-fulfilment of financial obligations by a client or counterparty under the erespective agreement. In the reporting period the Group's financial assets that are exposed to credit risk are reporting for and balances on bank accounts, trade assess.
Other accounts receivable for reseived as follows: cash and balances on bank ac other accounts receivable (except for receivables that are not represence by financial asses), loans receivable.

Trade and other receivables

The Group's exposure to credit risk is influenced mainly by the individual characteristics of each trade and other receivables. The main components of incurred losses in respect of relates to individually simply components of this allowance are a specific loss component that similar assess in respect of loses that hous been increative loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the vear ended 31 December 2017

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

a) Credit risk (cont.)

Exposure 10 credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting period was presented as follows:

	Note	2017	2016
Financial assets
Loan to related parties	21	14 884	12 594
Loans to third parties	21	4 836	4 168
Cash at bank	26	17 480	11 644
Trade receivables	24	2 737	341
Other receivables	24	61	749
Total		30 998	29 496

Credit quality of financial assets

The table below shows an analysis of the Group's cash balances on bank accounts by the credit rating of
the bank in which they are holds the bank in which they are held:

Bank group based on credit ratings by Moody's	Note	2017	2016
AZ
A53		-	10 223
Ca		1734
Caal			27
		37
Cas2		1 427	172
Caal		68	897
Unrated		14 214
Total
	રેણ	17 480	11 644

The ageing of trade receivables at the end of the reporting period that was not impaired was as follows:

2017				0-90 days 91-180 days 181-365 days over one year	Total
Carrying amount of trade receivables	975	1 613	123	26	2737
2016				0-90 days 91-180 days 181-365 days over one year	Total
Carrying amount of trade receivables	298	2	14	38	341

The column '0-90 days' represents the amounts neither past due nor impaired.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the vear ended 31 December 2017

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

a) Credit risk (cont.)

Credit quality of financial assets (cont.)

The ageing of trade receivables at the end of the reporting period that was impaired was as follows:

2017		0-90 days 91-180 days 181-365 days over one year	Tota
Carrying amount of trade receivables		258	258
2016		0-90 days 91-180 days 181-365 days over one year	Total
Carrying amount of trade receivables	0	332	332

As at 31 December 2017, an amount of USD 1 638 thousand and USD 352 thousand or 60% and 13% of the total carrying value of trade respectively is due from the two most significant debtors. For the year ended 31 December 2017, an annum of USD 13 057 thousand (25%) and USD 7 816 thousand (15%) from Group's revenue refers to the sales transactions carried out with two of the Group's clients.

As at 31 December 2016, an amount of USD 151 thousand and USD 79 thousand or 44% and 23% of the total carrying value of the receivables is due from the wood significant deblors. For the year ended 31 December 2016, an amount of USD 12 931 thousand (29%) and USD 5 942 thousand (13%) from the Group's revenue refers to the sales transactions carried out with two of the Group's clients.

b) Liquidity risk

Liquidity risk is the risk of the Group's failure to fulfil its financial obligations at the date of maturity. An unmatched position potentially enhances profitablity, but can also increase the risk of fosses. The Group highly light the object of minimising such losses such as maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities.

The table below represents the expected maturity of components of working capital.

Exposure to liquidity risk

2017	Note	Carrying simounts	Contractual 3 month or 3-12 month Between 1- shop) 11555	1655		5 years
Loan from owner	32	89	103
Notes	29					103
		9 807	0 260	2 265	453	7 542
Trade payables	30	466	466	466
Other payables	30	192	195
				192		0
Total		10 ટેક્ને	11 021	2 923	453	7 645

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

b) Liquidity risk (cont.)

Exposure to liquidity risk (cont.)

2016	Note	Carrying amounts	Contractual 3-12 month 3-12 month Between 1- cash flows	or less		5 years
Loan from owner	32	74	જરી
Notes	20	9357	10 495	182	277	86 8 456
Trade payables	30	454	454	યું રહ્યું
Other payables	30	53	53	53
Total		9 938	11 088	2 319	227	8 542

c) Market risk

Market risk is the risk of negative influence of changes in market prices, such as foreign exchange rates and interest rates, on revenue position of the Group or on the value of the Group's available financial instruments.

The objective of market risk management provides control over the Group's exposure to market risk, as well as keeping its level within reasonable limits.

Description of the Group's exposure to such market components as currency risk and interest risk is given
below: below:

Foreign currency risk

Foreign currency risk which represents a part of market risk is the risk of change in value of financial instruments due to changes in foreign exchange rates.

Management does not use derivalive financial instruments to hedge foreign currency risks and does not follow the official policy for distribution of risks between them of another currency. However, in the period of receiving new borrowings and loans, management uses its own estimates to take the decision as to which currency of the libility will be more favourable for the Group during the expected period till maturity.

Exposure to foreign currency risk

The Group's exposure to foreign currency risk as at 31 December 2017 based on carrying amounts was as follows:

(in conversion to USD thousand)	United States Dollars	Duro
Cash and cash equivalents Total carrying amount	112 1 112

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

c) Market risk (cont.)

The Group's exposure to foreign currency risk at 31 December 2016 based on carrying amounts was as follows:

(in conversion to USD thousand)	United States Dollars	Duro
Cash and cash equivalents	417	8
Trade and other payables		(20)
Total carrying amount	417	(12)

An increase of 100 basis points in foreign currency rates at 31 December would have decreased profit and equity by the amounts shown of this analysis assumes that all other variables, in particular interest rates, remain constant. For a decrease of 100 basis points there would be an equal and opposite impact on the profit and equity.

	2017		2016
	Effect on profit before tax	Effect on equity	Effect on profit before tax	Effect on equity
Euro			(1)	(1)
United States Dollars	111		42	42
	111	111	41	11

Interest rate risk

Interest rate risk is the risk that expenditure or the value of financial instruments will fluctuate due to changes in market interest rates. Borovings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed mes spose the Group to fair value interest rate risk. The Group's management monitors the interest rate fluctuations on a continuous basis and acts accordingly

At present, the Group's approach to limit the interest rate risk consists of borrowings at fixed interest rates.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

c) Market risk (cont.)

Structure of interest rate risk

The structure of interest financial instruments of the Group, grouped according to the types of interest rates, was presented as follows:

	2017	2016
Fixed rate instruments
Financial assets Financial liabilities	19 720 (9 896)	16 762 (9 43 }
Total	9 824	75891

d) Operational risk

Crops under cultivation

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.

Livestock

The Group's agro-industrial business is subject to risks of various diseases that could result in mortality losses Disease control measures were adopted by the Group to minimise and manage this risk. The Group's management is satisfied that its current existing risk management and quality control processes are effective and sufficient to prevent any outbreak of livestock diseases and related losses.

c) Capital management

The Group's management follows the policy of providing a firm capital base which allows supporting the trust of investors, creditors and market and ensuring future business development.

The Group manages its capital to ensure that it will be able to continue as a going concern while increasing the return to owners through the strive to improve the debt to equity ratio. The Group's overall strategy remains unchanged from prior year. To manage capital, the Group's management, above all, uses calculations of EBITDA.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

e) Capital management (cont.)

For the year ended 31 December 2017 and 31 December 2016 EBITDA amounted to:

	2017	2016
Profit for the year	8 322	21 781
Income tax charge	41
Impairment losses	29	53
Finance income	(2 488)	(2 331)
Finance costs	2 620	10
EBIT (Earnings before interest and income tux)	8 522	30 466
Depreciation and amortisation	2 251	2 220
EBITDA (earnings before interest, income tax, depreciation and
omortisation)	10 775	32 686

During the year there were no changes in approaches to capital management. The Group is not subject to any external regulatory capital requirements.

37. FAIR VALUES

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.

The different levels have been defined as follows:

· Level !: quoted prices (unadjusted) in active markets for identical assets or liabilities.
· Level 2: inputs other than quoted prices included within Level I that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

37. FAIR VALUES (cont.)

a) Fair value of financial assets

Assumptions in assessing fair value of financial instruments and assessment of their subsequent recognition

As no readily available market exists for the Group's financial instruments, judgment is necessary in instruments. The estimates processed brook conditions and specific risks attributable to the instruments. The estimates prosented herein are not mecessarily indicalive of the amounts the Group could realize in a market exchange from the sale of its full holding of the particular instrument.

At 31 December 2017, the following methods and assumptions were used by the Group to estimate the fair value of each class of financial instruments for which it is practicable to estimate such value:

· Cash and cash equivalents the fair value is estimated to be the same as the carrying value for these short-term financial instruments.
· Trade and other receivables the fair value is reasonably estimated to be the same as the carrying value, as provision for doubtful debts is reasonable estimation of discount needed for reflection of credit risk influence.
· Trade and other payables · the fair value is estimated to be the same as the carrying value for trade and other payables.

Application of the effective interest rate method for calculating carrying value of short - term receivables, interest free loans granted and received and payables has been applied to reflect fair values.

· Loans · the fair value of loans, is estimated to approximate the total carrying value as the nominal interest rate of loans is approximately tied to the market rate concerning loans with similar credit risk rate and repayment period at the reporting period.
· Equity securities the fair value of equity securities is measured using the available quoted market prices from the relevant stock exchange which the securities are listed.

b) Fair value of non-financial assets

Assumptions in assessing fuir value of non-financial instruments and assessment of their subsequent recognition

Biological assets of the Group are measured at fair value within level 3 of the fair value hierarchy, except for parent flock, cattle and hoses that are measured using the market comparison technique based on market prices for livestock of similar age, breed and geographic location, which is measured af fuir value within level 2 of the fair value hierarchy.

The Group has an established control framework with respect to the measurement of fair values. This framework includes a valuation team that reports the the measurement of fair values. This responsibility for fair value measurement of biological assets.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

37. FAIR VALUES (cont.)

The valuation team regularly reviews significant unobservable inpus and valuation adjustments. The valuation team assesses and documents the evidence obtained to support the conclusion that the valuation meets the requirements of IFRS, including the level in the fair value hierarchy. Significant valuation issues are reported to the Chief Financial Officer.

The Group's agro-industrial business is subject to risks of outbreaks of various diseases that could result in mortality losses. Disease control measures were adopted by the Group to minimise and manage this risk. The Group's management is satisfied that its current existing risk management and quality control processes are effective and sufficient to prevent any outbreak of livestock diseases and related inses.

The valuation requires management to make certain assumptions about unobservable inputs to the model of which the significant unobservable inputs are disclosed in the table below:

Level 3 fair values

l ype	Valuation technique	Significant unobservable inputs	Inter-relationship between key unobservable inputs and fair value measurement
Crops under cultivation	As at 31 December 2017 the biological transformation is insignificant, the fair value approximate cost	not applicable	not applicable

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

37. FAIR VALUES (cont.)

The table below analyses biological assets measured at fair value at the reporting period, by the level in the fair value hierachy into which the fair value at the end of the beforing period, by the have been defined as follows:

31 December 2017	Level 1	Level 2	Level 3	Total
Non-financial assets Plants and plantation Livestock	D		5 565	રે રેરિટે
		રે રેગ્ડિ		2 525
		2 525	5 565	8 090
31 December 2016 Non-financial assets	Level 1	Level 2	Level 3	Total
Plants and plantation			4 395	4 395
Livestock		3 220		3 220
	-	32220	4 395	7615

There were no transfers between any levels of the fair value hierarchy during the year 31 December 2017 and 31 December 2016.

Total gain or losses for the period as shown in the reconciliation (note 19) are presented on the face of the consolidated statement of comprehensive income as "Net change in fair value less costs to sell of biological assets and agricultural produce".

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

37. FAIR VALUES (cont.)

The following table and year he fair values of finances not measured at fair value, by the levels in the fair value hierachy into which such fair value measurement is categorized:

			Carrying amount				Fair value
	Designated at Tair value	Loans and receivables	Available «for-sale	financial liabilities Other	Total	Level	Leve	Level P	Total

Investments designated at fair value through profit					17
	236				236	236			236
		737 7			2,737			2 737	2 737
		9 720			19 720			19 720	19 720
		7 48 J			-181 17		0	48 17	17 481
	236	39 938	C		40 191	236	t	39 955	40 191

				807 ರ	9 807	807 C			807 ಿ
				89	89			89	89
				466	466			466	466
				192	192			102	192
			0	10 554	10 563	9 807		756	0 563

AGROTON PUBLIC LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

37. FAIR VALUES (cont.)

				Other			Fair value
	Designated at lair value	Loans and receivables	Available -for-sale	linancial liabilities	Total	Level	Level	Leve L	Total
Financial Assets measured at fair value 31 December 2016 Assets licid for sale
Investments designated at fair value through profit Financial assets not measured at fair value or loss	235				235	235			235
Trade receivables Loans receivable		341			341			341	3-11
Cash and cash equivalents		16 762			16 762			16 762	16 762
		11 674			11 674		-	674	11 674
	235	777 28	ﻟ		29 029	235	1	28 794	29 029
Financial Liabilities not measured at fair value Financial Liabilities measured at fair value Liabilities held for sale
Loans payable Notes				0 357	9 357	3 093			3 093
Trade payables				74	7-1			74	74
Other payables				વર્ષન	454			454	નદન
				53	53			53	53
			C	d 938	947 0	3 093		590	3 683

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

37. FAIR VALUES (cont.)

The fair value of financial assets and financial liabilities, together with the carrying amounts in the consolidated statement of financial position as at 31 December 2017 and 31 December 2016, are as as as as as as as as a follows.

31 December 2017 Financial assets	Carrying amount	Fair value

Investments designated at fair value through profit or loss	236	236
Trade receivables	2 737	2 737
Cash and cash equivalents	17 481	17 481
Loans receivable	19 720	19 720
Financial liabilities
Notes
Loans payable	9 807	9 807
Trade payables	89	89
	466	466
31 December 2016
	Carrying	Foir value

Financial assets	amount

Investments designated at fair value through profit or loss Trade receivables	235	235
Cash and cash equivalents	341	341
Loans receivable	11 674	11 674
	16 762	16 762
Financial liabilities
Notes
	9 357	3 093
Loans payable Trade payables	74 454	74 454

As at 31 December 2017, the fair value of the above financial instruments approximates to their carrying amount, except for notes whose fair value was USD 9 807 thousand (3) December 2016: USD 3 093)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

(in USD thousand, unless otherwise stated)

38. EVENTS AFTER THE REPORTING PERIOD

Events referred to in note 34 to the consolidated financial statements will continue to influence the Group's operations in 2018. While magement believes it is taking all necessary measures to maintain the sustainability of the business in the current circumstances, a further delevioration 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 14 January 2018, the Company paid a coupon interest on its Notes in the amount of USD 2 265 thousands as agreed with the Noteholders on 17 January 2017.
· In March 2018, the Group entered into an agreement for purchasing a storage facility with a total capacity of if if in May 2019 be completed in May 2018.
On 6 April 2018 the Company announced the timely and full repayment of interest on Notes deferred coupon amounting to USD 2 265 thousands.

On 23 April 2018 the Board of Directors of Agroton Public Limited approved and authorised these consolidated financial statements for issue.

AI Terminal

Agroton Public Limited

5489_10-k_2018-05-02_25dff782-cd98-4342-90cf-ff1c9ffd98e5.pdf

REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS

OFFICERS AND PROFESSIONAL ADVISORS

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

MANAGEMENT REPORT

INCORPORATION AND PRINCIPAL ACTIVITIES

FINANCIAL RESULTS

EXAMINATION OF THE DEVELOPMENT, POSITION AND PERFORMANCE OF THE

DIVIDENDS

FUTURE DEVELOPMENTS

PRINCIPAL RISKS AND UNCERTAINTIES

MANAGEMENT REPORT (cont.)

PRINCIPAL RISKS AND UNCERTAINTIES (cont.)

SHARE CAPITAL

STATEMENT ON CORPORATE GOVERNANCE

MANAGEMENT REPORT (cont.)

STATEMENT ON CORPORATE GOVERNANCE (cont.)

MANAGEMENT REPORT (cont.)

OWNERS HOLDING MORE THAN 5% OF THE COMPANY'S SHARE CAPITAL

DIRECTORS' INTEREST IN THE COMPANY'S SHARE CAPITAL

BOARD OF DIRECTORS

AUDIT COMMITTEE AND REMUNERATION COMMITTEE

MANAGEMENT REPORT (cont.)

AUDIT COMMITTEE AND REMUNERATION COMMITTEE (cont.)

EVENTS AFTER THE REPORTING PERIOD

BRANCHES

RELATED PARTY BALANCES AND TRANSACTIONS

INDEPENDENT AUDITORS

Independent Auditors' report

to the Members of

AGROTON PUBLIC LIMITED

Report on the audit of the consolidated financial statements

Opinion

Basis for opinion

Mnterial uncertainty relating to going concern

Key audit matters

Valuation of biological assets

Other information

Responsibilities of the Board of Directors for the consolidated financial statements

Auditors' responsibilities for the audit of the consolidated financial statements

Auditors' responsibilities for the audit of the consolidated financial statements (cont.)

Report on other legal and regulatory requirements

Other regulatory requirements

Date of our appointment and period of engagement

Consistency of the additional report to the Audit Committee

Report on other legal and regulatory requirements (cont.)

Other regulatory requirements (cont.)

Provision of non-audit services ("NAS")

Other legal requirements

Other matter

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 December 2017

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2017

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2017

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (cont.)

For the vear ended 31 December 2017

(in USD thousand, unless otherwise stated)

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2017

CONSOLIDATED STATEMENT OF CASH FLOWS (cont.)

For the vear ended 31 December 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

1. GENERAL INFORMATION

Country of incorporation

Principal activities

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

GENERAL INFORMATION (cont.) 1.

2. BASIS OF PREPARATION

2.1 Statement of compliance

2.2 Basis of measurement

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2017

2. BASIS OF PREPARATION (cont.)