IMC S.A. and its subsidiaries IMC S.A. and its subsidiaries

Consolidated financial statements For the year ended 31 December 2018 Consolidated financial statements For the year ended 31 December 2018

and Report of the the réviseur d'entreprises agréé and Report of the the réviseur d'entreprises agree

CONTENTS CONTENTS

	Pages Pages
of Statement of Management responsibilities Statement Management responsibilities	3 3
Management statement Management statement	4 4
Single management report report Single management	5 5
Corporate governance statement Corporate governance statement	20 20
of Report of the éviseur d'entreprises agréé Report the d'entreprises éViseur agree	24 24
Consolidated financial statements financial statements Consolidated
for the year ended 31 December 2018 for December the ended 2018 year 31
of Consolidated statement of comprehensive income income Consolidated statement comprehensive	30 30
of Consolidated statement of financial position financial position Consolidated statement	31 31
of Consolidated statement of changes in equity Consolidated statement in equity changes	32 32
of Consolidated statement of cash flows Consolidated flows statement cash	33 33
Notes to the Consolidated financial statements Notes to Consolidated financial statements the	35 35

Statement of Management responsibilities for preparation and approval of Consolidated financial statements for the year ended 31 December 2018 Statement of Management responsibilities for preparation and approval of Consolidated financialstatements for the year ended 31 December 2018

Management of the Group of companies "IMC" (the Group) is responsible for preparing the Consolidated financial statements which reflect in all material aspects the financial position of the Group as at 31 December 2018, as well as the results of its activities, cash flows and changes in equity for the year then ended in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. lVlanagement of the Group of companies "IMC" (the Group) is responsible for preparing the Consolidated financialstatements which reflect in all material aspects the financial position of the Group as at 31 December 2018, as well asthe results of its activities, cash flows and changes in equity for the year then ended in accordance with InternationalFinancial Reporting Standards (lFRS) as adopted by the European Union.

In preparing Consolidated financial statements the Group's Management is responsible for: In preparing Consolidated financial statements the Group's Management is responsible for:

selecting appropriate accounting policies and their consistent application; — selecting appropriate accounting policies and their consistent application;
making reasonable measurement and calculation; — making reasonable measurement and calculation;
following principles of IFRS as adopted by the European Union or disclosing all considerable deviations from IFRS in the notes to Consolidated financial statements; — following principles of IFRS as adopted by the European Union or disclosing all considerable deviations from IFRSin the notes to Consolidated financial statements;
preparing Consolidated financial statements of the Group on the going concern basis, except for the cases when such assumption is not appropriate; — preparing Consolidated financial statements of the Group on the going concern basis, except for the cases whensuch assumption is not appropriate;
accounting and disclosing in the Consolidated financial statements all the relations and transactions between related parties; — accounting and disclosing in the Consolidated financial statements all the relations and transactions between relatedparties;
accounting and disclosing in the Consolidated financial statements all subsequent events that would result in an adjustment or a disclosure; — accounting and disclosing in the Consolidated financial statements all subsequent events that would result in anadjustment or a disclosure;
disclosing all claims related to previous or potential legal proceedings; — disclosing all claims related to previous or potential legal proceedings;
disclosing in the Consolidated financial statements all the loans or guarantees to the Management. — disclosing in the Consolidated financial statements all the loans or guarantees to the Management.

The Group's Management is also responsible for: The Group's hianagement is also responsible for:

development, implementation and control over effective and reliable internal control system in the Group; — development, implementation and control over effective and reliable internal control system in the Group;
keeping accounting records in compliance with the legislation and accounting standards of the respective country of the Group's registration; — keeping accounting records in compliance with the legislation and accounting standards of the respective country ofthe Group's registration;
taking reasonable steps within its cognizance to safeguard the assets of the Group; — taking reasonable steps within its cognizance to safeguard the assets of the Group;
detecting and preventing from fraud and other irregularities. — detecting and preventing from fraud and other irregularities.

These Consolidated financial statements as at 31 December 2018 prepared in compliance with IFRS as approved by the European Union are approved on behalf of the Group's Management on 30 April 2019. These Consolidated financial statements as at 31 December 2018 prepared in compliance with lFRS as approved bythe European Union are approved on behalf of the Group's Management on 30 April 2019.

On behalf of the Management: On behalf of the Management:

Chief Executive Officer ALEX LISSITSA ______signed________ Chief Executive Officer

ALEX LlSSlTSA signed

Chief Financial Officer

Chief Financial Officer DMYTRO MARTYNIUK ______signed________ DMYTRO MARTYNIUK

Sign ed

Management statement Management statement

This statement is provided to confirm that, to the best of our knowledge, the Consolidated financial statements for the year ended 31 December 2018, and the comparable information, have been prepared in compliance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and as adopted by the European Union and give a true, fair and clear view of Group's assets, financial standing and net results, and that the directors' report on the operations truly reflects the development, achievements and position of the Group, including a description of the key risk factors and threats. This statement is provided to confirm that, to the best of our knowledge, the Consolidated financial statements forthe year ended 31 December 2018, and the comparable information, have been prepared in compliance withInternational Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and asadopted by the European Union and give a true, fair and clear view of Group's assets, financial standing and netresults, and that the directors' report on the operations truly reflects the development, achievements and position ofthe Group, including a description of the key risk factors and threats.

On behalf of the Management: On behalf of the Management:

Chief Executive Officer Officer Chief Executive	ALEX LISSITSA ALEX LlSSlTSA	__signed______ signed
Chief Financial Officer Officer Chief Financial	DMYTRO MARTYNIUK __signed______ DlVlYTRO MARTYNIUK	signed

Single management report Single management report

1. Business and General Conditions 1. Business and General Conditions
1. Operational and Financial Results 2. Operational and Financial Results
1. Risk report 3. Risk report
1. Selected Financial Data 4. Selected Financial Data

1. Business and General Conditions 1. Business and General Conditions

Macro-economic development Macro-economic development

World economy 0 World economy

Wheat \Wheat

2018 was the first year over the last 5–years period when the world production and stocks of wheat decreased in comparison with the previous year (4-5%). It was caused by summer's drought in the European Union (EU) – the largest producer of wheat in the world. Wheat harvest has suffered the most from 2018 summer's dry conditions, leading to a decrease of wheat production in the EU of 9% compared to 2017. Unfavorable weather conditions for winter wheat in Black Sea region (Ukraine, Russia), historically the largest wheat exporting region, have also led to decrease of wheat production by 7% and 15% respectively. Australia (#5 wheat exporter in the world) has also suffered from drought in 2018 resulted in 20% wheat production cut. 2018 was the first year over the last 5—years period when the world production and stocks of wheat decreased in comparison with the previousyear (4—5%). It was caused by summer's drought in the European Union (EU) — the largest producer of wheat in the world. \'C'heat harvest hassuffered the most from 2018 summer's dry conditions, leading to a decrease of wheat production in the EU of 9% compared to 2017.Unfavorable weather conditions for winter wheat in Black Sea region (Ukraine, Russia), historically the largest wheat exporting region, have alsoled to decrease of wheat production by 7% and 15% respectively. Australia (#5 wheat exporter in the world) has also suffered from drought in2018 resulted in 20% wheat production cut.

Prices for wheat in 2018 increased by 15-20% amid concerns over a shortfall in global supplies. Prices for wheat in 2018 increased by 15—20% amid concerns over a shortfall in global supplies.

Soybean Soybean

The USA-China trade conflict considerably influenced on soybean market in 2018. China, among other products, imposed tariffs on US soybeans, corn, wheat, sorghum and fresh fruit as well as nuts and certain dairy products that provided some additional export opportunities for other grain and oilseeds suppliers to Chinese market, especially Brazil (soybean). The USA—China trade conflict considerably influenced on soybean market in 2018. China, among other products, imposed tariffs on USsoybeans, corn, wheat, sorghum and fresh fruit as well as nuts and certain dairy products that provided some additional export opportunitiesfor other grain and oilseeds suppliers to Chinese market, especially Brazil (soybean).

The United States and Brazil are the world's top two producers and exporters of soybean and China is the world's biggest buyer, with demand for animal feed growing in step with China's rising demand for meat. However, as trade tensions escalated in 2018, China imposed tariffs on US soybean imports in July and turned to other suppliers such as Brazil. Brazilian soybean farmers increased planting to take advantage of higher demand from China, with a record crop of more than 120 million tonnes forecast for 2018/2019 MY (122 million tonnes according to USDA report, December 2018). The United States and Brazil are the world's top two producers and exporters of soybean and China is the world's biggest buyer, with demandfor animal feed growing in step with China's rising demand for meat. However, as trade tensions escalated in 2018, China imposed tariffs onUS soybean imports inJuly and turned to other suppliers such as Brazil. Brazilian soybean farmers increased planting to take advantage of higherdemand from China, with a record crop of more than 120 million tonnes forecast for 2018/2019 MY (122 million tonnes according to USDAreport, December 2018).

In the beginning of December 2018, the USA and China agreed to halt any further increases in tariffs for 90 days to try to hammer out trade differences between the two countries. China also promised to buy more US agricultural products. Ease of trade war between the USA and China could turn that bumper harvest into a soybean glut, sending down prices for soybeans from Brazil and other sources around the world. In the beginning of December 2018, the USA and China agreed to halt any further increases in tariffs for 90 days to try to hammer out tradedifferences between the two countries. China also promised to buy more US agricultural products. Ease of trade war between the USA andChina could turn that bumper harvest into a soybean glut, sending down prices for soybeans from Brazil and other sources around the world.

On the background of the above market conditions 17% growth of world soybean stocks was forecast in 2018/2019 MY (USDA report, December 2018) and market prices in autumn 2018 decreased by 7-10% vs. 2017 for soybean of Brazil/Argentina/Ukraine origin and by 15- 20% of US soybean. On the background of the above market conditions 17% growth of world soybean stocks was forecast in 2018/2019 MY (USDA report,December 2018) and market prices in autumn 2018 decreased by 7—10% vs. 2017 for soybean of Brazil/Argentina/Ukraine origin and by 15—20% of US soybean.

Corn Corn

Despite the forecast of some marginal growth of world corn production in 2018/2019 MY (2% according to USDA report, December 2018), it was forecast of 9% decrease of world corn stocks in 2018/2019 MY vs. 2017/2018 MY. World stocks decrease tendency for the second year in a row has led to corn price increase of 5-7% in 2018 vs. 2017. Despite the forecast of some marginal growth of world corn production in 2018/2019 MY (2% according to USDA report, December 2018),it was forecast of 9% decrease of world corn stocks in 2018/2019 MY vs. 2017/2018 IVIY. \World stocks decrease tendency for the second yearin a row has led to corn price increase of 5—7% in 2018 vs. 2017.

Ukrainian economy 0 Ukrainian economy

In 2018, there were some signals of strengthening of the Ukrainian economy. In 2018, there were some signals of strengthening of the Ukrainian economy.

According to the National Bank of Ukraine GDP of Ukraine in 2018 grew by 3.3% (vs. growth of 2.1% in 2017; growth of 2.3% in 2016; decline of 9.9% in 2015 and decline of 6.6% in 2014). According to the National Bank of Ukraine GDP of Ukraine in 2018 grew by 3.3% (vs. growth of 2.1% in2017; growth of 2.3% in 2016; declineof 9.9% in2015 and decline of 6.6% in2014).

State Statistic Service of Ukraine estimated inflation in Ukraine in 2018 at 9.8% (13.7% in 2017, 12.4% in 2016, 43.3% in 2015 and 24.9% in 2014). State Statistic Service of Ukraine estimated inflation in Ukraine in 2018 at 9.8% (13.7% in 2017, 12.4% in 2016, 43.3% in 2015 and 24.9%in2014).

In 2018, for the first time since 2013, the national currency (hryvnia) strengthened by 1.4% (vs. devaluation by 3.1% in 2017, 11.7% in 2016, 34.3% in 2015 and 49.3% in 2014). In 2018, for the first time since 2013, the national currency (hryvnia) strengthened by 1.4% (vs. devaluation by 3.1% in2017, 11.7% in2016,34.3% in2015 and 49.3% in 2014).

Banks started to expand lending to enterprises in 2018. Banks started to expand lending to enterprises in 2018.

The labor migration of Ukrainians has increased due to a visa-free regime with the European Union. The shortage of professional workers in many industries caused a visible rise in wages for the necessary personnel in Ukraine in 2018. The labor migration of Ukrainians has increased due to a visa—free regime with the European Union. The shortage of professional workers inmany industries caused a visible rise in wages for the necessary personnel in Ukraine in 2018.

2018 year was the extremely favorable for late crops in Ukraine. According to the Ministry of Agrarian Policy and Food of Ukraine in 2018 Ukrainian farmers received a record harvest of grain in the history of Ukraine - 70.1 million tonnes (+14% vs. 2017), including 34.5 million tonnes of corn. In addition, record crop has been collected of some oilseeds. Sunflower harvest in 2018 amounted 13.7 million tonnes - 12% more than in 2017 (the previous record was set in 2016 - 13.6 million tonnes). Also, a record yield of soybeans was received - 4.4 million tonnes, 13% more than in 2017 (the previous record was set in 2016 - 4.2 million tonnes). 2018 year was the extremely favorable for late crops in Ukraine. According to the Ministry of Agrarian Policy and Food of Ukraine in 2018Ukrainian farmers received a record harvest of grain in the history of Ukraine -70.1 million tonnes (+14% vs. 2017), including 34.5 milliontonnes of corn. In addition, record crop has been collected of some oilseeds. Sunflower harvest in 2018 amounted 13.7 million tonnes —12%more than in 2017 (the previous record was set in 2016 — 13.6million tonnes). Also, a record yield of soybeans was received — 4.4 million tonnes,13% more than in 2017 (the previous record was set in 2016 — 4.2 million tonnes).

According to the National Scientific Center "Institute of Agrarian Economics" exports of agricultural products from Ukraine in 2018 increased by 5% compared to 2017 and amounted to a record of 18.8 billion dollars. In 2018 agricultural products accounted for 39.8% of the total exports from Ukraine, retaining leadership in export structure. It is noted that according to the estimates of the Institute's scientists, the decisive factor for the total increase in the export of agricultural products in 2018 was the increase in supplies to the two key regions - Asia and the European Union. In particular, the volume of Ukrainian exports to Asian countries in value terms increased by 4% compared to 2017 - up to 8 billion dollars. In this case, the share of Asian countries in 2018 amounted to 42.6% in the overall structure of exports of Ukrainian agricultural products. In addition, in 2018, exports of agricultural products to the EU countries also became record. Thus, in value terms, the export of agricultural products to the EU countries amounted to 6.3 billion dollars against 5.8 billion dollars in 2017. The EU share in the total structure of Ukrainian agricultural exports last year amounted to 33.5%. India was the largest importer of Ukrainian agricultural products for the third year in a row. The volumes of Ukrainian agricultural products delivery to the country's market in 2018 amounted to 1.8 billion dollars. At the same time, India's share in the structure of Ukrainian agrarian exports was 9.9%. Also, according to the experts, the main consumers of Ukrainian agricultural products were also China (1.1 billion dollars), the Netherlands (1.1 billion dollars), Spain (1 billion dollars), Egypt (889 million dollars), Turkey (801 million dollars) Italy (738 million dollars), Germany (667 million dollars), Poland (657 million dollars) and Saudi Arabia (589 million dollars). These countries in 2018 formed for Ukrainian exporters of agricultural products more than 50% of the proceeds. It is noted that grain crops, oilseeds, seeds of oilseeds, meat and offal were the key products of Ukrainian agrarian exports in 2018, which accounted for about 81% of exports in value terms. According to the National Scientific Center "Institute of Agrarian Economics" exports of agricultural products from Ukraine in 2018 increasedby 5% compared to 2017 and amounted to a record of 18.8 billion dollars. In 2018 agricultural products accounted for 39.8% of the total exportsfrom Ukraine, retaining leadership in export structure. It is noted that according to the estimates of the Institute's scientists, the decisive factorfor the total increase in the export of agricultural products in 2018 was the increase in supplies to the two key regions — Asia and the EuropeanUnion. In particular, the volume of Ukrainian exports to Asian countries in value terms increased by 4% compared to 2017 — up to 8 billiondollars. In this case, the share of Asian countries in 2018 amounted to 42.6% in the overall structure of exports of Ukrainian agriculturalproducts. In addition, in 2018, exports of agricultural products to the EU countries also became record. Thus, in value terms, the export ofagricultural products to the EU countries amounted to 6.3 billion dollars against 5.8 billion dollars in 2017. The EU share in the total structureof Ukrainian agricultural exports last year amounted to 33.5%. India was the largest importer of Ukrainian agricultural products for the thirdyear in a row. The volumes of Ukrainian agricultural products delivery to the country's market in 2018 amounted to 1.8 billion dollars. At thesame time, India's share in the structure of Ukrainian agrarian exports was 9.9%. Also, according to the experts, the main consumers of Ukrainianagricultural products were also China (1.1 billion dollars), the Netherlands (1.1 billion dollars), Spain (1 billion dollars), Egypt (889 milliondollars), Turkey (801 million dollars) Italy (738 million dollars), Germany (667 million dollars), Poland (657 million dollars) and Saudi Arabia(589 million dollars). These countries in 2018 formed for Ukrainian exporters of agricultural products more than 50% of the proceeds. It isnoted that grain crops, oilseeds, seeds of oilseeds, meat and offal were the key products of Ukrainian agrarian exports in 2018, which accountedfor about 81% of exports in value terms.

Development of IMC S.A. and its Subsidiaries (the hereinafter "the Group" or "IMC") Development of IMC S.A. and its Subsidiaries (the hereinafter "the Group" or "IMC"[

Business owerview 0 Business owerview

Today IMC is the vertically integrated and high-technology group of companies operating in Sumy, Poltava and Chernihiv region (northern and central Ukraine) in three segments: crop farming, dairy farming, elevators and warehouses. Today IMC is the vertically integrated and high—technology group of companies operating in Sumy, Poltava and Chernihiv region (northern andcentral Ukraine) in three segments: crop farming, dairy farming, elevators and warehouses.

Crop farming Crop farming

The land bank of the company consists of five clusters within which the fields are situated close to each other. This allows increasing extensively the operational efficiency, and decreasing the expenditure through optimizing of human and technical resources involvement, as well as promoting of effective operational management. The land bank of the company consists of five clusters within which the fields are situated close to each other. This allows increasing extensivelythe operational efficiency, and decreasing the expenditure through optimizing of human and technical resources involvement, as well aspromoting of effective operational management.

IMC applies modern manufacturing and management practice in agriculture, and constantly invests in acquisition of new farming machinery and equipment of the leading world brands. IMC applies modern manufacturing and management practice in agriculture, and constantly invests in acquisition of new farming machineryand equipment of the leading world brands.

On the fields of IMC the system of different depth soil cultivation is applied: deep ripping, ploughing, disking, and cultivation. Rotation of these cultivation methods allows creating the optimal conditions for growing and development of agricultural crops. On the fields of IMC the system of different depth soil cultivation is applied: deep ripping, ploughing, disking, and cultivation. Rotation of thesecultivation methods allows creating the optimal conditions for growing and development of agricultural crops.

The IMC technology for crop farming anticipates using of seeds, fertilizers, and crop-protecting products only from the best national and foreign manufacturers. The IMC technology for crop farming anticipates using of seeds, fertilizers, and crop-protecting products only from the best national andforeign manufacturers.

The elements of precision farming are tested and introduced, such as: systems for GPS-monitoring of the machinery, auto-piloting, satellite monitoring, variable norms for seeding, and differentiated fertilization. The elements of precision farming are tested and introduced, such as: systems for GPS—monitoring of the machinery, auto—piloting, satellitemonitoring, variable norms for seeding, and differentiated fertilization.

Dairy farming Dairy farming

Dairy farming supplies high quality milk for customers-processing enterprises and ensures working places in the regions. Dairy farming supplies high quality milk for customers—processing enterprises and ensures working places in the regions.

The major portion of milk which IMC produces is rated as a milk of Extra category and the rest – as category I. IMC is one of the few industrialized milk producers which has an Operational permit for Baby Food Products, allowing it to sell milk to baby-food processing plants. This is another evidence of the high quality of the produced milk by the Company. The major portion of milk which IMC produces is rated as a milk of Extra category and the rest — as category I. IMC is one of the fewindustrialized milk producers which has an Operational permit for Baby Food Products, allowing it to sell milk to baby—food processing plants.This is another evidence of the high quality of the produced milk by the Company.

Elevators and warehouses Elevators and warehouses

IMC owns and operates storage facilities with significant storage capacity situated in close proximity to its operations in each of its clusters. IMC owns and operates storage facilities with significant storage capacity situated in close proximity to its operations in each of its clusters.

The Company utilizes only its own storage facilities. The existing storage capacities satisfy 100% of the Company's storage needs with sufficient capacity to meet its projected increased production in the short-term. The Company utilizes only its own storage facilities. The existing storage capacities satisfy 100% of the Company's storage needs with sufficientcapacity to meet its projected increased production in the short—term.

The existing storage capacities enable IMC to sell its produce throughout the marketing season, to reduce negative impact of crop pressure on prices at harvest time and at the same time to mitigate risks related to physical security of stocks. The existing storage capacities enable IMC to sell its produce throughout the marketing season, to reduce negative impact of crop pressure onprices at harvest time and at the same time to mitigate risks related to physical security of stocks.

Corporate structure 0 Corporate structure

The parent company of the Group of companies "IMC" is IMC S.A. It is a limited company registered in accordance with the legislation of Luxembourg. The parent company of the Group of companies "IMC" is lMC S.A. It is a limited company registered in accordance with the legislationofLuxembourg.

Unigrain Holding Limited is a direct subsidiary company of IMC S.A. and the parent company of Burat-Agro LLC, Burat LLC, Chernihiv Industrial Milk Company LLC, PJSC Mlibor. In addition, PJSC PKZ belongs directly to Burat LLC. Unigrain Holding Limited is a direct subsidiary company of IMC S.A. and the parent company of Burat-Agro LLC, Burat LLC, ChernihivIndustrial Milk Company LLC, PJSC Mlibor. In addition, PJSC PKZ belongs directly to Burat LLC.

In 2011 IMC S.A. purchased (indirectly, through its direct subsidiary company Unigrain Holding Limited) the silo PJSC Vyryvske HPP and the following agrarian companies: In 2011 IMC S.A. purchased (indirectly, through its direct subsidiary company Unigrain Holding Limited) the silo PJSC Vyrywske HPP and thefollowing agrarian companies:

PAE Slavutich - PAE Slavutich
PE Progress 2010 - PE Progress 2010
PAE Promin - PAE Promin
AF Kalynivska-2005, Ltd - AF Kalynivska—2005, Ltd
AF Zhovtneva, Ltd - AF Zhovtneva, Ltd
AF Shid-2005, Ltd - AF Shid—2005, Ltd
AIE Vyrynske, Ltd - AlE Vyrynske, Ltd
Pisky, Ltd - Pisky, Ltd
SE Vyry-Agro - SE Vyry—Agro

On November 30, 2011 to decrease expenses and to improve management quality the agrarian companies PAE Slavutich and PE Progress 2010 were joined to Chernihiv Industrial Milk Company LLC, and PAE Promin was joined to Burat-Agro LLC. On November 30, 2011 to decrease expenses and to improve management quality the agrarian companies PAE Slavutich and PE Progress 2010were joined to Chernihiv Industrial Milk Company LLC, and PAE Promin was joined to Burat-Agro LLC.

On August 30, 2011 owing to increase of volumes of export sales of the Group the direct subsidiary company Unigrain Holding Limited established Aristo Eurotrading Ltd (BVI). On August 30, 2011 owing to increase of volumes of export sales of the Group the direct subsidiary company Unigrain Holding Limitedestablished Aristo Eurotrading Ltd (BVl).

During the 12-month period ended 31 December 2012 IMC S.A. purchased (indirectly, through its direct subsidiary company Unigrain Holding Limited and Burat-Agro LLC belongs directly to Unigrain Holding Limited) the following agrarian companies: During the 12—month period ended 31 December 2012 IMC S.A. purchased (indirectly, through its direct subsidiary company Unigrain HoldingLimited and Burat—Agro LLC belongs directly to Unigrain Holding Limited) the following agrarian companies:

Ukragrosouz KSM, Ltd - Ukragrosouz KSM, Ltd
PAC Slobozhanschina Agro - PAC Slobozhanschina Agro
Bluerice Limited. The following companies became the part of the Group, as their owner is Bluerice Limited: Agroprogress Holding Ltd, Agroprogress PE, Bobrovitsky Hlebzavod Ltd, Plemzavod Noviy Trostyanets Ltd, PJSC ''Bobrovitske HPP", Losinovka-Agro Ltd, Parafiyivka-Progress Ltd, Nosovsky Saharny Zavod Ltd. - Bluerice Limited. The following companies became the part of the Group, as their owner is Bluerice Limited: Agroprogress HoldingLtd, Agroprogress PE, Bobrovitsky Hlebzavod Ltd, Plemzavod Noviy Trostyanets Ltd, PJSC "Bobrovitske HPP", Losinovka—AgroLtd, Parafiyivka—Progress Ltd, Nosovsky Saharny Zavod Ltd.

In November 2013 owing to increase of volumes of export sales of the Group IMC established Negoce Agricole S.A. (Luxembourg). In November 2013 owing to increase of volumes of export sales of the Group IMC established Negoce Agricole S.A. (Luxembourg).

In December 2013 IMC S.A. purchased (indirectly, through its subsidiary companies Unigrain Holding Limited and PAC Slobozhanschina Agro) the agrarian company AgroKIM Ltd. In December 2013 IMC S.A. purchased (indirectly, through its subsidiary companies Unigrain Holding Limited and PAC SlobozhanschinaAgro) the agrarian company AgroKlM Ltd.

During 2014-2016 Group's structure was optimized by mergering of some companies. During 2014—2016 Group's structure was optimized by mergering of some companies.

Group strategy 0 Group strategy

On 13 February 2018 the Board of Directors of IMC S.A. (hereinafter "the Company") published the updating of the Company's strategy for 2016 – 2020: On 13 February 2018 the Board of Directors of IMC S.A. (hereinafter "the Company") published the updating of the Company's strategy for2016 — 2020:

Before the introduction of the agricultural land market in Ukraine, the Company does not plan to expand the land bank in large scale, as it was planned earlier in the strategy 2016-2020, published on 15 February 2016 (see current report 3/2016 as of 15 February 2016). - Before the introduction of the agricultural land market in Ukraine, the Company does not plan to expand the land bank in large scale,as itwas planned earlier in the strategy 2016—2020, published on 15 February 2016 (see current report 3/2016 as of 15 February 2016).
Other strategic goals published on 15 February 2016 concerning storage capacities and crop mix are unchanged: 1) Storage capacity modernization; 2) Growing of limited number of highly profitable export-oriented crops (corn, sunflower, soybean, wheat). Corn is a key crop with the share in crop mix about 50%. - Other strategic goals published on 15 February 2016 concerning storage capacities and crop mix are unchanged: 1) Storage capacitymodernization; 2) Growing of limited number of highly profitable export—oriented crops (corn, sunflower, soybean, wheat). Cornisa key crop with the share in crop mix about 50%.

Taking into account a strong focus on business efficiency, the Company has defined additional strategic goal till 2020 achievement of a leading position among agricultural companies in Europe in introduction of innovations. - Taking into account a strong focus on business efficiency, the Company has defined additional strategic goal till 2020 — achievementof a leading position among agricultural companies in Europe in introduction of innovations.
Profit received in 2017-2020, the Company plans to invest mainly in projects on operational efficiency improvement, debt reduction and payment of dividends to its shareholders. - Profit received in 2017—2020, the Company plans to invest mainly in projects on operational efficiency improvement, debt reductionand payment of dividends to its shareholders.

The enterprise risk management and internal control system O The enterprise risk management and internal control system

Risk management at IMC Risk management at IMC

Risk management is the process of reducing the possibility of adverse consequences either by reducing the likelihood of an event or its impact or taking advantage of the upside risk. The goal of the risk management at IMC is to provide a reasonable assurance that Group's business objectives will be achieved. This process encompasses such stages as risk identification, risk assessment, risk respond and risk mitigation, monitoring. Risk management is the process of reducing the possibility of adverse consequences either by reducing the likelihood of an event or its impactor taking advantage of the upside risk. The goal of the risk management at IMC is to provide a reasonable assurance that Group's businessobjectives will be achieved. This process encompasses such stages as risk identification, risk assessment, risk respond and risk mitigation,monitoring.

IMC's management is responsible for day-to-day monitoring, identification, assessment and planning mitigation activities concerning operational risks in the course of its ordinary performance. Internal controls at IMC are the main tools of operational risks mitigation process. Established internal policies and internal regulatory documents are the primary mediums of internal controls implementation. IMC's management is responsible for day—to—day monitoring, identification, assessment and planning mitigation activities concerning operationalrisks in the course of its ordinary performance. Internal controls at IMC are the main tools of operational risks mitigation process. Establishedinternal policies and internal regulatory documents are the primary mediums of internal controls implementation.

The Board of Directors currently maintains responsibility for overseeing enterprise risk management process and strategic risks. Major risk exposures are regularly discussed at the board meetings. The Board of Directors currently maintains responsibility for overseeing enterprise risk management process and strategic risks. Major riskexposures are regularly discussed at the board meetings.

IMC's accounting-related risk management system IMC's accounting-related risk management system

IMC's control system relies on daily resource planning analyses which are detailed by cost center and cost article, department, thus providing all the necessary information for controlling inventories and products. IMC's control system relies on daily resource planning analyses which are detailed by cost center and cost article, department, thus providingallthe necessary information for controlling inventories and products.

IMC established internal controlling instruments to secure proper accounting in compliance with legal requirements. IMC established internal controlling instruments to secure proper accounting in compliance with legal requirements.

IMC's accounting procedures are governed by standardized guidelines and rules as well as a clearly defined course of action in different situation. Therefore, standard account parameters and booking directions for various production operations were established. Another control tool is the clear allocation of functions regarding various accounting processes. For Group consolidation and accounting purposes all bookkeeping data of the consolidated companies may be accessed automatically. IMC's accounting procedures are governed by standardized guidelines and rules as well as a clearly defined course of action in different situation.Therefore, standard account parameters and booking directions for various production operations were established. Another control tool is theclear allocation of functions regarding various accounting processes. For Group consolidation and accounting purposes all bookkeeping dataof the consolidated companies may be accessed automatically.

The internal control system of IMC is based on the accounting database thus integrating all controlling processes. Accounting processes are carried out on a high-level basis and are monitored and adjusted by specialists. The internal control system of IMC is based on the accounting database thus integrating all controlling processes. Accounting processes arecarried out on a high—level basis and are monitored and adjusted by specialists.

IMC's accounting-related risk management system is set up in a way that the risk of misrepresentation could mainly ensue from new business processes or amendments to legal provisions. Risks are contained by transferring decisions on accounting-relevant data resulting from new business processes to the management level. Ongoing continuation training regarding the applicable accounting provisions from time to time is provided to the management. IMC's accounting—related risk management system is set up in a way that the risk of misrepresentation could mainly ensue from new businessprocesses or amendments to legal provisions. Risks are contained by transferring decisions on accounting-relevant data resulting fromnewbusiness processes to the management level. Ongoing continuation training regarding the applicable accounting provisions from time to timeisprovided to the management.

The Group's internal control and risk management system in relation to the process for preparing consolidated financial statements is closely related to control mechanisms of accounting procedures. Consolidated accountes are prepared on the basis of verified and approved accounting system data, which cannot be corrected. Consolidated accounts are carried out by specialists, the level of which is maintained annually by training. The accounts are verified by the management by comparing of control points with management reports. The Group's internal control and risk management system in relation to the process for preparing consolidated financial statementsis closely related to control mechanisms of accounting procedures. Consolidated accountes are prepared on the basis of verified andapproved accounting system data, which cannot be corrected. Consolidated accounts are carried out by specialists, the level of whichismaintained annually by training. The accounts are verified by the management by comparing of control points with management reports.

The Internal Control and Risk Management Department The Internal Control and Risk Management Department

The Internal Control and Risk Management Department was established as the separate unit in a corporate governance structure of the Group. The Internal Control and Risk Management Department was established as the separate unit in a corporate governance structure of the Group.

The Department is created with the aim of the regular independent monitoring and estimation of effectiveness of the IMC corporate governance, efficiency of separate business processes at the level of group and separate structural subdivisions, assessing of adequacy of the risk management process, providing with recommendations and participation during an improvement process. The Department participates in improvement of internal control, risk management and governance processes. The Department is created with the aim of the regular independent monitoring and estimation of effectiveness of the IMC corporate governance,efficiency of separate business processes at the level ofgroup and separate structural subdivisions, assessing of adequacy of the risk managementprocess, providing with recommendations and participation during an improvement process. The Department participates in improvement ofinternal control, risk management and governance processes.

The Department regularly provides the management of IMC and the Audit Committee with independent and objective valuations and consultations. This involves an objective analysis of actual data with the aim of estimation and expression of an opinion on reliability of systems, processes, operations. The Department regularly provides the management of IMC and the Audit Committee with independent and objective valuations andconsultations. This involves an objective analysis of actual data with the aim of estimation and expression of an opinion on reliability of systems,processes, operations.

Personnel 0 Personnel

For more than a decade, IMC has been proud of its stable and well-coordinated team – professionals with valuable skills, knowledge and experience. Respect to employees' rights and needs, application of future-oriented approaches, continuous learning and training programs provision are all at the core of IMC's personnel management. For more than a decade, IMC has been proud of its stable and well—coordinated team — professionals with valuable skills, knowledge andexperience. Respect to employees' rights and needs, application of future—oriented approaches, continuous learning and training programsprovision are all at the core ofIMC's personnel management.

In 2016 IMC implemented crucial policies that are extremely important for staff to understand that the company they work in is respectful to its employees and human rights. IMC employs people based on principles of equal opportunity, without distinction to race, color, gender, sexual orientation, religion, descent or origin. IMC standards related to employees and human rights are declared in the following documents: In 2016 IMC implemented crucial policies that are extremely important for staff to understand that the company they work in is respectful toits employees and human rights. IMC employs people based on principles of equal opportunity, without distinction to race, color, gender, sexualorientation, religion, descent or origin. IMC standards related to employees and human rights are declared in the following documents:

Non-discrimination and equal opportunities in employment Policy - Non—discrimination and equal opportunities in employment Policy
Non-discrimination on grounds of sexual orientation and gender identity Policy - Non—discrimination on grounds of sexual orientation and gender identity Policy
Policy of collective bargaining - Policy of collective bargaining
Policy on freedom for workers to form or join trade unions - Policy on freedom forworkers to form or join trade unions
Policy of nursing and expectant mothers - Policy of nursing and expectant mothers
Policy on working hours and overtime - Policy on working hours and overtime
Employment of young person under the age of 18 Policy. - Employment of young person under the age of 18 Policy.

Policies are freely available to all employees and guests of IMC. The company policy prohibited discrimination based on color, ethnic or social origin, sex, pregnancy, civil, family status or status of a person caring for, language, religion or other opinion, political or other opinion, national or social origin, citizenship, economic status, association with a national minority, gender identity, age, disability, state of health, genetic characteristics of a person, and other signs or combinations of any of these attributes, actual or imaginary, as well as prohibited discrimination on the basis of association for any of the above listed features. As at 31 December 2018 IMC has 737 women employees (31% of the total employees), 71 of which are on leadership position in company. Policies are freely available to all employees and guests of IMC. The company policy prohibited discrimination based on color, ethnic or socialorigin, sex, pregnancy, civil, family status or status of a person caring for, language, religion or other opinion, political or other opinion, nationalor social origin, citizenship, economic status, association with a national minority, gender identity, age, disability, state of health, geneticcharacteristics of a person, and other signs or combinations of any of these attributes, actual or imaginary, as well as prohibited discriminationon the basis of association for any of the above listed features. As at 31 December 2018 IMC has 737 women employees (31% of the totalemployees), 71 of which are on leadership position in company.

In 2018, the IMC introduced a new format for working with proposals and complaints about the company's activities. Employees and shareholders can send their application in writing to e-mail [email protected]. Also, the IMC began to work with the Ethicontrol portal (imc.ethicontrol.com), which makes the appeal to the company absolutely confidential. In 2018, the IMC introduced a new format for working with proposals and complaints about the company's activities. Employees andshareholders can send their application in writing to e—mail [email protected]. Also, the IMC began to work with the Ethicontrol portal(imc.ethicontrol.com), which makes the appeal to the company absolutely confidential.

In 2018 IMC implemented Education's Regulations, which defines the process of planning, implementing, administering and evaluating the effectiveness of learning. IMC provides its personnel with training and learning opportunities aligned with strategic goals and values (professionalism, responsibility, team-work, effectiveness, initiative, honesty, respect) of the Company. Employees obtain knowledge and improve their skills through specialized training programs conducted by internal and external providers. Our learning and development offerings cover range of learnings goals: starting a career, expanding knowledge, personal growth and leaderships development. In 2018 IMC implemented Education's Regulations, which defines the process of planning, implementing, administering and evaluating theeffectiveness of learning. IMC provides its personnel with training and learning opportunities aligned with strategic goals and values(professionalism, responsibility, team—work, effectiveness, initiative, honesty, respect) of the Company. Employees obtain knowledge andimprove their skills through specialized training programs conducted by internal and external providers. Our learning and development offeringscover range of learnings goals: starting a career, expanding knowledge, personal growth and leaderships development.

In 2018, 278 employees of IMC's production departments, including precision farming technologies and R&D specialists, were trained by representatives of world's leading agribusiness companies. Also 397 linear managers took part in different development training programs of leadership, effective communication, emotional intelligence and people management skills. In 2018, 278 employees of IMC's production departments, including precision farming technologies and R&D specialists, were trained byrepresentatives of world's leading agribusiness companies. Also 397 linear managers took part in different development training programs ofleadership, effective communication, emotional intelligence and people management skills.

In October 2018, 30 senior and middle managers from the IMC started a half-year program for agriculture leader in MIM Business School. The training program has practical value for all business functions, as 4 real projects are additionally implemented to improve the performance of IMC Group. In October 2018, 30 senior and middle managers from the IMC started a half—year program foragriculture leader in MIM Business School. Thetraining program has practical value for all business functions, as 4 real projects are additionally implemented to improve the performanceofIMC Group.

The Company spent a total of around UAH 2,5 million on training in 2018. The Company spent a total of around UAH 2,5 million on training in 2018.

	2018 2018	2017 2017	Change in % °/o Change in
Total number of employees Total number of employees	2 309 2 309	2 412 2 412	-4% -4%
operating personnel operating personnel	1 632 1 632	1 748 1 748	-6% -6%
administrative personnel administrative personnel	655 655	642 642	2% 2%
sales personnel sales personnel	19 19	19 19	0% 0%
non-operating personnel non—operating personnel	3 3	3 3	0% 0%
Wages and salaries and related charges \W and salaries and related charges ages per employee (USD, for 12 months (USD, employee for 12 months per ended 31 December) December) ended 31	8 188 8 188	6 041 6 041	36% 36%

Personnel structure and wages and related charges were the following: Personnel structure and wages and related charges were the following:

Health, Safety and Environment (HSE) management system ⁰ Health, Safety and Environment (HSE) management system

Based on the experience of the world's leading companies, in 2016 IMC has started formation of the Health, Safety and Environment (HSE) management system. HSE department was formed at IMC's headquarter, designed to assist top-management of IMC in development and implementation of the company's strategy in these areas. On June 10, 2016 IMC approved a 5-year strategy of the company on Occupational Health and Safety and Environmental Protection in 2016-2020, which determines the priority directions of development of the company in this area. Based on the experience of the world's leading companies, in 2016 IMC has started formation of the Health, Safety and Environment (HSE) management system. HSE department was formed at IMC's headquarter, designed to assist top-management of IMC in development and implementation of the company's strategy in these areas. On June 10, 2016 IMC approved ^a 5—year strategy of the company on Occupational Health and Safety and Environmental Protection in 2016—2020, which determines the priority directions of development of the company in this area.

At all IMC's enterprises carry out on Monitoring in the areas: natural resource use and environmental legislation, occupational safety at production (compliance review of ІMС HSE principles against the requirements of Ukrainian regulatory documents). At all IMC's enterprises carry out on Monitoring in the areas: natural resource use and environmental legislation, occupational safety at production (compliance review of IMC HSE principles against the requirements of Ukrainian regulatory documents).

IMC is committed to involving all employees in the management for issues of Environment, Health & Safety and Social Aspects at IMC and its subsidiaries. IMC is committed to involving all employees in the management for issues of Environment, Health & Safety and Social Aspects at IMC and its subsidiaries.

IMC is constantly renewing its machinery and investing in technology, which has significant positive effect both on environmental and OH&S issues. Employees are receiving corporate personal protective equipment in accordance with the practice of world leading agricultural companies. IMC is constantly renewing its machinery and investing in technology, which has significant positive effect both on environmental and OH&S issues. Employees are receiving corporate personal protective equipment in accordance with the practice ofworld leading agricultural companies.

IMC is continuously improving the management system in the field of environmental and occupational health & safety, and is implementing new approaches based on the best local and international practices. IMC is continuously improving the management system in the field of environmental and occupational health & safety, and is implementing new approaches based on the best local and international practices.

IMC's enterprises annually implement a set of measures, where, along with traditional safety briefing instructions and control measures, the following are applied: IMC's enterprises annually implement ^a set of measures, where, along with traditional safety briefing instructions and control measures, the following are applied:

Improvement of labor conditions; - Improvement of labor conditions;
Identification and elimination of industrial hazards; - Identification and elimination ofindustrial hazards;
Health and safety management systems improvement; - Health and safety management systems improvement;
Health and safety trainings in partnership with the leading training institutions; - Health and safety trainings in partnership with the leading training institutions;
Provision of modern and high quality personal and mass protective equipment; - Provision of modern and high quality personal and mass protective equipment;
Raising employee awareness and safe work methods promotion; - Raising employee awareness and safe work methods promotion;
Improvement of health care services for the employees; - Improvement of health care services for the employees;
Work with contractor organizations. - \Xr'ork with contractor organizations.

On July 7, 2016 the Policy & Principles on Health, Safety and Environment of the IMC's enterprises have been adopted. On July 7, 2016 the Policy & Principles on Health, Safety and Environment of the IMC's enterprises have been adopted.

All IMC's enterprises have the Emergency Preparedness and Response plans (EPRP) for localization and liquidation of emergencies and accidents. The availability of such plans is obligatory in Ukraine and is regulated by legal requirements & local legislation. At the corporate level, the procedure of rapid incident notification from IMC enterprises to the Company Headquarters was implemented in May, 2016 in order to improve emergency response capacity and assure timely decision-making. All IMC's enterprises have the Emergency Preparedness and Response plans (EPRP) for localization and liquidation of emergencies and accidents. The availability of such plans is obligatory in Ukraine and is regulated by legal requirements & local legislation. At the corporate level, the procedure of rapid incident notification from IMC enterprises to the Company Headquarters was implemented in May, 2016 in order to improve emergency response capacity and assure timely decision—making.

Our employees are trained in the actions of the emergencies and accidents. Regular studies are conducted on IMC's enterprises, including those involving external training centers and organizations. Our employees are trained in the actions of the emergencies and accidents. Regular studies are conducted on IMC's enterprises, including those involving external training centers and organizations.

At the corporate level, the procedure of root causes identification was implemented in July, 2016 in order to improve the response to HSE management system, internal investigation and assure timely development of effective corrective and preventive measures. At the corporate level, the procedure of root causes identification was implemented in July, 2016 in order to improve the response to HSE management system, internal investigation and assure timely development of effective corrective and preventive measures.

In 2017 the Corporate Standard of Safety Audits was implemented for all IMC's siloses. In 2017 the Corporate Standard of Safety Audits was implemented for all IMC's siloses.

At the internal web site of IMC was developed a database for Behavioral and Technical Safety Audits for application at IMC's enterprises and subsequent analysis of information. For the effective conduct of safety audits in all divisions of the enterprises, the Directors of enterprises have approved schedules for conducting Safety Audits. CEO of IMC have approved schedule for conducting Safety Audits by the Top Management. There was started Executive Safety Audits by the Top Management of IMC's HQ at all siloses. There were 136 managers trained in HSE Leadership, IMC's HSE Strategy & Safety Audits in 2017. Based on the results of the HSE Leadership & Safety Audits training, the participants were issued with certificates from the CEO of IMC Group. At the internal web site of IMC was developed ^a database for Behavioral and Technical Safety Audits for application at IMC's enterprises and subsequent analysis ofinformation. For the effective conduct of safety audits in all divisions of the enterprises, the Directors of enterprises have approved schedules for conducting Safety Audits. CEO of IMC have approved schedule for conducting Safety Audits by the Top Management. There was started Executive Safety Audits by the Top Management of IMC's HQ at all siloses. There were 136 managers trained in HSE Leadership, IMC's HSE Strategy & Safety Audits in 2017. Based on the results of the HSE Leadership & Safety Audits training, the participants were issued with certificates from the CEO of IMC Group.

In 2018 the Corporate Standard and norms of personal protective equipment was developed and implemented for all IMC's enterprises. In 2018 the Corporate Standard and norms of personal protective equipment was developed and implemented for all IMC's enterprises.

In 2018 a new format of the HSE quarterly report was agreed and furnished to the HSE Committee of IMC. In order to bring Group's reporting in full conformity with IFC requirements, the IMC's enterprises were provided with an inquiry on submitting exhaustive information by contractor organizations. Methodical assistance is being rendered. In 2018 ^a new format of the HSE quarterly report was agreed and furnished to the HSE Committee of IMC. In order to bring Group's reporting in full conformity with IFC requirements, the IMC's enterprises were provided with an inquiry on submitting exhaustive information by contractor organizations. Methodical assistance is being rendered.

In 2018 was Introduction and adoption of "Cardinal HSE Rules at the enterprises of the IMC group" taking into account their specificity. Working team was created with engagement of enterprises' representatives. The cardinal rules are rules, the strict implementation of which is aimed at preventing accidents with the most serious consequences, including fatal injuries, accidents, fires, etc. Cardinal rules apply to all employees of the Group's enterprises without exception (from the CEO to the worker), visitors, contractors and temporary workers. In 2018 was Introduction and adoption of "Cardinal HSE Rules at the enterprises of the IMC group" taking into account their specificity. W'orking team was created with engagement of enterprises' representatives. The cardinal rules are rules, the strict implementation of which is aimed at preventing accidents with the most serious consequences, including fatal injuries, accidents, fires, etc. Cardinal rules apply to all employees of the Group's enterprises without exception (from the CEO to the worker), visitors, contractors and temporary workers.

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidated financial statements

In 2018 was developed and implemented Motivation program in the field of the HSE. Initially, the process of nominating HSE projects was launched to be awarded by the IMC CEO. 42 projects were submitted in three nominations: Occupational safety and industrial safety, Health protection, Environmental protection. Special Committees were formed to identify the best 3 projects. In 2018 was developed and implemented Motivation program in the field of the HSE. Initially, the process of nominating HSE projects waslaunched to be awarded by the IMC CEO. 42 projects were submitted in three nominations: Occupational safety and industrial safety, Healthprotection, Environmental protection. Special Committees were formed to identify the best 3 projects.

In 2018 a part of tasks on protection of the environment was done: Waste Procedures, Risk Register and Plans for obtaining permits. All procedures for all types of waste at all enterprises were developed and approved on the basis of united standards. Risk registers on environmental aspects have been updated and approved by the Directors of enterprises, a list of measures to reduce tem have been developed. In 2018 a part of tasks on protection of the environment was done: \Waste Procedures, Risk Register and Plans for obtaining permits. Allprocedures for all types ofwaste at all enterprises were developed and approved on the basis of united standards. Risk registers on environmentalaspects have been updated and approved by the Directors of enterprises, a list of measures to reduce tem have been developed.

All investments and initiatives in social projects including personalized support and projects of local infrastructure maintenance and development (roads, water supply, public lighting, schools, kindergartens, FAPs and medical points etc.) that IMC conducts within the villages it operates are conducted on the principles of «IMC. Aid to People» program. The Program includes obligatory social consultations and PR efforts for all significant investments. Local communities are involved in projects prioritization, budgeting and planning of necessary actions. All investments and initiatives in social projects including personalized support and projects oflocal infrastructure maintenance and development(roads, water supply, public lighting, schools, kindergartens, FAPs and medical points etc.) that IMC conducts within the villages it operates areconducted on the principles of «IMC. Aid to People» program. The Program includes obligatory social consultations and PR efforts for allsignificant investments. Local communities are involved in projects prioritization, budgeting and planning of necessary actions.

In 2018 the format of social assistance providing to rural communities was changed - from the transfer of funds on accounts of village councils to personalized support to the land plot owners. Medical and household projects were organized in the new format of targeted support. The realization of such large-scale projects became possible due to the change in the structure of the social service - a new position of Village Manager was implemented. The village manager works directly with land plot owners in each village where the IMC operates. In 2018 the format of social assistance providing to rural communities was changed — from the transfer of funds on accounts of village councilsto personalized support to the land plot owners. Medical and household projects were organized in the new format of targeted support. Therealization of such large—scale projects became possible due to the change in the structure of the social service — a new position of VillageManager was implemented. The village manager works directly with land plot owners in each village where the IMC operates.

The investments and initiatives for such projects in 2018 have reached UAH 22 million (Y2017 – UAH 16,2 million). The investments and initiatives for such projects in 2018 have reached UAH 22 million (Y2017 — UAH 16,2 million).

Management Incentive plan 0 Management Incentive plan

The Extraordinary shareholders meeting approved on 4 July 2017 a management incentive plan providing to Management Team Members and Eligible Employees as defined in the Management Incentive Plan an option to purchase in aggregate up to 1 878 000 new shares of IMC S.A., such number being equal to 6% of the issued stock of IMC S.A. as at the adoption date of such plan, at the price decided at the discretion of the Board of Directors of the Company which shall be equal to at least one euro cent EUR 0.01. The Extraordinary shareholders meeting approved on 4July 2017 a management incentive plan providing to Management Team Members andEligible Employees as defined in the Management Incentive Plan an option to purchase in aggregate up to 1878 000 new shares of IMC S.A.,such number being equal to 6% of the issued stock of IMC S.A. as at the adoption date of such plan, at the price decided at the discretionofthe Board of Directors of the Company which shall be equal to at least one euro cent EUR 0.01.

Performance period of the Management Incentive Plan is 3 years, starting from January 1, 2017 and ending on December 31, 2019. During the Performance Period, the Board of Directors of the Company may discretionarily decide when the Shares shall be issued by the Company to the Participants at the Subscription Price. Performance period of the Management Incentive Plan is 3 years, starting from January 1, 2017 and ending on December 31, 2019. During thePerformance Period, the Board of Directors of the Company may discretionarily decide when the Shares shall be issued by the Company to theParticipants at the Subscription Price.

As a part of this incentive plan, 1 878 000 new ordinary shares were issued with subscription price USD 0.00115. As at 31 December 2017 the purchase option was fully exercised, market share price was USD 2.73. As a part of this incentive plan, 1878 000 new ordinary shares were issued with subscription price USD 0.00115. As at 31 December 2017 thepurchase option was fully exercised, market share price was USD 2.73.

Used innovative technologies 0 Used innovative technologies

In 2017 the Research and development department was formed. The elements of precision farming are tested and introduced by R&D department: systems for GPS-monitoring of the machinery, auto-piloting, satellite monitoring, variable norms for seeding, and differentiated fertilization. This year extensive field experiments were carried out - testing the optimal seeding rate (different from the recommendations of the seed producer), selecting the optimal protection products. In 2017 the Research and development department was formed. The elements of precision farming are tested and introduced by R&Ddepartment: systems for GPS—monitoring of the machinery, auto—piloting, satellite monitoring, variable norms for seeding, and differentiatedfertilization. This year extensive field experiments were carried out — testing the optimal seeding rate (different from the recommendations ofthe seed producer), selecting the optimal protection products.

Innovative technologies used in operating activities: Innovative technologies used in operating activities:

Autopilot systems on heavy tractors. Allows to increase efficiency of carrying out of any field operations by 6-8% and corresponding saving of fuel by reducing the floor area. Autopilot systems on heavy tractors. Allows to increase efficiency of carrying out of any field operations by 6—8% and corresponding savingoffuel by reducing the floor area.

Systems of control of sections during sowing and spraying. A technology that allows to switch off sections at overlaps and save significantly on chemicals, seed and fertilizers. Systems of control of sections during sowing and spraying. A technology that allows to switch off sections at overlaps and save significantly onchemicals, seed and fertilizers.

Row Sense system and Row Vision system on spraying machines. Technology that avoids trampling plants when spraying industrial crops. Row Sense system and Row Vision system on spraying machines. Technology that avoids trampling plants when spraying industrial crops.

Monitoring the quality of field operations. Each seeder and sprayer machine has a controller, which records the actual work done. Monitoring the quality of field operations. Each seeder and sprayer machine has a controller, which records the actual work done.

Wialon GPS monitoring system. A software product that is used to organize the traffic control of machines, control fuel and record of work done. W'ialon GPS monitoring system. A software product that is used to organize the traffic control of machines, control fuel and record of workdone.

Satellite monitoring. Periodically, during the year, satellite monitoring of all crops in the fields of the IMC is carried out to identify deviations in the growing of crops. Satellite monitoring. Periodically, during the year, satellite monitoring of all crops in the fields of the IMC is carried out to identify deviationsinthe growing of crops.

Carrying aerial photography of drones. Each of our enterprises is equipped with drones, which provides detailed aerial survey of fields, which allows to quickly identify the nature of heterogeneity and react to any deviations in the vegetation of plants. Carrying aerial photography of drones. Each of our enterprises is equipped with drones, which provides detailed aerial survey of fields, whichallows to quickly identify the nature of heterogeneity and react to any deviations in the vegetation of plants.

Agrogeoportal - PreAgri. It acts as the only environment for collecting, storing, processing and visualizing all geospatial data from fields. Agrogeoportal — PreAgri. It acts as the only environment for collecting, storing, processing and visualizing all geospatial data from fields.

IMC S.A. AND ITS SUBSIDIARIES IMC S.A. AND ITS SUBSIDIARIES

Consolidated financial statements Consolidated financial statements

There were no development costs capitalized in the accounts, the research is done internally and is consequently captured mainly in the costs of personal. There were no development costs capitalized in the accounts, the research is done internally and is consequently captured mainly in the costsof personal.

2. Operational and Financial Results 2. Operational and Financial Results

The following table sets forth the Company's results of operations derived from the Consolidated financial statements: The following table sets forth the Company's results of operations derived from the Consolidated financial statements:

(in thousand USD) (in USD) thousand	For the year ended For the ended year
	N t Notes CS 0	31 December 31 December 2018 2018	31 December 31 December 2017 2017	Change Change in % in %
CONTINUING OPERATIONS CONTINUING OPERATIONS
Revenue Revenue	6 6	131 611 131 611	126 761 126 761	4% 4%
Gain from changes in fair value of biological assets and Gain from changes in fair value of biological and assets agricultural produce, net agricultural produce, net	7 7	73 326 73 326	62 777 62 777	17% 17%
Cost of sales Cost of sales	8 8	(138 854) (138 854)	(139 086) (139 086)	- -
GROSS PROFIT GROSS PROFIT		65 761 65 761	50 452 50 452	30% 30%
Administrative expenses Administrative expenses	9 9	(11 928) (11 928)	(9 605) (9 605)	24% 24%
Selling and distribution expenses Selling and distribution expenses	10 10	(11 794) (11 794)	(8 893) (8 893)	33% 33%
Other operating income Other operating income	11 11	951 951	1 610 1 610	-41% —41%
Other operating expenses Other operating expenses	12 12	(5 022) (5 022)	(3 422) (3 422)	47% 47%
Write-offs of property, plant and equipment \Write—offs of plant and equipment property,		(2 287) (2 287)	(1 656) (1 656)	38% 38%
Reversal of impairment of property, plant and equipment Reversal of impairment of plant and equipment property,		- -	591 591	-100% —100%
Impairment of property, plant and equipment Impairment of plant and equipment property,		- -	(271) (271)	-100% —100%
OPERATING PROFIT OPERATING PROFIT		36 003 36 003	28 806 28 806	25% 25%
Financial expenses, net Financial net expenses,	15 15	(4 987) (4 987)	(6 043) (6 043)	-17% —17%
Effect of additional return Effect of additional return	29 29	(3 265) (3 265)	(4 214) (4 214)	-23% —23%
Foreign currency exchange gain/(loss), net gain/ (loss), Foreign exchange net currency	16 16	567 567	(762) (762)	-174% —174%
PROFIT BEFORE TAX FROM CONTINUING PROFIT BEFORE TAX FROM CONTINUING OPERATIONS OPERATIONS		28 318 28 318	17 787 17 787	59% 59%
Income tax expenses, net Income tax net expenses,	17 17	(691) (691)	3 3	-23148% —23148%
NET PROFIT FOR THE PERIOD FROM PROFIT FOR PERIOD FROM NET THE CONTINUING OPERATIONS CONTINUING OPERATIONS		27 627 27 627	17 790 17 790	55% 55%

For the purposes of their analyses, the Company's management use Normalised Net profit, being Net profit adjusted for some expense items that are deemed to be substantially beyond their control, such as write-offs of property, plant and equipment and foreign currency exchange gains and losses, as well as items believed to be non-recurring. The non-recurring expenses currently include the effect of additional return on warrants (Note 29 to the Consolidated financial statements), as it is assumed that similar transactions will not be occurring in the foreseeable future. For the purposes of their analyses, the Company's management use Normalised Net profit, being Net profit adjusted for some expense itemsthat are deemed to be substantially beyond their control, such as write—offs of property, plant and equipment and foreign currency exchangegains and losses, as well as items believed to be non—recurring. The non—recurring expenses currently include the effect of additional return onwarrants (Note 29 to the Consolidated financial statements), as itis assumed that similar transactions will not be occurring in the foreseeablefuture.

The Normalised Net profit for the periods presented is calculated based on historical information derived from the Consolidated financial statements. The Normalised Net profit for the periods presented is calculated based on historical information derived from the Consolidated financialstatements.

The reconciliation to Normalised Net profit for the period (from continuing operations) is presented as follows: The reconciliation to Normalised Net profit for the period (from continuing operations) is presented as follows:

(in thousand USD) For the year ended (in thousand USD) For the ended year
	31 December 2018 December 31 2018	31 December 2017 December 31 2017	Change in % Change in IV0
CONTINUING OPERATIONS CONTINUING OPERATIONS
Net profit for the period profit for the period Net	27 627 27 627	17 790 17 790
Write-offs of property, plant and equipment \X'rite—offs of property, plant and equipment	2 287 2 287	1 656 1 656
Reversal of impairment of property, plant and equipment Reversal of impairment of property, plant and equipment	- —	(591) (591)
Impairment of property, plant and equipment Impairment of plant and equipment property,	- —	271 271
Foreign currency exchange (loss)/gain, net (loss) Foreign exchange / gain, net currency	(567) (567)	762 762
Non recurring items: Non recurring items:
Effect of additional return Effect of additional return	3 265 3 265	4 214 4 214
Normalised Net profit Normalised Net profit	32 612 32 612	24 102 24 102	35%

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidatedfinancialstatements

The Company also uses normalised Earnings before interest and taxes (EBIT) and normalised Earnings before interest, taxes, depreciation and amortisation (EBITDA) as key measures of its performance. The Company also uses normalised Earnings before interest and taxes (EBIT) and normalised Earnings before interest, taxes, depreciation andamortisation (EBITDA) as key measures of its performance.

Earnings before interest and taxes (EBIT) is an indicator of a company's profitability, calculated as revenue less expenses, the latter excluding tax and interest. To external users, EBIT provides information on the Company's ability to generate earnings directly from its operations, disregarding its cost of capital and the tax burden and thus making the Company's results comparable to similar companies across the industry where those companies may have varying capital structures or tax environments. To the management, EBIT provides a performance measure additionally adjusted for expenses that may be deemed fixed (i.e. stemming from the given capital structure) or externally imposed by the environment (i.e. the tax burden). Earnings before interest and taxes (EBIT) is an indicator of a company's profitability, calculated as revenue less expenses, the latter excludingtax and interest. To external users, EBIT provides information on the Company's ability to generate earnings directly from its operations,disregarding its cost of capital and the tax burden and thus making the Company's results comparable to similar companies across the industrywhere those companies may have varying capital structures or tax environments. To the management, EBIT provides a performance measureadditionally adjusted for expenses that may be deemed fixed (i.e. stemming from the given capital structure) or externally imposed by theenvironment (i.e. the tax burden).

The Company calculates Normalised EBIT by adjusting Net profit for the expense items that are deemed to be substantially beyond the control of management, as well as items believed to be non-recurring. The Normalised EBIT for the periods presented is calculated based on historical information derived from the Consolidated financial statements. The reconciliation to Normalised EBIT for the period (from continuing operations) is presented as follows: The Company calculates Normalised EBIT by adjusting Net profit for the expense items that are deemed to be substantially beyond the controlof management, as well as items believed to be non—recurring. The Normalised EBIT for the periods presented is calculated based on historicalinformation derived from the Consolidated financial statements. The reconciliation to Normalised EBIT for the period (from continuingoperations) is presented as follows:

(in thousand USD) (in USD) thousand	For the	For the year ended ended year
	31 December 2018 31 December 2018	31 December 2017 31 December 2017	Change in % 0/0 Change in
CONTINUING OPERATIONS CONTINUING OPERATIONS
Net profit for the period profit Net for the period	27 627 27 627	17 790 17 790
Write-offs of property, plant and equipment \X'rite—offs of plant and equipment property,	2 287 2 287	1 656 1 656
Reversal of impairment of property, plant and equipment Reversal of impairment of plant and equipment property,	- -	(591) (591)
Impairment of property, plant and equipment Impairment of plant and equipment property,	- -	271 271
Foreign currency exchange (loss)/gain, net (loss) Foreign exchange / gain, net currency	(567) (567)	762 762
Financial expenses, net Financial net expenses,	4 987 4 987	6 043 6 043
Income tax expenses, net Income tax net expenses,	691 691	(3) (3)
Non recurring items: Non recurring items:
Effect of additional return Effect of additional return	3 265 3 265	4 214 4 214
Normalised EBIT Normalised EBIT	38 290 38 290	30 142 30 142	27% 27%

Earnings before interest, taxes, depreciation and amortisation (EBITDA) is calculated as revenue less expenses, the latter excluding tax, interest, depreciation and amortisation. Being a proxy to the operating cash flow before working capital changes, EBITDA is widely used as an indicator of a company's ability to generate cash flows, as well as its ability to service debt. Consequently, to the management EBITDA serves as a measure to estimate financial stability of the Company. Besides, excluding the effect of depreciation and amortisation along with cost of capital and taxation provides to external users another measures comparable to similar companies regardless of varying tax environments, capital structures or depreciation accounting policies. Earnings before interest, taxes, depreciation and amortisation (EBITDA) is calculated as revenue less expenses, the latter excluding tax,interest, depreciation and amortisation. Being a proxy to the operating cash flow before working capital changes, EBITDA is widely used as anindicator of a company's ability to generate cash flows, as well as its ability to service debt. Consequently, to the management EBITDA servesas a measure to estimate financial stability of the Company. Besides, excluding the effect of depreciation and amortisation along with cost ofcapital and taxation provides to external users another measures comparable to similar companies regardless of varying tax environments, capitalstructures or depreciation accounting policies.

The Company calculates Normalised EBITDA by adjusting Net profit for the expense items that are deemed to be substantially beyond the control of management, as well as items believed to be non-recurring. The Normalised EBITDA for the periods presented is calculated based on historical information derived from the Consolidated financial statements. The reconciliation to Normalised EBITDA for the period (from continuing operations) is presented as follows: The Company calculates Normalised EBITDA by adjusting Net profit for the expense items that are deemed to be substantially beyond thecontrol of management, as well as items believed to be non—recurring. The Normalised EBITDA for the periods presented is calculated basedon historical information derived from the Consolidated financial statements. The reconciliation to Normalised EBITDA for the period (fromcontinuing operations) is presented as follows:

(in thousand USD) (in USD) thousand	For the year ended For the ended year
	31 December 2018 31 December 2018	31 December 2017 31 December 2017	Change in % 0/o Change in
CONTINUING OPERATIONS CONTINUING OPERATIONS
Net profit for the period Net profit for the period	27 627 27 627	17 790 17 790
Write-offs of property, plant and equipment \X'rite—offs of plant and equipment property,	2 287 2 287	1 656 1 656
Reversal of impairment of property, plant and equipment and Reversal of impairment of property, plant equipment	- -	(591) (591)
Impairment of property, plant and equipment Impairment of plant and equipment property,	- -	271 271
Foreign currency exchange (loss)/gain, net (loss) / Foreign exchange gain, net currency	(567) (567)	762 762
Financial expenses, net Financial net expenses,	4 987 987 4	6 043 6 043
Income tax expenses, net Income tax net expenses,	691 691	(3) (3)
Depreciation and amortization and Depreciation amortization	12 556 12 556	9 005 9 005
Non recurring items: Non recurring items:
Effect of additional return Effect of additional return	3 265 3 265	4 214 4 214
Normalised EBITDA Normalised EBITDA	50 846 50 846	39 147 39 147	30% 30%

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidatedfinancialstatements

Company's Normalised Net profit, as well as Normalised EBIT and EBITDA increased in Y2018 in comparison with Y2017 mainly due to record harvest of grain resulted in increase in gain from changes in fair value of biological assets and agricultural produce, net in Y2018. Company's Normalised Net profit, as well as Normalised EBlT and EBlTDA increased in Y2018 in comparison with Y2017 mainly duetorecord harvest of grain resulted in increase in gain from changes in fair value of biological assets and agricultural produce, net in Y2018.

Revenue Revenue

The Company's revenue from sales of finished products increased by 4% in Y2018 in comparison with previous period. The Company's revenue from sales of finished products increased by 4% inY2018 in comparison with previous period.

The following table sets forth the Company's sales revenue by products indicated: The following table sets forth the Company's sales revenue by products indicated:

(in thousand USD) (in thousand USD)

	For the year ended For the ended year
	31 December 2018 31 December 2018	31 December 2017 31 December 2017	Change in % Change in 0/0
Corn Corn	81 576 81 576	79 115 79 115	3% 3%
Sunflower Sunflower	24 331 24 331	22 253 22 253	9% 9%
Wheat \X'heat	10 637 10 637	11 031 11 031	-4% —4%
Soy beans Soy beans	9 818 9 818	7 755 7 755	27% 27%
Milk Milk	1 343 1 343	1 495 1 495	-10% —10%
Potatoes Potatoes	885 885	2 112 2 112	-58% —58%
Cattle Cattle	147 147	356 356	-59% —59%
Other Other	1 676 1 676	1 882 1 882	-11% —11%
	130 413 130 413	125 999 125 999	4% 4%

The most significant portion of the Company's revenue comes from selling corn, which represented 62,6% in Y2018 and 62,8% in Y2017 of total revenue. The most significant portion of the Company's revenue comes from selling corn, which represented 62,6% in Y2018 and 62.8% inY2017oftotal revenue.

The following table sets forth the volume of the Company's main crops and revenues generated from the sales of such crops: The following table sets forth the volume of the Company's main crops and revenues generated from the sales of such crops:

	For the year ended ended For the year
	31 December 2018 31 December 2018	31 December 2017 31 December 2017
Corn Corn
Sales of produced corn (in tonnes) (in tonnes) Sales of produced corn	495 823 495 823	510 320 510 320
Realization price (U.S. \$ per ton) (US. ton) Realization price 8 per	165 165	155 155
Revenue from produced corn (U.S. \$ in thousands) (US. Revenue from produced 8 in thousands) corn	81 576 81 576	79 115 79 115
Wheat Wheat
Sales of produced wheat (in tonnes) Sales of produced (in tonnes) wheat	62 978 62 978	74 228 228 74
Realization price (U.S. \$ per ton) Realization (US. ton) price 8 per	169 169	149 149
Revenue from produced wheat (U.S. \$ in thousands) (US. thousands) Revenue from produced wheat \$ in	10 637 10 637	11 031 11 031
Soy beans Soy beans
Sales of produced soy beans (in tonnes) Sales of produced (in tonnes) beans soy	27 312 27 312	20 026 20 026
Realization price (U.S. \$ per ton) Realization (US. ton) price 35 per	359 359	387 387
Revenue from produced soy beans (U.S. \$ in thousands) (US. thousands) Revenue from produced beans 5 in soy	9 818 9 818	7 755 7 755
Sunflower Sunflower
Sales of produced sunflower (in tonnes) Sales of produced sunflower (in tonnes)	80 902 80 902	66 717 66 717
Realization price (U.S. \$ per ton) (US. Realization price ton) 8 per	301 301	334 334
Revenue from produced sunflower (U.S. \$ in thousands) Revenue from produced sunflower (US. \$ thousands) in	24 331 24 331	22 253 22 253
Potatoes Potatoes
Sales of produced potatoes (in tonnes) Sales of produced (in tonnes) potatoes	8 290 8 290	24 428 24 428
Realization price (U.S. \$ per ton) (US. \$7 ton) Realization price per	107 107	86 86
Revenue from produced potatoes (U.S. \$ in thousands) (US. thousands) Revenue from produced potatoes 8 in	885 885	2 112 2 112
Other (produced only) (produced only) Other
Total sales volume (in tonnes) (in tonnes) Total sales volume	18 694 18 694	20 778 20 778
Total revenues (U.S. \$ in thousands) (US. \$7 thousands) Total in revenues	1 676 1 676	1 882 1 882
Total sales volume (in tonnes) (in tonnes) Total sales volume	693 999 693 999	716 497 716 497
Total revenue from sale of crops (U.S. \$ in thousands) (US. \$ thousands) Total from sale of in revenue crops	128 923 128 923	124 148 124 148

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidated financial statements

Revenue relating to sales of corn increased by 3% to USD 81,6 million in current period from USD 79,1 million in previous period, mainly due to an increase in realization price in 2018. Revenue relating to sales of corn increased by 3% to USD 81,6 million in current period from USD 79,1 million in previous period, mainly dueto an increase in realization price in 2018.

Revenue relating to sales of sunflower increased by 9% to USD 24,3 million in current period from USD 22,3 million in previous period, due to an increase in sales volume (tonnes) in 2018. Revenue relating to sales of sunflower increased by 9% to USD 24,3 million in current period from USD22,3 million in previous period, dueto an increase in sales volume (tonnes) in 2018.

Revenue relating to sales of wheat decreased by 4% to USD 10,6 million in current period from USD 11,0 million in previous period, due to decrease in sales volume (tonnes) in 2018. Revenue relating to sales of wheat decreased by 4% to USD10,6 million in current period from USD 11,0 million in previous period, duetodecrease in sales volume (tonnes) in 2018.

Revenue relating to sales of soy beans increased by 27% to USD 9,8 million in current period from USD 7,8 million in previous period, due to an increase in sales volume (tonnes) in 2018. Revenue relating to sales of soy beans increased by 27% to USD 9,8 million in current period from USD 7,8 million in previous period, duetoan increase in sales volume (tonnes) in 2018.

Revenues relating to sales of milk and cattle decreased in current period by 10% and 59% correspondingly due to decrease in the sales volume because of change in the structure of the herd and reorganization of dairy farms. Revenues relating to sales of milk and cattle decreased in current period by 10% and 59% correspondingly due to decrease in the sales volumebecause of change in the structure of the herd and reorganization of dairy farms.

Cost of sales Cost of sales

The Company's cost of sales changed to USD 138,9 million in current period from USD 139,1 million in previous period. The following table sets forth the principal components of the Company's cost of sales for the periods indicated: The Company's cost of sales changed to USD 138,9 million in current period from USD 139,1 million in previous period. The following tablesets forth the principal components of the Company's cost of sales for the periods indicated:

(in thousand USD) (in USD) thousand	For the year ended For the ended year
	31 December 2018 31 December 2018	31 December 2017 31 December 2017	Change in % Change in %

Raw materials Raw materials	(96 669) (96 669)	(99 306) (99 306)	-3% —3%
Change in inventories and work-in-progress Change in inventories and work—in—progress	11 458 11 458	6 056 6 056	89% 89%
Rent Rent	(15 042) (15 042)	(13 996) (13 996)	7% 7%
Depreciation and amortization Depreciation and amortization	(10 210) (10 210)	(7 498) (7 498)	36% 36%
Wages and salaries of operating personnel and related charges \X'ages and and related salaries of operating personnel charges	(9 148) (9 148)	(7 158) (7 158)	28% 28%
Fuel and energy supply Fuel and supply energy	(13 868) (13 868)	(11 719) (11 719)	18% 18%
Third parties' services Third parties' services	(6 032) (6 032)	(3 602) (3 602)	67% 67%
Repairs and maintenance Repairs and maintenance	(1 086) (1 086)	(768) (768)	41% 41%
Taxes and other statutory charges Taxes and other statutory charges	(589) (589)	(1 036) (1 036)	-43% —43%
Other expenses Other expenses	(78) (78)	(59) (59)	32% 32%
	(138 854) (138 854)	(139 086) (139 086)	- -

Increase in cost of sales consists of general increase of all items as a result of inflation and exchange rate fluctuations. But this growth was eliminated by a change in inventories and work-in-progress, since a big part of inventories left in stock. Increase in cost of sales consists of general increase of all items as a result ofinflation and exchange rate fluctuations. But this growth waseliminated by a change in inventories and work—in—progress, since a big part of inventories left in stock.

Gross profit Gross profit

The Company's gross profit increased to USD 64,7 million in current period from USD 50,5 million in previous period, an 28% year-on-year increase. In relative terms, the revenue increased by 4% and gain from changes in fair value of biological assets and agricultural produce increased by 17%. The Company's gross profit increased to USD64,7 million in current period from USD50,5 million in previous period, an 28% year—on—yearincrease. In relative terms, the revenue increased by 4% and gain from changes in fair value ofbiological assets and agricultural produce increasedby 17%.

Administrative expenses Administrative expenses

Administrative expenses increased year-on-year to USD 11,9 million in current period from USD 9,6 million in previous period, reflecting an increase in wages and salaries of administrative personnel and related charges to USD 9,4 million from USD 7,1 million. Administrative expenses increased year—on—year to USD 11,9 million in current period from USD 9,6 million in previous period, reflectinganincrease in wages and salaries of administrative personnel and related charges to USD 9,4 million from USD 7,1 million.

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidatedfinancialstatements

Selling and distribution expenses Selling and distribution expenses

Selling and distribution expenses increased year-on-year to USD 11,8 million in current period from USD 8,9 million in previous period, reflecting an increase in delivery costs in 2018. Selling and distribution expenses increased year—on—year to USD11,8 million in current period from USD 8,9 million in previous period,reflecting an increase in delivery costs in 2018.

Other operating income Other operating income

The Company's other operating income decreased by 41% to USD 0,9 million in current period from USD 1,6 million in previous period due to decrease in gain on recovery of assets previously written in Y2018. The Company's other operating income decreased by 41% to USD 0,9 million in current period from USD 1,6 million in previous period dueto decrease in gain on recovery of assets previously written in Y2018.

Other operating expenses Other operating expenses

Other operating expenses increased by 47% to USD 5,0 million in current period from USD 3,4 million in previous period reflecting an increase in depreciation and loss on disposal of property, plant and equipment. Other operating expenses increased by 47% toUSD 5,0 million in current period from USD 3,4 million in previous period reflecting an increasein depreciation and loss on disposal of property, plant and equipment.

Financial expenses, net Financial expenses, net

The Company's financial expenses, net decreased by 17% to USD 5,0 million in current period from USD 6,0 million in previous period. This decrease was related to the repayment of loans and borrowings in 2017-2018. The Company's financial expenses, net decreased by 17% to USD 5,0 million in current period from USD 6,0 million in previous period. Thisdecrease was related to the repayment of loans and borrowings in 2017—2018.

Foreign currency exchange, net Foreign currency exchange, net

Foreign currency exchange, net increase to USD 0,6 million in current period from USD 0,8 million of losses in previous period. This increase reflected the strengthening of UAH in 2018 in comparison with 2017 – 1,4% of revaluation as at 31 December 2018 in comparison with 3,1% of devaluation as at 31 December 2017. Foreign currency exchange, net increase to USD 0,6 million in current period from USD 0,8 million oflosses in previous period. This increasereflected the strengthening of UAH in 2018 in comparison with 2017 — 1,4% of revaluation as at 31 December 2018 in comparison with 3,1%of devaluation as at 31 December 2017.

Cash flows Cash flows

The following table sets out a summary of the Company's cash flows for the periods indicated: The following table sets out a summary of the Company's cash flows for the periods indicated:

(in thousand USD) USD) (in thousand	For the year ended For the ended year
	31 December 2018 31 December 2018	31 December 2017 31 December 2017

Net cash flows from operating activities Net cash flows from operating activities	28 173 28 173	32 412 32 412
Net cash flows from investing activities flows Net cash from investing activities	(4 530) (4 530)	(4 939) (4 939)
Net cash flows from financing activities Net cash flows from financing activities	(22 130) (22 130)	(23 945) (23 945)
Net increase in cash and cash equivalents Net increase in cash and cash equivalents	1 513 1 513	3 528 3 528

Net cash flow from operating activities Nit/'2' tax/aflowfl'om @erafing atflm'fz'ex

The Company's net cash inflow from operating activities decreased to USD 28,2 million in current period from USD 32,4 million in previous period. The decrease in 2018 was primarily attributable to changes in inventories. The Company's net cash inflow from operating activities decreased to USD 28,2 million in current period from USD 32,4 million in previousperiod. The decrease in 2018 was primarily attributable to changes in inventories.

Net cash flow from investing activities Nit/'2' tax/aflowflom z'mr'eyz'iflg attizlilies

The Company's net cash outflow from investing activities is almost equal to the previous period amount - USD 4,5 million in Y2018 and USD 4,9 million in Y2017. The Company's net cash outflow from investing activities is almost equal to the previous period amount — USD 4,5 million in Y2018 andUSD 4,9 million in Y2017.

Net cash flow from financing activities Net [ax/aflozL/fl'omfimmmg aria/flies

Net cash outflow from financing activities decreased to USD 22,1 million in current period from USD 23,9 million in previous period. The decrease in 2018 was primarily due to achieving the optimal level of debt and reducing loan repayment amounts, which made it possible to pay a larger amount of dividends than last year. Net cash outflow from financing activities decreased to USD22,1 million in current period from USD 23,9 million in previous period. Thedecrease in 2018 was primarily due to achieving the optimal level of debt and reducing loan repayment amounts, which made it possible to paya larger amount of dividends than last year.

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidated financial statements

3. Risk report 3. Risk report

Risks relating to the Industry Risks relating to the Industry

Grains prices volatility Graimprires yo/az'i/zbr

Changes in market prices for grains can adversely influence on IMC's earnings and financial results. Changes in market prices for grains can adversely influence on lMC's earnings and financial results.

To decrease an influence of this risk the Group on permanent basis researches the international and Ukrainian agricultural markets, monitoring price fluctuations and factors affecting these fluctuations (stocks, production, consumption, export, import, forecasts). Based on an analysis of the above-mentioned information the management of the Group makes decisions regarding crop rotation structure and production plans. To decrease an influence of this risk the Group on permanent basis researches the international and Ukrainian agricultural markets,monitoring price fluctuations and factors affecting these fluctuations (stocks, production, consumption, export, import, forecasts). Basedon an analysis of the above—mentioned information the management of the Group makes decisions regarding crop rotation structure andproduction plans.

Sound control over the grains production costs at IMC allows the company to ensure sufficient level of marginality regardless price fluctuations. The Group cooperates with large grain traders, which allows to sell large quantities of grain at the most favorable prices of the export market. Sound control over the grains production costs at IMC allows the company to ensure sufficient level of marginality regardless pricefluctuations. The Group cooperates with large grain traders, which allows to sell large quantities of grain at the most favorable prices ofthe export market.

Operational risks Operational risks

Adverse weather conditions Adz/em: wear/Jew mndz'z'z'om

Poor and unexpected weather conditions may disrupt the Group's production of crops. Poor and unexpected weather conditions may disrupt the Group's production of crops.

The land cultivated by the Group is spread between different climate zones of Ukraine. This allows to reduce the possible negative impact of adverse weather conditions. Additionally, to mitigate an influence of this risk IMC uses the following practices: The land cultivated by the Group is spread between different climate zones of Ukraine. This allows to reduce the possible negative impactof adverse weather conditions. Additionally, to mitigate an influence of this risk IMC uses the following practices:

On the fields of IMC the system of different depth soil cultivation is applied: deep ripping, ploughing, disking, and cultivation. Rotation of these cultivation methods allows creating the optimal conditions for growing and development of agricultural crops; — On the fields of IMC the system of different depth soil cultivation is applied: deep ripping, ploughing, disking, and cultivation.Rotation of these cultivation methods allows creating the optimal conditions for growing and development of agricultural crops;
Cultivation of relatively small share (10%) of winter crops in the general crop rotation structure enables to decrease the risk of disruption of a general production of crops during unfavorable winter conditions. — Cultivation of relatively small share (10%) of winter crops in the general crop rotation structure enables to decrease the riskofdisruption of a general production of crops during unfavorable winter conditions.
Increase of inputs costs I1167mm ofz'npm's mm

The Group's operating costs could increase and adversely affect the IMC's financial performance. The risk of Group's operating costs increase is basically connected to a possible price growth for fuel, seeds, fertilizers and crop protection materials. The Group's operating costs could increase and adversely affect the IMC's financial performance. The risk of Group's operating costsincrease is basically connected to a possible price growth for fuel, seeds, fertilizers and crop protection materials.

To reduce the risks mentioned above the Group: To reduce the risks mentioned above the Group:

has implemented the fuel consumption and machinery usage controlling systems using GPS-trackers; — has implemented the fuel consumption and machinery usage controlling systems using GPS-trackers;
follows the land bank development strategy based on principle of fields' close proximity to each other that allows to reduce fuel consumption; — follows the land bank development strategy based on principle of fields' close proximity to each other that allows to reducefuel consumption;
is focused on limited number of crops that allows to use and purchase seeds, fertilizers and crop protection materials more efficiently; — is focused on limited number of crops that allows to use and purchase seeds, fertilizers and crop protection materials moreefficiently;
has built long-term and mutually benefit relationships with suppliers of seeds, fertilizers and crop protection materials. — has built long—term and mutually benefit relationships with suppliers of seeds, fertilizers and crop protection materials.
Credit risk Credit ripe

Counterparties involved in transactions with IMC may fail to make scheduled payments, resulting in financial losses to IMC. Counterparties involved in transactions with IMC may fail to make scheduled payments, resulting in financial losses to IMC.

To decrease an influence of this risk the Group has implemented credit policy and monitoring practices. Police and operating guidelines include limits in respect of counterparties to ensure that there is no significant concentration of credit risk. Credit risks are managed by legal activities which include security paragraphs into agreements with customers. Also the financial department of the Group constantly carries out monitoring over payment terms deadlines according to goods selling contracts. To decrease an influence of this risk the Group has implemented credit policy and monitoring practices. Police and operating guidelinesinclude limits in respect of counterparties to ensure that there is no significant concentration of credit risk. Credit risks are managedbylegal activities which include security paragraphs into agreements with customers. Also the financial department of the Group constantlycarries out monitoring over payment terms deadlines according to goods selling contracts.

Risk of key personnel shortage Rik/é of/ég'pemaime/51mr2'age

A lack of key personnel can threaten the overall performance of IMC. A lack of key personnel can threaten the overall performance of IMC.

The Group conducts series of activities to mitigate this risk. IMC offers competitive working conditions for potential employees. Performance related remuneration scheme exists to motivate and retain key staff. IMC cooperates with a number of Ukrainian educational institutions for selection and hiring talented students. Educational and professional trainings are regularly held for personnel at IMC. The Group conducts series of activities to mitigate this risk. IMC offers competitive working conditions for potential employees.Performance related remuneration scheme exists to motivate and retain key staff. IMC cooperates with a number of Ukrainian educationalinstitutions for selection and hiring talented students. Educational and professional trainings are regularly held for personnel at IMC.

Risk of land loss 0 Kirk of/zmd [orr

Land is a key recourse in agricultural production and termination of essential number of land lease agreements can cause significant damage for the Group. Land is a key recourse in agricultural production and termination of essential number of land lease agreements can cause significantdamage for the Group.

To mitigate this risk, the Group holds a number of social events for the local communities to make IMC's presence beneficial for Company's land lessors. The terms of land lease agreements have been revised and re-signed in the best interest of counterparties. As at 31 December 2018 92% of land lease agreement are valid for a period over 5 years and 76% of contracts are valid for a period of more than 10 years. To mitigate this risk, the Group holds a number of social events for the local communities to make IMC's presence beneficial forCompany's land lessors. The terms of land lease agreements have been revised and re-signed in the best interest of counterparties. Asat31 December 2018 92% of land lease agreement are valid for a period over 5 years and 76% of contracts are valid for a period of morethan 10 years.

Risk of cybersecurity incidents 0 Kirk afg'lierrei'iti'z'i'y imiilmz'r

IMC's corporate information system can be corrupted by virus attack or external intrusion. IMC's corporate information system can be corrupted by virus attack or external intrusion.

Operations of the Group are highly dependent on corporate IT system in all aspects. Companies of the Group have experienced cybersecurity attack which has not had a material impact on our business. To prevent and mitigate this risk a series of actions has been done. The infrastructure of IMC's intranet has been improved in order to mitigate the risk of unauthorized external intrusion. A backup process was reconstructed to ensure a maximum possible safety of corporate business data. The riskiest points of unauthorized external intrusion have been isolated outside IMC's intranet. Operations of the Group are highly dependent on corporate IT system in all aspects. Companies of the Group have experiencedcybersecurity attack which has not had a material impact on our business. To prevent and mitigate this risk a series of actions has beendone. The infrastructure of IMC's intranet has been improved in order to mitigate the risk of unauthorized external intrusion. A backupprocess was reconstructed to ensure a maximum possible safety of corporate business data. The riskiest points of unauthorized externalintrusion have been isolated outside IMC's intranet.

Financial risks Financial risks

Risk of capital deficiency 0 Kirk ofmpiz'a/ defii'img'

Failure to generate or raise sufficient capital may restrict the Group's development strategy Failure to generate or raise sufficient capital may restrict the Group's development strategy

To decrease an influence of this risk the Group works on several sources of financing: bank crediting, financing by international financial organizations. To decrease an influence of this risk the Group works on several sources of financing: bank crediting, financing by international financialorganizations.

Risk of liquidity 0 Kirk of/i'qyidig/

It exists the risk of inability to meet financial obligations of the Group in due time. It exists the risk ofinability to meet financial obligations of the Group in due time.

To minimize such risk IMC maintains efficient budgeting and cash management processes to ensure that adequate funds are available to meet business requirements. IMC adopts a flexible CAPEX program enabling capital projects to be deferred if necessary. To minimize such risk IMC maintains efficient budgeting and cash management processes to ensure that adequate funds are availabletomeet business requirements. IMC adopts a flexible CAPEX program enabling capital projects to be deferred ifnecessary.

Risk of interest rate volatility 0 Kirk ofim'ereri' mtg w/az'i/ig'

Fluctuations of interest rates influence on the cost of IMC's borrowings. Fluctuations ofinterest rates influence on the cost of IMC's borrowings.

The Group utilizes balancing strategy to mitigate interest rate risk. The portfolio of IMC's borrowings consists of 45% of float rate debt and 55% of fixed rate debt. The Group utilizes balancing strategy to mitigate interest rate risk. The portfolio of IMC's borrowings consists of 45% of float rate debtand 55% of fixed rate debt.

IMC's creditors are well-known banks with a foreign capital or international financial institutions. As result, the cost of IMC's financial resources is lower than the market average. IMC's creditors are well—known banks with a foreign capital or international financial institutions. As result, the cost of lMC's financialresources is lower than the market average.

Fluctuation in currency exchange rates 0 F/itifitalion in Emma)! exv/Mizge rater

Unfavorable movements of currency exchange rates can lead to deteriorating of company's financial results. Unfavorable movements of currency exchange rates can lead to deteriorating of company's financial results.

The Group utilizes matching strategy to reduce this risk. The main functional currencies for IMC are Ukrainian hryvnia and US dollar. In the course of regular financial planning cash inflows and outflows are matched in each currency. IMC has a stable revenue both in UAH and US dollar which allows to exploit hedging strategy against national currency devaluation. The Group utilizes matching strategy to reduce this risk. The main functional currencies for IMC are Ukrainian hryvnia and US dollar. Inthe course of regular financial planning cash inflows and outflows are matched in each currency. IMC has a stable revenue both in UAHand US dollar which allows to exploit hedging strategy against national currency devaluation.

Legal and regulatory risks Legal and regulatory risks

Risk of non-compliance 0 Kirk offloiz-mmp/iame

The Group's business is influenced by regulatory rules of each country where IMC operates. A breach of these rules can cause legal proceedings and additional costs for the Company. The Group's business is influenced by regulatory rules of each country where IMC operates. A breach of these rules can cause legalproceedings and additional costs for the Company.

The monitoring of legislation changes is constantly conducted by the Legal Department at IMC. Employees regularly visit specialized events on legal issues. Group's business operations are conducted in accordance with current legislation taking into account possible future regulatory development. The monitoring of legislation changes is constantly conducted by the Legal Department at IMC. Employees regularly visit specializedevents on legal issues. Group's business operations are conducted in accordance with current legislation taking into account possiblefuture regulatory development.

IMC S.A. AND ITS SUBSIDIARIES IMC S.A. AND ITS SUBSIDIARIES

Consolidated financial statements Consolidated financial statements

Anti-corruption and bribery matters Anti-corruption and bribery matters

It is the policy of the Group not to engage in bribery or corruption and comply with applicable anti-corruption laws. It is the policy of the Group not to engage in bribery or corruption and comply with applicable anti—corruption laws.

We adhere to the UN Global Compact principles: we adhere to the UN Global Compact principles:

We shall work against corruption in all its forms, including extortion and bribery. — we shall work against corruption in all its forms, including extortion and bribery.
Making, promising or offering any payments, gifts or inducements with the purpose of influencing someone (incl. government officials, suppliers, clients, etc.) to act improperly is strictly forbidden; the same applies to accepting payments, gifts or inducements. — Making, promising or offering any payments, gifts or inducements with the purpose of influencing someone (incl. government officials, suppliers, clients, etc.) to act improperly is strictly forbidden; the same applies to accepting payments, gifts or inducements.
All payments should be reasonable and fall within the acceptable commercial practice. — All payments should be reasonable and fall Within the acceptable commercial practice.
All such expenses have to be properly recorded in the accounts. — All such expenses have to be properly recorded in the accounts.
We do not tolerate so-called facilitating payments (for example small unofficial payments to officials in order to speed up processes). — we do not tolerate so—called facilitating payments (for example small unofficial payments to officials in order to speed up processes).
The Group does not make political contributions. — The Group does not make political contributions.
When engaging in business relationships the Group chooses its partners with the same zero tolerance approach to corruption and bribery. — W'hen engaging in business relationships the Group chooses its partners with the same zero tolerance approach to corruption and bribery.
The Group appreciates the risk of corruption and bribery in the countries it operates and continues to take measures to minimize this risk. — The Group appreciates the risk of corruption and bribery in the countries itoperates and continues to take measures to minimize this risk.
All funds received and paid by the Group and its subsidiaries during the course of business are strictly accounted and handled via bank transfers exclusively to minimize the possibilities of cash being taken in or out for the purposes of bribery. In 2018, the Group continued to ensure its adherence to such cash management. — All funds received and paid by the Group and its subsidiaries during the course of business are strictly accounted and handled via bank transfers exclusively to minimize the possibilities of cash being taken in or out for the purposes of bribery. In 2018, the Group continued to ensure its adherence to such cash management.

4. Selected Financial Data 4. Selected Financial Data

(in thousand USD) (in thousand USD)

	For the year ended For the year ended	31 December 2018 December 31 2018	31 December 2017 December 31 2017
I. I.	Revenue Revenue	131 611 131 611	126 761 126 761
II. II.	profit/ Operating profit/(loss) Operating (loss)	36 003 36 003	28 806 28 806
III. III.	Profit/(loss) before income tax Profit/(loss) before income tax	28 318 28 318	17 787 787 17
IV. IV.	Net profit/(loss) Net profit/(loss)	27 627 27 627	17 790 790 17
V. V.	Net cash flow from operating activity Net flow from operating activity cash	28 173 28 173	32 412 32 412
VI. VI.	Net cash flow from investing activity Net flow from investing activity cash	(4 530) 530) (4	(4 939) 939) (4
VII. VII.	Net cash flow from financing activity Net flow from financing activity cash	(22 130) (22 130)	(23 945) (23 945)
VIII. VIII.	Total net cash flow flow Total net cash	1 513 1513	3 528 528 3
IX. IX.	Total assets Total assets	198 206 206 198	180 094 094 180
X. X.	Share capital capital Share	59 59	59 59
XI. XI.	Total equity Total equity	120 670 120 670	104 038 104 038
XII. XII.	Non-current liabilities liabilities Non—current	18 816 18 816	30 923 30 923
XIII. XIII.	Current liabilities Current liabilities	58 720 58 720	45 133 45 133
XIV. XIV.	of Weighted average number of shares number \Weighted average shares	33 178 000 33 178 000	32 190 121 32 190 121
XV. XV.	Profit/(loss) per ordinary share (in USD) Profit/(loss) ordinary per (in USD) share	0,83 0,83	0,55 0,55
XVI. XVI.	Book Book value per share (in USD) per (in USD) value share	3,62 3,62	3,22 3,22

On behalf of the Management: On behalf of the Management:

Chief Executive Officer Officer Chief Executive	ALEX ALEX LISSITSA LISSITSA	__signed______ signed
Chief Financial Officer Officer Chief Financial	MARTYNIUK DMYTRO MARTYNIUK __signed______ DMYTRO	signed

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidatedfinancialstatements

IMC S.A. Société anonyme Registered office: 16 rue Erasme L-1468Luxembourg, Grand Duchy of Luxembourg R.C.S Luxembourg: B 157843 (the Company) IMC S.A. Xaviéz'é away/7M Registered office: 16 rue Erasme L—1468Luxembourg, Grand Duchy of LuxembourgR.C.S Luxembourg: E 157843 (the Company)

Corporate governance statement Corporate governance statement

Corporate governance Corporate governance

Corporate governance within the Company is based on the Luxembourg law and the listing requirements of the Warsaw Stock exchange where the trading in the Company shares takes place. The Company follows New Code of Best Practices for WSE Listed Companies that entered into force on 1 January 2016 (the "2016 WSE Code", as amended on 13 October 2015). Corporate governance within the Company is based on the Luxembourg law and the listing requirements of the \Y/arsaw Stock exchange wherethe trading in the Company shares takes place. The Company follows New Code of Best Practices for \XVSE Listed Companies that entered intoforce on 1 January 2016 (the "2016 W'SE Code", as amended on 13 October 2015).

The Company's corporate governance rules are based on the Company's articles of Association (the "Articles"), and the corporate governance charter (the "Corporate Governance Charter"), and the Company's internal regulations. The Company's corporate governance rules are based on the Company's articles of Association (the "Articles"), and the corporate governancecharter (the "Corporate Governance Charter"), and the Company's internal regulations.

Board of Directors Board of Directors

According to the Articles of Association ('STATUTS COORDONNES'), the Company shall be managed by the Board of Directors composed of at least five members, their number being determined by the general meeting of shareholders. Directors need not be shareholders of the Company. The Board of Directors is composed of executive and non-executive directors. At least two directors shall be independent nonexecutive directors. According to the Articles ofAssociation ('STATUTS COORDONNES'), the Company shall be managed by the Board of Directors composedof at least five members, their number being determined by the general meeting of shareholders. Directors need not be shareholders of theCompany. The Board of Directors is composed of executive and non—executive directors. At least two directors shall be independent nonexecutive directors.

The directors shall be elected by the general meeting of shareholders for a period not exceeding six (6) years and until their successors are elected, provided, however, that any director may be removed at any time by a resolution taken by the general meeting of shareholders. The directors shall be eligible for reappointment. The directors shall be elected by the general meeting of shareholders for a period not exceeding six (6) years and until their successors areelected, provided, however, that any director may be removed at any time by a resolution taken by the general meeting of shareholders. Thedirectors shall be eligible for reappointment.

In the event of vacancy in the office of a director because of death, resignation or otherwise, the remaining directors elected by the general meeting of shareholders may elect a director to fill such vacancy until the next general meeting of shareholders. In the event of vacancy in the office of a director because of death, resignation or otherwise, the remaining directors elected by the generalmeeting of shareholders may elect a director to fill such vacancy until the next general meeting of shareholders.

Directors: Directors:

Name Name	Initial date of appointment lnitial date of appointment	End of mandate End of mandate
1.Mr. Alex Lissitsa, executive director, CEO Alex Lissitsa, executive director, CEO 1.Mr.	29 March 2012 March 29 2012	2022 2022
2.Mr. Dmytro Martyniuk, executive director, CFO Martyniuk, executive director, CFO 2.Mr. Dmytro	09 March 2011 March 09 2011	2022 2022
3. Mr. Oleksandr Petrov, executive director, Chairman Mr. Oleksandr Petrov, executive director, Chairman 3.	09 March 2011 March 09 2011	2022 2022
4. Mr. Alfons Balman, non-executive director Mr. Alfons Balman, non-executive director 4.	10 September 2013 10 September 2013	2019 2019
5.Mr. Kamil Jan Gaworecki, non-executive director 5.Mr. KamilJan Gaworecki, non-executive director	01 June 2016 01 June 2016	2019 2019

With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association (hereafter referred Articles of Association) and Luxembourg Companies Law 1915. The Articles of Association may be amended from time to time by a general meeting of the shareholders under the quorum and majority requirement provided for by the law of 10 August 1915 on commercial companies in Luxembourg, as amended. \With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association (hereafter referredArticles of Association) and Luxembourg Companies Law 1915. The Articles of Association may be amended from time to time by a generalmeeting of the shareholders under the quorum and majority requirement provided for by the law of 10 August 1915 on commercial companiesin Luxembourg, as amended.

The present Board is composed of two independent directors and three directors who either are employed by Subsidiaries of the Company or hold over 5% of votes in the Company. The present Board is composed of two independent directors and three directors who either are employed by Subsidiaries of the Companyorhold over 5% of votes in the Company.

Independency is assessed taking into consideration the criteria stated in Annex II of the European Commission Recommendation of 15 February 2005. Independency is assessed taking into consideration the criteria stated in Annex II of the European Commission Recommendation of 15 February2005.

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidated financial statements

Powers of Directors Powers of Directors

The Board is responsible for managing the business affairs of the Company within the clauses of the Article of Association. The directors may only act at duly convened meetings of the Board of Directors or by written consent in accordance with article 12 of Articles of Association. The Board is responsible for managing the business affairs of the Company within the clauses of the Article of Association. The directors mayonly act at duly convened meetings of the Board of Directors or by written consent in accordance with article 12 of Articles of Association.

The Board of Directors is vested with the broadest powers to act on behalf of the Company and to perform or authorize all acts of administrative or disposal nature, necessary or useful for accomplishing the Company's object. All powers not expressly reserved by the Law to the sole shareholder or, as the case may be, to the general meeting of shareholders, fall within the competence of the Board of Directors. The Board ofDirectors is vested with the broadest powers to act on behalf of the Company and to perform or authorize all acts of administrativeor disposal nature, necessary or useful for accomplishing the Company's object. All powers not expressly reserved by the Law to the soleshareholder or, as the case may be, to the general meeting of shareholders, fall within the competence of the Board of Directors.

Meetings of the Board of Directors Meetings of the Board of Directors

The Board of Directors meets upon notice given by the Chairman. A meeting of the Board of Directors must be convened if any two directors so require. The Chairman presides at all meetings of the Board of Directors. In Cairman's absence the Board of Directors may appoint another director as chairman pro tempore by vote of the majority present or represented at such meeting. Except in cases of urgency or with the prior consent of all those entitled to attend, there should be given written notice at least twenty-four hours before the meeting of the Board of Directors. Any such notice shall specify the place, the date, time and agenda of the meeting. The notice may be waived by unanimous written consent by all the directors at the meeting or otherwise. No separate notice is required for meetings held at times and places specified in a time schedule previously adopted by resolution of the Board of Directors. The Board of Directors meets upon notice given by the Chairman. A meeting of the Board of Directors must be convened ifany two directorsso require. The Chairman presides at all meetings of the Board of Directors. In Cairman's absence the Board of Directors may appoint anotherdirector as chairman pro tempore by vote of the majority present or represented at such meeting. Except in cases of urgency or with the priorconsent of all those entitled to attend, there should be given written notice at least twenty-four hours before the meeting of the Board ofDirectors. Any such notice shall specify the place, the date, time and agenda of the meeting. The notice may be waived by unanimous writtenconsent by all the directors at the meeting or otherwise. No separate notice is required for meetings held at times and places specified in a timeschedule previously adopted by resolution of the Board of Directors.

Every board meeting shall be held in Luxembourg or at such other place indicated in the notice. Every board meeting shall be held in Luxembourg or at such other place indicated in the notice.

Decisions will be taken by a majority of the votes of the directors present or represented at the relevant meeting. Each director has one vote. In case of a tied vote, the Chairman has a casting vote. Decisions will be taken by a majority of the votes of the directors present or represented at the relevant meeting. Each director has one vote. Incase of a tied vote, the Chairman has a casting vote.

One or more directors may participate in a meeting by means of a conference call, by videoconference or by any similar means of communication enabling several persons participating therein to simultaneously communicate with each other. Such methods of participation are to be considered equivalent to a physical presence at the meeting. One or more directors may participate in a meeting by means ofa conference call, by videoconference or by any similar means of communicationenabling several persons participating therein to simultaneously communicate with each other. Such methods of participation are to beconsidered equivalent to a physical presence at the meeting.

A written decision passed by circular means and transmitted by cable, facsimile or any other similar means of communication, signed by all the directors, is proper and valid as though it had been adopted at a meeting of the Board of Directors which was duly convened and held. Such a decision can be documented in a single document or in several separate documents having the same content and each of them signed by one or several directors. Except as far as a written decision passed by circular means is concerned, the minutes of the meeting of the Board of Directors shall be signed by the Chairman of the relevant meeting or any two directors or as resolved at the relevant board meeting or a subsequent board meeting. Any proxies will remain attached thereto. A written decision passed by circular means and transmitted by cable, facsimile or any other similar means of communication, signed by all thedirectors, is proper and valid as though ithad been adopted at a meeting of the Board of Directors which was duly convened and held. Suchadecision can be documented in a single document or in several separate documents having the same content and each of them signed by oneor several directors. Except as far as a written decision passed by circular means is concerned, the minutes of the meeting of the Board ofDirectors shall be signed by the Chairman of the relevant meeting or any two directors or as resolved at the relevant board meeting or asubsequent board meeting. Any proxies will remain attached thereto.

The Board has established processes regarding internal control and risk management systems to ensure its effective oversight of the financial reporting process. These include appointing an independent administrator (the "Administrator") to maintain the accounting records of the Company independent of IMC S. A. The Administrator has a duty of care to maintain proper books and records and prepare for review and approval by the Board the financial statements intended to give a true and fair view. The Board has appointed Totalserve Management (Luxembourg) S.a.r.l. as Administrator. The Board has established processes regarding internal control and risk management systems to ensure its effective oversight of the financialreporting process. These include appointing an independent administrator (the "Administrator") to maintain the accounting records of theCompany independent of IMC S. A. The Administrator has a duty of care to maintain proper books and records and prepare for review andapproval by the Board the financial statements intended to give a true and fair view. The Board has appointed Totalserve Management(Luxembourg) S.a.r.l. as Administrator.

Committees Committees

Audit Committee Audit Committee

The Audit committee has been established by the Board to assist the Board of directors with independent verifying and safeguard of the integrity of the company's financial reporting; and oversee the independence of the external auditors The Audit committee has been established by the Board to assist the Board of directors with independent verifying and safeguard of the integrityof the company's financial reporting; and oversee the independence of the external auditors

The Committee has responsibility for the following: The Committee has responsibility for the following:

(a) Monitoring the establishment of an appropriate internal control framework; (a) Monitoring the establishment of an appropriate internal control framework;
(b) Monitoring corporate risk assessment and compliance with internal controls; (b) Monitoring corporate risk assessment and compliance with internal controls;
(c) Overseeing business continuity planning and risk mitigation arrangements; (c) Overseeing business continuity planning and risk mitigation arrangements;
(d) Reviewing reports on any material defalcations, frauds and thefts from the Group; (d) Reviewing reports on any material defalcations, frauds and thefts from the Group;

(e) Monitoring compliance with relevant legislative and regulatory requirements (including continuous disclosure obligations) and declarations by the Secretary in relation to those requirements; (e) Monitoring compliance with relevant legislative and regulatory requirements (including continuous disclosure obligations) and declarationsby the Secretary in relation to those requirements;

(f) Reviewing the nomination, performance and independence of the external auditors; (f) Reviewing the nomination, performance and independence of the external auditors;

(g) Liaising with the external auditors and ensuring that the annual audit is conducted in an effective manner that is consistent with Committee members' information and knowledge and is adequate for shareholder needs; (g) Liaising with the external auditors and ensuring that the annual audit is conducted in an effective manner that is consistent with Committeemembers' information and knowledge and is adequate for shareholder needs;

(h) Reviewing management processes supporting external reporting; (h) Reviewing management processes supporting external reporting;

(i) Reviewing financial statements and other financial information distributed externally; and (i) Reviewing financial statements and other financial information distributed externally; and

(j) Reviewing external audit reports to ensure that, where major deficiencies or breakdowns in controls or procedures have been identified, appropriate and prompt remedial action is taken by management. (j) Reviewing external audit reports to ensure that, where major deficiencies or breakdowns in controls or procedures have been identified,appropriate and prompt remedial action is taken by management.

The Committee has an advisory role, consistent with its purpose of assisting the Board in relation to the matters with which it is charged with responsibility, and does not have any power to commit the Board to any recommendation or decision made by it except for matters relating to the appointment, oversight, remuneration and replacement of the external auditors. The Committee has an advisory role, consistent with its purpose of assisting the Board in relation to the matters with which itis charged withresponsibility, and does not have any power to commit the Board to any recommendation or decision made by it except for matters relatingtothe appointment, oversight, remuneration and replacement of the external auditors.

The Committee has unrestricted access to management and the external auditors as it may consider appropriate for the proper performance of its function. The Committee has unrestricted access to management and the external auditors as itmay consider appropriate for the proper performanceofits function.

The Board of Directors shall appoint the chairman and members of the Audit Committee from among the non-executive directors and external members which must be independent. The Audit Committee will comprise a minimum of two members. In any case the chairman of the Audit Committee must be appointed from among non-executive directors. The Board of Directors shall appoint the chairman and members of the Audit Committee from among the non—executive directors and externalmembers which must be independent. The Audit Committee will comprise a minimum of two members. In any case the chairman of the AuditCommittee must be appointed from among non—executive directors.

As of 31 December 2018 Audit committee consisted of two members, Alfons Balmann (chairman), a non-executive director and Kamil Jan Gaworecki (member), non-executive director. In the year 2018 the work of the Audit Committee was confined to reviewing the consolidated audit report and appointment of external auditor. In addition, Audit Committee had held meetings as it determined in Corporate governance chart. As of 31 December 2018 Audit committee consisted of two members, Alfons Balmann (chairman), a non—executive director and Kamil JanGaworecki (member), non—executive director. In the year 2018 the work of the Audit Committee was confined to reviewing the consolidatedaudit report and appointment of external auditor. In addition, Audit Committee had held meetings as itdetermined in Corporate governancechart.

Remuneration Committee Remuneration Committee

The role of the Committee is to advise on remuneration and issues relevant to remuneration policies and practices for senior management. The role of the Committee is to advise on remuneration and issues relevant to remuneration policies and practices for senior management.

The Responsibility of the Remuneration Committee includes issues regarding salaries, bonus programs and other employments terms of the CEO and senior management in conjunction with the Board. The Responsibility of the Remuneration Committee includes issues regarding salaries, bonus programs and other employments terms of theCEO and senior management in conjunction with the Board.

Notably, the Remuneration Committee is responsible for: Notably, the Remuneration Committee is responsible for:

submitting proposals to the Board regarding the remuneration of directors and managers, ensuring that these proposals are in accordance with the remuneration policy adopted by the Company (not adopted yet) — submitting proposals to the Board regarding the remuneration of directors and managers, ensuring that these proposals are in accordance withthe remuneration policy adopted by the Company (not adopted yet)
discussing with the chief executive officer the performance of executive management and of the individual executives at least once a year based on evaluation criteria clearly defined. The chief executive officer should not be present at the discussion of his own evaluation; — discussing with the chief executive officer the performance of executive management and of the individual executives at least once a year basedon evaluation criteria clearly defined. The chief executive officer should not be present at the discussion of his own evaluation;
ensuring that the remuneration of non-executive directors is proportional to their responsibilities and the time devoted to their functions. — ensuring that the remuneration of non—executive directors is proportional to their responsibilities and the time devoted to their functions.

The Board of Directors shall appoint the chairman and members of the Remuneration Committee from among the non-executive directors and external members which must be independent. The Remuneration Committee will comprise a minimum of two members. In any case the chairman of the Remuneration Committee must be appointed from among non-executive directors. The Board of Directors shall appoint the chairman and members of the Remuneration Committee from among the non—executive directors andexternal members which must be independent. The Remuneration Committee will comprise a minimum of two members. In any case thechairman of the Remuneration Committee must be appointed from among non-executive directors.

As of 31 December 2018 the Company hadn't adopted a remuneration policy. Principles of remuneration of the Board members shall be determined by the General Meeting of Shareholders and Board of Directors shall determine the remuneration of the Executives. Remuneration of the Board is related to the Company's financial results. As of 31 December 2018 the Company hadn't adopted a remuneration policy. Principles of remuneration of the Board members shall bedetermined by the General Meeting of Shareholders and Board of Directors shall determine the remuneration of the Executives. Remunerationof the Board is related to the Company's financial results.

Internal control and risk management Internal control and risk management

The Company's internal control over financial reporting includes those policies and procedures that pertain to the maintenance of financial records that, in reasonable detail, accurately and fairly reflect the transactions and disposals of the assets of the Company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements. In accordance with Luxembourg legal and regulatory requirements, that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company, and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposals of the Company's assets that could have a material effect on the financial statements. The Company's internal control over financial reporting includes those policies and procedures that pertain to the maintenance of financialrecords that, in reasonable detail, accurately and fairly reflect the transactions and disposals of the assets of the Company; provide reasonableassurance that transactions are recorded as necessary to permit preparation of financial statements. In accordance with Luxembourg legal andregulatory requirements, that receipts and expenditures of the company are being made only in accordance with authorizations of managementand directors of the company, and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, ordisposals of the Company's assets that could have a material effect on the financial statements.

External audit External audit

In accordance with the Luxembourg law on commercial companies, an external auditor appointed by the annual general meeting of shareholders certifies the Company's annual and consolidated accounts. In accordance with the Luxembourg law on commercial companies, an external auditor appointed by the annual general meeting of shareholderscertifies the Company's annual and consolidated accounts.

The external audit functions for consolidated financial statements for Y2018 and Y2017 are being carried by BDO Audit S.A. The external audit functions for consolidated financial statements for Y2018 and Y2017 are being carried by BDO Audit S.A.

Takeover bids Law statement Takeover bids Law statement

The structure of the capital of the Company is represented in Note 28. The Company is a publicly listed company whose shares are owned primarily by investors and Agrovalley Limited whose beneficial owner is Mr. Olexandr Petrov, chairman of the Board of Directors. As of 31 December 2018, Agrovalley Limited held 23 962 437 shares in the Company, what is equal to 72,22%; 0 The structure of the capital of the Company is represented in Note 28. The Company is a publicly listed company whose shares areowned primarily by investors and Agrovalley Limited whose beneficial owner is Mr. Olexandr Petrov, chairman of the Board ofDirectors. As of 31 December 2018, Agrovalley Limited held 23 962437 shares in the Company, what is equal to 72,22%;
The Company has no securities which are not admitted to trading on a regulated market; 0 The Company has no securities which are not admitted to trading on a regulated market;
The Company has no restrictions on the transfer of securities, such as limitations on the holding of securities or the need to obtain the approval of the company or other holders of securities, without prejudice to article 46 of Directive 2001/34/EC; 0 The Company has no restrictions on the transfer of securities, such as limitations on the holding of securities or the need to obtainthe approval of the company or other holders of securities, without prejudice to article 46 of Directive 2001/34/EC;
The details of those shareholders with an interest of 5% or more in the issued share capital of the Company, as notified to the Company, are set out in Note 28. The Company has no other significant direct or/and indirect shareholdings (including indirect shareholdings through pyramid structures and cross-shareholdings); 0 The details of those shareholders with an interest of 5% or more in the issued share capital of the Company, as notified to theCompany, are set out in Note 28. The Company has no other significant direct or/and indirect shareholdings (including indirectshareholdings through pyramid structures and cross—shareholdings);
The Company has no holders of any securities with special control rights. Transfer of shares is governing by the Articles of Association of the Company; 0 The Company has no holders of any securities with special control rights. Transfer of shares is governing by the Articles ofAssociation of the Company;
The Company has no adopted system of control of any employee share scheme where the control rights are not exercised directly by the employees; 0 The Company has no adopted system of control of any employee share scheme where the control rights are not exercised directlyby the employees;
The Company has no adopted restrictions on voting rights, such as limitations of the voting rights of holders of a given percentage or number of votes, deadlines for exercising voting rights, or systems whereby, with the company's cooperation, the financial rights attaching to securities are separated from the holding of securities; 0 The Company has no adopted restrictions on voting rights, such as limitations of the voting rights of holders of a given percentageor number of votes, deadlines for exercising voting rights, or systems whereby, with the company's cooperation, the financial rightsattaching to securities are separated from the holding of securities;
All of the issued and outstanding shares in the Company have equal voting rights and there are no special control rights attaching to the shares; 0 All of the issued and outstanding shares in the Company have equal voting rights and there are no special control rights attachingtothe shares;
The Company didn't receive the information about existence of any agreements between shareholders that may result any restrictions within the meaning of Directive 2001/34/EC; 0 The Company didn't receive the information about existence of any agreements between shareholders that may result any restrictionswithin the meaning of Directive 2001/34/EC;
The Company has no any agreements to which the company is a party and which take effect, alter or terminate upon a change of control of the company following a takeover bid, and the effects thereof, except where their nature is such that their disclosure would be seriously prejudicial to the Company; 0 The Company has no any agreements to which the company is a party and which take effect, alter or terminate upon a changeofcontrol of the company following a takeover bid, and the effects thereof, except where their nature is such that their disclosurewould be seriously prejudicial to the Company;
The Company grants non-availability of any agreements between the company and its board members or/and employees providing for compensation if they resign or are made redundant without valid reason or if their employment ceases because of a takeover bid. 0 The Company grants non—availability of any agreements between the company and its board members or/and employees providingfor compensation ifthey resign or are made redundant without valid reason or if their employment ceases because of a takeover bid.

Insider Dealing Insider Dealing

The Company follows Luxembourg Stock Exchange, Warsaw Stock Exchange and insider trading policy rules in regards to the disclosure of insider dealing, which require all Board Members to notify the Company with regards to all transaction in the shares in the Company. Following the rules of the notification, the Company notifies both stock exchanges via appropriate regulatory filings. The Company follows Luxembourg Stock Exchange, \Y/arsaw Stock Exchange and insider trading policy rules in regards to the disclosureofinsider dealing, which require all Board Members to notify the Company with regards to all transaction in the shares in the Company. Followingthe rules of the notification, the Company notifies both stock exchanges via appropriate regulatory filings.

On behalf of the Management: On behalf of the Management:

Chief Executive Officer Chief Executive Officer	ALEX LISSITSA LlSSlTSA ALEX	__signed______ signed
Chief Financial Officer Chief Financial Officer	DMYTRO MARTYNIUK __signed______ DlVTYTRO MARTYNIUK	signed

REPORT OF THE REVISEUR D'ENTREPRISES AGREE

To the Shareholders ofIMC S.A. 16, rue Erasme L-1468 Luxembourg

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of IMC SA and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position as at 31 December 2018, and the consolidated statement of comprehensive income, consolidatedstatement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significantaccounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2018, andof its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by theEuropean Union.

Basis for Opinion

We conducted our audit in accordance with the EU Regulation N°537/2014, the Law of 23 July 2016 on the audit profession (Law of 23 July 2016) and with International Standards onAuditing (ISAs) as adopted for Luxembourg by the "Commission de Surveillance du Secteur Financier" (CSSF). Our responsibilities under the EU Regulation N°537/2014, the Law of 23 July 2016 on the audit profession (Law of 23 July 2016) and the ISAs are further described inthe «Responsibilities of "Réviseur d'Entreprises Agréé" for the Audit of the Consolidated Financial Statements » section of our report. We are also independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) as adopted for Luxembourg by the CSSF together with theethical requirements that are relevant to our audit of the annual accounts, and have fulfilled ourother ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter - operating environment

We draw attention to note 4 "operating environment" to the consolidated financial statements,which describes the current situation in Ukraine. The impact of the political and economic crisisin Ukraine and their final resolution are unpredictable and may adversely affect the Ukrainianeconomy and the operations of IMC S.A. Our opinion is not qualified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Valuation of biological assets (notes 20 and 23 to the consolidated financial statements)

Biological assets (non-current and current) are valued at initial recognition and at each balance sheet date at fair value less estimated point-of-sale costs.

Estimating the fair value is a complex process as it is based on discounted cash flows and involves various inputs requiring significant judgments and estimates. As a consequence, we have determined the valuation of biological assets as a key audit matter.

Our procedures were as follows:

Considering the appropriateness of the model used by the Group and its consistency with prior periods ;
Reviewing the inputs used in the calculation, such as yields, prices… through comparison with internal supporting documentation including prior years' actual data and external data ;
Verifying whether the model is arithmetically correct ;
Reviewing the disclosures in the consolidated financial statements, including disclosures of key assumptions, judgments and sensitivity analysis.

Existence and valuation of inventories - Work in progress – (notes 3, 4, 8 and 22 to the consolidated financial statements)

Inventory contains a significant portion of work in progress linked to preparation of the lands for future harvest.

Estimating the costs to be allocated to the work in progress is a complex process as it is based on judgments of management using the recommendations of scientific sources and agronomic calculations of the internal services of the Group.

As a consequence, we have determined the existence and valuation of work in progress as a key audit matter.

Our procedures were as follows:

Confirming the existence of lands in preparation for future harvest through year end observation on a sample basis;
Reviewing the main assumptions underlying the costs allocation used by the Group (standard direct and indirect costs allocated to hectares of land on the basis of different factors such as the type of crop and the geographical location of the land);
Applying a control on a sample basis of the input data used by the Group in their costs allocation model to internal supporting information and documents;

Ourprocedures were as follows:

- Confirming the existence of lands in preparation for future harvest through year endobservation on a sample basis;
- Reviewing the main assumptions underlying the costs allocation used by the Group (standarddirect and indirect costs allocated to hectares of land on the basis of different factors suchas the type of crop and the geographical location of the land);
- Applying a control on a sample basis of the input data used by the Group in their costsallocation model to internal supporting information and documents;
- Reviewing the disclosures in the consolidated financial statements, including disclosures ofkey assumptions and judgments.

Going concern

As mentioned in note 4 to the consolidated financial statements, the Group is mainly activeinUkraine.

In 2014, Ukraine was faced with political and economic turmoil, including the annexation by theRussian Federation of Crimea and separatist movements in Lugansk and Donetsk regions.

Even though the Group has no assets in the regions mentioned above, the Group suffered fromtheconsequences of these events on the Ukrainian economy.

The Group is to a significant extent financed by banks and financial institutions, through loan contracts with covenants. Loans and borrowings represent 29.6 % of total liabilities and equity asat 31 December 2018.

Assessment on going concern is largely dependent on forecasts and estimates made bymanagement.

Wetherefore have considered going concern as a key audit matter.

Our procedures were as follows:

- Obtaining and evaluating the assessment made by management on going concern;
- Challenging the reasonableness of the key assumptions underlying the business plan andcash flow forecasts, through a review of past performance and comparison with prior forecasts, a review of the sensitivity analyses of the models, where possible a comparison of the assumptions with external data;
Verifying that based on the conditions of the contracts, the bank covenants are met as at31 December 2018, and that these are expected to be met based on the forecast prepared by the management until 31 December 2019;
Evaluating whether events and developments since the beginning of the year 2019 mayhave an impact on the business plan and forecasts.

Other information

The Board of directors is responsible for the other information. The other information comprises the information included in the single management report and the CorporateGovernance Statement but does not include the consolidated financial statements and ourreport of "Réviseur d 'Entreprises Agréé" thereon.

Our opinion on the consolidated financial statements does not cover the other information andwedonotexpressanyformofassuranceconclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materiallyinconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, weconclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and Those Charged with Governance for theconsolidated financial statements

The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs as adopted by the European Union,and for such internal control as the Board of Directors determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

The audit committee is responsible for overseeing the Group's financial reporting process.

Responsibilities of the "Réviseur d'Entreprises Agréé" for the audit of the consolidatedfinancial Statements

The objectives of our audit are to obtain reasonable assurance about whether the consolidatedfinancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of "Réviseur d'Entreprises Agréé" that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and withISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement whenitexists. Misstatements can arise from fraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the EU Regulation N°537/2014, the Law of 23 July 2016and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment andmaintainprofessionalskepticism throughout the audit. We also:

. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriatetoprovide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internalcontrol.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the Group's internal control.
. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the Board of Directors.
. Conclude on the appropriateness of Board of Directors' use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report of "Réviseur d'Entreprises Agréé" to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report of "Réviseur d'Entreprises Agréé".However, future events or conditions may cause the Group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achievesfair presentation.
. Obtain sufficient appropriate audit evidence regarding the financial information of theentities and business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision andperformance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significantdeficiencies in internal control that We identify during our audit.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements ofthe current period and are therefore the key audit matters. We describe these matters in ourreport unless law or regulation precludes public disclosure about the matter.

Report on Other Legal and Regulatory Requirements

We have been appointed as "Réviseur d'Entreprises Agréé" by the General Meeting of the Shareholders on 25 April 2017. As BDO Audit merged with HRT Révision, which was appointed as"Réviseur d'Entreprises Agréé" for year-end 2016, the duration of our uninterrupted engagementis 3 years.

The single management report is consistent with the consolidated financial statements and hasbeen prepared in accordance with applicable legal requirements.

The Corporate Governance Statement, on pages 20 to 23 of the consolidated financial statements, is the responsibility of the Board of Directors. The information required by Article68ter paragraph (1) letters c) and d) of the law of 19 December 2002 on the commercial andcompanies register and on the accounting records and annual accounts of undertakings, as amended, is consistent with the consolidated financial statements and has been prepared inaccordance with applicable legal requirements.

Other matter

The Corporate Governance Statement includes, when applicable, information required by Article 68ter paragraph (1) points a), b), e), f) and g) of the law of 19 December 2002 on thecommercial and companies register and on the accounting records and annual accounts of undertakings, as amended.

Luxembourg, 30 April 2019

BBC Audit Cabinet de révisi

J'éan-P ilippe Barret

IMC S.A. AND ITS SUBSIDIARIES IMC S.A. AND ITS SUBSIDIARIES

Consolidated financial statements Consolidated financial statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2018 (in thousand USD, unless otherwise stated) For the year ended 31 December 2018 (in t/Jommzd UXD, W/m of/Jmm'w Hated)

	Note Note	For For the year ended the year ended 31 December 2018 December 2018 31	For the year ended For the year ended 31 December 2017 December 2017 31
CONTINUING OPERATIONS CONTINUING OPERATIONS
Revenue Revenue	6 6	131 611 131 611	126 761 126 761
of biological assets Gain from changes in fair value of biological assets and agricultural in fair agricultural I:2:(riliqrelccthanges value and produce, net	7 7	326 73 73 326	777 62 62 777
of Cost of sales Cost sales	8 8	(138 854) (138 854)	(139 086) (139 086)
PROFIT GROSS PROFIT GROSS		65 761 65761	50 452 452 50
Administrative expenses Administrative expenses	9 9	(11 928) 928) (11	(9 605) 605) (9
Selling and distribution expenses distribution Selling and expenses	10 10	(11 794) 794) (11	(8 893) 893) (8
Other operating income Other operating income	11 11	951 951	1 610 610 1
Other operating expenses Other operating expenses	12 12	(5 022) 022) (5	(3 422) 422) (3
of property, Write-offs of property, plant and equipment plant equipment and \X'rite—offs		(2 287) 287) (2	(1 656) 656) (1
Reversal of of Reversal of impairment of property, plant and equipment impairment property, plant equipment and		- —	591 591
of Impairment of property, plant and equipment Impairment property, plant equipment and		- —	(271) (271)
OPERATING PROFIT OPERATING PROFIT		36 003 36 003	28 806 28 806
Financial expenses, net Financial expenses, net	15 15	(4 987) (4 987)	(6 043) 043) (6
of Effect of additional return Effect additional return	29 29	(3 265) 265) (3	(4 214) (4 214)
Foreign currency exchange gain/(loss), net gain/ Foreign currency exchange net (loss),	16 16	567 567	(762) (762)
TAX CONTINUING PROFIT BEFORE FROM PROFIT BEFORE TAX FROM CONTINUING OPERATIONS OPERATIONS		28 318 28318	17 787 787 17
Income tax expenses, net Income tax expenses, net	17 17	(691) (691)	3 3
NET THE CONTINUING NET PROFIT FOR THE PERIOD FROM CONTINUING PROFIT FOR PERIOD FROM OPERATIONS OPERATIONS		27 627 27 627	790 17 17 790
profit/(loss) Net profit/(loss) for the period attributable to: Net for the period attributable to:
of the Owners of the parent company Owners parent company		27 697 27 697	17 528 528 17
Non-controlling interests Non—controlling interests		(70) (70)	262 262
of Weighted average number of shares number \X'eighted average shares		33 178 000 000 33 178	32 190 121 32 190 121
Basic profit per ordinary share (in USD) profit per ordinary (in USD) Basic share		0,83 0,83	0,55 0,55
OTHER COMPREHENSIVE INCOME/(LOSS) OTHER COMPREHENSIVE INCOME/(LOSS)
profit Items that may be reclassified to profit or loss Items that may reclassified to or loss be
of Effect of foreign currency translation Effect foreign translation currency		1 955 1955	(3 820) 820) (3
will no profit Items that will no be reclassified to profit or loss Items that reclassified to or be loss
of property, Revaluation of property, plant and equipment plant Revaluation equipment and		- —	22 659 22 659
of property, Deferred tax charged directly to revaluation of property, plant and Deferred directly to revaluation plant tax charged and equipment equipment		_ -	(931) (931)
of revaluation Deferred tax charged directly to amortization of revaluation reserve Deferred directly amortization tax charged to reserve		259 259	140 140
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS) TOTAL OTHER COMPREHENSIVE INCOME/(LOSS)		2 214 2214	18 048 048 18
TOTAL COMPREHENSIVE PROFIT TOTAL COMPREHENSIVE PROFIT		29 841 29841	35 838 35 838
Comprehensive income/(loss) attributable to: income/ Comprehensive attributable (loss) to:
of the Owners of the parent company Owners parent company		29 903 29903	34 797 34 797
Non-controlling interests Non—controlling interests		(62) (62)	1 041 041 1

__________signed____________ signed signed

Alex Lissitsa Alex Lissitsa

Chief Executive Officer Chief Financial Officer Chief Executive Officer

Dmytro Martyniuk Dmytro Martyniuk Chief Financial Officer

__________signed____________

IMC S.A. AND ITS SUBSIDIARIES IMC S.A. AND ITS SUBSIDIARIES

Consolidated financial statements Consolidated financial statements

CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2018 As at 31 December 2018

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, Miles; ot/Jem/z'se stated)

	Note Note	31 December 2018 December 31 2018	31 December 2017 December 2017 31
ASSETS ASSETS
Non-current Non-current assets assets
Property, plant and equipment Property, plant equipment and	18 18	72 648 72 648	81 948 948 81
Intangible assets Intangible assets	19 19	2 099 2 099	2 918 918 2
Non-current biological assets biological assets Non—current	20 20	1 857 857 1	2 343 343 2
Prepayments for property, plant and equipment for property, plant equipment Prepayments and	21 21	566 566	800 800
Total non-current assets Total non-current assets		77 170 77170	88 009 009 88
Current assets Current assets
Inventories Inventories	22 22	101 578 578 101	62 161 62 161
Current biological assets Current biological assets	23 23	7 983 983 7	15 348 348 15
Trade accounts receivable, net Trade accounts receivable, net	24 24	459 459	321 321
Prepayments and other current assets, net other current Prepayments net and assets,	25 25	7 096 096 7	8 153 153 8
Prepayments for income tax for Prepayments income tax		0 0	10 10
Cash and cash equivalents Cash and equivalents cash	27 27	3 920 3920	6 092 092 6
Total current Total current assets assets		121 036 121036	92 085 085 92
TOTAL TOTAL ASSETS ASSETS		198 206 198206	180 094 094 180
LIABILITIES AND EQUITY LIABILITIES AND EQUITY Equity of parent Equity attributable to the owners of parent company attributable company to the owners
Share capital capital Share	28 28	59 59	59 59
Share premium premium Share		29 512 29 512	29 512 512 29
Revaluation reserve Revaluation reserve		48 603 48 603	58 825 58 825
Retained earnings Retained earnings		172 822 172822	147 853 147 853
of Effect of foreign currency translation Effect foreign currency translation		(130 753) (130 753)	(132 700) (132 700)
of parent Total equity attributable to the owners of parent company Total equity attributable to the owners company		120 243 120 243	103 549 103 549
Non-controlling interests Non—controlling interests		427 427	489 489
Total equity Total equity		120 670 120670	104 038 104 038
liabilities Non-current liabilities Non-current
Deferred tax liabilities Deferred liabilities tax	30 30	3 027 027 3	3 198 198 3
Long-term loans and borrowings borrowings loans Long—term and	31 31	15 789 789 15	27 725 27 725
Total non-current liabilities Total non-current liabilities		18 816 18 816	30 923 30 923
Current liabilities liabilities Current
Current portion of long-term borrowings of long—term portion Current borrowings	31 31	14 467 467 14	10 629 629 10
Short-term loans and borrowings borrowings loans and Short—term	32 32	28 500 28 500	26 113 26 113
Trade accounts payable Trade accounts payable	33 33	3 049 3049	1 303 303 1
Other current liabilities and accrued expenses Other current liabilities and accrued expenses	34 34	12 704 704 12	7 088 088 7
Total current liabilities Total current liabilities		58 720 58 720	45 133 45 133
Total liabilities Total liabilities		77 536 77 536	76 056 76 056
LIABILITIES TOTAL AND EQUITY TOTAL LIABILITIES AND EQUITY		198 206 198206	180 094 180 094

__________signed____________ signed

Alex Lissitsa Chief Executive Officer Chief Financial Officer Alex Lissitsa Chief Executive Officer

__________signed____________ Dmytro Martyniuk signed Dmytro Martyniuk Chief Financial Officer

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2018 For the year ended 31 December 2018

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m ot/Jemxise stated)

	Share Share capital capital	Share Share premium premium	Revaluation Revaluation reserve reserve	Retained Retained earnings earnings	Effect of Effect of foreign foreign currency currency translation translation	Total Total	Non Non- controlling controlling interests Interests	Total Total equity equlty
31 December 2016 December 2016 31	56 56	24 387 24 387	43 217 43 217	126 825 126 825	(128 876) 876) (128	65 609 609 65	(552) (552)	65 057 65 057
Сomprehensive Comprehensive
income/(loss) income/(loss) for the for the year year
Profit (loss) for the period for Profit period (loss) the	- -	-	-	17 528 528 17	- -	17 528 528 17	262 262	17 790 790 17
of property, Revaluation of property, Revaluation		—	—
plant and equipment plant equipment and Deferred tax charged Deferred tax charged	- -	- —	21 714 714 21	- -	- -	21 714 714 21	945 945	22 659 22 659
directly to revaluation of of directly revaluation to property, plant and property, plant and equipment equipment	- -	- —	(761) (761)	- -	- -	(761) (761)	(170) (170)	(931) (931)
of Amortization of Amortization revaluation reserve revaluation reserve	- -	- —	(5 485) 485) (5	5 485 485 5		- -		- -
Deferred tax charged Deferred tax charged of directly to amortization of directly amortization to	- _	- _	140 140			140 140		140 140
revaluation reserve revaluation reserve Other comprehensive Other comprehensive income/(loss) income/ (loss)	- -	- —	- —	- -	(3 824) (3 824)	(3 824) (3 824)	4 4	(3 820) (3 820)
Total comprehensive Total comprehensive profit/(loss) profit/(loss)	- -	- -	15 608 15 608	23 013 23 013	(3 824) (3 824)	34 797 34 797	1 041 1 041	35 838 35 838
Contributions Contributions by and by and
distributions distributions to owners to owners
of share Issue of share capital Issue capital	3 3	5 125 5 125	- —	- -	- -	5 128 128 5	- -	5 128 128 5
of dividends Distribution of dividends Distribution	- -	- —		(1 985) (1 985)	- -	(1 985) (1 985)	- -	(1 985) (1 985)
Total contributions Total contributions by by and distributions to distributions and to owners owners	3 3	5 125 5 125	- -	(1 985) (1 985)	- -	3 143 3 143	- -	3 143 3 143
31 December 2017 December 2017 31	59 59	29 512 29 512	58 825 58 825	147 853 147 853	(132 700) (132 700)	103 549 103 549	489 489	104 038 104 038
31 December 2017 December 2017 31	59 59	29 512 29 512	58 825 58 825	147 853 147 853	(132 700) (132 700)	103 549 103 549	489 489	104 038 104 038
Сomprehensive Comprehensive income/(loss) for income/(loss) for the the
year year Profit (loss) for the period Profit for period the (loss)	- -	- —	- —	27 697 27 697	- -	27 697 27 697	(70) (70)	27 627 27 627
of Amortization of Amortization
revaluation reserve revaluation reserve	- -	- —	(10 481) (10 481)	10 481 10 481	- -	- -	- -	- -
Deferred tax charged Deferred tax charged of directly to amortization of directly amortization to	- -	- —	259 259	- -	- -	259 259	- -	259 259
revaluation reserve revaluation reserve Other comprehensive Other comprehensive	- -	- —	- —	- -	1 947 947 1	1 947 947 1	8 8	1 955 955 1
income/(loss) income/ (loss) Total comprehensive Total comprehensive profit/(loss) profit/(loss)	- -	- -	(10 222) (10 222)	38 178 38 178	1 947 1 947	29 903 29 903	(62) (62)	29 841 29 841
Contributions Contributions by and by and distributions to owners distributions to owners
of dividends Distribution of dividends Distribution	- -	- —	- —	(13 209) (13 209)	- -	(13 209) (13 209)	- -	(13 209) (13 209)
31 December 2018 December 31 2018	59 59	29 512 29 512	48 603 48 603	172 822 822 172	(130 753) (130 753)	120 243 120 243	427 427	120 670 120 670

__________signed____________ signed

Alex Lissitsa Alex Lissitsa

Chief Executive Officer Chief Financial Officer Chief Executive Officer

__________signed____________ signed

Dmytro Martyniuk Dmytro Martyniuk Chief Financial Officer

I I

CONSOLIDATED STATEMENT OF CASH FLOWS CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2018 For the year ended 31 December 2018

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

	Note Note	For the year ended For the ended year 31 December 2018 31 December 2018	For the year ended For the ended year 31 December 2017 31 December 2017
CASH FLOWS FROM OPERATING ACTIVITIES: CASH OPERATING ACTIVITIES: FLOWS FROM
Profit before tax from continuing operations Profit before tax from continuing operations		28 318 28 318	17 787 17 787
Adjusted to reconcile profit before tax with net cash used in profit Adjusted to reconcile before tax with net cash used in
operating activities: operating activ1ties:
Gain from changes in fair value of biological assets and iiirciufrtplglqjhraggfcsci'nniir value of biological and assets agricultural produce, net	7 7	(73 326) (73 326)	(62 777) (62 777)
Disposal of revaluation of biological assets and agricultural :fig:::li:f[;:7::usaqqns;::irqiigical and agricultural assets	8	56 460	61 240
produce in the cost of sales, net	8	56 460	61 240
Depreciation and amortization Depreciation and amortization	13 13	12 556 12 556	9 005 9 005
Interest expenses and other financial expenses Interest and other financial expenses expenses	15 15	5 352 5 352	6 341 6 341
Effect of additional return Effect of additional return		3 265 3 265	4 214 4 214
Write-offs of property, plant and equipment Write—offs of plant and equipment property,		2 287 2 287	1 656 1 656
Gain on recovery of assets previously written off Gain of assets previously written off on recovery	11 11	(338) (338)	(968) (968)
Deferred expenses on options Deferred options expenses on		1 702 1 702	851 851
Foreign currency exchange loss/(gain), net loss/ (gain), Foreign exchange net currency		(630) (630)	717 717
Lost crops Lost crops	12 12	465 465	560 560
Loss on disposal of property, plant and equipment Loss disposal of plant and equipment property, on	12 12	1 521 1 521	514 514
Shortages and losses due to impairment of inventories Shortages and losses due impairment ofinventories to	12 12	236 236	381 381
Interest income income Interest	15 15	(364) (364)	(298) (298)
Gain on disposal of inventories Gain disposal ofinventories on	11 11	(66) (66)	(279) (279)
Income from write-offs of accounts payable Income from write—offs of payable accounts	11 11	(19) (19)	(245) (245)
Accruals for unused vacations Accruals for unused vacations		111 111	182 182
Accruals for audit services Accruals for audit services		71 71	112 112
Write-offs of VAT \X'rite-offs of VAT	12 12	51 51	84 84
Income from the exchange of property certificates Income from the exchange of property certificates	11 11	(31) (31)	(27) (27)
Allowance for doubtful accounts receivable Allowance for doubtful receivable accounts	12 12	153 153	19 19
Reversal of impairment of property, plant and equipment / Reversal of impairment of plant and equipment / property, (impairment), net (impairment), net		- _	(320) (320)
Government grants recognised as income Government grants recognised income as		(364) (364)	- —
Cash flows from operating activities before changes in :::11:ifl;v:: {1:231 operating activities before changes in working capital		37 410 37 410	38 748 38 748

Changes in trade accounts receivable Changes in trade receivable accounts		(361) (361)	57 57
Changes in prepayments and other current assets Changes in and other prepayments current assets		4 132 4 132	5 506 5 506
Changes in inventories Changes in inventories		(21 515) (21 515)	(13 412) (13 412)
Changes in current biological assets Changes in biological current assets		6 870 6 870	7 071 7 071
Changes in trade accounts payable Changes in trade payable accounts		1 781 1 781	(764) (764)
Changes in other current liabilities and accrued expenses Changes in other liabilities and accrued current expenses		5 656 5 656	1 770 1 770
Cash flows from operations Cash flows from operations		33 973 33 973	38 976 38 976
Interest paid paid Interest		(5 158) (5 158)	(6 540) (6 540)
Income tax paid Income tax paid		(642) (642)	(24) (24)
Net cash flows from operating activities cash flows from operating activities Net		28 173 28 173	32 412 32 412

__________signed____________ signed

Alex Lissitsa Alex Lissitsa Chief Executive Officer __________signed____________ Dmytro Martyniuk signedDmytro Martyniuk

CONSOLIDATED STATEMENT OF CASH FLOWS (continued) CONSOLIDATED STATEMENT OF CASH FLOWS (continued)

For the year ended 31 December 2018 (in thousand USD, unless otherwise stated) For the year ended 31 December 2018(in#90dUXD, W/mof/Jmm'wHated)

	N t Note 0 e	For the year ended For the ended year 31 December 2018 31 December 2018	For the year ended For the ended year 31 December 2017 31 December 2017
CASH FLOWS FROM INVESTING ACTIVITIES: CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment Purchase of plant and equipment property,		(5 222) (5 222)	(5 140) (5 140)
Purchase of intangible assets Purchase of intangible assets		(38) (38)	(55) (55)
Proceeds from disposal of property, plant and equipment Proceeds from disposal of plant and equipment property,		366 366	256 256
Proceeds from government grants Proceeds from government grants		364 364	- _
Net cash flows from investing activities Net cash flows from investing activities		(4 530) (4 530)	(4 939) (4 939)
CASH FLOWS FROM FINANCING ACTIVITIES: CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term and short-term borrowings Proceeds from long—term and short—term borrowings		11 408 11 408	32 587 32 587
Repayment of long-term and short-term borrowings Repayment of long—term and short—term borrowings		(20 329) (20 329)	(54 569) (54 569)
Issue of share capital Issue of share capital		- —	22 22
Payment of dividends of dividends Payment		(13 209) (13 209)	(1 985) (l 985)
Net cash flows from financing activities flows financing Net cash from activities		(22 130) (22 130)	(23 945) (23 945)
NET CASH FLOWS CASH FLOWS NET		1 513 l 513	3 528 3 528
Cash and cash equivalents as at the beginning of the period Cash and cash equivalents the beginning of the period at as	27 27	6 092 6 092	4 180 4 180
Effect of translation into presentation currency Effect of translation into presentation currency		(3 685) (3 685)	(1 616) (l 616)
Cash and cash equivalents as at the end of the period Cash and cash equivalents the end of the period at as	27 27	3 920 3 920	6 092 092 6

__________signed____________ signed

Alex Lissitsa Chief Executive Officer Chief Financial Officer Alex Lissitsa Chief Executive Officer

Dmytro Martyniuk Dmytro Martyniuk Chief Financial Officer

__________signed____________

signed

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

1. Description of formation and business 1. Description of formation and business

IMC S.A. (the "Parent company") is a limited liability company registered under the laws of Luxembourg on 28 December 2010 for an unlimited period of time. IMC S.A. was formed to serve as the ultimate holding company of Unigrain Holding Limited and its subsidiaries. The registered address of IMC S.A. is L-1468, 16 rue Erasme, Luxembourg, Grand Duchy Luxembourg, its register number within the Registre de Commerce et des Sociétés du Luxembourg is RCS B157843. IMC S.A. (the "Parent company") is ^a limited liability company registered under the laws of Luxembourg on 28 December 2010 for an unlimited period of time. IMC S.A. was formed to serve as the ultimate holding company of Unigrain Holding Limited and its subsidiaries. The registered address of IMC S.A. is L—1468, 16 rue Erasme, Luxembourg, Grand Duchy Luxembourg, its register number within the Registre de Commerce et des Sociétés du Luxembourg is RCS 13157843.

IMC S.A. and its subsidiaries (the "Group" or the "IMC") is an integrated agricultural company in Ukraine. The main areas of the Group's activities are: IMC S.A. and its subsidiaries (the "Group" or the "IMC") is an integrated agricultural company in Ukraine. The main areas of the Group's activities are:

cultivation of grain and oilseeds crops, potato production; - cultivation of grain and oilseeds crops, potato production;
dairy farming; - dairy farming;
storage and processing of grain and oilseeds crops. - storage and processing of grainand oilseeds crops.

The Group is among Ukraine's top-10 industrial milk producers. The grain and oilseeds crops produced by the Group are sold in both the Ukrainian and export markets. The Group is among Ukraine's top—10 industrial milk producers. The grain and oilseeds crops produced by the Group are sold in both the Ukrainian and export markets.

Until December 2010 there was no the holding company of the Group. Until December 2010 there was no the holding company of the Group.

In June 2009 in the course of the corporate reorganization Unigrain Holding Limited was established as a sub-holding company of the Group. Through the series of transactions Unigrain Holding Limited became the immediate parent of Burat-Agro, Ltd., Burat, Ltd., Chernihiv Industrial Milk Company, Ltd., PRJSC Mlibor, PRJSC Poltava Kombikormoviy Zavod and Zemelniy Kadastroviy Centr SA. In June 2009 in the course of the corporate reorganization Unigrain Holding Limited was established as ^a sub—holding company of the Group. Through the series of transactions Unigrain Holding Limited became the immediate parent of Burat-Agro, Ltd., Burat, Ltd., Chernihiv Industrial Milk Company, Ltd., PRJSC Mlibor, PRJSC Poltava Kombikormoviy Zavod and Zemelniy Kadastroviy Centr SA.

In December 2010 IMC S.A. was registered as a holding company of the Group through the ownership of 100% of the voting shares in the company Unigrain Holding Limited. In December 2010 IMC S.A. was registered as ^a holding company of the Group through the ownership of 100% of the voting shares in the company Unigrain Holding Limited.

In June 2011 Unigrain Holding Limited acquired 100% of the voting shares in the company PAE Promin, PE Progress 2010, PAE Slavutich. In November 2011 companies PAE Slavutich and PE Progress 2010 were merged to Chernihiv Industrial Milk Company, Ltd and the company PAE Promin was merged to Burat-Agro, Ltd. In June 2011 Unigrain Holding Limited acquired 100% of the voting shares in the company PAE Promin, PE Progress 2010, PAE Slavutich. In November 2011 companies PAE Slavutich and PE Progress 2010 were merged to Chernihiv Industrial Milk Company, Ltd and the company PAE Promin was merged to Burat—Agro, Ltd.

In August 2011 trading company Aristo Eurotrading was formed. In August 2011 trading company Aristo Eurotrading was formed.

In December 2011 Unigrain Holding Limited acquired 100% of the voting shares in the company AF Kalynivska 2005, Ltd, AF Zhovtneva, Ltd, AF Shid-2005, Ltd, APP Virynske, Ltd, Pisky, Ltd., SE "Viry-Agro" and 80,61% of the voting shares in the company PRJSC "Viryvske HPP". In December 2011 Unigrain Holding Limited acquired 100% of the voting shares in the company AF Kalynivska 2005, Ltd, AF Zhovtneva, Ltd, AF Shid—2005, Ltd, APP Virynske, Ltd, Pisky, Ltd., SE "Viry—Agro" and 80,61% of the voting shares in the company PRJSC "Viryvske HPP".

In March 2012 Unigrain Holding Limited acquired 100% of the voting shares in the company Ukragrosouz KSM, Ltd. In March 2012 Unigrain Holding Limited acquired 100% of the voting shares in the company Ukragrosouz KSM, Ltd.

In June 2012 Unigrain Holding Limited acquired 100% of the voting shares in the company PAC Slobozhanschina Agro. In June 2012 Unigrain Holding Limited acquired 100% of the voting shares in the company PAC Slobozhanschina Agro.

In November 2012 the Group was restructured and 6 companies were joined to PAC Slobozhanschina Agro: AF Kalynivska-2005 Ltd, AF Zhovtneva Ltd, AF Shid-2005 Ltd, AIE Vyrynske Ltd, Pisky Ltd, SE Vyry-Agro. In November 2012 the Group was restructured and ⁶ companies were joined to PAC Slobozhanschina Agro: AF Kalynivska—2005 Ltd, AF Zhovtneva Ltd, AF Shid—2005 Ltd, AIE Vyrynske Ltd, Pisky Ltd, SE Vyry—Agro.

In December 2012 Unigrain Holding Limited acquired 100% of the voting shares in the company Bluerice Limited. The following companies became the part of the Group, as their owner is Bluerice Limited: Agroprogress Holding Ltd, Agroprogress PE, Bobrovitsky Hlebzavod Ltd, Plemzavod Noviy Trostyanets Ltd, PRJSC "Bobrovitske HPP", Losinovka-Agro Ltd, Parafiyivka-Progress Ltd, Nosovsky Saharny Zavod Ltd. In December 2012 Unigrain Holding Limited acquired 100% of the voting shares in the company Bluerice Limited. The following companies became the part of the Group, as their owner is Bluerice Limited: Agroprogress Holding Ltd, Agroprogress PE, Bobrovitsky Hlebzavod Ltd, Plemzavod Noviy Trostyanets Ltd, PRJSC "Bobrovitske HPP", Losinovka—Agro Ltd, Parafiyivka-Progress Ltd, Nosovsky Saharny Zavod Ltd.

In November 2013 trading company Negoce Agricole S.A. was formed. In November 2013 trading company Negoce Agricole S.A. was formed.

In December 2013 Losinovka-Agro Ltd was joined to Agroprogress PE. In December 2013 Losinovka—Agro Ltd was joined to Agroprogress PE.

During the year 2013 the Group acquired the voting shares in the company AgroKIM Ltd and on 30 December 2013 the acquisition was completed and 100% of the voting shares were owned by the Group. During the year 2013 the Group acquired the voting shares in the company AgroKIM Ltd and on 30 December 2013 the acquisition was completed and 100% of the voting shares were owned by the Group.

In April 2014 Parafiyivka-Progress Ltd was joined to AgroKIM Ltd. In April 2014 Paraflyivka—Progress Ltd was joined to AgroKIM Ltd.

In May 2015 Plemzavod Noviy Trostyanets Ltd was joined to AgroKIM Ltd. In May 2015 Plemzavod Noviy Trostyanets Ltd was joined to AgroKIM Ltd.

In May 2016 Ukragrosouz KSM Ltd was joined to Burat-Agro Ltd. In May 2016 Ukragrosouz KSM Ltd was joined to Burat—Agro Ltd.
In October 2016 Zemelniy Kadastroviy Centr PE and Agroprogress Holding Ltd left the Group. In October 2016 Zemelniy Kadastroviy Centr PE and Agroprogress Holding Ltd left the Group.
In December 2016 Bluerice Limited left the Group. In December 2016 Bluerice Limited left the Group.

On 26 April 2017 IMC S.A. (formally Industrial Milk Company S.A., hereinafter the Company) informs that official name of the Company has been changed from Industrial Milk Company S.A. to IMC S.A. On 26 April 2017 IMC S.A. (formally Industrial Milk Company S.A., hereinafter the Company) informs that official name of the Company has been changed from Industrial Milk Company S.A. to IMC S.A.

All companies comprising the Group were under the control of the same beneficial owner Mr. Petrov O.L. as at all the reporting dates and have effectively operated as an operating group under common management. All companies comprising the Group were under the control of the same beneficial owner Mr. Petrov O.L. as at all the reporting dates and have effectively operated as an operating group under common management.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'i'e Hated)

The principal activities of the companies comprising the Group are as follows: The principal activities of the companies comprising the Group are as follows:

		Country of Country of	Year Year	Cumulative ownership ratio, Cumulative ownership ratio, % 0/o
Operating entity Principal activity registration Operating entity Principal activity registration		established/ es;:b11:::id/ acquired '1	31 December 31 December 2018 2018	31 December 31 December 2017 2017
IMC S.A. IMC S.A.	Holding company Holding company	Luxembourg Luxembourg	28.12.2010 28.12.2010	100 100	100 100
Burat—Agro Burat-Agro Ltd. e.	Agricultural and farming Agmultyral and farming production production	Ukraine Ukraine	31.12.2007 31.12.2007	100 100	100 100
Burat Ltd. Burat Ltd.	Grain elevator Grain elevator	Ukraine Ukraine	31.12.2007 31.12.2007	100 100	100 100
Chernihiv Industrial Milk Chernihiv Industrial Milk Company Ltd. Company Ltd.	Agricultural and farming Agricultural and farming production production	Ukraine Ukraine	31.12.2007 31.12.2007	100 100	100 100
PrJSC Poltava Kombilormoviy PrJSC Poltava Isombilormoviy Zavod Zavod	Granting of PPE into finance finance Granting of PPE into lease lease	Ukraine Ukraine	31.12.2007 31.12.2007	87,56 87,56	87,56 87,56
PrJSC Mlibor PrJSC Mlibor	Grain elevator Grain elevator	Ukraine Ukraine	31.05.2008 31.05.2008	72,85 72,85	72,85 72,85
Unigrain Holding Limited Unigrain Holding Limited	Subholding company Subholding company	Cyprus Cyprus	02.06.2009 02.06.2009	100 100	100 100
Aristo Eurotrading Limited Aristo Eurotrading Limited	Trading Trading company company	British Virgin B'fiffiffigm Islands	30.08.2011 30.08.2011	100 100	100 100
PrJSC "Vyryvske HPP" PrJSC "Vyryvske HPI'"	Grain elevator Grain elevator	Ukraine Ukraine	28.12.2011 28.12.2011	80,61 80,61	80,61 80,61
PAC Slobozhanschina Agro PAC Slobozhanschina Agro	Agricultural production Agricultural production	Ukraine Ukraine	26.06.2012 26.06.2012	100 100	100 100
Agroprogress PE Agroprogress PE	Agricultural and farming Agflcultyral and {mung production production	Ukraine Ukraine	28.12.2012 28.12.2012	100 100	100 100
Bobrovitsky Hlebzavod Ltd Bobrovitsky Hlebzavod Ltd	Bakery production Bakery production	Ukraine Ukraine	28.12.2012 28.12.2012	100 100	100 100
PrJSC "Bobrovitske HPP" PrJSC "Bobrovitske HPP"	Grain elevator Grain elevator	Ukraine Ukraine	28.12.2012 28.12.2012	92,83 92,83	92,83 92,83
Nosovsky Saharny Zavod Ltd Nosovsky Saharny Zavod Ltd	Storage facilities Storage facilities	Ukraine Ukraine	28.12.2012 28.12.2012	100 100	100 100
Negoce Agricole S.a r.l. Negoce Agricole S.a r.l.	Trading company Trading company	Luxembourg Luxembourg	19.11.2013 19.11.2013	100 100	100 100
AgroKIM AgroKIM Ltd. e.	Agricultural and farming Agflculmm {mung and production, grain elevator production, grain elevator	Ukraine Ukraine	30.12.2013 30.12.2013	100 100	100 100

Today IMC is the vertically integrated and high-technology group of companies operating in Sumy, Poltava and Chernihiv region (northern and central Ukraine). Today IMC is the vertically integrated and high—technology group of companies operating in Sumy, Poltava and Chernihiv region (northern andcentral Ukraine).

The Group controls 127,8 thousand ha (123,9 thousand ha under processing of high quality arable land). As at 31 December 2018 the Group operates in three segments: crop farming, dairy farming, elevators and warehouses. The Group controls 127,8 thousand ha (123,9 thousand ha under processing of high quality arable land). As at 31 December 2018 the Groupoperates in three segments: crop farming, dairy farming, elevators and warehouses.

The financial year of the Group begins on 01 January of each year and terminates on 31 December of each year. The financial year of the Group begins on 01 January of each year and terminates on 31 December of each year.

The Group's Consolidated financial statements are public and available at: The Group's Consolidated financial statements are public and availableat:

http://www.imcagro.com.ua/en/investor-relations/financial-reports. http://www.imcagro.com.ua/en/investor—relations/ financial—reports.

Stock information about the Company (company code name on WSE: IMCOMPANY (LU0607203980)): Stock information about the Company (company code name on \'C'SE: IMCOMPANY (LU0607203980)):

https://www.gpw.pl/company-factsheet?isin=LU0607203980 https://Www.gpw.pl/company—factsheet?isin=LU0607203980

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

2. Basis of preparation of the Consolidated financial statements 2. Basis of preparation of the Consolidated financial statements

Statement of compliance Statement of compliance

These Consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and as adopted by the European Union. These Consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and as adopted by the European Union.

These Consolidated financial statements are based on principal accounting policies and critical accounting estimates and judgments that are set out below. These accounting policies and assumptions have been applied consistently to all periods presented in these Consolidated financial statements. These Consolidated financial statements are based on principal accounting policies and critical accounting estimates and judgments that are set out below. These accounting policies and assumptions have been applied consistently to all periods presented in these Consolidated financial statements .

Companies comprising the Group which are incorporated in Ukraine maintain their accounting records in accordance with Ukrainian regulations. Ukrainian statutory accounting principles and procedures differ from those generally accepted under IFRS. Accordingly, the Consolidated financial statements, which have been prepared from the Ukrainian statutory accounting records for the entities of the Group domiciled in Ukraine, reflect adjustments necessary for such financial statements to be presented in accordance with IFRS. Companies comprising the Group which are incorporated in Ukraine maintain their accounting records in accordance with Ukrainian regulations. Ukrainian statutory accounting principles and procedures differ from those generally accepted under IFRS. Accordingly, the Consolidated financial statements, which have been prepared from the Ukrainian statutory accounting records for the entities of the Group domiciled in Ukraine, reflect adjustments necessary for such financial statements to be presented in accordance with IFRS.

Going concern Going concern

These Consolidated financial statements have been prepared on a going concern basis, which contemplates the disposal of assets and the settlement of liabilities in the normal course of business. The recoverability of Group's assets, as well as the future operations of the Group, may be significantly affected by the current and future economic environment. Management believes that Group has reliable access to sources of financing capable to support appropriate operating activity of Group entities. These Consolidated financial statements do not include any adjustments should the Group be unable to continue as going concern. These Consolidated financial statements have been prepared on ^a going concern basis, which contemplates the disposal of assets and the settlement of liabilities in the normal course of business. The recoverability of Group's assets, as well as the future operations of the Group, may be significantly affected by the current and future economic environment. Management believes that Group has reliable access to sources of financing capable to support appropriate operating activity of Group entities. These Consolidated financial statements do not include any adjustments should the Group be unable to continue as going concern.

Basis of measurement Basis of measurement

The Consolidated financial statements are prepared under historical cost basis except for the revalued amounts of property, plant and equipment, biological assets and agricultural produce. The Consolidated financial statements are prepared under historical cost basis except for the revalued amounts of property, plant and equipment, biological assets and agricultural produce.

The Group's management has decided to present and measure these Consolidated financial statements in United States Dollars ("USD") for the purposes of convenience of users of these financial statements. The Group's management has decided to present and measure these Consolidated financial statements in United States Dollars ("USD") for the purposes of convenience of users of these financial statements.

Use of estimates Use of estimates

The preparation of these Consolidated financial statements involves the use of reasonable accounting estimates and requires the Management to make judgments in applying the Group's accounting policies. These estimates and assumptions are based on Management's best knowledge of current events, historical experience and other factors that are believed to be reasonable. Note 4 contains areas, related to a high degree of importance or complexity in decision-making, or areas where assumptions and estimates are important for amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of the reporting period. The preparation of these Consolidated financial statements involves the use of reasonable accounting estimates and requires the Management to make judgments in applying the Group's accounting policies. These estimates and assumptions are based on Management's best knowledge of current events, historical experience and other factors that are believed to be reasonable. Note 4 contains areas, related to ^a high degree of importance or complexity in decision—making, or areas where assumptions and estimates are important for amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of the reporting period.

Foreign currency translation Foreign currency translation

Functional and presentation currency Functional andpresentation currency

Items included in the financial statements of each of the Group's companies are measured using the currency of the primary economic environment in which the company operates ("the functional currency"). For the companies of the Group operating in Ukraine the Ukrainian Hryvna ("UAH") is the functional currency. For the companies operating in Cyprus and Luxembourg the functional currency is Euro ("EUR"). Items included in the financial statements of each of the Group's companies are measured using the currency of the primary economic environment in which the company operates ("the functional currency"). For the companies of the Group operating in Ukraine the Ukrainian Hryvna ("UAH") is the functional currency. For the companies operating in Cyprus and Luxembourg the functional currency is Euro ("EUR").

These Consolidated financial statements are presented in the thousands of United States Dollars ("USD"), unless otherwise indicated. These Consolidated financial statements are presented in the thousands of United States Dollars ("USD"), unless otherwise indicated.

(in thousand USD, unless otherwise stated) (in t/Jomafld UXD, W/m ot/Jmm'te Hated)

Foreign currency transactions and balances Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction. 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 denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Non—monetary items that are measured in terms of historical cost in ^a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non—monetary items measured at fair value in ^a foreign currency are translated using the exchange rates at the date when the fair value is determined.

The principal exchange rates used in the preparation of these Consolidated financial statements are as follows: The principal exchange rates used in the preparation of these Consolidated financial statements are as follows:

c "my Currency	31 December December 31 2018 2018	Average for the year for Average the year ended 31 December 2018 ended December 2018 31	31 December December 31 2017 2017	Average for the year for Average the year ended ended 31 December 2017 December 2017 31	31 December December 31 2016 2016
UAH/USD	27,688264	27,20162	28,067223	26,59473	27,190858
UAH/USD	27,688264	27,20162	28,067223	26,59473	27,190858
EUR/USD	1,15	1,18	1,19	1,13	1,05
EUR/USD	1,15	1,18	1,19	1,13	1,05

Translation into presentation currency Translation intopresentation currency

The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: The results and financial position of all the Group entities (none of which has the currency of ^a hyper-inflationary economy) that have ^a functional currency different from the presentation currency are translated into the presentation currency as follows:

assets and liabilities for each balance sheet presented are translated at the official rate at the date of the balance sheet; — assets and liabilities for each balance sheet presented are translated at the official rate at the date of the balance sheet;
income and expenses are translated at average exchange rate for the period, unless fluctuations in exchange rates during that period are significant, in which case income and expenses are translated at the rate on the dates of the transactions; — income and expenses are translated at average exchange rate for the period, unless fluctuations in exchange rates during that period are significant, in which case income and expenses are translated at the rate on the dates of the transactions;
all the equity and provision items are translated at the rate on the dates of the transactions; — all the equity and provision items are translated at the rate on the dates of the transactions;
all resulting exchange differences are recognized as a separate component of other comprehensive income; — all resulting exchange differences are recognized as ^a separate component of other comprehensive income;
in the consolidated statement of cash flows cash balances at the beginning and end of each presented period are translated at rates prevailing at corresponding dates. All cash flows are translated at average exchange rates for the periods presented. Exchange differences arising from the translation are presented as the effect of translation into presentation currency. — in the consolidated statement of cash flows cash balances at the beginning and end of each presented period are translated at rates prevailing at corresponding dates. All cash flows are translated at average exchange rates for the periods presented. Exchange differences arising from the translation are presented as the effect of translation into presentation currency.

Principles of consolidation Principles of consolidation

Subsidiaries Subsidiaries

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one—half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de—consolidated from the date that control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured at the fair value of the assets given up, equity instruments issued and liabilities incurred or assumed at the date of acquisition, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at their fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the statement of comprehensive income. The acquisition method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured at the fair value of the assets given up, equity instruments issued and liabilities incurred or assumed at the date of acquisition, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in ^a business combination are measured at their fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the statement of comprehensive income.

Inter-company transactions, balances and unrealized gains on transactions between Group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Inter—company transactions, balances and unrealized gains on transactions between Group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Financial statements of Parent company and its subsidiaries, which are used while preparing the Consolidated financial statements, should be prepared as at the same date on the basis of consistent application of accounting policy for all companies of the Group. Financial statements of Parent company and its subsidiaries, which are used while preparing the Consolidated financial statements, should be prepared as at the same date on the basis of consistent application of accounting policy for all companies of the Group.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

3. Summary of significant accounting policies 3. Summary of significant accounting policies

Property, plant and equipment Property, plant and equipment

Property, plant and equipment are stated at their revalued amounts that are the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Any accumulated depreciation at the date of revaluation is restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount. Property, plant and equipment are stated at their revalued amounts that are the fair value at the date ofrevaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Any accumulated depreciation at the date of revaluation is restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount.

If there is no data about the market value of property, plant and equipment due to the nature of highly specialized machinery and equipment, such objects are evaluated according to acquisition expenses under present-day conditions, adjusted by an ageing percentage. If there is no data about the market value of property, plant and equipment due to the nature of highly specialized machinery and equipment, such objects are evaluated according to acquisition expenses under present—day conditions, adjusted by an ageing percentage.

Property, plant and equipment of acquired subsidiaries are initially recognised at their fair value which is based on valuations performed by independent professionally appraisers. Property, plant and equipment of acquired subsidiaries are initially recognised at their fair value which is based on valuations performed by independent professionally appraisers.

Valuations are performed frequently enough to ensure that the fair value of a remeasured asset does not differ materially from its carrying amount as at reporting date. Valuations are performed frequently enough to ensure that the fair value of ^a remeasured asset does not differ materially from its carrying amount as at reporting date.

Increases in the carrying amount arising on revaluation of property, plant and equipment are recognised in other comprehensive income and accumulated in equity under the line Revaluation reserve. Decreases in the carrying amount as a result of a revaluation are in profit or loss. However, the increase is recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss. Decrease related to previous increase of the same asset is recognized against other reserves directly in equity. Increases in the carrying amount arising on revaluation of property, plant and equipment are recognised in other comprehensive income and accumulated in equity under the line Revaluation reserve. Decreases in the carrying amount as ^a result of ^a revaluation are in profit or loss. However, the increase is recognised in profit or loss to the extent that it reverses ^a revaluation decrease of the same asset previously recognised in profit or loss. Decrease related to previous increase of the same asset is recognized against other reserves directly in equity.

The revaluation surplus included in equity in respect of an item of property, plant and equipment is transferred directly to retained earnings as the asset is used by an entity (in the amount that is the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset's original cost) and when the asset is derecognized (in the full amount). The revaluation surplus included in equity in respect of an item of property, plant and equipment is transferred directly to retained earnings as the asset is used by an entity (in the amount that is the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset's original cost) and when the asset is derecognized (in the full amount).

Subsequent major costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that these replacements will materially extend the life of property, plant and equipment or result in future economic benefits. The carrying amount of the replaced part is derecognized. All other day-to-day repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. Subsequent major costs are included in the asset's carrying amount or recognized as ^a separate asset, as appropriate, only when it is probable that these replacements will materially extend the life of property, plant and equipment or result in future economic benefits. The carrying amount of the replaced part is derecognized. All other day—to—day repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

Property, plant and equipment or their essential component are written-off in a case of their disposal or if future economic benefits from use or disposal of such asset are not expected. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the other incomes (expenses) in the statement of comprehensive income when the asset is derecognized. Property, plant and equipment or their essential component are written—off in ^a case of their disposal or if future economic benefits from use or disposal of such asset are not expected. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the other incomes (expenses) in the statement of comprehensive income when the asset is derecognized.

Depreciation of an asset begins when it is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the manner intended by Management. Depreciation of an asset ceases when the asset is derecognized. Depreciation does not cease when the asset becomes idle or is retired from active use and held for disposal unless the asset is fully depreciated. Depreciation of an asset begins when itis available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the manner intended by Management. Depreciation of an asset ceases when the asset is derecognized. Depreciation does not cease when the asset becomes idle or is retired from active use and held for disposal unless the asset is fully depreciated.

Depreciation on assets is calculated using the straight-line method to allocate their revalued amounts to their residual values over their estimated useful lives, as follows: Depreciation on assets is calculated using the straight—line method to allocate their revalued amounts to their residual values over their estimated useful lives, as follows:

- -	Buildings Buildings	15-55 years years 15—55
- -	Machinery Machinery	5-30 years years 5—30
- -	Motor vehicles Motor vehicles	5-20 years years 5—20
- -	Other assets Other assets	5-20 years years 5—20

The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date. The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date.

Land is not depreciated. Land is not depreciated.

Construction in progress comprises costs directly related to the construction of property, plant and equipment, as well as the relevant variable and fixed overhead costs related to the construction. These assets are depreciated from the moment when they are ready for operation. Construction in progress comprises costs directly related to the construction of property, plant and equipment, as well as the relevant variable and fixed overhead costs related to the construction. These assets are depreciated from the moment when they are ready for operation.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

Intangible assets Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in ^a business combination is their fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of comprehensive income in other income (expenses) when the asset is derecognized. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of comprehensive income in other income (expenses) when the asset is derecognized.

The Group determines whether the useful life of an intangible asset is finite or indefinite. The Group determines whether the useful life of an intangible asset is finite or indefinite.

Useful life of intangible assets is indefinite if the Group suggests that the period during which it is expected that the object of intangible assets will generate net cash inflows to the organization has no foreseeable limit. Intangible assets with indefinite useful lives are not amortized, but reviewed for impairment. Useful life of intangible assets is indefinite if the Group suggests that the period during which it is expected that the object of intangible assets will generate net cash inflows to the organization has no foreseeable limit. Intangible assets with indefinite useful lives are not amortized, but reviewed for impairment.

Amortisation of intangible assets is charged to the statement of comprehensive income on a straight-line basis over the estimated useful lives of intangible assets from the date they are available for use. The following estimated useful lives, which are re-assessed annually, have been determined for classes of finite-lived intangible assets: Amortisation ofintangible assets is charged to the statement of comprehensive income on ^a straight-line basis over the estimated useful lives of intangible assets from the date they are available for use. The following estimated useful lives, which are re-assessed annually, have been determined for classes of finite—lived intangible assets:

Land lease rights 5-15 years - Land lease rights 5—15 years
Computer software 5 years - Computer software 5 years

Impairment of property, plant and equipment and intangible assets Impairment of property, plant and equipment and intangible assets

The carrying amounts of property, plant and equipment and intangible assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated in order to determine the extent of the impairment loss, if any. Where it is impossible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of a cash-generating unit to which the asset belongs. The carrying amounts of property, plant and equipment and intangible assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated in order to determine the extent of the impairment loss, if any. \Where it is impossible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of ^a cash—generating unit to which the asset belongs.

The recoverable amount is the higher of the fair value of an asset less costs to sell and its value in use. Value in use is the net present value of expected future cash flows, discounted on a pre-tax basis, using a rate that reflects current market assessments of the time value of money. The recoverable amount is the higher of the fair value of an asset less costs to sell and its value in use. Value in use is the net present value of expected future cash flows, discounted on ^a pre—tax basis, using ^a rate that reflects current market assessments of the time value of money.

An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of comprehensive income. An impairment loss is recognized whenever the carrying amount of an asset or its cash—generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of comprehensive income.

A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of comprehensive income unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase. A previously recognized impairment loss is reversed only if there has been ^a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of comprehensive income unless the asset is carried at ^a revalued amount, in which case the reversal is treated as ^a revaluation increase.

Biological assets Biological assets

The biological assets are classified as non-current and current depending on the expected pattern of consumption of the economic benefits embodied in the biological assets. The biological assets are classified as non—current and current depending on the expected pattern of consumption of the economic benefits embodied in the biological assets.

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

Non-current biological assets of plant-breeding at fair value; - Non—current biological assets of plant—breeding at fair value;
Non-current biological assets of cattle-breeding at fair value; - Non—current biological assets of cattle—breeding at fair value;
Current biological assets of plant-breeding measured at fair value; - Current biological assets of plant—breeding measured at fair value;
Current biological assets of cattle-breeding measured at fair value. - Current biological assets of cattle—breeding measured at fair value.

The Group assesses a biological asset at initial recognition and at each balance sheet date at fair value less estimated point-of-sale costs, except for the cases where the fair value cannot be determined with reasonable assurance. The Group assesses ^a biological asset at initial recognition and at each balance sheet date at fair value less estimated point—of—sale costs, except for the cases where the fair value cannot be determined with reasonable assurance.

Gains or losses from movements in the fair value of biological assets less estimated selling and distribution expenses of the Group are recorded in the period they are incurred in the statement of comprehensive income as Gain (loss) from changes in fair value of biological assets and agricultural produce, net. Gains or losses from movements in the fair value of biological assets less estimated selling and distribution expenses of the Group are recorded in the period they are incurred in the statement of comprehensive income as Gain (loss) from changes in fair value of biological assets and agricultural produce, net.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

The Group capitalizes expenses between the reporting dates into the cost of biological assets. The Group capitalizes expenses between the reporting dates into the cost of biological assets.

Biological assets of plant-breeding - Biological assets of plant—breeding

The capitalized expenses include all the direct costs and overhead costs related to the farming division. Such costs may include the following costs: raw materials (seeds, mineral fertilizers, fuel and other materials), wages and salaries expenses of production personnel and related charges, amortization and depreciation, land lease expenses and other taxes, third parties' services and other expenses related to the cultivation and harvesting of biological assets of plant-breeding. The capitalized expenses include all the direct costs and overhead costs related to the farming division. Such costs may include the following costs: raw materials (seeds, mineral fertilizers, fuel and other materials), wages and salaries expenses of production personnel and related charges, amortization and depreciation, land lease expenses and other taxes, third parties' services and other expenses related to the cultivation and harvesting of biological assets of plant—breeding.

Biological assets of animal-breeding - Biological assets of animal—breeding

The capitalized expenses include all the direct costs and overhead costs related to the livestock breeding. The types of costs that are capitalized in the current biological assets of animal breeding are the following: fodder, means of protection of animals and artificial insemination, fuel and other materials, wages and salaries expenses of production personnel and related charges, amortization and depreciation, third parties' services and other expenses related to the current biological assets of animal breeding. The capitalized expenses include all the direct costs and overhead costs related to the livestock breeding. The types of costs that are capitalized in the current biological assets of animal breeding are the following: fodder, means of protection of animals and artificial insemination, fuel and other materials, wages and salaries expenses of production personnel and related charges, amortization and depreciation, third parties' services and other expenses related to the current biological assets of animal breeding.

All expenses related to the non-current biological assets of cattle breeding are included into the cost of milk. Respectively the Note of non-current biological assets does not include any capitalized costs. All expenses related to the non—current biological assets of cattle breeding are included into the cost of milk. Respectively the Note of non—current biological assets does not include any capitalized costs.

The expenses on works connected with preparation of the lands for future harvest are included into the Inventories as work-in-progress. After works on seeding on these lands the cost of field preparation is reclassified to biological assets held at fair value. The expenses on works connected with preparation of the landsfor future harvest are included into the Inventories as work—in—progress. After works on seeding on these lands the cost of field preparation is reclassified to biological assets held at fair value.

Agricultural produce Agricultural produce

The Group classifies the harvested product of the biological assets as agricultural produce. Agricultural produce is measured at its fair value less costs to sell at the point of harvest. The difference between the cost and fair value less costs to sell at the point of harvest of harvested agricultural produce is recognized in the statement of comprehensive income as Gain (loss) from changes in fair value of biological assets and agricultural produce, net. The Group classifies the harvested product of the biological assets as agricultural produce. Agricultural produce is measured at its fair value less costs to sell at the point of harvest. The difference between the cost and fair value less costs to sell at the point of harvest of harvested agricultural produce is recognized in the statement of comprehensive income as Gain (loss) from changes in fair value of biological assets and agricultural produce, net.

After the initial recognising as at the date of harvesting agricultural produce is treated as inventories. Agricultural produce measurement as at the date of harvest becomes inventories' cost to account. After the initial recognising as at the date of harvesting agricultural produce is treated as inventories. Agricultural produce measurement as at the date of harvest becomes inventories' cost to account.

Inventories Inventories

Inventories are measured at the lower of cost or net realizable value. Inventories are measured at the lower of cost or net realizable 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. 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.

The cost of agriculture produce is its fair value less costs to sell at the point of harvesting. The cost of agriculture produce is its fair value less costs to sell at the point of harvesting.

The cost of work in progress and finished goods includes costs of direct materials and labor and other direct productions costs and related production overheads (based on normal operating capacity). Costs are capitalized in work in progress for preparing and treating land prior to seeding in the next period. Work in progress is transferred to biological assets once the land is seeded. The cost of work in progress and finished goods includes costs of direct materials and labor and other direct productions costs and related production overheads (based on normal operating capacity). Costs are capitalized in work in progress for preparing and treating land prior to seeding in the next period. \Work in progress is transferred to biological assets once the land is seeded.

The cost of inventories is assigned by using FIFO method. The cost ofinventories is assigned by using FIFO method.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

The Group periodically analyses inventories to determine whether they are damaged, obsolete or slow-moving or if their net realizable value has declined, and makes an allowance for such inventories. If such situation occurred, the sum remissive the cost of inventories should be reflected as a part of other expenses in statement of comprehensive income. The Group periodically analyses inventories to determine whether theyare damaged, obsolete or slow-moving or if their net realizable value has declined, and makes an allowance for such inventories. If such situation occurred, the sum remissive the cost of inventories should be reflected as ^a part of other expenses in statement of comprehensive income.

Financial instruments Financial instruments

Financial assets and financial liabilities are regognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are regognised in the Group's statement of financial position when the Group becomes ^a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets or financial liabilities (other than financial assets or financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs that are directly attributable to the acquisition or issue of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets or financial liabilities (other than financial assets or financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs that are directly attributable to the acquisition or issue of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

Financial assets Financial assets

All regular way purchases or sales of financial assets are recognized on a trade date basis. All regular way purchases or sales of financial assets are recognized on ^a trade date basis.

All recognized financial assets are measured subsequently in their entirety at their amortised cost or fair value, depending on the classification of the financial assets. All recognized financial assets are measured subsequently in their entirety at their amortised cost or fair value, depending on the classification of the financial assets.

The Group's financial assets include cash and cash equivalents, trade and other accounts receivable and are classified as Financial assets at amortised cost. The Group's financial assets include cash and cash equivalents, trade and other accounts receivable and are classified as Financial assets at amortised cost.

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortization using the effective interest method of any different between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance. The effective interest method is ^a method of calculating the amortised cost ofa debt instrument and of allocating interest income over the relevant period. The amortised cost of ^a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortization using the effective interest method of any different between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of ^a financial asset is the amortised cost of ^a financial asset before adjusting for any loss allowance.

The Group recognises a loss allowance for expected credit losses on financial assets and updates the allowance at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The expected credit losses are estimated using a provision matrix based on the Group's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. The expected credit loss is estimated as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate. The Group recognises ^a loss allowance for expected credit losses on financial assets and updates the allowance at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The expected credit losses are estimated using ^a provision matrix based on the Group's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. The expected credit loss is estimated as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate.

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. On derecognition of financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration receives and receivable is recognised in consolidated statement of comprehensive income. The Group derecognises ^a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. On derecognition of financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration receives and receivable is recognised in consolidated statement of comprehensive income.

Financial liabilities Financial liabilities

All financial liabilities are measures subsequently at amortised cost using the effective interest method or at fair value through profit or loss. All financial liabilities are measures subsequently at amortised cost using the effective interest method or at fair value through profit or loss.

The Group's financial liabilities include trade and other payables, loans and borrowings, which are classified as Financial liabilities at amortised cost. The Group's financial liabilities include trade and other payables, loans and borrowings, which are classified as Financial liabilities at amortised COSt.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expenses over the relevant period. The effective interest rate is the rate that exactly discount estimated future cash payments (including all fees and points or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability. The effective interest method is ^a method of calculating the amortised cost of ^a financial liability and of allocating interest expenses over the relevant period. The effective interest rate is the rate that exactly discount estimated future cash payments (including all fees and points or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) ^a shorter period, to the amortised cost of ^a financial liability.

The Group derecognises a financial liability only when the Group's obligationa are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognized and the sum of the consideration paid and payable is recognised in consolidated statement of comprehensive income. The Group derecognises ^a financial liability only when the Group's obligationa are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognized and the sum of the consideration paid and payable is recognised in consolidated statement of comprehensive income.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in consolidated statement of comprehensive income. \When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as ^a derecognition of the original liability and the recognition of ^a new liability, and the difference in the respective carrying amounts is recognized in consolidated statement of comprehensive income.

Prepayments and other non-financial assets Prepayments and other non-financial assets

Prepayments are reflected at nominal value less VAT and accumulated impairment losses, other non-financial assets are reflected at nominal value less accumulated impairment losses. Prepayments are reflected at nominal value less VAT and accumulated impairment losses, other non-financial assets are reflected at nominal value less accumulated impairment losses.

Prepayments are classified as non-current assets when the goods or services relating to the prepayment are expected to be obtained after one year, or when the prepayment relates to an asset which will itself be classified as non-current upon initial recognition. Prepayments are classified as non—current assets when the goods or services relating to the prepayment are expected to be obtained after one year, or when the prepayment relates to an asset which will itself be classified as non—current upon initial recognition.

An option on Management Incentive Plan is classified as deferred expenses in the amount of exceeding of quoted share price under subscription price with impact on share premium in equity. The deferred expenses are recognized as expenses of the period in the line Wages and salaries of administrative personnel and related charges during the term of exercising of the option. An option on Management Incentive Plan is classified as deferred expenses in the amount of exceeding of quoted share price under subscription price with impact on share premium in equity. The deferred expenses are recognized as expenses of the period in the line \X'ages and salaries of administrative personnel and related charges during the term of exercising of the option.

If there is an indication that the assets, goods or services relating to a prepayment will not be received, the carrying value of the prepayment is written down accordingly and a corresponding impairment loss is recognised as a part of other expenses in statement of comprehensive income. If there is an indication that the assets, goods or services relating to ^a prepayment will not be received, the carrying value of the prepayment is written down accordingly and ^a corresponding impairment loss is recognised as ^a part of other expenses in statement of comprehensive income.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

Cash and cash equivalents Cash and cash equivalents

Cash and cash equivalents include cash in bank and cash in hand, call deposits. Cash and cash equivalents include cash in bank and cash in hand, call deposits.

Leases Leases

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date: whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset. The determination of whether an arrangement is, or contains ^a lease is based on the substance of the arrangement at inception date: whether fulfillment of the arrangement is dependent on the use of ^a specific asset or assets or the arrangement conveys ^a right to use the asset.

Group as a lessee ⁰ Group as ^a lessee

Leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are classified as finance leases. Assets held under finance lease are included in property, plant and equipment since the commencement of lease at the lower of the fair value of leased property and present value of minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in the statement of comprehensive income. Leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are classified as finance leases. Assets held under finance lease are included in property, plant and equipment since the commencement of lease at the lower of the fair value of leased property and present value of minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve ^a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in the statement of comprehensive income.

Leased assets are depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. Leased assets are depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognized as an expense in the statement of comprehensive income on a straight-line basis over the lease term. Operating lease payments are recognized as an expense in the statement of comprehensive income on ^a straight—line basis over the lease tCfl'l'l.

Taxation Taxation

Income tax 0 Income tax

Income tax expense represents the amount of the tax currently payable and deferred tax. Income tax expense represents the amount of the tax currently payable and deferred tax.

Income tax expenses are recorded as expenses or income in the statement of comprehensive income, except when they relate to items directly attributable to other comprehensive income (in which case the amount of tax is taken to other comprehensive income), or when they arise at initial recognition of company acquisition. Income tax expenses are recorded as expenses or income in the statement of comprehensive income, except when they relate to items directly attributable to other comprehensive income (in which case the amount of tax is taken to other comprehensive income), or when they arise at initial recognition of company acquisition.

i. Current income tax i. Current income tax

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 date, in the countries where the Group operates and generates taxable income. 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 date, in the countries where the Group operates and generates taxable income.

ii. Deferred income tax ii. Deferred income tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except: Deferred tax liabilities are recognized for all taxable temporary differences, except:

where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; - in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the — where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in ^a transaction that is not ^a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; — in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the

temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. temporary differences can be controlled and itis probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized except: Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized except:

where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; — where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in ^a transaction that is not ^a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;
in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized. — in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Deferred tax assets and deferred tax liabilities are offset, if ^a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Single tax 4th group (previously Fixed agricultural tax) 0 Single tax 4'h group (previously Fixed agricultural tax)

According to effective legislation, the Ukrainian consolidated companies of the Group involved in production, processing and sale of agricultural products may opt for paying single tax 4th group in lieu of income tax, land tax and some other local taxes if the revenues from sale of their own agricultural products constitute not less than 75% of their total (gross) revenues. The single tax 4th group is assessed at 0,95% on the deemed value of the land plots owned or leased by the entity (0,95% in 2017). As at 31 December 2018, 5 of the companies comprising the Group were elected to pay single tax 4th group (2017: 5). According to effective legislation, the Ukrainian consolidated companies of the Group involved in production, processing and sale of agricultural products may opt for paying single tax 4th group in lieu of income tax, land tax and some other local taxes if the revenues from sale of their own agricultural products constitute not less than 75% of their total (gross) revenues. The single tax 4Eh group is assessed at 0,95% on the deemed value of the land plots owned or leased by the entity (0,95% in2017). As at ³¹ December 2018,5 of the companies comprising the Group were elected to pay single tax 4th group (2017: 5).

VAT output equals to the total amount of VAT collected within a reporting period, and arises on the earlier of the date of shipping goods to a customer or the date of receiving payment from the customer. VAT input is the amount that a taxpayer is entitled to offset against his VAT liability in a reporting period. Rights to VAT input arise on the earlier of the date of payment to the supplier or the date goods are received. VAT output equals to the total amount of VAT collected within ^a reporting period, and arises on the earlier of the date of shipping goods to ^a customer or the date of receiving payment from the customer. VAT input is the amount that ^a taxpayer is entitled to offset against his VAT liability in ^a reporting period. Rights to VAT input arise on the earlier of the date of payment to the supplier or the date goods are received.

Revenue, expenses and assets are recognized less VAT amount, except cases, when VAT arising on purchases of assets or services, is not recoverable by tax authority; in this case VAT is recognized as part of purchase costs or part of item of expenses respectively. Net amount of VAT, recoverable by tax authority or paid, is included into accounts receivable and payable, reflected in consolidated statement of financial position. Revenue, expenses and assets are recognized less VAT amount, except cases, when VAT arising on purchases of assets or services, is not recoverable by tax authority; in this case VAT is recognized as part of purchase costs or part ofitem of expenses respectively. Net amount of VAT, recoverable by tax authority or paid, is included into accounts receivable and payable, reflected in consolidated statement of financial position.

Other taxes payable ⁰ Other taxes payable

Other taxes payable comprise liabilities for taxes other than above, accrued in accordance with legislation enacted or substantively enacted by the end of the reporting period. Other taxes payable comprise liabilities for taxes other than above, accrued in accordance with legislation enacted or substantively enacted by the end of the reporting period.

Government grants Government grants

The Ukrainian legislation provides various benefits and grants for companies engaged in agriculture. Such benefits and grants are approved by the Supreme Council of Ukraine, the Ministry of Agrarian Policy, Ministry of Finance and local authorities. The Group recognizes this type of benefits upon the receipt of funds as other operating income in the statement of comprehensive income. The Ukrainian legislation provides various benefits and grants for companies engaged in agriculture. Such benefits and grantsare approved by the Supreme Council of Ukraine, the Ministry ofAgrarian Policy, Ministry of Finance and local authorities. The Group recognizes this type of benefits upon the receipt of funds as other operating income in the statement of comprehensive income.

Provisions Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are recognized when the Group has ^a present obligation (legal or constructive) as ^a result ofa past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and ^a reliable estimate can be made of the amount of the obligation.

Contingent assets and liabilities Contingent assets and liabilities

Contingent liabilities are not recognized in the financial statements. The Group discloses information about contingent liabilities in the Notes to financial statements if any, except for the cases where fulfillment of contingent liabilities is unlikely; because of the remoteness of the event (possible repayment period is more than 12 months). Contingent liabilities are not recognized in the financial statements. The Group discloses information about contingent liabilities in the Notes to financial statements if any, except for the cases where fulfillment of contingent liabilities is unlikely; because of the remoteness of the event (possible repayment period is more than 12 months).

The Group constantly analyzes contingent liabilities to determine the possibility of their repayment. If the repayment of a liability, which was previously characterized as contingent, becomes probable, the Group records the provision for the period in which repayment of the obligation has become probable. The Group constantly analyzes contingent liabilities to determine the possibility of their repayment. If the repayment of ^a liability, which was previously characterized as contingent, becomes probable, the Group records the provision for the period in which repayment of the obligation has become probable.

Contingent assets are not recognized in the financial statements, but disclosed in the Notes where there is a reasonable possibility of future economic benefits. Contingent assets are not recognized in the financial statements, but disclosed in the Notes where there is ^a reasonable possibility of future economic benefits.

Share capital Share capital

Ordinary shares issued are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction. Any excess of the fair value of consideration received over the par value of shares issued is presented in financial statements as Share premium. Ordinary shares issued are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as ^a deduction. Any excess of the fair value of consideration received over the par value of shares issued is presented in financial statements as Share premium.

Dividends Dividends

Dividends are recognized as a liability and deducted from shareholders' equity at the balance sheet date only if they are declared before or on the balance sheet date. Dividends are disclosed when they are proposed before the balance sheet date or proposed or declared after the balance sheet date but before the Consolidated financial statements are authorized for issue. Dividends are recognized as ^a liability and deducted from shareholders' equity at the balance sheet date only if they are declared before or on the balance sheet date. Dividends are disclosed when they are proposed before the balance sheet date or proposed or declared after the balance sheet date but before the Consolidated financial statements are authorized for issue.

Value added tax (VAT) ⁰ Value added tax (VAT)

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

Share based payment Share based payment

Management Incentive Plan defined an option for a Management to purchase the Group's new shares under the subscription price. The issue of these new shares has an impact on Equity – it increases the line Share capital in the amount of subscription and the line Share premium in the amount that quoted share price exceeds subscription price. At the same time the deferred expenses were recognized in the amount of share premium. The deferred expenses are recognized as expenses of the period in the line Wages and salaries of administrative personnel and related charges during the term of exercising of the option. Management Incentive Plan defined an option for ^a Management to purchase the Group's new shares under the subscription price. The issue of these new shares has an impact on Equity — it increases the line Share capital in the amount of subscription and the line Share premium in the amount that quoted share price exceeds subscription price. At the same time the deferred expenses were recognized in the amount of share premium. The deferred expenses are recognized as expenses of the period in the line \Wages and salaries of administrative personnel and related charges during the term of exercising of the option.

Earnings per share Earnings per share

Earnings per share are determined by dividing the net profit or loss attributable to the owners of Parent company by the weighted average number of shares outstanding during the reporting period. Earnings per share are determined by dividing the net profit or loss attributable to the owners of Parent company by the weighted average number of shares outstanding during the reporting period.

Income from the exchange of property certificates Income from the exchange of property certificates

When the items of property, plant and equipment are acquired in exchange for non-cash asset (property certificate), the initial value of such assets is estimated at fair value. The difference between the price paid for property certificates and the fair value of received items of property, plant and equipment is recognized as income in the period of the exchange operation. \When the items of property, plant and equipment are acquired in exchange for non—cash asset (property certificate), the initial value of such assets is estimated at fair value. The difference between the price paid for property certificates and the fair value of received items of property, plant and equipment is recognized as income in the period of the exchange operation.

Revenue recognition Revenue recognition

Revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. According to the new standard a five-step model is established to account for revenue from contracts with customers. Revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to ^a customer. According to the new standard ^a five—step model is established to account for revenue from contracts with customers.

The Group performed an analysis of five-step model as follows - the Group is in the business of crops cultivation, dairy farming and providing storage and processing services. Crops and services are sold on their own in separate identified contracts with customers. So the sale of crops and dairy farming products or providing of services is the only performance obligation in contracts with customers. The contracts do not contain any variable considerations or warranty obligations. The Group receives only short-term advances from its clients and they are presented as a part of Other current liabilities and accrued expenses. The Group performed an analysis of five—step model as follows — the Group is in the business of crops cultivation, dairy farming and providing storage and processing services. Crops and services are sold on their own in separate identified contracts with customers. So the sale of crops and dairy farming products or providing of services is the only performance obligation in contracts with customers. The contracts do not contain any variable considerations or warranty obligations. The Group receives only short—term advances from its clients and they are presented as ^a part of Other current liabilities and accrued expenses.

Therefore, the Group recognizes revenue as follows: Therefore, the Group recognizes revenue as follows:

Sales of goods ⁰ Sales of goods

Revenue from sales of goods is recognised at the point of transfer of all risks and rewards of ownership of the goods, normally when the goods are shipped. If the Group agrees to transport goods to a specified location, revenue is recognised when the goods are passed to the customer at the destination point. The Group uses standardised INCOTERMS which define the point of risks and reward transfers. Revenue from sales of goods is recognised at the point of transfer of all risks and rewards of ownership of the goods, normally when the goods are shipped. If the Group agrees to transport goods to ^a specified location, revenue is recognised when the goods are passed to the customer at the destination point. The Group uses standardised INCOTERlVIS which define the point of risks and reward transfers.

Rendering of services Revenue from rendering services is recognized at the moment of transfer to the customer control over the product or service. ⁰ Rendering of services Revenue from rendering services is recognized at the moment of transfer to the customer control over the product or service.

Borrowing costs Borrowing costs

Borrowing costs consist of interest and other costs that the Group incurs in connection with the borrowing of funds. Borrowing costs consist of interest and other costs that the Group incurs in connection with the borrowing of funds.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. Investment income resulting from temporary investment of received borrowing costs, until their expensing for the purchase of capital construction objects, shall be deducted from the cost of raising borrowing costs that may be capitalized. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes ^a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. Investment income resulting from temporary investment of received borrowing costs, until their expensing for the purchase of capital construction objects, shall be deducted from the cost of raising borrowing costs that may be capitalized.

All other borrowing costs are expensed in the period they occur. All other borrowing costs are expensed in the period they occur.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

4. Critical accounting estimates and judgments 4. Critical accounting estimates and judgments

The preparation of the Group's Consolidated financial statements requires Management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and the disclosure of contingent assets and liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. The preparation of the Group's Consolidated financial statements requires Management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and the disclosure of contingent assets and liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require ^a material adjustment to the carrying amount of the asset or liability affected in future periods.

Used estimates and assumptions are reviewed by the Management of the Group on a continuous basis, by reference to past experiences, current trends and all available information that is relevant at the time of preparation of financial statements. Adjustments to accounting estimates are recognized in the period in which the estimate is revised if the change affects only that period or in the period of the revision and subsequent periods, if both periods are affected. Used estimates and assumptions are reviewed by the Management of the Group on ^a continuous basis, by reference to past experiences, current trends and all available information that is relevant at the time of preparation of financial statements. Adjustments to accounting estimates are recognized in the period in which the estimate is revised if the change affects only that period or in the period of the revision and subsequent periods, if both periods are affected.

In the process of applying the Group's accounting policies, Management has made the following judgments, estimates and assumptions which have the most significant effect on the amounts reflected in the Consolidated financial statements. In the process of applying the Group's accounting policies, Management has made the following judgments, estimates and assumptions which have the most significant effect on the amounts reflected in the Consolidated financial statements.

Fair value of property, plant and equipment Fair value of property, plant and equipment

The Group engages an independent appraiser to determine the fair value of property, plant and equipment on a regular basis. The Group engages an independent appraiser to determine the fair value of property, plant and equipment on ^a regular basis.

The assessment is conducted in accordance with International Valuation Standards for property. The assessment procedure is carried out for all groups of property, plant and equipment. The fair value of items of property, plant and equipment is estimated on the basis of comparative and cost plus approaches. The assessment is conducted in accordance with International Valuation Standards for property. The assessment procedure is carried out for all groups of property, plant and equipment. The fair value of items of property, plant and equipment is estimated on the basis of comparative and cost plus approaches.

The comparative approach is based on an analysis of sales prices and offers of similar items of property, plant and equipment, taking into account the appropriate adjustments for differences between the objects of comparison and assessment item. Based on the application of this approach, the fair value of property, plant and equipment is determined on the basis of their market value. The comparative approach is based on an analysis of sales prices and offers of similar items of property, plant and equipment, taking into account the appropriate adjustments for differences between the objects of comparison and assessment item. Based on the application of this approach, the fair value of property, plant and equipment is determined on the basis of their market value.

The cost approach involves the definition of present value of costs of reconstruction or replacement of the assessment item with their further adjustment by the depreciation (impairment) amount. Based on the application of this approach, the fair value of certain items of property, plant and equipment is determined in the amount of the replacement of these items. The cost plus method is adjusted by the income method data, which is based on the discounted cash flow model. The cost approach involves the definition of present value of costs of reconstruction or replacement of the assessment item with their further adjustment by the depreciation (impairment) amount. Based on the application of this approach, the fair value of certain items of property, plant and equipment is determined in the amount of the replacement of these items. The cost plus method is adjusted by the income method data, which is based on the discounted cash flow model.

This model is most sensitive to the discount rate, as well as to the expected cash flows and growth rates used for the extrapolation purposes. Judgments of the Group in determining the indices used in the appraisers' calculations may have a significant effect on the determination of fair value of property, plant and equipment, and hence on their carrying amount. This model is most sensitive to the discount rate, as well as to the expected cash flows and growth rates used for the extrapolation purposes. Judgments of the Group in determining the indices used in the appraisers' calculations may have ^a significant effect on the determination of fair value of property, plant and equipment, and hence on their carrying amount.

The fair value of property, plant and equipment of all the Group's companies has been measured as at 31 December 2017 by an independent appraiser LLC "Asset Expertise" (ODS Certificate No.439/15 as of 25 May 2015 issued by State Property Fund of Ukraine). The fair value of property, plant and equipment of all the Group's companies has been measured as at ³¹ December 2017 by an independent appraiser LLC "Asset Expertise" (ODS Certificate No.439/15 as of 25 May 2015 issued by State Property Fund of Ukraine).

Useful lives of property, plant and equipment Useful lives of property, plant and equipment

Items of property, plant and equipment owned by the Group are depreciated using the straight-line method over their useful lives. Items of property, plant and equipment owned by the Group are depreciated using the straight-line method over their useful lives.

The estimated useful life and residual value of property, plant and equipment are influenced by the rate of exploitation of assets, servicing technologies, changes in legislation, unforeseen operational circumstances. The Group's management periodically reviews the applicable useful lives. This analysis is based on the current technical condition of assets and the expected period in which they will generate economic benefits to the Group. The estimated useful life and residual value of property, plant and equipment are influenced by the rate of exploitation of assets, servicing technologies, changes in legislation, unforeseen operational circumstances. The Group's management periodically reviews the applicable useful lives. This analysis is based on the current technical condition of assets and the expected period in which they will generate economic benefits to the Group.

As at 31 December 2017 an independent valuation of the Group's land, buildings, machinery and vehicles was performed in accordance with International Valuation Standards by an independent appraiser LLC "Asset Expertise" (ODS Certificate No.631/16 as of 28 November 2016 issued by State Property Fund of Ukraine). In the process of preparing data for the appraiser, a lot of information was collected regarding the current technical condition of assets. The engineers of each department in each cluster of the Group collected data on repairs and upgrades carried out, about methods of using of assets, analyzed the available information on plans for these assets. Also the analysis of existence of the facts of increased wear of structures, malfunctions, intensive or inadequate operating conditions and storage conditions was carried out. This work was carried out jointly with appraisers, who also expressed their opinion on the recommended remaining useful life terms for the fixed assets in the context of each object that was included in the assessment. As at ³¹ December 2017 an independent valuation of the Group's land, buildings, machinery and vehicles was performed in accordance with International Valuation Standards by an independent appraiser LLC "Asset Expertise" (ODS Certificate No.631/16 as of 28 November 2016 issued by State Property Fund of Ukraine). In the process of preparing data for the appraiser, ^a lot of information was collected regarding the current technical condition of assets. The engineers of each department in each cluster of the Group collected data on repairs and upgrades carried out, about methods of using of assets, analyzed the available information on plans for these assets. Also the analysis of existence of the facts of increased wear of structures, malfunctions, intensive or inadequate operating conditions and storage conditions was carried out. This work was carried out jointly with appraisers, who also expressed their opinion on the recommended remaining useful life terms for the fixed assets in the context of each object that was included in the assessment.

As a result of this work, a large amount of new information was obtained with respect to the existing assets, that became the basis for the revision of the fixed assets useful life terms. The Group's management believes that the newly applied estimates to the terms of use of PPE reflect in the best way both the technical condition of the assets and the consumption of the benefits from their use. As ^a result of this work, ^a large amount of new information was obtained with respect to the existing assets, that became the basis for the revision of the fixed assets useful life terms. The Group's management believes that the newly applied estimates to the terms of use of PPE reflect in the best way both the technical condition of the assets and the consumption of the benefits from their use.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm're Hated)

The Group has performed a detailed impact assessment of useful lives changing of PPE. In summary the impact is as follows: The Group has performed ^a detailed impact assessment of useful lives changing of PPE. In summary the impact is as follows:

Impact on the statement of financial position as at 31 December 2018 Impact on the statement of financial position as at ³¹ December 2018

	kUSD kUSD
Property, plant and equipment and equipment Property, plant	443 443
including including
Land and buildings Land and buildings	149 149
Machinery Machinery	(305) (305)
Motor vehicles Motor vehicles	582 582
Other Other	16 1 6
Effect of foreign currency translation Effect of foreign translation currency	8 8

Impact on the statement of comprehensive income for Y2018 Impact on the statement of comprehensive income for X72018

	kUSD kUSD
Depreciation expenses Depreciation expenses	(451) (451)
Profit for the year Profit for the year	451 451

Impairment of property, plant and equipment and intangible assets Impairment of property, plant and equipment and intangible assets

The Group carries out revaluations on a regular basis and conducts a full valuation exercise if there is an indication of impairment. An impairment review is conducted at the balance sheet date. To test property, plant and equipment and intangible assets for impairment, the Group's business is treated as three cash generating units: farming division, livestock breeding and storage and processing. The recoverable amount of the cashgenerating unit is determined on the basis of value in use. The amount of value in use for the cash-generating unit is determined on the basis of the most recent budget estimates prepared by management and application of the income approach of valuation. The Group carries out revaluations on a regular basis and conducts a full valuation exercise if there is an indication of impairment. An impairmentreview is conducted at the balance sheet date. To test property, plant and equipment and intangible assets for impairment, the Group's businessis treated as three cash generating units: farming division, livestock breeding and storage and processing. The recoverable amount of the cashgenerating unit is determined on the basis of value in use. The amount of value in use for the cash-generating unit is determined on the basisofthe most recent budget estimates prepared by management and application of the income approach of valuation.

Fair value of acquisition of subsidiaries Fair value of acquisition of subsidiaries

The Group engages an independent appraiser to determine the fair value of identifiable assets acquired and liabilities assumed at the acquisition date. Acquisitions often result in significant intangible benefits for the Group, some of which qualify for recognition as intangible assets. Significant judgment is required in the assessment and valuation of these intangible assets, often with reference to internal data and models. The Group engages an independent appraiser to determine the fair value of identifiable assets acquired and liabilities assumed at the acquisitiondate. Acquisitions often result in significant intangible benefits for the Group, some ofwhich qualify for recognition as intangible assets. Significantjudgment is required in the assessment and valuation of these intangible assets, often with reference to internal data and models.

The estimation of fair value of assets and liabilities is based upon quoted market prices and widely accepted valuation techniques, including discounted cash flows and market multiple analyses. Such estimates include assumptions about inputs to our discounted cash flow calculations, industry economic factors and business strategies. The estimation of fair value of assets and liabilities is based upon quoted market prices and widely accepted valuation techniques, includingdiscounted cash flows and market multiple analyses. Such estimates include assumptions about inputs to our discounted cash flow calculations,industry economic factors and business strategies.

Fair value of biological assets Fair value of biological assets

Due to an absence of an active market for non-current biological assets for cattle-breeding and biological assets of plants-breeding in Ukraine, to determine the fair value of these biological assets, the Group used the discounted value of net cash flows expected from assets as at reporting date. Fair value is determined based on market prices and a current market-determinated pre-tax rate as at the date of valuation. Due to an absence of an active market for non—current biological assets for cattle—breeding and biological assets of plants—breeding in Ukraine, todetermine the fair value of these biological assets, the Group used the discounted value of net cash flows expected from assets as at reportingdate. Fair value is determined based on market prices and a current market—determinated pre—tax rate as at the date of valuation.

The fair value of current biological assets of cattle-breeding is measured using market prices as at reporting date. The fair value is determined based on market prices of milk, milk yields and discount rate. The fair value of current biological assets of cattle—breeding is measured using market prices as at reporting date. The fair value is determinedbased on market prices of milk, milk yields and discount rate.

Fair value of agricultural produce Fair value of agricultural produce

The Group estimates the fair value of agricultural produce at the date of harvesting using the current quoted prices in an active market. Costs to sell at the point of harvest are estimated based on expected future selling costs that depend on conditions of sales agreements. The fair value less costs to sell becomes the carrying value of inventories at the date of harvesting. The Group estimates the fair value of agricultural produce at the date of harvesting using the current quoted prices in an active market. Coststosell at the point of harvest are estimated based on expected future selling costs that depend on conditions of sales agreements. Thefair value lesscosts to sell becomes the carrying value ofinventories at the date of harvesting.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

Inventories Inventories

As at the reporting date the Group assesses the need to reduce the carrying amount of inventories to their net realizable value. The measurement of impairment is based on the analysis of market prices for similar inventories existing at the reporting date and published in official sources. Such assessments can have a significant impact on the carrying amount of inventories. As at the reporting date the Group assesses the need to reduce the carrying amount of inventories to their net realizable value. The measurement ofimpairment is based on the analysis of market prices for similar inventories existing at the reporting date and published in official sources. Such assessments can have ^a significant impact on the carrying amount of inventories.

Besides, at each balance sheet date, the Group assesses inventories for surplus and obsolescence and determines the allowance for obsolete and slow moving inventories. Changes in assessment can influence the amount of required allowance for obsolete and slow moving inventories either positively or negatively. Besides, at each balance sheet date, the Group assesses inventories for surplus and obsolescence and determines the allowance for obsolete and slow moving inventories. Changes in assessment can influence the amount of required allowance for obsolete and slow moving inventories either positively or negatively.

At the reporting date the item Work-in-progress includes expenses on works connected with preparation of the lands for the future harvest obtained from the biological assets of plant growing. The cost of work in progress includes costs of direct materials and labor and other direct productions costs and related production overheads (based on normal operating capacity).. Costs allocation to Work-in-progress includes a number of judgments of management based on the recommendations of scientific sources and agronomic calculations of the internal services of the Group. At the reporting date the item \Work—in—progress includes expenses on works connected with preparation of the lands for the future harvest obtained from the biological assets of plant growing. The cost of work in progress includes costs of direct materials and labor and other direct productions costs and related production overheads (based on normal operating capacity).. Costs allocation to \Work—in—progress includes ^a number of judgments of management based on the recommendations of scientific sources and agronomic calculations of the internal services of the Group.

Inventories as at the year end are an estimate resulting in a surplus/decrease in inventories when stock take is performed in subsequent year. Inventories as at the year end are an estimate resulting in ^a surplus /decrease in inventories when stock take is performed in subsequent year.

Inventory balances at the reporting dates are confirmed by inventories. But the amount of grain at the elevators and the method of its storage do not allow weighing of the whole grain at the time of the inventory. Therefore, enterprises use other methods for determining the amount of grain at the elevator. Inventory balances at the reporting dates are confirmed by inventories. But the amount of grain at the elevators and the method of its storage do not allow weighing of the whole grain at the time of the inventory. Therefore, enterprises use other methods for determining the amount of grain at the elevator.

The method consists in the following: The method consists in the following:

there is passport data of the volume of silo storage tanks — there is passport data of the volume of silo storage tanks
the commission inventories each tank and determines the volume filled with grain — the commission inventories each tank and determines the volume filled with grain
there is an indicator "nature of grain", i.e. its weight in 1l — there is an indicator "nature of grain", i.e. its weight in ll
the volume of grain is multiplied by its nature and the amount of grain in kg is obtained — the volume of grain is multiplied by its nature and the amount of grain in kg is obtained

But in fact, deviations are possible due to permissible errors in grain moisture, which resulting in a surplus/decrease in inventories when stock take is performed in subsequent year during the cleaning the elevator. But in fact, deviations are possible due to permissible errors in grain moisture, which resulting in ^a surplus /decrease in inventories when stock take is performed in subsequent year during the cleaning the elevator.

Fair value of financial instruments Fair value of financial instruments

The fair value of financial assets and liabilities is determined by applying various valuation methodologies. Management uses its judgment to make assumptions based on market conditions existing at each balance sheet date. Where the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flows model. Management uses discounted cash flow analysis for various loans and receivables as well as debt instruments that are not traded in active markets. The effective interest rate is determined by reference to the interest rates of instruments available to the Group in active markets. In the absence of such instruments, the effective interest rate is determined by reference to the interest rates of active market instruments available adjusted for the Group's specific risk premium estimated by management. The fair value of financial assets and liabilities is determined by applying various valuation methodologies. Management uses its judgment to make assumptions based on market conditions existing at each balance sheet date. \Where the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flows model. Management uses discounted cash flow analysis for various loans and receivables as well as debt instruments that are not traded in active markets. The effective interest rate is determined by reference to the interest rates of instruments available to the Group in active markets. In the absence of such instruments, the effective interest rate is determined by reference to the interest rates of active market instruments available adjusted for the Group's specific risk premium estimated by management.

Fair value measurement Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to the Group. Fair value is the price that would be received to sell an asset or paid to transfer ^a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of ^a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to the Group.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. A fair value measurement of ^a non—financial asset takes into account ^a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as ^a whole:

Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities. ° Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. ° Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. ° Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'i'e Hated)

Provision for expected credit losses Provision for expected credit losses

The Group uses a provision matrix to calculate expected credit losses for financial assets. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns. The provision matrix is initially based on the Group's historical observed default rates. The Group will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. The Group uses ^a provision matrix to calculate expected credit losses for financial assets. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns. The provision matrix is initially based on the Group's historical observed default rates. The Group will calibrate the matrix to adjust the historical credit loss experience with forward—looking information. At every reporting date, the historical observed default rates are updated and changes in the forward—looking estimates are analysed.

Impairment of non-financial assets Impairment of non-financial assets

Management assesses whether there are any indicators of possible impairment of non-financial assets at each reporting date. If any events or changes in circumstances indicate that the current value of the assets may not be recoverable or the assets, goods or services relating to a prepayment will not be received, the Group estimates the recoverable amount of assets. If there is objective evidence that the Group is not able to collect all amounts due to the original terms of the agreement, the corresponding amount of the asset is reduced directly by the impairment loss in the statement of comprehensive income. Subsequent and unforeseen changes in assumptions and estimates used in testing for impairment may lead to the result different from the one presented in the financial statements. Management assesses whether there are any indicators of possible impairment of non-financial assets at each reporting date. If any events or changes in circumstances indicate that the current value of the assets may not be recoverable or the assets, goods or services relating to ^a prepayment will not be received, the Group estimates the recoverable amount of assets. If there is objective evidence that the Group is not able to collect all amounts due to the original terms of the agreement, the corresponding amount of the asset is reduced directly by the impairment loss in the statement of comprehensive income. Subsequent and unforeseen changes in assumptions and estimates used in testing for impairment may lead to the result different from the one presented in the financial statements.

Taxation Taxation

The Group mostly operates in the Ukrainian tax jurisdiction. 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 affect the income tax and deferred tax provisions in the period in which such determination is made. The Group mostly operates in the Ukrainian tax jurisdiction. 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 affect the income tax and deferred tax provisions in the period in which such determination is made.

As a result of unstable economic situation in Ukraine, tax authorities in Ukraine pay more and more attention to the business cycles. In connection with it, tax laws in Ukraine are subject to frequent changes. Furthermore, there are cases of their inconsistent application, interpretation and execution. Non-compliance with laws and norms may lead to serious fines and penalties accruals. As ^a result of unstable economic situation in Ukraine, tax authorities in Ukraine pay more and more attention to the business cycles. In connection with it, tax laws in Ukraine are subject to frequent changes. Furthermore, there are cases of their inconsistent application, interpretation and execution. Non—compliance with laws and norms may lead to serious fines and penalties accruals.

Management at every reporting period reassessed the Group's uncertain tax positions. 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. Management at every reporting period reassessed the Group's uncertain tax positions. 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 December 2010, the revised Tax Code of Ukraine was officially published. The Group considers that it operates in compliance with tax laws of Ukraine. In December 2010, the revised Tax Code of Ukraine was officially published. The Group considers that it operates in compliance with tax laws of Ukraine.

Starting from 1 September 2013, Ukrainian legislation implemented new transfer pricing rules. These rules introduce additional reporting and documentation requirements to transactions with related parties. In accordance with the new rules, the tax authorities obtain additional tools with the help of which they may claim that prices or profitability in transactions with related parties different from arm's length transactions. The Group's transfer pricing practice is built in accordance with requirements of transfer pricing legislation. Starting from ¹ September 2013, Ukrainian legislation implemented new transfer pricing rules. These rules introduce additional reporting and documentation requirements to transactions with related parties. In accordance with the new rules, the tax authorities obtain additional tools with the help of which they may claim that prices or profitability in transactions with related parties different from arm's length transactions. The Group's transfer pricing practice is built in accordance with requirements of transfer pricing legislation.

Legal proceedings Legal proceedings

The Group's Management makes significant assumptions in estimation and reflection of the risk of exposure to contingent liabilities related to current legal proceedings and other unliquidated claims, as well as other contingent liabilities. Management's judgments are required in assessing the possibility of a secured claim against the Group or material obligations, as well as in determining probable amounts of final payment or obligations. Due to the uncertainties inherent in the evaluation process, actual expenses may differ from the initial calculations. The Group's Management makes significant assumptions in estimation and reflection of the risk of exposure to contingent liabilities related to current legal proceedings and other unliquidated claims, as well as other contingent liabilities. Management's judgments are required in assessing the possibility of ^a secured claim against the Group or material obligations, as well as in determining probable amounts of final payment or obligations. Due to the uncertainties inherent in the evaluation process, actual expenses may differ from the initial calculations.

These preliminary estimates are subject to changes as new information becomes available from the Group's internal specialists, if any, or from third parties, such as lawyers. Revisions of such estimates may have a significant impact on future operating results. These preliminary estimates are subject to changes as new information becomes available from the Group's internal specialists, if any, or from third parties, such as lawyers. Revisions of such estimates may have ^a significant impact on future operating results.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

Operating environment Operating environment

In 2014, Ukraine was faced with political and economic turmoil. Crimea, an autonomous republic of Ukraine, was effectively annexed by the Russian Federation. Ukraine also suffered from military aggression from Russia and the collapse of law enforcement in Lugansk and Donetsk regions. In 2014, Ukraine was faced with political and economic turmoil. Crimea, an autonomous republic of Ukraine, was effectively annexed by the Russian Federation. Ukraine also suffered from military aggression from Russia and the collapse of law enforcement in Lugansk and Donetsk regions.

The Ukrainian Hryvna devalued against major foreign currencies. The National Bank of Ukraine introduced a range of measures aimed at limiting the outflow of customer deposits from the banking system, improving the liquidity of banks, and supporting the exchange rate of the Ukrainian Hryvna. The Ukrainian Hryvna devalued against major foreign currencies. The National Bank of Ukraine introduced ^a range of measures aimed at limiting the outflow of customer deposits from the banking system, improving the liquidity of banks, and supporting the exchange rate of the Ukrainian Hrvvna.

Significant external financing is required to support economic stabilization and the political situation depends, to a large extent, upon success of the Ukrainian government's efforts; yet further economic and political developments are currently difficult to predict and an adverse effect on the Ukrainian economy may continue. Significant external financing is required to support economic stabilization and the political situation depends, to ^a large extent, upon success of the Ukrainian government's efforts; yet further economic and political developments are currently difficult to predict and an adverse effect on the Ukrainian economy may continue.

Management is monitoring the developments in the current environment and taking actions where appropriate. Management is monitoring the developments in the current environment and taking actions where appropriate.

The Group does not have assets in Crimea, Donetsk and Lugansk regions. The Group does not have assets in Crimea, Donetsk and Lugansk regions.

5. New and amended standards and interpretations 5. New and amended standards and interpretations

Applying of new standards Applying of new standards

The Group has initially adopted IFRS 15 Revenue from contracts with customers and IFRS 9 Financial instruments from 1 January 2018. The Group has initially adopted IFRS 15 Revenue from contracts with customers and IFRS 9 Financial instruments from ¹ January 2018.

Several other amendments and interpretations apply for the first time in 2018, but do not have a significant impact on the consolidated financial statements of the Group. Several other amendments and interpretations apply for the first time in 2018, but do not have ^a significant impact on the consolidated financial statements of the Group.

IFRS 9 Financial instruments IFRS 9 Financial instruments

IFRS 9 was issued first in November 2009 and the last revised version was issued in July 2014. IFRS 9 brings together all three aspects of the accounting for financial instruments: classification and measurement and hedge accounting. IFRS 9 is effective for annual periods on or after 1 January 2018, with early application permitted. IFRS ⁹ was issued first in November 2009 and the last revised version was issued in July 2014. IFRS ⁹ brings together all three aspects of the accounting for financial instruments: classification and measurement and hedge accounting. IFRS ⁹ is effective for annual periods on or after ¹ January 2018, with early application permitted.

Based on an analysis of the Group's financial instruments as at 31 December 2018 on the basis of the facts and circumstances that exist at that date, the impact of implementation of IFRS 9 to the Group's financial statements is follows: Based on an analysis of the Group's financial instruments as at ³¹ December 2018 on the basis of the facts and circumstances that exist at that date, the impact of implementation of IFRS ⁹ to the Group's financial statements is follows:

The adoption of IFRS 9 requires to change the classification of the Group's financial assets by the following way. The adoption of IFRS ⁹ requires to change the classification of the Group's financial assets by the following way.

Financial instrument Financial instrument	Category IAS 39 Category IAS 39	Category IFRS 9 Category IFRS 9
Financial assets Financial assets
Accounts receivable Accounts receivable	Loans and receivables Loans receivables and	Financial assets at amortised cost Financial assets at amortised cost
Other financial assets Other financial assets	Loans and receivables Loans receivables and	Financial assets at amortised cost Financial assets at amortised cost
Cash and cash equivalents equivalents Cash and cash	Loans and receivables Loans and receivables	Financial assets at amortised cost Financial assets at amortised cost

All financial assets and financial liabilities continue to be measured at the same bases is previously adopted under IAS 39. All financial assets and financial liabilities continue to be measured at the same bases is previously adopted under IAS 39.

IFRS 9 requires to record expected credit losses on all of the financial assets (except those fair valued through profit or loss). The Group applies the simplified approach to recognise lifetime expected credit losses for its trade and other receivables as permitted by IFRS 9. The following estimated reserve matrix was used to determine expected credit losses for Group's financial assets: IFRS ⁹ requires to record expected credit losses on all of the financial assets (except those fair valued through profit or loss). The Group applies the simplified approach to recognise lifetime expected credit losses for its trade and other receivables as permitted by IFRS 9. The following estimated reserve matrix was used to determine expected credit losses for Group's financial assets:

Trade accounts receivable Trade accounts receivable

	Current Current	Past due within within Past due 90 days 90 days	Past due from from Past due 90 to 180 days to 90 180 days	Past due from from Past due 180 to 360 days to 180 360 days	More than 360 More than 360 days past due past days due
Expected loss rate Expected loss rate	0,25% 0,25%	2,00% 2,00%	50,00% 50,00%	30,00% 30,00%	20,00% 20,00"/o

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm're Hated)

Other accounts receivable Other accounts receivable

	Group 1 Group 1	Group 2 Group 2	Group 3 Group 3	Group 4 Group 4
Expected loss rate Expected loss rate	0,001% 0,001%	0,001% 0,001%	0,30% 0,30%	3,00% 3,00%

In relation of the cash and cash equivalents the Management considers that they have low credit risk given their strong external credit rating and hence expected to recognise 12-month expected credit losses from these items. In relation of the cash and cash equivalents the Management considers that they have low credit risk given their strong external credit rating and hence expected to recognise 12—month expected credit losses from these items.

In general, the application of IFRS 9 doesn't have a significant impact on the financial statements of the Group. In general, the application of IFRS ⁹ doesn't have ^a significant impact on the financial statements of the Group.

IFRS 15 Revenue from contracts with customers IFRS ¹⁵ Revenue from contracts with customers

IFRS 15 was issued in May 2014 and amended in April 2016. The new standard will supersede all current revenue recognition requirements under IFRS and its retrospective application is required beginning on or after 1 January 2018. Early adoption is permitted. IFRS 15 was issued in May 2014 and amended in April 2016. The new standard will supersede all current revenue recognition requirements under IFRS and its retrospective application is required beginning on or after ¹ January 2018. Early adoption is permitted.

Under IFRS 15 revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. According to the new standard a five-step model is esteblished to account for revenue from contracts with customers. The Group performed an analysis of IFRS 15 impact on the financial statements: Under IFRS 15 revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to ^a customer. According to the new standard ^a five—step model is esteblished to account for revenue from contracts with customers. The Group performed an analysis of IFRS ¹⁵ impact on the financial statements:

The Group is in the business of crops cultivation, dairy farming and providing storage and processing services. Crops and services are sold on their own in separate identified contracts with customers. So the sale of crops and dairy farming products or providing of services is the only performance obligation in contracts with customers. The Group is in the business of crops cultivation, dairy farming and providing storage and processing services. Crops and services are sold on their own in separate identified contracts with customers. So the sale of crops and dairy farming products or providing of services is the only performance obligation in contracts with customers.

The contracts do not contain any variable considerations or warranty obligations. The contracts do not contain any variable considerations or warranty obligations.

The Group receives only short-term advances from its clients and they are presented as a part of Other current liabilities and accrued expenses. The Group receives only short—term advances from its clients and they are presented as ^a part of Other current liabilities and accrued expenses.

The presentation and disclosure requirements of IFRS 15 are more detailed than under previous IAS 18 , so the notes to the financial statements were expended. The presentation and disclosure requirements of IFRS ¹⁵ are more detailed than under previous IAS ¹⁸ , so the notes to the financial statements were expended.

Thereafter apart from providing more extensive disclosures on the Group's revenue transactions, the application of IFRS 15 doesn't have an impact on the financial statements of the Group. Thereafter apart from providing more extensive disclosures on the Group's revenue transactions, the application of IFRS 15 doesn't have an impact on the financial statements of the Group.

IFRIC Interpretation 22 Foreign Currency Transactions and Advance Considerations IFRIC Interpretation 22 Foreign Currency Transactions and Advance Considerations

The interpretation clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initialy recognises the non-monetary asset or non-monetary liability arising from the advance comsideration. If there are multiple payments or receipts in advance, then the entity must determine the date of the transactions for each payment or receipt of advance consideration. This Interpretation does not have any impact on the Group's consolidated financial statements. The interpretation clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of ^a non—monetary asset or non—monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initialy recognises the non—monetary asset or non—monetary liability arising from the advance comsideration. If there are multiple payments or receipts in advance, then the entity must determine the date of the transactions for each payment or receipt of advance consideration. This Interpretation does not have any impact on the Group's consolidated financial statements.

Amendments ro IFRS 2 Classification and Measurement of Share-based Payment Transactions Amendments r0 IFRS 2 Classification and Measurement of Share-based Pavment Transactions

The IASB issued amendments to IFRS 2 Share-based payment that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application os permitted. These amendments do not have any impact on the Group's consolidated financial statements. The IASB issued amendments to IFRS 2 Share—based payment that address three main areas: the effects ofvesting conditions on the measurement of ^a cash—settled share—based payment transaction; the classification of ^a share—based payment transaction with net settlement features for withholding tax obligations; and accounting where ^a modification to the terms and conditions of ^a share-based payment transaction changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application os permitted. These amendments do not have any impact on the Group's consolidated financial statements.

Standards and Interpretations in issue but not effective Standards and Interpretations in issue but not effective

IFRS 16 Leases IFRS 16 Leases

IFRS 16 was issued in January 2016. The new standard will supersede all current lease guidance when it becomes effective. IFRS 16 is effective for the annual periods beginning on or after 1 January 2019. Early application is permitted, but not before an entity applies IFRS 15. The Group plans to adopt the new standard on the required effective date. IFRS 16 was issued in January 2016. The new standard will supersede all current lease guidance when itbecomes effective. IFRS 16 is effective for the annual periods beginning on or after ¹ January 2019. Early application is permitted, but not before an entity applies IFRS 15. The Group plans to adopt the new standard on the required effective date.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. At the commencement date of a lease, a lessee will recognise a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset. Such approach should be applied to all leases operation except leases of low-value assets and short-term leases. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under ^a single on—balance sheet model similar to the accounting for finance leases under IAS 17. At the commencement date of ^a lease, ^a lessee will recognise ^a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right—of—use asset. Such approach should be applied to all leases operation except leases of low—value assets and short—term leases.

The new standard also requires to make more extensive disclosures than under IAS 17. The new standard also requires to make more extensive disclosures than under IAS 17.

During Y2018 the Group has performed a detailed impact assessment of IFRS 16. In summary the impact of IFRS 16 adoption is expected to be as follows: During Y2018 the Group has performed ^a detailed impact assessment of IFRS 16. In summary the impact of IFRS 16 adoption is expected to be as follows:

Impact on the consolidated statement of financial position as at 01 January 2019 Impact on the consolidated statement of financial position as at ⁰¹ January 2019

	kUSD kUSD
Assets Assets
Right-of-use assets - Land Land assets Right—of—use —	84 667 84 667
Other accounts receivable Other accounts receivable	(468) (468)
	84 199 84 199
Liabilities Liabilities
Lease liabilities liabilities Lease	86 616 86 616
of land for Accounts payable for the lease of land and property rights Accounts property rights payable the and lease	(2 417) 417) (2
	84 199 84 199

Impact on the consolidated statement of comprehensive income for Y2019 Impact on the consolidated statement of comprehensive income for Y2019

	kUSD kUSD
of Cost of sales Cost sales
Depreciation expenses Depreciation expenses	7 901 901 7
Operating lease expenses Operating lease expenses	(12 013) (12 013)
profit Operating profit Operating	4 112 4 112
Finance cost Finance cost	6 625 625 6
Profit/(Loss) Profit/(Loss) for the year for the year	(2 513) (2 513)

At the date of authorization of these Consolidated financial statements the following interpretations and amendments to the Standards, were in issue but not yet effective: At the date of authorization of these Consolidated financial statements the following interpretations and amendments to the Standards, were in issue but not yet effective:

Standards and Interpretations Interpretations Standards and	Effective for annual period for Effective annual period , , beginning on or after beginning on or after
Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures Joint Amendments IAS Interests in Ventures to 28: Long—term Associates and	1 January 2019 January 2019 1
Amendments to IFRS 9: Prepayment Features with Negative Compensation with Amendments to IFRS 9: Prepayment Features Negative Compensation	1 January 2019 January 2019 1
IFRIC Interpretation 23: Uncertainty over Income Tax Treatment IFRIC Interpretation 23: Uncertainty over Income Tax Treatment	1 January 2019 January 2019 1
Annual improvements to IFRS 2015-2017 Cycle Annual improvements to IFRS Cycle 2015—2017	1 January 2019 January 2019 1

The Board of Directors is currently analyzing the impact of the adoption of these financial reporting standards on the financial statements of the Group. The Board of Directors is currently analyzing the impact of the adoption of these financial reporting standards on the financial statements of the Group.

(in thousand USD, unless otherwise stated) (in #90d UXD, W/m of/Jmm'w Hated)

6. Revenue 6. Revenue

	N t Note 0 e	For the year ended For the year ended 31 December 2018 December 2018 31	For the year ended For the year ended 31 December 2017 December 31 2017
of finished Revenue from sales of finished products from products Revenue sales	a a	130 413 130413	125 999 999 125
Revenue from services rendered from Revenue services rendered	b b	1 198 198 1	762 762
		131 611 131 611	126 761 126 761

Disaggregation of revenue from contracts with customers Disaggregation of revenue from contracts with customers

The Group presented disaggregated revenue based on the type of finished products (a) and services provided to customers (b), the type of customers (c) and the timing of transfer of goods and services (d). The Group presented disaggregated revenue based on the type of finished products (a) and services provided to customers (b), the type of customers (c) and the timing of transfer of goods and services ((1).

a) Revenue from sales of finished products was as follows: a) Revenue from sales of finished products was as follows:

	For the year ended For the year ended 31 December 2018 December 31 2018	For the year ended For year ended the 31 December 2017 December 2017 31

Corn Corn	81 576 576 81	79 115 79 115
Sunflower Sunflower	24 331 24 331	22 253 22 253
Wheat \X'heat	10 637 10 637	11 031 031 11
Soy beans Soy beans	9 818 818 9	7 755 755 7
Milk Milk	1 343 343 1	1 495 495 1
Potatoes Potatoes	885 885	2 112 112 2
Cattle Cattle	147 147	356 356
Other Other	1 676 1676	1 882 882 1
	130 413 130413	125 999 999 125

b) Revenue from services rendered was as follows: b) Revenue from services rendered was as follows:

	For the year ended For the year ended 31 December 2018 December 2018 31	For the year ended For the year ended 31 December 2017 December 2017 31
Storage	313	107
Storage	313	107
Transport	310	163
Transport	310	163
Drying	248	205
Drying	248	205
Processing	189	256
Processing	189	256
Other	138	31
Other	138	31
	1 198 198 1	762 762

c) Revenue by the type of customers was as follows: c) Revenue by the type of customers was as follows:

For the year ended	For the year ended
For	For
the	the
year	year
ended	ended
31 December 2018	31 December 2017
December	December
2018	31
31	2017
99 706 99706	96 167 96 167
31 905	30 593
905	593
31	30
131 611	126 761
131	126
611	761

d) Finished products and services transferred to customers at a point in time. (1) Finished products and services transferred to customers at ^a point in time.

(in thousand USD, unless otherwise stated) (in #90d UXD, W/m of/Jmm'w Hated)

7. Gain from changes in fair value of biological assets and agricultural produce, net 7. Gain from changes in fair value of biological assets and agricultural produce, net

	N t Note 0 e	For the year ended For the year ended 31 December 2018 December 2018 31	For the year ended For the year ended 31 December 2017 December 2017 31
Agricultural produce Agricultural produce	23 23	73 523 73 523	56 142 142 56
Current biological assets Current biological assets	23 23	432 432	5 519 519 5
Non-current biological assets biological assets Non—current	20 20	(629) (629)	1 116 116 1
		73 326 73 326	62 777 62 777

8. Cost of sales 8. Cost of sales

	N t Note 0 e	For the year ended For the year ended 31 December 2018 December 31 2018	For the year ended For the year ended 31 December 2017 December 31 2017
Raw materials Raw materials	a a	(96 669) (96 669)	(99 306) (99 306)
Change in inventories and work-in-progress in inventories Change and work—in—progress	b b	11 458 11458	6 056 056 6
Rent Rent		(15 042) (15 042)	(13 996) (13 996)
Fuel and energy supply Fuel and energy supply		(13 868) (13 868)	(11 719) 719) (11
Depreciation and amortization Depreciation amortization and	13 13	(10 210) (10 210)	(7 498) 498) (7
of operating Wages and salaries of operating personnel and related and personnel and related \X salaries ages charges charges	14 14	148) (9 (9 148)	158) (7 (7 158)
Third parties' services Third parties' services		(6 032) 032) (6	(3 602) 602) (3
Repairs and maintenance Repairs maintenance and		(1 086) 086) (1	(768) (768)
Taxes and other statutory charges other statutory Taxes and charges		(589) (589)	(1 036) 036) (1
Other expenses Other expenses		(78) (78)	(59) (59)
		(138 854) (138 854)	(139 086) (139 086)

a) Raw materials for the year ended 31 December 2018 includes disposal of the gain recorded on initial recognition of realized agriculture produce and biological assets (both of current and non-current) in the amount of USD 56 460 thousand (USD 61 240 thousand for the year ended 31 December 2017). a) Raw materials for the year ended ³¹ December 2018 includes disposal of the gain recorded on initial recognition of realized agriculture produce and biological assets (both of current and non—current) in the amount of USD 56 460 thousand (USD ⁶¹ 240 thousand for the year ended ³¹ December 2017).

b) Change in inventories and work-in-progress comprises changes in work-in-progress, agricultural produce and current biological assets. b) Change in inventories and work—in—progress comprises changes in \vork—in—progress, agricultural produce and current biological assets.

9. Administrative expenses 9. Administrative expenses

	Note Note	For the year ended For the year ended 31 December 2018 December 31 2018	For the year ended For the year ended 31 December 2017 December 31 2017
of administrative X:g;:sand Wages and salaries of administrative personnel and related personnel and related salaries charges	14 14	443) (9 (9 443)	095) (7 (7 095)
Professional services Professional services	a a	(456) (456)	(656) (656)
Third parties' services Third parties' services		(373) (373)	(325) (325)
Depreciation and amortisation Depreciation amortisation and	13 13	(335) (335)	(214) (214)
Bank services Bank services		(283) (283)	(237) (237)
Transport expenses Transport expenses		(266) (266)	(247) (247)
Repairs and maintenance Repairs maintenance and		(200) (200)	(309) (309)
Other expenses Other expenses		(572) (572)	(522) (522)
		(11 928) 928) (11	(9 605) 605) (9

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousand USD, unless otherwise stated) (in #90d UXD, W/m of/Jmm'w Hated)

a) Professional services include the following audit and related fees: a) Professional services include the following audit and related fees:

	Fees billed by approved	Fees billed by Luxembourg Luxembourg approved audit firm (BDO (BDO audit firm Audit SA) SA) Audit		Other fees billed by BDO billed by Other fees BDO Luxembourg (BDO) Luxembourg (BDO)		Fees billed by other audit firms firms Fees billed by other audit
Fee Category Fee Category	For the year the For year ended 31 ended 31 December December 2018 2018	For the year the For year ended 31 ended 31 December December 2017 2017	For the year the For year ended 31 ended 31 December December 2018 2018	For the year the For year ended 31 ended 31 December December 2017 2017	For the year the For year ended 31 ended 31 December December 2018	For the year the For year ended 31 ended 31 December December 2017 2017
Audit fees Audit fees	48 48	48 48	-	- _	- _	- _
Audit related fees Audit related fees	36 36	37 37	-	- -	110 1 10	74 74
Tax fees Tax fees	- _	- _	3 3	- _	- _	- _
	85 85	85 85	3 3	- -	110 110	74 74

10. Selling and distribution expenses 10. Selling and distribution expenses

	N t Note 0 e	For the year ended For the ended year 31 December 2018 31 December 2018	For the year ended For the ended year 31 December 2017 31 December 2017
Delivery costs Delivery costs		(11 078) (11 078)	(8 089) (8 089)
Depreciation Depreciation	13 13	(239) (239)	(330) (330)
Wages and salaries of sales personnel and related charges \X'ages and salaries of sales personnel and related charges	14 14	(203) (203)	(218) (218)
Other expenses Other expenses		(274) (274)	(256) (256)
		(11 794) (11 794)	(8 893) (8 893)

11. Other operating income 11. Other operating income

	N t Note 0 e	For the year ended For the ended year 31 December 2018 31 December 2018	For the year ended For the ended year 31 December 2017 31 December 2017
Gain on recovery of assets previously written off Gain of assets previously written off on recovery	a a	338 338	968 968
Government grants recognised as income Government grants recognised income as		364 364	- —
Gain on disposal of inventories Gain disposal ofinventories on		66 66	279 279
Income from the exchange of property certificates from the exchange of certificates Income property		31 31	27 27
Income from write-offs of accounts payable Income from write—offs of accounts payable		19 19	245 245
Other income Other income		133 133	91 91
		951 951	1 610 1 610

a) Gain on recovery of assets previously written off is represented by amounts of insurance compensations, reparation of damages, recycled materials recorded as received. a) Gain on recovery of assets previously written off is represented by amounts of insurance compensations, reparation of damages, recycledmaterials recorded as received.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

12. Other operating expenses 12. Other operating expenses

	Note Note	For For the year ended year ended the 31 December 2018 December 31 2018	For the year ended For year ended the 31 December 2017 December 31 2017
Depreciation Depreciation	13 13	(1 752) 752) (1	(955) (955)
disposal of Loss on disposal of property, plant and equipment on property, plant equipment Loss and		(1 521) 521) (1	(514) (514)
Lost crops Lost crops		(465) (465)	(560) (560)
Charity Charity		(416) (416)	(515) (515)
of Shortages and losses due to impairment of inventories to impairment inventories Shortages and due losses		(236) (236)	(381) (381)
Allowance for doubtful accounts receivable for Allowance doubtful accounts receivable	26 26	(153) (153)	(19) (19)
of non—operating Wages and salaries of non-operating personnel and related charges and personnel and related salaries charges \X'ages	14 14	(112) (112)	(81) (81)
of VAT Write-offs of VAT \Write—offs		(51) (51>	(84) (84>
Other expenses Other expenses		(316) (316)	(313) (313)
		(5 022) (5 022)	(3 422) (3 422)

13. Depreciation and amortisation 13. Depreciation and amortisation

	Note Note	For the year ended For the year ended 31 December 2018 December 2018 31	For the year ended For the year ended 31 December 2017 December 31 2017
Depreciation Depreciation
of Cost of sales Cost sales	8	(9 467) 467) (9	(6 445) 445) (6
Other operating expenses Other operating expenses	12 12	(1 752) 752) (1	(955) (955)
Administrative expenses Administrative expenses	9	(333) (333)	(212) (212)
Selling and distribution expenses distribution Selling and expenses	10 10	(239) (239)	(330) (330)
of Depreciation as a part of article "Lost crops" "Lost Depreciation part crops" article as a		(20) (20)	(8) (8)
		(11 811) (11 811)	(7 950) 950) (7
Arnortisation Amortisation
of sales Cost of sales Cost	8	(743) (743)	(1 053) 053) (1
Administrative expenses Administrative expenses	9	(2) (2)	(2) (2)
		(745) (745)	(1 055) 055) (1
		(12 556) 556) (12	(9 005) 005) (9

14. Wages and salaries expenses 14. Wages and salaries expenses

	For For the year ended ended the year 31 December 2018 December 2018 31	For the year ended For ended the year 31 December 2017 December 2017 31
Wages and salaries and \X'ages salaries	(16 271) (16 271)	(12 494) (12 494)
Related charges Related charges	(2 635) 635) (2	(2 078) 078) (2
	(18 906) 906) (18	(14 572) 572) (14
of The average number of employees, persons The number average employees, persons	2 309 309 2	2 412 412 2
of management Remuneration of management Remuneration	3 113 3113	1 855 855 1

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

The distribution of wages and salaries and related charges was as follows: The distribution of wages and salaries and related charges was as follows:

	Note N0":	For the year ended 31 December For December the year ended 31 2018 2018		For the year ended 31 December For December the year ended 31 2017 2017
		Wages and Wages and salaries and salaries and related charges, related charges, thousand USD thousand USD	Average Average of number of number employees, employees, persons persons	Wages and Wages and salaries and and salaries related charges, related charges, thousand USD thousand USD	Average Average of number of number employees, employees, persons persons
Operating personnel Operating personnel	8 8	(9 148) 148) (9	1 632 632 1	(7 158) 158) (7	1 748 748 1
Administrative personnel Administrative personnel	9 9	(9 443) 443) (9	655 655	(7 095) 095) (7	642 642
Sales personnel personnel Sales	10 10	(203) (203)	19 19	(218) (218)	19 19
Non-operating personnel personnel Non—operating	12 12	(112) (112)	3 3	(81) (81)	3 3
of As a part of article "Construction in progress" part "Construction in As article progress" a		- —	- —	(20) (20)	- —
		(18 906) 906) (18	2 309 309 2	(14 572) 572) (14	2 412 2 412

15. Financial expenses, net 15. Financial expenses, net

	For the year ended For the year ended 31 December 2018 December 2018 31	For the year ended For the year ended 31 December 2017 December 2017 31
Interest income on bank deposits Interest income on bank deposits	364 364	298 298
Interest expenses on loans and borrowings Interest borrowings on loans expenses and	(5 243) 243) (5	(6 231) 231) (6
Other expenses Other expenses	(108) (108)	(110) (110)
	(4 987) (4 987)	(6 043) (6 043)

16. Foreign currency exchange (loss)/gain, net 16. Foreign currency exchange (loss)/gain, net

During the Y2018 the strengthening of Ukrainian Hryvnia took place - 1,4% of revaluation as at 31 December 2018 in comparison with 3,1% of devaluation as at 31 December 2017. As a result, during the Y2018 the Group recognised net foreign exchange gain in the amount of USD 567 thousand (USD 762 thousand of losses for Y2017) in the Consolidated statement of comprehensive income. During the Y2018 the strengthening of Ukrainian Hryvnia took place — 1,4% of revaluation as at ³¹ December 2018 in comparison with 3,1% of devaluation as at ³¹ December 2017. As ^a result, during the Y2018 the Group recognised net foreign exchange gain in the amount of USD 567 thousand (USD 762 thousand oflosses for Y2017) in the Consolidated statement of comprehensive income.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

17. Income tax expenses 17. Income tax expenses

The corporate income tax rate for the year ended 31 December 2018 was: 18% in Ukraine, 12,5% in Cyprus, 18% in Luxemburg (for the year ended 31 December 2017 - 18% in Ukraine, 12,5% in Cyprus, 19% in Luxemburg). The corporate income tax rate for the year ended 31 December 2018 was: 18% in Ukraine, 12,5% in Cyprus, 18% inLuxemburg (for the yearended 31 December 2017 — 18% inUkraine, 12,5% inCyprus, 19% inLuxemburg).

The components of income tax expenses were as follows: The components of income tax expenses were as follows:

	For the year For the year ended 31 ended 31 December 2018 December 2018	For the year For the year ended 31 ended 31 December 2017 December 2017
Current income tax Current income tax	(651) (651)	(18) (18)
Deferred tax Deferred tax	(40) (40)	21 21
Income tax benefit (expenses) reported in the statement of comprehensive income (expenses) Income benefit reported in the of comprehensive income tax statement	(691) (691)	3 3
Consolidated statement of other comprehensive income Consolidated statement of other comprehensive income Deferred tax related to item charged or credit directly to other comprehensive income during Deferred tax related to item charged credit directly to other comprehensive income during or
year: year: Net gain on revaluation of property, plant and equipment Net gain revaluation of property, plant and equipment on	259 259	(621) (621)

Reconciliation between tax expenses and the accounting value multiplied by tax rate was as follows: Reconciliation between tax expenses and the accounting value multiplied by tax rate was as follows:

	For the year ended For the ended year 31 December 2018 December 2018 31	For the year ended For the ended year 31 December 2017 December 31 2017
01 January 01 January	(3 198) (3 198)	(2 498) (2 498)
Income tax benefit (expenses) for the period recognized in other comprehensive income (expenses) Income benefit for the period recognized in other comprehensive income tax	259 259	(791) (791)
Income tax benefit (expenses) for the period recognized in profit or loss (expenses) Income benefit for the period recognized in profit loss tax or	(40) (40)	21 21
Effect of foreign currency translation Effect of foreign translation currency	(48) (48)	70 70
31 December 31 December	(3 027) (3 027)	(3 198) (3 198)

	For the year ended For the ended year 31 December 2018 31 December 2018	For the year ended For the ended year 31 December 2017 31 December 2017
Profit before tax from continuing operations Profit before tax from continuing operations	28 318 28 318	17 787 17 787
Profit before tax from continuing operations of companies non-payers of incom tax Profit before from continuing operations of companies ofincom tax tax non—payers	25 892 25 892	13 998 13 998
Profit before tax from continuing operations of companies payers of income tax Profit before from continuing operations of companies of income tax tax payers	2 425 2 425	3 789 3 789
Profit before tax from continuing operations of companies payers of income tax: Profit before tax from continuing operations of companies ofincome tax: payers
Ukraine Ukraine	(1 145) (1 145)	4 4
Cyprus Cyprus	54 54	(12 244) (12 244)
Luxembourg Luxembourg	(9 042) (9 042)	23 007 23 007
BVI BVI	12 558 12 558	(6 978) (6 978)
	2 425 2 425	3 789 3 789
Tax at statutory tax rate: Tax at statutory tax rate:
Ukraine 18% Ukraine 18%	- -	1 1
Cyprus 12,5% Cyprus 125%	7 7	- —
Luxembourg 18% (19% in 2017) Luxembourg 18% (19% 2017) in	- —	6 212 6 212
BVI 0% BV I 0%	- -	- —
	7 7	6 213 6 213
Non-taxable items Non—taxable items	684 684	(6 216) (6 216)
Income tax benefit Income benefit tax	691 691	(3) (3)

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm're Hated)

18. Property, plant and equipment 18. Property, plant and equipment

	Land Land and and buildings buildings	Machinery Machinery	Motor Motor vehicles vehicles	Other Other	Construction Construction in in progress progress	Total Total
INITIAL INITIAL COST COST
31 December 2016 December 31 2016	41 424 424 41	28 623 28 623	13 568 568 13	610 610	668 668	84 893 84 893
Additions Additions	322 322	4 098 4 098	709 709	113 113	1 298 298 1	6 540 540 6
Disposals Disposals	(1 250) 250) (1	(2 761) 761) (2	(443) (443)	(131) (131)	- —	(4 585) 585) (4
Transfer Transfer	199 199	121 121	19 19	13 13	(352) (352)	- —
Revaluation Revaluation	12 824 12 824	6 041 041 6	3 794 794 3	- —	- —	22 659 22 659
Reversal of Reversal of impairment impairment	422 422	159 159	11 11	- —	- —	592 592
Impairment Impairment	(184) (184)	(83) (83)	(5) (5)	- —	- —	(272) (272)
of depreciation Elimination of depreciation Elimination	4 260 260 4	5 694 694 5	5 727 727 5	- —	- —	15 681 15 681
Effect from translation into presentation Effect from into translation resentation currency 13 currency	(1 281) 281) (1	(973) (973)	(439) (439)	(19) (19)	(71) (71)	(2 783) 783) (2
31 December 2017 December 2017 31	56 736 56 736	40 919 40 919	22 941 22 941	586 586	1 543 543 1	122 725 122 725
31 December 2017 December 2017 31	56 736 56 736	40 919 40 919	22 941 22 941	586 586	1 543 543 1	122 725 122 725
Additions Additions	662 662	3 522 522 3	1 040 040 1	108 108	47 47	5 379 379 5
Disposals Disposals	(5 004) 004) (5	(2 324) 324) (2	(2 337) 337) (2	(30) (30)	- —	(9 695) 695) (9
Transfer Transfer	577 577	45 45	- —	16 16	(638) (638)	- —
Effect from translation into presentation E:f::;cf:om into translation presentation currency	836 836	534 534	332 332	6 6	31 31	739 1 1 739
31 December 2018 December 2018 31	53 807 53807	42 696 42 696	21 976 976 21	686 686	983 983	120 148 120 148
DEPRECIATION ACCUMULATED ACCUMULATED DEPRECIATION
31 December 2016 December 2016 31	(5 761) (5 761)	(9 621) (9 621)	(4 330) (4 330)	(531) (531)	- -	(20 243) (20 243)
Depreciation for the period for Depreciation period the	(1 844) 844) (1	(3 602) 602) (3	(2 385) 385) (2	(119) (119)	- —	(7 950) 950) (7
Disposals Disposals	415 415	1 396 396 1	271 271	82 82	- —	2 164 164 2
of depreciation Elimination of depreciation Elimination	(4 260) (4 260)	(5 694) 694) (5	(5 727) 727) (5	- —	- —	(15 681) (15 681)
Effect from translation into presentation into translation presentation Ejfreccrtlcf'rom currency	254 254	414 414	246 246	19 19	_ -	933 933
31 December 2017 December 31 2017	(11 196) (11 196)	(17 107) (17 107)	(11 925) 925) (11	(549) (549)	- -	(40 777) (40 777)
31 December 2017 December 2017 31	(11 196) 196) (11	(17 107) (17 107)	(11 925) 925) (11	(549) (549)	- -	(40 777) (40 777)
Depreciation for the period for Depreciation period the	(2 610) (2 610)	(5 682) 682) (5	(3 418) 418) (3	(101) (101)	- —	(11 811) (11 811)
Disposals Disposals	1 973 973 1	1 659 659 1	1 872 872 1	30 30	- —	5 534 534 5
Effect from translation into presentation into translation presentation Ejfreccrtlcf'rom currency	(141) (141)	(163) (163)	(136) (136)	(6) (6)	_ -	(446) (446)
31 December 2018 December 2018 31	(11 974) 974) (11	(21 293) 293) (21	(13 607) (13 607)	(626) (626)	- -	(47 500) (47 500)
Net book Net book value value
31 December 2016 December 2016 31	35 663 35 663	19 002 002 19	9 238 238 9	79 79	668 668	64 650 64 650
31 December 2017 December 2017 31	45 540 45 540	23 812 23 812	11 016 016 11	37 37	1 543 543 1	81 948 948 81
31 December 2018 December 2018 31	41 833 41833	21 403 403 21	8 369 369 8	60 60	983 983	72 648 72 648

As at 31 December 2017 an independent valuation of the Group's land, buildings, Machinery and vehicles was performed in accordance with International Valuation Standards by an independent appraiser LLC "Asset Expertise" (ODS Certificate No.631/16 as of 28 November 2016 issued by State Property Fund of Ukraine). As at ³¹ December 2017 an independent valuation of the Group's land, buildings, Machinery and vehicles was performed in accordance with International Valuation Standards by an independent appraiser LLC "Asset Expertise" (ODS Certificate No.631/16 as of 28 November 2016 issued by State Property Fund of Ukraine).

Most buildings and constructions were valued using cost approach. Other items of PPE were valued using the market approach. Market approach uses prices and other relevant information generated by market transactions involving identical or comparable (i.e. similar) assets. Most buildings and constructions were valued using cost approach. Other items of PPE were valued using the market approach. Market approach uses prices and other relevant information generated by market transactions involving identical or comparable (i.e. similar) assets.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm're Hated)

Cost approach either determines the cost to construct the assets in their present state and considers their remaining useful life or identifies fair value as a depreciated replacement cost. Cost approach was used only in the cases where there was no possibility to use market approach. Cost approach either determines the cost to construct the assets in their present state and considers their remaining useful life or identifies fair value as a depreciated replacement cost. Cost approach was used only in the cases where there was no possibility to use market approach.

The following factors were considered in determining the fair values of buildings under the depreciated replacement cost approach: The following factors were considered in determining the fair values of buildings under the depreciated replacement cost approach:

• the cost to construct the asset is based on the cost of the necessary materials and construction work as at the date of valuation; 'the cost to construct the asset is based on the cost of the necessary materials and construction work as at the date of valuation;

• expected usage of the asset is assessed by reference to the asset's expected capacity or physical output; 'expected usage of the asset is assessed by reference to the asset's expected capacity or physical output;

• technical or commercial obsolescence arising from changes or improvements in production for the product or service output of the asset as well as physical deterioration. ' technical or commercial obsolescence arising from changes or improvements in production for the product or service output of the asset as well as physical deterioration.

Impairment test Impairment test

As at 31 December 2017, impairment test was performed by an independent appraiser, since impairment test is an integral part of valuation of property, plant and equipment wherein used the depreciated replacement cost method. As at 31 December 2018 an impairment review was conducted by the management of the Group. Impairment test has been performed for the following Cash Generating Units: Crop farming, Dairy farming, Storage and processing. According to the results of the test impairment of PPE was not identified. As at ³¹ December 2017, impairment test was performed by an independent appraiser, since impairment test is an integral part of valuation of property, plant and equipment wherein used the depreciated replacement cost method. As at 31 December 2018 an impairment review was conducted by the management of the Group. Impairment test has been performed for the following Cash Generating Units: Crop farming, Dairy farming, Storage and processing. According to the results of the test impairment of PPE was not identified.

If property, plant and equipment were measured at cost their book value would be the following: If property, plant and equipment were measured at cost their book value would be the following:

	Land and 3:33.22: buildings	Machinery Machinery	Motor M.:.:: vehicles	Other	Magi" Construction in progress	Total
31 December 2016 December 2016 31	6 921 921 6	10 315 315 10	4 891 4 891	58 58	668 668	22 853 22 853
31 December 2017 December 31 2017	6 988 988 6	12 106 12 106	4 764 764 4	78 78	1 543 543 1	25 479 479 25
31 December 2018 December 31 2018	7 185 185 7	13 964 964 13	5 084 084 5	87 87	983 983	27 303 303 27

PPE in finance lease I'PE in finance lease

Leased assets, where the Group is a lessee under finance lease agreements, comprise the following items: Leased assets, where the Group is ^a lessee under finance lease agreements, comprise the following items:

	As As at 31 at 31	As As at 31 at 31
	December 2018 December 2018	December 2017 December 2017
Machinery Machinery	683 683	3 092 092 3
Motor vehicles Motor vehicles	278 278	2 711 2 711
	961 961	5 803 803 5

Pledged PPE Pledged I'I'E

The amount of property, plant and equipment pledged to secure bank loans was as follows: The amount of property, plant and equipment pledged to secure bank loans was as follows:

	31 December December 31 2018 2018	31 December December 31 2017 2017
Land and buildings Land buildings and	24 427 24 427	25 233 233 25
Machinery Machinery	5 127 127 5	6 374 374 6
Motor vehicles Motor vehicles	1 506 506 1	2 086 086 2
Other Other	3 3	3 3
	31 063 063 31	33 696 33 696

Capitalized cost Capitalized cost

There were no borrowing costs capitalized as a part of costs of property, plant and equipment during the year ended 31 December 2018 and 2017. There were no borrowing costs capitalized as ^a part of costs of property, plant and equipment during the year ended ³¹ December 2018 and 2017.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

Assets under construction Assets under construction

Included in property, plant and equipment as at 31 December 2018 was an amount of USD 983 thousand (USD 1 543 thousand as at 31 December 2017) relating to expenditure for property, plant and equipment in the course of construction. Included in property, plant and equipment as at ³¹ December 2018 was an amount of USD 983 thousand (USD 1543 thousand as at ³¹ December 2017) relating to expenditure for property, plant and equipment in the course of construction.

Capital commitments Capital commitments

As at 31 December 2018 the Group had capital commitments in the amount of USD 4 063 thousand (USD 3 372 thousand as at 31 December 2017). As at ³¹ December 2018 the Group had capital commitments in the amount of USD 4 063 thousand (USD 3372 thousand as at ³¹ December 2017).

19. Intangible assets 19. Intangible assets

	Computer software Computer software	Property certificates Property certificates	Land Land lease rights rights lease	Total Total
INITIAL INITIAL COST COST
31 December 2016 December 31 2016	17 17	383 383	9 482 482 9	9 882 882 9
Additions Additions	- -	56 56	- -	56 56
Disposals Disposals	- -	(73) (73)	- -	(73) (73)
Effect from translation into presentation Effect from translation into presentation currency currency	(1) (1)	(11) (11)	(295) (295)	(307) (307)
31 December 2017 December 31 2017	16 16	355 355	9 187 187 9	9 558 558 9
31 December 2017 December 2017 31	16 16	355 355	9 187 9 187	9 558 558 9
Additions Additions	12 12	27 27	- -	39 39
Disposals Disposals	- _	(1 69) (169)	-	(169) (169)
Effect from translation into presentation Effect from into translation presentation currency currency	- -	7 7	125 125	132 132
31 December 2018 December 31 2018	28 28	220 220	9 312 9 312	9 560 9 560
ACCUMULATED DEPRECIATION ACCUMULATED DEPRECIATION
31 December 2016 December 2016 31	(13) (13)	(1) (1)	(5 807) (5 807)	(5 821) (5 821)
Amortisation for the period for Amortisation period the	(2) (2)	- -	(1 053) (1 053)	(1 055) (1 055)
Effect from translation into presentation Effect from into translation presentation currency currency	- _	- —	236 236	236 236
31 December 2017 December 2017 31	(15) (15)	(1) (1)	(6 624) (6 624)	(6 640) (6 640)
31 December 2017 December 31 2017	(15) (15)	(1) (1)	(6 624) (6 624)	(6 640) (6 640)
Amortisation for the period for Amortisation period the	(1) (1)	(1) (1)	(743) (743)	(745) (745)
Effect from translation into presentation Effect from into translation presentation currency currency	- -	- -	(76) (76)	(76) (76)
31 December 2018 December 2018 31	(16) (16)	(2) (2)	(7 443) (7 443)	(7 461) (7 461)
NET BOOK VALUE NET BOOK VALUE
31 December 2016 December 2016 31	4 4	382 382	3 675 3 675	4 061 4 061
31 December 2017 December 31 2017	1 1	354 354	2 563 2 563	2 918 2 918
31 December 2018 December 2018 31	12 12	218 218	1 869 1 869	2 099 2 099

Property certificates represent deeds supporting ownership right for property units of members of agricultural entity, which are intended for exchange by the Group companies on the property objects of this agricultural entity. Property certificates represent deeds supporting ownership right for property units of members of agricultural entity, which are intended forexchange by the Group companies on the property objects of this agricultural entity.

(in thousand USD, unless otherwise stated) (in t/Joamfld UXD, W/m of/Jmm'w Hated)

20. Non-current biological assets 20. Non-current biological assets

	31 December December 31 2018 2018	31 December December 31 2017 2017
Non-current biological assets - animal-breeding Non-current biological assets - animal-breeding
Cattle Cattle	1 830 830 1	2 334 334 2
Non-current biological assets - plant-breeding Non-current biological assets - plant-breeding
Perennial grasses Perennial grasses	27 27	9 9
Total non-current biological assets Total non-current biological assets	1 857 857 1	2 343 343 2

As at the reporting dates non-current biological assets of animal-breeding were presented as follows: As at the reporting dates non—current biological assets of animal—breeding were presented as follows:

	31 December December 31 2018 2018	31 December December 31 2017 2017
Cattle Cattle
Cattle, units Cattle, units	845 845	842 842
Live weight, kg Live weight, kg	328 690 328 690	318 138 318 138
Book value Book value	1 830 830 1	2 334 334 2

Following changes took place in the non-current biological assets of animal-breeding: Following changes took place in the non—current biological assets of animal—breeding:

	Cattle Cattle
31 December 2016 December 31 2016	1 407 407 1
Transfer (from (to) current biological assets) Transfer (from (to) current biological assets)	(345) (345)
Sale Sale	(136) (136)
Change in fair value in fair Change value	1 116 116 1
Effect from translation into presentation currency Effect from into translation presentation currency	292 292
31 December 2017 December 2017 31	2 334 334 2
31 December 2017 December 31 2017	2 334 334 2
Transfer (from (to) current biological assets) Transfer (from (to) current biological assets)	286 286
Change in fair value in fair Change value	(629) (629)
Effect from translation into presentation currency Effect from into translation presentation currency	(161) (161)
31 December 2018 December 31 2018	1 830 830 1

Due to the absence of an active market for cattle in Ukraine, to determine the fair value of biological assets, the Group used the discounted value of net cash flows expected from assets. As a discount rate, the rate of 21,6% prevailing as at 31 December 2018 (19,4% as at 31 December 2017) was applied for cattle. Further details are provided in Note 23 relating Fair Value Measurement. Due to the absence of an active market for cattle in Ukraine, to determine the fair value of biological assets, the Group used the discounted value of net cash flows expected from assets. As ^a discount rate, the rate of 21,60/0 prevailing as at ³¹ December 2018 (19,4% asat ³¹ December 2017) was applied for cattle. Further details are provided in Note 23 relating Fair Value Measurement.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

As at the reporting dates non-current biological assets of plant-breeding were presented as follows: As at the reporting dates non—current biological assets of plant—breeding were presented as follows:

	31 December December 31 2018 2018	31 December December 31 2017 2017
Perennial grasses Perennial grasses
Area, ha Area, ha	363 363	147 147
Book value Book value	27 27	9 9

Following changes took place in the non-current biological assets of plant-breeding: Following changes took place in the non—current biological assets of plant—breeding:

	Perennial grasses Perennial grasses 25 25
31 December 2016 December 2016 31
Harvesting failure Harvesting failure	(16) (16)
Effect from translation into presentation currency Effect from translation into presentation currency	- —
31 December 2017 December 2017 31	9 9

31 December 2017 December 2017 31	9 9
Capitalized expenses Capitalized expenses	24 24
Harvesting failure Harvesting failure	(6) (6)
Effect from translation into presentation currency presentation Effect from translation into currency	- _
31 December 2018 December 2018 31	27 27

21. Prepayments for property, plant and equipment 21. Prepayments for property, plant and equipment

	31 December December 31 2018 2018	31 December December 31 2017 2017
Prepayments for property, plant and equipment for property, plant equipment Prepayments and	566 566	800 800

As at 31 December 2018 an amount of USD 550 thousand or 97% of the total amount of prepayments for property, plant and equipment is due from the 10 most significant counterparties (as at 31 December 2017 – USD 730 thousand or 91%). As at ³¹ December 2018 an amount of USD 550 thousand or 97% of the total amount of prepayments for property, plant and equipment is due from the 10 most significant counterparties (as at 31 December 2017 — USD 730 thousand or 91%).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

22. Inventories 22. Inventories

	Note Note	31 December 31 December 2018 2018	31 December December 31 2017 2017

Agricultural produce Agricultural produce	a a	87 100 87 100	50 789 789 50
Work-in-progress Work—in—progress	b b	10 129 10 129	8 480 8 480
Agricultural materials Agricultural materials		2 556 2 556	1 347 1 347
Fuel Fuel		892 892	712 712
Spare parts Spare parts		509 509	396 396
Raw materials materials Raw		324 324	293 293
Finished goods Finished goods		11 11	9 9
Other inventories Other inventories		57 57	135 135
		101 578 101 578	62 161 62 161

As at 31 December 2018 cost value of inventories amounts to USD 60 858 thousand (USD 43 676 thousand as at 31 December 2017). As at 31 December 2018 cost value ofinventories amounts to USD 60 858 thousand (USD 43676 thousand as at 31 December 2017).

a) As at the reporting dates agricultural produce was presented as follows: a) As at the reporting dates agricultural produce was presented as follows:

	31 December December 31 2018 2018	31 December 31 December 2017 2017
Corn	83 721	46 847
Corn	83 721	46 847
Soya Soya	2 676 2 676	2 202 2 202
Silage Silage	288 288	259 259
Wheat \X'heat	37 37	15 15
Hay Hay	11 1 1	33 33
Sunflower Sunflower	5 5	14 14
Potato Potato	- —	884 884
Other Other	362 362	535 535
	87 100 87100	50 789 50 789

The fair value of agricultural produce was estimated based on market price as at date of harvest and is within level 3 of the fair value hierarchy. The fair value of agricultural produce was estimated based on market price as at date of harvest and is within level 3 of the fair value hierarchy.

b) Work-in-progress includes expenses on works connected with preparation of the lands for the future harvest obtained from the biological assets of plant growing. The cost of work in progress includes costs of direct materials and labor and other direct productions costs and related production overheads (based on normal operating capacity). b) \X'ork—in—progress includes expenses on works connected with preparation of the lands for the future harvest obtained from the biologicalassets of plant growing. The cost of work in progress includes costs of direct materials and labor and other direct productions costs and relatedproduction overheads (based on normal operating capacity).

As at the reporting dates loans and borrowings were secured by agricultural produce: As at the reporting dates loans and borrowings were secured by agricultural produce:

	31 December December 31 2018 2018	31 December December 31 2017 2017
Corn Corn	12 742 12 742	10 664 10 664

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

23. Current biological assets 23. Current biological assets

	31 December 2018 December 31 2018	31 December 2017 December 31 2017
of animal-breeding Current biological assets of animal-breeding Current biological assets
Cattle Cattle	920 920	1 635 635 1
Other Other	2 2	3 3
	922 922	1 638 638 1
biological assets of plant-breeding Current biological assets of plant-breeding Current
Corn Corn	- -	7 577 577 7
Wheat \X'heat	7 031 031 7	6 067 067 6
Grasses Grasses	- -	32 32
Other Other	31 31	34 34
Total current of plant-breeding Total current biological assets of plant-breeding biological assets	7 061 061 7	13 710 710 13
Total current biological assets Total current biological assets	7 983 983 7	15 348 348 15

As at the reporting dates current biological assets of animal-breeding were presented as follows: As at the reporting dates current biological assets of animal—breeding were presented as follows:

	31 December 2018 December 2018 31	31 December 2017 December 2017 31

Cattle Cattle
Cattle, units units Cattle,	448 448	534 534
Live weight, kg Live weight, kg	123 594 123 594	164 747 164 747
Book value Book value	920 920	1 635 635 1
Other Other
of animals, Number of animals, units Number units	5 5	47 47
Live weight, kg Live weight, kg	2 296 296 2	3 874 874 3
Book value Book value	2 2	3 3
Total book Total book value value	922 922	1 638 638 1

Following changes took place in the current biological assets of animal-breeding: Following changes took place in the current biological assets of animal—breeding:

	Cattle Cattle	Other Other	Total Total
31 December 2016 December 31 2016	1 246 246 1	12 12	1 258 258 1
Capitalized expenses Capitalized expenses	360 360	- -	360 360
Transfer (from (to) non-current biological assets) (from Transfer biological assets) (to) non—current	345 345	- —	345 345
Sale Sale	(971) (971)	(8) (8)	(979) (979)
Slaughter Slaughter	(118) (118)	- —	(118) (118)
Change in fair value in fair Change value	1 108 108 1	(3) (3)	1 105 105 1
Effect from translation into presentation currency Effect from translation into presentation currency	(335) (335)	2 2	(333) (333)
31 December 2017 December 2017 31	1 635 635 1	3 3	1 638 638 1

31 December 2017 December 2017 31	1 635 635 1	3 3	1 638 638 1
Capitalized expenses Capitalized expenses	337 337	- —	337 337
Transfer (from (to) non-current biological assets) (from Transfer biological assets) (to) non—current	(286) (286)	- —	(286) (286)
Sale Sale	(857) (857)	(1) (1)	(858) (858)
Slaughter Slaughter	(142) (142)	- -	(142) (142)
Change in fair value in fair Change value	(6) (6)	(1) (1)	(7) (7)
Effect from translation into presentation currency Effect from translation into presentation currency	239 239	1 1	240 240
31 December 2018 December 31 2018	920 920	2 2	922 922

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m 027s7139 Hated)

As at the reporting dates current biological assets of plant-breeding were presented as follows: As at the reporting dates current biological assets of plant—breeding were presented as follows:

	31 December December 31	31 December December 31
	2018 2018	2017 2017
Corn Corn
Area, ha Area, ha	- -	7 089 089 7
Book value Book value	- -	7 577 577 7
Wheat Wheat
Area, ha Area, ha	13 080 080 13	12 618 12 618
Book value Book value	7 031 7 031	6 067 067 6
Grasses Grasses
Area, ha Area, ha	- —	213 213
Book value Book value	- -	32 32
Other Other
Area, ha Area, ha	103 03 1	129 29 1
Book value Book value	31 31	34 34
Total book value Total book value	7 061 061 7	13 710 710 13

Following changes took place in the current biological assets of plant-breeding: Following changes took place in the current biological assets of plant—breeding:

	Corn Corn	Wheat Wheat	Soya Soya	Sunflower Sunflower	Potato Potato	Grasses Grasses	Other Other	Total Total
31 December 2016 December 31 2016	11 025 025 11	5 901 901 5	- -	- -	- -	18 18	- -	16 944 944 16
Capitalized expenses (harvesting 2017) Capitalized (harvesting expenses 2017)	41 492 492 41	4 366 4 366	6 616 616 6	12 711 12 711	1 195 195 1	179 179	221 221	66 780 780 66
Revaluation at fair value at the date of 3:31:33;:gfi:;§é:%at 0f the date harvest (harvesting 2017)	37 883 883 37	4 822 822 4	2 516 516 2	9 545 545 9	1 376 376 1	-	-	56 142 142 56
Harvesting (harvesting 2017) Harvesting (harvesting 2017)	(86 850) 850) (86	(11 043) 043) (11	(9 132) 132) (9	(22 132) (22 132)	(2 571) 571) (2	(178) (178)	(199) (199)	(132 105) (132 105)
Harvest failure (harvesting 2017) Harvest failure (harvesting 2017)	(1) (1)	(1) (1)		(124) (124)		(1) (1)	(3) (3)	(130) (130)
Change in fair value (harvesting 2017) in fair Change value (harvesting 2017)	4 204 204 4	210 210	- —	- —	- —	- —	- —	4 414 414 4
Capitalized expenses (harvesting 2018) Capitalized (harvesting expenses 2018)	- —	2 068 068 2	- —	- —	- —	- —	- —	2 068 068 2
Effect from translation into Si::::::t::::::;im° presentation currency	(176) «76>	(256) <2se>	(0)	(0) a»	-	14 - 14	15 15	(403) (403
31 December 2017 December 2017 31	7 577 577 7	6 067 067 6	- -	- -	- -	32 32	34 34	13 710 13 710

	Corn Corn	Wheat Wheat	Soya Soya	Sunflower Sunflower	Potato Potato	Grasses Grasses	Other Other	Total Total
31 December 2017 December 31 2017	7 577 577 7	6 067 6 067	- -	- -	- -	32 32	34 34	13 710 710 13
Capitalized expenses (harvesting 2018) Capitalized (harvesting expenses 2018)	48 867 48 867	4 355 4 355	6 969 969 6	14 042 14 042	- —	280 280	122 122	74 635 74 635
Revaluation at fair value at the date of 3:31:33;:gfi:;§é:;ft 0f the date harvest (harvesting 2018)	56 502 502 56	3 533 533 3	3 259 259 3	10 229 229 10	-	-	-	73 523 523 73
Harvesting (harvesting 2018) Harvesting (harvesting 2018)	(113 112) (113 112)	(9 875) 875) (9	(10 226) 226) (10	(24 247) (24 247)	- —	(283) (283)	(146) (146)	(157 889) (157 889)
Harvest failure (harvesting 2018) Harvest failure (harvesting 2018)	(8) (8)	(20) (20)	(2) (2)	(24) (24)	- —	(15) (15)	(57) (57)	(126) (126)
Capitalized expenses (harvest 2019) Capitalized (harvest 2019) expenses	- —	2 479 479 2	- —	- —	- —	- —	31 31	2 510 510 2
Change in fair value (harvest 2019) in fair value (harvest Change 2019)	- —	439 439	- —	- —	- —	- —	- —	439 439
Effect from translation into Si::::::t::::::;im° presentation currency	174	53 53	-	- - -	- -	(14) we	46 46	259
31 December 2018 December 31 2018	- -	7 031 031 7	- -	- -	- -	- -	30 30	7 061 061 7

As at 31 December 2018 and as at 31 December 2017 there were no pledged biological assets. As at 31 December 2018 and as at 31 December 2017 there were no pledged biological assets.

(in thousand USD, unless otherwise stated) (in #90d UXD, W/m of/Jmm'w Hated)

Due to the absence of an active market, the fair value of biological assets is estimated by present valuing the net cash flows expected to be generated from the assets discounted at a current market-determined rate. The fair value of biological assets is determined by the Group's own agricultural and IFRS experts. The forecast indicators of crop yields used in assessing crops are determined on the basis of the current history of crop yields. The indicators of past periods are taken as a basis and are adjusted taking into account the state of crops, climatic conditions, varietal characteristics of the crop, soil fertility, the application of new technologies. Due to the absence of an active market, the fair value of biological assets is estimated by present valuing the net cash flows expected to be generated from the assets discounted at ^a current market—determined rate. The fair value of biological assets is determined by the Group's own agricultural and IFRS experts. The forecast indicators of crop yields used in assessing crops are determined on the basis of the current history of crop yields. The indicators of past periods are taken as ^a basis and are adjusted taking into account the state of crops, climatic conditions, varietal characteristics of the crop, soil fertility, the application of new technologies.

Biological assets of the Group are measured at fair value within Level 3 of the fair value hierarchy. There were no transfers between any levels during the year ended 31 December 2018. Biological assets of the Group are measured at fair value within Level ³ of the fair value hierarchy. There were no transfers between any levels during the year ended 31 December 2018.

i ti D Description on escr P	Fair Fair value as at 31 value at 31 as December 2018 December 2018	Valuation Valuation technique technique	bl i U t b Unobservable inputs npu no serva e S	of Range of Range unobservable inputs inputs unobservable
		Discounted ' .	Crops yield - tonnes per hectare Cro yield tonnes hectare er 5 —	5,9 5,9
Crops in fields - wheat in Crops fields wheat	7 031 031 7	DmoumCd cash flows "Sh flows	p p ' Crops price Crops price	per ton 163 per ton 163
			Milk yield - kg per cow Milk yield kg per cow —	7000-7580 per year per year 7000—7580
Cattle Cattle	2 750 750 2	Discounted D'scoumd cash flows flows cash	Milk Milk price price	per 1m 0,27 USD per liter USD 0,27
			Discount rate Discount rate	21,59% 21,590/0

Changes in key assumptions used to estimate biological assets fair value would have the following effect on the fair value of biological assets: Changes in key assumptions used to estimate biological assets fair value would have the following effect on the fair value of biological assets:

	Increase/decrease Increase/decrease in in assumption, % assumption, °/o	of Effect on fair Effect on fair value of value biological assets, th USD biological assets, th USD
	10 10	1 119 19 1 1
Crops yield Crops yield '	(10) (10)	(1 119) 19) (1 1
C	10 10	1 119 19 1 1
Crops price ri 0135p r ' C6	(10) (10)	(1 119) (1119)
, , Milk	10 10	270 270
Milk yield yield '	(10) (10)	(270) (270)
	10 10	945 945
Milk price Milk price	(10) (10)	(945) (945)
,	1 1	(27) (27)
Discount rate Discount rate	(1) (1)	27 27

24. Trade accounts receivable, net 24. Trade accounts receivable, net

	N t Note 0 e	31 December December 31 2018 2018	31 December December 31 2017 2017
Trade accounts receivable Trade accounts receivable		469 469	357 357
Allowances for accounts receivable for Allowances accounts receivable	26 26	(10) (10)	(36) (36)
		459 459	321 321

As at 31 December 2018 an amount of USD 450 thousand or 96% of the total amount of trade accounts receivable is due from the 10 most significant counterparties (as at 31 December 2017 – USD 307 thousand or 96%). As at ³¹ December 2018 an amount of USD 450 thousand or 96% of the total amount of trade accounts receivable is due from the 10 most significant counterparties (as at 31 December 2017 — USD 307 thousand or 96%).

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

Distribution of trade accounts receivable on time frames is the following: Distribution of trade accounts receivable on time frames is the following:

			Past due, not impaired not impaired Past due,
	Total Total	Neither Neither past due past due nor impaired nor impalred	Wlthin Within 90 90 days days	From 90 to days 360 From 90 to 360 days	More More than 1 than 1 year year
31 December 2018 December 2018 31	459 459	389 389	55 55	- —	15 15
31 December 2017 December 2017 31	321 321	290 290	30 30	- —	1 1

On the basis of analysis of payments for the current period Financial Department of the Group considers that there is no need to form provision for overdue, but not impaired trade accounts receivable. On the basis of analysis of payments for the current period Financial Department of the Group considers that there is no need to form provision for overdue, but not impaired trade accounts receivable.

25. Prepayments and other current assets, net 25. Prepayments and other current assets, net

	Note Note	31 December December 31 2018 2018	31 December December 31 2017 2017
Prepayments and other non-financial assets: other Prepayments and non—financial assets:
Deferred expenses Deferred expenses		2 553 2 553	4 255 4 255
VAT VAT for reimbursement for reimbursement		3 169 169 3	1 822 822 1
Advances to suppliers Advances to suppliers		578 578	1 032 032 1
Allowances for advances to suppliers for Allowances to suppliers advances	26 26	(3) (3)	(1) (1)
		6 297 6297	7 108 108 7
Other financial assets: Other financial assets:
Non-bank accommodations interest free accommodations interest Non—bank free		242 242	295 295
Other accounts receivable Other accounts receivable		634 634	756 756
Allowances for other accounts receivable for Allowances other accounts receivable	26 26	(77) (77)	(6) (6)
		799 799	1 045 045 1
		7 096 096 7	8 153 153 8

Deferred expenses relate to the purchase option according to the Management Incentive Plan (see Note 28). Deferred expenses relate to the purchase option according to the Management Incentive Plan (see Note 28).

As at 31 December 2018 an amount of USD 273 thousand or 47% of the total amount of advances to suppliers is due from the 10 most significant counterparties (as at 31 December 2017 – USD 780 thousand or 76%). As at ³¹ December 2018 an amount of USD 273 thousand or 47% of the total amount of advances to suppliers is due from the 10 most significant counterparties (as at 31 December 2017 — USD 780 thousand or 76%).

As at 31 December 2018 an amount of USD 197 thousand or 81% of the total amount of non-bank accommodations interest free is due from the 10 most significant counterparties (as at 31 December 2017 – USD 207 thousand or 70%). As at ³¹ December 2018 an amount of USD 197 thousand or 81% of the total amount of non—bank accommodations interest free is due from the 10 most significant counterparties (as at 31 December 2017 — USD 207 thousand or 70%).

26. Changes in allowances made 26. Changes in allowances made

	Note Note	31 December December 31 2018 2018	31 December December 31 2017 2017
Allowances for trade accounts receivable for Allowances trade accounts receivable	24 24	(10) (10)	(36) (36)
Allowances for advances to suppliers for to Allowances advances suppliers	25 25	(3) (3)	(1) (1)
Allowances for other accounts receivable for other Allowances accounts receivable	25 25	(77) (77)	(6) (6)
		(90) (90)	(43) (43)

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm're Hated)

The movements of the allowances were as follows: The movements of the allowances were as follows:

	Note Note	For the year For the year ended 31 ended 31 December 2018 December 2018	For the year For the year ended 31 ended 31 December 2017 December 2017
of the beginning period As at the beginning of the period As at the		(43) (43)	(45) (45)
Accrual Accrual	12 12	(153) (153)	(19) (19)
of allowances Use of allowances Use		104 104	19 19
Reverse of allowances of allowances Reverse		3 3	- _
Effect from translation into presentation currency Effect from into translation presentation currency		(1) (1)	2 2
of the As at the end of the period period As at the end		(90) (90)	(43) (43)

27. Cash and cash equivalents 27. Cash and cash equivalents

	Currency Currency	31 December December 31 2018 2018	31 December December 31 2017 2017
Cash in bank and hand in bank hand Cash and	USD USD	3 382 382 3	4 636 4 636
Cash in bank and hand in bank hand Cash and	UAH UAH	532 532	1 161 161 1
Cash in bank and hand in bank hand Cash and	EUR EUR	1 1	281 281
Cash in bank and hand in bank Cash and hand	PLN PLN	5 5	14 14
		3 920 3 920	6 092 6 092

There were no restrictions on the use of cash and cash equivalents during the year ended 31 December 2018 and 2017. There were no restrictions on the use of cash and cash equivalents during the year ended ³¹ December 2018 and 2017.

28. Equity 28. Equity

Share capital Share capital

IMC S.A. has one class of ordinary shares. The number of authorized, issued and fully paid shares as at 31 December 2018 is 33 178 000 (as at 31 December 2017 – 33 178 000). All shares have equal voting rights. Par value of one share is USD 0,0018 (EUR 0,0018). IMCS.A. has one class of ordinary shares. The number of authorized, issued and fully paid shares as at ³¹ December 2018 is 33 178 000 (as at ³¹ December 2017 — 33 178 000). All shares have equal voting rights. Par value of one share is USD 0,0018 (EUR 0,0018).

	31	31 December 2018 December 2018		31 December 2017 December 2017
	% 0/o	Ajnount Amount	% 0/0	Amount Amount
LIMITED AGROVALLEY LIMITED AGROVALLEY	72 72	43 43	68 68	38 38
of the Other shareholders (each one less than 5% of the share capital) Other shareholders one than 5% capital) (each share less	28 28	16 16	32 32	21 21
	100 100	59 59	100 100	59 59

A reconciliation of the number of shares outstanding at the beginning and at the end of the period: A reconciliation of the number of shares outstanding at the beginning and at the end of the period:

of number of authorized, issued and fully paid shares number fully authorized, issued and paid shares	For the year For the year ended 31 ended 31 December 2018 December 2018	For the year For the year ended 31 ended 31 December 2017 December 2017
of the beginning period As at the beginning of the period As at the	33 178 000 33 000 178	31 300 000 300 000 31
Changes for the period for the period Changes	- —	1 878 000 878 000 1
of the As at the end of the period period at the end As	33 178 000 33178 000	33 178 000 33 000 178

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

Extraordinary shareholders meeting approved on 4 July 2017 a Management Incentive Plan providing to Management Team Members an option to purchase in aggregate up to 1 878 000 new shares of IMC S.A. As a part of this incentive plan, 1 878 000 new ordinary shares were issued with subscription price USD 0.00115. As at the 31 December 2017 the purchase option was fully exercised, market share price was USD 2.73. Extraordinary shareholders meeting approved on 4July 2017 ^a Management Incentive Plan providing to Management Team Members an option to purchase in aggregate up to ¹ 878 000 new shares of IMC SA. As ^a part of this incentive plan,1878 000 new ordinary shares were issued with subscription price USD 0.00115. As at the 31 December 2017 the purchase option was fully exercised, market share price was USD 2.73.

Share premium Share premium

In 2011 IMC S.A. completed initial public offering of own shares on Warsaw Stock Exchange. Issue of share capital of IMC S.A. brought to the increase of share capital equaling to USD 10 thousand and share premium in amount of USD 24 387 thousand. In 2011 IMC S.A. completed initial public offering of own shares on \'Varsaw Stock Exchange. Issue of share capital of IMC SA. brought to the increase of share capital equaling to USD 10 thousand and share premium in amount of USD 24 387 thousand.

In 2017 Management Incentive Plan was realized. Issue of new shares of IMC S.A. brought to the increase of share capital equaling to USD 3 thousand and share premium in amount of USD 5 125 thousand. In 2017 Management Incentive Plan was realized. Issue of new shares of IMC SA. brought to the increase of share capital equaling to USD ³ thousand and share premium in amount of USD ⁵ 125 thousand.

Revaluation reserve Revaluation reserve

The fair value of Group's property, plant and equipment has been measured as at 31 December 2017, 2015, 2010, 2009 by an independent appraiser. As at 31 December 2009 the related revaluation surplus of USD 14 766 thousand was initially recognized in equity, as at 31 December 2010 it was additionally recognized in the amount of USD 4 326 thousand. As at 31 December 2015 the amount of USD 40 390 thousand was recognized as increase in revaluation reserve due to revaluation of PPE. As at 31 December 2017 the amount of USD 22 659 thousand was recognized as increase in revaluation reserve due to revaluation of PPE. The fair value of Group's property, plant and equipment has been measured as at ³¹ December 2017, 2015, 2010, 2009 by an independent appraiser. As at ³¹ December 2009 the related revaluation surplus of USD 14 766 thousand was initially recognized in equity, as at ³¹ December 2010 it was additionally recognized in the amount of USD 4 326 thousand. As at ³¹ December 2015 the amount of USD 40 390 thousand was recognized as increase in revaluation reserve due to revaluation of PPE. As at ³¹ December 2017 the amount of USD 22 659 thousand was recognized as increase in revaluation reserve due to revaluation of PPE.

Effect of foreign currency translation Effect of foreign currency translation

Effect of foreign currency translation comprises all foreign exchange differences arising from the translation of the financial statements into presentation currency. Effect of foreign currency translation comprises all foreign exchange differences arising from the translation of the financial statements into presentation currency.

Dividend policy Dividend policy

On 8 July 2016 the Board of Directors of IMC S.A. published its Dividend Policy: The Company intends to pay annual dividends starting from FY 2016 results with a dividend payout ratio up to 10% of Consolidated Net Profit of the Company and its Subsidiaries provided that the Company succeeds to receive dividend payment waivers from its creditors. On ⁸ July 2016 the Board of Directors of IMC SA. published its Dividend Policy: The Company intends to pay annual dividends starting from FY 2016 results with ^a dividend payout ratio up to 10% of Consolidated Net Profit of the Company and its Subsidiaries provided that the Company succeeds to receive dividend payment waivers from its creditors.

According to the announced Dividend Policy on 27 September 2017 the Company paid the interim dividend to the Company's shareholders for an aggregate amount of EUR 1 658 900 (EUR 0.05 per share). According to the announced Dividend Policy on 27 September 2017 the Company paid the interim dividend to the Company's shareholders for an aggregate amount of EUR ¹ 658 900 (EUR 0.05 per share).

According to several resolutions of the Board of directors on 29 August 2018 and according to the announced Dividend Policy on 11 September 2018, an interim dividend of EUR 12 164 579 (EUR 0.37 per share) was declared, the Board of Directors resolves to deduct the excess amount paid in 2017 for an amount of EUR 884 059 so that a gross cash amount of EUR 11 280 520 has been distributed.. . According to several resolutions of the Board of directors on 29 August 2018 and according tothe announced Dividend Policy on ¹¹ September 2018, an interim dividend of EUR 12 164 579 (EUR 0.37 per share) was declared, the Board of Directors resolves to deduct the excess amount paid in 2017 for an amount of EUR 884 059 so that ^a gross cash amount of EUR ¹¹ 280 520 has been distributed.

Legal reserve Legal reserve

From the annual net profits of the Parent company, 5% have to be allocated to the legal reserve. This allocation shall cease to be required as soon and as long as such surplus reserve amounts to 10% of the capital. This reserve may not be distributed to the shareholders. From the annual net profits of the Parent company, 5% have to be allocated to the legal reserve. This allocation shall cease to be required as soon and as long as such surplus reserve amounts to 10% of the capital. This reserve may not be distributed to the shareholders.

Management Incentive Plan Management Incentive Plan

The Extraordinary shareholders meeting approved on 4 July 2017 a management incentive plan providing to Management Team Members and Eligible Employees as defined in the Management Incentive Plan an option to purchase in aggregate up to 1 878 000 new shares of IMC S.A., such number being equal to 6% of the issued stock of IMC S.A. as at the adoption date of such plan, at the price decided at the discretion of the Board of Directors of the Company which shall be equal to at least one euro cent EUR 0.01. The Extraordinary shareholders meeting approved on 4 July 2017 ^a management incentive plan providing to Management Team Members and Eligible Employees as defined in the Management Incentive Plan an option to purchase in aggregate up to ¹ 878 000 new shares of IMC S.A., such number being equal to 6% of the issued stock ofIMC S.A. as at the adoption date of such plan, at the price decided at the discretion of the Board of Directors of the Company which shall be equal to at least one euro cent EUR 0.01.

Performance period of the Management Incentive Plan is 3 years, starting from January 1, 2017 and ending on December 31, 2019. During the Performance Period, the Board of Directors of the Company may discretionarily decide when the Shares shall be issued by the Company to the Participants at the Subscription Price. Performance period of the Management Incentive Plan is ³ years, starting from January 1, 2017 and ending on December 31, 2019. During the Performance Period, the Board of Directors of the Company may discretionarily decide when the Shares shall be issued by the Company to the Participants at the Subscription Price.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

As a part of this incentive plan, 1 878 000 new ordinary shares were issued with subscription price USD 0.00115. As at 31 December 2017 the purchase option was fully exercised, market share price was USD 2.73. As ^a part of this incentive plan,1878 000 new ordinary shares were issued with subscription price USD 0.00115. As at ³¹ December 2017 the purchase option was fully exercised, market share price was USD 2.73.

Options granted under the Plan are the following: Options granted under the Plan are the following:

	For the year ended 31 December 2018 For the year ended	December 2018 31	For the year ended 31 December 2017 For the year ended	December 2017 31
	Exercise price Exercise price per share option option per share	of Number Number of Exercise price Exercise price options per share option option options per share		of Number Number of options options
01 January January 01	- —	- —	- —	- —
Granted during the period during Granted the period	- —	- -	USD 0.00115 USD 0.00115	1 878 000 878 000 1
Exercised during the period during Exercised the period	- —	- -	USD 2.73 USD 2.73	(1 878 000) 878 000) (1
31 December December 31	- -	- -	- -	- -

29. Share purchase warrant 29. Share purchase warrant

According to the Warrant Agreement entered into between the Group and International Finance Corporation (IFC) as at 20 December 2013, IFC had the right to purchase up to 3 098 700 shares of IMC S.A. (representing equivalent of 9,90% of issued share capital) for a total amount up to USD 20 000 thousand. The warrant was exercisable at any time up to 19 December 2018. According to the \'Varrant Agreement entered into between the Group and International Finance Corporation (IFC) as at 20 December 2013, IFC had the right to purchase up to 3098 700 shares of IMC SA. (representing equivalent of 9,90% ofissued share capital) for ^a total amount up to USD 20 000 thousand. The warrant was exercisable at any time up to 19 December 2018.

But according to the IFC Loan agreement dated 19 December 2013 if all of the warrants have not been exercised by 19 December 2018, and if only some of the warrants have been issued, the portion of the Additional return which shall be payable shall be calculated by multiplying USD 21 000 thousand by a fraction the numerator of which is equal to the number of warrant shares not subscribed for pursuant to IFC loan agreement during the exercise period and the denominator of which is equal to the total number of warrant shares. This obligation to pay the additional return is an unconditional and independent debt obligation according to the IFC loan agreement. But according to the IFC Loan agreement dated ¹⁹ December ²⁰¹³ ifall of the warrants have not been exercised by ¹⁹ December 2018, and if only some of the warrants have been issued, the portion of the Additional return which shall be payable shall be calculated by multiplying USD ²¹ 000 thousand by ^a fraction the numerator ofwhich is equal to the number ofwarrant shares not subscribed for pursuant to IFC loan agreement during the exercise period and the denominator of which is equal to the total number of warrant shares. This obligation to pay the additional return is an unconditional and independent debt obligation according to the IFC loan agreement.

As at 30 June 2016 According to the Amendment to Loan agreement between IMC S.A. and International Financial Corporation the Additional Return had to be paid by IMC S.A. to International Financial Corporation. Amount of Additional Return had to be paid in a lump sum payment not later than 19 December 2018 in an amount USD 21 000 thousand or in two instalments as follows: USD 11 000 thousand on 19 December 2018 and USD 11 800 thousand on 19 December 2019. All the warrants according to the Warrant agreement dated 20 December 2013 were cancelled on 22 December 2016. As at 30 June 2016 According to the Amendment to Loan agreement between IMC SA. and International Financial Corporation the Additional Return had to be paid by IMC S.A. to International Financial Corporation. Amount ofAdditional Return had to be paid in ^a lump sum payment not later than 19 December 2018 in an amount USD 21 000 thousand or in two instalments as follows: USD ¹¹ 000 thousand on 19 December 2018 and USD ¹¹ 800 thousand on 19 December 2019. All the warrants according to the \Warrant agreement dated 20 December 2013 were cancelled on 22 December 2016.

In its treatment until 2015 year end, the Group determined fair value of the share purchase warrant by applying Black-Scholes model to determine its value as an option to purchase shares, embedded in the loan with the non-resident bank IFC of USD 30 000 thousand. The Group also treated this value separately from the host instrument, recognizing a separate loss in the amount of initial fair value of the option, and thereafter recognizing changes in that fair value at a fair value through profit and loss. At the same time, the Group considered the obligation to pay the additional return of USD 21 000 thousand, included in the Warrant Agreement, as a contingent liability since it expected the IFC to exercise its warrants to buy shares. This judgment represented an error. In its corrected treatment at year end 2016, the Group considers the additional return of USD 21 000 thousand as an obligation associated with the IFC loan. Accordingly, it has included it as an expected cash flow in calculation of the effective interest rate implicit in the loan, used in determining the amortized value of the loan instrument regarded as a whole. The effective interest rate thus determined is 17,46%. In its treatment until 2015 year end, the Group determined fair value of the share purchase warrant by applying Black—Scholes model to determine its value as an option to purchase shares, embedded in the loan with the non—resident bank IFC of USD 30 000 thousand. The Group also treated this value separately from the host instrument, recognizing ^a separate loss in the amount of initial fair value of the option, and thereafter recognizing changes in that fair value at ^a fair value through profit and loss. At the same time, the Group considered the obligation to pay the additional return of USD 21 000 thousand, included in the \Warrant Agreement, as ^a contingent liability since itexpected the IFC to exercise its warrants to buy shares. This judgment represented an error. In its corrected treatment at year end 2016, the Group considers the additional return of USD ²¹ 000 thousand as an obligation associated with the IFC loan. Accordingly, it has included itas an expected cash flow in calculation of the effective interest rate implicit in the loan, used in determining the amortized value of the loan instrument regarded as ^a whole. The effective interest rate thus determined is 17,46%.

In September 2017 new terms of payment of additional return were agreed. In accordance with new terms the amount of additional return is USD 19 742 708 and should be paid in 5 portions starting September 2017 till June 2020. The amortized value of the loan instrument was regarded with effective interest rate of 20,76% (18,46% as at 31 December 2017). In September 2017 new terms of payment of additional return were agreed. In accordance with new terms the amount of additional return is USD ¹⁹ 742 708 and should be paid in ⁵ portions starting September 2017 tillJune 2020. The amortized value of the loan instrument was regarded with effective interest rate of 20,76% (18,46% asat ³¹ December 2017).

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

30. Deferred tax assets and liabilities 30. Deferred tax assets and liabilities

The major components of deferred tax liabilities were as follows: The major components of deferred tax liabilities were as follows:

Deferred tax liabilities Deferred tax liabilities

	Property, plant plant Property, and equipment eguipment and
31 December 2016 December 2016 31	(2 498) (2 498)
Considering profit (loss) profit Considering (loss)	21 21
Considering equity Considering equity	(791) (791)
of Effect of foreign currency translation Effect foreign translation currency	70 70
31 December 2017 December 31 2017	(3 198) (3 198)

31 December 2017 December 2017 31	(3 198) (3 198)
Considering profit (loss) profit Considering (loss)	(40) (40)
Considering equity Considering equity	259 259
of Effect of foreign currency translation Effect foreign translation currency	(48) (48)
31 December 2018 December 2018 31	(3 027) (3 027)

31. Long-term loans and borrowings 31. Long-term loans and borrowings

	rt 11 C Currency " "y C	31 December December 31 2018 2018	31 December December 31 2017 2017
Secured Secured
Long-term bank loans bank loans Long—term	USD USD	29 889 29 889	37 579 37 579
Finance lease liabilities liabilities Finance lease	UAH, USD UAH, USD	367 367	775 775
Total long-term including portion Total long-term loans including current portion current loans		30 256 30 256	38 354 38 354
of long—term Current portion of long-term bank loans Current portion bank loans	USD USD	(14 110) (14 110)	(10 213) (10 213)
of finance Current portion of finance lease liabilities Current portion liabilities lease	UAH, USD UAH, USD	(357) (357)	(416) (416)
Total current portion Total current portion		(14 467) 467) (14	(10 629) (10 629)
Total long-term Total long-term loans and borrowings borrowings loans and		15 789 789 15	27 725 27 725

Essential terms of credit contracts Essential terms of credit contracts

Creditor Creditor	Year of fjf Year maturity maturlty		Nominal interest Currency Currency Nominal interest rate rate	31 December 2018 December 2018 31
				. . Long-term liabilities 11ab111t1es Long-term	Including current portion Includlng portion current
Non-resident bank* bank" Non—resident	2020 2020	USD USD	6M Libor+8,00% Libor+8,00% 6M	25 782 25 782	12 919 919 12
Ukrainian bank Ukrainian bank	2021 2021	USD USD	6,00% 6,00%	1 552 1552	496 496
Ukrainian bank Ukrainian bank	2023 2023	USD USD	5,00% 5,00%	2 555 2555	695 695
				29 889 29 889	14 110 14 110

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

Creditor Credltor	of Year of Year maturity maturity		Nominal interest Nominal interest rate rate	31 December 2017 December 2017 31
		Currency Currency		Long-term liabilities Long-term liabilities	Including current portion Including portion current
Non-resident bank* Non—resident bank"	2020 2020	USD USD	6M Libor+8,00% 61% Libor+8,00%	35 515 35 515	9 735 9 735
Ukrainian bank Ukrainian bank	2021 2021	USD USD	7,00% 7,00%	2 064 2064	478 478
				37 579 37 579	10 213 10 213

Loans and borrowings from Ukrainian banks are secured with property, plant and equipment in the amount USD 31 063 thousand (Note 18) and inventoris in the amount USD 12 742 thousand (Note 22). Loans and borrowings from Ukrainian banks are secured with property, plant and equipment in the amount USD 31 063 thousand (Note 18) andinventoris in the amount USD 12 742 thousand (Note 22).

* Loan from non-resident bank consists of: * Loan from non—resident bank consists of:

Basic loan amount of USD 30 000 thousand with 6M Libor+8,00% interest rate; - Basic loan amount of USD 30 000 thousand with 6M Libor+8,00% interest rate;
Additional return liabilities in the amount of USD 19 743 thousand payable in instalments till June 2020, interest free, discounted by 20,76% (as at 31 December 2016 - the amount of USD 21 000 thousand payable as of 19 December 2018, interest free, discounted by 17,46%). - Additional return liabilities in the amount of USD 19743 thousand payable in instalments tillJune 2020, interest free, discounted by 20,76%(as at 31 December 2016 — the amount of USD 21 000 thousand payable as of 19 December 2018, interest free, discounted by 17,460/0).

Long-term loans outstanding were repayable as follows: Long-term loans outstanding were repayable as follows:

	31 December 31 December 2018 2018	31 December 31 December 2017 2017
Within one year \X'ithin one year	14 110 14 110	10 213 10 213
In the second to fifth year inclusive In the second fifth inclusive to year	15 779 15 779	27 366 27 366
	29 889 29889	37 579 37 579

The Group has committed to comply with loans covenants. As at 31 December 2018 and 31 December 2017 the Group was in compliance with all loans covenants. The Group has committed to comply with loans covenants. As at 31 December 2018 and 31 December 2017 the Group was in compliance withall loans covenants.

Finance lease liabilities were presented as follows: Finance lease liabilities were presented as follows:

	31 December 2018 December 31 2018		31 December 2017 December 31 2017
	Minimum M1n1mum lease payments lease payments	Present value of Present value of minimum lease m1n1mum lease payments payments	Minimum M1n1mum lease payments lease payments	Present value of Present value of minimum lease minimum lease payments payments
Within one year \X'ithin one year	369 369	357 357	482 482	416 416
In the second to fifth year inclusive fifth In the second inclusive to year	11 11	10 10	372 372	359 359
	380 380	367 367	854 854	775 775
Less future finance charges Less future finance charges	(13) (13)	- -	(79) (79)	- —
Present value of minimum lease payments Present value of minimum lease payments	367 367	367 367	775 775	775 775

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

32. Short-term loans and borrowings 32. Short-term loans and borrowings

	C Currency ""6""	31 December December 31 2018 2018	31 December December 31 2017 2017
Secured Secured Short-term bank loans bank loans Short—term	USD USD	28 500 500 28	26 113 26 113

Essential terms of credit contracts Essential terms of credit contracts

Creditor Creditor	Currency Currency	Nominal interest Nominal interest rate rate	31 December 2018 December 2018 31
Ukrainian bank Ukrainian bank	USD USD	5,00% 5,00%	10 000 10 000
Ukrainian bank Ukrainian bank	USD USD	5,25% 5,25%	6 500 500 6
Ukrainian bank Ukrainian bank	USD USD	5,25% 5,25%	5 100 100 5
Ukrainian bank Ukrainian bank	USD USD	5,25% 5,25%	5 000 000 5
Ukrainian bank Ukrainian bank	USD USD	5,25% 5,25%	1 900 900 1
			28 500 28 500

Creditor Creditor	Currency Currency	Nominal interest Nominal interest rate rate	31 December 2017 December 2017 31
Ukrainian bank Ukrainian bank	USD USD	5,50% 5,50%	10 000 000 10
Ukrainian bank Ukrainian bank	USD USD	5,25% 5,25%	5 100 100 5
Ukrainian bank Ukrainian bank	USD USD	5,50% 5,50%	5 000 000 5
Ukrainian bank Ukrainian bank	USD USD	5,50% 5,50%	4 000 000 4
Ukrainian bank Ukrainian bank	USD USD	5,25% 5,25%	2 013 013 2
			26 113 26 113

Loans and borrowings from Ukrainian banks are secured with property, plant and equipment in the amount USD 31 063 thousand (Note 18) and inventoris in the amount USD 12 742 thousand (Note 22). Loans and borrowings from Ukrainian banks are secured with property, plant and equipment in the amount USD 31 063 thousand (Note 18) and inventoris in the amount USD 12 742 thousand (Note 22).

33. Trade accounts payable 33. Trade accounts payable

	31 December December 31 2018 2018	31 December December 31 2017 2017
Trade accounts payable Trade accounts payable	3 049 3049	1 303 303 1

As at 31 December 2018 an amount of USD 1 694 thousand or 56% of the total amount of trade accounts payable is due to the 10 most significant counterparties (as at 31 December 2017 – USD 770 thousand or 59%). As at ³¹ December 2018 an amount of USD ¹ 694 thousand or 56% of the total amount of trade accounts payable is due to the 10 most significant counterparties (as at 31 December 2017 — USD 770 thousand or 59%).

The table below summarizes the maturity profile of Group's liabilities on contractual payments on trade accounts payable: The table below summarizes the maturity profile of Group's liabilities on contractual payments on trade accounts payable:

	On On demand demand	Within Within 30 30 days days	From From 30 to 30 to 90 days days 90	From From 90 to 90 to 180 days days 180	From 180 to From to 180 360 days 360 days	From From 1 to 5 1 to 5 years years	T tI Total 0 a
31 December 2018 December 2018 31	- —	3 018 3018	31 31	- -	- -	- —	3 049 049 3
31 December 2017 December 2017 31	- —	1 138 138 1	165 165	- -	- -	- —	1 303 303 1

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

34. Other current liabilities and accrued expenses 34. Other current liabilities and accrued expenses

	31 December December 31 2018 2018	31 December December 31 2017 2017
Other liabilities: Other liabilities:
Advances from clients from Advances clients	7 773 7773	2 790 790 2
	7 773 7773	2 790 790 2
Other accounts payable: Other accounts payable:
Accounts payable for the lease of land and property rights of land for property Accounts rights payable the and lease	2 417 417 2	1 351 351 1
Wages, salaries and related charges payable and related charges payable \Wages, salaries	884 884	819 819
Interest payable on bank loans Interest on payable bank loans	330 330	211 211
Accruals for unused vacations for Accruals unused vacations	779 779	664 664
Accruals for audit services for audit Accruals services	70 70	112 112
Accounts payable for non-current tangible assets for Accounts tangible payable non—current assets	214 214	740 740
Taxes payable Taxes payable	217 217	377 377
Other accounts payable Other accounts payable	20 20	24 24
	4 931 4 931	4 298 298 4
	12 704 12704	7 088 088 7

As at 31 December 2018 an amount of USD 7 083 thousand or 99% of the total amount of advances from clients is due from the 10 most significant counterparties (as at 31 December 2017 – USD 2 772 thousand or 99%). As at ³¹ December 2018 an amount of USD ⁷ 083 thousand or 99% of the total amount of advances from clients is due from the 10 most significant counterparties (as at 31 December 2017 — USD 2772 thousand or 99%).

Distribution of other current liabilities and accrued expenses on time frames is the following: Distribution of other current liabilities and accrued expenses on time frames is the following:

	On On	Within Within 30 30	From From 30 to 30 to	From From 90 to 90 to	From 180 to From to 180	From 1 to 5 From 1to 5	T tI Total
	demand demand	days days	90 days days 90	180 days days 180	360 days days 360	years years	0 a
31 December 2018 December 2018 31	779 779	9 639 9639	473 473	604 604	1 209 209 1	- —	12 704 704 12
31 December 2017 December 2017 31	664 664	5 061 061 5	349 349	338 338	676 676	- —	7 088 088 7

35. Related party disclosures 35. Related party disclosures

According to existing criteria of determination of related parties, the related parties of the Group are divided into the following categories: According to existing criteria of determination of related parties, the related parties of the Group are divided into the following categories:

a) Entities - related parties under common control with the Companies of the Group; a) Entities — related parties under common control with the Companies of the Group;

b) Key management personnel. b) Key management personnel.

The Group performs transactions with related parties in the ordinary course of business. During the reporting period the Group did not perform any related parties transactions. The Group performs transactions with related parties in the ordinary course of business. During the reporting period the Group did not perform any related parties transactions.

Remuneration of key management personnel was as follows: Remuneration of key management personnel was as follows:

	For For the year year the ended 31 ended 31 December 2018 December	For the year For year the ended 31 ended 31 December 2017 December
	2018	2017
Wages and salaries and salaries \X'ages	2 520 520 2	1 446 446 1
Directors fees Directors fees	566 566	388 388
Related charges Related charges	27 27	21 21
	3 113 3113	1 855 855 1
of The average number of employees, persons number The employees, persons average	6 6	6 6

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

36. Information on segments 36. Information on segments

A business 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 business segments. A business 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 business segments.

For the purpose of Management, the Group is divided into the following business segments on the basis of produced goods and rendered services, and consists of the following 3 operating segments: For the purpose of Management, the Group is divided into the following business segments on the basis of produced goods and rendered services, and consists of the following ³ operating segments:

Farming division a segment, which deals with cultivation and sale of such basic agricultural crops as corn and wheat; - Farming division — ^a segment, which deals with cultivation and sale of such basic agricultural crops as corn and wheat;
Livestock breeding a segment which deals with breeding and sale of biological assets and agricultural products of live farming. Basic agricultural product of live farming for sale in this segment is milk; - Livestock breeding — ^a segment which deals With breeding and sale of biological assets and agricultural products of live farming. Basic agricultural product of live farming for sale in this segment is milk;
Storage and processing a segment which deals with storage and processing of agricultural produce. - Storage and processing — ^a segment which deals with storage and processing of agricultural produce.

Information on business segments for the year ended 31 December 2018 was the follow: Information on business segments for the year ended 31 December 2018 was the follow:

	farming Crop farming Crop	Dairy farming Dairy farming	Elevators and Elevators and warehouses warehouses	Unallocated Unallocated	Total Total
Revenue Revenue	217 721 217 721	1 489 1489	8 754 754 8	- —	227 964 227 964
Intra-group elimination elimination Intra—group	(88 797) 797) (88	- -	(7 556) 556) (7	- —	(96 353) 353) (96
Revenue from external buyers from external buyers Revenue	128 924 924 128	l 1 489 489	l 1 198 198	- -	131 611 131 611
Gain from changes in fair value of biological 2:235:23233353;?:;:::f:;bwl°3m assets and agricultural produce, net	73 962 2332	(636) 3333	- -	- -	73 326 2333
of Cost of sales Cost sales	(136 013) (136 013)	(1 450) 450) (1	(2 757) 757) (2	- —	(140 220) (140 220)
Gross income income Gross	66 873 66 873	(597) (597)	(1 559) 559) (1	- -	64 717 64 717
Administrative expenses Administrative expenses	- —	- —	- -	(11 928) 928) (11	(11 928) 928) (11
Selling and distribution expenses distribution Selling and expenses	- —	- —	- -	(11 794) (11 794)	(11 794) 794) (11
Other operating income Other operating income	- —	- —	- -	2 317 317 2	2 317 317 2
Other operating expenses Other operating expenses	- —	- —	- -	(5 022) 022) (5	(5 022) 022) (5
of property, Write-offs of property, plant and equipment plant equipment Write—offs and	- —	- —	- -	(2 287) 287) (2	(2 287) (2 287)
of a Operating income of a segment Operating income segment	66 873 66 873	(597) (597)	(1 559) 559) (1	(28 714) (28 714)	36 003 36 003
Financial expenses, net Financial expenses, net	- -	- -	- -	(4 987) 987) (4	(4 987) 987) (4
of Effect of additional return Effect additional return	- -	- -	- -	(3 265) 265) (3	(3 265) 265) (3
Foreign currency exchange gain/(loss), net gain/ Foreign currency net exchange (loss),	- -	- -	- -	567 567	567 567
Profit before tax Profit beforetax	66 873 66 873	(597) (597)	(l 559) (1 559)	(36 399) (36 399)	28 318 28 318
Income tax expenses, net Income net tax expenses,	- -	- -	- -	(691) (691)	(691) (691)
Net profit Net profit	66 873 66 873	(597) (597)	(l 559) (1 559)	(37 090) (37 090)	27 627 627 27
Other segment information: information: Other segment
Depreciation and amortisation Depreciation amortisation and	9 951 951 9	177 177	2 428 428 2	- —	12 556 12 556
Additions to non-current assets: Additions to non—current assets:
Property, plant and equipment Property, plant equipment and	4 109 4 109	1 026 026 1	244 244	- —	5 379 379 5
Intangible assets Intangible assets	39 39	- —	- -	- —	39 39

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm're Hated)

Revenues from the 10 most significant counterparties for the year ended 31 December 2018 were as follows: Revenues from the 10 most significant counterparties for the year ended 31 December 2018 were as follows:

	Business segment Business segment	of revenue % of revenue °/o
Non-residental buyer Non—residental buyer	Crop farming Crop farming	28,8% 28,8%
Non-residental buyer Non—residental buyer	Crop farming Crop farming	28,5% 28,5%
Ukrainian buyer Ukrainian buyer	Crop farming Crop farming	11,3% 11,3%
Non-residental buyer Non—residental buyer	Crop farming Crop farming	8,6% 8,60/0
Ukrainian buyer Ukrainian buyer	Crop farming Cr0p farming	4,7% 4,70/0
Non-residental buyer Non—residental buyer	Crop farming Cr0p farming	4,1% 4,10/0
Ukrainian buyer Ukrainian buyer	Crop farming Cr0p farming	2,8% 2,80/0
Non-residental buyer Non—residental buyer	Crop farming Cr0p farming	1,8% 1,80/0
Non-residental buyer Non—residental buyer	Crop farming CfOP farming	1,7% 137%
Non-residental buyer Non—residental buyer	Crop farming Cr0p farming	1,2% 1,20/0
		93,5% 93,5°/o

Information on business segments for the year ended 31 December 2017 was the follow: Information on business segments for the year ended 31 December 2017 was the follow:

	Crop farming faEIIiiilfig	Dairy fgggg farming	Elevators and warehouses EvilZ'iZtlifilsisad	Unallocated unallocated	Total Total
Revenue Revenue	208 849 208 849	1 852 852 1	8 732 732 8	- —	219 433 433 219
Intra-group elimination elimination Intra—group	(84 702) (84 702)	- —	(7 970) 970) (7	- —	(92 672) (92 672)
Revenue from external buyers from Revenue external buyers	124 147 124 147	l 1 852 852	762 762	- -	126 761 126 761
ofbiological assets :3:;::?1::.:§1§::315::rn::luC Gain from changes in fair value of biological assets and agricultural produce, net	60 557 60 557	220 2 2 220	_ -	_ -	62 777 62 777
of Cost of sales Cost sales	(137 052) (137 052)	(1 333) 333) (1	(701) (701)	- —	(139 086) (139 086)
Gross income income Gross	47 652 652 47	2 739 739 2	61 61	- -	50 452 452 50
Administrative expenses Administrative expenses	- —	- —	- —	(9 605) 605) (9	(9 605) 605) (9
Selling and distribution expenses distribution Selling and expenses	- —	- —	- —	(8 893) 893) (8	(8 893) (8 893)
Other operating income Other operating income	- —	- —	- —	1 610 610 1	1 610 610 1
Other operating expenses Other operating expenses	- —	- —	- —	(3 422) 422) (3	(3 422) 422) (3
of property, Write-offs of property, plant and equipment plant equipment Write—offs and	- —	- —	- —	(1 656) 656) (1	(1 656) 656) (1
5:11:11:[f of Reversal of impairment of property, plant and impairment property, plant and equipment	_ -	_ -	_ -	591 591	591 591
of Impairment of property, plant and equipment Impairment property, plant equipment and	- —	- —	- —	(271) (271)	(271) (271)
of a Operating income of a segment Operating income segment	47 652 652 47	2 739 739 2	61 61	(21 646) 646) (21	28 806 28 806
Financial expenses, net Financial expenses, net	- —	- —	- —	(6 043) 043) (6	(6 043) 043) (6
Effect of additional return of Effect additional return	- —	- —	- —	(4 214) 214) (4	(4 214) (4 214)
Foreign currency exchange gain/(loss), net gain/ Foreign currency net exchange (loss),	- —	- —	- —	(762) (762)	(762) (762)
Profit Profit before tax beforetax	47 652 652 47	2 739 739 2	61 61	(32 665) (32 665)	17 787 787 17
Income tax expenses Income tax expenses	- —	- —	- —	3 3	3 3
Net profit Net profit	47 652 652 47	2 739 739 2	61 61	(32 662) (32 662)	17 790 790 17
Other segment information: Other information: segment
Depreciation and amortisation Depreciation amortisation and	7 362 362 7	138 138	1 505 505 1	- —	9 005 005 9
Additions to non-current assets: Additions to non—current assets:
Property, plant and equipment Property, plant equipment and	6 013 013 6	194 194	333 333	- —	6 540 540 6
Intangible assets Intangible assets	56 56	- —	- —	- —	56 56

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm're Hated)

Revenues	from the	most 10	significant	Revenues from the 10 most significant counterparties for the year ended 31 December 2017 were as follows: counterparties	for the	ended year 31	December	2017 were as	follows:

	Business segment Business segment	of revenue % of revenue °/o
Non-residental buyer Non—residental buyer	Crop farming Cr0p farming	19,5% 19,5%
Non-residental buyer Non—residental buyer	Crop farming Cr0p farming	15,9% 15,9%
Non-residental buyer Non—residental buyer	Crop farming Cr0p farming	12,2% 12,2%
Non-residental buyer Non—residental buyer	Crop farming Cr0p farming	10,9% 10,9%
Ukrainian buyer Ukrainian buyer	Crop farming Cr0p farming	7,8% 7,80/0
Non-residental buyer Non—residental buyer	Crop farming farming Cr0p	6,9% 6,90/0
Non-residental buyer Non—residental buyer	Crop farming Cr0p farming	6,4% 6,40/0
Non-residental buyer Non—residental buyer	Crop farming CfOP farming	3,7% 337%
Non-residental buyer Non—residental buyer	Crop farming Cr0p farming	2,8% 2,80/0
Ukrainian buyer Ukrainian buyer	Crop farming Cr0p farming	2,7% 2,70/0
		88,8% 88,8°/o

37. Lease of land 37. Lease of land

The Group leases land for agricultural purposes from private individuals. Lease payments are calculated on the basis of monetary valuation of the land considering the inflation factor. The average interest rate for lease of land of the Group is 5-13%% in 2018 (5-11%% in 2017) and depends on validity of the contract. The Group leases land for agricultural purposes from private individuals. Lease payments are calculated on the basis of monetary valuation of the land considering the inflation factor. The average interest rate for lease of land of the Group is 5—13%% in 2018 (5—11%% in2017) and depends on validity of the contract.

Areas of operating leased land were as follows: Areas of operating leased land were as follows:

	31 December December 31 2018 2018	31 December December 31 2017 2017
of land Location Location of land	Hectare Hectare	Hectare Hectare
Poltava region region Poltava
Land under processing Land under processing	22 619 22 619	24 976 24 976
Land for grazing, construction, other for Land grazing, construction, other	2 009 009 2	2 009 009 2
Chernihiv Chernihiv region region
Land under processing Land under processing	77 436 77 436	80 036 80 036
Land for grazing, construction, other for construction, Land grazing, other	1 681 681 1	1 681 681 1
Sumy region region Sumy
Land under processing Land under processing	23 926 23 926	24 584 24 584
Land for grazing, construction, other for Land construction, other grazing,	113 113	113 113
	127 784 784 127	133 399 399 133

According to the Group's strategy, during Y2017-2018 areas of fallow lands were decreased by unrenewing of land lease agreements. According to the Group's strategy, during Y2017—2018 areas of fallow lands were decreased by unrenewing of land lease agreements.

Future minimum lease payments for operating leases of land of agricultural designation considering existing at that date the inflation factor are as follows: Future minimum lease payments for operating leases of land of agricultural designation considering existing at that date the inflation factor are as follows:

	31 December December 31 2018 2018	31 December December 31 2017 2017
Within one year \X'ithin one year	12 013 12 013	9 099 099 9
In the second to fifth year inclusive In fifth to inclusive the second year	46 470 470 46	34 384 384 34
fifth Later than fifth year Later than year	75 628 628 75	38 676 676 38
	134 111 134 111	82 159 82 159

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

38. Lease of property, plant and equipment 38. Lease of property, plant and equipment

The Group leases machinery from lease company. According to existing agreements the term of lease is 36 months, the interest rate is 1MLibor minus 0,15%. The Group leases machinery from lease company. According to existing agreements the term of lease is 36 months, the interest rate is 1MLibor minus 0,15%.

Future minimum lease payments for operating leases of property, plant and equipment were as follows: Future minimum lease payments for operating leases of property, plant and equipment were as follows:

	31 December December 31 2018 2018	31 December December 31 2017 2017
Within one year \X'ithin one year	17 17	189 189
In the second to fifth year inclusive In fifth the second to year inclusive	- —	17 17
	17 17	206 206

The lease payments for operating leases of property, plant and equipment for the agreements mentioned above in the amount of USD 225 thousand for the year ended 31 December 2018 were included to the item Rent of Cost of sales (USD 1 613 thousand for the year ended 31 December 2017). The lease payments for operating leases of property, plant and equipment for the agreements mentioned above in the amount of USD 225 thousand for the year ended ³¹ December 2018 were included to the item Rent of Cost of sales (USD 1613 thousand for the year ended ³¹ December 2017).

39. Financial instruments 39. Financial instruments

Financial instruments as at 31 December 2018 were represented by the following categories: Financial instruments as at 31 December 2018 were represented by the following categories:

Financial instrument Financial instrument	Category Category	Measurement Measurement
Financial assets Financial assets
Accounts receivable Accounts receivable	Financial assets at amortised cost Financial assets at amortised cost	Amortised cost Amortised cost
Other financial assets Other financial assets	Financial assets at amortised cost Financial assets at amortised cost	Amortised cost Amortised cost
Cash and cash equivalents Cash and equivalents cash	Financial assets at amortised cost Financial assets at amortised cost	Amortised cost Amortised cost
Financial liabilities Financial liabilities
Loans and borrowings borrowings Loans and	Financial liabilities at amortised cost Financial liabilities at amortised cost	Amortised cost Amortised cost
Accounts payable Accounts payable	Financial liabilities at amortised cost Financial liabilities at amortised cost	Amortised cost Amortised cost
Other financial liabilities Other financial liabilities	Financial liabilities at amortised cost Financial liabilities at amortised cost	Amortised cost Amortised cost

The fair values of the Group's financial assets and financial liabilities listed hereinbefore reflect the amounts that would be received to sell the assets or paid to transfer the liabilities in an orderly transaction between market participants at the measurement date. The fair values are based on inputs other than quoted prices that are observable for the asset or liability. These inputs include foreign currency exchange rates and interest rates. The financial assets and financial liabilities are primarily valued using standard calculations/models that use as their basis readily observable market parameters. Industry standard data providers are the primary source for forward and spot rate information for both interest rates and currency rates, with resulting valuations periodically validated through third party or counterparty quotes. The fair values of the Group's financial assets and financial liabilities listed hereinbefore reflect the amounts that would be received to sell the assets or paid to transfer the liabilities in an orderly transaction between market participants at the measurement date. The fair values are based on inputs other than quoted prices that are observable for the asset or liability. These inputs include foreign currency exchange rates and interest rates. The financial assets and financial liabilities are primarily valued using standard calculations/models that use as their basis readily observable market parameters. Industry standard data providers are the primary source for forward and spot rate information for both interest rates and currency rates, with resulting valuations periodically validated through third party or counterparty quotes.

The Group's non-derivative financial instruments included cash and cash equivalents, trade accounts receivable, other financial assets, trade accounts payable, other accounts payable, loans and borrowings. As at 31 December 2018 and 2017, the carrying value of these financial instruments, excluding long-term debt, approximates fair value because of the short-term maturities of these instruments. The major part of the long-term loans and borrowings has floating interest rates and other has fixed interest rates but they are corresponded to the market rate level, so the Management of the Group believes that book value of long-term loans and borrowings approximates their fair value. The Group's non—derivative financial instruments included cash and cash equivalents, trade accounts receivable, other financial assets, trade accounts payable, other accounts payable, loans and borrowings. As at ³¹ December 2018 and 2017, the carrying value of these financial instruments, excluding long—term debt, approximates fair value because of the short-term maturities of these instruments. The major part of the long—term loans and borrowings has floating interest rates and other has fixed interest rates but they are corresponded to the market rate level, so the Management of the Group believes that book value of long—term loans and borrowings approximates their fair value.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

40. Management of financial risks 40. Management of financial risks

One of the principal responsibilities of the Financial Department of the Group is to manage the financial risks arising from the Group's underlying operations. On an annual basis, the Financial Department approves a strategic plan that takes into account the opportunities and major risks of our business and mitigation factors to reduce these risks. The Financial Department also reviews risk management policies and procedures on an annual basis and sets upper limits on the transactional exposure to be managed and the time periods over which exposures may be managed. The objective of the policy is to reduce volatility in cash flow and earnings. Risks managed include: One of the principal responsibilities of the Financial Department of the Group is to manage the financial risks arising from the Group's underlying operations. On an annual basis, the Financial Department approves ^a strategic plan that takes into account the opportunities and major risks of our business and mitigation factors to reduce these risks. The Financial Department also reviews risk management policies and procedures on an annual basis and sets upper limits on the transactional exposure to be managed and the time periods over which exposures may be managed. The objective of the policy is to reduce volatility in cash flow and earnings. Risks managed include:

of risk Type Type of risk	Affected Affected by by	Risk management policies Risk policies management
Credit risk Credit risk	of counterparties Ability Ability of counterparties to financial instrument financial instrument to " to fulfill their contractual obligations fulfill their to contractual obligations	Credit approval and monitoring practices; monitoring Credit approval and practices; counterparties policies counterparties policies
Liquidity risk Liquidity risk	of cash Balance of cash flow flow Balance	of cash of detailed Preparation of detailed forecasts of cash flow flow Preparation forecasts
Market risk Market risk	- Market prices on products sold, materials and Market prices on products materials sold, and — services for production for production services , - Changes in interest rates in interest Changes rates — of foreign - Fluctuation of foreign currency exchange rates Fluctuation currency exchange rates —	- Long-term cooperation with reliable suppliers Long-term with cooperation reliable suppliers — , , , , , _ of fixed - Maintaining a combination of fixed and floating Maintaining combination floating and a — interest rates; USD and UAH interest rates UAH USD interest interest rates; and rates UAH - USD and UAH interest rates USD interest and rates —

Depending on the type of risks faced by the Group, it is possible to use a single or several methods of minimizing or levelling their negative impact on Group. Depending on the type of risks faced by the Group, it is possible to use ^a single or several methods of minimizing or levelling their negative impact on Group.

The use of the following risk management methods is possible at the Group's companies: The use of the following risk management methods is possible at the Group's companies:

1) risk pooling is a method aimed at reducing the risk by transferring accidental losses into the relatively small fixed expenses (this method is a basis for insurance); 1) risk pooling is ^a method aimed at reducing the risk by transferring accidental losses into the relatively small fixed expenses (this method is a basis for insurance);

2) limitation is a method involving the development of detailed strategic documentation, which sets the boundary level of risk in each area of the company's activities, as well as clear allocation of functions and responsibilities of personnel; 2) limitation is ^a method involving the development of detailed strategic documentation, which sets the boundary level of risk in each area of the company's activities, as well as clear allocation of functions and responsibilities of personnel;

3) diversification is a method of risk control through the selection of assets, profit on which slightly correlates, if possible; 3) diversification is ^a method of risk control through the selection of assets, profit on which slightly correlates, if possible;

4) hedging is a balancing transaction, minimizing the negative impact of risk (e.g., selection of assets and liabilities by timing, by currency). 4) hedging is ^a balancing transaction, minimizing the negative impact of risk (e.g., selection of assets and liabilities by timing, by currency).

Credit risk 0 Credit risk

Credit risk is a risk of financial loss to the Group, which results from failure of a buyer or a contractor under the financial instrument to fulfill its contractual obligations. The risk is primarily related to the Group's accounts receivable, cash and cash equivalent. Credit risk is ^a risk of financial loss to the Group, which results from failure of ^a buyer or ^a contractor under the financial instrument to fulfill its contractual obligations. The risk is primarily related to the Group's accounts receivable, cash and cash equivalent.

Book value of financial assets reflects maximal extent that is subject to credit risk of the Group. Maximal level of credit risk is the following: Book value of financial assets reflects maximal extent that is subject to credit risk of the Group. Maximal level of credit risk is the following:

	31 December December 31 2018 2018	31 December December 31 2017 2017
Trade accounts receivable, net Trade accounts receivable, net	459 459	321 321
Other financial assets: Other financial assets:
Non-bank accomodations interest free accomodations interest free Non—bank	242 242	295 295
Other accounts receivable, net Other accounts receivable, net	557 557	750 750
Cash and cash equivalents equivalents Cash and cash	3 920 3920	6 092 092 6
	5 178 178 5	7 458 458 7

The Group manages credit risk through rigorous credit approval and monitoring practices. Financial and Economic Department has developed the credit policy. In accordance with it, all contractors are subjected to careful analysis on ability to pay before the Group offers its standard terms of payment and delivery. If the Group sells goods to a contractor it has never dealt before, transactions are performed on terms of prepayment. Deferred payment is offered only to contractors with work experience with the Group more than 1 year without delays in payment terms established in sale contracts. The Group manages credit risk through rigorous credit approval and monitoring practices. Financial and Economic Department has developed the credit policy. In accordance with it, all contractors are subjected to careful analysis on ability to pay before the Group offers its standard terms of payment and delivery. If the Group sells goods to ^a contractor it has never dealt before, transactions are performed on terms of prepayment. Deferred payment is offered only to contractors with work experience with the Group more than ¹ year without delays in payment terms established in sale contracts.

Group's management believes that companies comprising the Group are free in their choice of the customers, have close contacts with the leading global and Ukrainian traders, and may switch without risk to other customer offering better conditions of collaboration. Group's management believes that companies comprising the Group are free in their choice of the customers, have close contacts with the leading global and Ukrainian traders, and may switch without risk to other customer offering better conditions of collaboration.

(in thousand USD, unless otherwise stated) (in 7790d UXD, W/m 027s7119 Hated)

The Financial Directorate of the Group constantly carries out monitoring over payment terms deadlines according to goods selling contracts. In case of delay in payment, the personnel of the commercial department deals up with the customer and the decision whether to apply penalties or slightly extend the terms (within 90 days) is taken. The Financial Directorate of the Group constantly carries out monitoring over payment terms deadlines according to goods selling contracts. In case of delay in payment, the personnel of the commercial department deals up with the customer and the decision whether to apply penalties or slightly extend the terms (within 90 days) is taken.

The Group forms estimated provision for trade and other accounts receivable. It corresponds with estimation of amount of already suffered credit losses. The main element of the provision is an element of certain loss, determined for assets considering already suffered but not fixed losses. Estimated amount of losses is determined on the basis of statistical data for previous periods for similar financial assets. The Group forms estimated provision for trade and other accounts receivable. It corresponds with estimation of amount of already suffered credit losses. The main element of the provision is an element of certain loss, determined for assets considering already suffered but not fixed losses. Estimated amount of losses is determined on the basis of statistical data for previous periods for similar financial assets.

Distribution of trade accounts receivable as at 31 December 2018 on time-frames is the following: Distribution of trade accounts receivable as at ³¹ December 2018 on time—frames is the following:

			Past due, not impaired impaired due, not Past
	Total Total	Neither Neither past due past due impaired nor impaired nor	Within Within 90 90 days days	From 90 to 360 From 90 to 360 days days	More than 1 More than 1 year year
31 December 2018 December 2018 31	459 459	389 389	55 55	- —	15 15
31 December 2017 December 2017 31	321 321	290 290	30 30	- —	1 1

On the basis of analysis of payments for the current period Financial Directorate of the Group considers that there is no need to form provision for overdue, but not impaired trade accounts receivable. On the basis of analysis of payments for the current period Financial Directorate of the Group considers that there is no need to form provision for overdue, but not impaired trade accounts receivable.

Liquidity risk ⁰ Liquidity risk

Risk of liquidity - is the risk of inability to meet financial obligations of the Group in due time. Risk of liquidity — is the risk of inability to meet financial obligations of the Group in due time.

The way the Group manages the liquidity lies in providing the Group with constant availability of liquid facilities, enough to meet the obligation in due time, avoiding unforeseen losses and not to expose the reputation of the Group to risk. The way the Group manages the liquidity lies in providing the Group with constant availability of liquid facilities, enough to meet the obligation in due time, avoiding unforeseen losses and not to expose the reputation of the Group to risk.

There is system of management accounting and budgeting, which allows to plan and control covering all the expenses from operating activity and related with its financial expenses by means of profit. There is system of management accounting and budgeting, which allows to plan and control covering all the expenses from operating activity and related with its financial expenses by means of profit.

The table below summarizes the maturity profile of Group's financial liabilities based on contractual payments as at 31 December 2018: The table below summarizes the maturity profile of Group's financial liabilities based on contractual payments as at ³¹ December 2018:

	On demand On demand	Within Within 30 30 days days	From 30 to From 30 to 90 days days 90	From From 90 to 90 to 180 days days 180	From From 180 to to 180 360 days 360 days	From From 1 to 5 1 to 5 years years	Total Total
Bank loans and interest payable "mm Bank loans and payable on bank loans on bank loans	-	532 532	17 927 927 17	6 000 000 6	17 561 17 561	16 699 699 16	58 719 58 719
Finance lease liabilities liabilities Finance lease	- —	46 46	73 73	182 182	56 56	10 10	367 367
Trade accounts payable Trade accounts payable	- —	3 018 3018	31 31	- —	- -	- —	3 049 049 3
Other current liabilities and Other current liabilities and accrued expenses accrued expenses	779 779	639 9 9 639	473 473	604 604	209 1 1 209	_ -	704 12 12 704
	779 779	13 235 235 13	18 504 504 18	6 786 6 786	18 826 826 18	16 709 709 16	74 839 74 839

The table below summarizes the maturity profile of Group's financial liabilities based on contractual payments as at 31 December 2017: The table below summarizes the maturity profile of Group's financial liabilities based on contractual payments as at ³¹ December 2017:

	On demand On demand	Within Within 30 30 days days	From 30 to From 30 to 90 days days 90	From From 90 to 90 to 180 days days 180	From From 180 to to 180 360 days days 360	From From 1 to 5 1 to 5 years years	Total Total
Bank loans and interest payable "mm Bank loans and payable on bank loans on bank loans	- _	292 292	187 187	2 500 500 2	29 825 29 825	31 099 099 31	63 903 63 903
Finance lease liabilities Finance liabilities lease	- —	45 45	140 140	135 135	96 96	359 359	775 775
Trade accounts payable Trade accounts payable	- —	1 138 138 1	165 165	- -	- —	- —	1 303 303 1
Other current liabilities and Other current liabilities and accrued expenses accrued expenses	664 664	117 5 5 117	293 293	338 338	676 676	_ -	088 7 7 088
	664 664	6 592 592 6	785 785	2 973 2 973	30 597 30 597	31 458 458 31	73 069 73 069

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

Market risk 0 Market risk

Market risk arises from fluctuations in market factors, including exchange rates, interest rates and commodity prices. Movements in these factors may affect the Group's income and expenses, or the value of its financial instruments. The objective of the Group's management of market risk is to maintain this risk within acceptable parameters, whilst optimizing returns. Market risk arises from fluctuations in market factors, including exchange rates, interest rates and commodity prices. Movements in these factors may affect the Group's income and expenses, or the value ofits financial instruments. The objective of the Group's management of market risk is to maintain this risk within acceptable parameters, whilst optimizing returns.

Market risk is comprised of: Market risk is comprised of:

Commodity price risk - Commodity price risk
- i) Risk of changes in market prices of products for sale i) Risk of changes in market prices of products for sale

The Group Sales Department makes continuous monitoring of market prices of products sold in order to manage exposure to changes in market prices for the products. According to the results of this analysis and subsequent prediction of prices for products, management pricing policy depending on the dynamics of market prices is formed. The Group Sales Department makes continuous monitoring of market prices of products sold in order to manage exposure to changes in market prices for the products. According to the results of this analysis and subsequent prediction of prices for products, management pricing policy depending on the dynamics of market prices is formed.

ii) Risk of changes in prices of materials and services ii) Risk of changes in prices of materials and services

The Group is exposed to changes in prices of materials and services that are used in the process of production. The Group manages these risks by working with reliable suppliers, business relationships with whom had developed over a long time, and the search for new, more affordable supply of resources. The Group is exposed to changes in prices of materials and services that are used in the process of production. The Group manages these risks by working with reliable suppliers, business relationships with whom had developed over ^a long time, and the search for new, more affordable supply of resources.

Currency risk - Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Foreign currency risk is the risk that the fair value or future cash flows of ^a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activities (when revenue or expense are denominated in a different currency from the Group's functional currency) and the Group's net investments in foreign subsidiaries. The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activities (when revenue or expense are denominated in ^a different currency from the Group's functional currency) and the Group's net investments in foreign subsidiaries.

The Group's companies manage their foreign currency risk by comparing the volumes of export revenues by currencies and loan portfolio by currencies. The Group avoids borrowing and production sales for export in any currency except for USD. The comparison is carried out as a part of the annual planning and budgeting. The Group's companies manage their foreign currency risk by comparing the volumes of export revenues by currencies and loan portfolio by currencies. The Group avoids borrowing and production sales for export in any currency except for USD. The comparison is carried out as ^a part of the annual planning and budgeting.

When the amount of the expected export revenue is below the level of USD borrowing for the financial year, the decrease in foreign currency borrowings by repayment of such loans or conversion of foreign currency loans into national currency is performed. When the amount of the expected export revenue is below the level of USD borrowing for the financial year, the decrease in foreign currency borrowings by repayment of such loans or conversion of foreign currency loans into national currency is performed.

Group avoided realization of risk transactions that are subject to foreign currency risk. Group avoided realization of risk transactions that are subject to foreign currency risk.

The table below summarizes the Group's exposure to foreign currency risk as at 31 December 2018: The table below summarizes the Group's exposure to foreign currency risk as at 31 December 2018:

	Note Note	UAH UAH	USD USD	EUR EUR	I'LN PLN	Total Total
Trade accounts receivable, net Trade net accounts receivable,	24 24	220 220	239 239	- —	- —	459 459
Cash and cash equivalents Cash and equivalents cash	27 27	532 532	3 382 382 3	1 1	5 5	3 920 920 3
Loans and borrowings Loans borrowings and	31, 32 31, 32	24 24	58 731 58 731	- —	- —	58 755 755 58
Other current liabilities and accrued expenses Other current liabilities and accrued expenses	34 34	4 663 4 663	8 041 041 8	- —	- —	12 704 704 12
		5 439 439 5	70 393 393 70	1 1	5 5	75 838 838 75

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

The Group's exposure to foreign currency risk, based on book value, as at 31 December 2018 was as follows: The Group's exposure to foreign currency risk, based on book value, as at 31 December 2018 was as follows:

	31 December December 31 2018 2018	Increase/decrease Increase/decrease in USD exchange in USD exchange 0 rate, % rate, /0	Effect profit Effect on profit on before tax before tax
,		10 10	338 338
Cash and cash equivalents Cash and equivalents cash	3 382 382 3	(10) (10)	(338) (338)
,	32 949 32 949	10 10	(3 295) 295) (3
Loans and borrowings Loans and borrow1ngs		(10) (10)	3 295 295 3
	330 330	10 10	(33) (33)
Other current liabilities and accrued expenses Other liabilities and accrued current expenses		(10) (10)	33 33
		10 10	(2 990) (2 990)
General effect General effect	- -	(10) (10)	2 990 2 990

The table below summarizes the Group's exposure to foreign currency risk as at 31 December 2017: The table below summarizes the Group's exposure to foreign currency risk as at 31 December 2017:

	Note Note	UAH UAH	USD USD	EUR EUR	PLN PLN	Total Total
Trade accounts receivable, net Trade receivable, accounts net	24 24	317 317	4 4	- —	- —	321 321
Cash and cash equivalents Cash and cash equivalents	27 27	1 161 1 161	4 636 4 636	281 281	14 14	6 092 6 092
Loans and borrowings Loans and borrowings	31, 32 31, 32	36 36	64 431 431 64	- —	- —	64 467 64 467
Other current liabilities and accrued Other current liabilities and accrued expenses expenses	34 34	4 384 4 384	2 704 2 704	- _	- _	7 088 7 088
		5 898 5 898	71 775 71 775	281 281	14 14	77 968 77 968

The Group's exposure to foreign currency risk, based on book value, as at 31 December 2017 was as follows: The Group's exposure to foreign currency risk, based on book value, as at 31 December 2017 was as follows:

	31 December December 31 2017 2017	Increase/decrease Increase/decrease in USD exchange in USD exchange 0 rate, % /0 rate,	Effect on profit Effect profit on before tax before tax
, Cash and cash equivalents Cash and cash equivalents	7 7	10 10	1 1
		(10) (10)	(1) (1)
,	28 916 28 916	10 10	(2 892) (2 892)
Loans and borrowings and borrow1ngs Loans		(10) (10)	2 892 2 892
	19 19	10 10	(2) (2)
Other current liabilities and accrued expenses Other current liabilities and accrued expenses		(10) (10)	2 2
		10 10	(2 893) 893) (2
General effect General effect	- -	(10) (10)	2 893 2 893

Interest rate risk - Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate risk is the risk that the fair value or future cash flows of ^a financial instrument will fluctuate because of changes in market interest rates.

Change in interest rates influences the involved loans and borrowings and finance lease transactions. Management of the Group doesn't have formalized policy respecting proportion of interest risk's allocation between the loans with fixed interest rate and floating interest rate. However, when attracting new loans and borrowings, management solves the problem respecting which interest rate, fixed or floating, will be more profitable for the Group during the expected period till the maturity date, based on own professional judgments. Change in interest rates influences the involved loans and borrowings and finance lease transactions. Management of the Group doesn't have formalized policy respecting proportion of interest risk's allocation between the loans with fixed interest rate and floating interest rate. However, when attracting new loans and borrowings, management solves the problem respecting which interest rate, fixed or floating, will be more profitable for the Group during the expected period till the maturity date, based on own professional judgments.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

The Group's interest-bearing financial instruments were formed as follows: The Group's interest—bearing financial instruments were formed as follows:

	31 December December 31 2018 2018	31 December December 31 2017 2017
Loans and borrowings Loans borrowings and
Fixed rate instruments Fixed instruments rate	32 607 607 32	28 177 28 177
Variable rate instruments Variable instruments rate	26 149 26 149	36 290 290 36
	58 756 756 58	64 467 467 64

The Group's exposure to interest rate risk, based on book value, as at 31 December 2018 was as follows: The Group's exposure to interest rate risk, based on book value, as at 31 December 2018 was as follows:

	Note Note	31 December December 31 2018 2018	Increase/decrease Increase/decrease Libor in Libor rate, % rate, 1n °/o	profit Effect Effect on profit on before tax before tax
		26 149 26 149	1 1	(261) (261)
Loans and borrowings borrowmgs Loans and	31, 32 31, 32		(1) (1)	261 261

The Group's exposure to interest rate risk, based on book value, as at 31 December 2017 was as follows: The Group's exposure to interest rate risk, based on book value, as at 31 December 2017 was as follows:

	Note Note	31 December December 31 2017 2017	Increase/decrease Increase/decrease in Libor in Libor rate, % rate, 0/n	Effect on profit Effect on profit before tax before tax
borrowings			1 1	(363) (363)
Loans and borrowings Loans and	31, 32 31, 32	36 290 36 290	(1) (1)	363 363

Agro-industrial risks Agro-industrial risks

Agro-industrial business is subject to risks of outbreaks of various diseases of cattle or crops. These diseases could result in 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 diseases and related losses. Agro—industrial business is subject to risks of outbreaks of various diseases of cattle or crops. These diseases could result in 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 diseases and related losses.

41. Capital management 41. Capital management

The Group's objectives in the process of capital management are maintaining the Group's ability to follow the going concern principle to provide benefits to interested parties, and also maintaining the optimal structure of involved and own funds. The Group's objectives in the process of capital management are maintaining the Group's ability to follow the going concern principle to provide benefits to interested parties, and also maintaining the optimal structure of involved and own funds.

The management of the Group regularly analyzes the structure of its capital. On basis of results of this analysis the Group takes measures, which are aimed at maintenance of total structure of the capital balance. The management of the Group regularly analyzes the structure of its capital. On basis of results of this analysis the Group takes measures, which are aimed at maintenance of total structure of the capital balance.

The main financial liabilities of the Group are long-term loans and borrowings, current portion of long-term borrowings, short-term loans and borrowings, trade accounts payable, other current liabilities and accrued expenses. The main purpose of these financial instruments is to raise funds for the activities of the Group. The main financial liabilities of the Group are long—term loans and borrowings, current portion of long-term borrowings, short—term loans and borrowings, trade accounts payable, other current liabilities and accrued expenses. The main purpose of these financial instruments is to raise funds for the activities of the Group.

(in thousand USD, unless otherwise stated) (in t/Jommzd UXD, W/m of/Jmm'w Hated)

The Group's gearing ratio was as follows: The Group's gearing ratio was as follows:

	Note Note	31 December December 31 2018 2018	31 December December 31 2017 2017
Long-term loans and borrowings borrowings Long—term loans and	31 31	15 789 15 789	27 725 725 27
of long—term Current portion of long-term borrowings portion Current borrowings	31 31	14 467 467 14	10 629 10 629
Short-term loans and borrowings borrowings Short—term loans and	32 32	28 500 28 500	26 113 26 113
Trade accounts payable Trade accounts payable	33 33	3 049 3049	1 303 303 1
Other current liabilities and accrued expenses Other current liabilities and accrued expenses	34 34	12 704 704 12	7 088 088 7
Cash and cash equivalents and equivalents Cash cash	27 27	(3 920) 920) (3	(6 092) 092) (6
Net debt Net debt		70 589 70589	66 766 66 766
Total equity Total equity		120 670 120670	104 038 104 038
Total net debt and equity Total net debt equity and		191 260 191260	170 804 170 804
Gearing ratio Gearing ratio		37% 37%	39% 39%

The capital structure of the Group is based on management's judgments of the appropriate balancing of all key elements of its financial strategy in order to meet its strategic and day-to-day needs. The Management of the Group considers the amount of capital in proportion to risk and manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. The Group will take appropriate steps in order to maintain, or if necessary adjust, the capital structure. The capital structure of the Group is based on management's judgments of the appropriate balancing of all key elements of its financial strategy in order to meet its strategic and day—to—day needs. The Management of the Group considers the amount of capital in proportion to risk and manages the capital structure and makes adjustments to itin the light of changes in economic conditions and the risk characteristics of the underlying assets. The Group will take appropriate steps in order to maintain, or if necessary adjust, the capital structure.

42. Events after the balance sheet date 42. Events after the balance sheet date

Conducting its normal operating activity, the Group considers important to highlight the following: Conducting its normal operating activity, the Group considers important to highlight the following:

Loans and borrowings and interests are repaid in the amount of USD 8 990 thousand. Loans and borrowings and interests are repaid in the amount of USD 8990 thousand.

Loans and borrowings are received in the amount of USD 11 274 thousand. Loans and borrowings are received in the amount of USD ¹¹ 274 thousand.

VAT for reimbursement is received in the amount of USD 3 092 thousand. VAT for reimbursement is received in the amount of USD ³ 092 thousand.

Starting 01 April 2019 PrJSC Poltava Kombilormoviy Zavod is in a state of business termination. As at 31 March 2019 the net assets of the company amounted to USD 5 thousand. Starting ⁰¹ April 2019 PrJSC Poltava Kombilormoviy Zavod is in ^a state of business termination. As at ³¹ March 2019 the net assets of the company amounted to USD 5 thousand.

There were no other material events after the end of the reporting date, which have a bearing on the understanding of the financial statements. There were no other material events after the end of the reporting date, which have ^a bearing on the understanding of the financial statements.

AI assistant

AC S.A. — Annual Report 2018

5485_rns_2019-04-30_df8df144-4a1c-40da-959b-8fba22a9952a.pdf

CONTENTS CONTENTS

Statement of Management responsibilities for preparation and approval of Consolidated financial statements for the year ended 31 December 2018 Statement of Management responsibilities for preparation and approval of Consolidated financialstatements for the year ended 31 December 2018

Management statement Management statement

Single management report Single management report

1. Business and General Conditions 1. Business and General Conditions

World economy 0 World economy

Wheat \Wheat

Soybean Soybean

Corn Corn

Ukrainian economy 0 Ukrainian economy

Development of IMC S.A. and its Subsidiaries (the hereinafter "the Group" or "IMC") Development of IMC S.A. and its Subsidiaries (the hereinafter "the Group" or "IMC"[

Business owerview 0 Business owerview

Crop farming Crop farming

Dairy farming Dairy farming

Elevators and warehouses Elevators and warehouses

Corporate structure 0 Corporate structure

Group strategy 0 Group strategy

The enterprise risk management and internal control system O The enterprise risk management and internal control system

Risk management at IMC Risk management at IMC

IMC's accounting-related risk management system IMC's accounting-related risk management system

The Internal Control and Risk Management Department The Internal Control and Risk Management Department

Personnel 0 Personnel

Health, Safety and Environment (HSE) management system 0 Health, Safety and Environment (HSE) management system

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidated financial statements

Management Incentive plan 0 Management Incentive plan

Used innovative technologies 0 Used innovative technologies

IMC S.A. AND ITS SUBSIDIARIES IMC S.A. AND ITS SUBSIDIARIES

2. Operational and Financial Results 2. Operational and Financial Results

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidatedfinancialstatements

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidatedfinancialstatements

Revenue Revenue

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidated financial statements

Cost of sales Cost of sales

Gross profit Gross profit

Administrative expenses Administrative expenses

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidatedfinancialstatements

Selling and distribution expenses Selling and distribution expenses

Other operating income Other operating income

Other operating expenses Other operating expenses

Financial expenses, net Financial expenses, net

Foreign currency exchange, net Foreign currency exchange, net

Cash flows Cash flows

Net cash flow from operating activities Nit/'2' tax/aflowfl'om @erafing atflm'fz'ex

Net cash flow from investing activities Nit/'2' tax/aflowflom z'mr'eyz'iflg attizlilies

Net cash flow from financing activities Net [ax/aflozL/fl'omfimmmg aria/flies

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidated financial statements

3. Risk report 3. Risk report

Risks relating to the Industry Risks relating to the Industry

Operational risks Operational risks

Risk of land loss 0 Kirk of/zmd [orr

Financial risks Financial risks

Legal and regulatory risks Legal and regulatory risks

IMC S.A. AND ITS SUBSIDIARIES IMC S.A. AND ITS SUBSIDIARIES

Anti-corruption and bribery matters Anti-corruption and bribery matters

4. Selected Financial Data 4. Selected Financial Data

On behalf of the Management: On behalf of the Management:

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidatedfinancialstatements

Corporate governance statement Corporate governance statement

Corporate governance Corporate governance

Board of Directors Board of Directors

Directors: Directors:

IMC S.A. AND ITS SUBSIDIARIES Consolidated financial statements IMC S.A. AND ITS SUBSIDIARIESConsolidated financial statements

Powers of Directors Powers of Directors

Meetings of the Board of Directors Meetings of the Board of Directors

Committees Committees

Audit Committee Audit Committee

Remuneration Committee Remuneration Committee

Internal control and risk management Internal control and risk management

External audit External audit

Takeover bids Law statement Takeover bids Law statement

Insider Dealing Insider Dealing

REPORT OF THE REVISEUR D'ENTREPRISES AGREE

Report on the Audit of the Consolidated Financial Statements

Opinion

Basis for Opinion

Emphasis of matter - operating environment

Key Audit Matters

AC S.A. Annual Report 2018

Health, Safety and Environment (HSE) management system ⁰ Health, Safety and Environment (HSE) management system