Agroton Public Limited

Annual / Quarterly Financial Statement • Feb 27, 2025

REPORT AND SEPARATE FINANCIAL STATEMENTS 31 December 2021

REPORT AND SEPARATE FINANCIAL STATEMENTS 31 December 2021

CONTENTS	PAGE
Board of Directors and other officers	1
Declaration of the members of the Board of Directors and the Company official responsible for the preparation of the financial statements	2
Management Report	3 - 6
Independent auditor's report	7 - 9
Statement of profit or loss and other comprehensive income	10
Statement of financial position	11
Statement of changes in equity	12
Cash flow statement	13
Notes to the separate financial statements	14 - 36

BOARD OF DIRECTORS AND OTHER OFFICERS

Board of Directors:	Iurii Zhuravlov (Chief Executive Officer) Tamara Lapta (Deputy Chief Executive Officer) Larysa Orlova (Chief Financial Officer) Borys Supikhanov (Non-Executive Director) Volodymyr Kudryavtsev (Non-Executive Director)
Company Secretary:	Inter Jura Cy (Services) Limited
Independent Auditors:	Exsus Ltd Chartered Accountants 12, Mykinon Street Office 11, 1st Floor, LAVINIA COURT, 1065, Nicosia, Cyprus
Legal Advisers:	K. Chrysostomides & Co LLC
Registered office:	1 Lampousas Street 1095 Nicosia Cybrus
Registration number:	HE255059

1

DECLARATION OF THE MEMBERS OF THE BOARD OF DIRECTORS AND THE COMPANY OFFICIAL RESPONSIBLE FOR THE PREPARATION OF THE FINANCIAL STATEMENTS

In accordance with article 9(3)(c) and (7) of the Transparency Requirements (Securities Listed for Trading on a Regulated Market) Law of 2007 (the "Law"), as amended from time to time, we, the Members of the Board of Directors and the Company official responsible for the financial statements of Agroton Public Limited (the "Company") for the year ended 31 December 2021, confirm that to the best of our knowledge:

a) the annual financial statements presented on pages 10 to 36:

i) have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union and the provisions of article (9), section (4) of the Law, and

ii) give a true and fair view of the assets and liabilities, the financial position and the profits or losses of Agroton Public Limited and of the entities included in the financial statements, as a whole and

b) the Management Report provides a fair review of the developments and performance of the business as well as the position of Agroton Public Limited, as a whole, together with a description of the major risks and uncertainties that they face.

Members of the Board of Directors:

DocuSigned by:
Iurii Zhuravlov = Bocustomed by:
BC9343FAC070418 Tamara Lapta Donnailing of the prough a
Larysa Orloval arysa 198888888888888999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999
Borys Supikhanov Borys Supinnanova Dorns Dorns Docurismed by: Volodymyr Kudryavits Coron 191486443E
lodymur kin

Company official responsible for the financial statements of the Company for the year ended 31 December 2021: -DocuSigned by:

Nicosia, 22 May 2024

MANAGEMENT REPORT

The Board of Directors of Agroton Public Limited (the "Company") presents to the members its Annual Report together with the audited financial statements of the Company for the year ended 31 December 2021.

Incorporation

The Company Agroton Public Limited was incorporated in Cyprus on 21 September 2009 as a private limited liability company under the provisions of the Cyprus Companies Law, Cap. 113. The Company was listed at the main market of Warsaw Stock Exchange on 8 November 2010.

Principal activities

The principal activities of the Company, which are unchanged from last year, are those of an investment holding company and the provision of financing to related parties. The Company is the holding company of a group of companies of agriculture producers in Ukraine. The principal activities of the Group which remained the same as in the previous year, are grain and oil crops growing, agricultural products storage and sale, cattle breeding (milk cattle-breeding, poultry farming) and milk processing. The poultry farming business has been temporarily abandoned due to the military clashes and armed conflict in Eastern Ukraine.

Examination of the development, position and performance of the activities of the Company

The current financial position as presented in the financial statements is not considered satisfactory and the Board of Directors is making an effort to reduce the Company losses.

Principal risks and uncertainties

The principal risks and uncertainties faced by the Company are disclosed in notes 6, 7 and 20 of the separate financial statements.

On 24 February 2022, Russia launched a military operation in Ukraine. Many governments are taking increasingly stringent measures against Russia and Belarus. These measures have already slowed down the economies both in Cyprus but globally as well with the potential of having wider impacts on the respective economies as the measures persist for a greater period of time. The conflict may have serious consequences on the Cyprus economy and also worldwide, which are difficult to precisely estimate. The moment is the rise of inflation, the uncertainty mainly about tourism and financial services and the price of fuel, which will affect household incomes and business operating costs.

Whilst management believes it is taking appropriate measures to support the sustainability of the Group's business in the current circumstances, a continuation of the current unstable business environment could negatively affect the Group's results and financial position in a manner not currently determinable. These consolidated financial statements reflect management's current assessment of the Ukrainian business environment on the operations and the financial position of the Group. The future business environment may differ from management's assessment.

Future developments of the Company

The Board of Directors does not expect any significant changes or developments in the operations, financial position and performance of the Company in the foreseeable future

Branches

The Company does not maintain any branches.

Financial Results

The Company's results for the year are set out on page 10. The net profit for the year attributable to the owners of the Company amounted to US\$1,609,308 (2020: net loss US\$1,403,701). On 31 December 2021 the total assets of the Company were US\$85,819,059 (2020: US\$81,035,970) and the net assets of the Company were US\$3,783,692 (2020: US\$2,174,384).

Dividends

The Board of Directors does not recommend the payment of a dividend.

Share capital

There were no changes in the share capital of the Company during the year under review.

MANAGEMENT REPORT

The Company lost over 50% of its issued share capital during the reporting period. According to the provisions of Section 169F of the Companies Law, Cap. 113, the Board of Directors is expected to convene an extraordinary general meeting in order to consider whether the Company should continue its operations for the achievement of its objectives or take any other measures to the contrary.

Statement on Corporate Governance

The Board of Directors has adopted the Code of Corporate Governance (the "Code") of the Warsaw Stock Exchange ("WSE") which is available in the WSE website.

At present, the Corporate Governance Code is not fully implemented. There are specific provisions of the Code which cannot be adopted since they are either contrary to and/or do not accord with the provisions of the Articles of Association of the Company, or they cannot be adopted due to the recent developments in Eastern Ukraine. The Board of Directors will endeavour to remedy these as soon as practicable.

The Board of Directors ensures through effective internal audit and risk management procedures the collection of the necessary items for the preparation of the periodic reporting required for listed companies.

The Company is governed by the Board of Directors. Companies formed under the Cyprus Companies Law, Cap. 113, do not have supervisory board and management board. Cyprus companies have a Board of Directors, members of which are appointed to fill certain executive positions. The management of the business and the conduct of the affairs of the Company are vested in the Board of Directors. The Board of Directors comprises five members, three of which are non-independent and the remaining two are independent. This is in compliance with the provisions of the Articles of Association of the Company, which requires that the Board of Directors comprise by at least two Directors, two of which shall be independent.

Directors are appointed at general meetings. There is no requirement in the Articles of Association for the retirement of Directors by rotation, thus all Directors continue in office, unless they resign or following an ordinary resolution from the Company shareholders.

The Company has an Audit Committee and a Remuneration Committees comprise two members, both of which are non-executive. Analysis of their responsibilities is disclosed separately in this report.

No benefits or emoluments were paid to Directors by the Company.

The interest in the Company's share capital held directly by each member of the Board of Directors at 31 December 2021 and 31 December 2020 are disclosed below.

The owners holding directly or indirectly more than 5% interest in the Company's share capital at 31 December 2021 and at 31 December 2020 are disclosed below.

There are currently no shares in issue holding special or limited rights.

The Board of Directors can proceed with the issue of shares following an ordinary resolution from the Company owners. For the repurchase of the Company shares a special resolution from the Company's owners is required, inaccordance with the provisions of Section 57 of Cyprus Companies Law.

The Report on Corporate Governance has been prepared in accordance with the provisions of the Code and includes the above mentioned explanations, as well as the information required by the relevant Article of the Directive.

Owners holding more than 5% of the Company's share capital

The owners holding directly or indirectly more than 5% interest in the Company's share capital at 31 December 2021 and at 31 December 2020 were as follows:

MANAGEMENT REPORT

	31 December 2021	31 December 2020
	0/0	0/0
Iurii Zhuravlov	77,77	77,77
Other	22,23	22,23

Board of Directors

The members of the Company's Board of Directors as at 31 December 2021 and at the date of this report are presented on page 1. All of them were members of the Board of Directors throughout the year ended 31 December 2021.

In accordance with the Company's Articles of Association all Directors presently members of the Board continue in office.

There were no significant changes in the assignment of responsibilities and remuneration of the Board of Directors.

Audit committee and remuneration committee

The Directors are responsible for formulating, reviewing and its subsidiary companies strategies, budgets, certain items of capital expenditures and senior personnel appointments. Being a company listed on the Warsaw Stock Exchange, the Directors have established audit and remuneration committees to improve corporate governance.

The Audit Committee and Remuneration Committee, were established on 4 May 2010 both of which were in forceduring the year ended 31 December 2021 and continued in force at the date of this report.

The Audit Committee assists the Company's Board of Directors its responsibilities with regard to financial reporting, external and internal audits and controls, including reviewing the annual consolidated financial statements, reviewing and monitoring the extent of the non-audit work undertaken by external auditors, advising onthe appointment of external auditors and reviewing the effectiveness of the internal audit activities, internal controls and risk management systems. The ultimate responsibility for reviewing and approving the annual consolidated financial statements and the half yearly financial statements with the Board of Directors. The Audit Committee of the Company, comprising of Mr. Borys Supikhanov and Mr. Volodymyr Kudryavstev and is chaired byMr. Borys Supikhanov.

The Remuneration Committee assists the Board of Directors its responsibilities in relation to remuneration, including making recommendations to the Board of Directors and/or the general meeting of the shareholders of the Company on the policy on executive remuneration, determining the individual remuneration and benefits package of each of the Executive Directors and recommending and monitoring the remuneration of senior management below Board level. The Remuneration Committee of the Company, comprising of Mr. Borys Supikhanov and Mr. Volodymyr Kudryavtsev (both Non-Executive Directors), and is chaired by Mr. Borys Supikhanov and sets and review the scale and structure Directors' remuneration packages, including share options and the terms of their service contracts.

Events after the reporting period

Any significant events that occurred after the end of the reporting period are described in note 24 of the separate financial statements.

Related party transactions

Disclosed in note 21 of the financial statements.

MANAGEMENT REPORT

Independent Auditors

The Independent Auditors, Exsus Ltd, have expressed their willingness to continue in office and a resolution giving authority to the Board of Directors to fix their remuneration will be proposed at the Annual General Meeting.

By order of the Board of Directors,

-DocuSigned by: larysa Orlova

Lary35f69788995F4BE... Director

Nicosia, 22 May 2024

Independent Auditor's Report

To the Members of Agroton Public Limited

Report on the Audit of the Separate Financial Statements

Opinion

We have audited the separate financial statements of parent company Agroton Public Limited (the "Company"), which are presented in pages 10 to 36 and comprise the statement of financial position as at 31 December 2021, and the separate statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes of the separate financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying separate financial statements give a true and fair view of the financial position of the Company as at 31 December 2021, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113 relating to separate financial statements.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Separate Financial Statements" section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) together with the ethical requirements that are relevant to our audit of the separate financial statements in Cyprus, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

We have determined that there are no key audit matters to communicate in our report.

Other information

The Board of Directors is responsible for the other information comprises the information included in the Management Report, but does not include the separate financial statements and our auditor's report thereon.

Our opinion on the separate financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

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

With regards to the management report, our report is presented in the "Report on other legal and regulatory requirements" section.

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Independent Auditor's Report (continued)

To the Members of Agroton Public Limited

Report on Other Legal Requirements

Requirements of Article 10(2) of the EU Regulation 537/2014

1. Appointment of the Auditor and Period of Engagement

We were appointed as auditors of the General Meeting of the Company's members on 21 May 2024. Our appointment has been renewed annually by shareholder resolution representing a total period of uninterrupted engagement appointment of 3 years covering the periods ended 31 December 2021.

2. Consistency of the Additional Report to the Audit Committee

We confirm that our audit opinion on the separate financial statements expressed in this report is consistent with the additional report to the Audit Company, which we issued on 22 May 2024 in accordance with Article 11 of the EU Regulation 537/2014.

3. Provision of Non-audit Services

We declare that no prohibited non-audit services referred to in Article 5 of the EU Regulation 537/2014 and Section 72 of the Auditors Law of 2017 were provided. In addition, there are no non-audit services which were provided by us to the Company and which have not been disclosed in the separate financial statements or the Management Report.

Other Legal Requirements

Pursuant to the additional requirements of the Auditors Law of 2017, we report the following:

• In our opinion, based on the work undertaken in the course of our audit, the Management Report has been prepared in accordance with the requirements of the Cyprus Companies Law, Cap 113, and the information given is consistent with the separate financial statements.
• In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the Management Report. We have nothing to report in this respect.

Other Matter

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Section 69 of the Auditors Law of 2017 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.

We have reported separately on the consolidated financial statements of the Company and its subsidiaries for the year ended 31 December 2021. The opinion in that report is qualified.

DocuSigned by:

9413E438F49D495. Avraam Kapiri Certified Public Accountant and Registered Auditor for and on behalf of Exsus Ltd Chartered Accountants

Nicosia, 22 May 2024

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 31 December 2021

	Note	2021 US\$	2020 ાટિક
Loan interest income Net fair value (losses)/gains on financial assets at fair value through profit		2.014.877	3.025.472
or loss	14	(620.410)	439.133
Other operating income		206.875	206.607
Interest expense Loss from sales of financial assets at fair value through profit or loss		(3.096.105) (4.160)	(3.096.105)
Gross (loss)/profit		(1.498.923)	575.107
Administration expenses Net impairment loss on financial assets	8 6.3	(96.948) 3.304.146	(105.484) (1.662.606)
Operating profit/(loss)		1.708.275	(1.192.983)
Net finance costs	9	(19.853)	(90.641)
Profit/(loss) before tax		1.688.42	(1.283.624)
Tax	10	(79.114)	(120.077)
Net profit/ (loss) for the year		1.609.308	(1.403.701)
Other comprehensive income
Total comprehensive income for the year		1.609.308	(1.403.701

The notes on pages 14 to 36 form an integral part of these separate financial statements.

STATEMENT OF FINANCIAL POSITION

31 December 2021

		2021	2020
	Note	US\$	ાટિક
ASSETS
Non-current assets
Investments in subsidiaries	11	4.818	4.818
Loans receivable	12	13.729.610	877.455
		13.734.428	882.273
Current assets
Receivables	13	64.510	66.525
Loans receivable	12	44.730.333	41.973.458
Financial assets at fair value through profit or loss Cash and cash equivalents	14 15	14.519.110 12.770.678	15.137.685 22.976.029
		72.084.631	80.153.697
Total assets		85.819.059	81.035.970
EQUITY AND LIABILITIES
Equity
Share capital	16	661.123	661.128
Share premium	16	88.531.664	88.531.664
Accumulated losses		(85.409.100)	(87.018.408)
Total equity		3.783 692	2.174.384
Non-current liabilities
Borrowings	17	81.433.218	78.337.113
		81.433.218	78.337.113
Current liabilities
Trade and other payables	18	28,284	29.722
Current tax liabilities	19	573.865	494.751
		602.149	524 473
Total liabilities		82.035367	78.861.586
Total equity and liabilities		85.819.059	81.035.970

On 22 May 2024 the Board of Directors of Agroton Public Limited authorised these separate financial statements for issue.

-DocuSigned by:

larysa Orlova 4AE2CD35B05F4BE・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

Larysa Orlova Director

—DocuSigned by: Tamara (apta -7680AAAAG4AD47F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tamara Lapta Director

The notes on pages 14 to 36 form an integral part of these separate financial statements.

STATEMENT OF CHANGES IN EQUITY

31 December 2021

	Share capital પાડદ	Share premium uss	Accumula- ted losses use	Ilotal પાટફ
Balance at 1 January 2020			661.128 88.531.664 (85.614.707) 3.578.085
Comprehensive income Net loss for the year			(1.403.701) (1.403.701)
Balance at 31 December 2020/ 1 January 2021			661.128 88.531.664 (87.018.408)	2.174.384
Comprehensive income Net profit for the year			1.609.308	1.609.308
Balance at 31 December 2021		661.128 88.531.664 (85.409.100)		3.783.692

In accordance with the Cyprus Companies Law, Cap. 113, Section 55 (2) the share premium reserve can only be used by the Company in (a) paying up unissued shares of the Company to be issued to members of the Company as fully paid bonus shares; (b) writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the Company; and (c) providing for the premium payable on redemable preference shares or of any debentures of the Company.

Companies which do not distribute 70% of their profits after tax, as defined by the Special Contribution for the Defence of the Republic Law, during the two years after the year of assessment to which the profits refer, will be deemed to have distributed this amount as dividend. Special contribution for defence at 17% will be payable on such deemed dividend to the extent that the ultimate owners at the end of two years from the end of the year of assessment to which the profits refer are both Cyprus domicled. The amount of this deemed dividend distribution is reduced by any actual dividend paid out of the relevant year at any time. This special contribution for defence is paid by the company for the owners.

The notes on pages 14 to 36 form an integral part of these separate financial statements.

CASH FLOW STATEMENT 31 December 2021

		2021	2020
CASH FLOWS FROM OPERATING ACTIVITIES	Note	uss	വട്ടു
Profit/(loss) before tax		1.688.422	(1.283.624)
Adjustments for:
Unrealised exchange loss Fair value losses/(gains) on financial assets at fair value through profit or		67	20.240
loss		620.410	(439.133)
(Reversal of impairment)/impairment charge on loans to related parties	21	(3.304.146)	1.662.606
Interest income		(2.014.877)	(3.025.472)
Interest expense	9	3.096.105	3.135.774
Coupon interest		(206.875)	(206.607)
		(120.894)	(136.216)
Changes in working capital:
Decrease in receivables		2.015	137.854
Decrease in trade and other payables		(1.618)	(12.750)
Cash used in operations		(120.497)	(11.112)
Interest received		1.209.993	4.299.019
Net cash generated from operating activities		1.089.496	4.287.907
CASH FLOWS FROM INVESTING ACTIVITIES
Loans granted		(11.500.000)	(3.500.000)
Loans repayments received			16.868.635
Payment for purchase of financial assets at fair value through profit or loss Proceeds from sale / redemption of financial assets at fair value through		(805.995)	(6.162.615)
profit or loss		300.000	500.000
Coupon interest received		211.215	212.274
Net cash (used in)/generated from investing activities		(11.294.780)	7.918.294
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease)/increase in cash and cash equivalents		(10.205.284)	12.206.201
Cash and cash equivalents at beginning of the year		22.976.029	10.769.745
Effect of exchange rate fluctuations on cash held		(67)	83
Cash and cash equivalents at end of the year	15	12.770.678	22.976.029

The notes on pages 14 to 36 form an integral part of these separate financial statements.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

1. Incorporation and principal activities

Country of incorporation

The Company Agroton Public Limited (the "Company") was incorporated in Cyprus on 21 September 2009 as a private limited liability company under the provisions of the Cyprus Companies Law, Cap. 113. The Company was listed at the main market of Warsaw Stock Exchange on 8 November 2010. Its registered office is at 1 Lampousas Street, 1095 Nicosia, Cyprus.

Principal activities

The principal activities of the Company, which are unchanged from last year, are those of an investment holding company and the provision of financing to related parties. The Company is the holding company of a group of companies of aqriculture producers in Ukraine. The Group which remained the same as in the previous year, are grain and oil crops growing, agricultural products storage and sale, cattle breeding (milk cattle-breeding, poultry farming) and milk processing. The poultry farming business has been temporarily abandoned due to the military clashes and armed conflict in Eastern Ukraine.

2. Basis of preparation

The Company has prepared these parent's separate financial statements for compliance with the requirements of the Cyprus Income Tax Law.

The separate financial statements have been prepared in accordance with International Reporting Standards (IFRSs) as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap. 113. The separate financial statements have been prepared under the historical cost convention as modified by the revaluation of, and financial assets and financial liabilities at fair value through profit or loss.

The Company has also prepared consolidated financial statements in accordance with IFRSs for the Company and its subsidiaries (the "Group").

Users of these parent's separate financial statements should read them together with the Group's consolidated financial statements as at and for the year ended 31 December 2021 in order to obtain a proper understanding of the financial position, the financial performance and the cash flows of the Company and the Group.

3. Adoption of new or revised standards and interpretations

As from 1 January 2019, the Company adopted all the following IFRSs and International Accounting Standards (IAS), which are relevant to its operations. The adoption of these Standards did not have a material effect on the financial statements.

4. Significant accounting policies

The principal accounting policies adopted in the preparation of these separate financial statements are set out below. These policies have been consistently applied to all years presented in these separate financial statements unless otherwise stated.

Going concern basis

The financial statements of the Company have been prepared on a going concern basis.

Subsidiary companies

Subsidiaries are entities controlled by the Company. Control exists where the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

4. Significant accounting policies (continued)

Subsidiary companies (continued)

Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as an expense in the period in which the impairment is identified.

Revenue

Recognition and measurement

Revenue represents the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods or services to the customer, excluding amounts collected on behalf of third parties (for example, value-added taxes); the transaction price. The transaction price an amount of variable consideration as a result of rebates/discounts only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Estimations for rebates and discounts are based on the Company's experience with similar contracts and forecasted sales to the customer.

The Company recognises revenue when the parties have approved the contract (in writing, orally or in accordance with other customary business practices ) and are committed to perform their respective obligations, the Company can identify each party's rights and the payment terms for the qoods or services to be transferred, the contract has commercial substance (i.e. the risk, timing or amount of the Company's future cash flows is a result of the contract), it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer and when specific criteria have been met for each of the Company's contracts with customers.

The Company bases its estimates on historical results, taking into consideration the type of transaction and the specifics of each arrangement. In evaluating whether collectability of an amount of consideration is probable, the Company considers only the customer's ability and intention to pay that amount of consideration when it is due.

Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimates are reflected in the statement of profit or loss and other comprehensive income in the period in which the circumstances that give rise to the revision become known by Management.

Identification of performance obligations

The Company assesses whether contracts that involve the provision of a range of goods and/or services contain one or more performance obligations (that is, distinct promises to provide a service) and allocates the transaction price to each performance obligation identified on the basis of its stand-alone selling price. A good or service that is promised to a customer is distinct if the customer can benefit from the good or service, either on its own or together with other resources that are readily available to the customer (that is the good or service is capable of being distinct) and the Company's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (that is, the good or service is distinct within the context of the contract).

Revenue is measured based on the consideration to which the Company expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Company recognises revenue when it transfers control of a product or service to a customer.

Interest income

Interest income is recognised on a time-proportion basis using the effective interest method.

Finance costs

Interest expense and other borrowing costs are charged to profit or loss as incurred.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

4. Significant accounting policies (continued)

Foreign currency translation

(1) Functional and presentation currency

Items included in the Company's financial statements are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in United States Dollars (US\$), which is the Company's functional and presentation currency.

(2) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Translation differences on non-monetary items such as equities held at fair value through profit or loss are reported as part of the fair value gain or loss.

Tax

Current tax liabilities and assets are measured at the amount expected to or recovered from the taxation authorities, using the tax rates and laws that have been enacted, or substantively enacted, by the reporting date.

Dividends

Dividend distribution to the Company's shareholders is recognised in the Company's financial statements in the year in which they are approved by the Company's shareholders.

Financial assets - Classification

The Company classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through OCI or through profit or loss), and
• those to be measured at amortised cost.

The classification and subsequent measurement of debt financial assets depends on: (i) the Company's business model for managing the related assets portfolio and (ii) the cash flow characteristics of the asset. On initial recognition, the Company may irrevocably designate a debt financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI or at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

For investments in equity instruments that are not held for trading, the classification will depend on whether the Company has made an irrevocable election at the of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI). This election is made on an investment hasis.

All other financial assets are classified as measured at FVTPI .

For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).

Financial assets - Recognition and derecognition

All purchases and sales of financial assets that require delivery within the time frame established by regulation or market convention ("regular way" purchases and sales) are recorded at trade date, which is the date when the Company commits to deliver a financial instrument. All other purchases and sales are recognised when the entity becomes a party to the contractual provisions of the instrument.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

4. Significant accounting policies (continued)

Financial assets - Recognition and derecognition (continued)

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

Financial assets - Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss. Fair value at initial recognition is best evidenced by the transaction price. A gain or loss on initial recognition is only recorded if there is a difference between fair value and transaction price which can be evidenced by other observable current market transactions in the same instrument or by a valuation technique whose inputs include only data from observable markets.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Financial assets - impairment - credit loss allowance for ECL

The Company assesses on a forward-looking basis the ECL for debt instruments (including loans) measured at amortised cost and FVOCI and exposure arising from loan commitments and financial quarantee contracts. The Company measures ECL and recognises credit loss allowance at each reporting date. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.

The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of the loss is recognised in the statement of profit or loss and other comprehensive income within "net impairment losses on financial and contract assets. Subsequent recoveries of amounts for which loss allowance was previously recognised are credited against the same line item.

Debt instruments carried at amortised cost are presented in the statement of financial position net of the allowance for ECL. For loan commitments and financial guarantee contracts, a separate provision for ECL is recognised as a liability in the statement of financial position.

For debt instruments at FVOCI, an allowance for ECL is recognised in profit or loss and it affects fair value gains or losses recognised in OCI rather than the carrying amount of those instruments.

The impairment methodology applied by the Company for calculating expected credit losses depends on the type of financial asset assessed for impairment. Specifically:

For trade receivables and contract assets, including tract assets with a significant financing component, and lease receivables the Company applies the simplified approach permitted by IFRS 9, which requires lifetime expected credit losses to be recognised from initial recognition of the financial assets.

For all other financial instruments that are subject to impairment under IFRS 9, the Company applies general approach - three stage model for impairment. The Company applies a three stage model for impairment, based on changes in credit quality since initial recognition. A financial instrument that is not credit-impaired on initial recognition is classified in Stage 1.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

4. Significant accounting policies (continued)

Financial assets - impairment - credit loss allowance for ECL (continued)

Financial assets in Stage 1 have their ECL measured at an amount equal to the portion of lifetime ECL that results from default events possible within the next 12 months or until contractual maturity, if shorter ("12 Months ECL"). If the Company identifies a significant increase in credit risk ("SICR") since initial recognition, the asset is transferred to Stage 2 and its ECL is measured based on ECL on a lifetime basis, that is, up until contractual maturity but considering expected prepayments, if any ("Lifetime ECL"). Refer to note 6, Credit risk section, for a description of how the Company determines when a SICR has occurred. If the Company determines that a financial asset is creditimpaired, the asset is transferred to Stage 3 and its ECL is measured as a Lifetime ECL. The Company's definition of credit impaired assets and definition of default is explained in note 6, Credit risk section.

Additionally the Company has decided to use the low credit risk assessment exemption for investment grade financial assets. Refer to note 6, Credit risk section for a description of how the Company determines low credit risk financial assets.

Financial assets -Reclassification

Financial instruments are reclassified only when the business model for managing those assets changes. The reclassification has a prospective effect and takes place from the start of the first reporting period following the change.

Financial assets - write-off

Financial assets are written-off, in whole or in part, when the Company exhausted all practical recovery efforts and has concluded that there is no reasonable expectation of recovery. The write-off represents a derecognition event. The Company may write-off financial assets that are still subject to enforcement activity when the Company seeks to recover amounts that are contractually due, however, there is no reasonable expectation of recovery.

Financial assets - modification

The Company sometimes renegotiates or otherwise modifies the contractual terms of the financial assets. The Company assesses whether the modification of contractual cash flows is substantial considering, among other, the following factors: any new contractual terms that substantially affect the risk profile of the asset (e.g. profit share or equity-based return), significant change in interest rate, change in the currency denomination, new collateral or credit enhancement that significantly affects the credit risk associated with the asset or a significant extension of a loan when the borrower is not in financial difficulties.

If the modified terms are substantially different, the rights to cash flows from the original asset expire and the Company derecognises the original financial asset and recognises a new asset at its fair value. The date of renegotiation is considered to be the date of initial recognition for subsequent impairment calculation purposes, including determining whether a SICR has occurred. The Company also assesses whether the new loan or debt instrument meets the SPPI criterion. Any difference between the carrying amount of the original asset derecognised and fair value of the new substantially modified asset is recognised in profit or loss, unless the substance of the difference is attributed to a capital transaction with owners.

In a situation where the renegotiation was driven by financial difficulties of the counterparty and inability to make the originally agreed payments, the Company compares the original and revised cash flows to assets whether the risks and rewards of the asset are substantially different as a result of the contractual modification. If the risks and rewards do not change, the modified asset is not substantially different from the original asset and the modification does not result in derecognition. The Company recalculates the gross carrying amount by discounting the modified contractual cash flows by the original effective interest rate, and recognises a modification gain or loss in profit or loss.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

4. Significant accounting policies (continued)

Cash and cash equivalents

For the purpose of the cash flow statement, cash and cash equivalents comprise cash at bank. Cash and cash equivalents are carried at amortised cost because: (i) they are held for collection of contractual cash flows and those cash flows represent SPPI, and (ii) they are not designated at FVTPL.

Classification as financial assets at amortised cost

These amounts generally arise from transactions outside the usual operating activities of the Company. They are held with the objective to collect their contractual cash flows represent solely payments of principal and interest. Accordingly, these are measured at amortised cost using the effective interest method, less provision for impairment. Financial assets at amortised cost are classified as current assets if they are due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current assets.

Financial liabilities - measurement categories

Financial liabilities are initially recognised at fair value and classified as subsequently measured at amortised cost, except for (i) financial liabilities at FVTPL: this classification is applied to derivatives hed for trading (e.g. short positions in securities), contingent consideration recognised by an acquirer in a business combination and other financial liabilities designated as such at initial recognition and (ii) financial guarantee contracts and loan commitments.

A financial liability is derecognised when the liability is discharged or cancelled or expires.

Financial liabilities - Modifications

An exchange between the Company and its original lenders of debt instruments with substantially different terms, as well as substantial modifications of the terms and conditions of existing financial liabilities, are accounted for as an extinquishment of the original financial liability and the recognition of a new financial liability. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. (In addition, other qualitative factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new conversion features attached to the instrument and change in loan covenants are also considered.)

If an exchange of debt instruments or modification of terms is accounted for as an extinquishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.

Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a cumulative catch up method, with any gain or loss recognised in profit or loss, unless the economic substance of the difference in carrying values is attributed to a capital transaction with owners and is recognised directly to equity.

Borrowing costs are interest and other costs that the Company incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premium relating of ancillary costs incurred in connection with the arrangement of borrowings, finance lease charges and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

Borrowing costs that are directly attributable to the acquisition or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use or sale, are capitalised as part of that asset, when it is probable that they will result in future economic benefits to the Company and the costs can be measured reliably.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

4. Significant accounting policies (continued)

Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the statement of financial position.

Share capital

Ordinary shares are classified as equity. The difference between the fair value of the consideration received by the Company and the nominal value of the share capital being issued is taken to the share premium account.

Comparatives

Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current vear.

5. New accounting pronouncements

At the date of approval of these separate financial statements, standards and interpretations were issued by the International Accounting Standards Board which were not yet effective. Some of them were adopted by the European Union and others not yet. The Board of Directors expects that the adoption of these accounting standards in future periods will not have a material effect on the separate financial statements of the Company.

6. Financial risk management

Financial risk factors

The Company is exposed to market price risk, iredit risk, liquidity risk, currency risk and capital risk management arising from the financial instruments it holds. The risk management policies employed by the Company to manage these risks are discussed below:

6.1 Market price risk

The Company is exposed to equity securities price risk because of equity investments held by the Company and classified on the statement of financial position either as fair value through other comprehensive income or at fair value through profit or loss. The Company is not exposed to commodity price risk.

Post-tax profit for the year would increase as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would increase as a result of gains/losses on equity securities classified as fair value through other comprehensive income.

To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company's Board of Directors.

6.2 Interest rate risk

Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Company's income and operating cash flows are substantially independent of changes in market interest rates as the Company has no significant interest-bearing assets. The Company is exposed to interest risk in relation to its non-current borrowings issued at variable rates expose the Company to cash flow interest rate risk. Borrowings issued at fixed rates expose the Company to fair value interest rate risk. The Company's Management monitors the interest rate fluctuations on a continuous basis and acts accordingly.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

6. Financial risk management (continued)

6.2 Interest rate risk (continued)

At the reporting date the interest rate profile of interest- bearing financial instruments was:

	2021	2020
	પાડિક	પિટિક
Fixed rate instruments
Financial assets	62.228.126	49.923.242
Financial liabilities	(81.433.218)
	(19.205.092) (28.413.871)

6.3 Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to meet an obligation. Credit risk arises from [cash and cash equivalents, contractual cash flows of debt investments carried at amortised cost, at fair value through other comprehensive income (FVOCI) and at fair value through profit or loss (FVTPL), favourable derivative financial instruments and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and contract assets as well as lease receivables. Further, credit risk arises from financial guarantees and credit related commitments.]

(i) Risk management

Credit risk is managed on a group basis. For banks and financial institutions, the Company has established policies whereby the majority of bank balances are held with independently rated parties with a minimum rating of ['C'].

If wholesale customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, Management assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. [Individual credit limits and credit terms are set based on the credit quality of the customer in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored. Sales to retail customers are settled in cash or using major credit cards.]

There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors and/or regions.

The Company's investments in debt instruments are considered to be low risk investments. The credit ratings of the investments are monitored for credit deterioration.

These policies enable the Company to reduce its credit risk significantly.

(ii) Impairment of financial assets

The Company has the following types of financial assets that are subject to the expected credit loss model:

• financial assets at amortised cost
• cash and cash equivalents

The impairment methodology applied by the Company for calculating expected credit losses depends on the type of financial asset assessed for impairment. Specifically:

For trade receivables the Company applies the simplified approach permitted by IFRS 9, which requires lifetime expected losses to be recognised from initial recognition of the financial assets.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

6. Financial risk management (continued)

6.3 Credit risk (continued)

(ii) Impairment of financial assets (continued)

For all other financial assets that are subject to impairment under IFRS 9, the Company applies general approach - three stage model for impairment. The Company applies a three-stage model for impairment, based on changes in credit quality since initial recognition. A financial asset that is not credit-impaired on initial recognition is classified in Stage 1. Financial assets in Stage 1 have their ECL measured at an amount equal to the portion of lifetime ECL that results from default events possible within the next 12 months or until contractual maturity, if shorter ("12 Months ECL"). If the Company identifies a significant increase in credit risk ("SICR") since initial recognition, the asset is transferred to Stage 2 and its ECL is measured based on ECL on a lifetime basis, that is, up until contractual maturity but considering expected prepayments, if any ("Lifetime ECL"). If the Company determines that a financial asset is credit-imparred, the asset is transferred to Stage 3 and its ECL is measured as a Lifetime ECL.

Impairment losses are presented as net impairment losses on financial and contract assets within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.

Significant increase in credit risk

The Company considers the probability of default upon initial recognition of the asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the financial asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information. Especially the following indicators are incorporated:

• internal credit rating .
• external credit rating (as far as available)
• actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower's/counterparty's ability to meet its obligations
• actual or expected significant changes in the operating results of the borrower/counterparty ●
• significant increases in credit risk on other financial instruments of the same borrower/counterparty
• significant changes in the value of the collateral supporting the obligation or in the quality of third-party ● guarantees or credit enhancements
• significant changes in the expected performance and behaviour of the borrower/counterparty, including ● changes in the payment status of counterparty in the Company and changes in the operating results of the borrower/counterparty.

Macroeconomic information (such as market interest rates or growth rates) is incorporated as part of the internal rating model. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The Company has identified the GDP and the unemployment rate of the countries in which it sells its goods and services to be the most relevant factors, and accordingly adjusts the historical loss rates based on expected changes in these factors. No significant changes to estimation techniques or assumptions were made during the reporting period.

Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is more than 30 days past due in making a contractual payment.

Low credit risk

The Company has decided to use the low credit risk assessment exemption for investment grade financial assets. Management consider 'low credit risk' for listed bonds to be an investment grade credit rating with at least one major rating agency. Other instruments are considered to be low credit risk when they have a low risk of default and the issuer has a strong capacity to meet its contractual cash flow obligations in the near term.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

6. Financial risk management (continued)

6.3 Credit risk (continued)

(ii) Impairment of financial assets (continued)

Default

A default on a financial asset is when the counterparty fails to make contractual payments within 90 days of when they fall due.

Write-off

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorises a debt financial asset for write off when a debtor fails to make contractual payments greater than 180 days past due. Where debt financial assets have been written off, the Company continues to engage in enforcement activity to recover the receivable due. Where recoveries are made, these are recognised in profit or loss.

The Company's exposure to credit risk for each class of (asset/instrument) subject to the expected credit loss model is set out below:

Loans to related parties

The gross carrying amounts below represent the Company's maximum exposure to credit risk on these assets as at 31 December 2021 and 31 December 2020:

Company internal credit rating	2021	2020
	પાટિક	ાટિટ
Performing	58.459.943	42.850.913
Total	58.459.943 42.850.913

The Company does not hold any collateral as security for any loans to related parties.

There were no significant loans to related parties written off during the year that are subject to enforcement activity,

Cash and cash equivalents

The Company assesses, on a group basis, its exposure to credit risk arising from cash at bank. This assessment takes into account, ratings from external credit rating institutions and internal are not available.

Bank deposits held with banks with investment grade rating are considered as low credit risk.

The gross carrying amounts below represent the Company's maximum exposure to credit risk on these assets as at 31 December 2021 and 31 December 2020:

Company internal credit rating	External credit rating	2021	2020
		પાકિ	પાટિક
Performing	AAA - A	12.770.678	22.975.507
Performing	BBB - B		522
Total		12.770.678

The ECL on current accounts is considered to be approximate to 0, unless the bank is subject to capital controls. The ECL on deposits accounts is calculated by considering published PDs for the rating as per Moody's and an LGD of 40-60% as published by ECB.

The Company does not hold any collateral as security for any cash at bank balances.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

6. Financial risk management (continued)

6.3 Credit risk (continued)

(ii) Impairment of financial assets (continued)

Cash and cash equivalents (continued)

There were no significant cash at balances written off during the year that are subject to enforcement activity.

(iii) Net impairment losses on financial assets recognised in profit or loss

During the year, the following gains/(losses) were recognised in profit or loss in relation to impaired financial assets:

Impairment losses	2021 પાર્ટફ	2020 ાટિક
Impairment charge - loans to related parties Reversal of impairment - loans to related parties	3.304.146	(2.953.861) 1.291.255
Net impairment loss on financial assets		3.304.146 (1.662.606)

6.4 Liquidity risk

Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Company has procedures with the object of minimising such losses such as maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities.

The following tables detail the Company's remaining contractual maturity for its financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The table includes both interest and principal cash flows.

31 December 2021	Carrying amounts US\$	Contractual cash flows US\$	3 months or ess ાટક	3-12 months ાટિક	1-2 years US\$	2-5 years US\$	More than 5 years US\$
Loans from own subsidiaries	81.433.218	81.433.218		81.433.218
		81.433.218 81.433.218		81.433.218
31 December 2020	Carrying amounts ાટિક	Contractual cash flows വടക	3 months or ાંટિક	less 3-12 months ાટિક	1-2 years ાટિર્દ	2-5 years ાટિક	More than 5 years വടക
Trade and other payables Loans from own	4.996	4.996		4.996
subsidiaries	78.337.113	78.337.113 78.342.109 78.342.109			78.337.113 4.996 78.337.113

6.5 Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Company's measurement currency. The Company is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Euro. The Company's Management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

6. Financial risk management (continued)

6.6 Capital risk management

Capital includes equity shares and share premium.

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance. The Company's overall strategy remains unchanged from last year.

Fair value estimation

The carrying amounts and fair values of certain financial assets and liabilities are as follows:

		Carrying amounts	Fair values
	2021	2020	2021	2020
	પાડિક	પાટિક	પારિક	ાટિક
Financial assets
Cash and cash equivalents	12.770.678	22.976.029	12.770.679	22.976.029
Fair value through profit or loss	14.519.110	15.137.685	14.519.110	15.137.685
Financial assets	58.459.943	47.850.913	61.433126	49.133.242
Financial liabilities
Amortised cost
Loans from related parties			(81.433.218) (78.337.113) (81.433.218) (78.337.113)
	4.316.513	2.627.514	7.294.697	8.909.843

The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Company is the current bid price. The appropriate quoted market price for financial liabilities is the current ask price.

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Company uses a variety of methods, such as estimated discounted cash flows, and makes assumptions that are based on market conditions existing at the reporting date.

The nominal value less any estimated credit adjustments for financial assets and liabilities with a maturity of less than one year are assumed to approximate their fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate available to the Company for similar financial instruments.

Fair value measurements recognised in statement of financial position

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

• Level 1 quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2 inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3 inputs for the asset or liability that are not based on observable market data (unobservable . inputs).

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

6. Financial risk management (continued)

Fair value estimation (continued)

Fair value measurements recognised in statement of financial position (continued)

31 December 2021	Level 1 પાટફ	Level 2 પાટિર્ફ	Level 3 પાટિર્ફ	Total US\$
Financial assets Financial assets at fair value through profit or
oss	14.519.110			14.519.110
Loans receivables from related parties			61.438.126	61.438.126
Cash and cash equivalents	12.770.679			12.770.679
lotal	27.289.789		61.438.126	88.777915
Financial liabilities
Loans payable to related parties			(81.433.218)	(81.433.218)
Total			(81.433.218) (81.433.218)
31 December 2020	Level 1	Level 2	l evel 3	Total
	US\$	US\$	US\$	US\$
Financial assets
Financial assets at fair value through profit or loss	15.137.685			15.137.685
Loans receivables from related parties			49.133.242	49.133.242
Cash and cash equivalents	22.976.027			22.976.027
Total	38.113.712		49.133.242	87.246.954
Financial liabilities
Loans payable to related parties			(78.337.113)	(78.337.113)
Total			(78.337.113)	(78.337.113)

7. Critical accounting estimates, judgments and assumptions

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

The Company makes estimates and assumptions concerning the resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Calculation of loss allowance .

When measuring expected credit losses the Company uses reasonable forward looking information, which is based on assumptions for the future movement of different economic drivers and now these drivers will affect each other.

Loss given default is an estimate of the loss arising on default. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, taking into account cash flows from collateral and integral credit enhancements.

Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

7. Critical accounting estimates, judgments and assumptions (continued)

Income taxes

Significant iudgment is required in determining the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Critical judgements in applying the Company's accounting policies

Fair value of financial assets

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Company uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at each reporting date. The fair value of the financial assets at fair value through other comprehensive income has been estimated based on the fair value of these individual assets.

Impairment of investments in subsidiaries .

The Company periodically evaluates the recoverability of investments in subsidiaries whenever indicators of impairment are present. Indicators of impairment include such items as declines in revenues, earnings or cash flows or material adverse changes in the economic or political stability of a particular country, which may indicate that the carrying amount of an asset is not recoverable. If facts and circumstances indicate that investment in subsidiaries may be impaired, the estimated future discounted cash flows associated with these subsidiaries would be compared to their carrying amounts to determine if a write-down to fair value is necessary.

Impairment of loans receivable .

The Company periodically evaluates the recoverability of Ioans receivable whenever indicators of impairment are present. Indicators of impairment include such items as declines in revenues, earnings or cash flows or material adverse changes in the economic or political stability of a particular country in which the borrower operates, which may indicate that the carrying amount of the loan is not recoverable. If facts and circumstances indicate that loans receivable may be impaired future discounted cash flows associated with these loans would be compared to their carrying amounts to determine if a write-down to fair value is necessary.

. Impairment of financial assets

The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Details of the key assumptions and inputs used are disclosed in note 6, Credit risk section.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

8. Administration expenses

	2021	2020
	US\$	വടക
Professional licence fee	1.805
Municipality taxes	415	215
Annual levy	4.23	396
Auditors' remuneration for the statutory audit of annual accounts	2.492	2.700
Accounting fees	12.559	11.968
Legal and professional	367	340
Secretarial fees	1.101	1.019
Registered office fees	1.101	1.019
Irrecoverable VAT	371	4.764
Professional fees	8.971	16.184
Custodian fees	67.338	54.817
Brokerage fees		12.062
	96.948	105.484
9. Finance costs
	2021	2020
	US\$	પાટફ
Net foreign exchange losses	262	29.739
Interest expense		39.669
Sundry finance expenses	19.591	21.233
Finance costs	19.853	90.641
10. Tax
	2021	2020
	US\$	US\$
Corporation tax - current year	79.114	119.481
Corporation tax - prior years		ટેત્રેર
Charge for the year	79.114	120.077

Charge for the year

The tax on the Company's profit before tax differs from theoretical amount that would arise using the applicable tax rates as follows:

2021	2020
ાદિદ	પાટિદ્દ
1.688.422	(1.283.624)
211-053	(160.453)
276 888	112.764
(413.019)	156.646
7.182	10.524
	596
79.114	120.077

The corporation tax rate is 12,5%.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

10. Tax (continued)

Under certain conditions interest income may be subject to defence contribution at the rate of 30% (reduced to 17% as of 1 January 2024). In such cases this interest will be exempt from corporation tax. In certain cases, dividends received from abroad may be subject to defence contribution at the rate of 17%.

Gains on disposal of qualifying titles (including shares, bonds, debentures, rights thereon etc) are exempt from Cyprus income tax.

Under certain conditions interest income may be subject to defence contribution at the rate of 30%. In such cases this interest will be exempt from corporation tax. In certain cases, dividends received from abroad may be subject to defence contribution at the rate of 17%.

11. Investments in subsidiaries

	2021	2020
	પાડિક	ાટિટે
Balance at 1 January	4 31 8	4.818
Balance at 31 December	4.818	4.818

The details of the subsidiaries are as follows:

Name	Country of	Principal activities	2021	2020
	incorporation		Holding	Holding	2021	2020
			0/0	0/0	ાટિક	വടക
"Living" LLC	Ukraine	Agricultural activities	dd go gy	gg gg	4.74 8	4.718
Agroton (BVI) Limited	British Virgin Tslands	Trading in Agriculture products	100	100	100	100
LLC "Lugastan" Ukraine *Note		Owner of land lease rights	gg.gg	gg gg
					4.818	4.818

The Company periodically evaluates the recoverability of investments in subsidiaries of impairment are present. Indicators of impairment include such items as declines in revenues, earnings or cash flows or material adverse changes in the economic or political stability of a particular country, which may indicate that the carrying amount of an asset is not recoverable. If facts and circumstances indicate that investment in subsidiaries may be impaired, the estimated future discounted cash flows associated with these subsidiaries would be compared to their carrying amounts to determine if a write-down to fair value is necessary.

*Note: The Company directly owns 30.92% of LLC "Lugastan" and indirectly controls an additional 69.07% through its subsidiaries, "Living" LLC and Agroton PJSC.

On 20 May 2022, the subsidiary company Agroton (BVI) Limited was liquidated.

12. Loans receivable

Balance at 1 January New loans granted Repayments	2021 USB 42.850.913 11.500.000 (1.209.993)	2020 પાટિક 59.155.701 3.500.000 (21.167.654)
Interest charged Expected Credit Loss Reversal of Expected Credit Loss	3.304.146	3.025.472 (1.662.606)
Balance at 31 December	58.459.943	42.850.913

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

12. Loans receivable (continued)

	2021	2020
	USS	ાટિક
Loans to related parties (Note 21.1)	62.228.126	49.923.242
Loss allowance on loans receivable	(3.768.183)	(7.072.329)
	58.459.943	42.850.913
Less current portion	(44.730.333) (41.973.458)
Non-current portion	13729.610	877.455

The loans are repayable as follows:

	2021	2020
	પાડિક	ાંટિર્દ
Within one year	44.730.333	41.973.458
Between one and five years	13729.610	877.455
	58.459.943	42.850.913

The exposure of the Company to credit risk in relation to loans receivable is reported in note 6 of the separate financial statements.

13. Receivables

	2021	2020
	US\$	വട്ടു
Accrued income	48.173	52.513
Refundable VAT	16.337	14.012
	64.510	66.525

The exposure of the Company to credit risk and impairment losses in relation to receivables is reported in note 6 of the separate financial statements.

14. Financial assets at fair value through profit or loss

	2021 US\$	2020 પાટફ
Listed securities Bank of Cyprus Holdings Plc US Treasury notes Other short term notes	95.511 14.423 599	71.557 15.066.128
	14.519.110	15.137.685
Balance at 1 January Additions Disposals Change in fair value	2021 પાટક 15.137.685 805.995 (804.160) (620.410)	2020 ાટિક 9.174.263 6.024.289 (500.000) 439.133
Balance at 31 December	14.519.110	15.137.685

Bank of Cyprus Shares:

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

14. Financial assets at fair value through profit or loss (continued)

Bank of Cyprus shares, designated at fair value through profit or loss represented equity securities of Bank of Cyprus converted into shares after the decree issued by Central Bank of Cyprus on 29 March 2013. Based on that decree and the measurements for recapitalization of Bank of Cyprus, 47,5% of the uninsured deposits of the affected deposits have been converted into Bank of Cyprus shares.

The Company held 1.591.105 shares with fair value €0,140 cents. In January 2017, the shares in Bank of Cyprus Public Company Limited were exchanged with new shares of Bank of Cyprus Holdings Plc listed in both London Stock Exchange and in Cyprus Stock Exchange with nominal value of €0,10 cents each. As at 31 December 2021 the Company held 79.556 shares in Bank of Cyprus Holdings Plc with fair value €1,060 (2020: €0,733) each.

UBS Switzerland AG and Bank Vontobel AG:

The Company acquired US Treasury bonds and other short-term investment held in both UBS Switzerland AG and Bank Vontobel AG for a total consideration of US\$14.423.599. All instruments are publicly traded, recognizing a fair value loss of US\$644,363 (2020: fair value gain US\$474.823) as presented on the Statement of Profit or loss.

The exposure of the Company to market risk in relation to financial assets is reported in note 6 of the separate financial statements.

15. Cash and cash equivalents

For the purposes of the statement of cash flows, the cash and cash equivalents include the following:

	2021	2020
	USS	ાટિક
Cash at bank		12.770.678 22.976.029
		12.770.678

The exposure of the Company to credit risk and impairment losses in relation to cash and cash equivalents is reported in note 6 of the separate financial statements.

16. Share capital and share premium

Issued and fully paid	Number of shares	Share capital USS	Share premium US\$	Total USB
Balance at 1 January 2020	21.670.000	661.128	88.531.664	89.192.792
Balance at 31 December 2020	21.670.000	661 123	88.531.664	89.192792
Balance at 31 December 2020/ 1
January 2021	21.670.000	661.128	88.531.664	89.197.72
Balance at 31 December 2021	21.670.000	661.128	88.531.664	89,192792

Listing of the Company to the Warsaw Stock Exchange

During the 2010, the Board of Directros of the Company resolved to proceed with the initial public offering of 5.670.000 new ordinary shares of the Company and the application of the entire issued share capital of the Company, including the Offer Shares to trading on the regulated market of the Warsaw Stock Exchange.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

17. Borrowings

	2021 US\$	2020 ાટક
Balance at 1 January Interest accrued	78.337.113 3.096.105	75.241.008 3.096.105
Balance at 31 December	81.433.218	78.337.113
	2021 US\$	2020 ાટિક
Non-current borrowings Loans from own subsidiaries (Note 21.2)	81.433.218	78.337.113
Maturity of non-current borrowings:
	2021 પાટિદ	2020 ાટિદ્દ

The exposure of the Company to liquidity risk in relation to loans and borrowings is reported in note 6 to the financialstatements.

81.433.218

573.865

78.337.113

494.751

18. Trade and other payables

Between two and five years

Accruals Other creditors	2021 US\$ 28,284	2020 വട്ടു 24.726 4.996
	28.284	29.722
19. Current tax liabilities
	2021	2020
	US\$	ાટક
Corporation tax Special contribution for defence	562.036 11.829	482.922 11.829

20. Operating Environment of the Company

The geopolitical situation in Eastern Europe intensified on 24 February 2022 with the commencement of the conflict between Russia and Ukraine. As at the date of authorising these separate financial statements for issue, the conflict continues to evolve as military activity proceeds. In addition to the events on entities that have operations in Russia, Ukraine, or Belarus or that conduct business with their counterparties, the conflict is increasingly affecting economies and financial markets globally and exacerbating ongoing economic challenges.

The European Union as well as United States of America, Switzerland, United Kingdom and other countries imposed a series of restrictive measures (sanctions) against the Russian government, various companies, and certain individuals. The sanctions imposed include an asset freeze and a prohibition from making funds available to the sanctioned individuals and entities. In addition, travel bans applicable to the sanctioned individuals prevents them from entering or transiting through the relevant territories. The Republic of Cyprus has adopted the United Nations and European Union measures. The rapid deterioration of the conflict in Ukraine may as well lead to the possibility of further sanctions in the future.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

20. Operating Environment of the Company (continued)

Emerging uncertainty regarding global supply of commodities due to the conflict between Russia and Ukraine conflict may also disrupt certain global trade flows and place significant upwards pressure on commodity prices and input costs as seen through early March 2022. Challenges for companies may include availability of funding to ensure access to raw materials, ability to finance margin payments and heightened risk of contractual non-performance.

The Israel-Gaza conflict has escalated significantly after Hamas launched a major attack on 7 October 2023. Companies with material subsidiaries, operations, contractual arrangements or joint ventures in the War area might be significantly exposed. Entities that do not have direct exposure to Israel and Gaza Strip are likely to be affected by the overall economic uncertainty and negative impacts on the global economy and major financial markets arising from the war. This is a volatile period and situation, however, the Company is not directly exposed. Management will continue to monitor the situation closely and take appropriate actions when and if needed.

The impact on the Company largely depends on the nature and duration of uncertain and unpredictable events, such as further military action, additional sanctions to ongoing developments by global financial markets.

The financial effect of the current crisis on the global economy and overall business activities cannot be estimated with reasonable certainty at this stage, due to the pace at which the conflict prevails and the high level of uncertainties arising from the inability to reliably predict the outcome.

The event did not exist in the reporting period and is therefore not reflected in the recognition and measurement of the assets and liabilities in the separate financial statements as at 31 December 2021 as it is considered as a nonadjusting event.

The Company has the following exposures in Ukraine, the Russian Federation and Belarus:

• Subsidiaries
• Loans receivables
• Clients
• Supply chain
• Financing .
• Other .

Operating in Russia, Belarus and Ukraine involves some risk of political instability, which may include changes in government, negative policy shifts and civil unrest. Financial and economic sanctions imposed by the global community on certain sectors of the Russian economy as well as businesses and individuals in Russia in the first quarter of 2022, and the counter-measures imposed by Russia on the United States of America, United Kingdom and European Union, may potentially pose a risk to the Company's operations. These factors may have a negative impact on the Company's supply arrangements, capital flows and ability of the Company to secure external financing.

The Company actively monitors political developments on an ongoing basis. However, the macroeconomic situation in Ukraine, Russia and Belarus is out of Management's control. The scope and impact of any new potential sanctions (and any counter-sanctions) is yet unknown, however they might further affect key Russian financial institutions as well as companies operating in the Russian Federation and Belarus. Going concern implications and a description of the impact to the Company's separate financial statements are addressed in note 4.

Management has considered the unique circumstances that could have a material impact on the business operations and the risk exposures of the Company and has concluded that the main impacts on the Company's profitability/liquidity position may arise from:

• interruptions or stoppage of production in affected areas and neighboring countries
• damage or loss of inventories and other assets e.g., buildings in conflict zones in Ukraine
• closure of roads and facilities in affected areas
• disruption in banking systems and capital markets
• supply-chain and travel disruptions in Eastern Europe
• seizure of assets by government authorities
• unavailability of personnel
• reductions in sales and earnings of business in affected areas

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

20. Operating Environment of the Company (continued)

• increased costs and expenditures
• cyberattacks
• restriction on cash balances .
• impairments of financial and non-financial assets .
• delays in planned business expansion .
• increased volatility in the value of financial instrument .
• reduced tourism
• disruption in travel and other leisure activities
• increase in expected credit losses from trade receivables, debt investments and intercompany loans
• failure to meet contractual obligations and breach of loan covenants, triggering of subjective covenants . (e.g., material adverse change clauses), amendments, or waivers in lending agreements, and/or debt default
• volatility/abnormally large changes in equity or debt securities, prices, foreign currency exchange rates, and/or interest rates after 31 December 2021 that will significantly impact the measurement of assets in the next 12 months
• announcing plans of discontinuance of major assets disposals

Management is in the process of reassessing their trading and relevant cash flows using revised assumptions and incorporating downside scenarios in assessing actual and potential financing needs, taking into consideration the main impacts identified above.

From the analysis performed additional liquidity needs/impact on financial covenants have been identified. Management is already negotiating with the financial institutions covenant resets/waivers and has already assessed future measures and alternative sources of financing such as:

• group financial support .
• additional drawdown from existing credit facilities .
• later payment to suppliers .
• factoring of receivables .
• additional financing
• cost cutting measures
• sale of investments

Management will continue to monitor the situation closely and assess/seek additional measures/committed facilities as a fall-back plan in case the crisis becomes prolonged.

21. Related party transactions

The Company is controlled by Mr. Iurri Zhuravlov, who holds directly 85,40% of the Company's share capital. The remaining 14,60% of the shares is widely held.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

21. Related party transactions (continued)

The following transactions were carried out with related parties:

21.1 Loans to related parties (Note 12)

	Terms	2012 US\$	2020 US\$
Private Enterprise Agricultural Production Firm "Agro"	Finance	27.340	437.340
Private Enterprise Agricultural Production Firm "Agro" Private Enterprise Agricultural Production	Finance	46.7/33 032	45.941.026
Firm "Agro" - Loan I Expected Credit loss on loans receivables	Finance	15.267.754 (3.768.183)	3.544.877 (7.072.329)
		58.459.943	42.850.914

During 2010, the Company has entered into several loan agreements with related party Private Enterprise Aqricultural Production Firm "AGRO" for a total amount of US\$ 20.000.000. The loans bear interest at a rate of 10% per annum and expired in 31 July 2014. During 2014 the two parties agreed to postpone the repayment date. As at 31 December 2018, the principal amount of the loans were fully repaid and the balance receivable relates to outstanding interest receivable.

Additionally, during the same period (2010), the Company has entered into several loan agreements with related party Private Enterprise Agricultural Production Firm "Agro" for a total amount of US\$ 65.000.000. The loans bear interest at a rate of 2,5%, 5% and 8% per annum.

The loan I to relared party Private Enterprise Agricultural Production Firm "Agro" was provided with interest 2,50% per annum, and there was a specified repayment date on 31 December 2024.

21.2 Loans from related parties (Note 17)

		20021	2020
	l erms	US\$	വടക
Agroton BVI Limited	Finance	81.433.218 78.337.113
		81.433.218 78.337.113

On 25 July 2011 the Company has entered into a loan agreement with its subsidiary company Agroton BVI Limited amounting to US\$10.000.000. During 2012 the amount of the loan was extended to US\$60.000.000. The loan was originaly provided interest free. From 1 January 2013 onwards the loan bears interest at a rate of 6% per annum and with expiry date on 1 January 2023.

On 3 March 2022, the Company entered into an assignment agreement where the loan due to Agroton (BVI) Limited was assigned to Private Enterprise Agricultural Production Firm "Agro".

22. Contingent liabilities

The Company had no contingent liabilities as at 31 December 2021.

23. Commitments

The Company had no capital or other commitments as at 31 December 2021.

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 31 December 2021

24. Events after the reporting period

As explained in note 20 the geopolitical situation in Eastern Europe and the Middle East intensified on 24 February 2022, with the commencement of the conflict between Russia and the Israel-Gaza conflict. As at the date of authorising these separate financial statements for issue, the conflicts continue to evolve as military activity proceeds and additional sanctions are imposed.

Depending on the duration of the conflict between Russia and Ukraine, the Israel-Gaza conflict and continued negative impact on economic activity, the Company might experience further negative restraints and incur additional impairments on its assets in 2022 which relate to new developments that occurred after the reporting period.

Independent auditor's report on pages 7 to 9

ADDITIONAL INFORMATION TO THE STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

CONTENTS	PAGE
Detailed income statement	1
Administration expenses	2
Finance costs	3
Computation of corporation tax	ব

DETAILED INCOME STATEMENT 31 December 2021

	Page	2021 US\$	2020 US\$
Revenue
Loan interest income		2.014.877	3.025.472
Net fair value (losses)/gains on financial assets at fair value through profit or loss		(620.410)	439.133
Other operating income		206-875	206.607
Interest expense		(3.096.105)	(3.096.105)
Loss from sales of financial assets at fair value through profit or loss		(4.160)
Other operating income
Reversal of impairment - loans to related parties		3.304.146	1.291.255
		1.805 223	1.866.362
Operating expenses
Administration expenses	2	(96.948)	(105.484)
		1.708.275	1.760.878
Other operating expenses
Impairment charge - loans to related parties			(2.953.861)
Operating profit/(loss)		1.708.275	(1.192.983)
Finance costs	3	(19.853)	(90.641)
Net profit/(loss) for the vear before tax		1.688.422	(1.283.624)

1

ADMINISTRATION EXPENSES

31 December 2021

	2021	2020
	US\$	വട്ടു
Administration expenses
Professional licence fee	1.805
Municipality taxes	415	215
Annual levy	423	396
Auditors' remuneration for the statutory audit of annual accounts	2.492	2.700
Accounting fees	12-559	11.968
Secretarial fees	1.101	1.019
Registered office fees	1.101	1.019
Legal and professional	367	340
Irrecoverable VAT	371	4.764
Professional fees	3.9741	16.184
Custodian fees	67 333	54.817
Brokerage fees		12.062
	96.948	105.484

FINANCE COSTS

31 December 2021

	2021 US\$	2020 US\$
Finance costs
Interest expense Interest on taxes	1	39.669
Sundry finance expenses Bank charges	19.591	21.233
Net foreign exchange losses Realised foreign exchange loss Unrealised foreign exchange loss	195 67	9.499 20.240
	19.853	90.641

COMPUTATION OF CORPORATION TAX 31 December 2021

Net profit per income statement		Page 1	ાટક	ાટિક 1.688.422
Add: Loss from sales of financial assets at fair value through profit or loss Fair value losses on financial assets at fair value through profit or loss Realised foreign exchange loss Unrealised foreign exchange loss Annual levy Non-allowable interest Other non-allowable expenses			4.160 620.410 195 67 428 1.547.612 18.230	2.191.102 3.879.524
Less: Reversal of impairment - loans to related parties Chargeable income for the year			3.304.146	(3.304.146) 575.378
Converted into € at US\$ 1,132600 = €1				€ 508.015
Calculation of corporation tax	Income €	Rate 0/0	Total € c	Total ાટિક
Tax at normal rates: Chargeable income as above 10% additional charge	508.015	12,50	63.501,88 6.350,19	71.922 7.192
TAX PAYABLE			69.852,07	79.114

REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

C O N T E N T S

Officers and Professional Advisors	Pages 1
Declaration of the Members of the Board of Directors and the Company official responsible for the preparation of the consolidated financial statements	2
Management Report	3 ñ 7
Independent Auditorís Report	8 - 13
Consolidated statement of profit or loss and other comprehensive income	14
Consolidated statement of financial position	15
Consolidated statement of changes in equity	16 - 17
Consolidated statement of cash flows	18 - 19
Notes to the consolidated financial statements	20 - 88

OFFICERS AND PROFESSIONAL ADVISORS

Board of Directors	Iurii Zhuravlov - Chief Executive Officer
	Tamara Lapta - Deputy Chief Executive Officer
	Larysa Orlova - Chief Financial Officer
	Anna Ordovska - Non-Executive Director
	Volodymyr Kudryavtsev - Non-Executive Director
Audit Committee	Anna Ordovska (Head of the Committee)
	Volodymyr Kudryavtsev
Remuneration Committee	Anna Ordovska (Head of the Committee)
	Volodymyr Kudryavtsev
Secretary	Inter Jura Cy (Services) Limited
Legal Advisors	K. Chrysostomides & Co LLC

DECLARATION OF THE MEMBERS OF THE BOARD OF DIRECTORS AND THE COMPANY OFFICIAL RESPONSIBLE FOR THE PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

In accordance with article 9(3)(c) and (7) of the Transparency Requirements (Securities Listed for Trading on a Regulated Market) Law of 2007 (the ìLawî), as amended from time to time, we, the Members of the Board of Directors and the Company official responsible for the preparation of the consolidated financial statements of Agroton Public Limited (the ìCompanyî) for the year ended 31 December 2021, confirm that to the best of our knowledge:

• a) the annual consolidated financial statements presented on pages 20 to 88:
  • i) have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union and the provisions of article (9), section (4) of the Law, and
  • ii) give a true and fair view of the assets and liabilities, the financial position and the profits or losses of Agroton Public Limited and of the entities included in the consolidated financial statements, as a whole and
• b) the Management Report provides a fair review of the developments and performance of the business as well as the position of Agroton Public Limited and of the entities included in the consolidated financial statements, as a whole, together with a description of the major risks and uncertainties that they face.

Members of the Board of Directors:

Iurii Zhuravlov
Tamara Lapta
Larysa Orlova
Anna Ordovska
Volodymyr Kudryavtsev

Company official responsible for the preparation of the consolidated financial statements of the Company for the year ended 31 December 2021:

Larysa Orlova

Nicosia, 23 September 2024

MANAGEMENT REPORT

The Board of Directors of Agroton Public Limited (the ìCompanyî) presents to the members its annual report together with the consolidated financial statements of the Company and of its subsidiary companies (together with the Company, the ìGroupî) for the year ended 31 December 2021.

INCORPORATION AND PRINCIPAL ACTIVITIES

Agroton Public Limited (the ìCompanyî) was incorporated in Cyprus on 21 September 2009 as a public company with limited liability under the Cyprus Companies Law, Cap. 113. The Company was listed at the main market of Warsaw Stock Exchange on 8 November 2010.

The principal activities of the Group which remained the same as in the previous year, are grain and oil crops growing, agricultural products storage and sale, cattle breeding (milk cattle-breeding, poultry farming). The poultry farming business has been temporarily abandoned due to the military clashes and armed conflict in Eastern Ukraine.

FINANCIAL RESULTS

The financial results of the Group for the year ended 31 December 2021 are set out in the consolidated statement of profit or loss and other comprehensive income on page 8 to the consolidated financial statements.

The profit for the year attributable to the owners of the Company amounted to USD 26 612 thousand 2020: profit of USD 11 744 thousand).

EXAMINATION OF THE DEVELOPMENT, POSITION AND PERFORMANCE OF THE ACTIVITIES OF THE GROUP

The Group recorded a profit of USD 26 612 thousand compared to USD 11 744 the previous year.

The total Group's revenue for 2021 amounted to USD 57 317 thousand as compared to USD 67 556 thousand in 2020, recording an increase of 15%, mainly due to decrease in market prices.

The increase in market prices for agricultural crop products in 2021 resulted in the growth of fair value gains recognised on agricultural produce at the point of harvest narrowed the gross profit as compared to 2020.

The change in financial position during 2021 was mainly impacted by the profitable performance of Group's business.

As a result of the above developments, the net asset position of the Group has increased from USD 101 569 thousand as at 31 December 2020 to USD 134 057 thousand as at 31 December 2021.

The financial position of the Group for the year, as presented in the consolidated financial statements is considered satisfactory.

DIVIDENDS

The Board of Directors does not recommend the payment of a dividend (2020: USD nil).

MANAGEMENT REPORT (cont.)

FUTURE DEVELOPMENTS

The Board of Directors does not expect major changes in the principal activities of the Group in the foreseeable future.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties faced by the Group and the steps taken to manage these risks are described in notes 34 and 36 to the consolidated financial statements.

Political and social events of the beginning of 2014 which resulted in the annexation of the Crimea by the Russian Federation and the loss of control by Ukraine over the territory of part of the Donetsk and Lugansk regions have remained unresolved. However, the intensity of hostilities has substantially decreased since the end of July 2020 upon agreeing on a ceasefire plan.

In March 2020, the World Health Organisation declared the Coronavirus COVID-19 outbreak to be a pandemic in recognition of its rapid spread across the globe. Many governments have been taking increasingly stringent steps to help contain, and in many jurisdictions, now delay, the spread of the virus, including: requiring self-isolation/ quarantine by those potentially affected, implementing social distancing measures, and controlling or closing borders and ìlocking-downî cities/regions or even entire countries. These measures have slowed down the global economic activities including Ukraine.

During 2021 Ukraine's GDP contracted by 4.4% (2020: grew by 4.0%).

As a result of the slowdown, the Ukrainian Hryvnia weakened against the world currencies, with the NBU UAH/USD exchange rate decreasing to 27.28 at 31 December 2021 from 28.27 at 31 December 2020.

The Ukraine's cooperation with the International Monetary Fund (IMF) is key for its macroeconomic stability. In June 2020, the IMF approved a USD 5 billion 18-month stand-by arrangement (SBA) aimed to address large balance-of-payments and fiscal financing needs, preserve achievements to date, and advance a small set of key structural reforms to ensure that Ukraine is well-poised to return to growthwhen the crisis ends. Ukraine received the first tranche of USD 2.1 billion under this SBA in June 2020.In July 2020, Ukraine also issued a USD 2 billion bonds due in 2033. This, to large extent, enabled Ukraine to meet its 2020 obligations under sovereign debt.

Whilst management believes it is taking appropriate measures to support the sustainability of the Groupís business in the current circumstances, a continuation of the current unstable business environment could negatively affect the Groupís results and financial position in a manner not currently determinable. These consolidated financial statements reflect managementís current assessment of the impact of the Ukrainian business environment on the operations and the financial position of the Group. The future business environment may differ from managementís assessment.

MANAGEMENT REPORT (cont.)

SHARE CAPITAL

There were no changes in the share capital of the Company during the year.

STATEMENT ON CORPORATE GOVERNANCE

The Board of Directors has adopted the Code of Corporate Governance (the ìCodeî) of the Warsaw Stock Exchange (ìWSEî) which is available in the WSE website.

At present, the Corporate Governance Code is not fully implemented. There are specific provisions of the Code which cannot be adopted since they are either contrary to and/or do not accord with the provisions of the Articles of Association of the Company, or they cannot be adopted due to the recent developments in Eastern Ukraine. The Board of Directors will endeavour to remedy these as soon as practicable.

The Board of Directors ensures through effective internal audit and risk management procedures the collection of the necessary items for the preparation of the periodic reporting required for listed companies.

The Company is governed by the Board of Directors. Companies formed under the Cyprus Companies Law, Cap. 113, do not have supervisory board and management board. Cyprus companies have a Board of Directors, members of which are appointed to fill certain executive and non-executive positions. The management of the business and the conduct of the affairs of the Company are vested in the Board of Directors. The Board of Directors comprises five members, three of which are non-independent and the remaining two are independent. This is in compliance with the provisions of the Articles of Association of the Company, which requires that the Board of Directors comprise by at least two Directors, two of which shall be independent.

Directors are appointed at general meetings. There is no requirement in the Articles of Association for the retirement of Directors by rotation, thus all Directors continue in office, unless they resign or following an ordinary resolution from the Company shareholders.

The Company has an Audit Committee and a Remuneration Committee. Both committees comprise two members, both of which are non-executive. Analysis of their responsibilities is disclosed separately in this report.

The emoluments and other benefits of Directors of the Company are presented below:

	Emoluments USD	Other benefits USD	Total USD
Iurii Zhuravlov	2 549 819	-	2 549 819
Tamara Lapta	568 778	-	568 778
Larysa Orlova	328 992	-	328 992
Anna Ordovska	-	-	-
Volodymyr Kudryavtsev	-	-	-

The owners holding directly or indirectly more than 5% interest in the Companyís share capital at 31 December 2020 and at 23 September 2024 are disclosed below.

MANAGEMENT REPORT (cont.)

STATEMENT ON CORPORATE GOVERNANCE (cont.)

There are currently no shares in issue holding special or limited rights.

The Board of Directors can proceed with the issue of shares following an ordinary resolution from the Company owners. For the repurchase of the Company shares a special resolution from the Companyís owners is required, in accordance with the provisions of Section 57 of Cyprus Companies Law.

The Report on Corporate Governance has been prepared in accordance with the provisions of the Code and includes the above mentioned explanations, as well as the information required by the relevant Article of the Directive.

OWNERS HOLDING MORE THAN 5% OF THE COMPANYíS SHARE CAPITAL

The owners holding directly or indirectly more than 5% interest in the Companyís share capital at 31 December 2020 and at 23 September 2024 were as follows:

	31 December	23 September 2024
	2020
	%	%
Iurii Zhuravlov	77,77	85,40
Other	22,23	14,60

On 30 January 2018 Mr. Zhuravlov acquired 329 233 shares and on 3 December 2018 he acquired further 484 000 shares.

DIRECTORSí INTEREST IN THE COMPANYíS SHARE CAPITAL

In accordance with Article 4(b) of the Cyprus Securities and Exchange Commission Directive the interest in the Companyís share capital held directly or indirectly by each member of the Board of Directors at 31 December 2020 and at 23 September 2024 were as follows:

	31 December 2021	23 September 2024
	%	%
Iurii Zhuravlov	77,77	85,40
Tamara Lapta	-	-
Larysa Orlova	-	-
Anna Ordovska	-	-
Volodymyr Kudryavtsev	-	-

BOARD OF DIRECTORS

The members of the Board of Directors at 31 December 2021 and at the date of this report are presented on page 1.

There is no requirement in the Company's Articles of Association for the retirement of Directors by rotation, thus all Directors presently members of the Board continue in office.

There were no significant changes in the assignment of responsibilities and remuneration of the Board of Directors.

AUDIT COMMITTEE AND REMUNERATION COMMITTEE

The Directors are responsible for formulating, reviewing and approving the Companyís and its subsidiary

7

AGROTON PUBLIC LIMITED

MANAGEMENT REPORT (cont.)

AUDIT COMMITTEE AND REMUNERATION COMMITTEE (cont.)

companies strategies, budgets, certain items of capital expenditures and senior personnel appointments. Being a company listed on the Warsaw Stock Exchange, the Directors have established audit and remuneration committees to improve corporate governance.

The Audit Committee and Remuneration Committee, were established on 4 May 2010 both of which were in force during the year ended 31 December 2021 and continued in force at the date of this report.

The Audit Committee assists the Companyís Board of Directors in discharging its responsibilities with regard to financial reporting, external and internal audits and controls, including reviewing the annual consolidated financial statements, reviewing and monitoring the extent of the non-audit work undertaken by external auditors, advising on the appointment of external auditors and reviewing the effectiveness of the internal audit activities, internal controls and risk management systems. The ultimate responsibility for reviewing and approving the annual consolidated financial statements and the half yearly financial statements remains with the Board of Directors. The Audit Committee of the Company, comprising of Ms. Anna Ordovska and Mr. Volodymyr Kudryavstev and is chaired by Ms. Anna Ordovska.

The Remuneration Committee assists the Board of Directors in discharging its responsibilities in relation to remuneration, including making recommendations to the Board of Directors and/or the general meeting of the shareholders of the Company on the policy on executive remuneration, determining the individual remuneration and benefits package of each of the Executive Directors and recommending and monitoring the remuneration of senior management below Board level. The Remuneration Committee of the Company, comprising of Ms. Anna Ordovska and Mr. Volodymyr Kudryavtsev (both Non-Executive Directors), and is chaired by Ms. Anna Ordovska and sets and review the scale and structure of the Executive Directorsí remuneration packages, including share options and the terms of their service contracts.

EVENTS AFTER THE REPORTING PERIOD

Any significant events that occurred after the reporting period are described in note 38 to the consolidated financial statements.

BRANCHES

The Group did not operate through any registered branches during the year ended 31 December 2021.

RELATED PARTY BALANCES AND TRANSACTIONS

Disclosed in note 32 to the consolidated financial statements.

INDEPENDENT AUDITORS

The independent auditors of the Company, Exsus Ltd, have expressed their willingness to continue in office. A resolution giving authority to the Board of Directors to fix their remuneration will be proposed at the next Annual General Meeting of the Company.

By order of the Board of Directors,

Larysa Orlova Director

Nicosia, 23 September 2024

Independent Auditor's Report

To the Members of Agroton Public Limited

Report on the Audit of the Consolidated Financial Statements

Qualified Opinion

We have audited the consolidated financial statements of Agroton Public Limited (the ''Company'') and its subsidiaries (the ''Group''), which are presented in pages 20 to 88 and comprise the consolidated statement of financial position as at 31 December 2021, and the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes of the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, except for the possible effects on the corresponding figures of the matter described in the Basis for Qualified Opinion section of our report, the accompanying consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2021, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113.

Basis for Qualified Opinion

Because we were appointed auditors of the Group during 2024, we were not able to observe the counting of the physical inventories at the beginning of that period or satisfy ourselves concerning those inventory quantities by alternative means. Since opening inventories affect the determination of the results of operations, we were unable to determine whether adjustments to the results of operations and opening retained earnings might be necessary for 2021. Our audit opinion on the consolidated financial statements for the period ended 31 December 2021 was modified accordingly. Our opinion on the current period's consolidated financial statements is also modified because of the possible effect of this matter on the comparability of the current period's figures and the corresponding figures.

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the ''Auditor's Responsibilities for the Audit of the Consolidated Financial Statements'' section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) together with the ethical requirements that are relevant to our audit of the consolidated financial statements in Cyprus, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the "Basis for qualified opinion" and "Material uncertainty related to going concern" sections, we have determined the matters described below to be the key audit matters to be communicated in our report.

Independent Auditor's Report (continued)

To the Members of Agroton Public Limited

Key Audit Matters (continued)

Valuation of biological assets

Refer to Notes 7, 19 (biological assets) and to Note 37 (fair values) to the consolidated financial statements. of the consolidated financial statements.

The key audit matter	How the matter was addressed in our audit
The Group's biological assets consist of agricultural crops and animals in growing and	Our audit approach in this area included, among others:
fattening, which are measured at fair value less estimated costs to sell.	Considering the appropriateness of the valuation methodology by reviewing the valuation expert's report on the methodology used by the Group for the valuation of animas and agreeing its consistency with IFRS. The competencies of the expert were also assessed;
Due to the nature of the asset, the valuation
technique includes a number of inputs from mostly internal sources. Consequently, we have determined the valuation of biological assets to be a key audit matter.	Compare amounts reported in the financial statements with those included in the valuation report. Back up inputs used to external observable data such as market prices;
	Challenging the inputs used by the Group in calculating the cost of agricultural crops and assessing the sources used to determine their fair values by:
	- Vouching to supporting documentation in order to verify the cost of crops which is an approximation of their Fair Value;
	- Verifying quantities harvested to current and post year-end sales.
	Testing the mathematical accuracy of the model;
	Evaluating the adequacy of the consolidated financial statements disclosures.

Independent Auditor's Report (continued)

To the Members of Agroton Public Limited

Other information

The Board of Directors is responsible for the other information. The other information comprises the information included in the Consolidated Management Report and the corporate governance statement, but does not include the consolidated financial statements and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

With regards to the management report and the corporate governance statement, our report is presented in "Report on other legal and regulatory' requirements" section.

Responsibilities of the Board of Directors for the Consolidated Financial Statements

The Board of Directors is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with IFRSs as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

The Board of Directors is responsible for overseeing the Group's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• · Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• · Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

To the Members of Agroton Public Limited

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements (continued)

• · Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.
• · Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• · Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves a true and fair view.
• · Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current perido and are therefore the key audit matters.

Report on Other Legal and regulatory requirements

Other regulatory requirements

Pursuant to the requirements of Article 10(2) of EU Regulation 537/2014 we provide the following informationin our Independent Auditors' Report, which is required in addition to the requirements o fISAs.

1. Appointment of the Auditor and Period of Engagement

We were appointed as auditors of the Group on by the General Meeting of the Company's members on 21 May 2024. Our appointment has been renewed annually by shareholder resolution representing a total period of uninterrupted engagement appointment of 3 years covering the periods ended 31 December 2019 to 31 December 2021.

2. Consistency of the Additional Report to the Audit Committee

We confirm that our audit opinion on the consolidated financial statements expressed in this report is consistent with the additional report to the Audit Committee of the Company, which we issued on 23 September 2024 in accordance with Article 11 of the EU Regulation 537/2014.

Independent Auditor's Report (continued)

To the Members of Agroton Public Limited

Report on Other Legal and regulatory requirements (continued)

3. Provision of Non-audit Services

We declare that no prohibited non-audit services referred to in Article 5 of the EU Regulation 537/2014 and Section 72 of the Auditors Law of 2017 were provided. In addition, there are no non-audit services which were provided by us to the Group and which have not been disclosed in the consolidated financial statements or the Consolidated Management Report.

Other Legal Requirements

Pursuant to the additional requirements of law L.53 (I) 2017, and based on the work undertaken in the course of our audit, we report the following:

• · In our opinion, the Management Report, the preparation of which is the responsibility of the Board of Directors, has been prepared in accordance with the requirements of the Companies Law, Cap. 113, and the information given is consistent with the consolidated financial statements.
• · In the light of the knowledge and understanding of the business and the Group's environment obtained in the course of the audit, we have not identified material misstatements in the Management Report.
• · In our opinion, the information included in the Corporate Governance Report in accordance with the requirements of subparagraphs (iv) and (v) of paragraph 2(a) of Article 151 of the Companies Law, Cap. 113, has been prepared in accordance with the requirements of the Companies Law, Cap. 113 and is consistent with the financial statements.
• · In light of the knowledge and understanding of the Group and its environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the Corporate Governance Report in relation to the information disclosed for items (iv) and (v) of the subparagraph 2( a) of Article 151 of the Companies Law, Cap. 113. We have not identified any material misstatements in this respect.
• · In our opinion, the Corporate Governance Report includes all information referred to in subparagraphs (i), (ii), (iii), (vi) and (vii) of paragraph 2(a) of Article 151 of the Companies Law, Cap. 113.

Independent Auditor's Report (continued)

To the Members of Agroton Public Limited

Other Matter

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Section 69 of the Auditors Law of 2017 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.

Avraam Kapiri Certified Public Accountant and Registered Auditor for and on behalf of Exsus Ltd Chartered Accountants 12, Mykinon Street Office 11, 1st Floor, LAVINIA COURT, 1065, Nicosia, Cyprus

Nicosia, 23 September 2024

	Note	2021	2020
Continuing operations
Revenue	5	57 317	67 556
Cost of sales	6	(44 132)	(57 549)
Net change in fair value less cost to sell of biological assets and
agricultural produce	7	25 358	22 902
Gross profit		38 543	32 909
Other operating income	8	304	460
Administrative expenses	9	(5 941)	(2 753)
Distribution expenses	10	(1 092)	(410)
Other operating expenses	11	(4 676)	(3 516)
Operating (loss)/ profit	12	27 138	26 690
Fair value gains/ (losses) on financial assets at fair value through
profit or loss		-	416
		27 138	27 106
Finance income	13	7 299	198
Finance costs	13	(7 746)	(15 531)
Net finance income		(447)	(15 333)
Profit before taxation		26 691	11 773
Taxation		(79)	(23)
Profit for the year		26 612	11 759
Other comprehensive expense
Items that are or may be reclassified subsequently to profit or loss
Effect of translation into presentation currency		5 889	3 025
Total comprehensive income		32 501	14 784
Profit attributable to:
Owners of the Company		26 585	11 744
Non-controlling interests		27	15
		26 612	11 759
Total comprehensive income attributable to:
Owners of the Company		32 516	14 794
Non-controlling interests		(15)	(10)
		32 501	14 784
Profit per share
Basic and fully diluted profit per share (USD)	31	1,23	0,54

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2021

(in USD thousand, unless otherwise stated)

	Note	2021	2020
Assets
Property, plant and equipment	16	25 567	18 111
Right-of-use assets	17	10 391	13 351
Intangible assets	18	18	26
Biological assets	19	695	903
Non-current assets		36 671	32 391
Inventories	22	56 296	16 067
Biological assets	19	11 317	7 272
Investments designated at fair value through profit or loss	20	14 250	15 195
Trade and other receivables	23	3 179	5 791
Loans receivable	21	18 549	18 549
Assets held for sale	26	14	17
Cash and cash equivalents	25	13 065	25 055
Current assets		116 670	87 946
Total assets		153 341	120 337
Equity
Share capital	27	661	661
Share premium	27	88 532	88 532
Accumulated loss		30 076	3 492
Foreign currency translation reserve		14 509	8 620
Equity attributable to owners of the Company		133 778	101 305
Non-controlling interests		276	264
Total equity		134 054	101 569
Liabilities
Lease liabilities	29	11 360	9 019
Non-current liabilities		11 360	9 019
Lease liabilities	29	4 250	5 697
Loans and borrowings	28	128	128
Trade and other payables	30	3 146	3 418
Income tax liability		403	506
Liabilities held for sale	26	-	-
Current liabilities		7 927	9 749
Total liabilities		19 287	18 768
Total equity and liabilities		153 341	120 337

On 23 September 2024 the Board of Directors of Agroton Public Limited approv consolidated financial statements for issue. Limited approved and authorised these

Tamara Lapta Larysa Orlova Deputy Chief Executive Officer Chief Financial Officer

The notes on pages 20 to 88 are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

Attributable to owners of the Company

			Attributable to owners of the Co	mpany
	capital Share	m miu Share pre	mulated Accu loss	translation currency Foreign reserve	Total	controlling interests Non	equity Total
Balance at 1 January 2020	661	88 532	(8 253)	5 595	86 535	274	86 809
me mprehensive inco Total co
Profit for the year	-	-	11 744	-	11 744	15	11 759
mprehensive expense for the year Other co	-	-	-	3 050	3 050	(25)	3 025
me for the year mprehensive inco Total co	-	-	11 744	3 050	14 794	(10)	14 784
mber 2020 Balance at 31 Dece	661	88 532	3 491	8 620	101 304	264	101 568
Profit for the year	-		26 585		26 585	27	26 612
mprehensive expense for the year Other co	-		-	5 889	5 889	(15)	5 874
me for the year mprehensive inco Total co	-	-	26 585	5 889	32 474	12	32 486
mber 2021 Balance at 31 Dece	661	88 532	30 076	14 509	133 778	276	134 054

The notes on pages 20 to 88 are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (cont.)

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

• · In accordance with the Cyprus Companies Law, Cap. 113, Section 55 (2) the share premium reserve can only be used by the Company in (a) paying up unissued shares of the Company to be issued to members of the Company as fully paid bonus shares; (b) writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the Company; and (c) providing for the premium payable on redemption of any redeemable preference shares or of any debentures of the Company.
• · Companies which do not distribute 70% of their profits after tax, as defined by the Special Contribution for the Defence of the Republic Law, during the two years after the end of the year of assessment to which the profits refer, will be deemed to have distributed this amount as dividend. Special contribution for defence at 17% will be payable on such deemed dividend to the extent that the owners (individuals and companies) at the end of the period of two years from the end of the year of assessment to which the profits refer are Cyprus tax residents. The amount of this deemed dividend distribution is reduced by any actual dividend paid out of the profits of the relevant year at any time. This special contribution for defence is paid by the Company for the account of the owners.

The above requirement of the Law is not applied in the case of the Company due to the fact that its owners are not residents in Cyprus for tax purposes.

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2021

	Note	2021	2020
Cash flows from operating activities:
Profit for the year		26 612	11 759
Adjustments for:		-
Depreciation	15	6 032	5 879
Amortisation	15	10	10
Fair value losses on financial assets at fair value through profit or loss		-	(416)
Wastages and impairment of inventories	11	4 246	3 044
Gain from changes in fair value less cost to sell of biological assets and	7		(22
agriculture produce		(25 358)	902)
Impairment of loans receivable		-	-
Impairment of trade and other receivables	24	1 166	41
Reversal of provision for bad debts	24	-	-
Reversal of impairment of PPE	16	-	-
Interest income	13	(46)	(198)
Interest expense	13	2 044	3 587
Trade payables written-off	8	-	-
Loss on disposal of property, plant and equipment	11	-	89
Loss on disposal of current assets	11	-	-
Loss on disposal of right-of use assets	11	-	267
Foreign exchange loss/(gain)	13	(1 551)	11 944
Income tax expense		79	23
Cash flow used in operations before working capital changes		13 234	13 127
Decrease in inventories		(19 114)	21 379
(Increase)/decrease in biological assets		(2 892)	(221)
Decrease/(increase) in trade and other receivables		1 446	(2 047)
(Decrease)/increase in trade and other payables		(288)	(2 373)
Net cash from operating activities		(7 614)	29 865
Income tax paid		(182)	(19)
Net cash from operating activities		(7 796)	29 846
Cash flow from investing activities
Acquisition of property, plant and equipment	16	(7 295)	(3 757)
Acquisition of intangible assets	18	-	(4)
Proceeds from disposal of property, plant and equipment		-	287
Acquisition of investments at FVTPL		-	(6 031)
Redemption of investments at FVTPL		-	500
Interest received		46	198
Net cash used in investing activities		(7 249)	(8 807)
Cash flows from financing activities
Repayment of principal portion of lease liabilities		(1 877)	(1 877)
Repayment of interest portion of lease liabilities		(2 044)	(3 587)
Repayment of loans and borrowings		-	-
Net cash used in financing activities		(3 921)	(5 464)

Net increase in cash and cash equivalents		(18 966)	15 575
Cash and cash equivalents at the beginning of the year		25 055	11 938
Effect from translation into presentation currency		6 976	(2 458)
Cash and cash equivalents at the end of the year	25	13 065	25 055

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

1. GENERAL INFORMATION

Country of incorporation

Agroton Public Limited (the ìCompanyî) was incorporated in Cyprus on 21 September 2009 as a public company with limited liability under the Cyprus Companies Law, Cap. 113. The Company was listed at the main market of Warsaw Stock Exchange on 8 November 2010.

The Companyís registered office is at 1 Lampousas Street, 1095 Nicosia, Cyprus.

Principal activities

The principal activities of the Group are grain and oil crops growing, agricultural products storage and sale, cattle breeding (milk cattle-breeding, poultry farming) and milk processing. The poultry farming business has been temporarily abandoned due to the military clashes and armed conflict in Eastern Ukraine.

The Group's subsidiaries, country of incorporation, and effective ownership percentages are disclosed below:

Company name	Country of incorporation	Ownership Interest 31.12.2021	Ownership Interest 31.12.2020
Living LLC	Ukraine	99,99 %	99,99 %
PE Agricultural Production Firm Agro	Ukraine	99,99 %	99,99 %
Agroton PJSC	Ukraine	99,99 %	99,99 %
OJSC Belokurakinskiy Elevator	Ukraine	99,99 %	99,99 %
Agro Meta LLC (i)	Ukraine	99,99 %	99,99 %
Etalon-Agro LLC (i)	Ukraine	-	99,99 %
ALLC Noviy Shlyah	Ukraine	99,99 %	99,99 %
ALLC Shiykivske	Ukraine	94.59 %	94,59 %
Agro-Chornukhinski Kurchata LLC	Ukraine	99,89 %	99,89 %
Agro-Svinprom LLC (i)	Ukraine	-	99,89 %
Agroton BVI Limited	British Virgin Islands	100,00 %	100,00 %
Gefest LLC (i)	Ukraine	-	100,00 %
LLC Lugastan (i)	Ukraine	-	99,99 %
LLC Siverskiy Elevator	Ukraine	100,00 %	100,00 %

(i) Agro Meta LLC is in the process of liquidation. Gefest LLC was liquidated. Corporate rights re Etalon-Agro LLC, LLC Lugastan and Agro-Svinprom LLC are transferred to the third parties

The parent company of the Group is Agroton Public Limited with an issued share capital of 21 670 000 ordinary shares with nominal value Ä 0,021 per share.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

1. GENERAL INFORMATION (cont.)

The shares at 31 December 2021 and as at the date of issue of these consolidated financial statements were distributed as follows:

		31 December 2020		31 December 2021
Shareholder	Number of Shares	Ownership interest, %	Number of Shares	Ownership interest, %
Mr. Iurii Zhuravlov	16 851 979	77,77 %	16 851 979	77,77 %
Others	4 818 021	22,23 %	4 818 021	22,23 %
	21 670 000		100,00 % 21 670 000	100,00 %

2. BASIS OF PREPARATION

These consolidated financial statements of the Company as at and for the year ended 31 December 2021 comprise the financial statements of the Company and its subsidiaries (together with the Company, the ''Group'').

The Company has subsidiary undertakings and according to 142(1)(b) of the Cyprus Companies Law Cap.113 is required to prepare consolidated financial statements and present them before the members of the Company at the Annual General Meeting.

2.1 Statement of compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS'), as adopted by the European Union ('EU'), and the requirements of the Cyprus Companies Law, Cap. 113, and are for the year ended 31 December 2021.

2.2 Basis of measurement

These consolidated financial statements have been prepared under the historical cost convention except for the following:

• · biological assets and agricultural produce, which are stated at fair value less costs to sell (agricultural produce is measured at fair value at the point of harvest)
• · debt securities which are stated at amortised cost
• · Investments designated at fair value through profit or loss.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

2 . BASIS OF PREPARATION (cont.)

2.3 Functional and presentation currency

The functional currencies of the companies of the Group are the Ukrainian Hryvnia (UAH) and United States Dollar (USD). The currency of Cyprus is Euro, but the principal exposure of the parent undertaking is in US dollars, therefore the functional currency of the Company is considered to be USD. Transactions in currencies other than the functional currency of the Group's companies are treated as transactions in foreign currencies. The Group's management decided to use US dollar (USD) as the presentation currency for financial and management reporting purposes. Exchange differences arising are classified as equity and transferred to the translation reserve.

2.4 Going concern basis

These consolidated financial statements have been prepared under the going concern basis, which assumes the realisation of assets and settlement of liabilities in the course of ordinary economic activity. Renewals of the Groupís assets, and the future activities of the Group, are significantly influenced by the current and future economic environment in Ukraine. The Board of Directors and Management are closely monitoring the challenging conditions in the domestic markets as described in note 34 to the consolidated financial statements and has assessed the current situation and there is no indication of adverse effects while at the same time are taking all the steps to secure Group's short and long term viability. To this effect, they consider that the Group is able to continue its operations as a going concern.

2.5 Standards and interpretations

Adoption of new and revised International Financial Reporting Standards and Interpretations

As from 1 January 2020, the Group adopted all changes to International Financial Reporting Standards (IFRSs) as adopted by EU which are relevant to its operations. The adoption of these standards, amendments and interpretations did not have a material effect on the consolidated financial statements of the Group.

A number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2021 and earlier application is permitted; however, the Group has not early adopted them in preparing these consolidated financial statements. None of these standards and amendments are expected to have a material impact of the Group's consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES

The Group has consistently applied accounting policies set out in this note to all years presented in these consolidated financial statements. Accounting policies of subsidiaries have been changed where necessary to achieve consistent application of the accounting policies applied by the Group.

3.1 Basis of consolidation

Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists where the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The financial statements of subsidiaries acquired or disposed during the year are included in the consolidated statement of profit or loss from the date that control commences until the date control ceases.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring them in line with the accounting policies of the Group.

Changes in the Group's ownership interests in existing subsidiaries

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity as transactions with owners acting in their capacity as owners. No adjustments are made to goodwill and no gain or loss is recognised in profit or loss. When the Group loses control of a subsidiary, the resulting profit or loss is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. The resulting profit or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

Business combinations

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisitionrelated costs are generally recognised in profit or loss as incurred.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.1 Basis of consolidation (cont.)

Business combinations (cont.)

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the acquisition date, except that:

• · deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
• · liabilities or equity instruments related to share-based payment arrangements of the acquiree or sharebased payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 Share-based Payment at the acquisition date; and
• · assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of noncontrolling interests are measured at fair value or, when applicable, on the basis specified in another IFRS.

When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ëmeasurement period' (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with IAS 39, or IAS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.

When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date(i.e.the date when the Group obtains control) and the resulting gain or loss,if any,is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.1 Basis of consolidation (cont.)

Business combinations (cont.)

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date.

Non-controlling interest (NCI)

NCI is represented by interest in the subsidiaries not owned by the Group. It is determined at the reporting period as interest in the fair value of identified assets and liabilities of the subsidiary at the date of acquisition or creation of a new subsidiary, as well as interest in change in net assets of a subsidiary after the acquisition or creation of a new subsidiary.

The Group provides information on NCI in net assets of subsidiaries and companies not connected with formal structure and not having a common parent company separately from items of equity attributable to the owners of the parent company.

3.2 Foreign currency translation

( ) 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 are translated into the functional currency of each company included into the Group, at the rates ruling at the reporting period. Foreign exchange gains and losses, arising from transactions in foreign currency, and also from translation of monetary assets and liabilities into the functional currency of each company included into the Group at the rate ruling at the end of the year, are recognised in profit or loss.

The exchange rates used in preparation of these consolidated financial statements, are as follows:

Currency	31 December	Weighted average	31 December	Weighted average
	2021	for the year 2021	2020	for the year 2020
US dollar - UAH	27,2782	27,2862	28,2746	26,9639

The strengthening of the UAH against USD has resulted in the increase of various values disclosed in the consolidated financial statements of profit or loss and financial position. This increase is applicable only in case of translation into presentation currency.

The foreign currencies may be freely convertible to the territory of Ukraine at the exchange rate which is close to the exchange rate established by the National Bank of Ukraine. At the moment, the Ukrainian Hryvnia is not a freely convertible currency outside the Ukraine.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.2 Foreign currency translation (cont.)

(b) Presentation currency

The financial results and position of each subsidiary are translated into the presentation currency as follows:

• · At each reporting period of the consolidated financial statements all the assets and liabilities are translated at the exchange rate of the National Bank of Ukraine and of the European Central Bank at that date;
• · Income and expenses are translated at the average exchange rates (except for the cases when such average exchange rate is not a reasonably approximate value reflecting cumulative influence of all exchange rates prevailing at the date of transaction, in which case income and expenses are translated at the exchange rates at the date of transaction);
• · All exchange differences are recognised in other comprehensive income.

3.3 Property, plant and equipment

Initial recognition of property, plant and equipment (ìPPEî) Property plant and equipment is recognised by the Group as an asset only when:

• · it is probable that the Group will receive certain future economic benefits;
• · the historical cost can be assessed in a reliable way;
• · it is intended for use during more than one operating cycle (usually more than 12 months).

Expenses after the initial recognition of property, plant and equipment

Any subsequent expenses, increasing the future economic benefits from the asset, are treated as additions. Otherwise, the Group recognises subsequent expenses to profit or loss of the year, in which they are incurred. The Group divides all expenses, related to the property, plant and equipment, into the following types:

• · current repairs and expenses for maintenance and technical service;
• · capital impairment, including modernisation.

Subsequent measurement of property, plant and equipment

After initial recognition as an asset, the Group applies the model of accounting for the property, plant and equipment at historical cost, net of accumulated depreciation and any accumulated losses from impairment, taking into account estimated residual values of such assets at the end of their useful lives. Such cost includes the cost of replacing significant parts of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced from time to time, the Group recognises such parts as individual assets with specific estimated useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying value of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the profit or loss of the year in which they are incurred.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.3 Property, plant and equipment (cont.)

Depreciation of property, plant and equipment is calculated using the straight-line method over the estimated useful lives agreed upon with the technical personnel of the Group.

The estimated useful lives of property, plant and equipment are as follows:

Construction in progress	Not depreciated
Buildings	10-75 years
Machinery and equipment	2-30 years
Vehicles	2-15 years
Computers and office equipment	1-10 years
Instruments, tools and other equipment	1-10 years

Residual values and useful lives of assets are reviewed at each reporting period and adjusted if appropriate.

The acquired asset is depreciated starting from the following month of the date of placing into operation and depreciation is fully accumulated when useful life ends.

Derecognition

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying value of the asset) is included in profit or loss of the year in which the asset is derecognised.

Impairment

At each reporting period the Group evaluates whether any indicators of possible impairment of an asset exist. If the recoverable value of an asset or a group of assets within property, plant and equipment is lower than their carrying (residual) value, the Group recognises such asset or group of assets as impaired, and accrues a provision for impairment of the amount of excess of the carrying value over the recoverable value of the asset. Impairment losses are recognised immediately in profit or loss.

Assets under construction

Assets under construction comprise costs directly related to construction of property, plant and equipment including an appropriate allocation of directly attributable variable overheads that are incurred in construction. Construction in progress is not depreciated. Depreciation of the construction in progress, on the same basis as for other property, plant and equipment items, commences when the assets are available for use, i.e. when they are in the location and condition necessary for them to be capable of operating in the manner intended by the management.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.4 Intangible assets

For the purpose of preparation of the consolidated financial statements, the Group defines the following groups of the intangible assets: computer software and land lease rights.

Computer software

Costs that are directly associated with identifiable and unique computer software products controlled by the Group and that will probably generate economic benefits exceeding costs beyond one year are recognised as intangible assets. Subsequently computer software is carried at cost less any accumulated amortisation and any accumulated impairment losses. Expenditure which enhances or extends the performance of computer software programs beyond their original specifications is recognised as a capital improvement and added to the original cost of the computer software. Costs associated with maintenance of computer software programs are recognised in profit or loss of the year in which they are incurred. Computer software are amortised on a straight-line basis over their useful lives, usually 5 years. Amortisation starts from the following year of the date of placing into operation and is fully accumulated when useful life ends.

Amortisation methods, useful lives and residual values are reviewed at each reporting period and adjusted accordingly.

Land lease rights - policy applicable before 1 January 2019

Land lease rights acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Land lease rights acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, land lease rights acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as land lease rights acquired separately.

Amortisation of land lease rights is recognised on a straight-line basis over their estimated useful lives. For land lease rights, the amortisation period is 10 years.

The amortisation period and the amortisation method for land lease rights are reviewed at least at the end of each reporting period, with the effect of any changes in estimate being accounted for prospectively.

As a result of IFRS 16 adoption, land lease rights were derecognised on 1 January 2019.

Derecognition of intangible assets

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss of the year in which the asset is derecognised.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.5 Financial instruments

a) Financial assets

(i) Recognition and initial measurement

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(ii) Classification and subsequent measurement

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investmentís fair value in OCI. This election is made on an investmentby-investment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Business model assessment

The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:.

• the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether managementís strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.5 Financial instruments (cont.)

a) Financial assets (cont.)

(ii) Classification and subsequent measurement (cont.)

• how the performance of the portfolio is evaluated and reported to the Groupís management;

• the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

• how managers of the business are compensated ñ e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

• the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Groupís continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ëprincipalí is defined as the fair value of the financial asset on initial recognition. ëInterestí is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:

• contingent events that would change the amount or timing of cash flows;
• terms that may adjust the contractual coupon rate, including variable-rate features;
• prepayment and extension features; and
• terms that limit the Groupís claim to cash flows from specified assets (e.g. non-recourse features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.5 Financial instruments (cont.)

a) Financial assets (cont.)

(ii) Classification and subsequent measurement (cont.)

Subsequent measurement and gains and losses

Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.

Financial assets at amortised cost: These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

Debt investments at FVOCI: These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairments are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

Equity investments at FVOCI: These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.

(iii) Impairment of financial assets

The Group uses the expected credit loss (ECL) model to measure impairment. The ECL model applies to financial assets measured at amortised cost.

The financial assets at amortised cost consist of trade receivables, loans receivable and cash and cash equivalents.

Loss allowances are measured on either of the following bases:

• 12-month ECLs; these are ECLs that result from possible default events within the 12 months after the reporting date; and

• lifetime ECLs; these are ECLs that result from all possible default events over the expected life of a financial instrument.

The Group has elected to measure loss allowances for trade receivables at an amount equal to lifetime ECLs.

The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.5 Financial instruments (cont.)

a) Financial assets (cont.)

(iii) Impairment of financial assets (cont.)

The maximum period considered when estimating ECLs is the maximum contractual period which the over Group is exposed to credit risk.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).

Credit-impaired financial assets

At each reporting period, the Group assesses whether financial assets carried at amortised cost are creditimpaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Presentation of impairment

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

b) Financial liabilities

(i) Recognition and initial measurement

Financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.

Financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its issue.

(ii) Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.5 Financial instruments (cont.)

b) Financial liabilities (cont.)

(iii) Derecognition

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

(iv) Offsetting

Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the consolidated statement of financial position.

3.6 Inventories

The Group identifies the following types of inventories:

• · raw and other materials (including principal and auxiliary industrial raw and other materials; agricultural purpose materials);
• · work-in-progress (including semi-finished products);
• · agricultural produce;
• · finished goods;
• · goods in stock;
• · other inventories (including fuel, packaging, construction materials, spare parts, low value items, other materials and consumable supplies).

Work in progress includes the costs incurred during the period, but relating to the preparation of crop areas under sowing for future reporting periods.

Agricultural products derived from biological assets are measured at fair value less costs to sell at the point of harvest. Profit or loss arising upon initial recognition of agricultural products at fair value less estimated costs to sell is recorded in profit or loss as gain/(loss) from changes in value of biological assets and agricultural produce.

Inventories are measured at the lower of cost and net realisable value.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.6 Inventories (cont.)

The cost of inventories is based on the first-in first-out (FIFO) principle and includes all expenses for acquiring the inventories, conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of work in progress and finished goods, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realisable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and preliminary estimated distribution and selling costs.

The Group regularly reviews inventories to determine whether there are any indicators of damage, obsolescence, slow movement, or a decrease in net realisable price. When such events take place, the amount by which inventories are impaired, is reported in profit or loss.

Impairment of inventories

Cost of inventories may be irrecoverable if the realisable value for such inventories has decreased due to their damage, whole or partial obsolescence or resulting from changes in market prices. Cost of inventories may be irrecoverable if possible costs for completion or sale have increased.

Raw and other materials in inventories are not written-off below cost, if finished goods, in which they will be included, will be sold at cost or above. However, when decrease in price for raw materials indicates that cost of finished goods will exceed the net realisable value, raw materials are written off to the net realisation value.

At each reporting period the Group analyses inventories to determine whether they are damaged, obsolete or slow-moving or whether their net realisable value has declined. If such situation occurred, the amount by which inventories are impaired is recorded in profit or loss.

3.7 Biological assets

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

• (a) current ñ with useful life of 1 year, including:
• · agricultural crops (winter crops, spring crops and industrial crops);
• · animals in growing and fattening (cattle);
• (b) non-current ñ with useful life over 1 year:
• · work and productive livestock (cattle, etc.).

Biological asset is an animal or plant which in the process of biological transformations can create agricultural products or additional biological assets, as well as bring economic benefits in other ways.

Biological assets are measured at fair value less estimated costs to sell, except in case where fair value cannot be determined reliably. Costs to sell include all costs that would be necessary to sell the assets, including transportation costs.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.7 Biological assets (cont.)

If there is an active market for a biological asset or agricultural produce, the Group determines the fair value of assets based on their quoted price in the market. If the Group has access to several markets, the definition of fair value is based on the market, which may be used by the Group with the highest probability.

In the absence of an active market, the Group uses one or more of the following indicators to determine the fair value of biological assets:

• · price of the most recent transaction in the market, provided that in the period between the date of the transaction and the reporting date there were no significant changes of economic conditions;
• · market prices for similar goods;
• · sectorial indices.

In case where there are no market prices or other value indicators to determine the fair value in respect of the biological asset at a particular time, the Group uses the discounted value of the asset's expected net cash flows, while applying a discount coefficient, calculated on the basis of current market conditions for cash flow before tax.

Where there is no information about market prices upon the initial recognition of biological asset, and alternative estimates of fair value are clearly unreliable, such biological asset is valued at cost less accumulated depreciation and impairment losses. Once there is the possibility to determine the fair value of biological assets with reasonable reliability, the biological asset is revalued at fair value less estimated costs to sell (this principle applies only at initial recognition of the biological asset). If the Group has previously valued the biological asset at fair value less estimated costs to sell, this biological asset is recorded at fair value less estimated costs to sell up to the moment of its disposal.

The difference between the fair value less estimated costs to sell and production cost of biological assets is recorded in profit or loss as gain/(loss) from changes in value of biological assets and agricultural products.

Biological assets and future harvest costs

Cost of crops for future harvest consists of actual costs incurred in growing harvest (including lease expenses, costs of land preparation, planting, fertilising, processing, collection, storage). The fair value of winter crops at the end of the year is approximate to its cost due to a minor biological transformation of seeds at the end of the year, significant impact of cultivation quality, weather conditions and precipitation on future harvest, variations in market demand for future harvest. Crops for future harvest are measured at cost.

3.8 Cash and cash equivalents

Cash and cash equivalents include cash at banks and in hand, cash in transit, issued letters of credit and call deposits.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.9 Impairment of non-current assets

The Group assesses at each reporting period the carrying value of its non-current assets to determine whether there is any objective evidence that non-current assets are impaired. If any such evidence exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). If it is not possible to estimate the recoverable amount of the individual asset, the Group shall determine the recoverable amount of the cash-generating unit to which the asset belongs (the assetís cash- generating unit).

The expected recoverable amount of a cash-generating unit is the highest of the cash-generating unitís selling value and its value in use. In estimating value in use, the future cash flows are discounted to present value using a discount rate before taxation which reflects current market assessments of the time value of money and the risks specific to the asset.

If the expected recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying value, the carrying value of the asset (or cash-generating unit) shall be reduced to its recoverable amount. That reduction is an impairment loss, unless the asset is carried at revalued amount. Any impairment loss of a revalued asset shall be treated as a revaluation deficit. If the impairment loss is reversed subsequently, then carrying value of an asset (or cash-generating unit) increases to the revised and estimated amount of its recoverable amount, where increased carrying value does not exceed the carrying value which could be determined only in that case if impairment loss for an asset (or cash- generating unit) was not recognised in the previous years. Reversal of the impairment loss is recognised in profit or loss.

3.10 Advances issued and other accounts receivable which are not financial assets

Advances issued are recorded at nominal value less value added tax and any accumulated impairment losses. Other current assets are recorded at nominal cost less accumulated impairment losses.

Impairment of advances issued is recognised if there is objective evidence that repayment of the full amount of the debt does not occur within the contract terms, including the incoming information about substantial financial difficulties of the debtor, the possibility of recognition a debtor as a bankrupt, or probability of debtor's reorganisation, in case of refusal from delivery, etc. Impairment of advances issued and other nonfinancial current assets is reflected according to order described in subparagraph 'Impairment of Assets' of Note 12.

Advances issued under the contracts for the purchase of property, plant and equipment are recorded in section 'Other non-current assets' of consolidated statement of financial position.

3.11 Value added tax (VAT)

In Ukraine VAT standard rate is 20% on imports and sale of goods and services in the territory of Ukraine and 0% rate for all exports and services rendered outside Ukraine.

The VAT liability is equal to the total amount of VAT accrued during the reporting period and arises at the earlier of goods shipment to the customer or at the date of receipt of payment from the client.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.11 Value added tax (VAT) (cont.)

VAT credit is the amount by which a taxpayer is entitled to reduce his/her VAT liabilities in the reporting period. The right to VAT credit arises on the earlier of the date of payment to supplier or the date of receipt of goods by the Company.

• · the value added tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the value added tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable;
• · receivables and payables are stated including the value added tax.

For the Cyprus Company VAT of 19% applies on expenses.

The Group classifies VAT recoverable arising from its operating activities and its capital expenditures. The balance of VAT recoverable may be realised by the Group either through a cash refund from the state budget or by sett off against VAT liabilities with the state budget in future periods.

The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the consolidated statement of financial position.

3.12 Income tax

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

Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit or loss and other comprehensive income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

The majority of Groups entities are registered as tax payers of fixed agricultural tax and therefore are not payers of corporate tax.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.13 Revenue recognition

Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue when it transfers control over a good or service to a customer.

Information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies is as follows:

Sale of Goods

Customers obtain control of Group's products when the goods are delivered to and have been accepted at a place specified in a sales contract. Invoices are generated at that point in time. Invoices are usually payable within 10 days. No discounts after delivery of goods are provided. Some contracts permit the customer to return an item.

Revenue is recognised when the goods are delivered and have been accepted by customers at a place specified in a sales contract. For contracts that permit the customer to returm an item of revenue is recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur.

Services

Services comprise storage and handling services, rendering of which is auxiliary to Group's main activities. Invoices are usually issued on a monthly basis and are payable during the period not exceeding 30 days.

Revenue is recognised over time as services are provided. The stage of completion for determining the amount of revenue to recognise is assessed on the basis of the actual service provided as a proportion of the total services to be provided.

3.14 Finance income and costs

Finance income comprises of interest income. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Finance costs comprise interest expense on borrowings and bank charges.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, which necessarily requires significant time to be prepared for use in accordance with the Groupís intentions or for sale, are capitalised as the part of initial value of such asset. All other borrowing costs are expensed in profit or loss in the period they were incurred. Borrowing costs include interest payments and other expenses incurred by the Group related to borrowings.

Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.15 Assets held for sale or distribution

Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale or distribution rather than through continuing use, are classified as held for sale or distribution. Immediately before classification as held for sale or distribution, the assets, or components of a disposal group, are remeasured in accordance with the Groupís accounting policies. Thereafter generally the assets, or disposal group, are measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, investment property or biological assets, which continue to be measured in accordance with the Groupís accounting policies. Impairment losses on initial classification as held for sale or distribution and subsequent gains and losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

Once classified as held for sale or distribution, intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity-accounted investee is no longer equity accounted.

3.16 Leases

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

As a lessee

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The rightof-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Groupís incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.16 Leases (cont.)

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Groupís estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

As a lessor

At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative standalone prices.

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to allocate the consideration in the contract.

The finance lease payments are appointed between the finance income and the decrease of the finance lease receivables based on the effective interest method.

The Group recognises lease payments received under operating leases as income on a straightline basis over the lease term as part of other revenue.

3.17 Distribution of dividends

The amount payable to the Owners of the Company in the form of dividends is recognised in the financial statements of the Group in the period the dividends were approved by the Owners of the Company.

3.18 Contingent assets and liabilities

Contingent liabilities represent the possible commitments of the Group arising from past events, which existence will be confirmed only as a result of occurrence or non-occurrence of one or more future events, that are not under the full control of the Group, or current liabilities arising from past events not recognized in the financial statements in connection with the fact that the Group does not consider the outflow of resources providing economic benefits and required for liabilities settlements as expected ones, or the amount of liabilities cannot be reliably measured.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.18 Contingent assets and liabilities (cont.)

The Group does not recognize contingent liabilities in financial statements. The Group discloses information about contingent liabilities in the notes to the financial statements unless the probability of outflow of resources required to settle the liability, is unlikely.

Contingent assets represent the possible assets of the Group arising from past events, which existence will be confirmed only as a result of occurrence or non-occurrence of one or more future events that are not under the full control of the Group. The Group does not recognize contingent assets in the financial statements. The Group discloses information about contingent assets in the notes to financial statements, if the flow of economic benefits is likely to occur.

3.19 Provisions

A provision is a liability of uncertain amount or timing. Provisions are recognised if as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the consolidated statement of profit or loss and other comprehensive income net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

3.20 Operating segments

Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, head office expenses and tax assets and liabilities.

The Group is organised by reportable segments and this is the primary format for segmental reporting. Each reportable segment provides products or services which are subject to risks and rewards that are different than those of other reportable segments.

The Group presents its geographical analysis for segmental revenue by customer location and for assets based on the asset's location. The Group operates mainly in Ukraine.

3.21 Discontinued operations

Classification as a discontinued operation occurs on disposal or when the operation meets the criteria to be classified as held for sale (see note 3.15), if earlier. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative year

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING POLICIES (cont.)

3.22 Share capital

Ordinary shares are classified as equity. The difference between the fair value of the consideration received and the nominal value of share capital issued is taken to share premium. Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognised as a deduction from equity.

3.23 Employee benefits

Post employee benefits

The Group contributes to the State Pension Fund of Ukraine and the social insurance funds for the benefit of its employees (defined benefits). The Group's contributions are expensed as incurred.

Current employee benefits

Employee salaries are expensed in the reporting period in which such work is performed.

3.24 Events after the reporting period

The Group adjusts the consolidated financial statements amounts if events after the reporting period demand adjustments. Events after the reporting period requiring adjustments of the consolidated financial statements amounts relate to the confirmation or contradiction of the circumstances prevailing at the reporting period, as well as estimates and judgments of management, which are made under conditions of uncertainty and incompleteness of information at the reporting period.

If non-adjusting events that occurred after the reporting period are significant, non-disclosure of information about them may affect the economic decisions of users which are made on the basis of these consolidated financial statements. Accordingly, the Group discloses the nature of such events and estimates of their financial effect or states the impossibility of such estimate for each material category of non-adjusting events that occurred after the reporting period.

4. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES

The preparation of the consolidated financial statements in accordance with IFRS requires from management to exercise judgment, to make estimates and assumptions that influence the application of accounting principles and the reported amounts of assets, liabilities, income and expenses. The estimates and underlying assumptions are based on historical experience and various other factors that are deemed to be reasonable based on knowledge available at that time. Actual results may deviate from such estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognised in the consolidated financial statements are described below.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

4. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (cont.)

4.1 Useful life of property, plant and equipment

The Group estimates the remaining useful life of property, plant and equipment at least once a year at the end of the fiscal year. Should the expectations differ from previous estimates, changes are accounted for as changes in accounting estimates in accordance with IAS 8 'Accounting Policy, Changes in Accounting Estimates and Errors'. These estimates may have a significant effect on the carrying value of property, plant and equipment and depreciation recognised in profit or loss.

4.2 Impairment of non-financial assets

An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in an armís length transaction of similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the assetís performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows and the growth rate used for extrapolation purposes.

4.3 Impairment of receivables

The Group reviews its trade and other receivables for evidence of their recoverability. Such evidence includes the customerís payment record and the customerís overall financial position.

The Group provides for doubtful debts to cover potential losses when a customer may be unable to make necessary payments. In assessing the adequacy of provision for doubtful debts, management considers the current economic conditions in general, the age of accounts receivable, the Groupís experience in writing off of receivables, solvency of customers and changes in conditions of settlements. Economic changes, industry situation or financial position of separate customers may result in adjustments related to the amount of provision for doubtful debts reflected in the consolidated financial statements as impairments of receivables.

Additionally a general provision for doubtful debts is provided on all receivables due for more than 365 days.

Bad debts which maturity has already expired are written-off from the consolidated statement of financial position along with a corresponding adjustment to the provision for doubtful debts.

Bad debts which are subsequently recovered are reversed in the consolidated financial statements through profit or loss.

The Group does not accrue provisions for doubtful debts on balances with related parties regardless of the origin date of current debt.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

4. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (cont.)

4.4 Legal proceedings

The Groupís Management applies significant assumptions in the measurement and recognition of provisions for and risks of exposure to contingent liabilities related to existing legal proceedings and other unsettled claims, and also other contingent liabilities. Managementís judgment is required in estimating the probability of a successful claim against the Group or the crystallising of a material obligation, and in determining the probable amount of the final settlement or obligation. Due to uncertainty inherent to the process of estimation, actual expenses may differ from the initial estimates. Such preliminary estimates may alter as new information is received, from internal specialists within the Group, if any, or from third parties, such as lawyers. Revision of such estimates may have a significant effect on the future results of operating activity.

4.5 Impairment of obsolete and surplus inventory

At each reporting period the Group assesses the necessity to impair obsolete and surplus inventory. The Group analyses inventories to determine whether they are damaged, obsolete or slow-moving or whether their net realisable value has declined. If such necessity exists, the reserve is calculated and necessary adjustments are made.

Inventories are measured at the lower of cost and net realisable value. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and preliminary estimated distribution and selling costs. The Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting period.

4.6 Taxation

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective regions in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group companiesí domicile.

Cyprus taxes

Significant judgment is required in determining the provision for Cyprus direct and indirect taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax and deferred tax provisions in the period in which such determination is made.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

4. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (cont.)

4.6 Taxation (cont.)

In Managementís opinion, the Company is in substantial compliance with the tax laws governing its operations. However, the risk remains that the relevant authorities could take different positions with regard to interactive issues and the effect could be significant.

The Company met the tax filing in Cyprus. To the best of Managementís knowledge, no breaches of tax law have occurred. Thus, the Company has not recorded any provisions for potential impact of any such breaches at the reporting period.

4.7 Contingent liabilities

Contingent liabilities are determined by the occurrence or non-occurrence of one or more future events. Measurement of contingent liabilities is based on managementís judgments and estimates of the outcomes of such future events. In particular, the tax laws in Ukraine are complex and significant management judgement is required to interpret those laws in connection with the tax affairs of the Group, which is open to challenge by the tax authorities. Additionally, the economic and political situation in Ukraine may have an impact (note 34 to the consolidated financial statements)

4.8 VAT

Management classified VAT recoverable balance as current based on expectations that will be realised within twelve months from the reporting period. In addition management assessed whether the allowance for irrecoverable VAT needs to be created.

In making this assessment, management considers past history of receiving VAT refunds from the state budget. For VAT recoverable expected to be set off against VAT liabilities in future periods, management based its estimates on detailed projections of expected excess of VAT input over VAT output in the normal course of business.

4.9 Measurement of fair values

A number of the Groupís accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the CFO.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified.

Significant valuation issues are reported to the Board of Directors.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

4. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (cont.)

4.9 Measurement of fair values (cont.)

When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

• · Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• · Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• · Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the relevant notes.

4.10 Ukrainian business environment

Political and social events of the beginning of 2014 which resulted in the annexation of the Crimea by the Russian Federation and the loss of control by Ukraine over the territory of part of the Donetsk and Lugansk regions have remained unresolved. However, the intensity of hostilities has substantially decreased since the end of July 2020 upon agreeing on a ceasefire plan.

In March 2020, the World Health Organisation declared the Coronavirus COVID-19 outbreak to be a pandemic in recognition of its rapid spread across the globe. Many governments have been taking increasingly stringent steps to help contain, and in many jurisdictions, now delay, the spread of the virus, including: requiring self-isolation/ quarantine by those potentially affected, implementing social distancing measures, and controlling or closing borders and ìlocking-downî cities/regions or even entire countries. These measures have slowed down the global economic activities including Ukraine.

During 2021 Ukraine's GDP contracted by 4.4% (2020: grew by 4.0%).

As a result of the slowdown, the Ukrainian Hryvnia weakened against the world currencies, with the NBU UAH/USD exchange rate decreasing to 27.28 at 31 December 2021 from 28.27 at 31 December 2020.

The Ukraine's cooperation with the International Monetary Fund (IMF) is key for its macroeconomic stability. In June 2020, the IMF approved a USD 5 billion 18-month stand-by arrangement (SBA) aimed to address large balance-of-payments and fiscal financing needs, preserve achievements to date, and advance a small set of key structural reforms to ensure that Ukraine is well-poised to return to growth when the crisis ends. Ukraine received the first tranche of USD 2.1 billion under this SBA in June 2020. In July 2020, Ukraine also issued a USD 2 billion bonds due in 2033. This, to large extent, enabled Ukraine to meet its 2020 obligations under sovereign debt.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

4. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (cont.)

4.10 Ukrainian business environment (cont.)

Whilst management believes it is taking appropriate measures to support the sustainability of the Groupís business in the current circumstances, a continuation of the current unstable business environment could negatively affect the Groupís results and financial position in a manner not currently determinable. These consolidated financial statements reflect managementís current assessment of the impact of the Ukrainian business environment on the operations and the financial position of the Group. The future business environment may differ from managementís assessment.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

5. REVENUE

	2021	2020
Sales of goods	56 955	66 704
Rendering of services	362	852
Total	57 317	67 556

Revenue generated from sale of goods was as follows:

	2021	2020
Sunflower	35 070	36 449
Winter wheat	19 027	27 410
Livestock and related revenue	2 726	2 288
Corn in grain	100	103
Other agricultural crops	394	454
Total	57 317	66 704

	2021	2020
	tonnes	tonnes
Winter wheat	78 159	162 559
Sunflower	56 267	86 185
Corn in grain	530	862
Total	134 956	249 606

Sales volume for milk yield for the year ended 31 December 2021 was 5 347 tonnes (2020: 5 809 tonnes).

Revenue generated from rendering of services relates to storage and handling services granted to third parties.

Livestock and related revenue includes revenue from milk and other livestock related products.

Timing of revenue recognition	2021	2020
Goods transferred at a point in time	56 955	66 704
Services transferred over time	362	852
Total	57 317	67 556

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

5. REVENUE (cont.)

The following table provides information about receivables and liabilities from contracts with customers:

	2021	2020
Trade receivables, which are included in Trade and other receivables	1 529	2 785
Advances from customers, which are included in Trade and other paybles	(9)	(16)

6. COST OF SALES

	2021	2020
Livestock and related operations	2 320	2 193
Plant breeding and related operations	41 588	53 931
Vegetable oil and protein meals	-	-
Other activities	224	1 425
Total	44 132	57 549

7. NET CHANGE IN FAIR VALUE LESS COST TO SELL OF BIOLOGICAL ASSETS AND AGRICULTURAL PRODUCE

	2021	2 020
Non-current biological assets	(128)	(116)
Current biological assets	25 486	23 018
Total	25 358	22 902

The net change in fair value less costs to sell per type of biological asset was:

Animals in growing and fattening	(701)	(633)
Crops under cultivation (Note 19)	26 059	23 535
Total	25 358	22 902

8. OTHER OPERATING INCOME

	Note	2021	2020
		-
Government grants			100
Reversal of provision for non-trade bad debts	24	-	46
Income from reversal of impairment of PPE	16	-	-
Trade payables written-off		7	-
Other income		297	313

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

8. OTHER OPERATING INCOME (cont.)

Gain on disposal of subsidiary companies		-	1
Total		304	460
ADMINISTRATIVE EXPENSES 9.
		2021	2020
Personnel expenses	14	4 759	1 759
Amortisation of intangible assets	15	9	9
Depreciation charge	15	137	48
Transportation expenses		76	129
Materials		43	12
Insurance		20	10
Professional fees		618	262
Communication services		15	57
Other expenses		264	467
Total		5 941	2 753

10. DISTRIBUTION EXPENSES

		2 021	2 020
Personnel expenses	14	2	1
Transportation expenses		311	390
Utilities		-	-
Other expenses		779	19
Total		1 092	410

11. OTHER OPERATING EXPENSES

		2 021	2 020
Depreciation charge	15	3	15
Loss on disposal of property, plant and equipment	12	15	89
Loss on disposal of right-of use assets		-	267
Loss on disposal of current assets		41	-
Wastages and impairment of inventories		4 246	3 044
Fines and penalties		11	1
Donations		45	44
Other expenses		315	56
Total		4 676	3 516

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

12. OPERATING PROFIT

Operating profit is stated after charging the following items:

	Note	2021	2020
Depreciation of property, plant and equipment	16	2 585	2 351
Amortisation of intangible assets	18	10	10
Loss on disposal of property, plant and equipment	11	-	89
Personnel expenses	14	17 997	10 214
Independent auditorsí remuneration for the statutory audit of
annual accounts

13. NET FINANCE INCOME

	2021	2020
Interest income	46	198
Gain on foreign exchange differences	7 253	-
Finance income	7 299	198
Interest on non-bank loans	-	-
Interest on notes	-	-
Interest on lease liabilities	(2 044)	(3 587)
Loss on foreign exchange differences	(5 702)	(11 944)
Finance costs	(7 746)	(15 531)
Net finance income	(447)	(15 333)

14. PERSONNEL EXPENSES

	2021	2020
Wages and salaries	15 618	8 498
Contributions to state funds	2 379	1 716
Total	17 997	10 214

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

14. PERSONNEL EXPENSES (cont.)

Payroll and related taxes were presented as follows:

	2021	2020
Production personnel	13 235	8 454
Administrative personnel	4 759	1 759
Distribution personnel	3	1
Total	17 997	10 214

The number of employees were presented as follows:

	2021	2020
Average number of employees, persons		1 769
Key management personnel		10

15. DEPRECIATION AND AMORTISATION

Depreciation charge:		2021	2020
Depreciation of production property, plant and equipment		2 537	2 288
Depreciation of right-of-use assets	17	3 447	3 528
Administrative expenses	9	48	48
Other expenses	11	10	15
Total		6 041	5 879

Total	10	10
Amortisation of intangible assets	10	10
Amortisation charge:

- --

AGROTON PUBLIC LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

PROPERTY, PLANT AND EQUIPMENT

16.	MENT QUIP RTY, PLANT AND E PROPE
		Construction in progress	Buildings	ment Equip	Vehicles	mputers and office ment equip Co	Instruments, tools and other	Total
							ment equip
Cost
	Balance at 1 January 2020
		1 213	14 457	28 053	2 589	185	165	46 662
Additions		1 445	319	1 607	332	47	7	3 757
Disposals		(671)	(114)	(136)	(2)	(2)	(1)	(926)
Transfers		(110)	43	65	-	2	-	-
	Effect from translation into presentation currency	(224)	(2 359)	(4 624)	(435)	(32)	(27)	(7 701)
	Balance at 31 December 2020	1 653	12 346	24 965	2 484	200	144	41 792
	Balance at 1 January 2021	1 653	12 346	24 965	2 484	200	144	41 792
Additions		7 475	1 154	5 169	716	5	251	14 770
Disposals		(7 475)	(30)	(142)	(9)	-	(4)	(7 660)
Transfers		(973)	973	-	-	-	-	-
	Effect from translation into presentation currency	9	(5 076)	(669)	(707)	(93)	85	(6 451)

9 367

29 323

2 484

112

Balance at 31 December 2021 689

476

42 451

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

16. PROPERTY, PLANT AND EQUIPMENT (cont.)

	Construction in progress	Buildings	ment Equip	Vehicles	mputers ment and office equip Co	Instruments, ment tools and other equip	Total
Accumulated depreciation and impairment losses Balance at 1 January 2020	50	10 748	12 599	2 151	110	120	25 778
Charge for the year	-	454	1 765	94	26	12	2 351
On disposals	-	(27)	(134)	(2)	(2)	(1)	(166)
Effect from translation into presentation currency	(6)	(1 764)	(2 120)	(353)	(19)	(20)	(4 282)
Balance at 31 December 2020	44	9 411	12 110	1 890	115	111	23 681
Balance at 1 January 2021	44	9 411	12 110	1 890	115	111	23 681
Charge for the year	-	499	1 941	103	29	13	2 585
On disposals	-	(27)	(130)	(8)	-	(4)	(169)
Effect from translation into presentation currency	(13)	(3 173)	(5 287)	(637)	(62)	(41)	(9 213)
Balance at 31 December 2021	31	6710	8634	1348	82	79	16 884
mber 2019 As at 31 Dece	1 163	3 709	15 454	438	75	45	20 884
mber 2020 As at 31 Dece	1 609	2 935	12 855	594	85	33	18 111
mber 2021 As at 31 Dece	658	2 657	20 689	1 136	30	397	25 567

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

17. RIGHT-OF-USE ASSETS

	Plough-land
Cost	23 119
Balance as at 1 January 2020
Additions	1 586
Disposals	(1 296)
Effect from translation into presentation currency	(3 766)
Balance as at 31 December 2020	19 643
Balance as at 1 January 2021	19 643
Additions	-
Disposals	-
Effect from translation into presentation currency	718
Balance as at 31 December 2021
	20 361
Accumulated depreciation and impairment losses	3 942
Balance as at 1 January 2020	3 942
Depreciation charge	3 528
Disposals	(707)
Effect from translation into presentation currency	(470)
Balance as at 31 December 2020	6 293
Balance as at 1 January 2021	6 293
Depreciation charge	3 447
Disposals	-
Effect from translation into presentation currency	230
Balance as at 31 December 2021
	9 970
Carrying amounts:
As at 1 January 2020	19 177
As at 1 January 2021	13 350
As at 31 December 2021	10 391

Right-of-use assets have been recognised as a result of adoption by the Group of IFRS 16 ìLeasesî from 1 January 2019. The Group's right-of-use assets represent leases of plough-land from individuals. The total size of leased plough-land at 31 December 2021 is 94 thousand hectares (31 December 2020: 94 thousand hectares).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

18. INTANGIBLE ASSETS

	Computer software	Land lease rights	Total
Cost
Balance as at 1 January 2020	60	-	60
Additions	4	-	4
Disposals	(3)	-	(3)
Effect from translation into presentation currency	(9)	-	(9)
Balance as at 31 December 2020	52	-	52
Amortisation charge	52	-	52
Additions	-	-	-
Disposals	-	-	-
Effect from translation into presentation currency	2	-	2
Balance as at 31 December 2021	54	-	54
Accumulated amortisation and impairment losses
Balance as at 1 January 2020	22	-	22
Amortisation charge	10	-	10
Disposals	(3)	-	(3)
Effect from translation into presentation currency	(4)	-	(4)
Balance as at 31 December 2020	25	-	25
Balance as at 1 January 2021	25	-	25
Amortisation charge	10	-	10
Disposals	-	-	-
Effect from translation into presentation currency	1	-	1
Balance as at 31 December 2021	36	-	36
Carrying amounts:
As at 1 January 2020	38	-	38
As at 31 December 2020	27	-	27
As at 31 December 2021	18	-	18

Land lease rights were derecognised as a result of adoption by the Group of IFRS 16 ìLeasesî from 1 January 2019.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

19. BIOLOGICAL ASSETS

Biological assets were presented as follows:

	2021
Crops under cultivation	10 772
Animals in growing and fattening	545
Total current biological assets	11 317
Cattle	695
Total non-current biological assets	695
Total	12
	012

19.1 Crops under cultivation

At 31 December 2021 and 31 December 2020 the crops under cultivation were presented as follows:

		31 December 2021	31 December 2020
	Thousands	Carrying	Thousands	Carrying
	of hectares	values	of hectares	values
Winter wheat plantings	61	10 772	38	6 694
Winter rape plantings	-	-	-	-
Other plantings	-	-	-	8
Total	61	10 772	38	6 702

The reconciliation of crops under cultivation carrying value was presented as follows:

	2021	2020
At 1 January	6 702	8 376
Increase in value as a result of capitalisation of cost	58 724	36 417
Decrease in value as a result of harvesting	(78 151)	(60 298)
Gain from presentation of biological assets at fair value (note 7)	26 059	23 535
Effect from translation into presentation currency	(2 562)	(1 328)
At 31 December	10 772	6 702

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

19. BIOLOGICAL ASSETS (cont.)

19.1 Crops under cultivation (cont.)

The main crops harvested and the fair value at the time of harvesting was as follows:

		31 December 2021		31 December 2020
	Volume,	Amount,	Volume,	Amount,
	tonnes	USD thousand	tonnes	USD thousand
Winter wheat	210 314	39 438	162 271	176 475
Sunflower	96 597	37 061	74 531	92 750
Corn	11 849	530	9 144	2 070
Other sowing	17 951	1 122	13 839	865
Total	336 711	78 151	259 785	60 298

Expenses capitalised in biological assets mainly include fertilisers, fuel, seeds, labour and the operating lease rentals.

19.2 Non-current biological assets and animals in growing and fattening

Non-current biological assets:

		31 December 2021		31 December 2020
	Number,	Fair	Number,	Fair
	heads	value	heads	value
Cattle	1 020	695	1 020	903
Total		695		903

Animals in growing and fattening:

	31 December 2021		31 December 2020
	Number,	Fair	Number,	Fair
	heads	value	heads	value
Cattle	1 204	545	1 204	570
Total		545		570

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

19. BIOLOGICAL ASSETS (cont.)

19.2 Non-current biological assets and animals in growing and fattening (cont.)

Reconciliation of non-current biological assets carrying value was presented as follows:

	2021	2020
At 1 January	903	1 141
Increase in value as a result of capitalisation of cost	172	1 907
Decrease in value as a result of harvesting agricultural products	(16)	(1 839)
Loss from presentation of biological assets at fair value	(128)	(116)
Other changes	-	(8)
Effect from translation into presentation currency	(236)	(182)
At 31 December	695	903

Expenses capitalised in biological assets of animals include mixed folder, electricity, labour, depreciation and other.

Reconciliation of animals in growing and fattening carrying value was presented as follows:

	2021	2020
At 1 January	570	731
Increase in value as a result of asset acquisition	80	-
Increase in value as a result of capitalisation of cost	234	730
Decrease in value as a result of harvesting agricultural products	(553)	(9)
Decrease in value as a result of sale of assets	(499)	(252)
Other changes	693	4
Loss from presentation of biological assets at fair value	(701)	(517)
Effect from translation into presentation currency	1 291	(117)
At 31 December	545	570

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

20. INVESTMENTS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS

	2021	2020
US Treasury notes	14 178	15 123
Bank of Cyprus Holdings Plc	72	72
Total	14 250	15 195

During 2019, the Group acquired US Treasury notes for a total amount of USD 8 821 thousand which mature in 2020-2027 and bear interest of 1.625%-2.42% p.a.. These instruments were classified as current as the Group holds them for trading.

Financial assets designated at fair value through profit or loss represent equity securities of Bank of Cyprus converted into shares after the decree issued by Central Bank of Cyprus on 29 March 2013. Based on that decree and the measurements for recapitalization of Bank of Cyprus, 47,5% of the uninsured deposits of the affected deposits have been converted into Bank of Cyprus shares.

In August 2013, pursuant to the above measurements, Bank of Cyprus, has issued to the Company 1 591 105 shares with nominal value Ä1,00 each. These shares have been identified, classified and measured according to the relevant provisions of IAS 39 ìFinancial instruments: Recognition and Measurementî and IFRS 13 ìFair Value Measurementî.

The Company held 1 591 105 shares with fair value Ä0,140 cents. In January 2017, the shares in Bank of Cyprus Public Company Limited were exchanged with new shares of Bank of Cyprus Holding Plc listed in both London Stock Exchange and in Cyprus Stock Exchange with nominal value of Ä0,10 cents each. At 31 December 2017 the Company held 79 555 shares in Bank of Cyprus Holding Plc with fair value Ä2,47 each. At 31 December 2018, the fair value of the shares held was Ä1,5520 each.

The exposure of the Company to market risk in relation to financial assets is reported in note 36 to the consolidated financial statements.

21. LOANS RECEIVABLE

	Note	2021	2020
Current assets
Loans to related parties	32	18 549	18 549
Loans to third parties		5 767	5 767
Provision for impairment		(5 767)	(5 767)
Total		18 549	18 549

The exposure of the Group to credit risk is reported in note 36 to the consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

22. INVENTORIES

	2021	2020
Raw materials	9 732	2 074
Work-in-progress	6 524	3 184
Agricultural produce	37 773	9 811
Other	2 267	998
Total	56 296	16 067

Work-in-progress

Work in progress includes expenditure capitalised in respect of 53 thousand hectares (2020: 53 thousand hectares) of plough land prepared for sowing in the current or following year.

Agricultural produce

The main agricultural produce was as follows:

	2021	2020
Winter wheat	14 294	34
Sunflower	9 814	9 202
Corn	36	4
Other agricultural crops	13 629	571
Total	37 773	9 811

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

23. TRADE AND OTHER RECEIVABLES

	22021
Trade receivables	2 722
Provision for impairment of trade receivables	(2)
Trade receivables, net	2 720
Prepayments to suppliers	913
Other receivables	33 852
Provision for impairment of prepayments and other receivables	(34 306)
VAT recoverable	-
Total	3 179

On 29 June 2012, the Company entered into a preliminary agreement with Stiomi Agri Limited ('Seller') for the acquisition of 100% of the issued share capital of Private Enterprise 'Peredilske'. The parties agreed that the price for transfer of the company's shares amounting to USD 23 080 000.

On 26 December 2012, the Company entered into a preliminary agreement with Stiomi Agri Limited ('Seller') for the acquisition of 100% of the issued share capital of Limited Liability Company 'Skhid Potencial-Resurs'. The parties agreed that the price for transfer of the company's shares shall amount to USD 10 000 000.

On 3 September 2013 both agreements for the acquisition of PE ìPeredilskeî and of LLC ìSkhid- Potencial-Resursî have been cancelled. The parties agreed that the whole amount paid should be returned to the Company within twelve months of the signing of the cancellation agreements, either in cash and/or an equivalent market valueís worth of agricultural goods.

Due to political and economic developments and military conflict in Eastern Ukraine, Stiomi Agri Limited is currently unable to repay this amount to the Group. It is highly probable that this amount will never be recovered, therefore an impairment loss for USD 33 080 thousand was recognised in 2014.

The exposure of the Group to credit risk and impairment losses in relation to trade and other receivables is reported in note 36 to the consolidated financial statements.

24. MOVEMENT IN PROVISION FOR DOUBTFUL DEBTS

The movement in the provision for doubtful debts in respect of trade and other receivables was as follows:

	2021	2020
At 1 January	33 142	33 206
Provision for the year	-	41
Reversal of provision for bad debts	-	-
Write-off of provision for bad debt from receivables	(45)	(76)
Effect of translation into presentation currency	1 211	(29)
At 31 December	34 308	33 142

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

25. CASH AND CASH EQUIVALENTS

	2021	2020
Fixed deposit	-	50
Cash at bank - USD	13 065	22 974
Cash at bank - UAH	-	2 030
Cash at bank - Euro	-	1
Cash in hand	-	-
Total	13 065	25 055

The exposure of the Group to credit risk and interest rate risk in relation to cash and cash equivalents is reported in note 36 to the consolidated financial statements.

26. DISCONTINUED OPERATIONS AND DISPOSAL GROUP HELD FOR SALE

Discontinued operations

The assets and liabilities of subsidiary company Agro-Svinprom LLC, operating in pig-breeding, has been presented as held for sale following the Management decision in July 2011 to dispose the company.

In this respect the Management of the Group has advertised their intention for the sale of the subsidiary to the public media, for attraction of prospective new investors. Held for sale

At 31 December 2021 the disposal group comprised the following assets and liabilities:

	Agro Svinprom LLC
Assets classified as held for sale
Property, plant and equipment	14
Total	14
Liabilities classified as held for sale
Trade and other payables	-
Total	-
Net assets	14

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

26. DISCONTINUED OPERATIONS AND DISPOSAL GROUP HELD FOR SALE (cont.)

Held for sale (cont.)

At 31 December 2020 the disposal group comprised the following assets and liabilities:

	Agro-Svinprom LLC
Assets classified as held for sale
Property, plant and equipment	17
Total	17
Liabilities classified as held for sale
Trade and other payables	-
Total	-
Net assets	17

27. SHARE CAPITAL AND SHARE PREMIUM

	2021 Number of shares	2021 Nominal value, USD	2020 Number of shares	2020 Nominal value, USD
Authorised share capital
Ordinary shares of EUR 0,021 each	47 619 048	1 321 500	47 619 048	1 321 500
Issued and fully paid	Number of shares	Nominal value, USD	Share premium, USD	Total, USD
At 1 January 2020	21 670 000	661 128	88 531 664	89 192 792
At 31 December 2020	21 670 000	661 128	88 531 664	89 192 792
At 31 December 2021	21 670 000	661 128	88 531 664	89 192 792

Issued share capital

• i Upon incorporation on 21 September 2009, the Company issued to the subscribers of its Memorandum of Association 12 000 000 ordinary shares of nominal value EUR0,021 each, amounting to EUR 252 000 (USD equivalent of USD 370 591).
• ii On 4 November 2009 the Company issued 4 000 000 additional ordinary shares of nominal value EUR 0,021 each, amounting to EUR 84 000 (USD equivalent of USD 123 715), at a premium of EUR 6,93 per share, amounting to a total share premium of EUR 27 720 000 (USD equivalent of USD 38 791 285).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

27. SHARE CAPITAL AND SHARE PREMIUM (cont.)

Issued share capital (cont.)

Global Depositary Receipts ìGDRsî were issued against the 4 000 000 new shares by ìThe Bank of New York Mellonî for USD 9,72875 per each new share. The total consideration of the share capital issued was USD 38 915 000 out of which USD 123 715 is the total nominal value credited to the share capital account and USD 38 791 285 is the share premium reserve. Share issue expenses of USD 317 154 were deducted from the share premium reserve.

iii The members of the Company held an Extraordinary General Meeting on 25 June 2010 where they authorized and approved the increase of the issued share capital of the Company from 16 000 000 ordinary shares of EUR 0,021 each amounting to EUR 336 000 (USD equivalent of USD 494 306) to 21 670 000 ordinary shares of nominal value of EUR 0,021, by the creation of 5 670 000 ordinary shares of a nominal value of EUR 0,021 each, ranking pari pasu with the existing shares of the Company.

On 29 October 2010 the Company proceeded and issued 5 670 000 ordinary shares of nominal value EUR 0,021 each, amounting to EUR 119.070 (equivalent to USD 166 822), at a premium of EUR 6,7595 per share amounting to a total share premium of EUR 38 326 365 (USD equivalent of USD 54 222 634). The issue price for shares in the Companyís public offering was set at PLN 27 per share. The Company raised total gross proceeds of PLN 153 090 000 (USD equivalent of USD 54 389 456) from the public offering. Share issue expenses of USD 4 165 101 were deducted from the share premium reserve.

Listing of the Company to the Warsaw Stock Exchange

During the year 2010, the Board of Directors of the Company resolved to proceed with the initial public offering of 5 670 000 new ordinary shares of the Company and the application for the admission of the entire issued share capital of the company, including the Offer Shares to trading on the regulated market of the Warsaw Stock Exchange.

28. LOANS AND BORROWINGS

	Note	2021	2020
Current liabilities Loan from owner	32	128	128
Total loans and borrowings		128	128

The exposure of the Group to interest rate risk in relation to loans and borrowings is reported in Note 36 to the consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

29. LEASE LIABILITIES

	2021	2020
Non-current liabilities
Lease liabilities	11 360	9 019
	11 360	9 019
Current liabilities
Lease liabilities	4 250	5 697
	4 250	5 697
Total lease liabilities	15 610	14 716

The exposure of the Group to liquidity risk in relation to lease liabilities is reported in Note 36 to the consolidated financial statements.

30. TRADE AND OTHER PAYABLES

	2021	2020
Trade payables	572	637
Payroll and related expenses accrued	1 948	1 790
Advances received	-	16
Liabilities for other taxes and mandatory payments	26	134
VAT payable	399	756
Accrued expenses	33	25
Other provisions	-	-
Other liabilities	168	60
Total	3 146	3 418

The exposure of the Group to liquidity risk in relation to trade and other payables is reported in Note 36 to the consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

31. PROFIT PER SHARE

Basic profit per share

The calculation of basic profit per share was based on the profit attributable to the owners of the Company, and a weighted average number of ordinary shares as follows:

	2021	2020
Profit attributable to the owners of the Company (in USD'000):
Profit from continuing operations attributable to the owners of the Company	26 956	11 735
Loss from discontinued operations attributable to the owners of the Company	-	9
Total profit attributable to the owners of the Company	26 956	11 744
Weighted average number of ordinary shares: Weighted average number of ordinary shares at 31 December	21 670 000	21 670 000
Total basic profit per share (USD per share)	1,23	0,54

Profit per share is the profit for the year after taxation attributable to the owners of the Company divided by weighted average number of shares in issue for each year.

There were no options or instruments convertible into shares and so basic and diluted earnings per share are the same.

32. RELATED PARTY BALANCES AND TRANSACTIONS

As at 31 December 2021 and the date of this report, the Company is controlled by Mr. Iurii Zhuravlov, who holds directly 77,77% of the Company's share capital. The remaining 22,23% of the shares is widely held.

For the purposes of these consolidated financial statements, parties are considered to be related if one party has the ability to control the other party, is under common control, or can exercise significant influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form.

According to these criteria the related parties of the Group are divided into the following categories:

• a. Companies in which Group's companies have an equity interest;
• b. Companies in which key management personnel has an equity interest;
• c. Key management personnel;
• d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies.

Salary costs of key management personnel for the years ended 31 December 2021 and 31 December 2020 were as follows:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

32. RELATED PARTY BALANCES AND TRANSACTIONS (cont.)

	2021	2020
Wages and salaries Contributions to social funds	3 689 30	3 639 30
Total	3 717	3 669

Key management personnel include Directors (Executive and Non-Executive), the Chief Financial Officer, the Chief Agronomist, the Head of the Food Production Division and the Head of the Livestock Division.

	2021	2020
Number of key management personnel, persons	10	10
Outstanding balances with related parties:
Loans receivable (note 21)	2021	2020
d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies
Mr Iurii Zhuravlov - Chief Executive Officer	18 549	18 549
Total	18 549	18 549
Loans payable (note 28)
d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies
Mr Iurii Zhuravlov - Chief Executive Officer	128	128
Total	128	128
The Group's transactions with related parties:
Finance cost, net	2021	2020
d. Companies and individuals significantly influencing the Group and
having an interest in equity of Group's companies
Mr Iurii Zhuravlov - Chief Executive Officer	-	-
Total	-	-
Expenses
c. Key management personnel	3 721	3 669
Total	3 721	3 669

33. OPERATING SEGMENTS

A reportable segment is a separable component of a business entity that produces goods or provides services to individuals (or groups of related products or services) in a particular economic environment that is subject to risks and generates revenues other than risks and income of those components that are peculiar to other reportable segments.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

33. OPERATING SEGMENTS (cont.)

Reportable segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. All reportable segmentsí results are reviewed regularly by the Groupís CEO to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

The operating businesses are organised and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

33. OPERATING SEGMENTS (cont.)

For the year ended 31 December 2021 the Group identified the following reportable segments, which include products and services, that differ by levels of risk and conditions of generation of income:

• · Plant breeding
• · Livestock
• · Vegetable oil and protein meal
• · Other
• (i) Plant breeding segment raises and sells agricultural products and renders accompanying services. The main types of agricultural produce which are sold in this reportable segment are wheat, rye, barley, sunflowers and rape. The main services which are sold in this reportable segment are ploughing, handling and grain storage services.
• (ii) Livestock segment raises and sells biological assets and agricultural products of cattle breeding. The main biological assets and agricultural products which are sold in this reportable segment are poultry, cattle, pigs and milk.
• (iii) Vegetable oil and protein meal is a new segment the Group started disclosing in 2017. It represents the processing of own sunflower seeds into sunflower oil and protein meal using outsourced production facilities.

No operating segments have been aggregated to form the above reportable operating segments.

Transfer prices between operating segments are on an armís length basis in a manner similar to transactions with third parties.

Management monitors the operating results of each of the unit separately for the purpose of making decisions about resources allocation and evaluation of operating results.

Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements. Group financing (including finance expense and finance income) and income taxes, are managed on a group basis and are not allocated to operating segments.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

33. OPERATING SEGMENTS (cont.)

Information by reportable segment is presented as follows:

			Vegetable
2021	Livestock	Plant breeding	oil and protein	Other	Group level	Total
			meal
Total revenue	54 877	2 895	-	625	-	58 397
ment sales Inter-seg	(780)	(169)	-	(131)	-	(1 080)
External revenues	54 097	2 726	-	494	-	57 317
Net change in fair value less cost to sell of biological assets and agricultural
produce	(701)	26 059	-		-	25 358
mortisation Expenses (excluding depreciation and a	(2 035)	(52 198)	-	(99)	-	(54 332)
mortisation) (Loss)/profit for the year (excluding depreciation and a	51 361	(23 413)	-	395	-	28 343
mortization Depreciation and a	(188)	(5 716)	-	(137)	-	(6 041)
m continuing operations (Loss)/profit before taxation fro	51 173	(29 129)	-	258	-	22 302
ment assets Reportable seg	4 291	89 085	-	4 684	38 306	136 366
ment liabilities Reportable seg	179	15 454	-	2 492	633	18 758

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

33. OPERATING SEGMENTS (cont.)

2020 Livestock Plant

2020	Livestock	Plant	Vegetable oil	Other	Group	Total
		breeding	and protein meal		level
Total revenue	2 321	68 418	-	1 078	-	71 817
ment sales Inter-seg	(33)	(4 002)	-	(226)	-	(4 261)
External revenues	2 288	64 416	-	852	-	67 556
Net change in fair value less cost to sell of
biological assets and agricultural produce	(633)	23 535	-	-	-	22 902
mortisation Expenses (excluding depreciation and a	(2 726)	(69 937)	-	(133)	-	(72 796)
(Loss)/profit for the year (excluding
mortisation) depreciation and a	(1 071)	18 014	-	719	-	17 662
mortization Depreciation and a	(183)	(5 572)	-	(134)	-	(5 889)
m continuing (Loss)/profit before taxation fro
operations	(1 254)	12 442	-	585	-	11 773
ment assets Reportable seg	3 787	78 614	-	4 133	33 803	120 337
ment liabilities Reportable seg	179	15 462	-	2 493	634	18 768

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

33. OPERATING SEGMENTS (cont.)

Geographical information

Reportable segment information related to geographical location for the year ended 31 December 2021 and 31 December 2020 is presented below. Sales revenue analysis was based on the geographical local of delivery destination.

	2021	2020
Ukraine	57 317	67 556
India	-	-
Netherlands	-	-
Italy	-	-
Iraq	-	-
Other countries	-	-
	57 317	67 556

34. OPERATING ENVIROMENT

Cyprus economic environment

The Cyprus economy has been adversely affected during the last few years by the economic crisis. The negative effects have to some extent been resolved, following the negotiations and the relevant agreements reached with the European Commission, the European Central Bank and the International Monetary Fund (IMF) for financial assistance which was dependent on the formulation and the successful implementation of an Economic Adjustment Program. The agreements also resulted in the restructuring of the two largest (systemic) banks in Cyprus through a ìbail inî.

The Cyprus Government has successfully completed earlier than anticipated the Economic Adjustments Program and exited the IMF program on 7 March 2016, after having recovered in the international markets and having only used Ä7,25 billion of the total Ä10 billion earmarked in the financial bailout. Under the new Euro area rules, Cyprus will continue to be under surveillance by its lenders with bi-annual postprogram visits until it repays 75% of the economic assistance received.

Although there are signs of improvement, especially in the macroeconomic environment of the countryís economy including growth in GDP and reducing unemployment rates, significant challenges remain that could affect the estimates of the Company's cash flows and its assessment of impairment of financial and non-financial assets.

Ukrainian economic and political environment

Political and social events of the beginning of 2014 which resulted in the annexation of the Crimea by the Russian Federation and the loss of control by Ukraine over the territory of part of the Donetsk and Lugansk regions have remained unresolved. However, the intensity of hostilities has substantially decreased since the end of July 2020 upon agreeing on a ceasefire plan.

In March 2020, the World Health Organisation declared the Coronavirus COVID-19 outbreak to be a pandemic in recognition of its rapid spread across the globe. Many governments have been taking increasingly stringent steps to help contain, and in many jurisdictions, now delay, the spread of the virus, including: requiring self-isolation/ quarantine by those potentially affected, implementing social distancing measures, and controlling or closing borders and ìlocking-downî cities/regions or even entire countries. These measures

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

.

34. OPERATING ENVIROMENT (cont.)

have slowed down the global economic activities including Ukraine.

During 2021 Ukraine's GDP contracted by 4.4% (2020: grew by 4.0%).

As a result of the slowdown, the Ukrainian Hryvnia weakened against the world currencies, with the NBU UAH/USD exchange rate decreasing to 27.28 at 31 December 2021 from 28.27 at 31 December 2020.

The Ukraine's cooperation with the International Monetary Fund (IMF) is key for its macroeconomic stability. In June 2020, the IMF approved a USD 5 billion 18-month stand-by arrangement (SBA) aimed to address large balance-of-payments and fiscal financing needs, preserve achievements to date, and advance a small set of key structural reforms to ensure that Ukraine is well-poised to return to growth when the crisis ends. Ukraine received the first tranche of USD 2.1 billion under this SBA in June 2020. In July 2020, Ukraine also issued a USD 2 billion bonds due in 2033. This, to large extent, enabled Ukraine to meet its 2020 obligations under sovereign debt.

Whilst management believes it is taking appropriate measures to support the sustainability of the Groupís business in the current circumstances, a continuation of the current unstable business environment could negatively affect the Groupís results and financial position in a manner not currently determinable. These consolidated financial statements reflect managementís current assessment of the impact of the Ukrainian business environment on the operations and the financial position of the Group. The future business environment may differ from managementís assessment.

Going concern basis following the economic and political environment

The dangers which may arise from unexpected external factors such as competition, and the further deterioration of the market conditions cannot be ignored. All these factors were analysed above. Having regard to the fact that the Notes have been repaid and additional external debt has been incurred, the Board of Directors believes that the Group will remain a going concern and that no indications of any kind of threat of liquidation exists in the foreseeable future.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

34. OPERATING ENVIROMENT (cont.)

The consolidated financial statements do not include any adjustments that would be necessary in case the Group was not able to continue operating as a going concern which could include:

• 1. The ability of the Groupís trade and other debtors to repay the amounts due to the Group
• 1. The cash flow forecasts of the Group and the assessment of impairment of other financial and non-financial assets
• 1. The ability of the Group to meet its obligations towards its customers.

35. CONTINGENT AND CONTRACTUAL LIABILITIES

Economic environment

The exposure of the Group to the economic environment and possible impact is disclosed in note 34 to the consolidated financial statements.

Taxation

As a result of unstable economic environment in Ukraine, tax authorities in Ukraine pay more and more attention to the business cycles. In connection with this, tax laws in Ukraine are subject to frequent changes. Furthermore, there are cases of their inconsistent application, interpretation and execution. Non- compliance with laws and regulations may lead to severe fines and penalties.

The Company operates in the Cypriot tax jurisdiction and its subsidiaries in tax jurisdiction of the respective countries of incorporation. The Groupís management must interpret and apply existing legislation to transactions with third parties and its own activities. Significant judgment is required in determining the provision for direct and indirect taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The Groupís uncertain tax positions are reassessed by management at every reporting period end. Liabilities are recorded for income tax positions that are determined by management as more likely than not to result in additional taxes being levied if the positions were to be challenged by the tax authorities. The assessment is based on the interpretation of tax laws that have been enacted or substantively enacted by the reporting period and any known court or other rulings on such issues. Liabilities for penalties, interest and taxes other than on income are recognised based on managementís best estimate of the expenditure required to settle the obligations at the reporting period.

Legal matters

In the course of its economic activities, the Group is involved in legal proceedings with third parties. In most cases, the Group is the initiator of such proceedings with the purpose of preventing or mitigating of economic losses.

The Groupís management considers that as at the reporting period, active legal proceedings on such matters will not have any significant influence on its financial position.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

35. CONTINGENT AND CONTRACTUAL LIABILITIES (cont.)

Pension and other liabilities

Most employees of the Group receive pension benefits from the Pension Fund, a Ukrainian Government organisation in accordance with the applicable laws and regulations of Ukraine. The Group is obliged to deduct and contribute a certain percentage of salaries to the Pension Fund to finance the benefits. The only obligation of the Group with respect to this pension plan is to make the specified contributions from salaries.

At 31 December 2021 and 31 December 2020 the Groupís entities had no liabilities for any supplementary pensions, health care, insurance benefits or retirement indemnities to its current or former employees.

36. FINANCIAL RISK MANAGEMENT

The Group has exposure to the following risks arising from the use of financial instruments:

(a) Credit risk

(b) Liquidity risk

(c) Market risk

(d) Operational risk

Risk Management framework

The Company's Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group is not a finance company, thus it uses financial instruments as may be necessary in order to obtain finance for its activities, not for the purpose of receiving income. In the process of its activities the Group uses the following financial instruments: cash and cash equivalents, bank deposits, accounts receivable, accounts payable.

The Group is exposed to the following risks resulting from use of financial instruments: credit risk, liquidity risk and market risk (including foreign currency risk and interest rate risk of fair value) and operation risk. This explanation contains information relating to the Groupís exposure to each of the risk types mentioned above, Groupís objectives, its policy and procedures of these risks measurement and management.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

Financial assets	2021	2020
Investments designated at fair value through profit or loss	14 250	15 195
Loan to related parties	18 549	18 549
Cash at bank	13 065	25 055
Trade receivables	2 720	2 785
Other receivables	-	-
Total	48 584	61 584

Risk Management framework (cont.)

Additional disclosures of quantitative information are presented in multiple other sections of these financial statements, including:

• · information on finance income and expenses is disclosed in Note 13 (all finance income and expenses are recognised as a part of profit or loss for the year);
• · information on cash is disclosed in Note 25;
• · information on trade and other receivables is disclosed in Note 23;
• · information on loans receivable is disclosed in Note 21;
• · information on trade and other payables is disclosed in Note 30;
• · information on loans payable is disclosed in Note 28.

a) Credit risk

Credit risk is the risk of financial loss for the Group in case of non-fulfilment of financial obligations by a client or counterparty under the respective agreement. In the reporting period the Groupís financial assets that are exposed to credit risk are represented as follows: cash and balances on bank accounts, trade and other accounts receivable (except for receivables that are not represented by financial assets), loans receivable.

Trade and other receivables

The Groupís exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group recognises impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting period was presented as follows:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

a) Credit risk (cont.)

Credit quality of financial assets

The table below shows an analysis of the Groupís cash balances on bank accounts by the credit rating of the bank in which they are held:

Bank group based on credit ratings by Moodyís	Note	2021	2020
Aa2		13 065	22 291
A3			684
B1			-
B2			56
B3			2 024
Caa2			-
Total	25	13 065	25 055

The ageing of trade receivables at the end of the reporting period that was not impaired was as follows:

2021	Not overdue	0-90 days	91-180 days	181- 365 days	over one year	Total
Carrying amount of trade receivables	2 709	9	-	2	-	2 720
2020	Not overdue	0-90 days			91-180 days 181-365 days over one year	Total
Carrying amount of trade receivables	2 774	9	-		2 -	2 785

The column '0-90 days' represents the amounts neither past due nor impaired.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

a) Credit risk (cont.)

Credit quality of financial assets (cont.)

As at 31 December 2019, an amount of USD 2 481 thousand and USD 93 thousand or 86% and 3% of the total carrying value of trade receivables is due from the two most significant debtors. For the year ended 31 December 2019, an amount of USD 15 823 thousand (29%) and USD 5 459 thousand (10%) from the Groupís revenue refers to the sales transactions carried out with two of the Groupís clients.

Expected credit loss assessment for corporate customers as at 1 January and 31 December 2020

The ECL for trade receivables is 0% due to the probability of default being 0% because of the prompt prepayment of all trade receivables. For any trade receivables of 1 year an ECL of 100% applies.

b) Liquidity risk

Liquidity risk is the risk of the Group's failure to fulfil its financial obligations at the date of maturity. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Group has procedures with the object of minimising such losses such as maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities.

The table below represents the expected maturity of components of working capital.

Exposure to liquidity risk

2021	Note	Carrying amounts	Contractual cash flows	3 month or less	3-12 month Between 1-	5 years	Over 5 years
Loan from owner	32	128	133	133	-	-	-
Lease liabilities	28	15 610	28 380	1 387	4 107	16 773	6 113
Trade payables	30	572	572	572	-	-	-
Other payables	30	42	42	42	-	-	-
Total		16 352	29 127	2 134	4 107	16 773	6 113
2020	Note	Carrying	Contractual	3 month	3-12 month Between 1-		Over 5
		amounts	cash flows	or less		5 years	years
Loan from owner	32	127	133	133	-	-	-
Lease liabilities	28	14 716	26 755	1 308	3 872	15 812	5 763
Trade payables Other payables	30 30	637 60	637 60	637 60	- -	- -	- -

c) Market risk

Market risk is the risk of negative influence of changes in market prices, such as foreign exchange rates and interest rates, on revenue position of the Group or on the value of the Groupís available financial instruments.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

c) Market risk (cont.)

The objective of market risk management provides control over the Groupís exposure to market risk, as well as keeping its level within reasonable limits.

Description of the Groupís exposure to such market components as currency risk and interest risk is given below:

Foreign currency risk

Foreign currency risk which represents a part of market risk is the risk of change in value of financial instruments due to changes in foreign exchange rates.

Management does not use derivative financial instruments to hedge foreign currency risks and does not follow the official policy for distribution of risks between liabilities in one or another currency. However, in the period of receiving new borrowings and loans, management uses its own estimates to take the decision as to which currency of the liability will be more favourable for the Group during the expected period till maturity.

Exposure to foreign currency risk

As at 31 December 2021 and as at 31 December 2020, the Group did not have items that exposed it to foreign currency risk.

c) Market risk (cont.)

An increase of 100 basis points in foreign currency rates at 31 December would have decreased profit and equity by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. For a decrease of 100 basis points there would be an equal and opposite impact on the profit and equity.

	2021		2020
	Effect on profit before tax	Effect on equity	Effect on profit before tax	Effect on equity
United States Dollars	65	65	-	-
	65	65	-	-

Interest rate risk

Interest rate risk is the risk that expenditure or the value of financial instruments will fluctuate due to changes in market interest rates. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group's management monitors the interest rate fluctuations on a continuous basis and acts accordingly

At present, the Groupís approach to limit the interest rate risk consists of borrowings at fixed interest rates.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

Structure of interest rate risk

The structure of interest financial instruments of the Group, grouped according to the types of interest rates, was presented as follows:

Fixed rate instruments	2021	2020
Financial assets	32 799	33 744
Financial liabilities	(15 738)	(14 843)
Total	17 061	18 901

d) Operational risk

Crops under cultivation

The Groupís operations are subject to seasonal fluctuations as a result of weather conditions. In particular, the cultivation of crops is adversely affected by winter weather conditions, which occur primarily from January to March. The first half of the year typically results in lower revenues and results for cultivations.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

36. FINANCIAL RISK MANAGEMENT (cont.)

d) Operational risk (cont.)

Livestock

The Group's agro-industrial business is subject to risks of outbreaks of various diseases that could result in mortality losses. Disease control measures were adopted by the Group to minimise and manage this risk. The Group's management is satisfied that its current existing risk management and quality control processes are effective and sufficient to prevent any outbreak of livestock diseases and related losses.

e) Capital management

The Group's management follows the policy of providing a firm capital base which allows supporting the trust of investors, creditors and market and ensuring future business development.

The Group manages its capital to ensure that it will be able to continue as a going concern while increasing the return to owners through the strive to improve the debt to equity ratio. The Group's overall strategy remains unchanged from prior year. To manage capital, the Group's management, above all, uses calculations of EBITDA.

For the year ended 31 December 2021 and 31 December 2020

	2021	2020
Profit for the year	26 612	11 759
Income tax charge	79	23
Finance income	(7 299)	(198)
Finance costs	7 746	15 531
EBIT (Earnings before interest and income tax)	27 138	27 115
Depreciation and amortisation	6 041	5 889
EBITDA (earnings before interest, income tax, depreciation and amortisation)	33 179	33 004

During the year there were no changes in approaches to capital management. The Group is not subject to any external regulatory capital requirements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

37. FAIR VALUES

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.

The different levels have been defined as follows:

• · Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• · Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• · Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

a) Fair value of financial assets

Assumptions in assessing fair value of financial instruments and assessment of their subsequent recognition

As no readily available market exists for the Group's financial instruments, judgment is necessary in arriving at fair value, based on current economic conditions and specific risks attributable to the instruments. The estimates presented herein are not necessarily indicative of the amounts the Group could realize in a market exchange from the sale of its full holding of the particular instrument.

At 31 December 2020, the following methods and assumptions were used by the Group to estimate the fair value of each class of financial instruments for which it is practicable to estimate such value:

• · Cash and cash equivalents the fair value is estimated to be the same as the carrying value for these short-term financial instruments.
• · Trade and other receivables the fair value is reasonably estimated to be the same as the carrying value, as provision for doubtful debts is reasonable estimation of discount needed for reflection of credit risk influence.
• · Trade and other payables the fair value is estimated to be the same as the carrying value for trade and other payables.

Application of the effective interest rate method for calculating carrying value of short - term receivables, interest free loans granted and received and payables has been applied to reflect fair values.

• · Loans the fair value of loans, is estimated to approximate the total carrying value as the nominal interest rate of loans is approximately tied to the market rate concerning loans with similar credit risk rate and repayment period at the reporting period.
• · Debt and equity securities ñ the fair value of debt and equity securities is measured using the available quoted market prices from the relevant stock exchange which the securities are listed.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

37. FAIR VALUES (cont.)

b) Fair value of non-financial assets

Assumptions in assessing fair value of non-financial instruments and assessment of their subsequent recognition

Biological assets of the Group are measured at fair value within level 3 of the fair value hierarchy, except for parent flock, cattle and horses that are measured using the market comparison technique based on market prices for livestock of similar age, breed and geographic location, which is measured at fair value within level 2 of the fair value hierarchy.

The Group has an established control framework with respect to the measurement of fair values. This framework includes a valuation team that reports directly to the Chief Financial Officer, and has overall responsibility for fair value measurement of biological assets.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. The valuation team assesses and documents the evidence obtained to support the conclusion that the valuation meets the requirements of IFRS, including the level in the fair value hierarchy. Significant valuation issues are reported to the Chief Financial Officer.

The Group's agro-industrial business is subject to risks of outbreaks of various diseases that could result in mortality losses. Disease control measures were adopted by the Group to minimise and manage this risk. The Group's management is satisfied that its current existing risk management and quality control processes are effective and sufficient to prevent any outbreak of livestock diseases and related losses.

The valuation requires management to make certain assumptions about unobservable inputs to the model of which the significant unobservable inputs are disclosed in the table below:

Level 3 fair values

Type	Valuation technique	Significant unobservable inputs	Inter-relationship between key unobservable inputs and fair value measurement
Crops under cultivation	As at 31 December 2021 the biological transformation is insignificant, the fair value approximate cost Not applicable Not applicable

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

37. FAIR VALUES (cont.)

Level 2 fair values

Type	Valuation technique	Significant observable inputs	Significant unobservable inputs	Inter-relationship between key unobservable inputs and fair value measurement
Livestock	Market comparison techniques: The valuation is based on existing market prices for items with similar age, breed and location characteristics, which are adjusted for variations in these characteristics.	Market prices	None	Not applicable

The table below analyses biological assets measured at fair value at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement is categorized. The different levels have been defined as follows:

31 December 2021	Level 1	Level 2	Level 3	Total
Non-financial assets
Plants and plantation	-	-	10 772	10 772
Livestock	-	1 240	-	1 240
	-	1 240	10 772	12 012
31 December 2020 Non-financial assets	Level 1	Level 2	Level 3	Total
Plants and plantation	-	-	6 702	6 702
Livestock	-	1 473	-	1 473
	-	1 473	6 702	8 175

There were no transfers between any levels of the fair value hierarchy during the year 31 December 2021 and 31 December 2020.

Total gain or losses for the period as shown in the reconciliation (note 19) are presented on the face of the consolidated statement of comprehensive income as ìNet change in fair value less costs to sell of biological assets and agricultural produceî.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

37. FAIR VALUES (cont.)

The following table analyses the fair values of financial instruments not measured at fair value, by the levels in the fair value hierarchy into which such fair value measurement is categorized:

	Designated at	At amortised	financial		Level	Level	Level
	fair value	cost	liabilities	Total	1	2	3	Total
31 December 2021
Financial Assets measured at fair value
Assets held for sale	14	-	-	14	14	-	-	14
Investments designated at fair value through profit or loss	14 250	-	-	14 250	14 250	-	-	14 250
Financial assets not measured at fair value				-		-	-	-
Trade receivables	-	2 720	-	2 720	-		2 720	2 720
Loans receivable	-	18 549	-	18 549	-		18 549	18 549
Cash and cash equivalents	-	13 065	-	13 065	13 065		-	13 065
	14 264	34 334	-	348 598	27 329	-	21 269	36 773
Financial Liabilities measured at fair value
Liabilities held for sale	-	-	-	-	-		-	-
Financial Liabilities not measured at fair value
Lease liabilities	-	-	15 610	15 610	-		15 610	15 610
Loans payable	-	-	128	128	-		128	128
Trade payables	-	-	572	572	-		572	572
Other payables	-	-	42	42	-		42	42
	-	-	16 352	16 352	-	-	16 352	16 352

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

37. FAIR VALUES (cont.)

						Fair value
			Other
	Designated at	At amortised	financial		Level	Level	Level
	fair value	cost	liabilities	Total	1	2	3	Total
31 December 2020
Financial Assets measured at fair value
Assets held for sale	17	-	-	17	17	-	-	17
Investments designated at fair value through
profit or loss	15 195	-	-	15 195	15 195	-	-	15 195
Financial assets not measured at fair value
Trade receivables	-	2 785	-	2 785	-	-	2 785	2 785
Loans receivable	-	18 549	-	18 549	-	-	18 549	18 549
Cash and cash equivalents	-	25 055	-	25 055	25 055	-	-	25 055
	15 212	46 389	-	61 601	40 267	-	21 334	61 601
Financial Liabilities measured at fair value
Liabilities held for sale	-	-	-	-	-	-	-	-
Financial Liabilities not measured at fair value
Lease liabilities	-	-	14 716	14 716	-	-	14 716	14 716
Loans payable	-	-	128	128	-	-	128	128
Trade payables	-	-	637	637	-	-	637	637
Other payables	-	-	60	60	-	-	60	60
	-	-	15 541	15 541	-	-	15 541	15 541

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2021

(in USD thousand, unless otherwise stated)

37. FAIR VALUES (cont.)

The fair value of financial assets and financial liabilities, together with the carrying amounts in the consolidated statement of financial position as at 31 December 2021 and 31 December 2020, are as follows.

31 December 2021	Carrying amount	Fair value
Financial assets
Investments designated at fair value through profit or loss	14 250	14 250
Trade receivables	2 720	2 720
Cash and cash equivalents	13 065	13 065
Loans receivable	18 549	18 549
Financial liabilities
Lease liabilities	15 610	15 610
Loans payable	128	128
Trade payables	572	572
31 December 2020
	Carrying	Fair value
	amount
Financial assets
Investments designated at fair value through profit or loss	14 250	14 250
Trade receivables	2 785	2 785
Cash and cash equivalents	13 065	25 055
Loans receivable	18 549	18 549
Financial liabilities
Notes	15 610	14 716
Loans payable	128	128
Trade payables	637	637
Other payables	-	-

38. EVENTS AFTER THE REPORTING PERIOD

Events referred to in note 34 to the consolidated financial statements will continue to influence the Group's operations in 2021. While management believes it is taking all necessary measures to maintain the sustainability of the business in the current circumstances, a further deterioration of economic and political conditions in Ukraine could adversely affect the Group's results and financial position, so that it is currently impossible to predict.

On 23 September 2024 the Board of Directors of Agroton Public Limited approved and authorised these consolidated financial statements for issue.