Annual / Quarterly Financial Statement • Jun 5, 2014
Annual / Quarterly Financial Statement
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| Page | |
|---|---|
| Officers and Professional Advisors | 1 |
| Report of the Board of Directors | 2 & 3 |
| Independent Auditors' report | 4 & 5 |
| Statement of profit or loss and other comprehensive income | 6 |
| Statement of financial position | 7 |
| Statement of changes in equity | 8 |
| Statement of cash flows | 9 |
| Notes to the financial statements | 10 - 37 |
| Additional information |
| Board of Directors | Iurii Zhuravlov (Chief Executive Officer) |
|---|---|
| Tamara Lapta (Deputy Chief Executive Officer) |
|
| Larysa Orlova (Chief Financial Officer) |
|
| Borys Supikhanov (Non-Executive Director) |
|
| Volodymyr Kudryavtsev (Non-Executive Director) |
|
| Nikolay Rozdymaha (Executive Director) |
|
| Alex Lissitsa (Non-Executive Director) |
|
| Secretary | Inter Jura Cy (Services) Limited |
| Independent Auditors | KPMG Limited |
| Bankers | Commerzbank International S.A. Bank of Cyprus Public Company Ltd |
| Registered Office | 1 Lampousas Street 1095 Nicosia Cyprus |
The Board of Directors of Agroton Public Limited (the ''Company'') presents to the members its Annual Report together with the audited financial statements of the Company for the year ended 31 December 2013.
The principal activities of the Company, which are unchanged from last year, are those of an investment holding company and the provision of financing to related parties. The Company is the holding company of a group of companies which represents one of the leading agriculture producers in Ukraine. The Group's core business is crop production, comprising principally sunflower seeds and wheat and also engaged in livestock and food processing.
The Company's financial results for the year ended 31 December 2013 are set out on page 6 of the financial statements. The net loss for the year attributable to the owners of the Company amounted to US\$4.628.907 (2012: US\$5.072.963) .
The current financial position as presented in the financial statements is not considered satisfactory and the Board of Directors is making an effort to reduce the Company losses.
The Board of Directors does not recommend the payment of a dividend.
The main risks and uncertainties faced by the Company and the steps taken to manage these risks, are described in note 19 of the financial statements.
The Board of Directors does not expect major changes in the principal activities of the Company in the foreseeable future.
There were no changes in the share capital of the Company during the year.
During the year ended 31 December 2013 the Company did not operate any branches.
The members of the Company's Board of Directors as at 31 December 2013 and at the date of this report are presented on page 1. All of them were members of the Board of Directors throughout the year ended 31 December 2013.
In accordance with the Company's Articles of Association 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 Directors.
Any significant events that occurred after the end of the reporting period are described in note 22 to the financial statements.
Disclosed in note 18 of the financial statements.
The independent auditors of the Company, KPMG Limited, have expressed their willingness to continue in office. A resolution giving authority to the Board of Directors to fix their remuneration will be submitted at the forthcoming Annual General Meeting.
By order of the Board of Directors,
Inter Jura Cy (Services) Limited Secretary
Nicosia, 30 April 2014
We have audited the accompanying financial statements of the parent company Agroton Public Limited (the ''Company'') on pages 6 to 37 which comprise the statement of financial position as at 31 December 2013, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
The Board of Directors is responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements that give a true and fair view 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the financial statements give a true and fair view of the financial position of parent company Agroton Public Limited as at 31 December 2013, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113.
We draw attention to notes 2 and 17 to the financial statements which refers to the significant uncertainty of the Cyprus economy and recent developments in the banking system in Cyprus. These adverse economic developments may adversely affect the operations, profitability and liquidity of the Company, however these developments can not be determined with certainty at this stage. Our opinion is not qualified in respect of this matter.
Pursuant to the additional requirements of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 and 2013, we report the following:
This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Section 34 of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 and 2013 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.
We have reported separately on the consolidated financial statements of the Company and its subsidiaries during the year ended 31 December 2013.
Maria A. Papacosta, FCCA Certified Public Accountant and Registered Auditor for and on behalf of
KPMG Limited Certified Public Accountants and Registered Auditors 14 Esperidon Street 1087 Nicosia Cyprus
30 April 2014
| Note | 2013 US\$ |
2012 US\$ |
|
|---|---|---|---|
| Loan interest income | 6.348.097 | 4.209.404 | |
| Interest expense | (7.524.830) | (7.169.009) | |
| Gross loss | (1.176.733) | (2.959.605) | |
| Other operating income | 1.755 | - | |
| Fair value losses on financial assets at fair value through profit or | |||
| loss | (1.549.634) | - | |
| Administrative expenses | (1.885.413) | (2.096.489) | |
| Operating loss | 4 | (4.610.025) | (5.056.094) |
| Finance income | 3.351 | 4.292 | |
| Finance expenses | (21.228) | (21.161) | |
| Net finance expenses | 5 | (17.877) | (16.869) |
| Loss before tax |
(4.627.902) | (5.072.963) | |
| Tax | 6 | (1.005) | - |
| Loss for the year |
(4.628.907) | (5.072.963) | |
| Other comprehensive income | - | - | |
| Total comprehensive expense for the year |
(4.628.907) | (5.072.963) |
| Note | US\$ | US\$ |
|---|---|---|
| Assets Investments in subsidiaries 7 |
35.193.406 | 35.193.406 |
| Financial assets at fair value through profit or loss 10 |
496.686 | - |
| Other non-current assets 11 |
10.742.066 | 45.314.824 |
| Loans to own subsidiaries 18 |
84.693.185 | 93.741.949 |
| Total non-current assets | 131.125.343 | 174.250.179 |
| Trade and other receivables 9 |
33.204.559 | 95.083 |
| Loans receivable 8 |
9.903.170 | 2.087.778 |
| Loans to own subsidiaries 18 |
- | 4.960.795 |
| Loans to owner 18 |
10.667.011 | 1.048.889 |
| Cash and cash equivalents 12 |
6.677.570 | 9.258.714 |
| Total current assets | 60.452.310 | 17.451.259 |
| Total assets | 191.577.653 | 191.701.438 |
| Equity | ||
| Share capital 13 |
661.128 | 661.128 |
| Share premium 13 |
88.531.664 | 88.531.664 |
| Reserves | (20.790.216) | (16.161.309) |
| Total equity | 68.402.576 | 73.031.483 |
| Liabilities | ||
| Loans and borrowings 14 |
51.537.511 | 45.066.286 |
| Loans from subsidiaries 18 |
70.007.394 | 65.961.450 |
| Loans from owner 18 |
1.303.677 | 1.083.889 |
| Total non-current liabilities | 122.848.582 | 112.111.625 |
| Bank overdrafts | 7 | - |
| Short term portion of long-term loans 14 |
- | 6.250.000 |
| Trade and other payables 15 |
212.983 | 194.825 |
| Tax liability 16 |
113.505 | 113.505 |
| Total current liabilities | 326.495 | 6.558.330 |
| Total liabilities | 123.175.077 | 118.669.955 |
| Total equity and liabilities | 191.577.653 | 191.701.438 |
On 30 April 2014 the Board of Directors of Agroton Public Limited authorised these financial statements for issue.
| Tamara Lapta | Larysa Orlova |
|---|---|
| Director | Director |
| For the year ended 31 December 2013 |
||||
|---|---|---|---|---|
| Share capital US\$ |
Share premium US\$ |
Retained earnings US\$ |
Total US\$ |
|
| Balance at 1 January 2012 |
661.128 | 88.531.664 | (11.088.346) | 78.104.446 |
| Comprehensive income | ||||
| Loss for the year |
- | - | (5.072.963) | (5.072.963) |
| Balance at 31 December 2012 |
661.128 | 88.531.664 | (16.161.309) | 73.031.483 |
| Balance at 1 January 2013 |
661.128 | 88.531.664 | (16.161.309) | 73.031.483 |
| Comprehensive income | ||||
| Loss for the year |
- | - | (4.628.907) | (4.628.907) |
| Balance at 31 December 2013 |
661.128 | 88.531.664 | (20.790.216) | 68.402.576 |
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 20% for the tax years 2012 and 2013 and 17% for 2014 and thereafter 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 profits of the relevant year at any time. This special contribution for defence is paid by the company for the account of the owners.
The above requirements of the Law are not applied in the case of the Company due to the fact that its owners are not residents in Cyprus for tax purposes.
| 2013 | 2012 | ||
|---|---|---|---|
| Note | US\$ | US\$ | |
| Cash flows from operating activities | |||
| Loss for the year |
(4.628.907) | (5.072.963) | |
| Adjustments for: | |||
| Amortisation of other non-current assets | 692.758 | 692.758 | |
| Amortisation of land leasing | 800.000 | - | |
| Fair value losses on financial assets at fair value through profit or loss | 10 | 1.549.634 | - |
| Interest income | 5 | (6.351.448) | (4.209.404) |
| Interest expense | 5 | 7.524.830 | 7.169.009 |
| Income tax expense | 1.005 | - | |
| Cash flows used in operations before working capital changes |
(412.128) | (1.420.600) | |
| (Increase)/decrease in trade and other receivables | (29.495) | 764.513 | |
| Increase/(decrease) in trade and other payables | 18.158 | (42.658) | |
| Cash flows used in operations |
(423.465) | (698.745) | |
| Interest paid | - | (2.924) | |
| Tax paid | (1.005) | - | |
| Net cash flows used in operating activities |
(424.470) | (701.669) | |
| Cash flows from investing activities | |||
| Payment for acquisition of investments in subsidiaries | 7 | - | (25.200.000) |
| Loans granted | (15.389.000) | (7.350.000) | |
| Loans repayments received | 13.913.331 | 18.893.859 | |
| Prepayment for acquisition of other non-current assets | 11 | - | (33.080.000) |
| Interest received | 3.351 | - | |
| Net cash flows used in investing activities |
(1.472.318) | (46.736.141) | |
| Cash flows from financing activities | |||
| Proceeds from loans from subsidiary companies | 4.267.169 | 48.522.000 | |
| Proceeds from loans from owners | 219.788 | 1.000.000 | |
| Interest paid | (3.125.000) | (6.250.000) | |
| Equity conversion | 10 | (2.046.320) | - |
| Net cash flows (used in)/from financing activities |
(684.363) | 43.272.000 | |
| Net decrease in cash and cash equivalents |
(2.581.151) | (4.165.810) | |
| Cash and cash equivalents at the beginning of the year |
9.258.714 | 13.424.524 | |
| Cash and cash equivalents at the end of the year |
12 | 6.677.563 | 9.258.714 |
Agroton Public Limited (the ''Company'') was incorporated in Cyprus on 21 September 2009 as a private limited liability company under the Cyprus Companies Law, Cap. 113. Its Registered Office is at 1 Lampousas Street, 1095 Nicosia, Cyprus.
The principal activities of the Company, which are unchanged from last year, are those of an investment holding company and the provision of financing to related parties. The Company is the holding company of a group of companies which represents one of the leading agriculture producers in Ukraine. The Group's core business is crop production, comprising principally sunflower seeds and wheat and also engaged in livestock and food processing.
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap.113.
The Company has prepared these parent's separate financial statements for compliance with the requirements of the Cyprus Income Tax Law.
The Company has also prepared consolidated financial statements in accordance with IFRSs for the Company and its subsidiaries (the ''Group''). The consolidated financial statements can be obtained from the registered office of the Company.
Users of these parent's separate financial statements should read them together with the Group's consolidated financial statements as at and for the year ended 31 December 2013 in order to obtain a proper understanding of the financial position, the financial performance and the cash flows of the Company and the Group
The financial statements have been prepared under the historical cost convention, except in the case of investments which are shown at their fair value.
These financial statements for the year ended 31 December 2013 have been prepared on a going concern basis. Despite the difficult operating environment and financial position of the Company as explained in note 17 of the financial statements, the Board of Directors believes that the Company will be able to continue as a going concern.
As from 1 January 2013, the Company adopted all changes to International Financial Reporting Standards (IFRSs), which are relevant to its operations. This adoption did not have a material effect on the accounting policies of the Company.
The following Standards, Amendments to Standards and Interpretations have been issued but are not yet effective for annual periods beginning on 1 January 2013. Those which may be relevant to the Company are set out below. The Company does not plan to adopt these Standards early.
(i) Standards and Interpretations adopted by the EU
(ii) Standards and Interpretations not adopted by the EU
The Board of Directors expects that the adoption of these standards in future periods will not have a material effect on the financial statements of the Company.
The preparation of financial statements in accordance with IFRSs requires from Management the exercise of judgment, to make estimates and assumptions that influence the application of accounting principles and the related amounts of assets and liabilities, income and expenses. The estimates and underlying assumptions are based on historical experience and various other factors that are deemed to be reasonable based on knowledge available at that time. Actual results may deviate from such estimates.
The estimates and underlying assumptions are revised on a continuous basis. Revisions in accounting estimates are recognised in the period during which the estimate is revised, if the estimate affects only that period, or in the period of the revision and future periods, if the revision affects the present as well as future periods.
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 financial statements are described below:
Income taxes
Significant judgment is required in determining the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
Fair value of financial assets
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Company uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at each reporting date. The fair value of the financial assets available for sale has been estimated based on the fair value of these individual assets.
Impairment of investments in subsidiaries
The Company periodically evaluates the recoverability of investments in subsidiaries whenever indicators of impairment are present. Indicators of impairment include such items as declines in revenues, earnings or cash flows or material adverse changes in the economic or political stability of a particular country, which may indicate that the carrying amount of an asset is not recoverable. If facts and circumstances indicate that investment in subsidiaries may be impaired, the estimated future discounted cash flows associated with these subsidiaries/associates would be compared to their carrying amounts to determine if a write-down to fair value is necessary.
The financial statements are presented in United States Dollars (US\$) which is the functional currency of the Company.
The following accounting policies have been applied consistently for all the years presented in these financial statements and in stating the financial position of the Company.
The Company has subsidiary undertakings for which section 142(1)(b) of the Cyprus Companies Law Cap. 113 requires consolidated financial statements to be prepared and laid before the Company at the Annual General Meeting.
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.
Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as an expense in the period in which the impairment is identified.
Revenues earned by the Company are recognised on the following bases:
Income from investments in securities
Dividend from investments in securities is recognised when the right to receive payment is established. Withheld taxes are transferred to profit or loss. Interest from investments in securities is recognised on an accruals basis.
Profits or losses from the sale of investments in securities represent the difference between the net proceeds and the carrying amount of the investments sold and is transferred to profit or loss.
The difference between the fair value of investments at fair value through profit or loss as at the reporting date and the mid cost price represents unrealised gains and losses and is included in profit or loss in the period in which it arises. Unrealised gains and losses arising from changes in the fair value of available-for-sale financial assets are recognised in equity. When available-for-sale financial assets are sold or impaired, the accumulated fair value adjustments are included in profit or loss as fair value gains or losses on investments, taking into account any amounts charged or credited to profit or loss in previous periods.
Interest income is recognised on a time-proportion basis using the effective interest method.
Finance income includes interest income which is recognised based on an accrual basis.
Interest expense and other borrowing costs are recognised to profit or loss using the effective interest method.
Items included in the Company's financial statements are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in United States Dollars (US\$), which is the Company's functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Translation differences on non-monetary items such as equities held at fair value through profit or loss are reported as part of the fair value gain or loss.
Tax liabilities and assets for the current and prior periods are measured at the amount expected to be paid to or recovered from the taxation authorities, using the tax rates and laws that have been enacted, or substantively enacted, by the reporting date. Current tax includes any adjustments to tax payable in respect of previous periods.
Dividend distribution to the Company's owners is recognised in the Company's financial statements in the year in which they are approved by the Company's owners.
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.
Loans originated by the Company by providing money directly to the borrower are categorised as loans and are carried at amortised cost. The amortised cost is the amount at which the loan granted is measured at initial recognition minus principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount, and minus any reduction for impairment or uncollectibility. All loans are recognised when cash is advanced to the borrower.
The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability (or group of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability.
The Company classifies its investments in equity and debt securities in the following categories: financial assets at fair value through profit or loss, held-to-maturity investments and available forsale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of investments at initial recognition.
This category has two sub-categories: financial assets held for trading and those designated at fair value through profit or loss at inception. A financial asset is classified in the held for trading category if acquired principally for the purpose of generating a profit from short-term fluctuations in price. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within twelve months from the reporting date.
Regular way purchases and sales of investments are recognised on trade-date which is the date on which the Company commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Investments are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Loans and receivables are carried at amortised cost using the effective interest method.
Realised and unrealised gains and losses arising from changes in the fair value of financial assets at fair value through profit or loss are included in profit or loss in the period in which they arise.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Company establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same and discounted cash flow analysis, making maximum use of market inputs and relying as little as possible on entity specific inputs. Equity investments for which fair values cannot be measured reliably are recognised at cost less impairment.
The Company assesses at each reporting date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for availablefor-sale financial assets the cumulative loss which is measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, is removed from equity and recognised in the profit or loss.
For financial assets measured at amortised cost, if in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
Financial instruments (continued)
In respect of available for sale equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under the heading of investments revaluation reserve. In respect of available for sale debt securities, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.
For the purpose of the statement of cash flows, cash and cash equivalents comprise deposits held at call with banks and bank overdrafts.
Borrowings are recorded initially at the proceeds received, net 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.
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:
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.
Financial assets and financial liabilities are offset and the net amount reported in the 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 asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the statement of financial position.
Ordinary shares are classified as equity. The difference between the fair value of the consideration received by the Company and the nominal value of the share capital being issued is taken to the share premium account.
Non-current liabilities represent amounts that are due more than twelve months from the reporting date.
Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.
| 2013 US\$ |
2012 US\$ |
|
|---|---|---|
| Operating loss is stated after charging the following items: |
||
| Independent auditors' remuneration for the statutory audit of annual accounts Independent auditors' remuneration for other assurance service Independent auditors' remuneration - prior years |
106.191 26.740 - |
101.594 37.490 80.285 |
| 5. NET FINANCE INCOME AND EXPENSES |
||
| 2013 US\$ |
2012 US\$ |
|
| Interest income Exchange profit |
3.351 - |
- 4.292 |
| Finance income | 3.351 | 4.292 |
| Net foreign exchange transaction losses Sundry finance expenses |
(4.504) (16.724) |
(1.024) (20.137) |
| Finance expenses | (21.228) | (21.161) |
| Net finance expenses | (17.877) | (16.869) |
| 2013 US\$ |
2012 US\$ |
|
|---|---|---|
| Special contribution to the defence fund for the year | 1.005 | - |
| Charge for the year |
1.005 | - |
| Reconciliation of tax based on the taxable income and tax based on accounting losses: |
||
| 2013 US\$ |
2012 US\$ |
|
| Accounting loss before tax |
(4.627.902) | (5.072.963) |
| Tax calculated at the applicable tax rates Tax effect of expenses not deductible for tax purposes Tax effect of allowances and income not subject to tax Tax effect of loss for the for the year Special contribution to the defence fund current year |
(578.488) 396.475 (419) 182.432 1.005 |
(507.296) 503.547 - 3.749 - |
| Tax as per statement of profit or loss and other comprehensive income - charge |
1.005 | - |
The corporation tax rate is 12,5% (2012:10%).
Under certain conditions interest income may be subject to defence contribution at the rate of 30% (2012:15%). In such cases this interest will be exempt from corporation tax. In certain cases, dividends received from abroad may be subject to defence contribution at the rate of 20% for the tax years 2012 and 2013 and 17% for 2014 and thereafter.
Due to tax losses sustained in the year, no tax liability arises on the Company. Tax losses may be carried forward for five years. Group companies may deduct losses against profits arising during the same tax year. As at 31 December 2013, the balance of tax losses which is available for offset against future taxable profits amounts to US\$1.525.985 for which no deferred asset is recognised in the statement of financial position.
Alinko Ukraine
LLC Lugastan Ukraine
| 2013 US\$ |
2012 US\$ |
|||||
|---|---|---|---|---|---|---|
| DIVIDENDS 1 January Additions |
35.193.406 - |
9.993.406 25.200.000 |
||||
| Balance at 31 December |
35.193.406 | 35.193.406 | ||||
| The details of the subsidiaries are as follows: | ||||||
| Name | Country of incorporation |
Principal activities |
2013 Holding % |
2012 Holding % |
2013 US\$ |
2012 US\$ |
| Living LLC | Ukraine | Agricultural activities |
99,99 | 99,99 | 4.718 | 4.718 |
| Agroton BVI Limited |
British Virgin Island |
Trading in Agriculture |
100 | 100 | 100 | 100 |
| LLC Gefest | Ukraine | Owner of land lease rights |
100 | 100 | 4.797.778 | 4.797.778 |
| Private Enterpise Tais Avb |
Ukraine | Owner of land lease rights |
100 | 100 | 5.190.810 | 5.190.810 |
| Private Enterprise | Owner of land |
Owner of land
lease rights 100 100 10.100.000 10.100.000
lease rights 100 100 15.100.000 15.100.000
35.193.406 35.193.406
| 2013 US\$ |
2012 US\$ |
|
|---|---|---|
| Balance at 1 January | 2.087.778 | - |
| New loans granted | 6.740.000 | 2.000.000 |
| Interest charged | 1.075.392 | 87.778 |
| Balance at 31 December | 9.903.170 | 2.087.778 |
| 2013 US\$ |
2012 US\$ |
|
|---|---|---|
| Loans receivable | 9.903.170 | 2.087.778 |
| 9.903.170 | 2.087.778 |
| 2013 US\$ |
2012 US\$ |
|
|---|---|---|
| Deposits and prepayments | 9.819 | 9.300 |
| Other receivables | 33.080.000 | - |
| Refundable VAT | 114.740 | 85.783 |
| 33.204.559 | 95.083 |
The exposure of the Company to credit risk and impairment losses in relation to trade and other receivables is reported in note 19 of the financial statements.
| 2013 | 2012 | |
|---|---|---|
| US\$ | US\$ | |
| Balance at 1 January | - | - |
| Additions | 2.046.320 | - |
| Change in fair value | (1.549.634) | - |
| Balance at 31 December | 496.686 | - |
Financial assets designated at fair value through profit or loss include/are Bank of Cyprus equity securities converted into Class A shares after the decree issued by Central Bank of Cyprus on 29 March 2013 (Note 12) amounting to US\$2.046.320.
Following the decree on the rescue by own means of Bank of Cyprus issued by the Central Bank of Cyprus on 29 March 2013, Cyprus Stock Exchange and Athens Stock Exchange have suspended the trading of Bank of Cyprus equity securities until 31 July 2014 inclusive.
Currently there is no indication of the fair value of the Bank of Cyprus equity securities. The Management of the Company estimates that the nominal value of the securities is higher than the fair value by approximately 76%.
Fair value loss amounted to €1.549.634 thousand was recognised in profit or loss for the year.
The exposure of the Company to market risk in relation to financial assets is reported in note 19 of the financial statements.
| 2013 | 2012 | |
|---|---|---|
| US\$ | US\$ | |
| Advances: | ||
| Advance for land lease | 8.000.000 | 8.000.000 |
| Less: amortisation | (2.800.000) | (2.000.000) |
| 5.200.000 | 6.000.000 | |
| Prepayments: | ||
| Prepayments for the immediate right to use the elevator | 10.000.000 | 10.000.000 |
| Less: provision for impairment | (3.072.418) | (3.072.418) |
| Less: amortisation | (1.385.516) | (692.758) |
| Prepayments for the immediate right to use elevator | 5.542.066 | 6.234.824 |
| Other receivables: | ||
| Prepayment for acquisition of investments | - | 33.080.000 |
| 10.742.066 | 45.314.824 |
On 20 July 2011 Private Enterprise Agricultural Production Firm Agro ("PE APF Agro") entered into an investment agreement with SJSC Khlib Ukraine Novoaydarskyy Elevator, in respect of the Novoaydarskyy Elevator. Based on the agreement PE APF Agro undertakes to invest US\$ 1.155 thousand for the upgrading of the elevator until 20 July 2021 and upon completion of the project, PE APF Agro will become the 54% owner of the elevator while the remaining 46% will continue to be owned by the existing owner. In case PE APF Agro invests additional amounts in the upgrading of the elevator, its participation in the ownership rights will increase. The grain elevator with a storage capacity of 130.000 tons was previously rented by the Group as part of its operations.
During the year 2011 Agroton Public Limited made a prepayment of US\$ 10.000 thousand in relation to this investment agreement specifically for its rights to secure use of this elevator. The fair value of these rights was evaluated at US\$ 6.928 thousand hence an impairment loss of USD 3.072 thousand was accounted for in the consolidated profit or loss.
At 31 December 2012 PE APF Agro made payments of US\$ 683 thousand for the upgrading of the elevator.
On 29 June 2012, Agroton Public Limited entered into a preliminary agreement with Stiomi Agri Ltd ("Seller") for the acquisition of 100% of the issued share capital of Private Enterprises "Peredilske". The parties agreed that the price for transfer of the company's shares shall amount to US\$23.080.000. The ownership of the company's shares shall be deemed transferred to the Company within 9 months after the effective date (29 June 2012).
On 26 December 2012, Agroton Public Limited entered into a preliminary agreement with Stiomi Agri Ltd ("Seller") for the purchase of 100% of the issued share capital of Limited Liability Company "Shid Potetial - Resurs". The parties agreed that the price for transfer of the company's shares shall amount to US\$10.000.000. The ownership of the company's shares shall be deemed transferred to the Company within 6 months after the effective date (26 December 2012).
On 3 September 2013 both agreements for the acquisition of Private Enterprises "Peredilske" and of Limited Liability Company "Shid Potetial - Resurs" have been cancelled. The parties agreed that the whole amount paid should be returned to the Company within twelve months of the signing of the cancellation agreements, either in cash and/or an equivalent market value's worth of agricultural goods.
For the purposes of the statement of cash flows, the cash and cash equivalents include the following:
| 2013 | 2012 | |
|---|---|---|
| US\$ | US\$ | |
| Cash with brokers | - | 871.692 |
| Cash at bank | 5.065.966 | 8.387.022 |
| Bank deposits | 1.611.604 | - |
| 6.677.570 | 9.258.714 |
Cash with brokers represents cash held by the Company's investment manager for the purpose of investment on behalf of the Company. In accordance with the agreement between the Company and the investment broker, the Company has access to this cash within three (3) working business days from the day the Company makes request.
Due to the current developments in the economic environment of Cyprus (described in Note 17 "Operating Environment") the Central Bank of Cyprus on 29 March 2013 has issued a Decree relating to Bank of Cyprus implementing measures for the bank under the Resolution of Credit and Other Institutions Law of 2013.
By this Decree, (i) in case where the total deposits that a person who holds with Bank of Cyprus including accrued interest, as recorded in the books of Bank of Cyprus at 22:00 on 26 March 2013, exceed the amount of one hundred thousand (100.000) euro, the amount of these deposits in excess of one hundred thousand (100.000) euro, but after reducing such amount by the aggregate amount of the credit claims which Bank of Cyprus had against that person as at the time mentioned above, and (ii) the aggregate amount of deposits that any person who holds with Bank of Cyprus including accrued interest, as recorded in the books of Bank of Cyprus at 22:00 on 26 March 2013, but after reducing such amount by the aggregate amount of the credit claims which Bank of Cyprus had against that person as at the time mentioned above, are subject to the following:
1.into Class A Shares of Bank of Cyprus to be issued and allotted at a conversion rate of one (1) euro nominal amount of Class A Shares for each one (1) euro (or, where applicable, the equivalent in foreign currency) in principal amount of the title which is converted;
2.into deposit at a conversion rate of one (1) euro for each one (1) euro (or, where applicable, the equivalent in foreign currency) in principal amount of the title which is converted, plus an additional amount equal to the amount of interest, calculated at an interest rate increased by 10 basis points, which would have accrued on the amount of such deposit if this Decree had not been issued.
c) the remaining 40% of the excess amount is reduced to zero and temporarily replaced by a title; The title including the amount of interest calculated shall be subject to conversion into deposit, in whole or in part, at any time upon a written conversion notice of the Resolution Authority at a conversion rate of one (1) euro for each one (1) euro (or, where applicable, the equivalent in foreign currency) in principal amount and accrued interest of the title which is converted.
On 2 April 2013, the Central Bank of Cyprus, as the Resolution Authority, sent written instructions to the Special Administrator of the Bank of Cyprus Public Company Ltd for the unfreezing of 10% (part of 40% replaced by a title) of uninsured deposits over EUR 100.000.
On 30 July 2013, the Ministry of Finance and the Central Bank of Cyprus, as the Resolution Authority, announced that Bank of Cyprus Public Company Ltd has been fully recapitalised by the overall conversion of 47,5% of uninsured deposits over EUR 100.000 into shares Class A Shares of Bank of Cyprus Public Company Ltd. Following the recapitalisation, 12% of deposits that were previously blocked have been released (5% in total). The amount released has been splited evenly into three separate time deposits of six, nine and twelve months, respectively. Bank of Cyprus Public Company Ltd has the option to renew the time deposits once for the same time duration.
The exposure of the Company to credit risk and impairment losses in relation to cash and cash equivalents is reported in note 19 of the financial statements.
| Issued and fully paid | Number of shares |
Share capital US\$ |
Share premium US\$ |
Total US\$ |
|---|---|---|---|---|
| Balance at 1 January 2012 |
21.670.000 | 661.128 | 88.531.664 | 89.192.792 |
| Balance at 31 December 2012 |
21.670.000 | 661.128 | 88.531.664 | 89.192.792 |
| Balance at 1 January 2013 |
21.670.000 | 661.128 | 88.531.664 | 89.192.792 |
| Balance at 31 December 2013 |
21.670.000 | 661.128 | 88.531.664 | 89.192.792 |
On 31 December 2012 the authorised share capital of the Company amounted to 47.619.048 ordinary shares of nominal value €0,021 each.
i) Upon incorporation on 21 September 2009, the Company issued to the subscribers of its Memorandum of Association12.000.000 ordinary shares of nominal value €0,021 each, amounting to €252.000 (US\$ equivalent of US\$370.591).
ii) On 4 November 2009 the Company issued 4.000.000 additional ordinary shares of nominal value €0,021 each, amounting to €84.000 (US\$ equivalent of US\$123.715), at a premium of €6,93 per share, amounting to a total share premium of €27.720.000 (US\$ equivalent of US\$38.791.285).
Global Depositary Receipts "GDRs" were issued against the 4.000.000 new shares by "The Bank of New York Mellon" for US\$9,72875 per each new share. The total consideration of the share capital issued was US\$38.915.000 out of which US\$123.715 is the total nominal value credited to the share capital account and US\$38.791.285 is the share premium reserve. Share issue expenses of US\$317.154 were deducted from the share premium reserve.
iii) The members of the Company held an Extraordinary General Meeting on 25 June 2010 where they authorized and approved the increase of the issued share capital of the Company from 16.000.000 ordinary shares of €0,021 each amounting to €336.000 (USD\$ equivalent of US\$494.306) to 21.670.000 ordinary shares of nominal value of €0,021, by the creation of 5.670.000 ordinary shares of a nominal value of €0,021 each, ranking pari pasu with the existing shares of the Company.
On 29 October 2010 the Company proceeded and issued 5.670.000 ordinary shares of nominal value €0,021 each, amounting to €119.070 (equivalent to US\$166.822), at a premium of €6,7595 per share amounting to a total share premium of €38.326.365 (US\$ equivalent of US\$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 153.090.000 (US\$ equivalent of US\$54.389.456) from the public offering. Share issue expenses of US\$4.165.101 were deducted from the share premium reserve.
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 application for the admission of the entire issued share capital of the company, including the Offer Shares to trading on the regulated market of the Warsaw Stock Exchange.
| 2013 US\$ |
2012 US\$ |
|
|---|---|---|
| Long term liabilities Bonds |
51.537.511 | 45.066.286 |
| Short term liabilities Bonds |
- | 6.250.000 |
| Total | 51.537.511 | 51.316.286 |
On 14 July 2011, the Company's issued US\$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 London Stock Exchange Plc and trading 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 US\$50.000.000 net of issue costs equal to US\$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 consolidated income statement over the period of the issue.
On 8 August 2013 with the consent of the Noteholders the Company has amended the terms and conditions of the Notes as follow:
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:
The following subsidiaries are acting as surety providers:
In February 2013 subsidiary company AF named by Shevchenko has been sold to a third party and subsequently released from its suretyship in respect of the Notes.
The exposure of the Company to interest rate risk in relation to financial instruments is reported in note 19 of the financial statements.
| 2013 US\$ |
2012 US\$ |
|
|---|---|---|
| Accruals | 117.410 | 109.549 |
| Other creditors | 95.573 | 85.176 |
| Payables to own subsidiaries (Note 18) | - | 100 |
| 212.983 | 194.825 |
The exposure of the Company to liquidity risk in relation to financial instruments is reported in note 19 of the financial statements.
| 2013 US\$ |
2012 US\$ |
|
|---|---|---|
| Special contribution for defence | 113.505 | 113.505 |
| 113.505 | 113.505 |
The Cyprus economy has been adversely affected from the crisis in the Cyprus banking system in conjunction with the inability of the Republic of Cyprus to borrow from international markets. As a result, the Republic of Cyprus entered into negotiations with the European Commission, the European Central Bank and the International Monetary Fund (the "Troika"), for financial support, which resulted into an agreement and the Eurogroup decision of 25 March 2013. The decision included the restructuring of the two largest banks in Cyprus through "bail in". During 2013 the Cyprus economy contracted further with a decrease in the Gross Domestic Product.
Following the positive outcome of the first and second quarterly reviews of Cyprus's economic programme by the European Commission, the European Central Bank and the International Monetary Fund during 2013, the Eurogroup endorsed the disbursement of the scheduled tranches of financial assistance to Cyprus.
The uncertain economic conditions in Cyprus, the unavailability of financing, the restructuring of the banking sector through "bail in" for Laiki Bank and Bank of Cyprus, and the imposition of capital controls together with the current situation of the banking system and the continuing overall economic recession, have affected:
The Company's management has assessed:
The Company's management is unable to predict all developments which could have an impact on the Cyprus economy and consequently, what effect, if any, they could have on the future financial performance, cash flows and financial position of the Company.
The above conditions, along with other matters as set forth in note 2 indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern.
On the basis of the evaluation performed, the Company's management has concluded that no provisions or impairment charges are necessary.
The Company's management believes that it is taking all the necessary measures to maintain the viability of the Company and the development of its business in the current business and economic environment.
The persons holding more than 5% of the share capital as at 31 December 2013 and 25 April 2014 (5 days before the date of approval of the financial statements by the Board of Directors) were as follows:
| 31 December 2013 | 25 April 2014 | |||
|---|---|---|---|---|
| Owners | Number of shares |
Ownership interest, % |
Number of shares |
Ownership interest, % |
| Mr. Iurii Zhuravlov | 11.059.994 | 51,04 | 11.059.994 | 51,04 |
| BNY (Nominees) Limited | 4.000.000 | 18,46 | 4.000.000 | 18,46 |
| Jaspen Capital Partners Limited | 3.256.187 | 15,03 | 3.256.187 | 15,03 |
| BPH Towarzystwo Funduszy Inwestycyjnych | ||||
| S.A. | 1.130.950 | 5,22 | 1.130.950 | 5,22 |
| Generali Otwarty Fundusz Emerytalny | 1.089.839 | 5,03 | - | - |
| Free float | 1.133.030 | 5,22 | 2.222.869 | 10,25 |
| 21.670.000 | 100,00 | 21.670.000 | 100,00 |
The transactions and balances with related parties are as follows:
| 2013 | 2012 | ||
|---|---|---|---|
| US\$ | US\$ | ||
| Name | Note | ||
| Private Enterprise Agricultural Production Firm Agro | a | 69.872.798 | 78.743.944 |
| Private Enterprise Agricultural Production Firm Agro | b | 14.820.387 | 14.998.005 |
| Private Enterprise Agricultural Production Firm Agro | c | - | 4.960.795 |
| 84.693.185 | 98.702.744 |
The Company has granted Private Enterprise Agricultural Production Firm "Agro", a related group company, 9 loans. Private Enterprise Agricultural Production Firm "Agro" is a wholly owned subsidiary of "Living" LLC, which is a wholly owned subsidiary of the Company.
a) On 23 November 2009, the Company entered into a loan agreement with Private Enterprise Agricultural Production Firm "Agro" for the amount of US\$8.000.000. The loan agreement was later amended, increasing the loan facility to US\$10.000.000. The loan bears interest at a rate of 2,5% per annum. On the 2 December 2010 through an additional loan agreement the repayment date was prolonged from 1 January 2011 to 1 January 2012.
On 25 March 2010, the Company enterd into a new loan agreement with Private Enterprise Agricultural Production Firm "Agro", were a loan facility of US\$10.000.000 was granted. The loan bears interest at a rate of 2,5% per annum and is repayable on 1 January 2015.
Also during the years 2010 and 2011, the Company entered into the following loan agreements with Private Enterprise Agricultural production firm "Agro":
(1) On 25 October 2010, granting a loan facility of US\$10.000.000;
(2) On 26 October 2010, granting a loan facility of US\$10.000.000;
(3) On 27 October 2010 granting a loan facility of US\$10.000.000;
(4) On 28 October 2010, granting a loan facility of US\$10.000.000;
(5) On 29 October 2010, granting a loan facility of US\$5.000.000;
(6) On 9 August 2010, granting a loan facility of US\$10.000.000; and
(7) On 5 January 2011, granting a loan facility of US\$10.000.000.
The above loans are unsecured, bear interest at the rate of 2,5% and are repayable on the 30 October 2015.
b) On 23 June 2011 the Company has entered into a loan agreement with Private Enterprise Agricultural Production Firm "Agro" for the granting of financing facility amounting to US\$10.000.000. The loan bears interest at a rate of 10% per annum and is repayable on 1 July 2014. The above loan is unsecured.
On 21 July 2011 the Company has entered into a loan agreement with Private Enterprise Agricultural Production Firm "Agro" for the granting of financing facility amounting to US\$10.000.000.. The loan bears interest at a rate of 10% per annum and is repayable on 1 July 2014. The above loan is unsecured.
c) On 3 March 2011, the Company entered into a new loan agreement with Private Enterprise Agricultural Production Firm "Agro" for US\$10.000.000. As at 31 December 2011 the total loan facility of US\$10.000.000 has been fully disbursed. The loan bears interest at a rate of 9,8% and was orginally repayable on 13 December 2011.The above loan is unsecured. Based on an addendum to the loan agreement, the repayment terms have been extended to 30 September 2012 and the interest rate has been increased to 10% as of 1 March 2012.
| 2013 | 2012 | |
|---|---|---|
| US\$ | US\$ | |
| Iurii Zhuravlov | 1.261.580 | 1.048.889 |
| Iurii Zhuravlov | 401.422 | - |
| Iurii Zhuravlov | 9.004.009 | - |
| 10.667.011 | 1.048.889 |
On 2 October 2012 the Company has entered into a loan agreement with the owner of the Company Mr. Iurii Zhuravlov amounting to US\$1.000.000. The loan bears interest at a rate of 20% per annum and was repayable on 2 September 2013. On 2 September 2013 the two parties agreed to postpone the repayment date to 31 December 2014. The above loan is unsecured.
On 10 May 2013 the Company has entered into a loan agreement with the owner of the Company Mr. Iurii Zhuravlov amounting to US\$355.000. The loan bears interest at a rate of 20% per annum and is repayable on 10 May 2014. The above loan is unsecured.
On 22 July 2013 the Company has entered into a loan agreement with the owner of the Company Mr. Iurii Zhuravlov amounting to US\$10.000.000. The loan bears interest at a rate of 20% per annum and is repayable on 22 July 2014. The above loan is unsecured.
| (iii) Payables to group companies (Note 15) | ||
|---|---|---|
| 2013 | 2012 | |
| US\$ | US\$ | |
| Name | ||
| Agroton (BVI) Limited | - | 100 |
| - | 100 | |
The amount payable to subsidiary company Agroton (BVI) Limited represents the unpaid share capital.
| (iv) Loans from subsidiaries | 2013 US\$ |
2012 US\$ |
|---|---|---|
| Agroton (BVI) Limited | 70.007.394 | 65.961.450 |
| 70.007.394 | 65.961.450 |
On 25 July 2011 the Company has entered into a contract with Agroton (BVI) Limited, a subsidiary company, to receive an interest free loan for the total amount of US\$10.000.000, repayable on 1 January 2015. On 10 September 2011 the Company has entered into an additional agreement for increasing the loan facility to US\$60.000.000 and amending the original repayment terms, for repayment of the loan in full on the repayment date of 1 January 2015 or any other date on the demand of the lender. Following an amendment signed by the two parties, from 1 January onwards the loan bears interest at a rate of 6% per annum.
| 2013 US\$ |
2012 US\$ |
|
|---|---|---|
| Iurii Zhuravlov | 1.303.677 | 1.083.889 |
| 1.303.677 | 1.083.889 |
On 2 August 2012 the Company has entered into a contract with the owner of the Company Mr. Iurii Zhuravlov to receive a loan for the amount of US\$1.000.000. The loan bears interest at a rate of 20% per annum and was repayable on 2 August 2013. On 2 August 2013 the two parties agreed to postpone the repayment date to 2 August 2014. The above loan is unsecured.
Financial risk factors
The Company is exposed to the following risks from its use of financial instruments:
The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework.
The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and in the Company's activities.
Credit risk arises when a failure by counter parties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the reporting date. The Company has no significant concentration of credit risk. The Company has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history and monitors on a continuous basis the ageing profile of its receivables.
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
| 2013 | 2012 | |
|---|---|---|
| US\$ | US\$ | |
| Loans receivable | 9.903.170 | 2.087.778 |
| Loans receivables from related parties | 95.360.196 | 99.751.633 |
| Trade and other receivables | 33.080.000 | - |
| Cash at bank | 5.065.966 | 8.387.022 |
| Bank deposits | 1.611.604 | - |
| 145.020.936 | 110.226.433 |
The credit quality of financials assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if applicable) or to historical information about counterparty default rates:
| 2012 | ||
|---|---|---|
| US\$ | US\$ | |
| - | ||
| 1.620.621 | 8.387.022 | |
| 6.677.570 | 8.387.022 | |
| 2013 5.056.949 |
None of the financial assets that are fully performing has been renegotiated.
(ii) Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Company has procedures with 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 following are the contractual maturities of financial liabilities, including estimated interest payments:
| 31 December 2013 | Carrying amounts US\$ |
Contractual cash flows US\$ |
3 months or less US\$ |
Between 3-12 months US\$ |
Between 1-5 years US\$ |
Over than 5 years US\$ |
|---|---|---|---|---|---|---|
| Loans and borrowings | 51.537.511 | 69.500.000 | - | - | 13.500.000 | 56.000.000 |
| Bank overdrafts | 7 | 7 | 7 | - | - | - |
| Trade and other payables | 95.573 | 95.573 | 95.573 | - | - | - |
| Loans from subsidiaries | 70.007.394 | 77.834.511 | - | - | 77.834.511 | - |
| Loans from owner | 1.303.677 | 1.436.218 | - | 1.436.218 | - | - |
| 122.944.162 | 148.866.309 | 95.580 | 1.436.218 | 91.334.511 | 56.000.000 | |
| 31 December 2012 | Carrying amounts US\$ |
Contractual cash flows US\$ |
3 months or less US\$ |
Between 3-12 months US\$ |
Between 1-5 years US\$ |
More than 5 years US\$ |
| Loans and borrowings | 51.316.286 | 60.888.204 | 3.125.000 | 3.125.000 | 54.638.204 | - |
| Trade and other payables | 85.176 | 85.176 | 85.176 | - | - | - |
| Payables to related parties | 100 | 100 | 100 | - | - | - |
| Loans from subsidiaries | 65.961.450 | 65.961.450 | 65.961.450 | - | - | - |
| Loans from owner | 1.083.889 | 1.202.778 | - | 1.202.778 | - | - |
| 118.446.901 | 128.137.708 | 69.171.726 | 4.327.778 | 54.638.204 | - |
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's income or the value of its holdings of financial instruments.
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. Borrowings issued at variable rates expose the Company to cash flow interest rate risk. Borrowings issued at fixed rates expose the Company to fair value interest rate risk. The Company's management monitors the interest rate fluctuations on a continuous basis and acts accordingly.
At the reporting date the interest rate profile of interest- bearing financial instruments was:
| 2013 | 2012 | |
|---|---|---|
| US\$ | US\$ | |
| Fixed rate instruments | ||
| Financial assets | 106.874.970 | 102.711.103 |
| Financial liabilities | (122.962.087)(118.361.625) | |
| Variable rate instruments | ||
| Financial assets | 5.065.966 | 8.387.022 |
| Financial liabilities | (7) | - |
| (11.021.158) | (7.263.500) |
An increase of 100 basis points in interest rates at 31 December 2013 would have increased equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. For a decrease of 100 basis points there would be an equal and opposite impact on the profit and other equity.
| Equity | Profit or loss | |||
|---|---|---|---|---|
| 2013 US\$ |
2012 US\$ |
2013 US\$ |
2012 US\$ |
|
| Variable rate instruments | 506.596 | 838.702 | 506.596 | 838.702 |
| 506.596 | 838.702 | 506.596 | 838.702 |
The Company 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 Company's overall strategy remains unchanged from last year.
The fair values of the Company's financial assets and liabilities approximate their carrying amounts at the reporting period.
The fair value of financial instruments traded in active markets, such as publicly traded trading and available-for-sale financial assets is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Company is the current bid price. The appropriate quoted market price for financial liabilities is the current ask price.
The nominal value less any estimated credit adjustments for financial assets and liabilities with a maturity of less than one year are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate available to the Company for similar financial instruments.
The Company had no contingent liabilities as at 31 December 2013.
There were no material events after the reporting period which affect the financial statements as at 31 December 2013 apart from:
On 14 April 2014 the Company announced in London Stock Exchange the purchase of its own Notes for US\$22,1 million divided into 22.100 Notes of US\$ 1 thousand per Note.
On 30 April 2014 the Board of Directors of Agroton Public Limited authorised these financial statements for issue.
FINANCIAL STATEMENTS
For the year ended 31 December 2013
ADDITIONAL INFORMATION
| Income statement | 1 |
|---|---|
| Administrative expenses | 2 |
| Finance income/cost | 3 |
| Computation of corporate tax | 4 |
| Certificate | 5 |
| 2012 US\$ |
||
|---|---|---|
| Schedule | ||
| 6.348.097 | 4.209.404 | |
| (7.169.009) | ||
| (1.176.733) | (2.959.605) | |
| - | ||
| - | ||
| (2.096.489) | ||
| (4.610.025) | (5.056.094) | |
| 4.292 | ||
| (21.161) | ||
| (17.877) | (16.869) | |
| (5.072.963) | ||
| (1.005) | - | |
| (5.072.963) | ||
| 2 3 3 |
2013 US\$ (7.524.830) 1.755 (1.549.634) (1.885.413) 3.351 (21.228) (4.627.902) (4.628.907) |
| 2013 | 2012 | |
|---|---|---|
| US\$ | US\$ | |
| Schedule | ||
| Professional licence fee | - | 20.000 |
| Registrar annual fee | 459 | 428 |
| Sundry expenses | 1.501 | - |
| Courier expenses | - | 315 |
| Subscriptions and contributions | - | 3.961 |
| Independent auditors' remuneration for the statutory audit of annual | ||
| accounts | 106.191 | 101.594 |
| Independent auditors' remuneration for other assurance service | 26.740 | 37.490 |
| Independent auditors' remuneration - prior years | - | 80.285 |
| Accounting fees | 12.533 | 16.708 |
| Legal fees | 33.962 | 70.758 |
| Other professional fees | 7.633 | 9.017 |
| Secretarial fees | 1.180 | 1.080 |
| Registered office fees | 1.180 | 1.080 |
| Revenue stamps | - | 342 |
| Fines | 46 | - |
| Travelling | - | 17.460 |
| Irrecoverable VAT | 2.380 | - |
| Professional services | 198.850 | 243.213 |
| Amortisation of prepayment for property elevator | 692.758 | 692.758 |
| Amortisation of land lease rights | 800.000 | 800.000 |
| 1 | 1.885.413 | 2.096.489 |
| 2013 US\$ |
2012 US\$ |
||
|---|---|---|---|
| Schedule | |||
| Finance income | |||
| Bank interest | 3.351 | - | |
| Realised exchange profit | - | 4.292 | |
| 3.351 | 4.292 | ||
| Finance expenses | |||
| Sundry finance expenses Bank charges |
16.724 | 20.137 | |
| Net foreign exchange transaction losses | |||
| Realised exchange loss | 3.486 | - | |
| Unrealised exchange loss | 1.018 | 1.024 | |
| 21.228 | 21.161 | ||
| Net finance expenses | 1 | (17.877) | (16.869) |
| US\$ | US\$ | ||
|---|---|---|---|
| Schedule | |||
| Net loss before tax per income statement |
1 | (4.627.902) | |
| Add: | |||
| Fair value losses on financial assets at fair value through | |||
| profit or loss | 1.549.634 | ||
| Unrealised exchange loss | 1.018 | ||
| Registrar annual fee | 459 | ||
| Fines | 46 | ||
| Interest on taxes | 472 | ||
| Amortisation of other non-current assets | 692.758 | ||
| Amortisation of other non-current assets | 800.000 | ||
| Legal fees | 33.962 | ||
| Professional services | 93.448 | ||
| 3.171.797 | |||
| (1.456.105) | |||
| Less: | |||
| Interest income | 3.351 | ||
| (3.351) | |||
| Net loss for the year |
(1.459.456) | ||
| € | |||
| Converted into € at US\$ 1,379100 = €1 |
(1.058.267) | ||
| Loss brought forward | (48.241) | ||
| Loss carried forward |
(1.106.508) | ||
We hereby certify, to the best of our knowledge and belief, that:
Yours truly,
.................................... Tamara Lapta Director
.................................... Larysa Orlova Director
Nicosia, 30 April 2014
ΗΕ 255059
The report of the Board of Directors, the Independent Auditors' report and the Financial Statements of the company for the year ended 31 December 2013 are true copies of those presented at the Annual General Meeting that took place on 30 April 2014.
Signature ......................................... Director
Signature ......................................... Secretary
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