Annual / Quarterly Financial Statement • Apr 30, 2021
Annual / Quarterly Financial Statement
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For the year ended 31 December 2020
| Officers and Professional Advisors | Pages 1 |
|---|---|
| Declaration of the Members of the Board of Directors and the Company official responsible for the preparation of the consolidated financial statements |
2 |
| Management Report | 3 |
| Consolidated statement of profit or loss and other comprehensive income | 8 |
| Consolidated statement of financial position | 9 |
| Consolidated statement of changes in equity | 10 - 11 |
| Consolidated statement of cash flows | 12 - 13 |
| Notes to the consolidated financial statements | 14 - 82 |
| Board of Directors | Iurii Zhuravlov - Chief Executive Officer | |
|---|---|---|
| Tamara Lapta - Deputy Chief Executive Officer | ||
| Larysa Orlova - Chief Financial Officer | ||
| Borys Supikhanov - Non-Executive Director | ||
| Volodymyr Kudryavtsev - Non-Executive Director | ||
| Audit Committee | Borys Supikhanov (Head of the Committee) | |
| Volodymyr Kudryavtsev | ||
| Remuneration Committee | Borys Supikhanov (Head of the Committee) | |
| Volodymyr Kudryavtsev | ||
| Secretary | Inter Jura Cy (Services) Limited | |
| Legal Advisors | K. Chrysostomides & Co LLC | |
| Registered office | 1 Lampousas Street 1095 Nicosia Cyprus |
In accordance with article 9(3)(c) and (7) of the Transparency Requirements (Securities Listed for Trading on a Regulated Market) Law of 2007 (the "Law"), as amended from time to time, we, the Members of the Board of Directors and the Company official responsible for the preparation of the consolidated financial statements of Agroton Public Limited (the "Company") for the year ended 31 December 2020, confirm that to the best of our knowledge:
Members of the Board of Directors:
| Iurii Zhuravlov | signed |
|---|---|
| Tamara Lapta | signed |
| Larysa Orlova | signed |
| Borys Supikhanov | signed |
| Volodymyr Kudryavtsev | signed |
Company official responsible for the preparation of the consolidated financial statements of the Company for the year ended 31 December 2020:
| Larysa Orlova | signed |
|---|---|
| --------------- | -------- |
Nicosia, 30 April 2021
The Board of Directors of Agroton Public Limited (the "Company") presents to the members its annual report together with the consolidated financial statements of the Company and of its subsidiary companies (together with the Company, the "Group") for the year ended 31 December 2020.
Agroton Public Limited (the "Company") was incorporated in Cyprus on 21 September 2009 as a public company with limited liability under the Cyprus Companies Law, Cap. 113. The Company was listed at the main market of Warsaw Stock Exchange on 8 November 2010.
The principal activities of the Group which remained the same as in the previous year, are grain and oil crops growing, agricultural products storage and sale, cattle breeding (milk cattle-breeding, poultry farming). The poultry farming business has been temporarily abandoned due to the military clashes and armed conflict in Eastern Ukraine.
The financial results of the Group for the year ended 31 December 2020 are set out in the consolidated statement of profit or loss and other comprehensive income on page 8 to the consolidated financial statements.
The profit for the year attributable to the owners of the Company amounted to USD 11 744 thousand 2019: profit of USD 5 183 thousand).
The Group recorded a profit of USD 11 759 thousand compared to USD 5 185 the previous year.
The total Group's revenue for 2020 amounted to USD 67 556 thousand as compared to USD 54 376 thousand in 2019, recording an increase of 24%, mainly due to increase in market prices.
The increase in market prices for agricultural crop products in 2020 resulted in the growth of fair value gains recognised on agricultural produce at the point of harvest narrowed the gross profit as compared to 2019.
The weakening of UAH against USD resulted in net foreign exchange loss of USD 11 944 thousand (2019: gain USD 10 779 thousand).
The change in financial position during 2020 was mainly impacted by the profitable performance of Group's business.
As a result of the above developments, the net asset position of the Group has increased from USD 86 809 thousand as at 31 December 2019 to USD 101 569 thousand as at 31 December 2020.
The financial position of the Group for the year, as presented in the consolidated financial statements is considered satisfactory.
The Board of Directors does not recommend the payment of a dividend (2019: USD nil).
The Board of Directors does not expect major changes in the principal activities of the Group in the foreseeable future.
The principal risks and uncertainties faced by the Group and the steps taken to manage these risks are described in notes 34 and 36 to the consolidated financial statements.
Political and social events of the beginning of 2014 which resulted in the annexation of the Crimea by the Russian Federation and the loss of control by Ukraine over the territory of part of the Donetsk and Lugansk regions have remained unresolved. However, the intensity of hostilities has substantially decreased since the end of July 2020 upon agreeing on a ceasefire plan.
In March 2020, the World Health Organisation declared the Coronavirus COVID-19 outbreak to be a pandemic in recognition of its rapid spread across the globe. Many governments have been taking increasingly stringent steps to help contain, and in many jurisdictions, now delay, the spread of the virus, including: requiring self-isolation/ quarantine by those potentially affected, implementing social distancing measures, and controlling or closing borders and "locking-down" cities/regions or even entire countries. These measures have slowed down the global economic activities including Ukraine.
During 2020 Ukraine's GDP contracted by 4.0% (2019: grew by 3.9%), with the bulk of the decline being attributed to the first six months of 2020 (11.4%), which was offset by a GDP recovery in the second half of 2020.
As a result of the slowdown, the Ukrainian Hryvnia weakened against the world currencies, with the NBU UAH/USD exchange rate increasing to 28.27 at 31 December 2020 from 23.69 at 31 December 2019.
The National Bank of Ukraine (NBU) reduced its discount rate in June 2020 to 6% from 11% in order to support the economy and remains committed to its policy of easing controls introduced earlier in 2014- 2015 in response to a severe economic downturn.
The Ukraine's cooperation with the International Monetary Fund (IMF) is key for its macroeconomic stability. In June 2020, the IMF approved a USD 5 billion 18-month stand-by arrangement (SBA) aimed to address large balance-of-payments and fiscal financing needs, preserve achievements to date, and advance a small set of key structural reforms to ensure that Ukraine is well-poised to return to growth when the crisis ends. Ukraine received the first tranche of USD 2.1 billion under this SBA in June 2020. In July 2020, Ukraine also issued a USD 2 billion bonds due in 2033. This, to large extent, enabled Ukraine to meet its 2020 obligations under sovereign debt.
In September 2020 and February 2021, Fitch Ratings affirmed Ukraine's long-term foreign-currency issuer default rating at 'B' with a stable outlook.
Whilst management believes it is taking appropriate measures to support the sustainability of the Group's business in the current circumstances, a continuation of the current unstable business environment could negatively affect the Group's results and financial position in a manner not currently determinable. These consolidated financial statements reflect management's current assessment of the impact of the Ukrainian business environment on the operations and the financial position of the Group. The future business environment may differ from management's assessment.
There were no changes in the share capital of the Company during the year.
The Board of Directors has adopted the Code of Corporate Governance (the "Code") of the Warsaw Stock Exchange ("WSE") which is available in the WSE website.
At present, the Corporate Governance Code is not fully implemented. There are specific provisions of the Code which cannot be adopted since they are either contrary to and/or do not accord with the provisions of the Articles of Association of the Company, or they cannot be adopted due to the recent developments in Eastern Ukraine. The Board of Directors will endeavour to remedy these as soon as practicable.
The Board of Directors ensures through effective internal audit and risk management procedures the collection of the necessary items for the preparation of the periodic reporting required for listed companies.
The Company is governed by the Board of Directors. Companies formed under the Cyprus Companies Law, Cap. 113, do not have supervisory board and management board. Cyprus companies have a Board of Directors, members of which are appointed to fill certain executive and non-executive positions. The management of the business and the conduct of the affairs of the Company are vested in the Board of Directors. The Board of Directors comprises five members, three of which are non-independent and the remaining two are independent. This is in compliance with the provisions of the Articles of Association of the Company, which requires that the Board of Directors comprise by at least two Directors, two of which shall be independent.
Directors are appointed at general meetings. There is no requirement in the Articles of Association for the retirement of Directors by rotation, thus all Directors continue in office, unless they resign or following an ordinary resolution from the Company shareholders.
The Company has an Audit Committee and a Remuneration Committee. Both committees comprise two members, both of which are non-executive. Analysis of their responsibilities is disclosed separately in this report.
The emoluments and other benefits of Directors of the Company are presented below:
| Emoluments USD |
Other benefits USD |
Total USD |
|
|---|---|---|---|
| Iurii Zhuravlov | 2 549 819 | - | 2 549 819 |
| Tamara Lapta | 568 778 | - | 568 778 |
| Larysa Orlova | 328 992 | - | 328 992 |
| Borys Supakhanov | - | - | - |
| Volodymyr Kudryavtsev | - | - | - |
The interest in the Company's share capital held directly or indirectly by each member of the Board of Directors at 31 December 2020 and at 30 April 2021 are disclosed below.
The owners holding directly or indirectly more than 5% interest in the Company's share capital at 31 December 2020 and at 30 April 2021 are disclosed below.
There are currently no shares in issue holding special or limited rights.
The Board of Directors can proceed with the issue of shares following an ordinary resolution from the Company owners. For the repurchase of the Company shares a special resolution from the Company's owners is required, in accordance with the provisions of Section 57 of Cyprus Companies Law.
The Report on Corporate Governance has been prepared in accordance with the provisions of the Code and includes the above mentioned explanations, as well as the information required by the relevant Article of the Directive.
The owners holding directly or indirectly more than 5% interest in the Company's share capital at 31 December 2020 and at 30 April 2021 were as follows:
| 31 December 2020 | 30 April 2021 | |
|---|---|---|
| % | % | |
| Iurii Zhuravlov | 77,77 | 77,77 |
| Other | 22,23 | 22,23 |
On 30 January 2018 Mr. Zhuravlov acquired 329 233 shares and on 3 December 2018 he acquired further 484 000 shares.
In accordance with Article 4(b) of the Cyprus Securities and Exchange Commission Directive the interest in the Company's share capital held directly or indirectly by each member of the Board of Directors at 31 December 2020 and at 30 April 2021 were as follows:
| 31 December 2020 % |
30 April 2021 % |
|||
|---|---|---|---|---|
| Iurii Zhuravlov | 77,77 | 77,77 | ||
| Tamara Lapta | - | - | ||
| Larysa Orlova | - | - | ||
| Borys Supikhanov | - | - | ||
| Volodymyr Kudryavtsev | - | - |
The members of the Board of Directors at 31 December 2020 and at the date of this report are presented on page 1.
There is no requirement in the Company's Articles of Association for the retirement of Directors by rotation, thus all Directors presently members of the Board continue in office.
There were no significant changes in the assignment of responsibilities and remuneration of the Board of Directors.
The Directors are responsible for formulating, reviewing and approving the Company's and its subsidiary
companies strategies, budgets, certain items of capital expenditures and senior personnel appointments. Being a company listed on the Warsaw Stock Exchange, the Directors have established audit and remuneration committees to improve corporate governance.
The Audit Committee and Remuneration Committee, were established on 4 May 2010 both of which were in force during the year ended 31 December 2020 and continued in force at the date of this report.
The Audit Committee assists the Company's Board of Directors in discharging its responsibilities with regard to financial reporting, external and internal audits and controls, including reviewing the annual consolidated financial statements, reviewing and monitoring the extent of the non-audit work undertaken by external auditors, advising on the appointment of external auditors and reviewing the effectiveness of the internal audit activities, internal controls and risk management systems. The ultimate responsibility for reviewing and approving the annual consolidated financial statements and the half yearly financial statements remains with the Board of Directors. The Audit Committee of the Company, comprising of Mr. Borys Supikhanov and Mr. Volodymyr Kudryavstev and is chaired by Mr. Borys Supikhanov.
The Remuneration Committee assists the Board of Directors in discharging its responsibilities in relation to remuneration, including making recommendations to the Board of Directors and/or the general meeting of the shareholders of the Company on the policy on executive remuneration, determining the individual remuneration and benefits package of each of the Executive Directors and recommending and monitoring the remuneration of senior management below Board level. The Remuneration Committee of the Company, comprising of Mr. Borys Supikhanov and Mr. Volodymyr Kudryavtsev (both Non-Executive Directors), and is chaired by Mr. Borys Supikhanov and sets and review the scale and structure of the Executive Directors' remuneration packages, including share options and the terms of their service contracts.
Any significant events that occurred after the reporting period are described in note 38 to the consolidated financial statements.
The Group did not operate through any registered branches during the year ended 31 December 2020.
Disclosed in note 32 to the consolidated financial statements.
By order of the Board of Directors,
signed
Larysa Orlova Director
Nicosia, 30 April 2021
| Note | 2020 | 2019 | |
|---|---|---|---|
| Continuing operations | |||
| Revenue | 5 | 67 556 | 54 376 |
| Cost of sales | 6 | (57 549) | (60 582) |
| Net change in fair value less cost to sell of biological assets and | |||
| agricultural produce | 7 | 22 902 | 16 580 |
| Gross profit | 32 909 | 10 374 | |
| Other operating income | 8 | 460 | 324 |
| Administrative expenses | 9 | (2 753) | (9 793) |
| Distribution expenses | 10 | (410) | (812) |
| Other operating expenses | 11 | (3 516) | (4 397) |
| Operating (loss)/ profit | 12 | 26 690 | (4 304) |
| Fair value gains/ (losses) on financial assets at fair value through | |||
| profit or loss | 416 | 301 | |
| 27 106 | (4 003) | ||
| Finance income | 13 | 198 | 13 056 |
| Finance costs | 13 | (15 531) | (3 727) |
| Net finance income | (15 333) | 9 329 | |
| Profit before taxation | 11 773 | 5 326 | |
| Taxation | (23) | (141) | |
| Profit for the year | 11 759 | 5 185 | |
| Other comprehensive expense | |||
| Items that are or may be reclassified subsequently to profit or loss | |||
| Effect of translation into presentation currency | 3 025 | (2 801) | |
| Total comprehensive income | 14 784 | 2 384 | |
| Profit attributable to: | |||
| Owners of the Company | 11 744 | 5 183 | |
| Non-controlling interests | 15 | 2 | |
| 11 759 | 5 185 | ||
| Total comprehensive income attributable to: | |||
| Owners of the Company | 14 794 | 2 360 | |
| Non-controlling interests | (10) | 24 | |
| 14 784 | 2 384 | ||
| Profit per share | |||
| Basic and fully diluted profit per share (USD) | 31 | 0,54 | 0,24 |
| Note | 2020 | 2019 | |
|---|---|---|---|
| Assets | |||
| Property, plant and equipment | 16 | 18 111 | 20 884 |
| Right-of-use assets | 17 | 13 351 | 18 819 |
| Intangible assets | 18 | 26 | 38 |
| Biological assets | 19 | 903 | 1 141 |
| Non-current assets | 32 391 | 40 882 | |
| Inventories | 22 | 16 067 | 20 180 |
| Biological assets | 19 | 7 272 | 9 107 |
| Investments designated at fair value through profit or loss | 20 | 15 195 | 9 264 |
| Trade and other receivables | 23 | 5 791 | 4 508 |
| Loans receivable | 21 | 18 549 | 18 549 |
| Assets held for sale | 26 | 17 | 20 |
| Cash and cash equivalents | 25 | 25 055 | 11 938 |
| Current assets | 87 946 | 73 566 | |
| Total assets | 120 337 | 114 448 | |
| Equity | |||
| Share capital | 27 | 661 | 661 |
| Share premium | 27 | 88 532 | 88 532 |
| Accumulated loss | 3 492 | (8 253) | |
| Foreign currency translation reserve | 8 620 | 5 595 | |
| Equity attributable to owners of the Company | 101 305 | 86 535 | |
| Non-controlling interests | 264 | 274 | |
| Total equity | 101 569 | 86 809 | |
| Liabilities | |||
| Lease liabilities | 29 | 9 019 | 15 389 |
| Non-current liabilities | 9 019 | 15 389 | |
| Lease liabilities | 29 | 5 697 | 4 895 |
| Loans and borrowings | 28 | 128 | 127 |
| Trade and other payables | 30 | 3 418 | 6 754 |
| Income tax liability | 506 | 463 | |
| Liabilities held for sale | 26 | - | 11 |
| Current liabilities | 9 749 | 12 250 | |
| Total liabilities | 18 768 | 27 639 | |
| Total equity and liabilities | 120 337 | 114 448 |
On 30 April 2021 the Board of Directors of Agroton Public Limited approved and authorised these consolidated financial statements for issue.
| signed | signed | ||
|---|---|---|---|
| Tamara Lapta | Larysa Orlova | ||
| Deputy Chief Executive Officer | Chief Financial Officer |
The notes on pages 14 to 82 are an integral part of these consolidated financial statements.
For the year ended 31 December 2020
(in USD thousand, unless otherwise stated)
| Attributable to owners of the Company | |||||||
|---|---|---|---|---|---|---|---|
| Share capital |
Share premium |
Accumulated loss |
Foreign currency translation reserve |
Total | Non controlling interests |
Total equity |
|
| Balance at 1 January 2019 | 661 | 88 532 | (13 436) | 8 418 | 84 175 | 250 | 84 425 |
| Total comprehensive income Profit for the year |
- | - | 5 183 | - | 5 183 | 2 | 5 185 |
| Other comprehensive expense | - | - | - | (2 823) | (2 823) | 22 | (2 801) |
| Other comprehensive expense for the year | - | - | 5 183 | (2 823) | 2 360 | 24 | 2 384 |
| Balance at 31 December 2019 | 661 | 88 532 | (8 253) | 5 595 | 86 535 | 274 | 86 809 |
| Balance at 1 January 2020 | 661 | 88 532 | (8 253) | 5 595 | 86 535 | 274 | 86 809 |
| Total comprehensive income | |||||||
| Profit for the year | - | - | 11 744 | - | 11 744 | 15 | 11 759 |
| Other comprehensive expense for the year | - | - | - | 3 050 | 3 050 | (25) | 3 025 |
| Total comprehensive income for the year | - | - | 11 744 | 3 050 | 14 794 | (10) | 14 784 |
| Balance at 31 December 2020 | 661 | 88 532 | 3 491 | 8 620 | 101 304 | 264 | 101 568 |
The notes on pages 14 to 82 are an integral part of these consolidated financial statements.
The above requirement of the Law is not applied in the case of the Company due to the fact that its owners are not residents in Cyprus for tax purposes.
(in USD thousand, unless otherwise stated)
| Note | 2020 | 2019 | |
|---|---|---|---|
| Cash flows from operating activities: | |||
| Profit for the year | 11 759 | 5 185 | |
| Adjustments for: | |||
| Depreciation | 15 | 5 879 | 6 245 |
| Amortisation | 15 | 10 | 9 |
| Fair value losses on financial assets at fair value through profit | |||
| or loss | (416) | (301) | |
| Wastages and impairment of inventories | 11 | 3 044 | 3 629 |
| Gain from changes in fair value less cost to sell of biological | |||
| assets and agriculture produce | 7 | (22 902) | (16 580) |
| Impairment of loans receivable | - | - | |
| Impairment of trade and other receivables | 24 | 41 | 9 |
| Reversal of provision for bad debts | 24 | - | (54) |
| Reversal of impairment of PPE | 16 | - | (3) |
| Interest income | 13 | (198) | (2 277) |
| Interest expense | 13 | 3 587 | 3 727 |
| Trade payables written-off | 8 | - | (4) |
| Loss on disposal of property, plant and equipment | 11 | 89 | 11 |
| Loss on disposal of current assets | 11 | - | 15 |
| Loss on disposal of right-of use assets | 11 | 267 | - |
| Foreign exchange loss/(gain) | 13 | 11 944 | (10 779) |
| Income tax expense | 23 | 141 | |
| Cash flow used in operations before working capital | |||
| changes | 13 127 | (11 027) | |
| Decrease in inventories | 21 379 | 22 081 | |
| (Increase)/decrease in biological assets | (221) | 54 | |
| Decrease/(increase) in trade and other receivables | (2 047) | 1 969 | |
| (Decrease)/increase in trade and other payables | (2 373) | 3 208 | |
| Net cash from operating activities | 29 865 | 16 285 | |
| Income tax paid | (19) | (15) | |
| Net cash from operating activities | 29 846 | 16 270 | |
| Cash flow from investing activities | |||
| Acquisition of property, plant and equipment | 16 | (3 757) | (6 321) |
| Acquisition of intangible assets | 18 | (4) | - |
| Proceeds from disposal of property, plant and equipment | 287 | 9 | |
| Acquisition of investments at FVTPL | (6 031) | (8 821) | |
| Redemption of investments at FVTPL | 500 | - | |
| Interest received | 198 | 2 | |
| Net cash used in investing activities | (8 807) | (15 131) |
The notes on pages 14 to 82 are an integral part of these consolidated financial statements.
(in USD thousand, unless otherwise stated)
| Note | 2020 | 2019 | |
|---|---|---|---|
| Cash flows from financing activities | |||
| Repayment of principal portion of lease liabilities | (1 877) | (2 528) | |
| Repayment of interest portion of lease liabilities | (3 587) | (3 689) | |
| Repayment of loans and borrowings | - | (7 777) | |
| Net cash used in financing activities | (5 464) | (13 994) | |
| Net increase in cash and cash equivalents | 15 575 | (12 855) | |
| Cash and cash equivalents at the beginning of the year | 11 938 | 24 881 | |
| Effect from translation into presentation currency | (2 458) | (88) | |
| Cash and cash equivalents at the end of the year | 25 | 25 055 | 11 938 |
(in USD thousand, unless otherwise stated)
Agroton Public Limited (the "Company") was incorporated in Cyprus on 21 September 2009 as a public company with limited liability under the Cyprus Companies Law, Cap. 113. The Company was listed at the main market of Warsaw Stock Exchange on 8 November 2010.
The Company's registered office is at 1 Lampousas Street, 1095 Nicosia, Cyprus.
The principal activities of the Group are grain and oil crops growing, agricultural products storage and sale, cattle breeding (milk cattle-breeding, poultry farming) and milk processing. The poultry farming business has been temporarily abandoned due to the military clashes and armed conflict in Eastern Ukraine.
The Group's subsidiaries, country of incorporation, and effective ownership percentages are disclosed below:
| Company name | Country of incorporation |
Ownership Interest 31.12.2020 |
Ownership Interest 31.12.2019 |
|
|---|---|---|---|---|
| Living LLC | Ukraine | 99,99 % |
99,99 % |
|
| PE Agricultural Production Firm Agro | Ukraine | 99,99 % |
99,99 % |
|
| Agroton PJSC | Ukraine | 99,99 % |
99,99 % |
|
| OJSC Belokurakinskiy Elevator | Ukraine | 99,99 % |
99,99 % |
|
| Agro Meta LLC (i) | Ukraine | 99,99 % |
99,99 % |
|
| Rosinka-Star LLC | Ukraine | 99,99 % |
99,99 % |
|
| Etalon-Agro LLC (i) | Ukraine | 99,99 % |
99,99 % |
|
| ALLC Noviy Shlyah | Ukraine | 99,99 % |
99,99 % |
|
| ALLC Shiykivske | Ukraine | 94,59 % |
94,59 % |
|
| Agro-Chornukhinski Kurchata LLC | Ukraine | 99,89 % |
99,89 % |
|
| Agro-Svinprom LLC (ii) | Ukraine | 99,89 % |
99,89 % |
|
| Agroton BVI Limited | British Virgin Islands | 100,00 % |
100,00 % |
|
| Gefest LLC (i) | Ukraine | 100,00 % |
100,00 % |
|
| LLC Lugastan | Ukraine | 99,99 % |
99,99 % |
|
| LLC Siverskiy Elevator | Ukraine | 100,00 % |
100,00 % |
(i) Agro Meta LLC, Etalon-Agro LLC, and Gefest LLC are in the process of liquidation.
(ii) In July 2011 the management of Living LLC resolved to dispose subsidiary of the Group namely Agro-Svinprom LLC engaged in the pig-breeding.
The parent company of the Group is Agroton Public Limited with an issued share capital of 21 670 000 ordinary shares with nominal value € 0,021 per share.
(in USD thousand, unless otherwise stated)
The shares at 31 December 2020 and as at the date of issue of these consolidated financial statements were distributed as follows:
| 31 December 2020 | 30 April 2021 | ||||
|---|---|---|---|---|---|
| Shareholder | Number of Shares |
Ownership interest, % |
Number of Shares |
Ownership interest, % |
|
| Mr. Iurii Zhuravlov | 16 851 979 | 77,77 % |
16 851 979 | 77,77 % |
|
| Others | 4 818 021 | 22,23 % |
4 818 021 | 22,23 % |
|
| 21 670 000 | 100,00 % |
21 670 000 | 100,00 % |
These consolidated financial statements of the Company as at and for the year ended 31 December 2020 comprise the financial statements of the Company and its subsidiaries (together with the Company, the ''Group'').
The Company has subsidiary undertakings and according to 142(1)(b) of the Cyprus Companies Law Cap.113 is required to prepare consolidated financial statements and present them before the members of the Company at the Annual General Meeting.
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS'), as adopted by the European Union ('EU'), and the requirements of the Cyprus Companies Law, Cap. 113, and are for the year ended 31 December 2020.
These consolidated financial statements have been prepared under the historical cost convention except for the following:
(in USD thousand, unless otherwise stated)
The functional currencies of the companies of the Group are the Ukrainian Hryvnia (UAH) and United States Dollar (USD). The currency of Cyprus is Euro, but the principal exposure of the parent undertaking is in US dollars, therefore the functional currency of the Company is considered to be USD. Transactions in currencies other than the functional currency of the Group's companies are treated as transactions in foreign currencies. The Group's management decided to use US dollar (USD) as the presentation currency for financial and management reporting purposes. Exchange differences arising are classified as equity and transferred to the translation reserve.
These consolidated financial statements have been prepared under the going concern basis, which assumes the realisation of assets and settlement of liabilities in the course of ordinary economic activity. Renewals of the Group's assets, and the future activities of the Group, are significantly influenced by the current and future economic environment in Ukraine. The Board of Directors and Management are closely monitoring the challenging conditions in the domestic markets as described in note 34 to the consolidated financial statements and has assessed the current situation and there is no indication of adverse effects while at the same time are taking all the steps to secure Group's short and long term viability. To this effect, they consider that the Group is able to continue its operations as a going concern.
As from 1 January 2020, the Group adopted all changes to International Financial Reporting Standards (IFRSs) as adopted by EU which are relevant to its operations. The adoption of these standards, amendments and interpretations did not have a material effect on the consolidated financial statements of the Group.
A number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2021 and earlier application is permitted; however, the Group has not early adopted them in preparing these consolidated financial statements. None of these standards and amendments are expected to have a material impact of the Group's consolidated financial statements.
(in USD thousand, unless otherwise stated)
The Group has consistently applied accounting policies set out in this note to all years presented in these consolidated financial statements. Accounting policies of subsidiaries have been changed where necessary to achieve consistent application of the accounting policies applied by the Group.
Subsidiaries are entities controlled by the Group. Control exists where the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The financial statements of subsidiaries acquired or disposed during the year are included in the consolidated statement of profit or loss from the date that control commences until the date control ceases.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring them in line with the accounting policies of the Group.
Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity as transactions with owners acting in their capacity as owners. No adjustments are made to goodwill and no gain or loss is recognised in profit or loss.
When the Group loses control of a subsidiary, the resulting profit or loss is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. The resulting profit or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit or loss as incurred.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
(in USD thousand, unless otherwise stated)
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the acquisition date, except that:
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another IFRS.
When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the 'measurement period' (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with IAS 39, or IAS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.
When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date(i.e.the date when the Group obtains control) and the resulting gain or loss,if any,is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed.
(in USD thousand, unless otherwise stated)
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date.
NCI is represented by interest in the subsidiaries not owned by the Group. It is determined at the reporting period as interest in the fair value of identified assets and liabilities of the subsidiary at the date of acquisition or creation of a new subsidiary, as well as interest in change in net assets of a subsidiary after the acquisition or creation of a new subsidiary.
The Group provides information on NCI in net assets of subsidiaries and companies not connected with formal structure and not having a common parent company separately from items of equity attributable to the owners of the parent company.
Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction.
Monetary assets and liabilities are translated into the functional currency of each company included into the Group, at the rates ruling at the reporting period. Foreign exchange gains and losses, arising from transactions in foreign currency, and also from translation of monetary assets and liabilities into the functional currency of each company included into the Group at the rate ruling at the end of the year, are recognised in profit or loss.
The exchange rates used in preparation of these consolidated financial statements, are as follows:
| Currency | 31 December 2020 |
Weighted average for the year 2020 |
31 December 2019 |
Weighted average for the year 2019 |
|---|---|---|---|---|
| US dollar - UAH | 28,2746 | 26,9639 | 23,6862 | 25,8373 |
The strengthening of the UAH against USD has resulted in the increase of various values disclosed in the consolidated financial statements of profit or loss and financial position. This increase is applicable only in case of translation into presentation currency.
The foreign currencies may be freely convertible to the territory of Ukraine at the exchange rate which is close to the exchange rate established by the National Bank of Ukraine. At the moment, the Ukrainian Hryvnia is not a freely convertible currency outside the Ukraine.
(in USD thousand, unless otherwise stated)
The financial results and position of each subsidiary are translated into the presentation currency as follows:
Property plant and equipment is recognised by the Group as an asset only when:
Any subsequent expenses, increasing the future economic benefits from the asset, are treated as additions. Otherwise, the Group recognises subsequent expenses to profit or loss of the year, in which they are incurred. The Group divides all expenses, related to the property, plant and equipment, into the following types:
After initial recognition as an asset, the Group applies the model of accounting for the property, plant and equipment at historical cost, net of accumulated depreciation and any accumulated losses from impairment, taking into account estimated residual values of such assets at the end of their useful lives. Such cost includes the cost of replacing significant parts of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced from time to time, the Group recognises such parts as individual assets with specific estimated useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying value of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the profit or loss of the year in which they are incurred.
(in USD thousand, unless otherwise stated)
Depreciation of property, plant and equipment is calculated using the straight-line method over the estimated useful lives agreed upon with the technical personnel of the Group.
The estimated useful lives of property, plant and equipment are as follows:
| Not depreciated |
|---|
| 10-75 years |
| 2-30 years |
| 2-15 years |
| 1-10 years |
| 1-10 years |
Residual values and useful lives of assets are reviewed at each reporting period and adjusted if appropriate.
The acquired asset is depreciated starting from the following month of the date of placing into operation and depreciation is fully accumulated when useful life ends.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying value of the asset) is included in profit or loss of the year in which the asset is derecognised.
At each reporting period the Group evaluates whether any indicators of possible impairment of an asset exist. If the recoverable value of an asset or a group of assets within property, plant and equipment is lower than their carrying (residual) value, the Group recognises such asset or group of assets as impaired, and accrues a provision for impairment of the amount of excess of the carrying value over the recoverable value of the asset. Impairment losses are recognised immediately in profit or loss.
Assets under construction comprise costs directly related to construction of property, plant and equipment including an appropriate allocation of directly attributable variable overheads that are incurred in construction. Construction in progress is not depreciated. Depreciation of the construction in progress, on the same basis as for other property, plant and equipment items, commences when the assets are available for use, i.e. when they are in the location and condition necessary for them to be capable of operating in the manner intended by the management.
(in USD thousand, unless otherwise stated)
For the purpose of preparation of the consolidated financial statements, the Group defines the following groups of the intangible assets: computer software and land lease rights.
Costs that are directly associated with identifiable and unique computer software products controlled by the Group and that will probably generate economic benefits exceeding costs beyond one year are recognised as intangible assets. Subsequently computer software is carried at cost less any accumulated amortisation and any accumulated impairment losses. Expenditure which enhances or extends the performance of computer software programs beyond their original specifications is recognised as a capital improvement and added to the original cost of the computer software. Costs associated with maintenance of computer software programs are recognised in profit or loss of the year in which they are incurred. Computer software are amortised on a straight-line basis over their useful lives, usually 5 years. Amortisation starts from the following year of the date of placing into operation and is fully accumulated when useful life ends.
Amortisation methods, useful lives and residual values are reviewed at each reporting period and adjusted accordingly.
Land lease rights acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Land lease rights acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, land lease rights acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as land lease rights acquired separately.
Amortisation of land lease rights is recognised on a straight-line basis over their estimated useful lives. For land lease rights, the amortisation period is 10 years.
The amortisation period and the amortisation method for land lease rights are reviewed at least at the end of each reporting period, with the effect of any changes in estimate being accounted for prospectively.
As a result of IFRS 16 adoption, land lease rights were derecognised on 1 January 2019.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss of the year in which the asset is derecognised.
(in USD thousand, unless otherwise stated)
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:.
(in USD thousand, unless otherwise stated)
how the performance of the portfolio is evaluated and reported to the Group's management;
the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Group's continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.
For the purposes of this assessment, 'principal' is defined as the fair value of the financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.
(in USD thousand, unless otherwise stated)
Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial assets at amortised cost: These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Debt investments at FVOCI: These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairments are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI: These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.
The Group uses the expected credit loss (ECL) model to measure impairment. The ECL model applies to financial assets measured at amortised cost.
The financial assets at amortised cost consist of trade receivables, loans receivable and cash and cash equivalents.
Loss allowances are measured on either of the following bases:
12-month ECLs; these are ECLs that result from possible default events within the 12 months after the reporting date; and
lifetime ECLs; these are ECLs that result from all possible default events over the expected life of a financial instrument.
The Group has elected to measure loss allowances for trade receivables at an amount equal to lifetime ECLs.
The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held).
(in USD thousand, unless otherwise stated)
The maximum period considered when estimating ECLs is the maximum contractual period which the over Group is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).
At each reporting period, the Group assesses whether financial assets carried at amortised cost are creditimpaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
Financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.
Financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its issue.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
(in USD thousand, unless otherwise stated)
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the consolidated statement of financial position.
The Group identifies the following types of inventories:
Work in progress includes the costs incurred during the period, but relating to the preparation of crop areas under sowing for future reporting periods.
Agricultural products derived from biological assets are measured at fair value less costs to sell at the point of harvest. Profit or loss arising upon initial recognition of agricultural products at fair value less estimated costs to sell is recorded in profit or loss as gain/(loss) from changes in value of biological assets and agricultural produce.
Inventories are measured at the lower of cost and net realisable value.
(in USD thousand, unless otherwise stated)
The cost of inventories is based on the first-in first-out (FIFO) principle and includes all expenses for acquiring the inventories, conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of work in progress and finished goods, cost includes an appropriate share of production overheads based on normal operating capacity.
Net realisable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and preliminary estimated distribution and selling costs.
The Group regularly reviews inventories to determine whether there are any indicators of damage, obsolescence, slow movement, or a decrease in net realisable price. When such events take place, the amount by which inventories are impaired, is reported in profit or loss.
Cost of inventories may be irrecoverable if the realisable value for such inventories has decreased due to their damage, whole or partial obsolescence or resulting from changes in market prices. Cost of inventories may be irrecoverable if possible costs for completion or sale have increased.
Raw and other materials in inventories are not written-off below cost, if finished goods, in which they will be included, will be sold at cost or above. However, when decrease in price for raw materials indicates that cost of finished goods will exceed the net realisable value, raw materials are written off to the net realisation value.
At each reporting period the Group analyses inventories to determine whether they are damaged, obsolete or slow-moving or whether their net realisable value has declined. If such situation occurred, the amount by which inventories are impaired is recorded in profit or loss.
The following groups of biological assets are distinguished by the Group:
(a) current – with useful life of 1 year, including:
(b) non-current – with useful life over 1 year:
work and productive livestock (cattle, etc.).
Biological asset is an animal or plant which in the process of biological transformations can create agricultural products or additional biological assets, as well as bring economic benefits in other ways.
Biological assets are measured at fair value less estimated costs to sell, except in case where fair value cannot be determined reliably. Costs to sell include all costs that would be necessary to sell the assets, including transportation costs.
(in USD thousand, unless otherwise stated)
If there is an active market for a biological asset or agricultural produce, the Group determines the fair value of assets based on their quoted price in the market. If the Group has access to several markets, the definition of fair value is based on the market, which may be used by the Group with the highest probability.
In the absence of an active market, the Group uses one or more of the following indicators to determine the fair value of biological assets:
In case where there are no market prices or other value indicators to determine the fair value in respect of the biological asset at a particular time, the Group uses the discounted value of the asset's expected net cash flows, while applying a discount coefficient, calculated on the basis of current market conditions for cash flow before tax.
Where there is no information about market prices upon the initial recognition of biological asset, and alternative estimates of fair value are clearly unreliable, such biological asset is valued at cost less accumulated depreciation and impairment losses. Once there is the possibility to determine the fair value of biological assets with reasonable reliability, the biological asset is revalued at fair value less estimated costs to sell (this principle applies only at initial recognition of the biological asset). If the Group has previously valued the biological asset at fair value less estimated costs to sell, this biological asset is recorded at fair value less estimated costs to sell up to the moment of its disposal.
The difference between the fair value less estimated costs to sell and production cost of biological assets is recorded in profit or loss as gain/(loss) from changes in value of biological assets and agricultural products.
Cost of crops for future harvest consists of actual costs incurred in growing harvest (including lease expenses, costs of land preparation, planting, fertilising, processing, collection, storage). The fair value of winter crops at the end of the year is approximate to its cost due to a minor biological transformation of seeds at the end of the year, significant impact of cultivation quality, weather conditions and precipitation on future harvest, variations in market demand for future harvest. Crops for future harvest are measured at cost.
Cash and cash equivalents include cash at banks and in hand, cash in transit, issued letters of credit and call deposits.
(in USD thousand, unless otherwise stated)
The Group assesses at each reporting period the carrying value of its non-current assets to determine whether there is any objective evidence that non-current assets are impaired. If any such evidence exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). If it is not possible to estimate the recoverable amount of the individual asset, the Group shall determine the recoverable amount of the cash-generating unit to which the asset belongs (the asset's cashgenerating unit).
The expected recoverable amount of a cash-generating unit is the highest of the cash-generating unit's selling value and its value in use. In estimating value in use, the future cash flows are discounted to present value using a discount rate before taxation which reflects current market assessments of the time value of money and the risks specific to the asset.
If the expected recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying value, the carrying value of the asset (or cash-generating unit) shall be reduced to its recoverable amount. That reduction is an impairment loss, unless the asset is carried at revalued amount. Any impairment loss of a revalued asset shall be treated as a revaluation deficit. If the impairment loss is reversed subsequently, then carrying value of an asset (or cash-generating unit) increases to the revised and estimated amount of its recoverable amount, where increased carrying value does not exceed the carrying value which could be determined only in that case if impairment loss for an asset (or cashgenerating unit) was not recognised in the previous years. Reversal of the impairment loss is recognised in profit or loss.
Advances issued are recorded at nominal value less value added tax and any accumulated impairment losses. Other current assets are recorded at nominal cost less accumulated impairment losses.
Impairment of advances issued is recognised if there is objective evidence that repayment of the full amount of the debt does not occur within the contract terms, including the incoming information about substantial financial difficulties of the debtor, the possibility of recognition a debtor as a bankrupt, or probability of debtor's reorganisation, in case of refusal from delivery, etc. Impairment of advances issued and other non-financial current assets is reflected according to order described in subparagraph 'Impairment of Assets' of Note 12.
Advances issued under the contracts for the purchase of property, plant and equipment are recorded in section 'Other non-current assets' of consolidated statement of financial position.
In Ukraine VAT standard rate is 20% on imports and sale of goods and services in the territory of Ukraine and 0% rate for all exports and services rendered outside Ukraine.
The VAT liability is equal to the total amount of VAT accrued during the reporting period and arises at the earlier of goods shipment to the customer or at the date of receipt of payment from the client.
(in USD thousand, unless otherwise stated)
VAT credit is the amount by which a taxpayer is entitled to reduce his/her VAT liabilities in the reporting period. The right to VAT credit arises on the earlier of the date of payment to supplier or the date of receipt of goods by the Company.
For the Cyprus Company VAT of 19% applies on expenses.
The Group classifies VAT recoverable arising from its operating activities and its capital expenditures. The balance of VAT recoverable may be realised by the Group either through a cash refund from the state budget or by sett off against VAT liabilities with the state budget in future periods.
The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the consolidated statement of financial position.
Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, by the reporting period, in the countries where the Group operates and generates taxable income.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit or loss and other comprehensive income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
The majority of Groups entities are registered as tax payers of fixed agricultural tax and therefore are not payers of corporate tax.
(in USD thousand, unless otherwise stated)
Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue when it transfers control over a good or service to a customer.
Information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies is as follows:
Customers obtain control of Group's products when the goods are delivered to and have been accepted at a place specified in a sales contract. Invoices are generated at that point in time. Invoices are usually payable within 10 days. No discounts after delivery of goods are provided. Some contracts permit the customer to return an item.
Revenue is recognised when the goods are delivered and have been accepted by customers at a place specified in a sales contract. For contracts that permit the customer to returm an item of revenue is recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur.
Services comprise storage and handling services, rendering of which is auxiliary to Group's main activities. Invoices are usually issued on a monthly basis and are payable during the period not exceeding 30 days.
Revenue is recognised over time as services are provided. The stage of completion for determining the amount of revenue to recognise is assessed on the basis of the actual service provided as a proportion of the total services to be provided.
Finance income comprises of interest income. Interest income is recognised as it accrues in profit or loss, using the effective interest method.
Finance costs comprise interest expense on borrowings and bank charges.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, which necessarily requires significant time to be prepared for use in accordance with the Group's intentions or for sale, are capitalised as the part of initial value of such asset. All other borrowing costs are expensed in profit or loss in the period they were incurred. Borrowing costs include interest payments and other expenses incurred by the Group related to borrowings.
Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.
For the year ended 31 December 2020
(in USD thousand, unless otherwise stated)
Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale or distribution rather than through continuing use, are classified as held for sale or distribution. Immediately before classification as held for sale or distribution, the assets, or components of a disposal group, are remeasured in accordance with the Group's accounting policies. Thereafter generally the assets, or disposal group, are measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, investment property or biological assets, which continue to be measured in accordance with the Group's accounting policies. Impairment losses on initial classification as held for sale or distribution and subsequent gains and losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.
Once classified as held for sale or distribution, intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity-accounted investee is no longer equity accounted.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The rightof-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
(in USD thousand, unless otherwise stated)
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative standalone prices.
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to allocate the consideration in the contract.
The finance lease payments are appointed between the finance income and the decrease of the finance lease receivables based on the effective interest method.
The Group recognises lease payments received under operating leases as income on a straightline basis over the lease term as part of other revenue.
The amount payable to the Owners of the Company in the form of dividends is recognised in the financial statements of the Group in the period the dividends were approved by the Owners of the Company.
Contingent liabilities represent the possible commitments of the Group arising from past events, which existence will be confirmed only as a result of occurrence or non-occurrence of one or more future events, that are not under the full control of the Group, or current liabilities arising from past events not recognized in the financial statements in connection with the fact that the Group does not consider the outflow of resources providing economic benefits and required for liabilities settlements as expected ones, or the amount of liabilities cannot be reliably measured.
(in USD thousand, unless otherwise stated)
The Group does not recognize contingent liabilities in financial statements. The Group discloses information about contingent liabilities in the notes to the financial statements unless the probability of outflow of resources required to settle the liability, is unlikely.
Contingent assets represent the possible assets of the Group arising from past events, which existence will be confirmed only as a result of occurrence or non-occurrence of one or more future events that are not under the full control of the Group. The Group does not recognize contingent assets in the financial statements. The Group discloses information about contingent assets in the notes to financial statements, if the flow of economic benefits is likely to occur.
A provision is a liability of uncertain amount or timing. Provisions are recognised if as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the consolidated statement of profit or loss and other comprehensive income net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, head office expenses and tax assets and liabilities.
The Group is organised by reportable segments and this is the primary format for segmental reporting. Each reportable segment provides products or services which are subject to risks and rewards that are different than those of other reportable segments.
The Group presents its geographical analysis for segmental revenue by customer location and for assets based on the asset's location. The Group operates mainly in Ukraine.
Classification as a discontinued operation occurs on disposal or when the operation meets the criteria to be classified as held for sale (see note 3.15), if earlier. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative year
(in USD thousand, unless otherwise stated)
Ordinary shares are classified as equity. The difference between the fair value of the consideration received and the nominal value of share capital issued is taken to share premium. Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognised as a deduction from equity.
The Group contributes to the State Pension Fund of Ukraine and the social insurance funds for the benefit of its employees (defined benefits). The Group's contributions are expensed as incurred.
Employee salaries are expensed in the reporting period in which such work is performed.
The Group adjusts the consolidated financial statements amounts if events after the reporting period demand adjustments. Events after the reporting period requiring adjustments of the consolidated financial statements amounts relate to the confirmation or contradiction of the circumstances prevailing at the reporting period, as well as estimates and judgments of management, which are made under conditions of uncertainty and incompleteness of information at the reporting period.
If non-adjusting events that occurred after the reporting period are significant, non-disclosure of information about them may affect the economic decisions of users which are made on the basis of these consolidated financial statements. Accordingly, the Group discloses the nature of such events and estimates of their financial effect or states the impossibility of such estimate for each material category of non-adjusting events that occurred after the reporting period.
The preparation of the consolidated financial statements in accordance with IFRS requires from management to exercise judgment, to make estimates and assumptions that influence the application of accounting principles and the reported amounts of assets, liabilities, income and expenses. The estimates and underlying assumptions are based on historical experience and various other factors that are deemed to be reasonable based on knowledge available at that time. Actual results may deviate from such estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognised in the consolidated financial statements are described below.
(in USD thousand, unless otherwise stated)
The Group estimates the remaining useful life of property, plant and equipment at least once a year at the end of the fiscal year. Should the expectations differ from previous estimates, changes are accounted for as changes in accounting estimates in accordance with IAS 8 'Accounting Policy, Changes in Accounting Estimates and Errors'. These estimates may have a significant effect on the carrying value of property, plant and equipment and depreciation recognised in profit or loss.
An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in an arm's length transaction of similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset's performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows and the growth rate used for extrapolation purposes.
The Group reviews its trade and other receivables for evidence of their recoverability. Such evidence includes the customer's payment record and the customer's overall financial position.
The Group provides for doubtful debts to cover potential losses when a customer may be unable to make necessary payments. In assessing the adequacy of provision for doubtful debts, management considers the current economic conditions in general, the age of accounts receivable, the Group's experience in writing off of receivables, solvency of customers and changes in conditions of settlements. Economic changes, industry situation or financial position of separate customers may result in adjustments related to the amount of provision for doubtful debts reflected in the consolidated financial statements as impairments of receivables.
Additionally a general provision for doubtful debts is provided on all receivables due for more than 365 days.
Bad debts which maturity has already expired are written-off from the consolidated statement of financial position along with a corresponding adjustment to the provision for doubtful debts.
Bad debts which are subsequently recovered are reversed in the consolidated financial statements through profit or loss.
The Group does not accrue provisions for doubtful debts on balances with related parties regardless of the origin date of current debt.
(in USD thousand, unless otherwise stated)
The Group's Management applies significant assumptions in the measurement and recognition of provisions for and risks of exposure to contingent liabilities related to existing legal proceedings and other unsettled claims, and also other contingent liabilities. Management's judgment is required in estimating the probability of a successful claim against the Group or the crystallising of a material obligation, and in determining the probable amount of the final settlement or obligation. Due to uncertainty inherent to the process of estimation, actual expenses may differ from the initial estimates. Such preliminary estimates may alter as new information is received, from internal specialists within the Group, if any, or from third parties, such as lawyers. Revision of such estimates may have a significant effect on the future results of operating activity.
At each reporting period the Group assesses the necessity to impair obsolete and surplus inventory. The Group analyses inventories to determine whether they are damaged, obsolete or slow-moving or whether their net realisable value has declined. If such necessity exists, the reserve is calculated and necessary adjustments are made.
Inventories are measured at the lower of cost and net realisable value. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and preliminary estimated distribution and selling costs. The Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting period.
Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective regions in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group companies' domicile.
Significant judgment is required in determining the provision for Cyprus direct and indirect taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax and deferred tax provisions in the period in which such determination is made.
(in USD thousand, unless otherwise stated)
In Management's opinion, the Company is in substantial compliance with the tax laws governing its operations. However, the risk remains that the relevant authorities could take different positions with regard to interactive issues and the effect could be significant.
The Company met the tax filing in Cyprus. To the best of Management's knowledge, no breaches of tax law have occurred. Thus, the Company has not recorded any provisions for potential impact of any such breaches at the reporting period.
Contingent liabilities are determined by the occurrence or non-occurrence of one or more future events. Measurement of contingent liabilities is based on management's judgments and estimates of the outcomes of such future events. In particular, the tax laws in Ukraine are complex and significant management judgement is required to interpret those laws in connection with the tax affairs of the Group, which is open to challenge by the tax authorities. Additionally, the economic and political situation in Ukraine may have an impact (note 34 to the consolidated financial statements)
Management classified VAT recoverable balance as current based on expectations that will be realised within twelve months from the reporting period. In addition management assessed whether the allowance for irrecoverable VAT needs to be created.
In making this assessment, management considers past history of receiving VAT refunds from the state budget. For VAT recoverable expected to be set off against VAT liabilities in future periods, management based its estimates on detailed projections of expected excess of VAT input over VAT output in the normal course of business.
A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the CFO.
The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified.
Significant valuation issues are reported to the Board of Directors.
(in USD thousand, unless otherwise stated)
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in the relevant notes.
Political and social events of the beginning of 2014 which resulted in the annexation of the Crimea by the Russian Federation and the loss of control by Ukraine over the territory of part of the Donetsk and Lugansk regions have remained unresolved. However, the intensity of hostilities has substantially decreased since the end of July 2020 upon agreeing on a ceasefire plan.
In March 2020, the World Health Organisation declared the Coronavirus COVID-19 outbreak to be a pandemic in recognition of its rapid spread across the globe. Many governments have been taking increasingly stringent steps to help contain, and in many jurisdictions, now delay, the spread of the virus, including: requiring self-isolation/ quarantine by those potentially affected, implementing social distancing measures, and controlling or closing borders and "locking-down" cities/regions or even entire countries. These measures have slowed down the global economic activities including Ukraine.
During 2020 Ukraine's GDP contracted by 4.0% (2019: grew by 3.9%), with the bulk of the decline being attributed to the first six months of 2020 (11.4%), which was offset by a GDP recovery in the second half of 2020.
As a result of the slowdown, the Ukrainian Hryvnia weakened against the world currencies, with the NBU UAH/USD exchange rate increasing to 28.27 at 31 December 2020 from 23.69 at 31 December 2019.
The National Bank of Ukraine (NBU) reduced its discount rate in June 2020 to 6% from 11% in order to support the economy and remains committed to its policy of easing controls introduced earlier in 2014- 2015 in response to a severe economic downturn.
(in USD thousand, unless otherwise stated)
The Ukraine's cooperation with the International Monetary Fund (IMF) is key for its macroeconomic stability. In June 2020, the IMF approved a USD 5 billion 18-month stand-by arrangement (SBA) aimed to address large balance-of-payments and fiscal financing needs, preserve achievements to date, and advance a small set of key structural reforms to ensure that Ukraine is well-poised to return to growth when the crisis ends. Ukraine received the first tranche of USD 2.1 billion under this SBA in June 2020. In July 2020, Ukraine also issued a USD 2 billion bonds due in 2033. This, to large extent, enabled Ukraine to meet its 2020 obligations under sovereign debt.
In September 2020 and February 2021, Fitch Ratings affirmed Ukraine's long-term foreign-currency issuer default rating at 'B' with a stable outlook.
Whilst management believes it is taking appropriate measures to support the sustainability of the Group's business in the current circumstances, a continuation of the current unstable business environment could negatively affect the Group's results and financial position in a manner not currently determinable. These consolidated financial statements reflect management's current assessment of the impact of the Ukrainian business environment on the operations and the financial position of the Group. The future business environment may differ from management's assessment.
(in USD thousand, unless otherwise stated)
| 2020 | 2019 | |
|---|---|---|
| Sales of goods | 66 704 | 53 537 |
| Rendering of services | 852 | 839 |
| Total | 67 556 | 54 376 |
Revenue generated from sale of goods was as follows:
| 2020 | 2019 | |
|---|---|---|
| Livestock and related revenue | 2 288 | 3 948 |
| Winter wheat | 27 410 | 23 152 |
| Sunflower | 36 449 | 18 533 |
| Vegetable oil and protein meals | - | 7 124 |
| Corn in grain | 103 | 235 |
| Other agricultural crops | 454 | 545 |
| Total | 66 704 | 53 537 |
Sales volume for main agricultural products in tonnes was as follows:
| 2020 tonnes |
2019 tonnes |
|
|---|---|---|
| Winter wheat | 162 559 | 173 932 |
| Sunflower | 86 185 | 64 355 |
| Vegetable oil and protein meals | - | 16 883 |
| Corn in grain | 862 | 2 120 |
| Total | 249 606 | 257 290 |
Sales volume for milk yield for the year ended 31 December 2020 was 5 809 tonnes (2019: 8 647 tonnes).
Revenue generated from rendering of services relates to storage and handling services granted to third parties.
Livestock and related revenue includes revenue from milk and other livestock related products.
| Timing of revenue recognition | 2020 | 2019 |
|---|---|---|
| Goods transferred at a point in time | 66 704 | 53 537 |
| Services transferred over time | 852 | 839 |
| Total | 67 556 | 54 376 |
(in USD thousand, unless otherwise stated)
The following table provides information about receivables and liabilities from contracts with customers:
| 2020 | 2019 | |
|---|---|---|
| Trade receivables, which are included in Trade and other receivables Advances from customers, which are included in Trade and other paybles |
2 785 (16) |
2 877 - |
| 6. COST OF SALES |
||
| 2020 | 2019 | |
| Livestock and related operations | 2 193 | 3 549 |
| Plant breeding and related operations | 53 931 | 48 363 |
| Vegetable oil and protein meals | - | 6 773 |
| Other activities | 1 425 | 1 897 |
| Total | 57 549 | 60 582 |
| 2020 | 2019 | |
|---|---|---|
| Non-current biological assets | (116) | (307) |
| Current biological assets | 23 018 | 16 887 |
| Total | 22 902 | 16 580 |
The net change in fair value less costs to sell per type of biological asset was:
| 2020 | 2019 | |
|---|---|---|
| Animals in growing and fattening | (633) | (1 609) |
| Crops under cultivation (Note 19) | 23 535 | 18 189 |
| Total | 22 902 | 16 580 |
| Note | 2020 | 2019 | ||
|---|---|---|---|---|
| Government grants | 100 | 145 | ||
| Reversal of provision for non-trade bad debts | 24 | 46 | - | |
| Income from reversal of impairment of PPE | 16 | - | 3 | |
| Trade payables written-off | - | 4 | ||
| Other income | 313 | 172 |
(in USD thousand, unless otherwise stated)
| Gain on disposal of subsidiary companies | 1 | - |
|---|---|---|
| Total | 460 | 324 |
| Note | 2020 | 2019 |
|---|---|---|
| Personnel expenses 14 |
1 759 | 8 629 |
| Amortisation of intangible assets 15 |
9 | 10 |
| Depreciation charge 15 |
48 | 60 |
| Transportation expenses | 129 | 189 |
| Materials | 12 | 23 |
| Insurance | 10 | 2 |
| Professional fees | 262 | 249 |
| Communication services | 57 | 57 |
| Other expenses | 467 | 574 |
| Total | 2 753 | 9 793 |
| Note | 2020 | 2019 | |
|---|---|---|---|
| Personnel expenses | 14 | 1 | 2 |
| Transportation expenses | 390 | 791 | |
| Utilities | - | 2 | |
| Other expenses | 19 | 17 | |
| Total | 410 | 812 |
| Note | 2020 | 2019 | |
|---|---|---|---|
| Depreciation charge Loss on disposal of property, plant and equipment |
15 12 |
15 89 |
21 11 |
| Loss on disposal of right-of use assets | 267 | - | |
| Loss on disposal of current assets Wastages and impairment of inventories |
- 3 044 |
15 3 629 |
|
| Fines and penalties Donations |
1 44 |
2 24 |
|
| Other expenses | 56 | 695 | |
| Total | 3 516 | 4 397 |
(in USD thousand, unless otherwise stated)
Operating profit is stated after charging the following items:
| Note | 2020 | 2019 | |
|---|---|---|---|
| Depreciation of property, plant and equipment | 16 | 2 351 | 2 303 |
| Amortisation of intangible assets | 18 | 10 | 9 |
| Loss on disposal of property, plant and equipment | 11 | 89 | 11 |
| Personnel expenses | 14 | 10 214 | 18 220 |
| Independent auditors' remuneration for the statutory audit of | |||
| annual accounts | - | 51 |
| 2020 | 2019 |
|---|---|
| 198 | 2 277 |
| 198 | 10 779 13 056 |
| (21) | |
| (17) | |
| (3 689) | |
| (15 531) | (3 727) |
| (15 333) | 9 329 |
| - (3 587) (11 944) |
| 2020 | 2019 | |
|---|---|---|
| Wages and salaries | 8 498 | 16 340 |
| Contributions to state funds | 1 716 | 1 880 |
| Total | 10 214 | 18 220 |
(in USD thousand, unless otherwise stated)
Payroll and related taxes were presented as follows:
| Note | 2020 | 2019 | |
|---|---|---|---|
| Production personnel | 8 454 | 9 589 | |
| Administrative personnel | 9 | 1 759 | 8 629 |
| Distribution personnel | 10 | 1 | 2 |
| Total | 12 | 10 214 | 18 220 |
| The number of employees were presented as follows: | |||
| 2020 | 2019 | ||
| Average number of employees, persons | 1 769 | 1 959 | |
| Key management personnel | 10 | 11 |
| Note | 2020 | 2019 | |
|---|---|---|---|
| Depreciation charge: | |||
| Depreciation of production property, plant and equipment | 2 288 | 2 222 | |
| Depreciation of right-of-use assets | 17 | 3 528 | 3 942 |
| Administrative expenses | 9 | 48 | 60 |
| Other expenses | 11 | 15 | 21 |
| Total | 5 879 | 6 245 | |
| Amortisation charge: | |||
| Amortisation of intangible assets | 9 | 10 | 9 |
| Total | 18 | 10 | 9 |
| Total depreciation and amortisation | 5 889 | 6 254 |
(in USD thousand, unless otherwise stated)
| Construction in progress |
Buildings | Equipment | Vehicles | Computers and office equipment |
Instruments, tools and other equipment |
Total | |
|---|---|---|---|---|---|---|---|
| Cost | |||||||
| Balance at 1 January 2019 | 747 | 11 913 | 19 223 | 2 155 | 128 | 125 | 34 291 |
| Additions | 498 | 388 | 5 280 | 100 | 37 | 18 | 6 321 |
| Disposals | (6) | (6) | (240) | (31) | (3) | (1) | (287) |
| Transfers | (180) | 92 | 88 | - | - | - | - |
| Effect from translation into presentation currency | 154 | 2 070 | 3 702 | 365 | 23 | 23 | 6 337 |
| Balance at 31 December 2019 | 1 213 | 14 457 | 28 053 | 2 589 | 185 | 165 | 46 662 |
| Balance at 1 January 2020 | 1 213 | 14 457 | 28 053 | 2 589 | 185 | 165 | 46 662 |
| Additions | 1 445 | 319 | 1 607 | 332 | 47 | 7 | 3 757 |
| Disposals | (671) | (114) | (136) | (2) | (2) | (1) | (926) |
| Transfers | (110) | 43 | 65 | - | 2 | - | - |
| Effect from translation into presentation currency | (224) | (2 359) | (4 624) | (435) | (32) | (27) | (7 701) |
| Balance at 31 December 2020 | 1 653 | 12 346 | 24 965 | 2 484 | 200 | 144 | 41 792 |
(in USD thousand, unless otherwise stated)
| Construction in progress |
Buildings | Equipment | Vehicles | Computers and office equipment |
Instruments, tools and other equipment |
Total | |
|---|---|---|---|---|---|---|---|
| Accumulated depreciation and impairment losses | |||||||
| Balance at 1 January 2019 | 46 | 8 803 | 9 390 | 1 753 | 76 | 91 | 20 159 |
| Charge for the year | - | 424 | 1 717 | 125 | 23 | 14 | 2 303 |
| On disposals | - | (4) | (228) | (31) | (3) | (1) | (267) |
| Reversal Impairment | - | (1) | - | (1) | (1) | - | (3) |
| Effect from translation into presentation currency | 4 | 1 526 | 1 720 | 305 | 15 | 16 | 3 586 |
| Balance at 31 December 2019 | 50 | 10 748 | 12 599 | 2 151 | 110 | 120 | 25 778 |
| Balance at 1 January 2020 | 50 | 10 748 | 12 599 | 2 151 | 110 | 120 | 25 778 |
| Charge for the year | - | 454 | 1 765 | 94 | 26 | 12 | 2 351 |
| On disposals | - | (27) | (134) | (2) | (2) | (1) | (166) |
| Effect from translation into presentation currency | (6) | (1 764) | (2 120) | (353) | (19) | (20) | (4 282) |
| Balance at 31 December 2020 | 44 | 9 411 | 12 110 | 1 890 | 115 | 111 | 23 681 |
| Carrying amounts: | |||||||
| As at 1 January 2019 | 701 | 3 110 | 9 833 | 402 | 52 | 34 | 14 132 |
| As at 31 December 2019 | 1 163 | 3 709 | 15 454 | 438 | 75 | 45 | 20 884 |
| As at 31 December 2020 | 1 609 | 2 935 | 12 855 | 594 | 85 | 33 | 18 111 |
(in USD thousand, unless otherwise stated)
| Plough-land | |
|---|---|
| Cost Balance as at 1 January 2019 Additions Effect from translation into presentation currency |
19 390 414 3 315 |
| Balance as at 31 December 2019 Balance as at 1 January 2020 Additions Disposals Effect from translation into presentation currency Balance as at 31 December 2020 |
23 119 23 119 1 586 (1 296) (3 766) 19 643 |
| Accumulated depreciation and impairment losses Balance as at 1 January 2019 Depreciation charge Balance as at 31 December 2019 |
- 3 942 3 942 |
| Balance as at 1 January 2020 Depreciation charge Disposals Effect from translation into presentation currency Balance as at 31 December 2020 |
3 942 3 528 (707) (470) 6 293 |
| Carrying amounts: As at 1 January 2019 As at 1 January 2020 As at 31 December 2020 |
19 390 19 177 13 350 |
Right-of-use assets have been recognised as a result of adoption by the Group of IFRS 16 "Leases" from 1 January 2019. The Group's right-of-use assets represent leases of plough-land from individuals. The total size of leased plough-land at 31 December 2020 is 94 thousand hectares (31 December 2019: 94 thousand hectares).
For the year ended 31 December 2020
(in USD thousand, unless otherwise stated)
| Computer software |
Land lease rights |
Total | |
|---|---|---|---|
| Cost | |||
| Balance as at 1 January 2019 | 52 | 12 202 | 12 254 |
| Impact of IFRS 16 adoption | - | (12 202) | (12 202) |
| Effect from translation into presentation currency | 8 | - | 8 |
| Balance as at 31 December 2019 | 60 | - | 60 |
| Amortisation charge | 60 | - | 60 |
| Additions | 4 | - | 4 |
| Disposals | (3) | - | (3) |
| Effect from translation into presentation currency | (9) | - | (9) |
| Balance as at 31 December 2020 | 52 | - | 52 |
| Accumulated amortisation and impairment losses | |||
| Balance as at 1 January 2019 | 11 | 8 549 | 8 560 |
| Impact of IFRS 16 adoption | - | (8 549) | (8 549) |
| Amortisation charge | 9 | - | 9 |
| Effect from translation into presentation currency | 2 | - | 2 |
| Balance as at 31 December 2019 | 22 | - | 22 |
| Balance as at 1 January 2020 | 22 | - | 22 |
| Amortisation charge | 10 | - | 10 |
| Disposals | (3) | - | (3) |
| Effect from translation into presentation currency | (4) | - | (4) |
| Balance as at 31 December 2020 | 25 | - | 25 |
| Carrying amounts: | |||
| As at 1 January 2019 | 41 | 3 653 | 3 694 |
| As at 31 December 2019 | 38 | - | 38 |
| As at 31 December 2020 | 27 | - | 27 |
Land lease rights were derecognised as a result of adoption by the Group of IFRS 16 "Leases" from 1 January 2019.
(in USD thousand, unless otherwise stated)
Biological assets were presented as follows:
| 2020 | 2019 | |
|---|---|---|
| Crops under cultivation | 6 702 | 8 376 |
| Animals in growing and fattening | 570 | 731 |
| Total current biological assets | 7 272 | 9 107 |
| Cattle | 903 | 1 141 |
| Total non-current biological assets | 903 | 1 141 |
| Total | 8 175 | 10 248 |
At 31 December 2020 and 31 December 2019 the crops under cultivation were presented as follows:
| 31 December 2020 | 31 December 2019 | |||
|---|---|---|---|---|
| Thousands of hectares |
Carrying values |
Thousands of hectares |
Carrying values |
|
| Winter wheat plantings | 38 | 6 694 | 38 | 8 232 |
| Winter rape plantings | - | - | 1 | 137 |
| Other plantings | - | 8 | - | 7 |
| Total | 38 | 6 702 | 39 | 8 376 |
The reconciliation of crops under cultivation carrying value was presented as follows:
| 2020 | 2019 |
|---|---|
| 7 329 | |
| 36 288 | |
| (54 460) | |
| 23 535 | 18 189 |
| (1 328) | 1 030 |
| 6 702 | 8 376 |
| 8 376 36 417 (60 298) |
(in USD thousand, unless otherwise stated)
The main crops harvested and the fair value at the time of harvesting was as follows:
| 31 December 2020 | 31 December 2019 | |||
|---|---|---|---|---|
| Volume, tonnes |
Amount, USD thousand |
Volume, tonnes |
Amount, USD thousand |
|
| Winter wheat | 162 271 | 30 429 | 176 475 | 25 865 |
| Sunflower | 74 531 | 28 595 | 92 750 | 26 567 |
| Corn | 9 144 | 409 | 2 070 | 241 |
| Other sowing | 13 839 | 865 | 43 367 | 1 787 |
| Total | 259 785 | 60 298 | 314 662 | 54 460 |
Expenses capitalised in biological assets mainly include fertilisers, fuel, seeds, labour and the operating lease rentals.
Non-current biological assets:
| 31 December 2020 | 31 December 2019 | ||||
|---|---|---|---|---|---|
| Number, heads |
Fair value |
Number, heads |
Fair value |
||
| Cattle | 1 020 | 903 | 1 072 | 1 141 | |
| Total | 903 | 1 141 |
Animals in growing and fattening:
| 31 December 2020 | 31 December 2019 | |||
|---|---|---|---|---|
| Number, heads |
Fair value |
Number, heads |
Fair value |
|
| Cattle | 1 204 | 570 | 1 273 | 731 |
| Total | 570 | 731 | ||
(in USD thousand, unless otherwise stated)
Reconciliation of non-current biological assets carrying value was presented as follows:
| 2020 | 2019 | |
|---|---|---|
| At 1 January | 1 141 | 1 452 |
| Increase in value as a result of capitalisation of cost | 1 907 | 2 605 |
| Decrease in value as a result of harvesting agricultural products | (1 839) | (2 659) |
| Loss from presentation of biological assets at fair value | (116) | (307) |
| Other changes | (8) | (148) |
| Effect from translation into presentation currency | (182) | 198 |
| At 31 December | 903 | 1 141 |
Expenses capitalised in biological assets of animals include mixed folder, electricity, labour, depreciation and other.
Reconciliation of animals in growing and fattening carrying value was presented as follows:
| 2020 | 2019 | |
|---|---|---|
| At 1 January | 731 | 1 448 |
| Increase in value as a result of asset acquisition | - | 229 |
| Increase in value as a result of capitalisation of cost | 730 | 1 183 |
| Decrease in value as a result of harvesting agricultural products | (9) | (15) |
| Decrease in value as a result of sale of assets | (252) | (1 117) |
| Other changes | 4 | 141 |
| Loss from presentation of biological assets at fair value | (517) | (1 302) |
| Effect from translation into presentation currency | (117) | 164 |
| At 31 December | 570 | 731 |
(in USD thousand, unless otherwise stated)
| 2020 | 2019 | ||
|---|---|---|---|
| US Treasury notes | 15 123 | 9 157 | |
| Bank of Cyprus Holdings Plc | 72 | 107 | |
| Total | 15 195 | 9 264 |
During 2019, the Group acquired US Treasury notes for a total amount of USD 8 821 thousand which mature in 2020-2027 and bear interest of 1.625%-2.42% p.a.. These instruments were classified as current as the Group holds them for trading.
Financial assets designated at fair value through profit or loss represent equity securities of Bank of Cyprus converted into shares after the decree issued by Central Bank of Cyprus on 29 March 2013. Based on that decree and the measurements for recapitalization of Bank of Cyprus, 47,5% of the uninsured deposits of the affected deposits have been converted into Bank of Cyprus shares.
In August 2013, pursuant to the above measurements, Bank of Cyprus, has issued to the Company 1 591 105 shares with nominal value €1,00 each. These shares have been identified, classified and measured according to the relevant provisions of IAS 39 "Financial instruments: Recognition and Measurement" and IFRS 13 "Fair Value Measurement".
The Company held 1 591 105 shares with fair value €0,140 cents. In January 2017, the shares in Bank of Cyprus Public Company Limited were exchanged with new shares of Bank of Cyprus Holding Plc listed in both London Stock Exchange and in Cyprus Stock Exchange with nominal value of €0,10 cents each. At 31 December 2017 the Company held 79 555 shares in Bank of Cyprus Holding Plc with fair value €2,47 each. At 31 December 2018, the fair value of the shares held was €1,5520 each.
The exposure of the Company to market risk in relation to financial assets is reported in note 36 to the consolidated financial statements.
| Note | 2020 | 2019 | |
|---|---|---|---|
| Current assets | |||
| Loans to related parties | 32 | 18 549 | 18 549 |
| Loans to third parties | 5 767 | 5 767 | |
| Provision for impairment | (5 767) | (5 767) | |
| Total | 18 549 | 18 549 |
The exposure of the Group to credit risk is reported in note 36 to the consolidated financial statements.
(in USD thousand, unless otherwise stated)
| 2020 | 2019 | |
|---|---|---|
| Raw materials | 2 074 | 1 387 |
| Work-in-progress | 3 184 | 4 153 |
| Agricultural produce | 9 811 | 13 689 |
| Other | 998 | 951 |
| Total | 16 067 | 20 180 |
Work in progress includes expenditure capitalised in respect of 53 thousand hectares (2019: 53 thousand hectares) of plough land prepared for sowing in the current or following year.
The main agricultural produce was as follows:
| 2020 | 2019 | |
|---|---|---|
| Winter wheat | 34 | 125 |
| Sunflower | 9 202 | 12 792 |
| Corn | 4 | 36 |
| Other agricultural crops | 571 | 736 |
| Total | 9 811 | 13 689 |
As at 31 December 2020 and 31 December 2019 the main agricultural produce volume in tonnes was as follows:
| 2020 | 2019 | |
|---|---|---|
| Winter wheat | 197 | 783 |
| Sunflower | 20 067 | 40 869 |
| Corn | 25 | 307 |
| Total | 20 289 | 41 959 |
During the year inventory of USD 3 038 thousand was included into other operating expenses as wastage due to mandatory clearing and drying processes in the elevators (2019: USD 3 629 thousand).
(in USD thousand, unless otherwise stated)
| Note | 2020 | 2019 | |
|---|---|---|---|
| Trade receivables Provision for impairment of trade receivables |
24 | 2 787 (2) |
2 877 - |
| Trade receivables, net | 2 785 | 2 877 | |
| Prepayments to suppliers | 1 570 | 891 | |
| Other receivables | 33 852 | 33 695 | |
| Provision for impairment of prepayments and other receivables | 24 | (33 140) | (33 206) |
| VAT recoverable | 724 | 251 | |
| Total | 5 791 | 4 508 |
On 29 June 2012, the Company entered into a preliminary agreement with Stiomi Agri Limited ('Seller') for the acquisition of 100% of the issued share capital of Private Enterprise 'Peredilske'. The parties agreed that the price for transfer of the company's shares amounting to USD 23 080 000.
On 26 December 2012, the Company entered into a preliminary agreement with Stiomi Agri Limited ('Seller') for the acquisition of 100% of the issued share capital of Limited Liability Company 'Skhid Potencial-Resurs'. The parties agreed that the price for transfer of the company's shares shall amount to USD 10 000 000.
On 3 September 2013 both agreements for the acquisition of PE "Peredilske" and of LLC "Skhid-Potencial-Resurs" have been cancelled. The parties agreed that the whole amount paid should be returned to the Company within twelve months of the signing of the cancellation agreements, either in cash and/or an equivalent market value's worth of agricultural goods.
Due to political and economic developments and military conflict in Eastern Ukraine, Stiomi Agri Limited is currently unable to repay this amount to the Group. It is highly probable that this amount will never be recovered, therefore an impairment loss for USD 33 080 thousand was recognised in 2014.
The exposure of the Group to credit risk and impairment losses in relation to trade and other receivables is reported in note 36 to the consolidated financial statements.
The movement in the provision for doubtful debts in respect of trade and other receivables was as follows:
| Note | 2020 | 2019 | |
|---|---|---|---|
| At 1 January | 33 206 | 33 230 | |
| Provision for the year | 11 | 41 | 9 |
| Reversal of provision for bad debts | - | (54) | |
| Write-off of provision for bad debt from receivables | (76) | - | |
| Effect of translation into presentation currency | (29) | 21 | |
| At 31 December | 23 | 33 142 | 33 206 |
(in USD thousand, unless otherwise stated)
| 2020 | 2019 | |
|---|---|---|
| Fixed deposit | 50 | - |
| Cash at bank - USD | 22 974 | 11 112 |
| Cash at bank - UAH | 2 030 | 824 |
| Cash at bank - Euro | 1 | 1 |
| Cash in hand | - | 1 |
| Total | 25 055 | 11 938 |
The exposure of the Group to credit risk and interest rate risk in relation to cash and cash equivalents is reported in note 36 to the consolidated financial statements.
The assets and liabilities of subsidiary company Agro-Svinprom LLC, operating in pig-breeding, has been presented as held for sale following the Management decision in July 2011 to dispose the company.
In this respect the Management of the Group has advertised their intention for the sale of the subsidiary to the public media, for attraction of prospective new investors. Held for sale
At 31 December 2020 the disposal group comprised the following assets and liabilities:
| Agro Svinprom LLC |
|
|---|---|
| Assets classified as held for sale | |
| Property, plant and equipment | 17 |
| Total | 17 |
| Liabilities classified as held for sale | |
| Trade and other payables | - |
| Total | - |
| Net assets | 17 |
(in USD thousand, unless otherwise stated)
Held for sale (cont.)
At 31 December 2019 the disposal group comprised the following assets and liabilities:
| Agro-Svinprom LLC |
|
|---|---|
| Assets classified as held for sale | |
| Property, plant and equipment | 20 |
| Total | 20 |
| Liabilities classified as held for sale | |
| Trade and other payables | (11) |
| Total | (11) |
| Net assets | 9 |
| 2020 Number of shares |
2020 Nominal value, USD |
2019 Number of shares |
2019 Nominal value, USD |
|
|---|---|---|---|---|
| Authorised share capital | ||||
| Ordinary shares of EUR 0,021 each | 47 619 048 | 1 321 500 | 47 619 048 | 1 321 500 |
| Issued and fully paid | Number of shares |
Nominal value, USD |
Share premium, USD |
Total, USD |
| At 1 January 2019 | 21 670 000 | 661 128 | 88 531 664 | 89 192 792 |
| At 31 December 2019 | 21 670 000 | 661 128 | 88 531 664 | 89 192 792 |
| At 31 December 2020 | 21 670 000 | 661 128 | 88 531 664 | 89 192 792 |
(in USD thousand, unless otherwise stated)
Global Depositary Receipts "GDRs" were issued against the 4 000 000 new shares by "The Bank of New York Mellon" for USD 9,72875 per each new share. The total consideration of the share capital issued was USD 38 915 000 out of which USD 123 715 is the total nominal value credited to the share capital account and USD 38 791 285 is the share premium reserve. Share issue expenses of USD 317 154 were deducted from the share premium reserve.
iii The members of the Company held an Extraordinary General Meeting on 25 June 2010 where they authorized and approved the increase of the issued share capital of the Company from 16 000 000 ordinary shares of EUR 0,021 each amounting to EUR 336 000 (USD equivalent of USD 494 306) to 21 670 000 ordinary shares of nominal value of EUR 0,021, by the creation of 5 670 000 ordinary shares of a nominal value of EUR 0,021 each, ranking pari pasu with the existing shares of the Company.
On 29 October 2010 the Company proceeded and issued 5 670 000 ordinary shares of nominal value EUR 0,021 each, amounting to EUR 119.070 (equivalent to USD 166 822), at a premium of EUR 6,7595 per share amounting to a total share premium of EUR 38 326 365 (USD equivalent of USD 54 222 634). The issue price for shares in the Company's public offering was set at PLN 27 per share. The Company raised total gross proceeds of PLN 153 090 000 (USD equivalent of USD 54 389 456) from the public offering. Share issue expenses of USD 4 165 101 were deducted from the share premium reserve.
During the year 2010, the Board of Directors of the Company resolved to proceed with the initial public offering of 5 670 000 new ordinary shares of the Company and the application for the admission of the entire issued share capital of the company, including the Offer Shares to trading on the regulated market of the Warsaw Stock Exchange.
| Note | 2020 | 2019 | |
|---|---|---|---|
| Current liabilities Loan from owner |
32 | 127 | 127 |
| Total loans and borrowings | 128 | 127 |
The exposure of the Group to interest rate risk in relation to loans and borrowings is reported in Note 36 to the consolidated financial statements.
(in USD thousand, unless otherwise stated)
| 2020 | 2019 | |
|---|---|---|
| Non-current liabilities | ||
| Lease liabilities | 9 019 | 15 389 |
| 9 019 | 15 389 | |
| Current liabilities | ||
| Lease liabilities | 5 697 | 4 895 |
| 5 697 | 4 895 | |
| Total lease liabilities | 14 716 | 20 284 |
The exposure of the Group to liquidity risk in relation to lease liabilities is reported in Note 36 to the consolidated financial statements.
| 2020 | 2019 | |
|---|---|---|
| Trade payables | 637 | 78 |
| Payroll and related expenses accrued | 1 790 | 6 186 |
| Advances received | 16 | - |
| Liabilities for other taxes and mandatory payments | 134 | 135 |
| VAT payable | 756 | 287 |
| Accrued expenses | 25 | 36 |
| Other provisions | - | 13 |
| Other liabilities | 60 | 19 |
| Total | 3 418 | 6 754 |
The exposure of the Group to liquidity risk in relation to trade and other payables is reported in Note 36 to the consolidated financial statements.
(in USD thousand, unless otherwise stated)
The calculation of basic profit per share was based on the profit attributable to the owners of the Company, and a weighted average number of ordinary shares as follows:
| 2020 | 2019 | |
|---|---|---|
| Profit attributable to the owners of the Company (in USD'000): | ||
| Profit from continuing operations attributable to the owners of the | ||
| Company | 11 735 | 5 183 |
| Loss from discontinued operations attributable to the owners of the | ||
| Company | 9 | - |
| Total profit attributable to the owners of the Company | 11 744 | 5 183 |
| Weighted average number of ordinary shares: | ||
| Weighted average number of ordinary shares at 31 December | 21 670 000 | 21 670 000 |
| Total basic profit per share (USD per share) | 0,54 | 0,24 |
Profit per share is the profit for the year after taxation attributable to the owners of the Company divided by weighted average number of shares in issue for each year.
There were no options or instruments convertible into shares and so basic and diluted earnings per share are the same.
As at 31 December 2020 and the date of this report, the Company is controlled by Mr. Iurii Zhuravlov, who holds directly 77,77% of the Company's share capital. The remaining 22,23% of the shares is widely held.
For the purposes of these consolidated financial statements, parties are considered to be related if one party has the ability to control the other party, is under common control, or can exercise significant influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form.
According to these criteria the related parties of the Group are divided into the following categories:
Salary costs of key management personnel for the years ended 31 December 2020 and 31 December 2019 were as follows:
(in USD thousand, unless otherwise stated)
| 2020 | 2019 | |
|---|---|---|
| Wages and salaries | 3 639 | 6 681 |
| Contributions to social funds | 30 | 31 |
| Total | 3 669 | 6 712 |
Key management personnel include Directors (Executive and Non-Executive), the Chief Financial Officer, the Chief Agronomist, the Head of the Food Production Division and the Head of the Livestock Division.
| 2020 | 2019 | |
|---|---|---|
| Number of key management personnel, persons | 10 | 11 |
| Outstanding balances with related parties: | ||
| Loans receivable (note 21) | 2020 | 2019 |
| d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies |
||
| Mr Iurii Zhuravlov - Chief Executive Officer | 18 549 | 18 549 |
| Total | 18 549 | 18 549 |
| Loans payable (note 28) | ||
| d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies |
||
| Mr Iurii Zhuravlov - Chief Executive Officer | 127 | 127 |
| Total | 127 | 127 |
| The Group's transactions with related parties: | ||
| Finance cost, net | 2020 | 2019 |
| d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies |
||
| Mr Iurii Zhuravlov - Chief Executive Officer | - | 2 254 |
| Total | - | 2 254 |
| Expenses | ||
| c. Key management personnel | 3 669 | 6 712 |
| Total | 3 669 | 6 712 |
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.
(in USD thousand, unless otherwise stated)
Reportable segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. All reportable segments' results are reviewed regularly by the Group's CEO to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.
The operating businesses are organised and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.
(in USD thousand, unless otherwise stated)
For the year ended 31 December 2020 the Group identified the following reportable segments, which include products and services, that differ by levels of risk and conditions of generation of income:
No operating segments have been aggregated to form the above reportable operating segments.
Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties.
Management monitors the operating results of each of the unit separately for the purpose of making decisions about resources allocation and evaluation of operating results.
Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the 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.
(in USD thousand, unless otherwise stated)
Information by reportable segment is presented as follows:
| 2020 | Livestock | Plant breeding |
Vegetable oil and protein meal |
Other | Group level |
Total |
|---|---|---|---|---|---|---|
| Total revenue | 2 321 | 68 418 | - | 1 078 | - | 71 817 |
| Inter-segment sales | (33) | (4 002) | - | (226) | - | (4 261) |
| External revenues | 2 288 | 64 416 | - | 852 | - | 67 556 |
| Net change in fair value less cost to sell of | ||||||
| biological assets and agricultural produce | (633) | 23 535 | - | - | - | 22 902 |
| Expenses (excluding depreciation and amortisation | (2 726) | (69 937) | - | (133) | - | (72 796) |
| (Loss)/profit for the year (excluding | ||||||
| depreciation and amortisation) | (1 071) | 18 014 | - | 719 | - | 17 662 |
| Depreciation and amortisation | (183) | (5 572) | - | (134) | - | (5 889) |
| (Loss)/profit before taxation from continuing | ||||||
| operations | (1 254) | 12 442 | - | 585 | - | 11 773 |
| Reportable segment assets | 3 787 | 78 614 | - | 4 133 | 33 803 | 120 337 |
| Reportable segment liabilities | 179 | 15 462 | - | 2 493 | 634 | 18 768 |
| 2019 | Livestock | Plant breeding |
Vegetable oil and protein meal |
Other | Group level |
Total |
|---|---|---|---|---|---|---|
| Total revenue | 4 189 | 42 662 | 7 124 | 1 559 | - | 55 534 |
| Inter-segment sales | (241) | (197) | - | (720) | - | (1 158) |
| External revenues | 3 948 | 42 465 | 7 124 | 839 | - | 54 376 |
| Net change in fair value less cost to sell of | (1 609) | 18 189 | - | - | - | 16 580 |
| biological assets and agricultural produce Expenses (excluding depreciation and amortisation) |
(3 795) | (48 797) | (6 467) | (317) | - | (59 376) |
| (Loss)/profit for the year (excluding depreciation and amortisation) |
(1 456) | 11 857 | 657 | 522 | - | 11 580 |
| Depreciation and amortisation | (176) | (5 527) | (306) | (245) | - | (6 254) |
| (Loss)/profit before taxation from continuing operations |
(1 632) | 6 330 | 351 | 277 | - | 5 326 |
| Reportable segment assets | 4 918 | 77 378 | 16 | 4 323 | 27 813 | 114 448 |
| Reportable segment liabilities | 268 | 26 726 | - | 55 | 590 | 27 639 |
(in USD thousand, unless otherwise stated)
Reportable segment information related to geographical location for the year ended 31 December 2020 and 31 December 2019 is presented below. Sales revenue analysis was based on the geographical local of delivery destination.
| 2020 | 2019 | |
|---|---|---|
| Ukraine | 67 556 | 47 022 |
| India | - | 3 779 |
| Netherlands | - | 1 720 |
| Italy | - | 969 |
| Iraq | - | 28 |
| Other countries | - | 858 |
| 67 556 | 54 376 |
The Cyprus economy has been adversely affected during the last few years by the economic crisis. The negative effects have to some extent been resolved, following the negotiations and the relevant agreements reached with the European Commission, the European Central Bank and the International Monetary Fund (IMF) for financial assistance which was dependent on the formulation and the successful implementation of an Economic Adjustment Program. The agreements also resulted in the restructuring of the two largest (systemic) banks in Cyprus through a "bail in".
The Cyprus Government has successfully completed earlier than anticipated the Economic Adjustments Program and exited the IMF program on 7 March 2016, after having recovered in the international markets and having only used €7,25 billion of the total €10 billion earmarked in the financial bailout. Under the new Euro area rules, Cyprus will continue to be under surveillance by its lenders with bi-annual post-program visits until it repays 75% of the economic assistance received.
Although there are signs of improvement, especially in the macroeconomic environment of the country's economy including growth in GDP and reducing unemployment rates, significant challenges remain that could affect the estimates of the Company's cash flows and its assessment of impairment of financial and non-financial assets.
Political and social events of the beginning of 2014 which resulted in the annexation of the Crimea by the Russian Federation and the loss of control by Ukraine over the territory of part of the Donetsk and Lugansk regions have remained unresolved. However, the intensity of hostilities has substantially decreased since the end of July 2020 upon agreeing on a ceasefire plan.
In March 2020, the World Health Organisation declared the Coronavirus COVID-19 outbreak to be a pandemic in recognition of its rapid spread across the globe. Many governments have been taking increasingly stringent steps to help contain, and in many jurisdictions, now delay, the spread of the virus, including: requiring self-isolation/ quarantine by those potentially affected, implementing social distancing measures, and controlling or closing borders and "locking-down" cities/regions or even entire countries. These measures have slowed down the global economic activities including Ukraine.
(in USD thousand, unless otherwise stated)
Ukrainian economic and political environment (cont.)
During 2020 Ukraine's GDP contracted by 4.0% (2019: grew by 3.9%), with the bulk of the decline being attributed to the first six months of 2020 (11.4%), which was offset by a GDP recovery in the second half of 2020.
As a result of the slowdown, the Ukrainian Hryvnia weakened against the world currencies, with the NBU UAH/USD exchange rate increasing to 28.27 at 31 December 2020 from 23.69 at 31 December 2019.
The National Bank of Ukraine (NBU) reduced its discount rate in June 2020 to 6% from 11% in order to support the economy and remains committed to its policy of easing controls introduced earlier in 2014- 2015 in response to a severe economic downturn.
The Ukraine's cooperation with the International Monetary Fund (IMF) is key for its macroeconomic stability. In June 2020, the IMF approved a USD 5 billion 18-month stand-by arrangement (SBA) aimed to address large balance-of-payments and fiscal financing needs, preserve achievements to date, and advance a small set of key structural reforms to ensure that Ukraine is well-poised to return to growth when the crisis ends. Ukraine received the first tranche of USD 2.1 billion under this SBA in June 2020. In July 2020, Ukraine also issued a USD 2 billion bonds due in 2033. This, to large extent, enabled Ukraine to meet its 2020 obligations under sovereign debt.
In September 2020 and February 2021, Fitch Ratings affirmed Ukraine's long-term foreign-currency issuer default rating at 'B' with a stable outlook.
Whilst management believes it is taking appropriate measures to support the sustainability of the Group's business in the current circumstances, a continuation of the current unstable business environment could negatively affect the Group's results and financial position in a manner not currently determinable. These consolidated financial statements reflect management's current assessment of the impact of the Ukrainian business environment on the operations and the financial position of the Group. The future business environment may differ from management's assessment.
The dangers which may arise from unexpected external factors such as competition, and the further deterioration of the market conditions cannot be ignored. All these factors were analysed above. Having regard to the fact that the Notes have been repaid and additional external debt has been incurred, the Board of Directors believes that the Group will remain a going concern and that no indications of any kind of threat of liquidation exists in the foreseeable future.
(in USD thousand, unless otherwise stated)
The consolidated financial statements do not include any adjustments that would be necessary in case the Group was not able to continue operating as a going concern which could include:
The exposure of the Group to the economic environment and possible impact is disclosed in note 34 to the consolidated financial statements.
As a result of unstable economic environment in Ukraine, tax authorities in Ukraine pay more and more attention to the business cycles. In connection with this, tax laws in Ukraine are subject to frequent changes. Furthermore, there are cases of their inconsistent application, interpretation and execution. Noncompliance with laws and regulations may lead to severe fines and penalties.
The Company operates in the Cypriot tax jurisdiction and its subsidiaries in tax jurisdiction of the respective countries of incorporation. The Group's management must interpret and apply existing legislation to transactions with third parties and its own activities. Significant judgment is required in determining the provision for direct and indirect taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
The Group's uncertain tax positions are reassessed by management at every reporting period end. Liabilities are recorded for income tax positions that are determined by management as more likely than not to result in additional taxes being levied if the positions were to be challenged by the tax authorities. The assessment is based on the interpretation of tax laws that have been enacted or substantively enacted by the reporting period and any known court or other rulings on such issues. Liabilities for penalties, interest and taxes other than on income are recognised based on management's best estimate of the expenditure required to settle the obligations at the reporting period.
In the course of its economic activities, the Group is involved in legal proceedings with third parties. In most cases, the Group is the initiator of such proceedings with the purpose of preventing or mitigating of economic losses.
The Group's management considers that as at the reporting period, active legal proceedings on such matters will not have any significant influence on its financial position.
(in USD thousand, unless otherwise stated)
Most employees of the Group receive pension benefits from the Pension Fund, a Ukrainian Government organisation in accordance with the applicable laws and regulations of Ukraine. The Group is obliged to deduct and contribute a certain percentage of salaries to the Pension Fund to finance the benefits. The only obligation of the Group with respect to this pension plan is to make the specified contributions from salaries.
At 31 December 2020 and 31 December 2019 the Group's entities had no liabilities for any supplementary pensions, health care, insurance benefits or retirement indemnities to its current or former employees.
The Group has exposure to the following risks arising from the use of financial instruments:
(a) Credit risk
(b) Liquidity risk
(c) Market risk
(d) Operational risk
The Company's Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.
The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Group is not a finance company, thus it uses financial instruments as may be necessary in order to obtain finance for its activities, not for the purpose of receiving income. In the process of its activities the Group uses the following financial instruments: cash and cash equivalents, bank deposits, accounts receivable, accounts payable.
The Group is exposed to the following risks resulting from use of financial instruments: credit risk, liquidity risk and market risk (including foreign currency risk and interest rate risk of fair value) and operation risk. This explanation contains information relating to the Group's exposure to each of the risk types mentioned above, Group's objectives, its policy and procedures of these risks measurement and management.
(in USD thousand, unless otherwise stated)
Additional disclosures of quantitative information are presented in multiple other sections of these financial statements, including:
Credit risk is the risk of financial loss for the Group in case of non-fulfilment of financial obligations by a client or counterparty under the respective agreement. In the reporting period the Group's financial assets that are exposed to credit risk are represented as follows: cash and balances on bank accounts, trade and other accounts receivable (except for receivables that are not represented by financial assets), loans receivable.
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group recognises impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting period was presented as follows:
| Note | 2020 | 2019 | |
|---|---|---|---|
| Financial assets | |||
| Investments designated at fair value through profit or loss | 20 | 15 195 | 9 264 |
| Loan to related parties | 21 | 18 549 | 18 549 |
| Cash at bank | 25 | 25 055 | 11 937 |
| Trade receivables | 23 | 2 785 | 2 877 |
| Other receivables | 23 | - | 465 |
| Total | 61 584 | 43 092 | |
(in USD thousand, unless otherwise stated)
a) Credit risk (cont.)
Credit quality of financial assets
The table below shows an analysis of the Group's cash balances on bank accounts by the credit rating of the bank in which they are held:
| Bank group based on credit ratings by Moody's | Note | 2020 | 2019 |
|---|---|---|---|
| Aa2 | 22 291 | 10 607 | |
| A3 | 684 | 161 | |
| B1 | - | 2 | |
| B2 | 56 | - | |
| B3 | 2 024 | - | |
| Caa2 | - | 1 167 | |
| Total | 25 | 25 055 | 11 937 |
The ageing of trade receivables at the end of the reporting period that was not impaired was as follows:
| 2020 | Not overdue |
0-90 days | 91-180 days | 181-365 days | over one year | Total |
|---|---|---|---|---|---|---|
| Carrying amount of trade receivables |
2 774 | 9 | - | 2 | - | 2 785 |
| 2019 | Not overdue |
0-90 days | 91-180 days | 181-365 days | over one year | Total |
| Carrying amount of trade receivables |
2 685 | 190 | 2 | - | - | 2 877 |
The column '0-90 days' represents the amounts neither past due nor impaired.
The ageing of trade receivables at 31 December 2020 that were impaired was as follows:
| 2020 | 0-90 days | 91-180 days | 181-365 days | over one year | Total |
|---|---|---|---|---|---|
| Carrying amount of trade receivables |
- | - | 2 | 2 | 4 |
There were no trade receivables as at 31 December 2019 that were impaired.
As at 31 December 2020, an amount of USD 2 430 thousand and USD 159 thousand or 87% and 6% of the total carrying value of trade receivables respectively is due from the two most significant debtors. For the year ended 31 December 2020, an amount of USD 21 768 thousand (32%) and USD 10 164 thousand (15%) from Group's revenue refers to the sales transactions carried out with two of the Group's clients.
(in USD thousand, unless otherwise stated)
As at 31 December 2019, an amount of USD 2 481 thousand and USD 93 thousand or 86% and 3% of the total carrying value of trade receivables is due from the two most significant debtors. For the year ended 31 December 2019, an amount of USD 15 823 thousand (29%) and USD 5 459 thousand (10%) from the Group's revenue refers to the sales transactions carried out with two of the Group's clients.
Expected credit loss assessment for corporate customers as at 1 January and 31 December 2020
The ECL for trade receivables is 0% due to the probability of default being 0% because of the prompt prepayment of all trade receivables. For any trade receivables of 1 year an ECL of 100% applies.
Liquidity risk is the risk of the Group's failure to fulfil its financial obligations at the date of maturity. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Group has procedures with the object of minimising such losses such as maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities.
The table below represents the expected maturity of components of working capital.
| 2020 | Note | Carrying | Contractual | 3 month or | 3-12 month | Between 1- | Over 5 |
|---|---|---|---|---|---|---|---|
| amounts | cash flows | less | 5 years | years | |||
| Loan from owner | 32 | 127 | 133 | 133 | - | - | - |
| Lease liabilities | 28 | 14 716 | 26 755 | 1 308 | 3 872 | 15 812 | 5 763 |
| Trade payables | 30 | 637 | 637 | 637 | - | - | - |
| Other payables | 30 | 60 | 60 | 60 | - | - | - |
| Total | 15 540 | 27 585 | 2 138 | 3 872 | 15 812 | 5 763 | |
| 2019 | Note | Carrying | Contractual | 3 month | 3-12 month | Between 1- | Over 5 |
| amounts | cash flows | or less | 5 years | years | |||
| Loan from owner | 32 | 127 | 133 | 133 | - | - | - |
| Lease liabilities | 28 | 20 284 | 31 930 | 1 546 | 4 638 | 18 871 | 6 875 |
| Trade payables | 30 | 78 | 78 | 78 | - | - | - |
| Other payables | 30 | 19 | 19 | 19 | - | - | - |
Market risk is the risk of negative influence of changes in market prices, such as foreign exchange rates and interest rates, on revenue position of the Group or on the value of the Group's available financial instruments.
(in USD thousand, unless otherwise stated)
The objective of market risk management provides control over the Group's exposure to market risk, as well as keeping its level within reasonable limits.
Description of the Group's exposure to such market components as currency risk and interest risk is given below:
Foreign currency risk which represents a part of market risk is the risk of change in value of financial instruments due to changes in foreign exchange rates.
Management does not use derivative financial instruments to hedge foreign currency risks and does not follow the official policy for distribution of risks between liabilities in one or another currency. However, in the period of receiving new borrowings and loans, management uses its own estimates to take the decision as to which currency of the liability will be more favourable for the Group during the expected period till maturity.
As at 31 December 2020, the Group did not have items that exposed it to foreign currency risk.
The Group's exposure to foreign currency risk at 31 December 2019 based on carrying amounts was as follows:
| (in conversion to USD thousand) | United States Dollars |
|---|---|
| Cash and cash equivalents | 350 |
| Total carrying amount | 350 |
(in USD thousand, unless otherwise stated)
An increase of 100 basis points in foreign currency rates at 31 December would have decreased profit and equity by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. For a decrease of 100 basis points there would be an equal and opposite impact on the profit and equity.
| 2020 | 2019 | |||||
|---|---|---|---|---|---|---|
| Effect on profit before tax |
Effect on equity |
Effect on profit before tax |
Effect on equity |
|||
| United States Dollars | - | - | 35 | 35 | ||
| - | - | 35 | 35 |
Interest rate risk is the risk that expenditure or the value of financial instruments will fluctuate due to changes in market interest rates. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group's management monitors the interest rate fluctuations on a continuous basis and acts accordingly
At present, the Group's approach to limit the interest rate risk consists of borrowings at fixed interest rates.
The structure of interest financial instruments of the Group, grouped according to the types of interest rates, was presented as follows:
| 2020 | 2019 | |
|---|---|---|
| Fixed rate instruments | ||
| Financial assets | 33 744 | 27 706 |
| Financial liabilities | (14 843) | (20 411) |
| Total | 18 901 | 7 295 |
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.
(in USD thousand, unless otherwise stated)
Livestock
The Group's agro-industrial business is subject to risks of outbreaks of various diseases that could result in mortality losses. Disease control measures were adopted by the Group to minimise and manage this risk. The Group's management is satisfied that its current existing risk management and quality control processes are effective and sufficient to prevent any outbreak of livestock diseases and related losses.
The Group's management follows the policy of providing a firm capital base which allows supporting the trust of investors, creditors and market and ensuring future business development.
The Group manages its capital to ensure that it will be able to continue as a going concern while increasing the return to owners through the strive to improve the debt to equity ratio. The Group's overall strategy remains unchanged from prior year. To manage capital, the Group's management, above all, uses calculations of EBITDA.
For the year ended 31 December 2020 and 31 December 2019 EBITDA amounted to:
| 2020 | 2019 | |
|---|---|---|
| Profit for the year | 11 759 | 5 185 |
| Income tax charge | 23 | 141 |
| Finance income | (198) | (13 056) |
| Finance costs | 15 531 | 3 727 |
| EBIT (Earnings before interest and income tax) | 27 115 | (4 003) |
| Depreciation and amortisation | 5 889 | 6 254 |
| EBITDA (earnings before interest, income tax, depreciation and | ||
| amortisation) | 33 004 | 2 251 |
During the year there were no changes in approaches to capital management. The Group is not subject to any external regulatory capital requirements.
(in USD thousand, unless otherwise stated)
The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.
The different levels have been defined as follows:
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.
At 31 December 2020, the following methods and assumptions were used by the Group to estimate the fair value of each class of financial instruments for which it is practicable to estimate such value:
Application of the effective interest rate method for calculating carrying value of short - term receivables, interest free loans granted and received and payables has been applied to reflect fair values.
(in USD thousand, unless otherwise stated)
Assumptions in assessing fair value of non-financial instruments and assessment of their subsequent recognition
Biological assets of the Group are measured at fair value within level 3 of the fair value hierarchy, except for parent flock, cattle and horses that are measured using the market comparison technique based on market prices for livestock of similar age, breed and geographic location, which is measured at fair value within level 2 of the fair value hierarchy.
The Group has an established control framework with respect to the measurement of fair values. This framework includes a valuation team that reports 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.
The Group's agro-industrial business is subject to risks of outbreaks of various diseases that could result in mortality losses. Disease control measures were adopted by the Group to minimise and manage this risk. The Group's management is satisfied that its current existing risk management and quality control processes are effective and sufficient to prevent any outbreak of livestock diseases and related losses.
The valuation requires management to make certain assumptions about unobservable inputs to the model of which the significant unobservable inputs are disclosed in the table below:
| Type | Valuation technique | Significant unobservable inputs |
Inter-relationship between key unobservable inputs and fair value measurement |
|---|---|---|---|
| Crops under cultivation |
As at 31 December 2020 the biological transformation is insignificant, the fair value approximate cost |
Not applicable | Not applicable |
(in USD thousand, unless otherwise stated)
| Type | Valuation technique | Significant observable inputs |
Significant unobservable inputs |
Inter-relationship between key unobservable inputs and fair value measurement |
|---|---|---|---|---|
| Livestock | Market comparison techniques: The valuation is based on existing market prices for items with similar age, breed and location characteristics, which are adjusted for variations in these characteristics. |
Market prices | None | Not applicable |
The table below analyses biological assets 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. The different levels have been defined as follows:
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| 31 December 2020 | ||||
| Non-financial assets | ||||
| Plants and plantation | - | - | 6 702 | 6 702 |
| Livestock | - | 1 473 | - | 1 473 |
| - | 1 473 | 6 702 | 8 175 | |
| Level 1 | Level 2 | Level 3 | Total | |
| 31 December 2019 | ||||
| Non-financial assets | ||||
| Plants and plantation | - | - | 8 376 | 8 376 |
| Livestock | - | 1 872 | - | 1 872 |
| - | 1 872 | 8 376 | 10 248 |
There were no transfers between any levels of the fair value hierarchy during the year 31 December 2020 and 31 December 2019.
Total gain or losses for the period as shown in the reconciliation (note 19) are presented on the face of the consolidated statement of comprehensive income as "Net change in fair value less costs to sell of biological assets and agricultural produce".
(in USD thousand, unless otherwise stated)
The following table analyses the fair values of financial instruments not measured at fair value, by the levels in the fair value hierarchy into which such fair value measurement is categorized:
| Carrying amount | Fair value | |||||||
|---|---|---|---|---|---|---|---|---|
| Designated at fair value |
At amortised cost |
Other financial liabilities |
Total | Level 1 |
Level 2 |
Level 3 |
Total | |
| 31 December 2020 | ||||||||
| Financial Assets measured at fair value | ||||||||
| Assets held for sale | 17 | - | - | 17 | 17 | - | - | 17 |
| Investments designated at fair value through | ||||||||
| profit or loss | 15 195 | - | - | 15 195 | 15 195 | - | - | 15 195 |
| Financial assets not measured at fair value | ||||||||
| Trade receivables | - | 2 785 | - | 2 785 | - | - | 2 785 | 2 785 |
| Loans receivable | - | 18 549 | - | 18 549 | - | - | 18 549 | 18 549 |
| Cash and cash equivalents | - | 25 055 | - | 25 055 | 25 055 | - | - | 25 055 |
| 15 212 | 46 389 | - | 61 601 | 40 267 | - | 21 334 | 61 601 | |
| Financial Liabilities measured at fair value Liabilities held for sale |
- | - | - | - | - | - | - | - |
| Financial Liabilities not measured at fair value | ||||||||
| Lease liabilities | - | - | 14 716 | 14 716 | - | - | 14 716 | 14 716 |
| Loans payable | - | - | 128 | 128 | - | - | 128 | 128 |
| Trade payables | - | - | 637 | 637 | - | - | 637 | 637 |
| Other payables | - | - | 60 | 60 | - | - | 60 | 60 |
| - | - | 15 541 | 15 541 | - | - | 15 541 | 15 541 |
(in USD thousand, unless otherwise stated)
| Fair value | ||||||||
|---|---|---|---|---|---|---|---|---|
| Designated at fair value |
At amortised cost |
Other financial liabilities |
Total | Level 1 |
Level 2 |
Level 3 |
Total | |
| 31 December 2019 | ||||||||
| Financial Assets measured at fair value | ||||||||
| Assets held for sale | 20 | - | - | 20 | 20 | - | - | 20 |
| Investments designated at fair value through | ||||||||
| profit or loss | 9 264 | - | - | 9 264 | 9 264 | - | - | 9 264 |
| Financial assets not measured at fair value | ||||||||
| Trade receivables | - | 2 877 | - | 2 877 | - | - | 2 877 | 2 877 |
| Loans receivable | - | 18 549 | - | 18 549 | - | - | 18 549 | 18 549 |
| Cash and cash equivalents | - | 11 938 | - | 11 938 | 11 938 | - | - | 11 938 |
| 9 284 | 33 364 | - | 42 648 | 21 222 | - | 21 426 | 42 648 | |
| Financial Liabilities measured at fair value | ||||||||
| Liabilities held for sale | 11 | - | - | 11 | 11 | - | - | 11 |
| Financial Liabilities not measured at fair value | ||||||||
| Lease liabilities | - | - | 20 284 | 20 284 | - | - | 20 284 | 20 284 |
| Loans payable | - | - | 127 | 127 | - | - | 127 | 127 |
| Trade payables | - | - | 78 | 78 | - | - | 78 | 78 |
| Other payables | - | - | 19 | 19 | - | - | 19 | 19 |
| 11 | - | 20 508 | 20 519 | 11 | - | 20 508 | 20 519 |
(in USD thousand, unless otherwise stated)
The fair value of financial assets and financial liabilities, together with the carrying amounts in the consolidated statement of financial position as at 31 December 2020 and 31 December 2019, are as follows.
| 31 December 2020 | Carrying amount |
Fair value |
|---|---|---|
| Financial assets | ||
| Investments designated at fair value through profit or loss | 15 195 | 15 195 |
| Trade receivables | 2 785 | 2 785 |
| Cash and cash equivalents | 25 055 | 25 055 |
| Loans receivable | 18 549 | 18 549 |
| Financial liabilities | ||
| Lease liabilities | 14 716 | 14 716 |
| Loans payable | 128 | 128 |
| Trade payables | 637 | 637 |
| 31 December 2019 | Carrying | Fair value |
| amount | ||
| Financial assets | ||
| Investments designated at fair value through profit or loss | 9 264 | 9 264 |
| Trade receivables | 2 877 | 2 877 |
| Cash and cash equivalents | 11 938 | 11 938 |
| Loans receivable | 18 549 | 18 549 |
| Financial liabilities | ||
| Notes | - | - |
| Loans payable | 127 | 127 |
| Trade payables Other payables |
78 19 |
78 19 |
Events referred to in note 34 to the consolidated financial statements will continue to influence the Group's operations in 2021. While management believes it is taking all necessary measures to maintain the sustainability of the business in the current circumstances, a further deterioration of economic and political conditions in Ukraine could adversely affect the Group's results and financial position, so that it is currently impossible to predict.
On 30 April 2021 the Board of Directors of Agroton Public Limited approved and authorised these consolidated financial statements for issue.
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