Interim / Quarterly Report • Sep 2, 2013
Interim / Quarterly Report
Open in ViewerOpens in native device viewer
For the six months ended 30 June 2013
$\frac{1}{1}$
$\ddot{\phantom{a}}$
$\mathcal{A}^{\pm}$
Pages
| Board of Directors and other officers | |
|---|---|
| Declaration of the members of the Board of Directors and the person responsible for the preparation of the condensed consolidated interim financial statements |
2 |
| Independent Auditors' Report on review of condensed consolidated interim financial statements |
3 |
| Condensed consolidated statement of comprehensive income | 4 |
| Condensed consolidated statement of financial position | 5 |
| Condensed consolidated statement of changes in equity | $6 - 7$ |
| Condensed consolidated statement of cash flows | 8 |
| Notes to the condensed consolidated interim financial statements | $9 - 37$ |
$\mathcal{L}_{\mathcal{A}}$
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
Borys Supikhanov (Head of the Committee) Volodymyr Kudryavtsev
Borys Supikhanov (Head of the Committee)
Remuneration Committee
Board of Directors
Audit Committee
ŧ
Volodymyr Kudryavtsev
Secretary
Independent Auditors
Legal Advisors
Registered Office
Inter Jura Cy (Services) Limited
KPMG Limited
K. Chrysostomides & Co LLC
1 Lampousas Street 1095 Nicosia Cyprus
$\bar{z}$
$\mathbf{1}$
We, the Members of the Board of Directors and the person responsible for the preparation of the condensed consolidated interim financial statements of Agroton Public Limited for the period ended 30 June 2013, based on our knowledge, which is the product of careful and conscientious work, declare that the particulars which are specified in the condensed consolidated interim financial statements are true and complete.
Members of the Board of Directors:
| Iurii Zhuravlov | |
|---|---|
| Tamara Lapta | |
| Larysa Orlova | |
| Borys Supikhanov | |
| Volodymyr Kudryavtsev |
Person responsible for the preparation of the condensed consolidated interim financial statements for the period ended 30 June 2013: $\Delta$
| Larysa Orlova | |
|---|---|
| ັ |
Nicosia, 29 August 2013
KPMG Limited Chartered Accountants 14 Esperidon Street 1087 Nicosia, Cyprus P.O.Box 21121 1502 Nicosia, Cyprus
Telephone +357 22 209000 Fax +357 22 678200 F-mail [email protected] Internet www.kpmg.com.cy
3
Introduction
We have reviewed the accompanying condensed consolidated statement of financial position of Agroton Public Limited (the "Company") and its subsidiary companies (together referred to as "the Group") as at 30 June 2013, and the related condensed consolidated statements of comprehensive income, changes in equity and cash flows for the six-month period then ended, and notes to the condensed consolidated interim financial statements. Management is responsible for the preparation and fair presentation of these condensed consolidated interim financial statements in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting". Our responsibility is to express a conclusion on these condensed consolidated interim financial statements based on our review.
We conducted our review in accordance with the International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of condensed consolidated interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements do not give a true and fair view of the financial position of the Group as at 30 June 2013, and of its financial performance and its cash flows for the six-month period then ended in accordance with IAS 34 "Interim Financial Reporting".
PUG diwited
Chartered Accountants
Nicosia, 29 August 2013
D.C. Syrimis, A.K. Christofides, E.Z. Hadjizacharias, P.G. Loizou
A.M. Gregoriades, A.A. Demetriou, D.S. Vakis, A.A. Apostolou S.A. Loizides, M.A. Loizides, S.G. Sofocleous, M.M. Antoniades o. c. Locatedo, Wich. Locatedos, M.J. Halios, M.P. Michael, P.A. Peleties
G.V. Vasiliou, P.E. Antoniades, M.J. Halios, M.P. Michael, P.A. Peleties
G.V. Markides, M.A. Papacosta, K.A. Papanicolaou, A.I. Shiammoutis C. N. Tziortzis, H.S. Charalambous, C.P. Anayotos, F.P. Ghalanos
M.G. Cregoriades, H.A. Kakoullis, G.P. Anayotos, I.P. Ghalanos
M.G. Gregoriades, H.A. Kakoullis, G.P. Savva, C.A. Kalias, C.N. Kallis
M.H. Zavrou, P.S. Elia,
P.S. Theophanous, M.A. Karantoni, C.A. Markides
KPMG Limited, a private company limited by shares, registered in Cyprus
under registration number HE 132822 with its registered office at
14, Esperidon Street, 1087, Nicosia, Cyprus.
Limassol P.O.Box 50161, 3601 Telephone +357 25 869000 +357 25 363842 Fax
Larnaca P.O.Box 40075, 6300
Telephone +357 24 200000 +357 24 200200 Fax
+357 26 943050
+357 26 943062
P O Box 60288 8101
Paphos
Fax
Telephone
Paralimni / Avia Napa P.O.Box 33200, 531 Telephone +357 23 820080 +357 23 820084 Fax
Polis Chrysochou P.O.Box 66014, 8330
Telephone +357 26 322098 Fax +357 26 322722
(in USD thousands, unless otherwise stated)
$\bar{z}_i$
$\mathcal{L}$
| Note | 30 June 2013 | 30 June 2012 | |
|---|---|---|---|
| Continuing operations | |||
| Revenue | 4 | 40.772 | 41.332 |
| Cost of sales | 5 | (43.013) | (37.607) |
| Net change in fair value less cost to sell of biological assets and | |||
| agricultural produce | 12.190 | 31.404 | |
| Gross profit | 9.949 | 35.129 | |
| Other operating income | 6 | 3.547 | 7.574 |
| Administrative expenses | (2.634) | (3.068) | |
| Distribution expenses | (431) | (746) | |
| 7 | (6.342) | (3.188) | |
| Other operating expenses | 35.701 | ||
| Profit from operating activities | 4.089 | ||
| Loss on derecognition of financial asset | 14 | (921) | |
| 438 | 13 | ||
| Finance income | |||
| Finance costs | (3.793) | (4.576) | |
| Net finance costs | 18 | (3.355) | (4.563) |
| (Loss)/profit before taxation Taxation |
(187) | 31.138 | |
| (Loss)/profit from continuing operations | (187) | 31.138 | |
| Discontinued operations | |||
| Loss from discontinued operations | 21 | (36) | (649) |
| (Loss)/profit for the period | (223) | 30.489 | |
| Other comprehensive income | |||
| Effect of translation into presentation currency | (99) | ||
| Total comprehensive (expense)/income for the period | (223) | 30.390 | |
| (Loss)/profit for the period attributable to: | |||
| Owners of the Company | (219) | 30.496 | |
| Non-controlling interests | (4) | (7) | |
| (Loss)/profit for the period | (223) | 30.489 | |
| Total comprehensive (expense)/income attributable to: | |||
| (219) | 30.397 | ||
| Owners of the Company | (4) | (7) | |
| Non-controlling interests | |||
| Total comprehensive (expense)/income for the period | (223) | 30.390 | |
| Earnings per share | |||
| Basic and fully diluted (loss)/earnings per share - (USD cents) | 26 | (1) | 141 |
| Earnings per share | |||
| Basic and fully diluted (loss)/earnings per share – continuing | |||
| $operations - (USD cents)$ | 26 | (1) | 144 |
The notes on pages 9 to 37 are an integral part of these condensed consolidated interim financial statements.
| Note | 30 June 2013 |
31 December 2012 |
|
|---|---|---|---|
| Assets | |||
| Property, plant and equipment | 9 | 35.405 | 33.791 |
| Intangible assets | 10 | 31.331 | 33.099 |
| Biological assets | 11 | 3.694 | 2.606 |
| Other non-current assets | 12 | 44.569 | 45.315 |
| Non-current assets | 114.999 | 114.811 | |
| Inventories | 13 | 19.958 | 44.808 |
| Biological assets | 11 | 37.219 | 10.770 |
| Investments | 14 | 1.664 | |
| Trade and other receivables | 15 | 2.640 | 3.273 |
| Cash in hand and cash at bank | 16 | 4.299 | 9.813 |
| Loans receivable | 17 | 9.274 | 3.340 |
| Assets held for sale | 21 | 303 | 291 |
| Current assets | 75.357 | 72.295 | |
| Total assets | 190.356 | 187.106 | |
| Equity | |||
| Share capital | 18 | 661 | 661 |
| Share premium | 18 | 88.532 | 88.532 |
| Retained earnings | 47.028 | 47.247 | |
| Foreign currency translation reserve | (10.156) | (10.156) | |
| Total equity attributable to owners of the Company | 126.065 | 126.284 | |
| Non-controlling interests | 315 | 319 | |
| Total equity | 126.380 | 126.603 | |
| Liabilities | |||
| Loans and borrowings | 19 | 48.902 | 48.429 |
| Non-current liabilities | 48.902 | 48.429 | |
| 19 | 4.076 | 4.024 | |
| Loans and borrowings Trade and other payables |
20 | 10.867 | 7.916 |
| Income tax liability | 112 | 114 | |
| Liabilities held for sale | 21 | 19 | 20 |
| Current liabilities | 15.074 | 12.074 | |
| Total liabilities | 63.976 | 60.503 | |
| Total equity and liabilities | 190.356 | 187.106 |
On 29 August 2013 the Board of Directors of Agroton Public Limited authorised these condensed consolidated interim financial statements for issue.
Tamara Lapta Deputy Chief Executive Officer
LarystOrlova Chief Financial Officer
The notes on pages 9 to 37 are an integral part of these condensed consolidated interim financial statements.
| ļ |
|---|
| l |
| ì |
| $\overline{\phantom{a}}$ |
(in USD thousands, unless otherwise stated)
$\ddot{\phantom{a}}$
| Attributable to owners of the Company | |||||||
|---|---|---|---|---|---|---|---|
| I | Foreign | ||||||
| currency | Non- | ||||||
| Share | Share | Retained | translation | controlling | Total | ||
| capital | premium | earnings | reserve | Total | interests | equity | |
| Balance at 1 January 2012 | 661 I |
88.532 | 40.487 | (10.152) | 119,528 | 292 | 119.820 |
| Total comprehensive income for the period | I | ||||||
| Profit for the period | 30.496 | මූ | (99) 30.496 |
$\bigcirc$ 30.489 |
|||
| Total comprehensive income/(expense) for the period Total other comprehensive income |
l | 30.496 | මූ | 30.397 | E | 30.390 | |
| Balance at 30 June 2012 | 661 I |
88.532 | 70.983 | (10.251) | 149.925 | 285 | 150.210 |
| Balance at 1 January 2013 | 561 I |
88.532 | 47.247 | (10.156) | 126.284 | 319 | 126,603 |
| Total comprehensive income for the period Profit for the period |
ŧ ļ |
(219) | (219) | ₹ | (223) | ||
| Total comprehensive expense for the period | ł I |
(219) | (219) | € | (223) | ||
| Balance at 30 June 2013 | 661 | 88.532 | 47.028 | (10.156) | 126.065 | 315 | 126.380 |
The notes on pages 9 to 37 are an integral part of these condensed consolidated interim financial statements.
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.
The notes on pages 9 to 37 are an integral part of these condensed consolidated interim financial statements.
Ĵ,
| (in USD thousands, unless otherwise stated) | Note | 30 June 2013 | 30 June 2012 |
|---|---|---|---|
| Cash flows from operating activities | |||
| (Loss)/profit for the period | (223) | 30.489 | |
| Adjustments for: | |||
| Depreciation and amortisation charge | 2.607 | 3.100 | |
| Gain from changes in fair value less cost to sell of biological assets and | |||
| agricultural produce | (12.190) | (31.404) | |
| Loss on derecognition of financial assets | 921 | ||
| Impairment of inventories | 2.929 | ||
| Interest income | (425) | ||
| Interest expense | 3.703 | 4.487 | |
| Interest income on financial assets measured at amortised cost | (13) | (13) | |
| Impairment of harvest failure | 222 | 778 | |
| Impairment of receivables | 346 | 25 | |
| Bad debts recovered | (189) | (3.422) | |
| Loss on disposal of property, plant and equipment | 64 | ||
| Bad debts written-off | 393 | ||
| Trade payables write-off | (73) | (86) | |
| Loss from foreign exchange differences | 90 | 89 | |
| Gain on disposal of current assets | (58) | ||
| Profit on disposal on subsidiaries | (27) | ||
| Cash flow (used in)/from operations before working capital changes | (2.258) | 4.378 | |
| Decrease in biological assets and inventories | 8.295 | 4.441 | |
| Decrease in trade and other receivables | 475 | 18.568 | |
| Increase in trade and other payables | 2.905 | 10.831 | |
| Cash generated from operating activities | 9.417 | 38.218 | |
| Taxation paid | (3) | ||
| Net cash from operating activities | 9.417 | 38.215 | |
| Cash flow from investing activities | (3.726) | (3.149) | |
| Acquisition of property, plant and equipment | (3) | (25.400) | |
| Acquisition of intangible assets | 3 | ||
| Proceeds from disposal of property, plant and equipment | (5.515) | ||
| Loans granted | 19 | ||
| Interest received | (2.585) | ||
| Equity convertion Restricted cash |
(1.292) | ||
| Disposal of subsidiary, net of cash disposed | ł | ||
| (13.098) | (28.549) | ||
| Net cash used in investing activities | |||
| Cash flows from financing activities | |||
| Repayment of loan and borrowings | (3.125) | (3.624) | |
| Interest paid | (3.852) | ||
| Repayment of financial lease liabilities | (14) | ||
| Net cash used in financing activities | (3.125) | (7.490) | |
| Effect from translation into presentation currency | (27) | ||
| Net (decrease)/increase in cash and cash equivalents | (6.806) | 2.149 | |
| Cash and cash equivalents at the beginning of the period | 9.813 | 17.627 | |
| Cash and cash equivalents at the end of the period | 16 | 3.007 | 19.776 |
The notes on pages 9 to 37 are an integral part of these condensed consolidated interim financial statements.
$\sim$
Agroton Public Limited (the "Company") was incorporated in Cyprus on 21 September 2009 as a public company with limited liability under the Cyprus Companies Law, Cap. 113. The Company was listed at Warsaw Stock Exchange on 8 November 2010.
The Company's registered office is at 1 Lampousas Street, 1095 Nicosia, Cyprus.
The condensed consolidated interim financial statements of the Company as at and for the six months ended 30 June 2013 comprises the interim financial statements of the Company and its subsidiaries (together referred to as the "Group").
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 Group's subsidiaries, country of incorporation, and effective ownership percentages are disclosed below:
| Country of | Ownership | Ownership | Ownership | |
|---|---|---|---|---|
| Company name | Interest | Interest | Interest | |
| incorporation | 30.06.2013 | 31.12.2012 | 30.06.2012 | |
| Living LLC | Ukraine | 99,99% | 99,99% | 99,99% |
| PE Agricultural Production Firm Agro | Ukraine | 99,99% | 99,99% | 99,99% |
| Agroton PJSC | Ukraine | 99,99% | 99,99% | 99,99% |
| OJSC Belokurakinskiy Elevator (i) | Ukraine | 84,68% | 84,68% | 84,68% |
| OJSC Breeding Poultry Farm Mirnyi (i) | Ukraine | 78,46% | 78,46% | 78,46% |
| Agro Meta LLC | Ukraine | 99,99% | 99,99% | 99,99% |
| Rosinka-Star LLC | Ukraine | 99,99% | 99,99% | 99,99% |
| Etalon-Agro LLC (i) | Ukraine | 99,99% | 99,99% | 99,99% |
| ALLC Noviy Shlyah | Ukraine | 99,99% | 99,99% | 99,99% |
| AF named by Shevchenko (iii) | Ukraine | 99,99% | 99,99% | |
| ALLC Shiykivske | Ukraine | 94,58% | 94,58% | 94,58% |
| Agro-Chornukhinski Kurchata LLC | Ukraine | 99,99% | 99,99% | 99,99% |
| Agro-Svinprom LLC (iv) | Ukraine | 99,99% | 99,99% | 99,99% |
| Markivskii Sirzavod LLC (iv) | Ukraine | 100% | 100% | 100% |
| Agroton BVI Limited | British Virgin | 100% | 100% | 100% |
| Islands | ||||
| Gefest LLC | Ukraine | 100% | 100% | 100% |
| Tais-Abb PE | Ukraine | 100% | 100% | 100% |
| PE Alinco (ii) | Ukraine | 100% | 100% | 100% |
| LLC Lugastan (ii) | Ukraine | 100% | 100% | 100% |
The parent company of the Group is Agroton Public Limited with an issued share capital of 21.670.000 ordinary shares with nominal value EUR 0,021 per share.
These condensed consolidated financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting". They do not include all the information required for a complete set of IFRS consolidated financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Groups financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2012.
These condensed consolidated interim financial statements were authorised for issue by the Company's Board of Directors on 29 August 2013.
In preparing these condensed consolidated interim financial statements, Management make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
The significant judgements made by Management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2012.
Except as described below, the accounting policies applied in these condensed consolidated interim financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 December 2012.
The Group has adopted International Financial Reporting Standard 13 "Fair Value Measurement", including any consequential amendments to other standards, with a date of initial application of 1 January 2013.
IFRS 13 establishes a single framework for measuring fair value and making disclosures about fair value measurements, when such measurements are required or permitted by other IFRSs. In particular, it unifies the definition of fair value as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurmemt date. It also replaces and expands the disclosure requirements about fair value measurements in other IFRSs, including IFRS 7 "Financial Instruments: Disclosures". Some of these disclosures are specifically required in interim financial statements for financial instruments; accordingly, the Group has included additional disclosures in this regard (see Note 29).
In accordance with the transitional provisions of IFRS 13, the Group has applied the new fair value measurement guidance prospectively, and has not provided any comparative information for new disclosures. Notwithstanding the above, the change had no significant impact on the measurements of the Group's assets and liabilities.
The exchange rates used in preparation of these condensed consolidated interim financial statements are as follows:
| Currency | 30 June 2013 |
Weighted average for the period 30 June 2013 |
31 December 2012 |
Weighted average for the period 30 June 2012 |
30 June 2012 |
|---|---|---|---|---|---|
| UAH – US dollar | 7,9930 | 7,9930 | 7,9930 | 7,9890 | 7,9925 |
| EUR – US dollar | 0,7645 | 0,7617 | 0,7579 | - | |
| REVENUE 4. |
|||||
| 30 June 2013 | 30 June 2012 |
| Sales of goods | 39.412 | 39.928 |
|---|---|---|
| Rendering of services | 1.360 | .404 |
| Total | 40.772 | 41.332 |
Revenue generated from sale of goods was as follows:
| JV JUMLAJIJ | JV UULL SVIS |
|---|---|
| 10.208 | 9.802 |
| 12.148 | |
| 15.716 | 15.414 |
| 1.910 | 1.652 |
| 1.061 | 870 |
| 54 | 42 |
| 39.412 | 39.928 |
| 10.463 |
$30 \text{ Juma } 2013$
$20$ Treme $2012$
Sales volume of main agricultural products in tonnes was as follows:
| 30 June 2013 tonnes |
30 June 2012 tonnes |
|
|---|---|---|
| Winter wheat | 46.218 | 64.165 |
| Sunflower | 31.846 | 37.512 |
| Corn in grain | 5.409 | 9.289 |
| Total | 83.473 | 110.966 |
Sales volume of milk for the six months ended 30 June 2013 was 5.533 thousand tonnes (six months ended 30 June 2012: 5.076 thousand tonnes).
Revenue generated from rendering of services mainly relates to tillage, storage and handling services granted to third parties which is reflected within the revenue of plant-breeding segment in Note 22.
| JU JUNE ZULJ | JU JUNG ZULZ | |
|---|---|---|
| Livestock and related operations | 12.617 | 7.459 |
| Plant breeding and related operations | 30.336 | 29.993 |
| Other activities | 60 | 155 |
| Total | 43.013 | 37.607 |
| Note | 30 June 2013 | 30 June 2012 | |
|---|---|---|---|
| Government grants | 44 | 48 | |
| VAT grant | 3.210 | 3.960 | |
| Reversal of provision for bad debts | 189 | 3.422 | |
| Gain on disposal of current assets | 58 | ||
| Trade payables written off | 73 | 86 | |
| Other income | 4 | ||
| Profit on disposal of subsidiary | 27 | 27 | |
| Total | 3.547 | 7.574 |
$-30$ Iune $2012$
$20$ Iune 2012
| Note | 30 June 2013 | 30 June 2012 | |
|---|---|---|---|
| Impairment of trade and other receivables | 346 | 25 | |
| Loss on disposal of property, plant and equipment | 64 | ||
| Amortisation of intangible assets | 3 | ||
| Impairment of inventories | 13 | 2.929 | 579 |
| Fines and penalties | |||
| Impairment of harvest failure | 11 | 222 | 778 |
| Amortisation of the prepayments for the immediate | |||
| right to use the elevator | 12 | 346 | |
| Donations | 76 | 6 | |
| Depreciation charge | 29 | 25 | |
| Amortisation of land lease rights | 1.768 | 765 | |
| Amortisation of land lease advance | 12 | 400 | 400 |
| Bad debts written-off | 393 | ||
| Other expenses | 152 | 217 | |
| Total | 6.342 | 3.188 |
$\label{eq:2} \frac{1}{\sqrt{2}}\int_{0}^{\infty}\frac{dx}{\sqrt{2\pi}}\,dx$
$\mathcal{A}$
| 30 June 2013 | 30 June 2012 | |
|---|---|---|
| Interest income | 425 | |
| Interest income on financial assets measured at amortised cost |
13 | 13 |
| Finance income | 438 | 13 |
| Interest on bank loans | (629) | |
| Interest on non-bank loans | (109) | |
| Interest on finance lease | (83) | |
| Interest on bonds | (3.594) | (3.775) |
| Loss on foreign exchange differences | (90) | (89) |
| Finance costs | (3.793) | (4.576) |
| Net finance costs | (3.355) | (4.563) |
(in USD thousands, unless otherwise stated)
During the six months ended 30 June 2013 the Group acquired property, plant and equipment with a cost of USD 3.726 thousand (six months ended 30 June 2012: USD 3.158 thousand).
During the six months ended 30 June 2013 the Group disposed property, plant and equipment with a carrying amount of USD 67 thousand (six months ended 30 June 2012: Nil).
At 30 June 2013 Private Enterprise Agricultural Production Firm Agro made payments of USD 973 thousand for the upgrading of SJSC Khlib Ukraine Noroaydarskyy Elevator (USD 683 thousand at 31 December 2012) (Note 12). This amount is included in construction in progress.
During the six months ended 30 June 2013 the Group acquired intangible assets with a cost of USD 3 thousand.
During the six months ended 30 June 2012 the Group acquired 100% interest in two companies. The acquisition of these subsidiaries does not constitute a business therefore the cost of USD 25.379 thousand was recognized as an asset (land lease rights) and agreed to the fair value as at 30 June 2012. The acquisition agreement clearly states that the useful economic life for the land lease rights is 10 years.
Biological assets at 30 June 2013 and 31 December 2012 were presented as follows:
| 30 June 2013 31 December 2012 | |
|---|---|
| 32.341 | 6.502 |
| 4.878 | 4.268 |
| 37.219 | 10.770 |
| 3.658 | 2.598 |
| 36 | |
| 3.694 | 2.606 |
| 40.913 | 13.376 |
(in USD thousands, unless otherwise stated)
As at 30 June 2013 and 31 December 2012 the crops under cultivation were as follows:
| 30 June 2013 | 31 December 2012 | |||
|---|---|---|---|---|
| Thousands of hectares |
Carrying Values |
Thousands of hectares |
Carrying Values |
|
| Sunflower plantings | 35 | 12.218 | ||
| Corn sowing | 5.234 | |||
| Winter wheat plantings | 23 | 7.649 | 35 | 6.393 |
| Winter rye plantings | 19 | 100 | ||
| Other plantings | 15 | 7.221 | 9 | |
| 81 | 32.341 | 35 | 6.502 |
The increase in balances of crops under cultivation during the six months ended 30 June 2013 is primarily attributable to the spring sowing and revaluation of crops.
The main crops harvested in the six months ended 30 June 2013 and 31 December 2012 were as follows:
| For the six months ended 30 June 2013 |
For the year ended 31 December 2012 |
|||
|---|---|---|---|---|
| Volume, tonnes |
Amount, USD thousand |
Volume, tonnes |
Amount, USD thousand |
|
| Winter wheat | 37.846 | 9.197 | 140.967 | 30.418 |
| Sunflower | 67.568 | 36.586 | ||
| Corn | 26.701 | 6.035 | ||
| 37.846 | 9.197 | 235.236 | 73.039 |
As at 30 June 2013 impairment of harvest failure amounted to USD 222 thousand and is included in other operating expenses (Note 7). The impairment identified was the result of bad weather conditions.
| . | 30 June 2013 | 31 December 2012 | ||
|---|---|---|---|---|
| Number, heads |
Amount USD thousand |
Number, heads |
Amount USD thousand |
|
| Cattle | 2.663 | 3.658 | 2.661 | 2.598 |
| Horses | 14 | 36 | 13 | |
| 3.694 | 2.606 |
Non-current biological assets
(in USD thousands, unless otherwise stated)
Animals in growing and fattening
| 30 June 2013 | 31 December 2012 | |||
|---|---|---|---|---|
| Number, heads |
Amount USD thousand |
Number, heads |
Amount USD thousand |
|
| Cattle | 3.236 | 3.423 | 3.016 | 2.955 |
| Poultry | 566.500 | 1.366 | 703.089 | 1.282 |
| Horses | 16 | 89 | 15 | 31 |
| 4.878 | 4.268 |
| 30 June | 31 December | |
|---|---|---|
| 2013 | 2012 | |
| Advances: | ||
| Advance for land lease | 8.000 | 8.000 |
| Less: amortisation | (2.400) | (2.000) |
| Advance for land lease-net | 5.600 | 6.000 |
| Prepayments: | ||
| Prepayments for the immediate right to use the elevator | 10.000 | 10.000 |
| Less: Provision for impairment | (3.072) | (3.072) |
| Less: amortisation | (1.039) | (693) |
| Prepayments for the immediate right to use elevator | 5.889 | 6.235 |
| Prepayments made for ownership of PE Peredilske | 23.080 | 23.080 |
| Prepayments made for ownership of LLC Shid-Potencial | ||
| Resurs | 10.000 | 10.000 |
| Total | 44,569 | 45.315 |
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 USD 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.
(in USD thousands, unless otherwise stated)
During the year 2011 Agroton Public Limited 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 these rights was evaluated at USD 6.928 thousand hence an impairment loss of USD 3.072 thousand was accounted for in the condensed consolidated statement of comprehensive income. At 30 June 2013 PE APF Agro made payments of USD 973 thousand for the upgrading of the elevator (Note 9). Amortisation amounting to USD 346 thousand was included in other operating expenses in note 7.
On 29 June 2012, Agroton Public Limited entered into a preliminary agreement with Stiomi Agri Limited ("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 USD 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 Limited ("Seller") for the purchase of 100% of the issued share capital of Limited Liability Company "Shid Potecial - Resurs". The parties agreed that the price for transfer of the company's shares shall amount to USD 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).
The transfer of ownership for both Private Enterprises "Peredilske" and Limited Liability Company "Shid Potecial-Resurs" was not completed up to 30 June 2013.
As at 30 June 2013 and 31 December 2012 the inventories were as follows:
| 30 June 2013 |
31 December 2012 |
|
|---|---|---|
| Raw materials | 1.816 | 2.235 |
| Work-in-progress | 4.375 | 6.930 |
| Agricultural produce | 11.082 | 33.769 |
| Finished goods | 146 | 201 |
| Other | 2.539 | 1.673 |
| 19.958 | 44.808 |
Work in progress includes expenditure capitalised in respect of 33 thousand hectares (31) December 2012: 86 thousand hectares) of plough land prepared of sowing in the current or following year.
(in USD thousands, unless otherwise stated)
As at 30 June 2013 and 31 December 2012 the main agricultural produce was as follows:
| 30 June 2013 |
31 December 2012 |
|
|---|---|---|
| Winter wheat | 7.877 | 11.091 |
| Sunflower | 1.978 | 18.787 |
| Corn | 177 | 1.692 |
| Other agricultural crops | 1.050 | 2.199 |
| 11.082 | 33.769 |
As at 30 June 2013 and 31 December 2012 the main agricultural produce volume in tonnes was as follows:
| 30 June 2013 |
31 December 2012 |
|
|---|---|---|
| Winter wheat | 42.063 | 53.693 |
| Sunflower | 4.090 | 34.581 |
| Corn | 812 | 7.397 |
| 46.965 | 95.671 |
During the six months ended 30 June 2013 part of agricultural produce of winter wheat was impaired by USD 2.319 thousand (31 December 2012: Nil) due to reduced net realisable value which is presented as part of impairment of inventories in Note 7.
| 30 June 2013 |
31 December 2012 |
|
|---|---|---|
| Financial assets designated at fair value through profit or loss Debt instruments convertible into equity securities designated |
889 | |
| at fair value through profit or loss | 775 | |
| Total | 1.664 |
Financial assets designated at fair value through profit or loss 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 16).
Debt instruments convertible into equity securities are subject to conversion as described in Note 16.
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 30 October 2013 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 45%.
Loss on derecognision of the above securities amounted to USD 921 thousand was recognised in profit or loss for the period.
| 30 June 2013 |
31 December 2012 |
|
|---|---|---|
| Trade receivables | 3.967 | 3.330 |
| Less: provision for impairment of trade receivables | (2.600) | (2.429) |
| Trade receivables, net | 1.367 | 901 |
| Prepayments to suppliers | 785 | 1.655 |
| Other receivables | 459 | 906 |
| Provision for impairment of prepayments and other receivables |
(307) | (321) |
| VAT recoverable | 336 | 132 |
| Total | 2.640 | 3.273 |
Due to the current developments in the economic environment of Cyprus (described in Note 24 "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:
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 the basis of conditions existing as at 30 June 2013 the amount of an affected bank deposit with Bank of Cyprus is derecognised and the following four assets are recognised in accordance with the provisions of the Decree issued for the Bank of Cyprus on 29 March 2013 and relevant developments thereafter up to 30 June 2013:
(in USD thousands, unless otherwise stated)
| 30 June 2013 |
31 December 2012 |
|---|---|
| 872 | |
| 4.239 | 8.791 |
| 60 | 150 |
| 4.299 | 9.813 |
| (1.292) | |
| 9.813 | |
| 30 June 2013 |
31 December 2012 |
| 1.252 | |
| 7.548 | 2.088 |
| 9.274 | 3.340 |
| 3.007 1.726 |
On 3 June 2013 maturity date of loan agreement with Stimi Agri Limited for the amount of USD 2.000 thousand was prolonged to 29 December 2013.
On 4 March 2013 a new loan agreement was signed with Agriland Trading Limited repayable on 4 March 2014 for the total amount of USD 10 million and applicable interest rate of 20% per annum. Amount of USD 3,16 million was already granted during six months ended 30 June 2013.
| Number of shares |
Nominal value, USD |
Share premium, USD |
Total | |
|---|---|---|---|---|
| Issued and fully paid At 1 January 2012 |
21.670.000 | 661.128 | 88.531.664 | 89.192.792 |
| At 31 December 2012 | 21.670.000 | 661.128 | 88.531.664 | 89.192.792 |
| At 30 June 2013 | 21.670.000 | 661.128 | 88.531.664 | 89.192.792 |
(in USD thousands, unless otherwise stated)
At 30 June 2013 and 31 December 2012 the authorised share capital of the Company was 47.619.048 ordinary shares of nominal value EUR 0,021 each.
There were no changes in the issued share capital of the Company during the year ended 31 December 2012 and the six months ended 30 June 2013.
$\sim 100$
and all
| 30 June 2013 |
31 December 2012 |
|
|---|---|---|
| Non-current liabilities | ||
| Bonds | 48.902 | 48.429 |
| 48.902 | 48.429 | |
| Current liabilities | ||
| Non-bank loans | 1.193 | 1.084 |
| Accrued bond interest payable | 2.883 | 2.887 |
| Finance lease obligation | 53 | |
| 4.076 | 4.024 | |
| Total | 52.978 | 52.453 |
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 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 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 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 follows:
(in USD thousands, unless otherwise stated)
| 30 June 2013 |
31 December 2012 |
|
|---|---|---|
| Trade payables | 3.482 | 1.890 1.303 |
| Payroll and related expenses Advances received |
1.651 2.577 |
3.953 |
| Liabilities for other taxes and mandatory payments VAT payable |
39 2 |
40 46 |
| Payable for operating lease of land Accrued expenses |
2.951 46 |
360 45 |
| Other provisions Other liabilities |
13 106 |
13 266 |
| Total | 10.867 | 7.916 |
The assets and liabilities of Group companies Agro-Svinprom LLC and Markivskii Sirzavod LLC, operating in pig-breeding and cheese production respectively, have been presented as held for sale following the Management's decision in July 2011 to dispose both companies.
In this respect the management of the Group has advertised their intention for the sale of the two subsidiaries to the public media for the attraction of prospective new investors.
| 30 June 2013 | 30 June 2012 | |
|---|---|---|
| Results of discontinued operations | ||
| Revenue | 7 | |
| Expenses | (43) | (649` |
| Total comprehensive loss for the period | (36) | (649) |
| Basic and diluted earnings per share from discontinued operation |
(3) | |
| Cash flows used in discontinued operations Net cash used in operating activities |
5) | |
| Effect on cash flows | (5) |
Assets and liabilities of disposal group as at 30 June 2013 and 31 December 2012 classified as held for sale were as follows:
| 30 June 2013 |
31 December 2012 |
|---|---|
| 178 | 181 |
| 21 | |
| 99 | 110 |
| 5 | |
| 303 | 291 |
| 19 | 20 |
| 19 | 20 |
| 284 | 271 |
A reportable segment is a separable component of a business entity that produces goods or provides services to individuals (or groups of related products or services) in a particular economic environment that is subject to risks and generates revenues other than risks and income of those components that are peculiar to other reportable segments.
Reportable segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. All operating segments' results are reviewed regularly by the Group's CEO to make decisions about resources to be allocated to each segment and to assess its performance, and for which discrete financial information is available.
The operating businesses are organized 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.
At 30 June 2013 and 30 June 2012 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 segment raises and sells agricultural products and renders accompanying $(i)$ services. The main agricultural products which are sold in this reportable segment are wheat, rye, barley, sunflowers and rape. The main services which are sold in this reportable segment are ploughing, handling and grain storage services.
(in USD thousands, unless otherwise stated)
Livestock segment raises and sells biological assets and agricultural products of cattle $(ii)$ breeding. The main biological assets and agricultural products which are sold in this reportable segment are poultry, cattle, pigs and milk.
No operating segments have been aggregated to form the above reportable segments.
Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties.
Management monitors the operating results of each of the unit separately for the purpose of making decisions about resources allocation and evaluation of operating results.
Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the condensed consolidated financial statements. Group financing (including finance expense and finance income) and income taxes, are managed on a group basis and are not allocated to operating segments.
The Group carries out its core financial and economic activities in the territory of Ukraine. Accordingly, the Group selects one geographical business segment.
| Plant | Group | ||||
|---|---|---|---|---|---|
| Livestock | breeding | Other | level | Total | |
| 30 June 2013 | |||||
| Total revenue | 10.628 | 31.930 | 96 | 42.654 | |
| Inter-segment revenue | (420) | (1.411) | (51) | (1.882) | |
| External revenues | 10.208 | 30.519 | 45 | 40.772 | |
| Net change in fair value less cost to sell of biological |
|||||
| assets and agricultural produce | 3.072 | 9.118 | 12.190 | ||
| Expenses (excluding depreciation and amortisation) |
(11.998) | (29.661) | (31) | (6.897) | (48.587) |
| Profit for the period | |||||
| (excluding depreciation and amortisation) |
1.282 | 9.976 | 14 | (6.897) | 4.375 |
| Depreciation and amortisation | (619) | (3.826) | (29) | (88) | (4.562) |
| Profit/(loss) before tax from continuing operations |
663 | 6.150 | (15) | (6.985) | (187) |
| Reportable segment assets | 24.176 | 145.337 | 1.146 | 19.697 | 190.356 |
| Reportable segment liabilities | 1.358 | 56.245 | 26 | 6.347 | 63.976 |
(in USD thousands, unless otherwise stated)
| Plant | Group | ||||
|---|---|---|---|---|---|
| Livestock | breeding | Other | level | Total | |
| 30 June 2012 | |||||
| Total revenue | 10.130 | 32.736 | 43 | 42.909 | |
| Inter-segment revenue | (328) | (1.248) | (1) | (1.577) | |
| External revenues | 9.802 | 31.488 | 42 | 41.332 | |
| Net change in fair value less cost | |||||
| to sell of biological assets and | |||||
| agricultural produce | 271 | 31.133 | 31.404 | ||
| Expenses (excluding depreciation | |||||
| and amortisation) | (6.909) | (27.536) | (62) | (3.491) | (37.998) |
| Profit for the period | |||||
| (excluding depreciation and | |||||
| amortisation) | 3.164 | 35.085 | (20) | (3.491) | 34.738 |
| Depreciation and amortisation | (550) | (1.229) | (30) | (1.791) | (3.600) |
| Profit/(loss) before tax from | |||||
| continuing operations | 2.614 | 33.856 | (50) | (5.282) | 31.138 |
| Reportable segment assets | 21.214 | 170.092 | 785 | 26.040 | 218.131 |
| Reportable segment liabilities | 1.483 | 57.989 | 19 | 8.430 | 67.921 |
The above analysis does not include any information about business segments which were discontinued as explained in Note 21.
The Group's operations are subject to seasonal fluctuations as a result of weather conditions. In particular, the cultivation of crops is adversely affected by winter weather conditions, which occur primarily from January to March. The first half of the year typically results in lower revenues and results for cultivations.
As a result of the annual cycle of crops producing and the Group's attempts to take an advantage of seasonal price changes by managing inventory in its storage facilities, the Group's Plant breeding segment is subject to seasonal fluctuations. Profits of this segment tend to be higher in the first half of a year.
(in USD thousands, unless otherwise stated)
The main operating activities of the Group are carried out within Ukraine. Laws and other regulatory acts affecting the activities of entities in Ukraine may be subject to changes during short periods of time. As a result, assets and operating activity of the Group may be exposed to risk in case of any unfavourable changes in the political and economic environment.
The global financial crisis has negatively affected Ukraine's financial and capital markets in 2008, and 2009. The Ukraine's economy returned to growth in 2011.
Most employees of the Group receive pension benefits from the Pension Fund, a Ukrainian Government organization in accordance with the applicable laws and regulations of Ukraine. The Group is required to contribute a specified percentage of the payroll to the Pension Fund to finance the benefits. The only obligation of the Group with respect to this pension plan is to make the specific contributions from salaries.
At 30 June 2013 the Group's entities had no liabilities for supplementary pensions, health care, insurance benefits or retirement indemnities to its current or former employees.
In the course of its economic activities the Group participates in legal proceedings with third parties. In most cases, the Group is the initiator of such proceedings with the purpose of preventing from losses in the economic sphere or minimising them.
The Group's management considers that legal proceedings on such matters will not have any significant influence on its financial position.
Plough-land is leased by the Group from individuals. The total size of leased plough-land as at 30 June 2013 is 125 thousand hectares (31 December 2012: 160 thousand hectares). The average rental payment for leased plough-land in the six months ended 30 June 2013 ranges between 3%-5% (year ended 31 December 2012: 1,5%-3%) from the normative value of land.
(in USD thousands, unless otherwise stated)
The Group had the following contract obligations on land lease agreements as at 30 June 2013 and 31 December 2012:
| 30 June 2013 |
31 December 2012 |
|
|---|---|---|
| Less than 1 year | 7.695 | 8.681 |
| Between 1 and 5 years | 28.252 | 33.902 |
| More than 5 years | 11.137 | 27.345 |
| 39.389 | 61.247 | |
| Total | 47.084 | 69.928 |
The Company operates in the Cypriot tax jurisdiction and its subsidiaries in tax jurisdiction of the respective countries of incorporation. The Group's management must interpret and apply mainly existing legislation to transactions with third parties and its own activities. Significant judgment is required in determining the provision for direct and indirect taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
As a result of unstable economic situation in Ukraine, tax authorities in Ukraine pay more and more attention to the business circles. In connection with this, tax laws in Ukraine are subject to frequent changes. Above this, there are cases of their inconsistent application, interpretation and execution. Non-compliance with laws and regulations may lead to severe fines and penalties.
The Group's uncertain tax positions are reassessed by management at every reporting period. Liabilities are recorded for income tax positions that are determined by management as more likely than not, to result in additional taxes being levied if the positions were to be challenged by the tax authorities. The assessment is based on the interpretation of tax laws that have been enacted or substantively enacted by the reporting period and any known Court or other rulings on such issues. Liabilities for penalties, interest and taxes other than on income are recognised based on management's most precise estimate of the expenditure required to settle the obligations at the reporting period.
The Group considers that it operates in compliance with tax laws of Ukraine, although, a lot of new laws about taxes and transactions in foreign currency have been adopted recently, and their interpretation is rather ambiguous.
(in USD thousands, unless otherwise stated)
The Group took part in transactions which may be interpreted by tax authorities in Ukraine not in the way they are interpreted by the Group, as a result of which there may be accrued additional significant tax liabilities and fines. Notwithstanding the fact that most of tax returns of the Group's Ukrainian companies for the mentioned periods were reviewed by the tax authorities without any significant discrepancies or imposition of additional tax liabilities, they remain open to subsequent investigations. According to effective laws, tax returns remain open and may be subject to the reviews during three years after their submission, but, in some cases, this limit is not applied.
As a result of future tax reviews additional liabilities may be discovered which may not comply with the tax reporting of the Group. Such liabilities may be represented by taxes, as well as fines and penalties; and their amounts may be significant.
The Cyprus economy has been adversely affected over the last few years by the international credit crisis, the instability in the financial markets, the Greek sovereign debt crisis, including the impairment of Greek Government Bonds, and its impact on the Cyprus economy, as well as the crisis in the Cyprus banking system in conjunction with the inability of the Republic of Cyprus to borrow from international markets.
Cyprus and the Eurogroup (together with the International Monetary Fund) reached an agreement on 25 March 2013 on the key elements necessary for a future macroeconomic adjustment programme which includes the provision of financial assistance to the Republic of Cyprus of up to EUR 10 billion. The programme aims to address the exceptional economic challenges that Cyprus is facing and to restore the viability of the financial sector, with the view of restoring sustainable economic growth and sound public finances over the coming years.
The Eurogroup decision on Cyprus includes plans for the restructuring of the financial sector and safeguards deposits below EUR 100.000 in accordance with EU legislation. In addition, the Cypriot authorities have reaffirmed their commitment to step up efforts in the areas of fiscal consolidation, structural reforms and privatization. Following the request of the Eurogroup, the Cypriot authorities and the European Commission, in liaison with the European Central Bank and the International Monetary Fund, finalized the Memorandum of Understanding in April 2013, which was then formally approved by the Board of Directors of the European Stability Mechanism and subsequently being ratified by Eurozone member states through national parliamentary (or equivalent) approvals.
On 22 March 2013 the House of Representatives voted legislation relating to capital controls affecting transactions executed through banking institutions operating in Cyprus. The extent and duration of the capital controls is decided by the Minister of Finance and the Governor of the Central Bank of Cyprus and were enforced on 28 March 2013. The Company's management is monitoring the developments in relation to these capital controls and is assessing the implications on the Company's operations and particularly due to the loss and blockage of funds.
(in USD thousands, unless otherwise stated)
On 12 April 2013 the Eurogroup welcomed the agreement that has been reached between Cyprus and the Troika institutions regarding the macroeconomic adjustment programme for Cyprus and stated that the necessary elements were in place to launch the relevant national procedures required for the formal approval of the European Stability Mechanism financial assistance facility agreement.
On 18 April 2013 legislation was enacted by the House of Representatives to increase the corporate tax from 10% to 12,5% with effect from 1 January 2013. Furthermore, legislation was enacted to increase the rate of special defense contribution from 15% to 30% on interest which does not arise from the ordinary course of business or is closely linked to it with effect from 29 April 2013.
Following the first quarterly review of Cyprus's economic programme by the European Commission, the European Central Bank and the International Monetary Fund it was announced on 31 July 2013 that their overall assessment is that Cyprus's program is on track. All the fiscal targets were met as a result of significant fiscal consolidation measures underway and prudent budget execution. The authorities have taken decisive steps to stabilize the financial sector and have already been gradually relaxing deposit restrictions and capital controls. Furthermore, as per the Troika announcement, while the authorities have started to implement the program with determination, risks remain substantial. The short-run economic outlook remains difficult and subject to considerable uncertainty.
With regards to the financial sector, according to the Troika announcement, the policies are geared towards restoring confidence in the banking system. The authorities have taken the necessary steps to fully recapitalize Bank of Cyprus, thus allowing it to exit resolution. The authorities have also set out a clear agenda to restructure and recapitalize other financial institutions, including the cooperative credit sector, before the end of 2013, using program resources where necessary, and without involving depositors.
The uncertain economic conditions in Cyprus, the unavailability of financing, the impairment loss incurred on bank deposits and the imposition of the above mentioned capital controls together with the current instability of the banking system and the anticipated overall economic recession, could affect:
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.
On the basis of the evaluation performed, the Company's management has proceeded with the provisions and impairments described in notes 14 and 16.
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 calculation of basic earnings per share is based on the profit attributable to the owners of the Company, and a weighted average number of ordinary shares as follows:
| 30 June 2013 | 30 June 2012 | |
|---|---|---|
| (Loss)/profit from continuing operations attributable to the owners of the Company |
(183) | 31.145 |
| Loss from discontinued operations attributable to the owners of the Company |
(36) | (649) |
| Total (loss)/profit attributable to the owners of the Company |
(219) | 30.496 |
| Weighted average number of shares: Weighted average number of ordinary shares in issue (in thousands) |
21.670 | 21.670 |
| Earnings per share from continuing and discontinued operations attributable to the owners of the Company (in USD cents per share): |
||
| (Loss)/earnings per share from continuing operations | (0, 84) | 143,72 |
| Loss per share from discontinued operations | (0,17) | (2,99) |
| Total basic and fully diluted (loss)/earnings per share | $(1,!01)$ | 140,73 |
Earnings per share is the (loss)/profit for the period after taxation attributable to the owners of the Company divided by the weighted average number of shares in issue.
There are no options or instruments convertible into new shares and so basic and diluted earnings per share are the same.
(in USD thousands, unless otherwise stated)
As at 30 June 2013 and the date of signing these condensed consolidated interim financial statements, the Company is controlled by Mr. Iurii Zhuravlov, who holds 51,04% of the Company's share capital after a transfer of 940.000 of his owned shares to Group employees as part of an incentive schedule. The remaining 48,96% of the shares is widely held.
In the ordinary course of its business, the Group has engaged and continues to engage, in transactions with related parties.
For the purpose of these condensed consolidated interim financial statements, parties are considered to be related if one party has the ability to control the other party, is under common control, or can exercise significant influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form.
The Group enters into transactions with both related and unrelated parties on market terms and in accordance with relevant legislation. It is generally not possible to objectively determine whether any transaction with a related party would have been entered into if the parties had not been related, or whether such transactions would have been effected on the same terms, conditions and amounts if the parties had not been related.
According to these criteria the related parties of the Group are divided into the following categories:
d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies.
For the six months ended 30 June 2013 and the six months ended 30 June 2012 salary costs of key management personnel were presented as follows:
| 30 June 2013 | 30 June 2012 | |
|---|---|---|
| Wages and salaries | 73 | 84 |
| Other employees benefits | − | |
| Contributions to social funds | 27 | 31 |
| 107 | 116 |
Key management personnel include the Directors (Executive and Non-Executive), the Chief Financial Officer, the Chief Agronomist, the Head of the Food Production Division and the Head of Livestock Division.
| 30 June 2013 | 30 June 2012 | |
|---|---|---|
| Number of key management personnel, persons | 14 | 13 |
| Group's transactions with related parties: | ||
| 30 June 2013 | 30 June 2012 | |
| Finance income d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies |
||
| Mr Iurii Zhuravlov-Chief Executive officer | 118 | 13 |
| 118 | 13 | |
| Expenses d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies |
109 109 |
|
| Outstanding balances with related parties: | 30 June 2013 |
31 December 2012 |
| Loans receivable d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's |
||
| companies | 1.726 | 1.252 |
| 1.726 | 1.252 | |
| Loans payable d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's |
||
| companies | 1.193 | 1.084 |
| 1.193 | 1.084 |
(in USD thousands, unless otherwise stated)
In February 2013, the Group sold its subsidiary AF named by Shevchenko to third party. The subsidiary was not previously classified as held for sale or as discontinued operation. Management committed to a plan to sell this subsidiary early in 2013.
| Company name | Country of incorporation |
Main activity | Date of disposal |
Ownership interest disposed |
|---|---|---|---|---|
| AF named by Shevchenko | Ukraine | Agricultural activity |
08/02/2013 | 99,99% |
The fair value of the net assets disposed was as follows:
| AF named by Shevchenko Fair Value |
|
|---|---|
| Assets | |
| Liabilities | |
| Trade and other payables | 26 |
| Current liabilities | 26 |
| Net assets disposed | (26) |
| Consideration received | |
| Cash and cash equivalents disposed of | |
| Consideration received, net of cash disposed | |
| Net assets disposed | 26 |
| Consideration received, net of cash disposed | |
| Profit on disposal of subsidiaries | 27 |
The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
(in USD thousands, unless otherwise stated)
• Level $3$ – inputs that are unobservable. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have significant effect on the instrument's valuation
The table below analyses financial instruments measured at fair value at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement is categorized.
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| 30 June 2013 | ||||
| Financial assets | ||||
| Designated at fair value | ||||
| through profit or loss | - | $\blacksquare$ | 1.664 | 1.664 |
| $\blacksquare$ | 1.664 | 1.664 |
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the six months ended 30 June 2013.
The Group has an established control framework with respect to the measurement of fair values. This framework includes a valuation team that reports directly to the Chief Financial Officer, and has overall responsibility for fair value measurement of biological assets.
The valuation team regularly reviews significant unobservable inputs 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.
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 arriving at fair value, based on current economic conditions and specific risks attributable to the instruments. The estimates presented herein are not necessarily indicative of the amounts the Group could realize in a market exchange from the sale of its full holding of the particular instrument.
As at 30 June 2013, the following methods and assumptions were used by the Group to estimate the fair value of the financial instruments:
(in USD thousands, unless otherwise stated)
Assumptions in assessing fair value of financial instruments and assessment of their subsequent recognition (cont.)
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. However 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 30 October 2013 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 45%.
The higher the market price the higher the fair value of the Bank of Cyprus equity securities.
Sensitivity analysis of fair value of financial assets designated at fair value through profit or loss, to the possible changes in market prices is disclosed in the table below:
| Increase/decrease of | |||
|---|---|---|---|
| Effect in USD thousand | market price | Effect on fair value | |
| 30 June 2013 | |||
| Market price | 10% | 113 | |
| Market price | $-10%$ | (113) |
Other aspects of the Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 December 2012.
There were no material events after the reporting period which affect the condensed consolidated interim financial statements at 30 June 2013 apart from the following:
(a) On 30 June 2013 the Ministry of Finance and the Central Bank of Cyprus announced that the process for the full recapitalisation of Bank of Cyprus has been completed and the Bank of Cyprus exited from resolution status. In accordance with the announcement the conversion ratio of uninsured deposits into share capital is 47,5%. The recapitalisation ensures that the Bank of Cyprus well exceeds the minimum capital adequacy ratio. Based on the latest financial information, Bank of Cyprus's Common Equity Tier 1 ratio is estimated to be at around 12%.
(in USD thousands, unless otherwise stated)
In addition, 12% of deposits in Bank of Cyprus that were previously blocked will be released (5% of the total) and the remaining balance of deposits will be split evenly into three separate time deposits of six, nine and twelve months, respectively. Bank of Cyprus will have the option to renew the time deposits once for the same time duration.
It was also announced that the share structure of Bank of Cyprus will be amended so that all shareholders hold ordinary shares in order for the new share capital structure is in compliance with the European Capital Requirements Regulation.
The Bank of Cyprus also announced on 1 August 2013 that it has been reinstated as an eligible counterparty by the European Central Bank for monetary policy operations.
On 29 August 2013 the Board of Directors of Agroton Public Limited authorised these condensed consolidated interim financial statements for issue.
$\mathcal{L}^{\text{max}}_{\text{max}}$ .
$\label{eq:2.1} \frac{1}{\sqrt{2}}\left(\frac{1}{\sqrt{2}}\right)^{2} \left(\frac{1}{\sqrt{2}}\right)^{2} \left(\frac{1}{\sqrt{2}}\right)^{2} \left(\frac{1}{\sqrt{2}}\right)^{2} \left(\frac{1}{\sqrt{2}}\right)^{2} \left(\frac{1}{\sqrt{2}}\right)^{2} \left(\frac{1}{\sqrt{2}}\right)^{2} \left(\frac{1}{\sqrt{2}}\right)^{2} \left(\frac{1}{\sqrt{2}}\right)^{2} \left(\frac{1}{\sqrt{2}}\right)^{2} \left(\frac{1}{\sqrt{2}}\right)^{2} \left(\$
$\sim$ $\sim$
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.