KSG Agro S.A.

Annual / Quarterly Financial Statement • Jun 5, 2024

KSG Agro S.A. - 2221005HTTH3XEY0HJ91 - 2024 KSG Agro S.A. Société Anonyme 24, rue Astrid L-1143 Luxembourg R.C.S. B 156.864 ANNUAL ACCOUNTS AND REPORT OF THE REVISEUR D'ENTREPRISES AGREE FOR THE YEAR ENDED 31 DECEMBER 2023 Table of contents Management report 1-7 Report of the Réviseur d’Entreprises Agréé 8-12 Balance sheet 13-17 Profif and loss account 18-19 Notes to the annual accounts 20-22 1 KSG Agro S. A. Société anonyme Registered address: 24, rue Astrid L-1143 Luxembourg, Grand Duchy of Luxembourg R.C.S. Luxembourg: B 156.864 (the Company ) MANAGEMENT REPORT 2023 of the Board of directors to the annual general meeting of Shareholders of the Company Dear Shareholders, The Board of directors of the Company (the Board ) hereby presents the annual accounts, consisting of the balance sheet, the profit and loss account and the notes to the annual accounts for the financial year started from January 1 st , 2023 and ended on December 31 st , 2023 (the Annual Accounts ) and submits for your approval such Annual Accounts, which are established in accordance with the applicable Luxembourg law provisions. RESULTS The Company has a balance sheet total of USD 128.282,41 (one hundred twenty-eight thousand two hundred eighty-two United States Dollars and forty-one cents) as at 31 December 2023, showing a loss of USD 148.535,17 (one hundred forty-eight thousand five hundred thirty-five United States Dollars and seventeen cents) for the year ending 31 December 2023 and losses brought forward of USD 41.615.174,16 (forty-one million six hundred fifteen thousand one hundred seventy-four United States Dollars and sixteen cents) as at 31 December 2023. The Board of Directors considers that the impairment booked in the accounts ending 31.12.2022 against the shares held in KSG Agricultural and Industrial Holding Ltd is still justified and it is consequently valued as at 31.12.2023 at USD 1. The management did not deem necessary to do a reversal of the impairment according to the prudence principle. For further information on the performance of the Group, we refer to the management report on the consolidated financial statements as at December 31 st , 2023. Thus, we request your approval of the Annual Accounts and to carry forward the loss realized for the financial year ended December 31 st , 2023 to the next financial year. Pursuant to Article 480-2 of the modified Law of August 10, 1915 on commercial companies, the Board of Directors unanimously resolves to i) establish a special report, and ii) propose to continue the Company’s activity despite the losses recorded and losses brought forward from the prior financial years resulting in the Company’s net assets f alling below one-quarter of the share capital. INFORMATION WITH RESPECT TO ARTICLE 11 OF THE LAW OF 19 MAY 2006 ON TAKEOVER BIDS Article 11 a) the structure of the capital, including securities which are not admitted to trading on a regulated market in a Member State, where appropriate with an indication of the different classes of shares and, for each class of shares, the rights and obligations attaching to it and the percentage of total share capital that it represents. According to article 5.1 of the articles of association of the Company (the “Articles”), the Company’s subscribed share capital amounts to one hundred fifty thousand two hundred United States Dollars (USD 1 2 150,200.00) represented by fifteen million twenty thousand (15,020,000) shares having a nominal value of one Cent (USD 0.01) each. All the issued share capital of the Company is admitted to listing and trading on the main market of the Warsaw Stock Exchange. On May 23, 2013, the Company bought back thirty-two thousand one hundred and seventy-two (32,172) own shares, representing 0.21% of share capital, that are accounted for as treasury shares. Article 11 b) any restrictions on the transfer of securities, such as limitations on the holding of securities or the need to obtain the approval of the Company or other holders of securities, without prejudice to article 46 of Directive 2001/34/EC. The shares of the Company are transferred in accordance with customary procedures for the transfer of securities in book-entry form. Furthermore, there is no restriction in relation with the transfer of securities pursuant to article 7.5 of the Articles. The sole requirement is that any transfer shall be recorded in the register of shares of the Company. In accordance with article 7.10 of the Articles, any shareholder, company or individual, who acquires or sells shares, including certificates representing shares of the Company, shall notify to the Company the percentage of the voting rights he/she/it will own pursuant to such acquisition or sale, in case such percentage reaches the thresholds of 5%, 10%, 15%, 20%, 33 1/3%, 50% and 66 2/3% or supersedes or falls under such thresholds. The shareholders shall also notify the Company should the percentage of their respective voting rights reach the above mentioned thresholds or supersede them or fall under such thresholds pursuant to certain events amending the voting rights repartition of the Company. Those notification requirements apply also to certain situations as listed by article 9 of the law of 11 January 2008 on transparency obligations with respect to the information of companies which securities are listed on a regulated market. Article 11 c) significant direct and indirect shareholdings (including indirect shareholdings through pyramid structures and cross-shareholdings) within the meaning of Directive 2004/109/EC. The distribution of shares of the Company as at the reporting date is as follows: - Demaline Holding LTD holds eight million seven hundred and five thousand five hundred (8,705,500) shares, representing 57.96% of the issued share capital of the Company. - KSG Agro S.A holds thirty-two thousand one hundred seventy-two (32,172) shares, representing 0.21% of the issued share capital of the Company. - In free float there are six million two hundred and eighty-two thousand three hundred twenty-eight (6,282,328) shares, representing 41.83% of the issued share capital of the Company. Article 11 d) the holders of any securities with special control rights and a description of those rights. There are no special control rights. Article 11 e) the system of control of any employee share scheme where the control rights are not exercised directly by the employees. There is no employee share scheme. Article 11 f) any restrictions on voting rights, such as limitations of the voting rights of holders of a given percentage or number of votes, deadlines for exercising voting rights, or systems whereby, with the Company ’ s cooperation, the financial rights attaching to securities are separated from the holding of securities. 2 3 Pursuant to article 7.10 of the Articles, if a shareholder breaches the thresholds mentioned in point b) and fails to notify the Company within the period of four (4) listing days, as stated therein, the exercise of voting rights attached to the new participation exceeding the relevant threshold will be suspended. Article 11 g) any agreements between shareholders which are known to the Company and may result in restrictions on the transfer of securities or voting rights within the meaning of Directive 2004/109/EC. To the best of our knowledge there are no such agreements. Article 11 h) the rules governing the appointment and replacement of board members and the amendment of the articles of association. Pursuant to article 8 of the Articles, the Directors of the Company (the “Directors” or the “Board”, as applicable) are to be appointed by the general meeting of the shareholders of the Company (the “General Meeting”) for a period not exceeding six (6) yea rs and until their successors are elected. Moreover, the decision to suspend or dismiss a Director must be adopted by the General Meeting with a majority of more than one-half (1/2) of all voting rights present or represented. When a legal person is appointed as Director, the legal entity must designate a permanent representative (representant permanent) in accordance with article 441-3 of the Company Law. In accordance with article 20 of the Articles, the Articles may be amended from time to time by a General Meeting under the quorum and majority requirements provided for by the Company Law. Article 11 i) the powers of board members, and in particular the power to issue or buy back shares. With respect to the acquisition of own shares, article 6 of the Articles establishes that the Company may acquire its own shares to the extent permitted by law. To the extent permitted by Luxembourg law, the Board is irrevocably authorized and empowered to take any and all steps to execute any and all documents to do and perform any and all acts for and in the name and on behalf of the Company which may be necessary or advisable in order to effectuate the acquisition of the shares and the accomplishment and completion of all related actions. According to article 11.2 of the Articles, the Board is vested with the broadest powers to perform all acts of administration and disposition in the Company’s interests and within the objectives and purposes of the Company. All powers not expressly reserved by law or by the Articles to the General Meeting fall within the competence of the Board. Article 11 j) any significant agreements to which the Company is a party and which take effect, alter or terminate upon a change of control of the Company following a takeover bid, and the effects thereof, except where their nature is such that their disclosure would be seriously prejudicial to the Company; this exception shall not apply where the Company is specifically obliged to disclose such information on the basis of other legal requirements. To the extent of our knowledge there are no such agreements. Article 11 k) any agreements between the Company and its board members or employees providing for compensation if they resign or are made redundant without valid reason or if their employment ceases because of a takeover bid. To the extent of our knowledge there are no such agreements. 3 4 OPERATING ENVIRONMENT AND GOING CONCERN In determining the appropriate basis for preparation of the annual accounts, the Board of Directors and management are required to consider whether the Company can continue its business for the foreseeable future. Those considerations are presented below. Please refer to note 2 of the consolidated financial statements which describes the military conflict in Ukraine and any adverse economic, political, and military developments that may adversely affect the operations, profitability, and liquidity. 2022: Russia’s Invasion of Ukraine On 24 February 2022, Russia started a full-scale invasion of Ukraine. After an initial series of air strikes, which targeted key military infrastructure, Russian ground troops moved in across the whole length of the state border between Russia and Ukraine (north-east and east), as well as south from the annexed Crimea. Facing heavy resistance from both the regular Ukrainian Armed Forces and government-supported Territorial Defence Forces (which included civilians), advancement of Russian troops had essentially stalled after several weeks, and they have not made significant progress since. Throughout 2023, Russian forces concentrated their efforts in the eastern part of Ukraine. Due to the slow progress of the Russian troops, and because the Company’s locations are in the center of Ukraine, management currently estimates the risk that any fighting will reach the Company’s productionlocations to be rather low. Management’s Assessment of the Impact of Russia’s Invasion As at the date these annual accounts are being issued, full-scale war has been raging for two years. With the continuing support of Ukrainian people, businesses, and international partners, Ukraine’s economy and army were able to persevere and even improve. A lot of international companies, who shut down their Ukrainian operations at the start of the invasion, have since resumed business in Ukraine, especially in the territories that are further from the front lines. The above conditions indicate the existence of material uncertainty that may cast significant doubt on the Company’s ability to continue its operations as a going concern. IN CONCLUSION Management forecasts, taking into account of reasonably possible downsides, indicate that the Company has adequate resources to continue in operational existence for the foreseeable future. The Board of Directors has, therefore, concluded that it is appropriate to prepare these annual accounts on a going concern basis. However, due to the currently unpredictable effects of the ongoing Russia’s invasion of Ukraine on the significant assumptions underlying management forecasts, a material uncertainty exists, which may cast significant doubt on the Com pany’ s ability to continue as a going concern. CORPORATE GOVERNANCE For more details on this matter, please r efer to the section “ Corporate Governance ” on page 6 of the consolidated management report included in the consolidated financial statements as at December 31, 2023. ACTIVITY IN THE FIELD OF RESEARCH AND DEVELOPMENT The Company is not involved in any activity in the field of research and development. 4 5 BRANCHES The Company has no branch. OWN SHARES No additional own shares were acquired during the year. As at December 31 st , 2023, the Company is the holder of thirty-two thousand one hundred seventy-two (32,172) own shares having a nominal value of one USD cent (USD 0.01) each, representing 0.21% of the issued share capital of the Company. BUSINESS AND FINANCIAL RISKS For more details on this matter, please refer to the section “Business and Financial Risk” on page 5 of the consolidated management report included in the consolidated financial statements as at December 31, 2023. FINANCIAL INSTRUMENTS The Company does not use any financial instruments during the years 2023. RELATED PARTIES The list of related parties identified by Management in accordance with the definition given in article 65 (1) 7b of the law of 19 December 2002 as modified regarding the Register of Commerce and Companies as well as the accounting and annual accounts of undertakings (hereafter « law of 19 December 2002 » ) are as follows: Name of the related party Nature of relationship Sergiy KASIANOV Director A and Chairman of the Board Andriy SKOROKHOD Director A Andrii MUDRIIEVSKYI Director A Xavier SOULARD Director B Eric TAZZIERI Director B Olbis Investments LTD SA Direct shareholder until 30/10/2023 Demaline Holding Limited Direct shareholder as from 30/10/2023 KSG Agricultural and Industrial Holding LTD Direct subsidiary KSG Agro Polska Indirect subsidiary KSG Energy Group LTD (in liquidation) Indirect subsidiary (50%) Parisifia Trading LTD Indirect subsidiary Abbondanza SA Indirect subsidiary (50%), disposed in December 2023 Enterprise n°2 of Ukrainian agricultural and industrial holding LLC Indirect subsidiary 5 6 Scorpio Agro LLC Indirect subsidiary Agro-Trade House Dniprovsky LLC Indirect subsidiary SPE Promvok LLC Indirect subsidiary, disposed in March 2023 Rantye LLC Indirect subsidiary Agroplaza LLC Indirect subsidiary Stepove LLC Indirect subsidiary Dzherelo LLC Indirect subsidiary Kolosyste LLC Indirect subsidiary Ukrzernoprom - Prudy LLC Indirect subsidiary Ukrzernoprom - Uyutne LLC Indirect subsidiary KSG Dnipro LLC Indirect subsidiary Strong-invest LLC Indirect subsidiary Modern Agricultural Investments LLC Indirect subsidiary The following significant related parties transactions have been identified at Company level: SUBSEQUENT EVENTS Any relevant developments relating to the Russian Invasion of Ukraine have been disclosed in the consolidated financial statements of the group. DISCHARGE We propose that you grant full discharge at the Meeting by special vote to the members of the Company’s Board of Directors and to the Company’s independent auditor (réviseur d’entreprises agréé) on the execution of their respective mandates. [Rest of the page left intentionally blank; signature page follows] 6 7 Nothing else to be reported. We invite you to approve this report following its lecture. The Board remains at the full disposal of the shareholders for any further information in relation to the above. _____ ____ Name: Sergiy KASIANOV Name: Andriy SKOROKHOD Title: Chairman / A Director Date: 03/06/2024 Title: A Director Date: 03/06/2024 ___ Name: Andrii MUDRIIEVSKYI Title: A Director Date: 03/06/2024 ___ ______ Name: Xavier SOULARD Name: Eric TAZZIERI Title: B Director Date: 03/06/2024 Title: B Director Date: 03/06/2024 7 PKF Audit & Conseil Sàrl Cabinet de révision agréé - RC B222994 76, avenue de la Liberté L-1930 Luxembourg +352 28 80 12 PKF Audit & Conseil is a member of PKF Global, the network of member firms of PKF International Limited, each of which is a separate and independent legal entity and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm(s). INDEPENDENT AUDITOR’S REPORT To the Shareholders of KSG Agro S.A. 24, Rue Astrid L-1143 Luxembourg Report on the audit of the annual accounts Opinion We have audited the annual accounts of KSG Agro S.A. (the “Company”) which comprise the balance sheet as at 31 December 2023, and the profit and loss account for the year then ended, and notes to the annual accounts, including a summary of significant accounting policies. In our opinion, the accompanying annual accounts present fairly, in all material respects, the financial position of the Company as at 31 December 2023, and its financial performance for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the annual accounts. Basis for opinion We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 on the audit profession (“Law of 23 July 2016”) and with International Standards on Auditing (“ISAs”) as adopted for Luxembourg by the “ Commission de Surveillance du Secteur Financier ” (“CSSF”). Our responsibilities under the EU regulation N o 537/2014, the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the « Responsibilities of “ Réviseur d’entreprises agréé ” for the audit of the annual accounts » section of our report. We are also independent of the Company in accordance with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants (IESBA Code) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the annual accounts, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material uncertainty related to going concern We draw attention to Note 2.1 of the annual accounts which describes the military conflict in Ukraine and any adverse economic, political and military developments that may adversely affect the operations, profitability and liquidity of the Company. However, these developments cannot be determined with certainty at this stage. In addition, the Company presents negative capital and reserves as of 31 December 2023 due to the impairment of the financial assets in 2022 8 . The above conditions indicate the existence of material uncertainty that may cast significant doubt on the Company’s ability to continue its operations as a going concern. Our opinion is not modified in respect of these matters. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts of the current period. These matters were addressed in the context of the audit of the annual accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Except for the matter described in the “Material uncertainty related to going concern” section of our report, we have determined that there are no other key audit matters to communicate in our report. Other information The Board of Directors is responsible for the other information. The other information comprises the information stated in the annual report including the management report and the Governance Statement but does not include the annual accounts and our report of the “ réviseur d’entreprises agréé ” thereon. Our opinion on the annual accounts does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the annual accounts, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the annual accounts or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard. Responsibilities of the board of directors and those charged with governance for the annual accounts The Board of Directors is responsible for the preparation and fair presentation of the annual accounts in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the annual accounts and for such internal control as it determines is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error. In preparing the annual accounts, the Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing any going concern issues and applying the going concern basis of accounting unless the Board of Directors intends to liquidate the Company or to cease operations, or if there is no realistic alternative. Those charged with governance are responsible for overseeing the Company's financial reporting process. 9 The Board of Directors is responsible for the presentation of the annual accounts in accordance with the requirements set forth in the EU Regulation No. 2019/815 on the Single European Electronic Format (" ESEF Regulation "). Responsibilities of the “ réviseur d’entreprises agréé ” for the audit of the annual accounts The objectives of our audit are to obtain reasonable assurance about whether the annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of the “ réviseur d’entreprises agréé ” that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts. As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: o Identify and assess the risks of material misstatement of the annual accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. o Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. o Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. o Conclude on the appropriateness of Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report of the “ réviseur d’entreprises agréé ” to the related disclosures in the annual accounts or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report of the “ réviseur d’entreprises agréé ”. However, future events or conditions may cause the Company to cease to continue as a going concern. o Evaluate the overall presentation, structure and content of the annual accounts, including the disclosures, and whether the annual accounts represent the underlying transactions and events in a manner that achieves fair presentation. 10 Our responsibility is to obtain sufficient appropriate evidence to conclude on whether the format and mark-up of the digital consolidated financial statements comply, in all material respects, with the requirements set out in the ESEF Regulation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the annual accounts of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes public disclosure about the matter. Report on other legal and regulatory requirements We have been appointed as “réviseur d’entreprises agréé” by the General Meeting of Shareholders on 17 July 2023 and the duration of our uninterrupted engagement, including previous renewals and reappointments, is two years. The management report is consistent with the annual accounts and has been prepared in accordance with applicable legal requirements. The Corporate Governance Statement is included in the management report of the consolidated financial statements. The information required by Article 68ter paragraph (1) letters c) and d) of the law of 19 December 2002 on the commercial and companies register and on the accounting records and annual accounts of undertakings, as amended, is consistent with the annual account and has been prepared in accordance with applicable legal requirements. We confirm that the audit opinion is consistent with the additional report to those charged with governance. We have verified the conformity of the Company's annual accounts as of 31 December 2023 with the requirements of the ESEF Regulations applicable to annual accounts. For the Company, they relate to the requirements that the annual accounts be prepared in a valid XHTML format. In our opinion, the annual accounts of KSG Agro S.A. as at 31 December 2023, identified as 2221005HTTH3XEY0HJ91-standalone-2023-12-31-en, have been prepared, in all material respects, in compliance with the requirements laid down in the ESEF Regulation. 11 We confirm that our audit opinion is consistent with the contents of the supplementary report to the Audit Committee. We confirm that we have not provided any prohibited non-audit services as referred to in Regulation (EU) N° 537/2014 and that we have remained independent from the Company during the audit. Luxembourg, 3 June 2024 PKF Audit & Conseil Sàrl Cabinet de révision agréé Jean Medernach 12 Page 1/5 The notes in the annex form an integral part of the annual accounts Annual Accounts Helpdesk : Tel. : (+352) 247 88 494 Email : centralebilans@statec.etat.lu RCSL Nr. : Matricule : BALANCE SHEET Financial year from to (in ) 01 02 03 ASSETS Reference(s) Current year Previous year A. Subscribed capital unpaid 1101 101 102 I. Subscribed capital not called 1103 103 104 II. Subscribed capital called but unpaid 1105 105 106 B. Formation expenses 1107 107 108 C. Fixed assets 1109 109 110 I. Intangible assets 1111 111 112 1. Costs of development 1113 113 114 2. Concessions, patents, licences, trade marks and similar rights and assets, if they were 1115 115 116 a) acquired for valuable consideration and need not be shown under C.I.3 1117 117 118 b) created by the undertaking itself 1119 119 120 3. Goodwill, to the extent that it was acquired for valuable consideration 1121 121 122 4. Payments on account and intangible assets under development 1123 123 124 II. Tangible assets 1125 125 126 1. Land and buildings 1127 127 128 2. Plant and machinery 1129 129 130 13 Page 2/5 The notes in the annex form an integral part of the annual accounts RCSL Nr. : Matricule : Reference(s) Current year Previous year 3. Other fixtures and fittings, tools and equipment 1131 131 132 4. Payments on account and tangible assets in the course of construction 1133 133 134 III. Financial assets 1135 135 136 1. Shares in affiliated undertakings 1137 137 138 2. Loans to affiliated undertakings 1139 139 140 3. Participating interests 1141 141 142 4. Loans to undertakings with which the undertaking is linked by virtue of participating interests 1143 143 144 5. Investments held as fixed assets 1145 145 146 6. Other loans 1147 147 148 D. Current assets 1151 151 152 I. Stocks 1153 153 154 1. Raw materials and consumables 1155 155 156 2. Work in progress 1157 157 158 3. Finished goods and goods for resale 1159 159 160 4. Payments on account 1161 161 162 II. Debtors 1163 163 164 1. Trade debtors 1165 165 166 a) becoming due and payable within one year 1167 167 168 b) becoming due and payable after more than one year 1169 169 170 2. Amounts owed by affiliated undertakings 1171 171 172 a) becoming due and payable within one year 1173 173 174 b) becoming due and payable after more than one year 1175 175 176 3. Amounts owed by undertakings with which the undertaking is linked by virtue of participating interests 1177 177 178 a) becoming due and payable within one year 1179 179 180 b) becoming due and payable after more than one year 1181 181 182 4. Other debtors 1183 183 184 a) becoming due and payable within one year 1185 185 186 b) becoming due and payable after more than one year 1187 187 188 14 Page 3/5 The notes in the annex form an integral part of the annual accounts RCSL Nr. : Matricule : Reference(s) Current year Previous year III. Investments 1189 189 190 1. Shares in affiliated undertakings 1191 191 192 2. Own shares 1209 209 210 3. Other investments 1195 195 196 IV. Cash at bank and in hand 1197 197 198 E. Prepayments 1199 199 200 TOTAL (ASSETS) 201 202 15 Page 4/5 The notes in the annex form an integral part of the annual accounts RCSL Nr. : Matricule : CAPITAL, RESERVES AND LIABILITIES Reference(s) Current year Previous year A. Capital and reserves 1301 301 302 I. Subscribed capital 1303 303 304 II. Share premium account 1305 305 306 III. Revaluation reserve 1307 307 308 IV. Reserves 1309 309 310 1. Legal reserve 1311 311 312 2. Reserve for own shares 1313 313 314 3. Reserves provided for by the articles of association 1315 315 316 4. Other reserves, including the fair value reserve 1429 429 430 a) other available reserves 1431 431 432 b) other non available reserves 1433 433 434 V. Profit or loss brought forward 1319 319 320 VI. Profit or loss for the financial year 1321 321 322 VII. Interim dividends 1323 323 324 VIII. Capital investment subsidies 1325 325 326 B. Provisions 1331 331 332 1. Provisions for pensions and similar obligations 1333 333 334 2. Provisions for taxation 1335 335 336 3. Other provisions 1337 337 338 C. Creditors 1435 435 436 1. Debenture loans 1437 437 438 a) Convertible loans 1439 439 440 i) becoming due and payable within one year 1441 441 442 ii) becoming due and payable after more than one year 1443 443 444 b) Non convertible loans 1445 445 446 i) becoming due and payable within one year 1447 447 448 ii) becoming due and payable after more than one year 1449 449 450 2. Amounts owed to credit institutions 1355 355 356 a) becoming due and payable within one year 1357 357 358 b) becoming due and payable after more than one year 1359 359 360 16 Page 5/5 The notes in the annex form an integral part of the annual accounts RCSL Nr. : Matricule : Reference(s) Current year Previous year 3. Payments received on account of orders in so far as they are not shown separately as deductions from stocks 1361 361 362 a) becoming due and payable within one year 1363 363 364 b) becoming due and payable after more than one year 1365 365 366 4. Trade creditors 1367 367 368 a) becoming due and payable within one year 1369 369 370 b) becoming due and payable after more than one year 1371 371 372 5. Bills of exchange payable 1373 373 374 a) becoming due and payable within one year 1375 375 376 b) becoming due and payable after more than one year 1377 377 378 6. Amounts owed to affiliated undertakings 1379 379 380 a) becoming due and payable within one year 1381 381 382 b) becoming due and payable after more than one year 1383 383 384 7. Amounts owed to undertakings with which the undertaking is linked by virtue of participating interests 1385 385 386 a) becoming due and payable within one year 1387 387 388 b) becoming due and payable after more than one year 1389 389 390 8. Other creditors 1451 451 452 a) Tax authorities 1393 393 394 b) Social security authorities 1395 395 396 c) Other creditors 1397 397 398 i) becoming due and payable within one year 1399 399 400 ii) becoming due and payable after more than one year 1401 401 402 D. Deferred income 1403 403 404 TOTAL (CAPITAL, RESERVES AND LIABILITIES) 405 406 17 Page 1/2 The notes in the annex form an integral part of the annual accounts Annual Accounts Helpdesk : Tel. : (+352) 247 88 494 Email : centralebilans@statec.etat.lu RCSL Nr. : Matricule : PROFIT AND LOSS ACCOUNT Financial year from to (in ) 01 02 03 Reference(s) Current year Previous year 1. Net turnover 1701 701 702 2. Variation in stocks of finished goods and in work in progress 1703 703 704 3. Work performed by the undertaking for its own purposes and capitalised 1705 705 706 4. Other operating income 1713 713 714 5. Raw materials and consumables and other external expenses 1671 671 672 a) Raw materials and consumables 1601 601 602 b) Other external expenses 1603 603 604 6. Staff costs 1605 605 606 a) Wages and salaries 1607 607 608 b) Social security costs 1609 609 610 i) relating to pensions 1653 653 654 ii) other social security costs 1655 655 656 c) Other staff costs 1613 613 614 7. Value adjustments 1657 657 658 a) in respect of formation expenses and of tangible and intangible fixed assets 1659 659 660 b) in respect of current assets 1661 661 662 8. Other operating expenses 1621 621 622 9. Income from participating interests 1715 715 716 a) derived from affiliated undertakings 1717 717 718 b) other income from participating interests 1719 719 720 18 Page 2/2 The notes in the annex form an integral part of the annual accounts RCSL Nr. : Matricule : Reference(s) Current year Previous year 10. Income from other investments and loans forming part of the fixed assets 1721 721 722 a) derived from affiliated undertakings 1723 723 724 b) other income not included under a) 1725 725 726 11. Other interest receivable and similar income 1727 727 728 a) derived from affiliated undertakings 1729 729 730 b) other interest and similar income 1731 731 732 12. Share of profit or loss of undertakings accounted for under the equity method 1663 663 664 13. Value adjustments in respect of financial assets and of investments held as current assets 1665 665 666 14. Interest payable and similar expenses 1627 627 628 a) concerning affiliated undertakings 1629 629 630 b) other interest and similar expenses 1631 631 632 15. Tax on profit or loss 1635 635 636 16. Profit or loss after taxation 1667 667 668 17. Other taxes not shown under items 1 to 16 1637 637 638 18. Profit or loss for the financial year 1669 669 670 19 However, due to the currently unpredictable effects of the ongoing Russian Invasion of Ukraine on the significant assumptions underlying management forecasts, a material uncertainty exists, which may cast significant doubt on the Company’s ability to continue as a going concern. The annual accounts have been a prepared on a going concern basis and the Board estimates that it will continue to operate. • Impact of the war events in Ukraine The Russian Invasion of Ukraine had started in late February 2022 and is ongoing as at the date of this report. Because the Group’s key assets and operations are in Ukraine, the Group might be significantly affected by these events. Management’s analysis of the risks and uncertainties surrounding the Invasion, as well as management’s strategy and actions to mitigate those risks, are outlined in Note 3 to the consolidated financial statements. The outcome of the Invasion, however, is impossible to predict at this time. Throughout 2023, Russian forces concentrated their efforts in the eastern part of Ukraine. Due to the slow progress of the Russian troops, and because the Group’s locations are in the center of Ukraine, management currently estimates the risk that any fighting will reach the Group’s production locations to be rather low. The annual accounts are expressed in USD. In the case of a durable depreciation in value according to the opinion of the Board of the Directors, value adjustments are made in respect of financial assets, so that they are valued at the lower figure to be attributed to them at the balance sheet date. These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply. The main accounting policies and valuation rules applied by the Company are the following, in accordance with the principles described above: KSG Agro S.A. Société Anonyme R.C.S. B 156.864 Notes to the annual accounts as at 31 December 2023 Note 1 – General Information KSG Agro S.A. ''the Company'' was incorporated on 16 November 2010 under the name Borquest S.A. and organised under the laws of Luxembourg in the form of a Société Anonyme for an unlimited period. On 8 March 2011, the Company's name was changed into its current denomination. Its registered office is established at 24, rue Astrid, L-1143 Luxembourg. The Company's financial year starts on 1 January and ends on 31 December of each year. The purpose of the Company shall be the acquisition of ownership interests, in Luxembourg or abroad, in any companies or enterprises in any form whatsoever and the management of such ownership interests. The Company may in particular acquire by way of subscription, purchase and exchange or in any other manner any stock, shares and securities of whatever nature, including bonds, debentures, certificates of deposit and other debt instruments and more generally any securities and financial instruments issued by any public or private entity whatsoever. It may participate in the creation, development and control of any company or enterprise. It may further invest in the acquisition and management of a portfolio of patents and other intellectual property rights. Note 2 – Significant accounting policies and valuation rules 2.1 General principles The Company also prepares consolidated annual accounts, which are published according to the Luxembourg legal requirements and are available at the registered office. KSG Agro S.A., separately referred to as “KSG Agro” or the “Company” and together with its subsidiaries referred to as the “Group”, remains among the largest vertically integrated agricultural groups in the Dnipropetrovsk region of Ukraine, present in all major sectors of the agricultural market, including production, storage, processing and sale of agricultural products. Its key operating activities are breeding of pigs, processing of pork and production of wheat and sunflower. The annual accounts are prepared in accordance with Luxembourg legal and regulatory requirements under the historical cost convention and the going concern assumption. Accounting policies and valuation rules are, besides the ones laid down by the amended Law of 19 December 2002 determined, and applied by the Board of Directors. The preparation of annual accounts requires the use of certain critical accounting estimates. It also requires the Board of Directors to exercise their judgement in the process of applying the accounting policies. Changes in assumptions may have a significant impact on the annual accounts in the period in which the assumptions changed. Management believes that the underlying assumptions are appropriate and that the annual accounts therefore present fairly the financial position and results. The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities in the next financial year. Estimates and judgements are continually assessed and are based on historical experience and other factors, including expectations of futures events that are believed to be reasonable under the circumstances. Cash is valued at its nominal value. 2.2 Significant accounting policies and valuation rules 2.2.1 Financial assets 2.2.2 Debtors Debtors are valued at their nominal value. They are subject to value adjustments where their recovery is compromised. These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply. Transactions expressed in currencies other than USD are translated into USD at the exchange rate effective at the time of the transaction. Where the amount repayable on account is greater than the amount received, the difference is shown in the profit and loss account when the debt is issued. Cash at bank is translated at the exchange rate effective at the balance sheet date. Exchange losses and gains are recorded in the profit and loss account of the year. Other assets and liabilities are translated separately respectively at the lower or at the higher of the value converted at the historical exchange rate or the value determined on the basis of the exchange rates effective at the balance sheet date. The unrealised exchange losses are recorded in the profit and loss account. The realized exchange gains are recorded in the profit and loss account at the moment of their realisation. Fixed assets expressed in currencies other than USD are translated into USD at the exchange rate effective at the time of the transaction. At the balance sheet date, these assets remain translated at historic exchange rates. 2.2.4 Foreign currency translation Shares in affiliated undertakings are valued at acquisition cost including the expenses incidental thereto. The Company is listed on the Warsaw stock exchange. Since the start of the Russian Invasion, no fighting occurred in close vicinity to the Group’s assets. The Group’s pig farm and its crop fields are located in the center of Ukraine, which hasn’t seen any fighting yet. Creditors are valued at their reimbursement value. 2.2.3 Cash at bank and in hand 2.2.5 Creditors 17 20 KSG Agro S.A. Société Anonyme R.C.S. B 156.864 Notes to the annual accounts as at 31 December 2023 The movements of the year are as follows: Shares in affiliated underta- kings Loans to affiliated underta- kings Participating interests Loans to underta- kings with which the undertaking is linked by virtue of participa- ting interests Investments held as fixed assets Other loans Total USD USD USD USD USD USD USD 36,002,800.00 - - - - - 36,002,800.00 2,501.26 - - - - - 2,501.26 - - - - - - - - - - - - - - 36,005,301.26 - - - - - 36,005,301.26 (36,002,799.00) - - - - - (36,002,799.00) - - - - - - - - - - - - - - - - - - - - - (36,002,799.00) - - - - - (36,002,799.00) 1.00 - - - - - 1.00 2,502.26 - - - - - 2,502.26 Ownership % Last balance sheet date Currency 100% 31/12/2023 USD 100% 31/12/2023 USD Within one year After more than one year Total 2023 Total 2022 USD USD 1,897.42 - 1,897.42 302.93 - Dividends receivable 1.00 - 1.00 1.00 - Other loan - - - - - - - - - Tax advances 11,440.56 - 11,440.56 11,440.56 - Other receivables 1.00 - 1.00 1.00 13,339.98 - 13,339.98 11,745.49 Own shares Total USD USD Gross book value- opening balance 112,440.17 112,440.17 - - - - - - Gross book value - closing balance 112,440.17 112,440.17 Accumulated value adjustment- opening balance - - - - - - - - Accumulated value adjustment- closing balance - - Net book value- opening balance 112,440.17 112,440.17 Net book value- closing balance 112,440.17 112,440.17 In 2022, the Company's financial assets, as shown in the above table, had been impaired following the assessment made by the Board of Directors. Consequently, the Board of Directors had recorded a durable depreciation of USD 36,002,799 according to the prudence principle. Additions for the year The movements for the year are as follows: 1. Trade receivables KSG Agro Polska sp zoo () The dividends receivable (before 2021) from the subsidiary KSG Agricultural and Industrial Holding Ltd with a gross value of USD 2 020 328,54 as at 31 December 2023 (USD 2 020 328,54 as at 31 December 2022) was written down in 2022 to a net book value of USD 1,- as at 31 December 2023 (USD 1,- as at 31 December 2022). Note 4 - Debtors Note 5 - Investment securities Disposals for the year Transfers for the year (5,037,518.00) Transfers for the year Allocations for the year Reversals for the year 2. Amounts owed by affiliated undertakings 3. Amounts owed by undertakings with which the company is linked by virtue of participating interests 4. Other debtors Total KSG Agricultural and Industrial Holding LTD Accumulated value adjustment - closing balance Net book value - opening balance Net book value - closing balance Transfers for 2023 Accumulated value adjustment - opening balance Allocations for 2023 Note 3 – Financial assets Gross book value - closing balance Additions for 2023 Disposals for 2023 Gross book value - opening balance Name of undertakings (legal form) Registered office Net equity at the balance sheet date of the company concerned Profit or loss of the last financial year Reversals for 2023 Transfers for 2023 81,047.90 () these accounts are not audited and are presented in PLN and are converted into USD by using the closing exchange rate as at 31 December 2023 (1 PLN = 0.25382 USD) As at 31 December 2023, the Company is the holder of thirty-two thousand one hundred seventy-two (32,172) own shares, having a nominal value of one USD cent (USD 0.01) each, representing 0.21% of the issued share capital of the Company. Debtors are composed as follows : Cyprus 1,120,971.00 Polska 80,799.80 18 21 KSG Agro S.A. Société Anonyme R.C.S. B 156.864 Notes to the annual accounts as at 31 December 2023 Share premium Other premiums 2023 USD USD USD Share premium account - opening balance 40,318,256.87 - 40,318,256.87 - - - Share premium account - closing balance 40,318,256.87 - 40,318,256.87 Legal reserve Reserves for own shares Reserves provided for by the Articles of Association Other reserves Profit or loss brought forward Result for the financial year Dividends payment Total USD USD USD USD USD USD USD USD 15,020.00 112,440.17 - (5,877.16) (19,160,423.92) (22,454,750.24) - (41,493,591.15) - - - - - - (22,454,750.24) 22,454,750.24 - - - - - - - (148,535.17) - (148,535.17) - - - - - - - - - 15,020.00 112,440.17 - (5,877.16) (41,615,174.16) (148,535.17) - (41,642,126.32) After less than one year After more than one year Total 2023 Total 2022 USD USD USD USD - 142.67 - 142.67 127.96 - - - - 132,682.07 - 132,682.07 270,792.09 - - - - 955,632.73 - 955,632.73 694,304.97 - - - - 6,032.29 - 6,032.29 5,476.59 - - - - 207,462.10 - 207,462.10 178,619.33 1,301,951.86 - 1,301,951.86 1,149,320.94 Creditors Amount (excluding interests) Interest % Comments EKF Denmark's Export Credit Agency 1,604,013.00 EUR 5,5 following default event Movement for the year 2023 01-Jan-23 This amount corresponds to the sum of the 18 bills received initially by KSH AIH from Breeders of Denmark based on the agreement n°01.40.2012 signed on 18/10/2012. During 2015, collection of this debt was assigned to EKF. On June 19, 2019, KSH AIH was offered a Settlement agreement which has not been respected. As a consequence the total outstanding amount of € 1.604.013,- is due by KSG AIH as at 31.12.2023 with overdue interests, at a rate of 5,5% per year. The Company was initially acting as guarantor and is still a guarantor following the transfer to EKF. As at 31 December 2023, the following guarantee agreements are still applicable: The allocation of the loss for the year 2022 was approved by the General Shareholders' meeting of 17 July 2023. Amounts owed to affiliated undertakings consist of an interest free advance from KSG Agricultural and Industrial Holding Ltd (due to invoice payments made on behalf of the Company). 2. Payments received on account of orders in so far they are not shown separately as deductions from stocks As at Note 11 - Staff The Company had no employees in 2023. Note 12 - Off balance sheet commitments Total Other creditors are mainly composed of a Promissory Note of USD 159 756,93 repayable to GEM Global Yield Fund Limited. 4. Bills of exchange payable 3. Trade creditors b) Social security 5. Amounts owed to affiliated undertakings 8. Other creditors Movements of the year Note 8 – Legal reserve In accordance with article 461-1 of the modified law of 10 August 1915 on commercial companies, Luxembourg companies are required to allocate to a legal reserve a minimum of 5% of the annual net income, until this reserve equals 10% of the subscribed share capital. This reserve cannot be distributed. 31-Dec-23 a) Tax Note 10 – Creditors Amounts due and payable for the accounts shown under “creditors” are as follows: 6. Amounts owed to undertakings with which the company is linked by virtue of participating interests. 7. Tax and social security debts 1. Amounts owed to credit institutions The movements on the “Share premium account” item during the year are as follows: The subscribed capital amounts to USD 150 200,- and is divided into 15 020 000 shares fully paid-up with a nominal value per unit of USD 0,01. Other movements Note 7 – Share premium account The movements for the year are as follows: As at Note 6 – Subscribed capital Allocation of prior year's profit or loss Profit or loss of the year Note 15 - Subsequent events Note 13 - Emoluments granted to the members of the managing and supervisory bodies and commitments in respect of retirement pensions for former members of those bodies Note 14 - Advances and loans granted to the members of the managing and supervisory bodies In 2023 the Directors of the Company received no remuneration (2022: nil). Note 9 – Movements for the year on the reserves and profit/loss items There are no subsequent events after 31 December 2023. There are no advances, loans or commitments given on their behalf by way of guarantee of any kind granted to the members of the management and supervisory bodies during the financial year (2022: nil). 19 22