AC S.A. — Interim / Quarterly Report 2022

Jun 23, 2022

Interim report

For the three months ended 31 March 2022

CONTENTS

Single management report
War in Ukraine	3
Financial and operational results	4
Alternative performance measures	7
Selected Financial Data	8
Condensed consolidated interim financial statements
Management responsibility statement	9
Condensed consolidated interim statement of comprehensive income	10
Condensed consolidated interim statement of financial position	11
Condensed consolidated interim statement of changes in equity	12
Condensed consolidated interim statement of cash flows	13
Notes to the Condensed consolidated interim financial statements	15

Single management report

War in Ukraine

On 24 February 2022 Russian troops invaded Ukraine and peaceful Ukrainian cities were shelled by missiles. Russia has started a full-scale war against Ukraine. As a result of military actions certain areas in Ukraine became unsuitable for agricultural use. Due to the Russian Federation's blockade of Ukraine's seaports in the Black Sea, grain exports through them are currently impossible. Transportation of goods is performed by railway and trucks.

The government has implemented appropriate emergency measures to stabilize markets and the economy. As of 15 March 2022, the Verkhovna Rada of Ukraine approved a set of taxation amendments to support Ukrainian businesses under war conditions. The law establishes a special economic regime during the period of martial law. Further economic growth depends upon the resolving the Russia invasion of Ukraine and upon success of the Ukrainian government in realization of new reforms and recovery strategy after stopping the invasion, cooperation with the international funds.

From the first days of the vile invasion of the Russian Federation into the territory of Ukraine, the Group provides comprehensive assistance and support in the fight against the occupier. IMC provides all available material resources of the company, which are necessary for the protection of our Motherland and the people of Ukraine. Hundreds of our employees are fighting in the Armed Forces of Ukraine and the Territorial Defense.

The main priority for the company has been and remains to save the lives of our employees. The Group coordinated the evacuation of employees from regions engaged in active military action and provided additional assistance needed. The business processes have been reorganised to adjust to the existing challenges and to provide continuity to the Group's activities. The Group's key personnel and top managers continue working but remotely.

Production sites and lands cultivated by enterprises of IMC S.A. are located in Chernihiv, Sumy and Poltava regions of Ukraine, where active hostilities were underway. Part of Chernihiv and Sumy regions were occupied, but the Armed Forces of Ukraine managed to liberate these regions. As a result of active hostilities around Chernihiv city in February-March 2022, the company's grain elevator was partially damaged. Damage is not critical and it is planned to complete the repair work in the shortest time. Most of the mobile machineries were transferred from Chernihiv city to other companies of the Group. None of the Group's critical facilities or infrastructure has suffered any significant damage. As of the date of publication of the report all the Group's assets are located in the de-occupied territories. All of the Group's inventories are in good condition and are in safe storage.

As a result, the Group's business activities have been affected as follows:

• None of the Group's critical facilities or infrastructure has suffered any significant damage.
• All of the Group's inventories are in good condition and are in safe storage.
• As of today all the Group's assets are located in the de-occupied territories.
• The Group does not have a labor shortage and has managed to retain its staff. The Group's key personnel and top managers continue working but remotely. Most of the staff at the enterprises returned to work in the office or in production.
• The Group's companies continue to pay all taxes required by law and to comply with all business rules, regardless of martial law.
• The Group provides comprehensive assistance and support in the fight against the occupier. IMC provides all available material resources of the company, which are necessary for the protection of our Motherland and the people of Ukraine. Hundreds of our employees are fighting in the Armed Forces of Ukraine and the Territorial Defense.
• Black Sea ports in Ukraine remain blocked for export activities. Alternative logistics chains for grain exports through seaports of other neighboring countries were developed by IMC team. The first shipments were made in the middle of May 2022.
• On 15 May 2022 the most difficult spring sowing in the entire 15-year history of IMC company was completed. A total of 19.2 thousand hectares of sunflower and 50.2 thousand hectares of corn were sown. Given the 18.4 thousand hectares of winter wheat sown in the fall of 2021, as of today 73% of the Company's land bank is sown. The rest of the lands in the Chernihiv region were under active hostilities, so the area is currently being inspected for explosives (mines, blind artillery and mortar shells, missile remnants, etc) and we plan to return them to production in the fall.

Management has identified the following specific risks to the Group's activities due to the war:

• Destruction of fixed assets;
• Loss of stocks of inventories;
• Loss of access to the assets in case of occupation of territories;
• Employee-related risks;
• Disruption of logistics routes in Ukraine;
• Inability to conduct export activities;
• Potential cyber attack.

The Group has no influence on most factors, but the Management has taken possible precautionary measures:

• Part of the mobile machineries was moved from the northern branches to other regions of the Group, as there is a risk of re-occupation.
• Training work was carried out with the staff on behavior and personal safety in wartime, certain work processes were reconfigured to ensure the safety of employees in the performance of their duties, the number of fire protection equipment and first aid kits at workplaces was increased.
• Cyber attack response plans have been developed.

Financial and operational results

Financial and operational results

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

(in thousand USD)	For the three months ended 31 March 2022	For the three months ended 31 March 2021	Changes, %
CONTINUING OPERATIONS
Revenue	37 970	58 572	-35%
Gain from changes in fair value of biological assets and agricultural produce, net	1 778	4 011	-56%
Cost of sales	(37 560)	(51 290)	-27%
GROSS PROFIT	2 188	11 293	-81%
Administrative expenses	(2 660)	(2 574)	3%
Selling and distribution expenses	(4 598)	(6 120)	-25%
Other operating income	100	1 263	-92%
Other operating expenses	(703)	(663)	6%
Write-offs of property, plant and equipment	-	(19)	-100%
OPERATING PROFIT/(LOSS)	(5 673)	3 180	-278%
Financial expenses, net	110	(252)	-144%
Effect of lease of right-of-use assets	(1 781)	(1 510)	18%
Foreign currency exchange (loss)/gain, net	(2 760)	1 031	-368%
PROFIT/(LOSS) BEFORE TAX FROM CONTINUING OPERATIONS	(10 104)	2 449	-513%
Income tax expenses, net	(563)	(1 035)	-46%
NET PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS	(10 667)	1 414	-854%
Normalised EBITDA	(125)	8 876	-101%

Company's Normalised EBITDA decreased in 1Q2022 in comparison with 1Q20021 due to decrease in sale volume due to the ongoing war in Ukraine.

Revenue

The Company's revenue from sales of finished products decreased by 35% in 1Q2022 in comparison with previous period. The following table sets forth the Company's sales revenue by products indicated:

(in thousand USD)	For the three months ended 31 March 2022	For the three months ended 31 March 2021	Changes, %
Corn	37 360	57 722	-35%
Sunflower	-	116	-100%
Wheat	197	65	202%
Milk	176	346	-49%
Cattle	38	65	-42%
Other	135	166	-19%
	37 906	58 480	-35%

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

(in thousand USD)	For the three months ended 31 March 2022	For the three months ended 31 March 2021
Corn
Sales of produced corn (in tonnes)	181 596	292 196
Realization price (U.S. \$ per ton)	206	198
Revenue from produced corn (U.S. \$ in thousands)	37 360	57 722
Sunflower
Sales of produced sunflower (in tonnes)	-	185
Realization price (U.S. \$ per ton)	-	627
Revenue from produced sunflower (U.S. \$ in thousands)	-	116
Wheat
Sales of produced wheat (in tonnes)	624	269
Realization price (U.S. \$ per ton)	315	242
Revenue from produced wheat (U.S. \$ in thousands)	197	65
Other (produced only)
Total sales volume (in tonnes)	3 513	1 024
Total revenues (U.S. \$ in thousands)	135	164
Total sales volume (in tonnes)	185 733	293 675
Total revenue from sale of crops (U.S. \$ in thousands)	37 691	58 067

Revenue relating to sales of corn decreased by 35% to USD 181,6 million in current period from USD 292,2 million in previous period due decrease in sales volume as a result of the blockade of export routes due to the war in Ukraine.

Cost of sales

The Company's cost of sales changed to USD 37,6 million in current period from USD 51,3 million in previous period. The following table sets forth the principal components of the Company's cost of sales for the periods indicated:

(in thousand USD)	For the three months ended 31 March 2022	For the three months ended 31 March 2021	Changes, %
Raw materials	(19 912)	(23 217)	-14%
Change in inventories and work-in-progress	(8 720)	(19 556)	-55%
Depreciation and amortization	(5 305)	(5 211)	2%
Wages and salaries of operating personnel and related charges	(2 264)	(2 043)	11%
Fuel and energy supply	(847)	(621)	36%
Third parties' services	(258)	(269)	-4%
Rent	(26)	(25)	3%
Repairs and maintenance	(113)	(209)	-46%
Taxes and other statutory charges	(93)	(113)	-18%
Other expenses	(22)	(26)	-16%
	(37 560)	(51 290)	-27%

A 27% decrease in cost of sales in 1Q2022 is consistent with a decrease in sales volume.

Foreign currency exchange, net

As at 31 March 2022 Ukrainian Hryvnia depreciated against the USD by 6,8% compared 31 December 2021 (1,4% of revaluation as at 31 March 2021 compared 31 December 2020), 4,7% of devaluation for the average rate 1Q2022/1Q2021 in comparison with 0,6% of revaluation for the average rate 1Q2021/1Q2020. As a result, during the 1Q2022 the Group recognised net foreign exchange loss in the amount of USD 2 760 thousand (USD 1 031 thousand of net gain for the 1Q2021) in the Condensed consolidated interim statement of comprehensive income.

Cash flows

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

(in thousand USD)	For the three months ended 31 March 2022	For the three months ended 31 March 2021	Changes, %
Net cash flows from operating activities	8 910	35 728	-75%
Net cash flows from investing activities	(3 895)	(4 392)	-11%
Net cash flows from financing activities	1 195	(4 493)	-127%
Net increase in cash and cash equivalents	6 210	26 843	-77%

The Company's net cash inflow from operating activities decreased to USD 8,9 million in current period from USD 35,7 million in previous period. The decrease was primarily attributable to decrease in sales and gain from changes in fair value of biological assets and agricultural produce, net.

The Company's net cash outflow from investing activities decreased to USD 3,9 million in 1Q2022 from USD 4,4 million in 1Q2021 which is in line with the Group's CAPEX program.

Net cash inflow from financing activities was USD 1,2 million in current period compared to USD 4,5 million of the net cash outflow in previous period, reflecting the changes in terms of paymnemt of lease liabilities as to right-of-use assets.

Alternative performance measures

Certain measures were included in this report but they are not measures of performance under IFRS - Alternative performance measurements (APM). The Management believe that these APMs assist in providing additional useful information on the underlying trends, performance and position of the Group. APMs are used for performance analysis, planning, reporting.

Alternative performance measurements are:

• Normalised EBITDA
• Debt
• Net Borrowings
• Current ratio
• Interest coverage
• Segment's results

Normalised EBITDA

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, 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 accounting policies regarding depreciation and amortization.

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:

(in thousand USD)	For the three months ended 31 March 2022	For the three months ended 31 March 2021	Changes, %
CONTINUING OPERATIONS
Net profit/(loss) for the period	(10 667)	1 414
Financial expenses, net	(110)	252
Income tax expenses, net	563	1 035
Depreciation and amortization	5 548	5 677
Write-offs of property, plant and equipment	-	19
Effect of lease of right-of-use assets	1 781	1 510
Foreign currency exchange (loss)/gain, net	2 760	(1 031)
Normalised EBITDA	(125)	8 876	-101%

The Group believes that these measures better reflect the Group core operating activities and provide both management and investors with information regarding operating performance, which is more useful for evaluating the financial position of the Group than traditional measures, to the exclusion of external factors unrelated to their performance.

Debt

Debt is defined as bank borrowings. The Group believes that Debt is commonly used by securities analysts, investors and other interested parties in the evaluation of a company's leverage.

Net Borrowings

Net borrowings is defined as bank borrowings (Debt) less cash and cash equivalents. The Group believes that Net borrowings is usually used in conjunction with Debt when assessing a company's leverage.

Current ratio

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. The ratio considers the weight of total current assets versus total current liabilities. It indicates the financial health of a company and how it can maximize the liquidity of its current assets to settle debt and payables.

Interest coverage

The interest coverage ratio measures the ability of a company to pay the interest on its outstanding debt. This measurement is used by creditors, lenders, and investors to determine the risk of lending funds to a company. The interest coverage ratio is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expense during a given period.

Segment's results

The Group uses as a key measures of segment operating performance Gross income of the segment. Expenses and incomes that are not included in gross income are not allocated to each segment and are presented separately as unallocated. Actually indicators Operating income, Profit before tax and Net profit of a segment are Gross income of the segment

Selected Financial Data

	(in thousand USD, unless otherwise stated)	For the three months ended 31 March 2022	For the three months ended 31 March 2021
I.	Revenue	37 970	161 387
II.	Operating profit/(loss)	(5 673)	50 349
III.	Profit/(loss) before income tax	(10 104)	32 188
IV.	Net profit/(loss)	(10 667)	31 705
V.	Net cash flow from operating activity	8 910	59 963
VI.	Net cash flow from investing activity	(3 895)	(5 736)
VII.	Net cash flow from financing activity	1 195	(37 767)
VIII.	Total net cash flow	6 210	16 460
IX.	Total assets	387 425	280 088
X.	Share capital	59	59
XI.	Total equity	168 071	138 427
XII.	Non-current liabilities	154 516	89 780
XIII.	Current liabilities	64 838	51 881
XIV.	Weighted average number of shares	33 178 000	33 178 000
XV.	Profit/(loss) per ordinary share (in USD)	(0,32)	0,96
XVI.	Book value per share (in USD)	5,07	4,17

Management Responsibility Statement

This statement is provided to confirm that, to the best of our knowledge, the Consolidated financial statements for the year ended 31 December 2021, and the comparable information, have been prepared in compliance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union and give a true and fair view of the Group's assets, liabilities, financial position and profit or loss of IMC S.A Group and the undertakings included in the consolidation taken as a whole and that the management report includes a fair review of the development and performance of the business and the position of IMC S.A Group and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties

On behalf of the Board of Directors:

Chief Executive Officer ALEX LISSITSA ______signed________

Chief Financial Officer DMYTRO MARTYNIUK ______signed________

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the three months ended 31 March 2022

(in thousand USD, unless otherwise stated)

	Note	For the three months ended 31 March 2022	For the three months ended 31 March 2021
		Unaudited	Unaudited
CONTINUING OPERATIONS
Revenue	6	37 970	58 572
Gain from changes in fair value of biological assets and agricultural produce, net	7	1 778	4 011
Cost of sales	8	(37 560)	(51 290)
GROSS PROFIT		2 188	11 293
Administrative expenses	9	(2 660)	(2 574)
Selling and distribution expenses	10	(4 598)	(6 120)
Other operating income	11	100	1 263
Other operating expenses	12	(703)	(663)
Write-offs of property, plant and equipment		-	(19)
OPERATING PROFIT/(LOSS)		(5 673)	3 180
Financial expenses, net	15	110	(252)
Effect of lease of right-of-use assets	19	(1 781)	(1 510)
Foreign currency exchange (loss)/gain, net	16	(2 760)	1 031
PROFIT/(LOSS) BEFORE TAX FROM CONTINUING OPERATIONS		(10 104)	2 449
Income tax expenses, net	17	(563)	(1 035)
NET PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS		(10 667)	1 414
Net profit/(loss) for the period attributable to:
Owners of the parent company		(10 651)	1 470
Non-controlling interests		(16)	(56)
Weighted average number of shares		33 178 000	33 178 000
Basic profit/(loss) per ordinary share (in USD)		(0,32)	0,04
OTHER COMPREHENSIVE INCOME/(LOSS)
Items that may be reclassified to profit or loss:
Effect of foreign currency translation		(12 218)	1 771
Items that will no be reclassified to profit or loss:
Deferred tax charged directly to amortization of revaluation reserve		40	66
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS)		(12 178)	1 837
TOTAL COMPREHENSIVE PROFIT/(LOSS)		(22 845)	3 251
Comprehensive income/(loss) attributable to:
Owners of the parent company		(22 945)	3 336
Non-controlling interests		100	(85)

__________signed____________

Alex Lissitsa Chief Executive Officer Chief Financial Officer

Dmytro Martyniuk

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

As at 31 March 2022

(in thousand USD, unless otherwise stated)	Note	31 March 2022	31 December 2021	31 March 2021
		Unaudited	Audited	Unaudited
ASSETS
Non-current assets
Property, plant and equipment	18	58 529	64 128	68 015
Right-of-use assets	19	155 848	168 614	123 963
Intangible assets	20	758	900	1 148
Non-current biological assets	21	1 185	1 769	2 321
Prepayments for property, plant and equipment		3 235	154	568
Total non-current assets		219 555	235 565	196 015
Current assets
Inventories	22	97 756	121 104	57 473
Current biological assets	23	20 409	16 784	18 199
Trade accounts receivable, net	24	140	281	147
Prepayments and other current assets, net	25	16 126	11 305	7 852
Prepayments for income tax		36	30	30
Cash and cash equivalents	27	33 403	28 830	45 069
Total current assets		167 870	178 334	128 770
TOTAL ASSETS		387 425	413 899	324 785
LIABILITIES AND EQUITY
Equity attributable to the owners of parent company
Share capital	28	59	59	59
Share premium	28	29 512	29 512	29 512
Revaluation reserve	28	34 602	35 207	38 659
Retained earnings		245 779	255 785	205 001
Effect of foreign currency translation		(141 376)	(129 042)	(131 658)
Total equity attributable to the owners of parent company		168 576	191 521	141 573
Non-controlling interests		(505)	(605)	105
Total equity		168 071	190 916	141 678
Non-current liabilities
Deferred tax liabilities	17	2 654	2 895	3 153
Long-term loans and borrowings	29	6 608	4 524	5 648
Long-term lease liabilities as to right-of-use assets	19	145 254	152 416	114 677
Total non-current liabilities		154 516	159 835	123 478
Current liabilities
Current portion of long-term borrowings	29	2 996	2 247	2 898
Current portion of long-term lease liabilities as to right-of-use assets	19	16 512	18 568	11 447
Short-term loans and borrowings	30	26 000	26 000	26 000
Trade accounts payable		8 664	3 222	11 378
Other current liabilities and accrued expenses	31	10 666	13 111	7 906
Total current liabilities		64 838	63 148	59 629
Total liabilities		219 354	222 983	183 107
TOTAL LIABILITIES AND EQUITY		387 425	413 899	324 785

__________signed____________

Alex Lissitsa Chief Executive Officer Chief Financial Officer

Dmytro Martyniuk

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

For the three months ended 31 March 2022

(in thousand USD, unless otherwise stated)

	Share capital	Share premium	Revaluation reserve	Retained earnings	Effect of foreign currency translation	Total	Non controlling interests	Total equity
31 December 2020 (audited)	59	29 512	40 151	201 973	(133 458)	138 237	190	138 427
Сomprehensive income/(loss) for the period
Profit/(loss) for the period	-	-	-	1 470	-	1 470	(56)	1 414
Amortization of revaluation reserve Deferred tax charged	-	-	(1 558)	1 558	-	-	-	-
directly to amortization of revaluation reserve	-	-	66	-	-	66	-	66
Other comprehensive income	-	-	-	-	1 800	1 800	(29)	1 771
Total comprehensive profit/(loss)	-	-	(1 492)	3 028	1 800	3 336	(85)	3 251
31 March 2021 (unaudited)	59	29 512	38 659	205 001	(131 658)	141 573	105	141 678
31 December 2021 (audited)	59	29 512	35 207	255 785	(129 042)	191 521	(605)	190 916
Сomprehensive income/(loss) for the period
Profit/(loss) for the period	-	-	-	(10 651)	-	(10 651)	(16)	(10 667)
Amortization of revaluation reserve Deferred tax charged	-	-	(645)	645	-	-	-	-
directly to amortization of revaluation reserve	-	-	40	-	-	40	-	40
Other comprehensive income	-	-	-	-	(12 334)	(12 334)	116	(12 218)
Total comprehensive profit/(loss)	-	-	(605)	(10 006)	(12 334)	(22 945)	100	(22 845)
31 March 2022 (unaudited)	59	29 512	34 602	245 779	(141 376)	168 576	(505)	168 071

__________signed____________

Alex Lissitsa Chief Executive Officer Chief Financial Officer

Dmytro Martyniuk

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

For the three months ended 31 March 2022

(in thousand USD, unless otherwise stated)

	Note	For the three months ended	For the three months ended
		31 March 2022	31 March 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit before tax from continuing operations		(10 104)	2 449
Adjusted to reconcile profit before tax with net cash used in operating activities:
Gain from changes in fair value of biological assets and agricultural produce, net	7	(1 778)	(4 011)
Disposal of revaluation of biological assets and agricultural produce in the cost of sales, net	8	17 289	20 596
Depreciation and amortization	13	5 548	5 677
Effect of lease of right-of-use assets	19	1 781	1 510
Interest expenses and other financial expenses	15	322	401
Foreign currency exchange loss/(gain), net	16	2 521	(1 106)
Loss/(gain) on disposal of property, plant and equipment	11 , 12	(2)	124
Write-offs of property, plant and equipment		-	19
Gain on recovery of assets previously written off	11	(17)	(19)
Interest income	15	(432)	(148)
Accruals for unused vacations		310	207
Write-offs of VAT	12	1	44
Shortages and losses due to impairment of inventories	12	24	6
Income from write-offs of accounts payable	11	(16)	(2)
Gain on disposal of inventories	11	-	(6)
Allowance for doubtful accounts receivable	12	-	16
Effect of modification of right-of-use assets	11	(48)	(1 162)
Cash flows from operating activities before changes in working capital		15 399	24 595
Changes in trade accounts receivable		237	47
Changes in prepayments and other current assets		(5 290)	(2 278)
Changes in inventories		(1 633)	5 212
Changes in current biological assets		(2 747)	(3 223)
Changes in trade accounts payable		5 800	10 370
Changes in other current liabilities and accrued expenses		(1 815)	2 657
Cash flows from operations		9 951	37 380
Interest paid on loans and borrowings		(239)	(348)
Interest paid on lease liabilities as to right-of-use assets		(224)	(222)
Income tax paid		(578)	(1 082)
Net cash flows from operating activities		8 910	35 728

__________signed____________

Alex Lissitsa Chief Executive Officer Chief Financial Officer

Dmytro Martyniuk

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS (continued)

For the three months ended 31 March 2022

(in thousand USD, unless otherwise stated)

	Note	For the three months ended 31 March 2022	For the three months ended 31 March 2021
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(3 903)	(4 738)
Proceeds from disposal of property, plant and equipment		8	346
Net cash flows from investing activities		(3 895)	(4 392)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term and short-term borrowings		3 217	2 872
Repayment of long-term and short-term borrowings		(384)	(1 556)
Repayment of long-term and short-term lease liabilities as to right-of-use assets		(1 638)	(5 809)
Net cash flows from financing activities		1 195	(4 493)
NET CASH FLOWS		6 210	26 843
Cash and cash equivalents as at the beginning of the period	27	28 830	17 990
Effect of translation into presentation currency		(1 637)	236
Cash and cash equivalents as at the end of the period	27	33 403	45 069

__________signed____________

Alex Lissitsa Chief Executive Officer Chief Financial Officer

Dmytro Martyniuk

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. 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;
• dairy farming;
• storage and processing of grain and 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.

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

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.

In April 2014 Parafiyivka-Progress 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 October 2016 Zemelniy Kadastroviy Centr PE and Agroprogress Holding Ltd 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.

In June 2019 trading company Aristo Eurotrading HK Limited was formed.

Since November 2021 Nosovsky Saharny Zavod Ltd is in the process of joining to Agroprogress PE.

PrJSC Poltava Kombilormoviy Zavod ceased to exist due to the decision of the Management in December 2021.

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.

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

		Country of	Year	Cumulative ownership ratio, %
Operating entity	Principal activity established/ registration acquired		31 March 2022	31 March 2021
IMC S.A.	Holding company	Luxembourg	28.12.2010	100	100
Burat-Agro Ltd.	Agricultural production	Ukraine	31.12.2007	100	100
Burat Ltd.	Grain elevator	Ukraine	31.12.2007	100	100
Chernihiv Industrial Milk Company Ltd.	Agricultural and farming production	Ukraine	31.12.2007	100	100
PrJSC Poltava Kombilormoviy Zavod	Granting of PPE into finance lease	Ukraine	31.12.2007	-	87,58
PrJSC Mlibor	Grain elevator	Ukraine	31.05.2008	74,41	74,28
Unigrain Holding Limited	Subholding company	Cyprus	02.06.2009	100	100
Aristo Eurotrading Limited	Trading company	British Virgin Islands	30.08.2011	100	100
PrJSC "Vyryvske HPP"	Grain elevator	Ukraine	28.12.2011	80,61	80,61
PAC Slobozhanschina Agro	Agricultural production	Ukraine	26.06.2012	100	100
Agroprogress PE	Agricultural production	Ukraine	28.12.2012	100	100
Bobrovitsky Hlebzavod Ltd	Bakery production	Ukraine	28.12.2012	100	100
PrJSC "Bobrovitske HPP"	Grain elevator	Ukraine	28.12.2012	92,83	92,83
Nosovsky Saharny Zavod Ltd	Storage facilities	Ukraine	28.12.2012	100	99,9
Negoce Agricole S.a r.l.	Trading company	Luxembourg	19.11.2013	100	100
AgroKIM Ltd.	Agricultural production, grain elevator	Ukraine	30.12.2013	100	100
Aristo Eurotrading HK Limited	Trading company	Hong Kong	21.06.2019	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).

The Group controls 120,3 thousand ha (120,0 thousand ha under processing of high quality arable land). As at 31 March 2022 the Group operates 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 Group's Consolidated financial statements are public and available at:

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

Stock information about the Company (company code name on WSE: IMCOMPANY (LU0607203980)):

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

2 Basis of preparation of the financial statements

Statement of compliance

These Condensed consolidated interim 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 interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2020.

These Condensed consolidated interim 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 Condensed consolidated interim 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 Condensed consolidated interim 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.

These Consolidated financial statements as at 31 December 2021 prepared in compliance with IFRS as approved by the European Union are approved on behalf of the Group's Board of Directors on 15 May 2022.

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. For further information, relating to the impact on going concern of the post balance sheet event "War in Ukraine," see pages 30 and 55.

Basis of measurement

The Consolidated financial statements are prepared under historical cost basis except for the revalued amounts of property, plant and equipment, fair values of 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.

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.

Foreign currency translation

Functional and presentation 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").

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

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.

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.

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

Currency	31 March 2022	Average for 1Q2022	31 December 2021	31 March 2021	Average for 1Q2021	31 December 2020
UAH/USD	29,2549	28,55449	27,2782	27,8852	27,9694	28,2746
EUR/USD	1,11	1,13	1,13	1,17	1,21	1,23

Translation into presentation 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:

• 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;

• 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;

• 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

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.

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 consolidated 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.

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.

3 Summary of significant accounting policies

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.

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.

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.

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 consolidated 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 consolidated 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 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	15-55 years
-	Machinery	5-30 years
-	Motor vehicles	5-20 years

• Other assets 5-20 years

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

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.

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.

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 consolidated 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.

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 consolidated 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
• Computer software 5 years

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 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 consolidated 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 consolidated 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

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:

• Non-current biological assets of plant-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 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.

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 consolidated statement of comprehensive income as Gain (loss) from changes in fair value of biological assets and agricultural produce, net.

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

• 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 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.

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

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 consolidated 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.

Inventories

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 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 inventories 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.

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 consolidated statement of comprehensive income.

Financial instruments

Financial assets and financial liabilities are regognised in the Group's consolidated 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

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.

The Group's financial assets include cash and cash equivalents, trade receivables and other receivables 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 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.

Financial liabilities

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 payables 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 Group derecognises a financial liability only when the Group's obligations 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.

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 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.

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.

Cash and cash equivalents

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

Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Group as a lessee

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of lowvalue assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.

Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of property, plant and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term.

Group as a lessor

Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.

Taxation

Income 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 consolidated 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

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

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:

• 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.

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;

• 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.

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 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)

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 2021). As at 31 March 2022, 5 of the companies comprising the Group were elected to pay single tax 4th group (2021: 5).

Value added tax (VAT)

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.

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.

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. 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 concludes contract with the customers in written form, where the parties and each party's rights are mentioned, all conditions relating goods or services, payments and delivery are described.

• 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 receives only short-term advances from its clients and they are presented as a part of Other current liabilities and accrued expenses. The contracts do not contain any variable considerations or warranty obligations. The transaction price is clearly stated in the contract.

• finished products and services transferred to customers at a point in time.

Therefore, the Group recognizes revenue as follows:

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.

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

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 consolidated statement of comprehensive income.

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.

Contingent assets and liabilities

Contingent liabilities are not recognized in the consolidated financial statements. The Group discloses information about contingent liabilities in the Notes to the consolidated 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.

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

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 consolidated financial statements as Share premium.

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.

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.

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.

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.

Borrowing costs

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.

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

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.

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 consolidated 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.

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 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 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.

The fair value of property, plant and equipment of all the Group's companies has been measured as at 31 December 2020 by an independent appraiser LLC "Asset Expertise" (ODS Certificate No.905/19 as of 28 November 2019 issued by State Property Fund of Ukraine).

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, which are calculated in accordance with business plans and operating calculations of the Group's Management with respect to those assets.

The estimated useful life and residual value of non-current assets 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.

Any of the above factors may affect the future rates of depreciation, as well as carrying and residual value of property, plant and equipment.

There were no changes in accounting estimates of remaining useful lives of items of property, plant and equipment during Y2021.

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 cash-generating 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.

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.

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.

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.

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.

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.

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.

The method consists in the following:

• there is passport data of the volume of silo storage tanks
• 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
• 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.

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 consolidated 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 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.

All assets and liabilities for which fair value is measured or disclosed in the consolidated 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 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.

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 forwardlooking estimates are analysed.

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 consolidated 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 consolidated financial statements.

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.

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.

The Group considers that it operates in compliance with tax laws of Ukraine.

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.

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.

Operating environment

Operating environment

The Group conducts its operations in Ukraine. The Ukrainian economy is open, non-diversified and deemed to be of market status with certain characteristics of an emerging market, and it has critical dependence on world commodity prices and low liquidity in the international capital market. The Ukrainian economy is showing signs of stabilization after many years of political and economic tensions.

The impact of Russian military aggression against Ukraine in some areas of Lugansk and Donetsk regions that started in spring 2014 is still in progress; parts of Lugansk and Donetsk regions remain under control of self-proclaimed republics and Ukrainian government is not able to enforce the law of Ukraine on those territories. In March 2014 the series of events led to annexing the Crimea to the Russian Federation, which was not recognized either by Ukraine or many other countries. The Group does not have assets in Crimea, Donetsk and Lugansk regions.

On 24 February 2022 Russian troops invaded Ukraine and peaceful Ukrainian cities were shelled by missiles. Russia has started a full-scale war against Ukraine. As a result of military actions certain areas in Ukraine became unsuitable for agricultural use. As of the date of publication of the report all the Group's assets are located in the deoccupied territories. Due to the Russian Federation's blockade of Ukraine's seaports in the Black Sea, grain exports through them are currently impossible. Transportation of goods is performed by railway and trucks.

The government has implemented appropriate emergency measures to stabilize markets and the economy. As of 15 March 2022, the Verkhovna Rada of Ukraine approved a set of taxation amendments to support Ukrainian businesses under war conditions. The law establishes a special economic regime during the period of martial law. Further economic growth depends upon the resolving the Russia invasion of Ukraine and upon success of the Ukrainian government in realization of new reforms and recovery strategy after stopping the invasion, cooperation with the international funds.

Going concern

Management prepared its budget for the next 12 months based on the known facts and events, but there is a significant uncertainty over the future development of military invasion, its duration and impact on the Group. The following key assumptions were used for the forecasts: no further significant progression of Russian troops into the territory of Ukraine that could severely affect the Group's assets; no critical assets preventing the Group to continue operations are damaged or located in the uncontrolled territories; remaining logistic routes will continue to be available; maintain minimum sales level to cover minimum operational expenses level and debt servicing; ability to run harvesting campaign.

Based on these forecasts, Management concluded that it is appropriate to prepare the financial statements on a going concern basis. However, due to the currently unpredictable effects of the ongoing War on the significant assumptions underlying forecasts, Management concluded that a material uncertainty exists, which may cast significant doubt about the Group's ability to continue as a going concern and, therefore, the Group may be unable to realize its assets and discharge its liabilities in the normal course of business.

5 New and amended standards and interpretations

Applying of new standards

Amendments to IFRS 9, IAS 39 and IFRS17: Interest Rate Benchmark Reform

The amendments to IFRS 9 and IAS 39 Financial Instruments: Recognition and Measurement provide a number of reliefs, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainty about the timing and/or amount of benchmark-based cash flows of the hedged item or the hedging instrument. These amendments have no impact on the consolidated financial statements of the Group as it does not have any interest rate hedge relationships.

Amendments to IFRS 16 Covid-19 Related Rent Concessions

On 28 May 2020, the IASB issued Covid-19-Related Rent Concessions - amendment to IFRS 16 Leases The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19 related rent concession from a lessor is a lease modification. The amendment applies to annual reporting periods beginning on or after 1 June 2020. Earlier application is permitted. This amendment had no impact on the consolidated financial statements of the Group.

Issued but not yet effective standards

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	Effective for annual period beginning on or after
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Classification of Liabilities as Current or Non-current - Deferral of Effective Date (issued on 23 January 2020 and 15 July 2020 respectively)	1 January 2023 (Not yet endorsed by EU)
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (issued on 12 February 2021)	1 January 2023 (Endorsed by EU on 2 March 2022)
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (issued on 12 February 2021)	1 January 2023 (Endorsed by EU on 2 March 2022)
Amendments to: IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and Contingent Assets; Annual Improvements 2018-2020 (All issued 14 May 2020)	1 January 2022 (Endorsed by EU on 28 June 2021)

The management do not expect that the adoption of the Standards listed above will have a material impact on the consolidated financial statements of the Group in future periods.

6 Revenue

	Note	For the three months ended 31 March 2022	For the three months ended 31 March 2021
		Unaudited	Unaudited
Revenue from sales of finished products	a	37 906	58 480
Revenue from services rendered	b	64	92
		37 970	58 572

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).

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

	For the three months ended 31 March 2022	For the three months ended 31 March 2021
	Unaudited	Unaudited
Corn	37 360	57 722
Sunflower	-	116
Wheat	197	65
Milk	176	346
Cattle	38	65
Other	135	166
	37 906	58 480

b) Revenue from services rendered was as follows:

	For the three months ended 31 March 2022	For the three months ended 31 March 2021
	Unaudited	Unaudited
Transport	32	5
Storage	9	22
Processing	-	24
Other	23	41
	64	92

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

	For the three months ended 31 March 2022	For the three months ended 31 March 2021
	Unaudited	Unaudited
Export	37 557	57 788
Domestic	413	784
	37 970	58 572

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

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.

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

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

	Note	For the three months ended 31 March 2022	For the three months ended 31 March 2021
		Unaudited	Unaudited
Current biological assets	23
- Animal-breeding		(227)	364
- Plant-breeding		2 487	3 395
Non-current biological assets	21
- Animal-breeding		(482)	252
		1 778	4 011

8 Cost of sales

	Note	For the three months ended 31 March 2022	For the three months ended 31 March 2021
		Unaudited	Unaudited
Raw materials	a	(19 912)	(23 217)
Change in inventories and work-in-progress	b	(8 720)	(19 556)
Depreciation and amortization	13	(5 305)	(5 211)
Wages and salaries of operating personnel and related charges	14	(2 264)	(2 043)
Fuel and energy supply		(847)	(621)
Third parties' services		(258)	(269)
Rent		(26)	(25)
Repairs and maintenance		(113)	(209)
Taxes and other statutory charges		(93)	(113)
Other expenses		(22)	(26)
		(37 560)	(51 290)

a) Raw materials for the three months ended 31 March 2022 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 17 289 thousand (USD 20 596 thousand for the three months ended 31 March 2021).

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

9 Administrative expenses

	Note	For the three months ended 31 March 2022	For the three months ended 31 March 2021
		Unaudited	Unaudited
Wages and salaries of administrative personnel and related charges	14	(2 107)	(1 881)
Depreciation and amortisation	13	(144)	(139)
Professional services	a	(90)	(132)
Third parties' services		(73)	(92)
Bank services		(79)	(147)
Repairs and maintenance		(19)	(35)
Transport expenses		(37)	(43)
Other expenses		(111)	(105)
		(2 660)	(2 574)

10 Selling and distribution expenses

	Note	For the three months ended 31 March 2022	For the three months ended 31 March 2021
		Unaudited	Unaudited
Forwarding services		(4 381)	(5 813)
Delivery costs		(79)	(122)
Wages and salaries of sales personnel and related charges	14	(60)	(70)
Depreciation	13	(40)	(48)
Other expenses		(38)	(67)
		(4 598)	(6 120)

11 Other operating income

	Note	For the three months ended 31 March 2022	For the three months ended 31 March 2021
		Unaudited	Unaudited
Income from write-offs of accounts payable		16	2
Gain on recovery of assets previously written off		17	19
Gain on disposal of inventories		(0)	6
Effect of modification of right-of-use assets	a	48	1 162
Other income		19	74
		100	1 263

a) Effect of modification of right-of-use assets increased significantly in Y2021 due to the massive conclusion of contracts on new terms.

12 Other operating expenses

	Note	For the three months ended 31 March 2022	For the three months ended 31 March 2021
		Unaudited	Unaudited
Depreciation	13	(58)	(279)
Charity		(574)	(89)
Wages and salaries of non-operating personnel and related charges	14	(2)	(38)
Shortages and losses due to impairment of inventories		(24)	(6)
Write-offs of VAT		(1)	(44)
Allowance for doubtful accounts receivable	26	(0)	(16)
Loss on disposal of PPE		2	(124)
Other expenses		(46)	(67)
		(703)	(663)

13 Depreciation and amortisation

	Note	For the three months ended 31 March 2022	For the three months ended 31 March 2021
		Unaudited	Unaudited
Depreciation
Cost of sales	8	(1 656)	(2 008)
Other operating expenses	9	(58)	(279)
Administrative expenses	10	(104)	(102)
Selling and distribution expenses	12	(40)	(48)
		(1 858)	(2 437)
Amortisation
Cost of sales	8	(3 649)	(3 203)
Administrative expenses	10	(40)	(37)
		(3 689)	(3 240)
		(5 547)	(5 677)

14 Wages and salaries expenses

	For the three months ended 31 March 2022	For the three months ended 31 March 2021
	Unaudited	Unaudited
Wages and salaries	(3 715)	(3 375)
Related charges	(718)	(657)
	(4 433)	(4 032)
The average number of employees, persons	1 803	1 850
Remuneration of management	321	324

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

		For the three months ended 31 March 2022		For the three months ended 31 March 2021
	Note	Wages and salaries and related charges, thousand USD	Average number of employees, persons	Wages and salaries and related charges, thousand USD	Average number of employees, persons
		Unaudited		Unaudited
Operating personnel	8	(2 264)	1 278	(2 043)	1 291
Administrative personnel	9	(2 107)	505	(1 881)	539
Sales personnel	10	(60)	18	(70)	18
Non-operating personnel	12	(2)	2	(38)	2
		(4 433)	1 803	(4 032)	1 850

15 Financial expenses, net

	For the three months ended 31 March 2022	For the three months ended 31 March 2021
	Unaudited	Unaudited
Interest income on bank deposits	432	148
Interest expenses on loans and borrowings	(294)	(345)
Other expenses	(28)	(55)
	110	(252)

16 Foreign currency exchange gain/(loss), net

As at 31 March 2022 Ukrainian Hryvnia depreciated against the USD by 6,8% compared 31 December 2021 (1,4% of revaluation as at 31 March 2021 compared 31 December 2020), 4,7% of devaluation for the average rate 1Q2022/1Q2021 in comparison with 0,6% of revaluation for the average rate 1Q2021/1Q2020. As a result, during the 1Q2022 the Group recognised net foreign exchange loss in the amount of USD 2 760 thousand (USD 1 031 thousand of net gain for the 1Q2021) in the Condensed consolidated interim statement of comprehensive income.

17 Income tax expenses and deferred tax liabilities

The corporate income tax rate for the three months ended 31 March 2022 was: 18% in Ukraine, 12,5% in Cyprus, 24,94% in Luxemburg.

The components of income tax expenses were as follows:

	For the three months ended 31 March 2022	For the three months ended 31 March 2021
	Unaudited	Unaudited
Current income tax	(570)	(1 037)
Deferred tax	7	2
	(563)	(1 035)
Consolidated statement of other comprehensive income
Deferred tax related to item charged or credit directly to other comprehensive income during year:
Net gain on revaluation of property, plant and equipment	40	66
The deferred tax liabilities were as follows:		Property, plant and equipment
31 December 2020 (audited)		(3 177)
Income tax benefit (expenses) for the period recognized in profit or loss		2
Income tax benefit (expenses) for the period recognized in other comprehensive income		66
Effect of foreign currency translation		(44)
31 March 2021 (unaudited)		(3 153)
31 December 2021 (audited)		(2 895)
Income tax benefit (expenses) for the period recognized in profit or loss		7
Income tax benefit (expenses) for the period recognized in other comprehensive income		40
Effect of foreign currency translation		194
31 March 2022 (unaudited)		(2 654)

No deferred tax asset has been set up on loss carry forwards of some enetities of the Group, as there are not sufficient profits foreseen on these entities to justify the set up of deferred tax assets.

18 Property, plant and equipment

	Land and buildings	Machinery	Motor vehicles	Other	Construction in progress	Total
INITIAL COST
31 December 2020 (audited)	56 250	39 325	22 614	192	84	118 465
Additions	369	2 357	1 329	38	45	4 138
Disposals	(454)	(847)	(1 274)	(9)	-	(2 584)
Effect from translation into	785	555	316	3	-	1 659
presentation currency
31 March 2021 (unaudited)	56 950	41 390	22 985	224	129	121 678
31 December 2021 (audited)	59 096	41 987	20 957	311	140	122 491
Additions	7	232	258	7	63	567
Disposals	-	(21)	(37)	-	-	(58)
Transfer	-	5	-	-	(5)	-
Effect from translation into presentation currency	(3 993)	(2 842)	(1 421)	(21)	(11)	(8 288)
31 March 2022 (unaudited)	55 110	39 361	19 757	297	187	114 712
ACCUMULATED DEPRECIATION
31 December 2020 (audited)	(17 724)	(20 793)	(13 992)	(75)	-	(52 584)
Depreciation for the period	(593)	(1 182)	(657)	(5)	-	(2 437)
Disposals	333	744	1 009	8	-	2 094
Effect from translation into presentation currency	(250)	(292)	(193)	(1)	-	(736)
31 March 2021 (unaudited)	(18 234)	(21 523)	(13 833)	(73)	-	(53 663)
31 December 2021 (audited)	(20 012)	(24 713)	(13 545)	(93)	-	(58 363)
Depreciation for the period	(478)	(887)	(483)	(11)	-	(1 859)
Disposals	-	19	32	-	-	51
Effect from translation into presentation currency	1 364	1 691	926	7	-	3 988
31 March 2022 (unaudited)	(19 126)	(23 890)	(13 070)	(97)	-	(56 183)
Net book value
31 December 2020 (audited)	38 526	18 532	8 622	117	84	65 881
31 March 2021 (unaudited)	38 716	19 867	9 152	151	129	68 015
31 December 2021 (audited)	39 084	17 274	7 412	218	140	64 128
31 March 2022 (unaudited)	35 984	15 471	6 687	200	187	58 529

As at 31 December 2020 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.905/19 as of 28 November 2019 issued by State Property Fund of Ukraine).

Impairment test

As at 31 March 2022, 31 December 2021, 31 March 2021 and 31 December 2020 an impairment tests was conducted, according to the results of the tests impairment of PPE was not identified.

As at 31 March 2022, 31 December 2021, 31 March 2021 an impairment review was conducted by the management of the Group.

As at 31 December 2020, 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.

19 Right-of-use assets

Amounts recognised in the consolidated statements of financial position:

	31 March 2022	31 December 2021	31 March 2021
	Unaudited	Audited	Unaudited
Right-of-use assets
Land	150 281	161 906	115 235
Office	276	335	441
Machinery	5 291	6 373	8 287
	155 848	168 614	123 963
Lease liabilities as to right-of-use assets
Long-term	145 254	152 416	114 677
Current portion	16 512	18 568	11 447
	161 765	170 985	126 124

Amounts recognised in the consolidated statements of comprehensive income:

	Note	For the three months ended 31 March 2022	For the three months ended 31 March 2021
		Unaudited	Unaudited
Amortisation of right-of-use assets
Land	8	(2 900)	(2 425)
Office	9	(37)	(34)
Machinery	8	(668)	(682)
		(3 605)	(3 141)
Effect of lease of right-of-use assets		(1 781)	(1 510)

Annual report 2021 Consolidated financial statements Notes to the Consolidated financial statements (in thousand USD, unless otherwise stated)

Following changes took place in the right-of-use assets:

	Land	Office	Machinery	Total
Net book value as at 31 December 2020 (audited)	85 082	34	8 847	93 963
Cost as at 31 December 2020	100 707	275	11 994	112 976
Accumulated amortisation as at 31 December 2020	(15 626)	(241)	(3 147)	(19 014)
Additions	50 807	440	-	51 247
Amortisation	(2 425)	(34)	(682)	(3 141)
Disposals	(19 504)	-	-	(19 504)
Cost disposals	(23 563)	(278)	-	(23 841)
Accumulated amortisation disposals	4 058	278	-	4 336
Effect from translation into presentation currency	1 275	2	121	1 398
Cost as at 31 March 2021	129 439	441	12 162	142 042
Accumulated amortisation as at 31 March 2021	(14 204)	-	(3 875)	(18 079)
Net book value as at 31 March 2021 (unaudited)	115 235	441	8 287	123 963
Net book value as at 31 December 2021 (audited)	161 906	335	6 373	168 614
Cost as at 31 December 2021	177 355	451	12 432	190 238
Accumulated amortisation as at 31 December 2021	(15 449)	(116)	(6 059)	(21 624)
Additions	3 231	-	-	3 231
Amortisation	(2 900)	(37)	(668)	(3 605)
Disposals	(1 033)	-	-	(1 033)
Cost disposals	(1 240)	-	-	(1 240)
Accumulated amortisation disposals	207	-	-	207
Effect from translation into presentation currency	(10 923)	(22)	(415)	(11 360)
Cost as at 31 March 2022	167 314	421	11 592	179 327
Accumulated amortisation as at 31 March 2022	(17 033)	(145)	(6 301)	(23 479)
Net book value as at 31 March 2022 (unaudited)	150 281	276	5 291	155 848

20 Intangible assets

	Computer software	Property certificates	Land lease rights	Total
INITIAL COST
31 December 2020 (audited)	81	217	9 119	9 417
Effect from translation into presentation currency	1	3	127	131
31 March 2021 (unaudited)	82	220	9 246	9 548
31 December 2021 (audited)	82	225	9 451	9 758
Effect from translation into presentation currency	(6)	(15)	(639)	(660)
31 March 2022 (unaudited)	76	210	8 812	9 098
ACCUMULATED DEPRECIATION
31 December 2020 (audited)	(28)	(3)	(8 156)	(8 187)
Amortisation for the period	(3)	-	(96)	(99)
Effect from translation into presentation currency	-	-	(114)	(114)
31 March 2021 (unaudited)	(31)	(3)	(8 366)	(8 400)
31 December 2021 (audited)	(38)	(4)	(8 816)	(8 858)
Amortisation for the period	(3)	-	(81)	(84)
Effect from translation into presentation currency	3	-	599	602
31 March 2022 (unaudited)	(38)	(4)	(8 298)	(8 340)
NET BOOK VALUE
31 December 2020 (audited)	53	214	963	1 230
31 March 2021 (unaudited)	51	217	880	1 148
31 December 2021 (audited)	44	221	635	900
31 March 2022 (unaudited)	38	206	514	758

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.

21 Non-current biological assets

		31 March 2022		31 December 2021		31 March 2021
		Unaudited	Audited		Unaudited
Animal-breeding	Units	Book value	Units	Book value	Units	Book value
Cattle	607	1 180	615	1 755	635	2 299
Plant-breeding	Area, ha	Book value	Area, ha	Book value	Area, ha	Book value
Perennial grasses	108	5	175	15	172	22
Total non-current biological assets	-	1 185	-	1 769	-	2 321

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

	Cattle
31 December 2020 (audited)	1 983
Transfer (from (to) current biological assets)	35
Change in fair value	252
Effect from translation into presentation currency	29
31 March 2021 (unaudited)	2 299
31 December 2021 (audited)	1 755
Transfer (from (to) current biological assets)	15
Change in fair value	(482)
Effect from translation into presentation currency	(108)
31 March 2022 (unaudited)	1 180

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

	Perennial
	grasses
31 December 2020 (audited)	44
Capitalized expenses	-
Effect from translation into presentation currency	(22)
31 March 2021 (unaudited)	22
31 December 2021 (audited)	15
Capitalized expenses	-
Effect from translation into presentation currency	(10)
31 March 2022 (unaudited)	5

22 Inventories

	Note	31 March 2022	31 December 2021	31 March 2021
		Unaudited	Audited	Unaudited
Agricultural produce	a	57 519	98 176	19 201
Work-in-progress	b	17 634	12 472	15 915
Agricultural materials		20 107	8 595	20 455
Spare parts		808	468	701
Fuel		1 230	946	775
Raw materials		321	326	308
Other inventories		137	121	118
		97 756	121 104	57 473

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

	31 March 2022	31 December 2021	31 March 2021
	Unaudited	Audited	Unaudited
Corn	57 132	97 624	18 973
Wheat	4	131	44
Sunflower	43	47	-
Other	340	374	184
	57 519	98 176	19 201

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).

23 Current biological assets

	31 March 2022 31 December 2021		31 March 2021
	Unaudited		Audited		Unaudited
Animal-breeding	Units Book value		Units	Book value	Units	Book value
Cattle	392	681	399	997	367	1 282
Other	3	2	3	2	3	2
Plant-breeding	Area, ha	Book value	Area, ha	Book value	Area, ha	Book value
Wheat	18 340	19 717	18 340	15 785	21 441	16 883
Grasses	68	9	-	-	132	32
Total current biological assets	-	20 409	-	16 784	-	18 199

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

	Cattle	Other	Total
31 December 2020 (audited)	1 075	1	1 076
Capitalized expenses	93	1	94
Transfer (from (to) non-current biological assets)	(35)	-	(35)
Sale	(230)	-	(230)
Change in fair value	364	-	364
Effect from translation into presentation currency	15	-	15
31 March 2021 (unaudited)	1 282	2	1 284
31 December 2021 (audited)	997	2	999
Capitalized expenses	94	-	94
Transfer (from (to) non-current biological assets)	(15)	-	(15)
Sale	(82)	-	(82)
Slaughter	(23)	-	(23)
Change in fair value	(227)	-	(227)
Effect from translation into presentation currency	(63)	-	(63)
31 March 2022 (unaudited)	681	2	683

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

	Wheat	Grasses	Total
31 December 2020 (audited)	10 193	-	10 193
Capitalized expenses (harvest 2021)	3 132	32	3 164
Change in fair value (harvest 2021)	3 395	-	3 395
Effect from translation into presentation currency	163	-	163
31 March 2021 (unaudited)	16 883	32	16 915
31 December 2021 (audited)	15 785	-	15 785
Capitalized expenses (harvest 2022)	2 633	9	2 642
Change in fair value (harvest 2022)	2 487	-	2 487
Effect from translation into presentation currency	(1 188)	-	(1 188)
31 March 2022 (unaudited)	19 717	9	19 726

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 1Q2022 and 1Q2021.

Description	Fair value as at 31 March 2022	Valuation technique	Unobservable inputs	Range of unobservable inputs	Relationship of unobservable inputs to fair value
			Milk yield - kg per cow	6 600 per year	The higher the milk yield, the higher the fair value
Cattle	1 861	Discounted cash flows	Milk price	USD 0,33 per liter	The higher the market price, the higher the fair value
			Discount rate	18,3%	The higher the discount rate, the lower the fair value
		Discounted cash flows	Crops yield - tonnes per hectare	5,8	The higher the crops yield, the higher the fair value
Crops in fields - Wheat	19 717		Crops price	USD 212 per ton	The higher the market price, the higher the fair value
			Discount rate	18,3%	The higher the discount rate, the lower the fair value
			Future production cost	USD 268 per ha	The higher the future production cost, the lower the fair value

24 Trade accounts receivable, net

	Note	31 March 2022	31 December 2021	31 March 2021
		Unaudited	Audited	Unaudited
Trade accounts receivable		191	336	157
Allowances for accounts receivable	26	(51)	(55)	(10)
		140	281	147

25 Prepayments and other current assets, net

	Note	31 March 2022	31 December 2021	31 March 2021
		Unaudited	Audited	Unaudited
Prepayments and other non-financial assets:
VAT for reimbursement		7 929	7 254	6 173
Advances to suppliers		7 292	3 297	909
Allowances for advances to suppliers	26	(56)	(61)	(15)
		15 165	10 490	7 067
Other financial assets:
Non-bank accommodations interest free		472	494	325
Allowances for non-bank accommodations interest free	26	(5)	(6)	-
Other accounts receivable		557	394	498
Allowances for other accounts receivable	26	(63)	(67)	(38)
		961	815	785
		16 126	11 305	7 852

26 Changes in allowances made

	Note	31 March 2022	31 December 2021	31 March 2021
		Unaudited	Audited	Unaudited
Allowances for trade accounts receivable	24	(51)	(55)	(10)
Allowances for advances to suppliers	25	(56)	(61)	(15)
Allowances for non-bank accommodations interest free	25	(5)	(6)	-
Allowances for other accounts receivable	25	(63)	(67)	(38)
Allowances for prepayments for property, plant and equipment		(15)	(16)	-
		(190)	(205)	(63)

The movements of the allowances were as follows:

	Note	For the three months ended 31 March 2022	For the three months ended 31 March 2021
		Unaudited	Unaudited
As at the beginning of the period		(205)	(63)
Accrual	12	(0)	(16)
Use of allowances		-	16
Reverse of allowances		-	1
Effect from translation into presentation currency		15	(1)
As at the end of the period		(190)	(63)

27 Cash and cash equivalents

	Currency	31 March 2022	31 December 2021	31 March 2021
Cash in bank and hand	USD	17 462	5 438	28 808
Cash in bank and hand	UAH	15 058	23 291	16 078
Cash in bank and hand	EUR	882	88	157
Cash in bank and hand	PLN	1	13	26
		33 403	28 830	45 069

There were no restrictions on the use of cash and cash equivalents during the reporting periods.

28 Equity

Share capital

IMC S.A. has one class of ordinary shares. The number of authorized, issued and fully paid shares is 33 178 000 as at 31 March 2022, 31 December 2021 and 31 March 2021. All shares have equal voting rights. Par value of one share is USD 0,0018 (EUR 0,0018).

		31 March 2022		31 December 2021		31 March 2021
	Unaudited		Audited		Unaudited
	%	Amount	%	Amount	%	Amount
AGROVALLEY LIMITED	81	48	81	48	80	47
Other shareholders (each one less than 5% of the share capital)	19	11	19	11	20	12
	100	59	100	59	100	59

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

	For the three	For the three
Number of authorized, issued and fully paid shares	months ended	months ended
	31 March 2022	31 March 2021
As at the beginning of the period	33 178 000	33 178 000
Changes for the period	-	-
As at the end of the period	33 178 000	33 178 000

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 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.

Revaluation reserve

The fair value of Group's property, plant and equipment has been measured as at 31 December 2020, 2017, 2015, 2010, 2009 by an independent appraiser. The related revaluation surplus was recognized in equity:

• as at 31 December 2009 USD 14 766 thousand was initially recognized in equity;
• as at 31 December 2010 USD 4 326 thousand was additionally recognized as increase in revaluation reserve;
• as at 31 December 2015 USD 40 390 thousand was additionally recognized as increase in revaluation reserve;
• as at 31 December 2017 USD 22 659 thousand was additionally recognized as increase in revaluation reserve;
• as at 31 December 2020 USD 5 265 thousand was additionally recognized as increase in revaluation reserve.

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).

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.

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 provided that the Company succeeds to receive dividend payment waivers from its creditors.

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).

On 14 September 2018 the Company paid the interim dividend to the Company's shareholders for an aggregate amount of EUR 11 280 520 (EUR 0.34 per share).

On 29 August 2019 the Company paid the interim dividend to the Company's shareholders for an aggregate amount of EUR 14 930 100 (EUR 0.45 per share).

On 28 August 2020 the Company paid the interim dividend to the Company's shareholders for an aggregate amount of EUR 5 972 040 (EUR 0.18 per share).

On 03 June 2021 the Company paid the interim dividend to the Company's shareholders for an aggregate amount of EUR 20 570 360 (EUR 0.62 per share).

On 30 November 2021 the Company paid the interim dividend to the Company's shareholders for an aggregate amount of EUR 5 308 480 (EUR 0.16 per share).

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.

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.

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.

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.

Options granted under the Plan are the following:

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

29 Long-term loans and borrowings

	Currency	31 March 2022	31 December 2021	31 March 2021
		Unaudited	Audited	Unaudited
Secured
Long-term bank loans	USD	9 604	6 771	8 546
Current portion of long-term bank loans	USD	(2 996)	(2 247)	(2 898)
Total long-term loans and borrowings		6 608	4 524	5 648

Essential terms of credit contracts

	Year of maturity	Currency	Nominal interest rate	31 March 2022 Unaudited
Creditor
				Long-term liabilities	Including current portion
Ukrainian bank	2023	USD	5,00%	542	542
Ukrainian bank	2024	USD	4,90%	849	523
Ukrainian bank	2026	USD	4,98%	2 544	1 111
Ukrainian bank	2026	USD	3,70%	2 461	820
Ukrainian bank	2026	USD	2,40%	3 208	-
				9 604	2 996

		Currency	Nominal interest rate	31 December 2021 Audited
	Year of maturity
Creditor				Long-term liabilities	Including current portion
Ukrainian bank	2023	USD	5,00%	610	407
Ukrainian bank	2024	USD	4,90%	915	392
Ukrainian bank	2026	USD	4,98%	2 683	833
Ukrainian bank	2026	USD	3,70%	2 563	615
				6 771	2 247

	Year of maturity	Currency	Nominal interest rate	31 March 2021 Unaudited
Creditor
				Long-term liabilities	Including current portion
Ukrainian bank	2021	USD	4,75%	651	651
Ukrainian bank	2023	USD	5,00%	813	407
Ukrainian bank	2024	USD	4,90%	1 111	392
Ukrainian bank	2026	USD	4,98%	3 100	833
Ukrainian bank	2026	USD	3,70%	2 871	615
				8 546	2 898

Long-term loans outstanding were repayable as follows:

	31 March 2022	31 December 2021	31 March 2021
	Unaudited	Audited	Unaudited
Within one year	2 996	2 247	2 898
In the second to fifth year inclusive	6 608	4 524	5 648
	9 604	6 771	8 546

The Group has committed to comply with loans covenants.

As at 31 March 2022, 31 December 2021 and 31 March2021 the Group was in compliance with all loans covenants.

30 Short-term loans and borrowings

	Currency	31 March 2022	31 December 2021	31 March 2021
		Unaudited	Audited	Unaudited
Secured
Short-term bank loans	USD	26 000	26 000	26 000

Essential terms of credit contracts

		Nominal	31 March 2022
Creditor	Currency	interest rate	Unaudited
Ukrainian bank	USD	2,75%	10 000
Ukrainian bank	USD	2,70%	5 000
Ukrainian bank	USD	2,70%	5 000
Ukrainian bank	USD	2,90%	5 000
Ukrainian bank	USD	2,90%	1 000
			26 000

		Nominal	31 December 2021
Creditor	Currency	interest rate	Audited
Ukrainian bank	USD	2,75%	10 000
Ukrainian bank	USD	2,70%	5 000
Ukrainian bank	USD	2,70%	5 000
Ukrainian bank	USD	2,90%	5 000
Ukrainian bank	USD	2,90%	1 000
			26 000

		Nominal	31 March 2021
Creditor	Currency	interest rate	Unaudited
Ukrainian bank	USD	3,85%	10 000
Ukrainian bank	USD	3,95%	5 000
Ukrainian bank	USD	3,95%	5 000
Ukrainian bank	USD	3,80%	4 100
Ukrainian bank	USD	3,80%	1 900
			26 000

31 Other current liabilities and accrued expenses

	31 March 2022	31 December 2021	31 March 2021
	Unaudited	Audited	Unaudited
Other liabilities:
Advances from clients	9 303	10 487	5 664
Other accounts payable:
Wages, salaries and related charges payable	14	1 052	1 072
Accruals for unused vacations	918	1 095	812
Interest payable on bank loans	118	73	96
Accounts payable for non-current tangible assets	69	254	76
Accruals for audit services	67	52	78
Taxes payable	153	66	89
Other accounts payable	24	32	19
	1 363	2 624	2 242
Total other current liabilities and accrued expenses	10 666	13 111	7 906

32 Related party disclosures

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;

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, except with key management personnel.

Remuneration of key management personnel was as follows:

	For the three months ended 31 March 2022	For the three months ended 31 March 2021
	Unaudited	Unaudited
Wages and salaries	204	208
Directors fees	106	106
Related charges	11	11
	321	325
The average number of employees, persons	6	6

33 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.

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:

• Crop farming a segment, which deals with cultivation and sale of such basic agricultural crops as corn and wheat;
• Dairy farming 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;
• Elevators and warehouses a segment which deals with storage and processing of agricultural produce.

Information on business segments for the three months ended 31 March 2022 was as follows:

	Crop farming	Dairy farming	Elevators and warehouses	Unallocated	Total
Revenue	71 315	214	1 080	-	72 609
Intra-group elimination	(33 623)	-	(1 016)	-	(34 639)
Revenue from external buyers	37 692	214	64	-	37 970
Gain from changes in fair value of biological assets and agricultural produce, net	2 487	(709)	-	-	1 778
Cost of sales	(37 408)	(128)	(24)	-	(37 560)
Gross income	2 771	(623)	40	-	2 188
Administrative expenses	-	-	-	(2 660)	(2 660)
Selling and distribution expenses	-	-	-	(4 598)	(4 598)
Other operating income	-	-	-	100	100
Other operating expenses	-	-	-	(703)	(703)
Write-offs of property, plant and equipment	-	-	-	-	-
Operating income of a segment	2 771	(623)	40	(7 861)	(5 673)
Financial expenses, net	-	-	-	110	110
Effect of lease of right-of-use assets	-	-	-	(1 781)	(1 781)
Foreign currency exchange (loss)/gain, net	-	-	-	(2 760)	(2 760)
Profit before tax	2 771	(623)	40	(12 292)	(10 104)
Income tax expenses, net	-	-	-	(563)	(563)
Net profit	2 771	(623)	40	(12 855)	(10 667)

	Crop farming	Dairy farming	Elevators and warehouses	Unallocated	Total
Other segment information:
Depreciation and amortisation	4 953	18	576	-	5 547
Additions to non-current assets:
Property, plant and equipment	538	-	29	-	567
Right-of-use assets	3 231	-	-	-	3 231

Information on business segments for the three months ended 31 March 2021 was as follows:

	Crop farming	Dairy farming	Elevators and	Unallocated	Total
			warehouses
Revenue	110 192	412	1 142	-	111 746
Intra-group elimination	(52 124)	-	(1 050)	-	(53 174)
Revenue from external buyers	58 068	412	92	-	58 572
Gain from changes in fair value of biological assets and agricultural produce, net	3 395	616	-	-	4 011
Cost of sales	(50 325)	(348)	(617)	-	(51 290)
Gross income	11 138	680	(525)	-	11 293
Administrative expenses	-	-	-	(2 574)	(2 574)
Selling and distribution expenses	-	-	-	(6 120)	(6 120)
Other operating income	-	-	-	1 263	1 263
Other operating expenses	-	-	-	(663)	(663)
Write-offs of property, plant and equipment	-	-	-	(19)	(19)
Operating income of a segment	11 138	680	(525)	(8 113)	3 180
Financial expenses, net	-	-	-	(252)	(252)
Effect of lease of right-of-use assets	-	-	-	(1 510)	(1 510)
Foreign currency exchange (loss)/gain, net	-	-	-	1 031	1 031
Profit before tax	11 138	680	(525)	(8 844)	2 449
Income tax expenses, net	-	-	-	(1 035)	(1 035)
Net profit	11 138	680	(525)	(9 879)	1 414
Other segment information:
Depreciation and amortisation	4 878	33	766	-	5 677
Additions to non-current assets:
Property, plant and equipment	3 285	-	853	-	4 138
Right-of-use assets	51 247	-	-	-	51 247

34 Subsequent events

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 272 thousand.

Loans and borrowings are received in the amount of USD 3 209 thousand.

VAT for reimbursement is received in the amount of USD 849 thousand.

At the end of the April 2022 the Group has started a spring sowing campaign. The company was provided with all necessary agricultural machinery and inputs (seeds, fertilizers, plant protection products, fuel) for the projected sown areas. On 15 May 2022 the most difficult spring sowing in the entire 15-year history of IMC company was completed. A total of 19.2 thousand hectares of sunflower and 50.2 thousand hectares of corn were sown. Given the 18.4 thousand hectares of winter wheat sown in the fall of 2021, as of today 73% of the Company's land bank is sown. The rest of the lands in the Chernihiv region were under active hostilities, so the area is currently being inspected for explosives (mines, blind artillery and mortar shells, missile remnants, etc) and we plan to return them to production in the fall. IMC enterprises have started preparations for the winter wheat harvesting, which will take place in the summer of 2022. We are repairing and preparing the relevant agricultural machinery for field works and preparing elevators for the grain harvest of 2022.

The company together with its customers (international grain traders) and with the support of the Government of Ukraine is trying to develop alternative logistics chains for grain exports through seaports of other neighboring countries. Through the efforts of the IMC team grain export is gradually resuming and the first shipments were made in the middle of May 2022.

There were no other material events after the end of the reporting date, which have a bearing on the understanding of the financial statements.