Interim Report • Sep 30, 2024
Interim Report
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REPORT AND SEPARATE UNAUDITED FINANCIAL STATEMENTS For the period from 1 January 2024 to 30 June 2024
| 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 - 5 |
| Unaudited statement of profit or loss and other comprehensive income | 6 |
| Unaudited statement of financial position | 7 |
| Unaudited statement of changes in equity | 8 |
| Unaudited statement of cash flows | 9 |
| Notes to the unaudited separate financial statements | 10 - 29 |
| 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: | Aelius Circle Auditing Accounts L.L.C. |
| Legal Advisers: | K. Chrysostomides & Co LLC |
| Registered office: | 1 Lampousas Street 1095 Nicosia Cyprus |
| Registration number: | ΗΕ255059 |
In accordance with article 9(3)(c) and (7) of the Transparency Requirements (Securities Listed for Trading on a Regulated Market) Law of 2007 (the "Law"), as amended from time to time, we, the Members of the Board of Directors and the Company official responsible for the preparation of the financial statements of Agroton Public Limited (the "Company") for the period from 1 January 2024 to 30 June 2024, confirm that to the best of our knowledge:
a) the annual financial statements presented on pages 6 to 29:
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.
Iurii Zhuravlov Tamara Lapta Larysa Orlova Borys Supikhanov Volodymyr Kudryavtsev
Company official responsible for the preparation of the financial statements of the Company for the period from 1 January 2024 to 30 June 2024:
Larysa Orlova:
Nicosia, XX Month XXX
The Board of Directors of Agroton Public Limited (the ''Company'') presents to the members its Management Report and unaudited separate financial statements of the Company for the period from 1 January 2024 to 30 June 2024.
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.
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.
The Company's 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's losses.
The principal risks and uncertainties faced by the Company are disclosed in notes 6, 7 and 21 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 main concern at the moment is the rise of inflation, the uncertainty mainly about tourism and financial services and the increase in the price of fuel, which will affect household incomes and business operating costs.
The Israel-Gaza conflict has escalated significantly after Hamas launched a major attack on 7 October 2023. Companies with material subsidiaries, operations, investments, 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 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.
The Company does not maintain any branches.
The Company's results for the period are set out on page 6.
The net loss for the period attributable to the shareholders of the Company amounted to US\$933,293 (2023: net loss US\$639,288). On 30 June 2024 the total assets of the Company were US\$89,174,535 (2023: US\$88,573,592) and the net liabilities of the Company were US\$674,887 (2023: US\$258,406).
The Company did not have any distributable profits as at 30 June 2024, thus the Board of Directors cannot recommend the payment of a dividend.
There were no changes in the share capital of the Company during the period under review.
The Company lost over 50% of its issued share capital. 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.
The Board of Directors has adopted the Code of Corporate Governance (the "Code") of the Warsaw Stock Exchange ("WSE") which is available in the WSE website.
At present, the Corporate Governance Code is not fully implemented. There are specific provisions of the Code which cannot be adopted since they are either contrary to and/or do not accord with the provisions of the Articles of Association of the Company, or they cannot be adopted due to the recent developments in Eastern Ukraine. The Board of Directors will endeavour to remedy these as soon as practicable.
The Board of Directors ensures through effective internal audit and risk management procedures the collection of the necessary items for the preparation of the periodic reporting required for listed companies.
The Company is governed by the Board of Directors. Companies formed under the Cyprus Companies Law, Cap. 113, do not have supervisory board and management board. Cyprus companies have a Board of Directors, members of which are appointed to fill certain executive and non-executive positions. The management of the business and the conduct of the affairs of the Company are vested in the Board of Directors. The Board of Directors comprises five members, three of which are non-independent and the remaining two are independent. This is in compliance with the provisions of the Articles of Association of the Company, which requires that the Board of Directors comprise by at least two Directors, two of which shall be independent.
Directors are appointed at general meetings. There is no requirement in the Articles of Association for the retirement of Directors by rotation, thus all Directors continue in office, unless they resign or following an ordinary resolution from the Company shareholders.
The Company has an Audit Committee and a Remuneration Committee. Both committees comprise two members, both of which are non-executive. Analysis of their responsibilities is disclosed separately in this report.
No benefits or emoluments were paid to Directors by the Company.
The interest in the Company's share capital held directly or indirectly by each member of the Board of Directors at 30 June 2024 and 31 December 2023 are disclosed below.
The owners holding directly or indirectly more than 5% interest in the Company's share capital at 30 June 2024 and at 31 December 2023 are disclosed below.
There are currently no shares in issue holding special or limited rights.
The Board of Directors can proceed with the issue of shares following an ordinary resolution from the Company owners. For the repurchase of the Company shares a special resolution from the Company's owners is required, in accordance with the provisions of Section 57 of Cyprus Companies Law.
The Report on Corporate Governance has been prepared in accordance with the provisions of the Code and includes the above mentioned explanations, as well as the information required by the relevant Article of the Directive.
The owners holding directly or indirectly more than 5% interest in the Company's share capital at 30 June 2024 and at 31 December 2023 were as follows:
| 30 June 2024 | 31 December 2023 | |||
|---|---|---|---|---|
| % | % | |||
| Iurii Zhuravlov | 85.40 | 85.40 | ||
| Other | 14.60 | 14.60 |
The members of the Company's Board of Directors as at 30 June 2024 and at the date of this report are presented on page 1. All of them were members of the Board of Directors throughout the period from 1 January 2024 to 30 June 2024.
There is no requirement in the Company's Articles of Association for the retirement of Directors by rotation, thus all Directors presently members of the Board continue in office.
There were no significant changes in the assignment of responsibilities and remuneration of the Board of Directors.
The Directors are responsible for formulating, reviewing and approving the Company's and its subsidiary companies strategies, budgets, certain items of capital expenditures and senior personnel appointments. Being a company listed on the Warsaw Stock Exchange, the Directors have established audit and remuneration committees to improve corporate governance.
The Audit Committee and Remuneration Committee, were established on 4 May 2010 both of which were in force during the period ended 30 June 2024 and continued in force at the date of this report.
The Audit Committee assists the Company's Board of Directors in discharging its responsibilities with regard to financial reporting, external and internal audits and controls, including reviewing the annual consolidated financial statements, reviewing and monitoring the extent of the non-audit work undertaken by external auditors, advising on the appointment of external auditors and reviewing the effectiveness of the internal audit activities, internal controls and risk management systems. The ultimate responsibility for reviewing and approving the annual consolidated financial statements and the half yearly financial statements remains with the Board of Directors. The Audit Committee of the Company, comprising of Mr. Borys Supikhanov and Mr. Volodymyr Kudryavstev and is chaired by Mr. Borys Supikhanov.
The Remuneration Committee assists the Board of Directors in discharging its responsibilities in relation to remuneration, including making recommendations to the Board of Directors and/or the general meeting of the shareholders of the Company on the policy on executive remuneration, determining the individual remuneration and benefits package of each of the Executive Directors and recommending and monitoring the remuneration of senior management below Board level. The Remuneration Committee of the Company, comprising of Mr. Borys Supikhanovand Mr. Volodymyr Kudryavtsev (both Non-Executive Directors), and is chaired by Mr. Borys Supikhanov and sets and review the scale and structure of the Executive Directors' remuneration packages, including share options and the terms of their service contracts.
Any significant events that occurred after the end of the reporting period are described in note 25 of the separate financial statements.
Disclosed in note 22 of the separate financial statements.
The Independent Auditors, Aelius Circle Auditing Accounts L.L.C., 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,
Larysa Orlova Director
Nicosia, ................... 2024
For the period from 1 January 2024 to 30 June 2024
| Note | 2024 US\$ |
2023 US\$ |
|
|---|---|---|---|
| Dividend income Loan interest income Net fair value gains on financial assets at fair value through profit or loss Coupon interest Interest expense |
15 | - 808,424 70,651 114,326 (1,539,593) |
4,383 1,564,151 677,610 234,632 (3,096,105) |
| Gross loss | (546,192) | (615,329) | |
| Other operating income Administration expenses |
8 9 |
14,776 (367,458) |
- (116,414) |
| Operating loss | (898,874) | (731,743) | |
| Net finance (costs)/income | 10 | (34,419) | 139,678 |
| Loss before tax | (933,293) | (592,065) | |
| Tax | 11 | - | (47,223) |
| Net loss for the period/year | (933,293) | (639,288) | |
| Other comprehensive income | - | - | |
| Total comprehensive income for the period/year | (933,293) | (639,288) |
The notes on pages 10 to 29 form an integral part of these separate financial statements.
30 June 2024
| 2024 | 2023 | ||
|---|---|---|---|
| Assets | Note | US\$ | US\$ |
| Non-current assets | |||
| Investments in subsidiaries | 12 | 4,718 | 4,718 |
| Loans receivable | 13 | 22,310,383 | 22,146,699 |
| 22,315,101 | 22,151,417 | ||
| Current assets Receivables |
14 | 41,308 | 83,941 |
| Loans receivable | 13 | 46,842,375 | 44,197,635 |
| Financial assets at fair value through profit or loss | 15 | 18,643,432 | 20,558,005 |
| Cash and cash equivalents | 16 | 1,332,319 | 1,582,594 |
| 66,859,434 | 66,422,175 | ||
| Total assets | 89,174,535 | 88,573,592 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | 17 | 661,128 | 661,128 |
| Share premium | 17 | 88,531,664 | 88,531,664 |
| Accumulated losses | (89,867,679) | (88,934,386) | |
| Total equity | (674,887) | 258,406 | |
| Non-current liabilities | |||
| Borrowings | 18 | 89,165,022 | 87,625,429 |
| 89,165,022 | 87,625,429 | ||
| Current liabilities | |||
| Trade and other payables | 19 | 33,039 | 38,396 |
| Current tax liabilities | 20 | 651,361 | 651,361 |
| 684,400 | 689,757 | ||
| Total liabilities | 89,849,422 | 88,315,186 | |
| Total equity and liabilities | 89,174,535 | 88,573,592 |
On ................... 2024 the Board of Directors of Agroton Public Limited authorised these separate financial statements for issue.
Director Director
.................................... ....................................
The notes on pages 10 to 29 form an integral part of these separate financial statements.
| Share capital US\$ |
Share premium US\$ |
Accumulated losses US\$ |
Total US\$ |
|
|---|---|---|---|---|
| Balance at 1 January 2023 | 661,128 | 88,531,664 | (88,295,098) | 897,694 |
| Comprehensive income Net loss for the year |
- | - | (639,288) | (639,288) |
| Balance at 31 December 2023/ 1 January 2024 |
661,128 | 88,531,664 | (88,934,386) | 258,406 |
| Comprehensive income Net loss for the period |
- | - | (933,293) | (933,293) |
| Balance at 30 June 2024 | 661,128 | 88,531,664 | (89,867,679) | (674,887) |
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, within two years after the end of the relevant tax year, will be deemed to have distributed this amount as dividend on the 31 of December of the second year. The amount of the deemed dividend distribution is reduced by any actual dividend already distributed by 31 December of the second year for the year the profits relate. The Company pays special defence contribution on behalf of the shareholders over the amount of the deemed dividend distribution at a rate of 17% (applicable since 2014) when the entitled shareholders are natural persons tax residents of Cyprus and have their domicile in Cyprus. In addition, the Company pays on behalf of the shareholders General Healthcare System (GHS) contribution at a rate of 2,65%, when the entitled shareholders are natural persons tax residents of Cyprus, regardless of their domicile.
The notes on pages 10 to 29 form an integral part of these separate financial statements.
For the period from 1 January 2024 to 30 June 2024
| 2024 | 2023 | ||
|---|---|---|---|
| Note | US\$ | US\$ | |
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Loss before tax Adjustments for: |
(933,293) | (592,065) | |
| Unrealised exchange profit | (732) | (1,682) | |
| Profit from the sale of financial assets at fair value through profit or loss | (14,776) | - | |
| Fair value gains on financial assets at fair value through profit or loss | (70,651) | (677,610) | |
| Coupon interest | (114,326) | (234,632) | |
| Interest income | 10 | (808,424) | (1,721,562) |
| Interest expense | 10 | 1,539,593 | 3,096,105 |
| Dividend income | - | (4,383) | |
| (402,609) | (135,829) | ||
| Changes in working capital: | |||
| Decrease in receivables | 42,633 | 59,258 | |
| Decrease/(increase) in financial assets at fair value through profit or loss | 1,976,656 | (6,748,722) | |
| Decrease in bank deposits | - | 7,000,000 | |
| (Decrease)/increase in trade and other payables | (4,538) | 4,833 | |
| Cash generated from operations | 1,612,142 | 179,540 | |
| Dividends received | - | 4,383 | |
| Net cash generated from operating activities | 1,612,142 | 183,923 | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Loans granted | (2,000,000) | (3,500,000) | |
| Coupon Interest received | 137,670 | 218,153 | |
| Interest received | - | 157,411 | |
| Net cash used in investing activities | (1,862,330) | (3,124,436) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | - | - | |
| Net decrease in cash and cash equivalents | (250,188) | (2,940,513) | |
| Cash and cash equivalents at beginning of the period/year Effect of exchange rate fluctuations on cash held |
1,582,594 (87) |
4,523,076 31 |
|
| Cash and cash equivalents at end of the period/year | 1,332,319 | 1,582,594 | |
| 16 |
The notes on pages 10 to 29 form an integral part of these separate financial statements.
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.
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.
The separate financial statements have been prepared in accordance with International Financial 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 prepared these parent's separate financial statements for compliance with the requirements of the Cyprus Income Tax Law.
The Company has also prepared consolidated financial statements in accordance with IFRSs for the Company and its subsidiaries (together with the Company, 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 period ended 30 June 2024 in order to obtain a proper understanding of the financial position, the financial performance and the cash flows of the Company and the Group.
During the current period the Company adopted all the new and revised International Financial Reporting Standards (IFRSs) that are relevant to its operations and are effective for accounting periods beginning on 1 January 2024. This adoption did not have a material effect on the accounting policies of the Company.
The material 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.
Management seeks not to reduce the understandability of these separate financial statements by obscuring material information with immaterial information. Hence, only material accounting policy information is disclosed, where relevant, in the related disclosure notes.
The financial statements of the Company have been prepared on a going concern basis.
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.
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.
Interest income is recognised on a time-proportion basis using the effective interest method.
Dividends are received from financial assets measured at fair value through profit or loss (FVTPL) and at fair value through other comprehensive income (FVOCI). Dividends are recognised as other income in profit or loss when the right to receive payment is established. This applies even if they are paid out of preacquisition profits, unless the dividend clearly represents a recovery of part of the cost of an investment. In this case, the dividend is recognised in OCI if it relates to an investment measured at FVOCI.
Interest income is recognised on a time-proportion basis using the effective method.
Interest expense and other borrowing costs are charged to profit or loss as incurred.
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.
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 liabilities and assets for the current and prior periods are measured at the amount expected to be paid to or recovered from the taxation authorities, using the tax rates and laws that have been enacted, or substantively enacted, by the reporting date. Current tax includes any adjustments to tax payable in respect of previous periods.
The Company classifies its financial assets in the following measurement categories:
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 time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI). This election is made on an investment-by-investment basis.
All other financial assets are classified as measured at FVTPL.
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).
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.
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.
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.
Subsequent measurement of debt instruments depends on the Company's business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments:
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in Loan interest income and Coupon Interest. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss and other comprehensive income. Financial assets measured at amortised cost (AC) comprise: cash and cash equivalents, bank deposits with original maturity over 3 months, trade receivables and financial assets at amortised cost.
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in ''other income''. Foreign exchange gains and losses are presented in ''other gains/(losses)'' and impairment expenses are presented as separate line item in the statement of profit or loss and other comprehensive income.
FVTPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL. A gain or loss on a debt investment that is subsequently measured at FVTPL is recognised in profit or loss and presented net within Fair value gain/(loss) in financial assets measured at FVPL in the period in which it arises.
The Company subsequently measures all equity investments at fair value. Where the Company's Management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment, any related balance within the FVOCI reserve is reclassified to retained earnings. The Company's policy is to designate equity investments as FVOCI when those investments are held for strategic purposes other than solely to generate investment returns. Dividends from such investments continue to be recognised in profit or loss as other income when the Company's right to receive payments is established.
Changes in the fair value of financial assets at FVTPL are recognised in Fair value gain/(loss) in financial assets measured at FVPL in the statement of profit or loss and other comprehensive income as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
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 guarantee 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 and supportable 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 including trade and loans issued, the Company applies the simplified approach permitted by IFRS 9, which uses lifetime expected 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.
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'').note 6, Credit risk section, If the Company determines that a financial asset is credit-impaired, the asset is transferred to Stage 3 and its ECL is measured as a Lifetime ECL.note 6, Credit risk section.
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 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.
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 expected 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.
For the purpose of the statement of cash flows, cash and cash equivalents comprise deposits held at call with banks and bank overdrafts.
These amounts generally arise from transactions from the usual operating activities of the Company. These are held with the objective to collect their contractual cash flows and their 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.
The Company has the following non-derivative financial liabilities: loans and borrowings and trade and other payables. At initial recognition, the Company measures a financial liability at its fair value plus transaction costs that are directly attributable to the issuance of the financial liability. Financial liabilities are subsequently measured at amortised cost using the effective interest method.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
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 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 statement of financial position.
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.
Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.
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.
The Company is exposed to market risk, interest rate risk, credit risk, liquidity risk and currency risk arising from the financial instruments it holds. The risk management policies employed by the Company to manage these risks are discussed below:
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's income or the value of its holdings of financial instruments.
The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. Interest bearing assets and borrowings issued at variable rates expose the Company to cash flow interest rate risk. Interest bearing assets and 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.
At the reporting date the interest rate profile of interest- bearing financial instruments was:
| 2024 US\$ |
2023 US\$ |
|
|---|---|---|
| Fixed rate instruments | ||
| Financial assets | 61,500,000 | 59,500,000 |
| Financial liabilities | (51,601,755) | (51,601,755) |
| 9,898,245 | 7,898,245 |
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 cash and cash equivalents, contractual cash flows of debt investments carried at amortised cost and at fair value through profit or loss (FVTPL).
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 ['B'].
The Company has the following types of financial assets that are subject to the expected credit loss model:
financial assets at amortised cost
(ii) Impairment of financial assets (continued)
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 ratings, if external 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 30 June 2024 and 31 December 2023:
| Company internal credit rating | External credit rating | 2024 | 2023 |
|---|---|---|---|
| US\$ | US\$ | ||
| Performing | AAA - A | 1,332,319 | 1,582,594 |
| Total | 1,332,319 | 1,582,594 |
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.
There were no significant cash at bank balances written off during the period that are subject to enforcement activity.
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.
| 30 June 2024 | Carrying | Contractual | Less than | Between |
|---|---|---|---|---|
| amounts | cash flows | 1 year | 2-5 years | |
| US\$ | US\$ | US\$ | US\$ | |
| Trade and other payables | 5,851 | 5,851 | 5,851 | - |
| Loans from own subsidiaries | 89,165,022 | 103,080,577 | - | 103,080,577 |
| 89,170,873 103,086,428 | 5,851 103,080,577 | |||
| 31 December 2023 | Carrying | Contractual | Less than | Between |
| amounts | cash flows | 1 year | 2-5 years | |
| US\$ | US\$ | US\$ | US\$ | |
| Trade and other payables | 6,962 | 6,962 | 6,962 | - |
| Loans from own subsidiaries | 87,625,429 | 103,122,920 | - | 103,122,920 |
| 87,632,391 103,129,882 | 6,962 103,122,920 |
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 US Dollar and the Euro. The Company's Management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.
As at 30 June 2024 the Company was not exposed to significant currency risk.
The carrying amounts and fair values of certain financial assets and liabilities are as follows:
| Carrying amounts | Fair values | |||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||
| US\$ | US\$ | US\$ | US\$ | |||
| Financial assets | ||||||
| Cash and cash equivalents | 1,332,319 | 1,582,594 | 1,332,319 | 1,582,594 | ||
| Fair value through profit or loss | 18,643,432 | 20,558,005 | 18,643,432 | 20,558,005 | ||
| Loans receivables from related parties | 69,152,758 | 66,344,334 | 69,152,758 | 66,344,334 | ||
| Financial liabilities | ||||||
| Loans from related parties | (89,165,022) | (87,625,429) | (89,165,022) | (87,625,429) | ||
| (36,513) | 859,504 | (36,513) | 859,504 |
The fair value of financial instruments traded in active markets, such as publicly traded trading and available-for-sale financial assets 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 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 values. The 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.
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.
For the period from 1 January 2024 to 30 June 2024
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
| 30 June 2024 | Designated at fair value US\$ |
At amortised cost US\$ |
Other financial liabilities US\$ |
Total US\$ |
Level 1 US\$ |
Level 2 US\$ |
Level 3 US\$ |
Total US\$ |
|---|---|---|---|---|---|---|---|---|
| Financial assets | ||||||||
| Investments designated at fair falue through | ||||||||
| profit or loss | 18,643,432 | - | - | 18,643,432 | 18,643,432 | - | - | 18,643,432 |
| Loans receivables from related parties | - | 69,152,758 | - | 69,152,758 | - | - | 69,152,758 | 69,152,758 |
| Cash and cash equivalents | - | 1,332,319 | - | 1,332,319 | 1,332,319 | - | - | 1,332,319 |
| Total | 18,643,432 | 70,485,077 | - | 89,128,509 | 19,975,751 | - | 69,152,758 | 89,128,509 |
| Financial liabilities | ||||||||
| Loans payable to related parties related parties | - | (89,165,022) | - | (89,165,022) | - | - | (89,165,022) | (89,165,022) |
| Total | - | (89,165,022) | - | (89,165,022) | - | - | (89,165,022) | (89,165,022) |
For the period from 1 January 2024 to 30 June 2024
| 31 December 2023 | Designated at fair value US\$ |
At amortised cost US\$ |
Other financial liabilities US\$ |
Total US\$ |
Level 1 US\$ |
Level 2 US\$ |
Level 3 US\$ |
Total US\$ |
|---|---|---|---|---|---|---|---|---|
| Financial assets | ||||||||
| Investments designated at fair falue through profit | ||||||||
| or loss | 20,558,005 | - | - | 20,558,005 | 20,558,005 | - | - | 20,558,005 |
| Loans receivables from related parties | - | 66,344,334 | - | 66,344,334 | - | - | 66,344,334 | 66,344,334 |
| Cash and cash equivalents | - | 1,582,594 | - | 1,582,594 | 1,582,594 | - | - | 4,747,782 |
| Total | 20,558,005 | 67,926,928 | - | 88,484,933 | 22,140,599 | - | 66,344,334 | 91,650,121 |
| Financial liabilities | ||||||||
| Loans payable to related parties related parties | - | (87,625,429) | - | (87,625,429) | - | - | (87,625,429) | (87,625,429) |
| Total | - | (87,625,429) | - | (87,625,429) | - | - | (87,625,429) | (87,625,429) |
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates and requires Management to exercise its judgment in the process of applying the Company's accounting policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on Management's best knowledge of current events and actions, actual results may ultimately differ from those estimates.
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.
The Company makes estimates and assumptions concerning the future. 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.
Significant judgment 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
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.
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.
The Company periodically evaluates the recoverability of loans 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, the estimated 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.
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.
| 2024 | 2023 | |
|---|---|---|
| US\$ | US\$ | |
| Profit from sale of financial assets at fair value through profit or loss | 14,776 | - |
| 14,776 | - |
| 2024 | 2023 | |
|---|---|---|
| US\$ | US\$ | |
| Professional licence fee | 1,949 | 2,427 |
| Municipality taxes | 271 | 272 |
| Annual levy | - | 377 |
| Sundry expenses | 108 | - |
| Auditors' remuneration for the statutory audit of annual accounts | (9,623) | 2,431 |
| Accounting fees | 2,185 | 10,413 |
| Legal fees | 25,500 | 5,234 |
| Legal and professional | - | 323 |
| Secretarial fees | 972 | 970 |
| Nominee fees | 324 | - |
| Registered office fees | 972 | 970 |
| Fines | - | 4,420 |
| Irrecoverable VAT | 43,913 | 1,159 |
| Professional fees | 252,343 | 10,381 |
| Custodian fees | 48,544 | 77,037 |
| 367,458 | 116,414 |
| 2024 US\$ |
2023 US\$ |
|
|---|---|---|
| Interest income Exchange profit |
- 732 |
157,411 1,682 |
| Finance income | 732 | 159,093 |
| Net foreign exchange losses Sundry finance expenses |
(24,467) (10,684) |
(732) (18,683) |
| Finance costs | (35,151) | (19,415) |
| Net finance (costs)/income | (34,419) | 139,678 |
| 2024 US\$ |
2023 US\$ |
|
|---|---|---|
| Defence contribution | - | 47,223 |
| Charge for the period/year | - | 47,223 |
The tax on the Company's results before tax differs from theoretical amount that would arise using the applicable tax rates as follows:
| Loss before tax | 2024 US\$ (933,293) |
2023 US\$ (592,065) |
|---|---|---|
| Tax calculated at the applicable tax rates Tax effect of expenses not deductible for tax purposes Tax effect of allowances and income not subject to tax Tax effect of tax loss for the period/year Defence contribution current period |
(116,662) 3,059 (10,770) 124,373 - |
(74,008) 164,817 (105,136) 14,327 47,223 |
| Tax charge | - | 47,223 |
The corporation tax rate is 12,5%.
Under certain conditions interest income may be subject to defence contribution at the rate of 17%. 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%.
Due to tax losses sustained in the period, no tax liability arises on the Company. Under current legislation, tax losses may be carried forward and be set off against taxable income of the five succeeding years.
| Balance at 1 January | Balance at 30 June/31 December | 2024 US\$ 4,718 4,718 |
2023 US\$ 4,718 4,718 |
|||
|---|---|---|---|---|---|---|
| The details of the subsidiaries are as follows: | ||||||
| Name | Country of incorporation |
Principal activities | 2024 Holding |
2023 Holding |
2024 | 2023 |
| "Living" LLC | Ukraine | Agricultural activities |
% 99.99 |
% 99.99 |
US\$ 4,718 |
US\$ 4,718 |
| 4,718 | 4,718 |
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.
| 2024 | 2023 | |
|---|---|---|
| Balance at 1 January | US\$ 66,344,334 |
US\$ 61,280,182 |
| New loans granted | 2,000,000 | 3,500,000 |
| Interest charged | 808,424 | 1,564,152 |
| Balance at 30 June/31 December | 69,152,758 | 66,344,334 |
| 2024 | 2023 | |
| US\$ | US\$ | |
| Loans to own subsidiaries (Note 22.1) | 46,842,375 | 44,197,635 |
| Loan to ultimate beneficial owner (Note 22.2) | 26,077,780 | 25,914,096 |
| Loss allowance on loans receivable | (3,767,397) | (3,767,397) |
| 69,152,758 | 66,344,334 | |
| Less current portion | (46,842,375) | (44,197,635) |
| Non-current portion | 22,310,383 | 22,146,699 |
| The loans are repayable as follows: | ||
| 2024 | 2023 | |
| US\$ | US\$ | |
| Within one year | 46,842,375 | 44,197,635 |
| Between one and five years | 22,310,383 | 22,146,699 |
| 69,152,758 | 66,344,334 |
The exposure of the Company to credit risk in relation to loans receivable is reported in note 6 of the separate financial statements.
| 2024 | 2023 | |
|---|---|---|
| US\$ | US\$ | |
| Accrued income | 41,308 | 64,652 |
| Refundable VAT | - | 19,289 |
| 41,308 | 83,941 |
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.
| 2024 US\$ |
2023 US\$ |
|
|---|---|---|
| Listed securities Bank of Cyprus Holdings Plc US Treasury notes |
339,804 18,303,628 |
296,252 20,261,753 |
| 18,643,432 | 20,558,005 |
| 2024 | 2023 | |
|---|---|---|
| US\$ | US\$ | |
| Balance at 1 January | 20,558,005 | 13,115,195 |
| Additions | - | 6,765,200 |
| Disposals | (1,985,224) | - |
| Change in fair value | 70,651 | 677,610 |
| Balance at 30 June/31 December | 18,643,432 | 20,558,005 |
Bank of Cyprus Shares:
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 30 June 2024 the Company held 79.556 shares in Bank of Cyprus Holdings Plc with fair value €3,990 (2023: €3,370) 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 with a market value of US\$13.018.691. All instruments are publicly traded, recognizing a fair value gain of US\$27.099 (2023: Gain US\$526.033) 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.
For the purposes of the statement of cash flows, the cash and cash equivalents include the following:
| 2024 | 2023 | |
|---|---|---|
| US\$ | US\$ | |
| Cash at bank | 1,332,319 | 1,582,594 |
| 1,332,319 | 1,582,594 |
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.
| Issued and fully paid | Number of | Share | ||
|---|---|---|---|---|
| shares | Share capital | premium | Total | |
| US\$ | US\$ | US\$ | ||
| Balance at 1 January 2023 | 21,670,000 | 661,128 | 88,531,664 | 89,192,792 |
| Balance at 31 December 2023/ 1 | ||||
| January 2024 | 21,670,000 | 661,128 | 88,531,664 | 89,192,792 |
| Balance at 30 June 2024 | 21,670,000 | 661,128 | 88,531,664 | 89,192,792 |
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 of the Company, including the Offer Shares to trading on the regulated market of the Warsaw Stock Exchange.
| 2024 US\$ 87,625,429 1,539,593 |
2023 US\$ 84,529,324 3,096,105 |
|---|---|
| 89,165,022 | 87,625,429 |
| 2024 US\$ |
2023 US\$ |
| 89,165,022 | 87,625,429 |
| 2024 US\$ 89,165,022 |
2023 US\$ 87,625,429 |
| 2024 US\$ 5,851 19,973 7,215 |
2023 US\$ 6,962 - 31,434 38,396 |
| 33,039 |
The exposure of the Company to liquidity risk in relation to financial instruments is reported in note 6 to the financial statements.
| 2024 | 2023 | |
|---|---|---|
| US\$ | US\$ | |
| Corporation tax | 564,423 | 564,423 |
| Special contribution for defence | 86,938 | 86,938 |
| 651,361 | 651,361 |
The above amounts are payable within one year.
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 impact of 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 and Belarussian 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.
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, investments, 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, and reactions 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 Company is materially exposed considering that the Group is a diversified vertically integrated agricultural producer in Eastern Ukraine. The Group's core business is crop production, comprising principally sunflower seeds and wheat, as well as the processing, storage and sale of such crops. In addition, the Group is engaged in livestock and food processing. The Company is exposed in regard to its subsidiaries situated in Ukraine, its clients and in general its supply chain.
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.
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 ie interruptions or stoppage of production in affected areas and neighbouring countries, damage or loss of inventories and other assets, closure of roads and facilities in affected areas, disruption in banking systems and capital markets, supply-chain and travel disruptions in Eastern Europe,restriction on cash balances etc.
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.
The Company is controlled by Mr. Iurii Zhuravlov, who holds directly 85,40% of the Company's share capital. The remaining 14,60% of the shares is widely held.
The transactions and balances with related parties are as follows:
| 2024 | 2023 | ||
|---|---|---|---|
| Terms | US\$ | US\$ | |
| Private Enterprise Agricultural Production | |||
| Firm "Agro" | Finance | 27,054,511 | 26,619,402 |
| Private Enterprise Agricultural Production | |||
| Firm "Agro" - Loan I | Finance | 19,787,864 | 17,578,233 |
| Expected credit loss on loans receivables | (3,767,397) | (3,767,397) | |
| 43,074,978 | 40,430,238 |
During the 2010, the Company has entered into several loan agreements with subsidiary company PE Agricultural Production Firm Agro for a total amount of US\$20.000.000. The loans bear interest at rate of 5% per annum and have no specified repayment date.
The loan I to related party Private Enterprise Agricultural Production Firm "Agro" was provided with interest 2,50% per annum, and its repayment date is on 31 December 2024.
| 2024 | 2023 | |
|---|---|---|
| US\$ | US\$ | |
| Iurii Zhuravlov | 26,077,780 | 25,914,096 |
During 2022, the Company entered into two loan agreements with its ultimate beneficial owner. The loans bear interest at a rate of 1% per annum and their repayment dates are on 1 February 2027 and on 3 February 2027 respectively.
During the year, the Company entered into three loan agreements with its ultimate beneficial owner. The loans bear interest at a rate of 3% per annum and their repayment dates are on 13 March 2028, 20 July 2028 and on 20 September 2028 respectively.
| 22.3 Loans from related parties (Note 18) | ||
|---|---|---|
| 2024 | 2023 | |
| US\$ | US\$ | |
| Private Enterprise Agricultural Production Firm "AGRO" | 89,165,022 | 87,625,429 |
| 89,165,022 | 87,625,429 |
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 originally provided interest free. From 1 January 2013 onwards the loan bears interest at a rate of 6% per annum and its repayment date was 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". The loan bears interest at 6% and its repayment date is on 31 December 2028.
The Company had no contingent liabilities as at 30 June 2024.
The Company had no capital or other commitments as at 30 June 2024.
As explained in note 21 the geopolitical situation in Eastern Europe and the Middle East remains intense with the continuation of the conflict between Russia and Ukraine 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 negative results, and liquidity restraints and incur impairments on its assets in 2024 which relate to new developments that occurred after the reporting period. The exact impact on the Company's activities in 2024 and thereafter cannot be predicted.
There were no other material events after the reporting period, which have a bearing on the understanding of the separate financial statements.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
For the six months ended 30 June 2024
| Officers and Professional Advisors | 1 |
|---|---|
| Declaration of the Members of the Board of Directors and the Company official responsible for the preparation of the condensed consolidated interim financial statements |
2 |
| Condensed consolidated statement of profit or loss and other comprehensive income |
3 |
| Condensed consolidated statement of financial position |
4 |
| Condensed consolidated statement of changes in equity |
6 |
| Condensed consolidated statement of cash flows | 7 |
| Notes to the condensed consolidated interim financial statements |
8 - 28 |
| Board of Directors |
Iurii Zhuravlov - Chief Executive Officer |
|
|---|---|---|
| Tamara Lapta - Deputy Chief Executive Officer |
||
| Larysa Orlova - Chief Financial Officer |
||
| Borys Supikhanov - Non-Executive Director |
||
| Volodymyr Kudryavtsev - Non-Executive Director |
||
| Audit Committee |
Borys Supikhanov (Head of the Committee) | |
| Volodymyr Kudryavtsev |
||
| Remuneration Committee |
Borys Supikhanov (Head of the Committee) | |
| Volodymyr Kudryavtsev |
||
| Secretary | Inter Jura Cy (Services) Limited |
|
| Legal Advisors |
K. Chrysostomides & Co LLC |
|
| Registered office |
1 Lampousas Street 1095 Nicosia Cyprus |
In accordance with article 9(3)(c) and (7) of the Transparency Requirements (Securities Listed for Trading on a Regulated Market) Law of 2007 (the "Law"), as amended from time to time, we, the Members of the Board of Directors and the Company official responsible for the preparation of the condensed consolidated interim financial statements of Agroton Public Limited (the "Company") for the six months ended 30 June 2024, confirm that to the best of our knowledge:
the condensed consolidated interim financial statements presented on pages 3 to 28:
Members of the Board of Directors:
| Iurii Zhuravlov |
signed |
|---|---|
| Tamara Lapta | signed |
| Larysa Orlova |
signed |
| Borys Supikhanov |
signed |
| Volodymyr Kudryavtsev |
signed |
Company official responsible for the preparation of the condensed consolidated interim financial statements of the Company for the six months ended 30 June 2024:
| Larysa Orlova |
signed |
|---|---|
Nicosia, 30 August 2024
| Note 30 June 2024 30 June 2023 Continuing operations Revenue 4 86 714 Cost of sales 5 (156) (940) Net change in fair value less cost to sell of biological assets and agricultural produce 15 144 Gross profit (55) (82) Other operating income 6 163 836 Administrative expenses 7 (671) (448) Distribution expenses 8 - (62) Other operating expenses 9 (2 963) (887) Operating profit (3 526) (643) Impairment losses on loans, trade and other receivable - - Fair value losses on financial assets at fair value through profit or loss - - (3 526) (643) Finance income 10 923 1,938 Finance costs 10 (34) - Net finance (costs)/income 889 1,938 Profit before taxation (2 637) 1 295 Taxation - - Profit for the period (2 637) 1 295 Other comprehensive income Items that are or may be reclassified subsequently to profit or loss Effect of translation into presentation currency (1 062) (3 111) Total comprehensive income/(expense) (1 062) (3 111) Profit attributable to: Owners of the Company (2 634) 1 294 Non-controlling interests (3) 1 (2 637) 1 295 Total comprehensive income attributable to: Owners of the Company (1 062) (3 110) Non-controlling interests - (1) (1 062) (3 111) |
(in USD thousand, unless otherwise stated) | ||
|---|---|---|---|
| Profit per share | |||
| Basic and fully diluted profit per share (USD) (0,12) (0,06) |
|||
| Profit per share – continuing operations | |||
| Basic and fully diluted profit per share (USD) (0,12) (0,06) |
The notes on pages 8 to 28 are an integral part of these condensed consolidated interim financial statements.
| Note | 30 June 2024 | 31 December 2023 |
|
|---|---|---|---|
| Assets | |||
| Property, plant and equipment | 11 | 14 826 | 15 913 |
| Right-of-use assets | 12 | - | - |
| Intangible assets | 11 | 12 | |
| Biological assets | 13 | 495 | 498 |
| Total non-current assets | 15 332 | 16 423 | |
| Inventories | 16 | 11 994 | 12 671 |
| Biological assets | 13 | 20 369 | 21 787 |
| Investments designated at fair value through profit or loss | 14 | 18 643 | 20 558 |
| Trade and other receivables | 17 | 2 050 | 2 255 |
| Loans receivable | 15 | 26 078 | 26 078 |
| Assets held for sale | 10 | 10 | |
| Cash and cash equivalents | 18 | 3 429 | 1 995 |
| Total current assets | 82 573 | 85 354 | |
| Total assets | 97 905 | 101 777 | |
| Equity | |||
| Share capital | 661 | 661 | |
| Share premium | 88 532 | 88 532 | |
| Retained earnings | 4 692 | 7 326 | |
| Foreign currency translation reserve | 1 004 | 2 066 | |
| Total equity attributable to owners of the Company | 94 889 | 98 585 | |
| Non-controlling interests | 259 | 262 | |
| Total equity | 95 148 | 98 847 | |
| Liabilities | |||
| Lease liabilities | 19 | - | - |
| Total non-current liabilities | - | - | |
| Lease liabilities | - | - | |
| Loans and borrowings | 20 | 86 | 92 |
| Trade and other payables | 21 | 2 020 | 2 187 |
| Income tax liability | 651 | 651 | |
| Liabilities held for sale | - | - | |
| Total current liabilities | 2 757 | 2 930 | |
| Total liabilities | 2 757 | 2 930 | |
| Total equity and liabilities | 97 905 | 101 777 |
On 30 August 2024 the Board of Directors of Agroton Public Limited approved and authorised these condensed consolidated interim financial statements for issue.
signed signed
Tamara Lapta Larysa Orlova Deputy Chief Executive Officer Chief Financial Officer
The notes on pages 8 to 28 are an integral part of these condensed consolidated interim financial statements.
For the six months ended 30 June 2024
(in USD thousand, unless otherwise stated)
| Attributable | to owners of the Company |
||||||
|---|---|---|---|---|---|---|---|
| Share capital |
Share premium |
Retained earnings |
Foreign currency translation reserve |
Total | Non controlling interests |
Total equity |
|
| Balance at 1 January 2024 |
661 | 88 532 | 7 326 | 2 066 | 98 585 | 262 | 98 847 |
| Comprehensive income (loss) for the period |
(2 634) | (2 634) | (3) | (2 637) | |||
| Profit (loss) for the period |
(1 062) |
(1 062) | (1 062) | ||||
| Other comprehensive income (loss) for the year |
- | - | - | - | - | - | - |
| Total comprehensive income (loss) for the period |
(2 634) | (1 062) | (3 696) | (3) | (3 699) | ||
| Balance at 30 June 2024 |
661 | 88 532 | 4 692 | 1 004 | 94 889 | 259 | 95 148 |
The notes on pages 8 to 28 are an integral part of these condensed consolidated interim financial statements.
The above requirement of the Law is not applied in the case of the Company due to the fact that its owners are not residents in Cyprus for tax purposes.
(in USD thousand, unless otherwise stated)
| Note | 30 June 2024 |
30 June 2023 |
|
|---|---|---|---|
| Cash flows from operating activities: |
|||
| Profit/(Loss) for the period |
(2 637) | 1 295 | |
| Adjustments for: |
|||
| Depreciation | 38 | 819 | |
| Fair value gain on financial assets at fair value through profit |
- | - | |
| or loss | - | - | |
| Impairment of inventories |
(11) | (20) | |
| (Gain)/Loss from changes in fair value less cost to sell of |
|||
| biological assets and agriculture produce |
(15) | (144) | |
| Net impairment of trade and other receivables |
(63) | - | |
| Interest income |
- | - | |
| Income from reversal of impairment of PPE |
- | - | |
| Interest expense |
- | - | |
| Loss on disposal of property, plant and equipment |
- | - | |
| Loss/(income) on disposal of current assets |
- | - | |
| Foreign exchange (gain)/ loss |
(2 913) | (100) | |
| Income tax expense |
- | - | |
| Cash flow from operations before working capital changes |
(5 601) | 1 850 | |
| Change in inventories |
703 | 750 | |
| Change in biological assets |
1 421 | 1 516 | |
| Change in trade and other receivables |
268 | 286 | |
| Change in trade and other payables |
(172) | (183) | |
| Income tax paid |
- | - | |
| Net cash from operating activities |
(3 381) | 4 219 | |
| Cash flow from investing activities |
|||
| Acquisition of property, plant and equipment |
(1) | (1) | |
| Acquisition of financial instruments at FVTPL |
- | - | |
| Proceeds from sale of financial instruments at FVTPL |
1,915 | - | |
| Net cash used in investing activities |
1 914 | (1) | |
| Repayment of loans and borrowings |
- | - | |
| Interest on Notes paid |
- | - | |
| Repayment of principal portion of lease liabilities |
- | - | |
| Repayment of interest portion of lease liabilities |
- | - | |
| Net cash used in financing activities |
- | - | |
| Net decrease in cash and cash equivalents |
(1 467) | 4 218 | |
| Cash and cash equivalents at the beginning of the period |
1 995 | 1 186 | |
| Effect from translation into presentation currency |
2 901 | (3 409) | |
| Cash and cash equivalents at the end of the period |
3 429 | 451 |
(in USD thousand, unless otherwise stated)
Agroton Public Limited (the "Company") was incorporated in Cyprus on 21 September 2009 as a public company with limited liability under the Cyprus Companies Law, Cap. 113. The Company was listed at the main market of Warsaw Stock Exchange on 8 November 2010.
The Company's registered office is at 1 Lampousas Street, 1095 Nicosia, Cyprus.
The principal activities of the Group are grain and oil crops growing, agricultural products storage and sale, cattle breeding (milk cattle-breeding, poultry farming) and milk processing. The poultry farming business has been temporarily abandoned due to the military clashes and armed conflict in Eastern Ukraine.
The Group's subsidiaries, country of incorporation, and effective ownership percentages are disclosed below:
| Company name |
Country of incorporation |
Ownership Interest 30.06.2024 |
Ownership Interest 31.12.2023 |
|---|---|---|---|
| Living LLC |
Ukraine | 99,99 % |
99,99 % |
| PE Agricultural Production Firm Agro |
Ukraine | 99,99 % |
99,99 % |
| Agroton PJSC |
Ukraine | 99,99 % |
99,99 % |
| LLC Belokurakinskiy Elevator |
Ukraine | 99,99 % |
99,99 % |
| Agro Meta LLC (i) |
Ukraine | 99,99 % |
99,99 % |
| ALLC Noviy Shlyah |
Ukraine | 99,99 % |
99,99 % |
| ALLC Shiykivske |
Ukraine | 94,59 % |
94,59 % |
| Agro-Chornukhinski Kurchata LLC |
Ukraine | 99,89 % |
99,89 % |
| LLC Siverskiy Elevator |
Ukraine | 100,00 % |
100,00 % |
(i) Agro Meta LLC is in the process of liquidation.
The parent company of the Group is Agroton Public Limited with an issued share capital of 21 670 000 ordinary shares with nominal value € 0,021 per share.
(in USD thousand, unless otherwise stated)
The shares at 30 June 2024 and as at the date of issue of these condensed consolidated interim financial statements were distributed as follows:
| 30 | June 2024 |
31 December 2023 | |||
|---|---|---|---|---|---|
| Shareholder | Number of Shares |
Ownership interest, % |
Number of Shares |
Ownership interest, % |
|
| Mr. Iurii Zhuravlov |
18 506 665 |
85,40 % |
18 506 665 |
85,40 % |
|
| Others | 3 163 335 | 14,60 % |
3 163 335 | 14,60 % |
|
| 21 670 000 |
100,00 | % 21 670 000 |
100,00 % |
The condensed consolidated interim financial statements of the Company as at and for the six months ended 30 June 2024 comprise the financial statements of the Company and its subsidiaries (together with the Company, the ''Group'').
These condensed consolidated interim financial statements for the six months ended 30 June 2024 have been prepared in accordance with International Accounting Standard (IAS) 34 ''Interim Financial Reporting'' and were not audited by the external independent auditors of the Group. These condensed consolidated interim financial statements do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2023.
These condensed consolidated interim financial statements have been prepared under the historical cost convention except for the following:
(in USD thousand, unless otherwise stated)
The functional currencies of the companies of the Group are the Ukrainian Hryvnia (UAH) and United States Dollar (USD). The currency of Cyprus is Euro, but the principal exposure of the parent undertaking is in US dollars, therefore the functional currency of the Company is considered to be USD. Transactions in currencies other than the functional currency of the Group's companies are treated as transactions in foreign currencies. The Group's management decided to use US dollar (USD) as the presentation currency for financial and management reporting purposes. Exchange differences arising are classified as equity and transferred to the translation reserve.
The exchange rates used in preparation of these condensed consolidated interim financial statements, are as follows:
| Currency | 30 June 2024 | Average for the six months |
31 December 2023 |
Average for the six months |
|
|---|---|---|---|---|---|
| ended 30 June |
ended 30 June |
||||
| 2024 | 2020 | ||||
| US dollar – UAH |
40,5374 | 39,0103 2 |
37,9824 | 36,5750 |
These condensed consolidated interim financial statements have been prepared under the going concern basis, which assumes the realisation of assets and settlement of liabilities in the course of ordinary economic activity. Renewals of the Group's assets, and the future activities of the Group, are significantly influenced by the current and future economic environment in Ukraine. The Board of Directors and Management are closely monitoring the events in the current operating environment of the Group as described in note 25 to the condensed consolidated interim financial statements and has assessed the current situation and there is no indication of adverse effects while at the same time are taking all the steps to secure Group's short and long term viability. To this effect, they consider that the Group is able to continue its operations as a going concern.
As from 1 January 2021, the Group adopted all changes to International Financial Reporting Standards (IFRSs) as adopted by EU which are relevant to its operations. This adoption did not have a material effect on the condensed 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 condensed consolidated interim financial statements. Their adoption in the next reporting periods is not expected to have a material impact on the Group.
(in USD thousand, unless otherwise stated)
The accounting policies applied in these condensed consolidated interim financial statements are the same as those applied in the Group's annual consolidated financial statements as at and for the year ended 30 June 2024.
| 30 June 2024 | 30 June 2023 | |
|---|---|---|
| Sales of goods | 85 | 714 |
| Rendering of services | 1 | - |
| Total | 86 | 714 |
Revenue generated from sale of goods was as follows:
| 30 June 2024 | 30 June 2023 | |
|---|---|---|
| Livestock and related revenue | - | 140 |
| Winter wheat | - | 471 |
| Sunflower | 85 | 62 |
| Corn in grain | - | 32 |
| Vegetable oil and protein meals | - | - |
| Other agricultural crops | - | 9 |
| Total | 85 | 714 |
Sales volume for main agricultural products in tonnes was as follows:
| 30 June 2024 | 30 June 2023 | |
|---|---|---|
| Winter wheat | 171 | 225 |
| Sunflower | 18 267 | 37 461 |
| Corn in grain | 24 | 572 |
| Vegetable oil and protein meals | - | - |
| Total | 18 462 | 38 258 |
Sales volume for milk yield for the six months ended 30 June 2024 was 0 tonnes (30 June 2023: 268 tonnes).
Revenue generated from rendering of services relates to storage and handling services provided to third parties.
Livestock and related revenue includes revenue from poultry and other livestock related products.
(in USD thousand, unless otherwise stated)
| 30 June 2024 | 30 June 2023 | |
|---|---|---|
| Livestock and related operations | - | 151 |
| Plant breeding and related operations | 152 | 730 |
| Vegetable oil and protein meals | - | - |
| Other activities | 4 | 59 |
| Total | 156 | 940 |
| 30 June 2024 | 30 June 2023 | |
|---|---|---|
| Government grants | - | - |
| Reversal of provision for bad debts | 63 | - |
| Income from reversal of impairment of PPE | - | - |
| Other income | 100 | 836 |
| Total | 163 | 836 |
| 30 June 2024 | 30 June 2023 | |
|---|---|---|
| Professional fees | 297 | 23 |
| Personnel expenses | 182 | 218 |
| Depreciation charge | 35 | 54 |
| Materials | 29 | 24 |
| Communication services | 2 | 2 |
| Other expenses | 126 | 117 |
| Total | 671 | 448 |
| 30 June 2024 | 30 June 2023 | |
|---|---|---|
| Transportation expenses | - | 19 |
| Other expenses | - | 43 |
| Total | - | 62 |
(in USD thousand, unless otherwise stated)
| 30 June 2024 | 30 June 2023 | |
|---|---|---|
| Depreciation charge | - | 690 |
| Exchange rate differences | 2 913 | 100 |
| Disposal of non-current assets | - | - |
| Impairment of inventories | 11 | 20 |
| Fines and penalties | 4 | - |
| Other expenses | 35 | 77 |
| Total | 2 963 | 887 |
| 30 June 2024 | 30 June 2023 | |
|---|---|---|
| Interest income | 808 | 1 721 |
| Profit on foreign exchange differences | 115 | |
| Finance income | 923 | 1 938 |
| Finance costs on lease liabilities | - | - |
| Interest on non-bank loans | - | - |
| Interest on notes | - | - |
| Loss on foreign exchange differences | (34) | - |
| Finance costs | (34) | - |
| Net finance (costs)/income | 889 | 1 938 |
During the six months ended 30 June 2024, the Group acquired items of property, plant and equipment with a cost of USD 1 thousand (the six months ended 30 June 2023: USD 1 thousand).
The Group's right-of-use assets represent leases of plough-land from individuals. The total size of leased plough-land at 30 June 2024 is 0 thousand hectares (31 December 2023: 0 thousand hectares).
(in USD thousand, unless otherwise stated)
Biological assets were presented as follows:
| 30 June 2024 | 30 June 2023 | |
|---|---|---|
| Crops under cultivation | 20 335 | 21 751 |
| Animals in growing and fattening | 34 | 36 |
| Total current biological assets | 20 369 | 21 787 |
| Cattle | 495 | 498 |
| Total non-current biological assets | 495 | 498 |
| Total | 20 864 | 22 285 |
At 30 June 2024 and 31 December 2023 the crops under cultivation were presented as follows:
| 30 June 2024 | 30 December 2023 | |||
|---|---|---|---|---|
| Thousands of hectares |
Carrying values |
Thousands of hectares |
Carrying values |
|
| Winter wheat plantings | 1 550 | 10 380 | 1 653 | 11 072 |
| Corn plantings | 177 | 59 | 189 | 63 |
| Sunflower plantings | 174 | 2 436 | 191 | 2 671 |
| Winter rape plantings | 177 | 70 | 189 | 75 |
| Other plantings | 333 | 7 390 | 354 | 7 870 |
| Total | 2 411 | 20 335 | 2 576 | 21 751 |
The main crops harvested and the fair value at the time of harvesting was as follows:
| 30 June 2024 | 30 December 2023 | |||
|---|---|---|---|---|
| Volume, tonnes | Amount, USD thousand |
Volume, tonnes |
Amount, USD thousand |
|
| Winter wheat | - | - | 771 | 63 |
| Sunflower | 310 | 99 | 3 930 | 1 343 |
| Corn | - | - | - | - |
| Other sowing | 147 | 47 | 954 | 12 |
| Total | 457 | 146 | 5 655 | 1 418 |
Other sowing mainly includes grass plants for production of animal feed.
Expenses capitalised in biological assets mainly include fertilisers, fuel, seeds and labour.
(in USD thousand, unless otherwise stated)
Non-current biological assets:
| 30 June 2024 | 30 December 2023 | |||
|---|---|---|---|---|
| Number, heads | Fair value | Number, heads |
Fair value | |
| Cattle | 550 | 495 | 550 | 498 |
| Total | 550 | 495 | 550 | 498 |
Animals in growing and fattening:
| 30 June 2024 | 30 December 2023 | |||
|---|---|---|---|---|
| Number, heads | Fair value | Number, heads |
Fair value | |
| Cattle | 76 | 34 | 76 | 36 |
| Horses | - | - | - | - |
| Total | 76 | 34 | 76 | 36 |
Expenses capitalised in biological assets of animals include mixed folder, electricity, labour, depreciation and other.
| 30 June 2024 | 31 December 2023 | |
|---|---|---|
| US Treasury notes | 18 304 | 20 261 |
| Bank of Cyprus Holdings Plc | 339 | 297 |
| Total | 18 643 | 20 558 |
| 30 June 2024 | 31 December 2023 | |
|---|---|---|
| Current assets | ||
| Loans to related parties | 26 078 | 26 078 |
| Total | 26 078 | 26 078 |
(in USD thousand, unless otherwise stated)
| 30 June 2024 | 31 December 2023 | |
|---|---|---|
| Raw materials | 645 | 709 |
| Work-in-progress | 35 | - |
| Agricultural produce | 9 134 | 9 701 |
| Other | 2 180 | 2 261 |
| Total | 11 994 | 12 671 |
| 30 December 2023 | |
|---|---|
| 2 385 | 2 386 |
| 6 636 | 7 201 |
| 1 | 2 |
| 112 | 112 |
| 9 134 | 9 701 |
| 30 June 2024 |
| 30 June 2024 | 30 December 2023 | |
|---|---|---|
| Winter wheat | 21 508 | 21 510 |
| Sunflower | 14 634 | 14 920 |
| Corn | 6 | 21 |
| Total | 36 148 | 36 451 |
(in USD thousand, unless otherwise stated)
| 30 June 2024 | 31 December 2023 | |
|---|---|---|
| Trade receivables | 788 | 892 |
| Provision for impairment of receivables | (76) | (145) |
| Trade receivables, net | 712 | 747 |
| Prepayments to suppliers | 83 | 546 |
| Other receivables | 23 468 | 24 638 |
| Provision for impairment of prepayments and other | ||
| receivables | (22 300) | (23 800) |
| VAT recoverable | 87 | 124 |
| Total | 2 050 | 2 255 |
On 29 June 2012, the Company entered into a preliminary agreement with Stiomi Agri Limited ('Seller') for the acquisition of 100% of the issued share capital of Private Enterprise 'Peredilske'. The parties agreed that the price for transfer of the company's shares amounting to USD 23 080 000.
On 26 December 2012, the Company entered into a preliminary agreement with Stiomi Agri Limited ('Seller') for the acquisition of 100% of the issued share capital of Limited Liability Company 'Skhid Potencial-Resurs'. The parties agreed that the price for transfer of the company's shares shall amount to USD 10 000 000.
On 3 September 2013 both agreements for the acquisition of PE "Peredilske" and of LLC "Skhid-Potencial-Resurs" have been cancelled. The parties agreed that the whole amount paid should be returned to the Company within twelve months of the signing of the cancellation agreements, either in cash and/or an equivalent market value's worth of agricultural goods.
Due to political and economic developments and military conflict in Eastern Ukraine, Stiomi Agri Limited is currently unable to repay this amount to the Group. It is highly probable that this amount will never be recovered, therefore an impairment loss for USD 33 080 thousand was recognised in 2014.
| 30 June 2024 | 31 December 2023 | |
|---|---|---|
| Fixed deposit | - | - |
| Cash at bank - USD |
3 392 | 1 703 |
| Cash at bank - UAH |
37 | 292 |
| Cash at bank - Euro |
- | - |
| Cash in hand | - | - |
| Total | 3 429 | 1 995 |
(in USD thousand, unless otherwise stated)
| 30 June 2024 | 31 December 2023 | |
|---|---|---|
| Non-current liabilities | ||
| Lease liabilities | - | - |
| - | - | |
| Current liabilities | - | - |
| Lease liabilities | - | - |
| - | - | |
| Total lease liabilities | - | - |
Lease liabilities represent Group's obligations recognised in respect of the Group's right-of-use assets in respect of operating leases of plough-land from individuals.
| 30 June 2024 | 31 December 2023 | |
|---|---|---|
| Current liabilities | ||
| Loan from owner | 86 | 92 |
| Total loans and borrowings | 86 | 92 |
| 30 June 2024 | 31 December 2023 | |
|---|---|---|
| Trade payables | 1 434 | 1 447 |
| Payroll and related expenses accrued | 75 | 96 |
| Advances received | 39 | 62 |
| Liabilities for other taxes and mandatory payments | 63 | 67 |
| VAT payable | 67 | 92 |
| Accrued expenses | 304 | 382 |
| Other liabilities | 38 | 41 |
| Total | 2 020 | 2 187 |
(in USD thousand, unless otherwise stated)
As at 30 June 2024 and the date of this report, the Company is controlled by Mr. Iurii Zhuravlov, who holds directly 85,40% of the Company's share capital. The remaining 14,60% of the shares is widely held.
For the purposes of these condensed consolidated interim 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:
Outstanding balances with related parties:
| 30 June 2024 | 31 December 2023 | |
|---|---|---|
| Loans receivable | ||
| d. Companies and individuals significantly influencing the Group and having an interest in equity of Group's companies |
||
| Mr Iurii Zhuravlov - Chief Executive Officer |
26 078 | 26 078 |
| Total | 26 078 | 26 078 |
| Loans payable | ||
| d. Companies and individuals significantly influencing the | ||
| Group and having an interest in equity of Group's companies | ||
| Mr Iurii Zhuravlov - Chief Executive Officer |
86 | 92 |
| Total | 86 | 92 |
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.
Reportable segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. All reportable segments' results are reviewed regularly by the Group's CEO to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.
The operating businesses are organised and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.
(in USD thousand, unless otherwise stated)
For the six months ended 30 June 2024 the Group identified the following reportable segments, which include products and services, that differ by levels of risk and conditions of generation of income:
No operating segments have been aggregated to form the above reportable operating segments.
Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties.
Management monitors the operating results of each of the unit separately for the purpose of making decisions about resources allocation and evaluation of operating results.
Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the condensed consolidated interim financial statements. Group financing (including finance expense and finance income) and income taxes, are managed on a group basis and are not allocated to operating segments.
(in USD thousand, unless otherwise stated)
Information by reportable segment is presented as follows:
| For the six months ended 30 June 2024 | Livestock | Plant breeding |
Vegetable oil and protein meal |
Other | Group level |
Total |
|---|---|---|---|---|---|---|
| Total revenue | - | 153 | - | 4 | - | 157 |
| Inter-segment sales | - | (68) | - | (3) | - | (71) |
| External revenues | - | 85 | - | 1 | - | 86 |
| Net change in fair value less cost to sell of biological assets and agricultural produce |
- | 15 | - | - | - | 15 |
| Expenses (excluding depreciation and amortisation) | - | (3 589) | - | - | - | (3 589) |
| Profit for the period (excluding depreciation and amortisation) | - | (3 489) | - | 1 | - | (3 488) |
| Depreciation and amortisation | - | (38) | - | - | - | (38) |
| (Loss)/profit before taxation from continuing operations | - | (3 527) | - | 1 | - | (3 526) |
| Reportable segment assets | - | 84 610 | - | 13 295 | - | 97 905 |
| Reportable segment liabilities | - | 2 074 | - | 683 | - | 2 757 |
(in USD thousand, unless otherwise stated)
| For the six months ended 30 June 2023 | Livestock | Plant breeding |
Vegetable oil and protein meal |
Other | Group level |
Total |
|---|---|---|---|---|---|---|
| Total revenue | 140 | 622 | - | - | - | 762 |
| Inter-segment sales | - | (48) | - | - | - | (48) |
| External revenues | 140 | 574 | - | - | - | 714 |
| Net change in fair value less cost to sell of biological assets and agricultural produce |
- | 144 | - | - | - | 144 |
| Expenses (excluding depreciation and amortisation) | (122) | (1 211) | - | - | - | (1 333) |
| Profit for the period (excluding depreciation and amortisation) | 18 | (493) | - | - | - | (475) |
| Depreciation and amortisation | (18) | (150) | - | - | - | (168) |
| (Loss)/profit before taxation from continuing operations | - | (643) | - | - | - | (643) |
| Reportable segment assets | 3 148 | 78 960 | - | 19 669 | - | 101 777 |
| Reportable segment liabilities | 49 | 2 177 | - | 704 | - | 2 930 |
(in USD thousand, unless otherwise stated)
The Group's operations are subject to seasonal fluctuations as a result of weather conditions. In particular, the cultivation of crops is adversely affected by winter weather conditions, which occur primarily from January to March. The first half of the year typically results in lower revenues and results for cultivations.
As a result of the annual cycle of crops producing and the Group's attempts to take an advantage of seasonal price changes by managing inventory in its storage facilities, the Group's Plant breeding segment is subject to seasonal fluctuations. Profits of this segment tend to be higher in the first half of a year.
The Cyprus economy has been adversely affected during the last few years by the economic crisis. The negative effects have to some extent been resolved, following the negotiations and the relevant agreements reached with the European Commission, the European Central Bank and the International Monetary Fund (IMF) for financial assistance which was dependent on the formulation and the successful implementation of an Economic Adjustment Program. The agreements also resulted in the restructuring of the two largest (systemic) banks in Cyprus through a "bail in".
The Cyprus Government has successfully completed earlier than anticipated the Economic Adjustments Program and exited the IMF program on 7 March 2016, after having recovered in the international markets and having only used €7,25 billion of the total €10 billion earmarked in the financial bailout. Under the new Euro area rules, Cyprus will continue to be under surveillance by its lenders with biannual post-program visits until it repays 75% of the economic assistance received.
Although there are signs of improvement, especially in the macroeconomic environment of the country's economy including growth in GDP and reducing unemployment rates, significant challenges remain that could affect the estimates of the Company's cash flows and its assessment of impairment of financial and non-financial assets.
In February 2022, the Russian Federation recognised the temporarily occupied territories in the Luhansk and Donetsk regions as independent republics and launched a military invasion of Ukraine, which resulted in a full-scale war throughout Ukraine. On 4 October 2022, the president of the Russian Federation signed laws on the annexation of parts of Luhansk, Donetsk, Zaporizhzhia and Kherson regions, which had previously been ratified by the country's parliament. The ongoing military attack has resulted in significant destruction of infrastructure, displacement of population and disruption of economic activity in Ukraine.
Due to the military invasion of the Russian Federation and the outbreak of a full-scale war, Ukraine's economy suffered serious consequences. During 2023, Ukraine's economy began to gradually recover. In 2023, Ukraine's GDP growth amounted to 5.3% (2022 saw a 28.8% drop in GDP) and inflation fell to 5.1% after a spike in 2022 (2022: 26.6%). The devaluation of the national currency in 2023 was significantly reduced compared to 2022 and amounted to 4% against the dollar (2022: 34%) and 8% against the euro (2022: 26%) at official exchange rates at the end of 2023.
(in USD thousand, unless otherwise stated)
(cont.)
Ukrainian economic and political environment (cont.)
Since the beginning of the invasion, the National Bank of Ukraine (NBU) has introduced a number of temporary measures, such as limiting international payments in foreign currency and fixing the official exchange rate of major currencies: on July 21, 2022, the NBU adjusted the official exchange rate of the hryvnia to the U.S. dollar by 25% to 36.5686 UAH per 1 U.S. dollar. Since October 2023, Ukraine has again introduced a floating exchange rate, and as of December 31, 2023, the dollar exchange rate was UAH 38.002 and the euro exchange rate was UAH 41.996.
Since the beginning of the war, the NBU fixed the discount rate at 10% due to enforced administrative restrictions, but subsequently raised it to 25% in June and gradually reduced it to 15% from July 2023 until the end of the year. As of the date of signing these consolidated financial statements, the NBU's discount rate is 13.5%. In 2023, the NBU further tightened the mandatory reserve requirements for banks.
Significant expenditures on defence capability, social support and infrastructure rehabilitation determine the record high size of the state budget deficit (UAH 1.33 trillion, which is UAH 418.9 billion more than in 2022). International aid remains the key source of financing budgetary needs. Budgetary needs are primarily covered by international, of which UAH 425.4bn were grants.
Thanks to receipts from international partners under various macro-financial assistance programmes and from the placement of foreign currency bonds, despite significant net sales of foreign currency by the NBU and payments for servicing and repayment of government debt in foreign currency, Ukraine's international reserves reached USD 40.5 billion at the end of December 2023.
On 23 June 2022, the European Council summit in Brussels decided to grant Ukraine the status of a candidate for accession to the European Union. Ukraine is going to become a participant in EU programmes and initiatives open to candidates.
The key risk to macro-financial stability is Russia's full-scale invasion of sovereign Ukraine, which is ongoing. The consequences of the war are changing every day and their impact in the long term cannot be determined. The further impact on the Ukrainian economy depends on how the full-scale war ends, on the Ukrainian government's successful implementation of new reforms, the strategy of rebuilding and transforming the country in order to obtain EU membership, and co-operation with international funds.
The Group's management monitors the current situation and takes measures to minimise any negative effects to the extent possible.
Whilst management believes it is taking appropriate measures to support the sustainability of the Group's business in the current circumstances, a further unstable business environment could negatively affect the Group's results and financial position in a manner not currently determinable.
The known and estimable effects of these factors on the financial position and performance of the Group during the reporting period have been taken into account in preparing these Consolidated Financial Statements. The future business environment may differ from management's assessment.
Management is unable to predict all developments which could have an impact on the wider economy and what effect they might have on the future financial position of the Group. Management believes it is taking all the measures necessary to support the sustainability and development of the Group's business.
(in USD thousand, unless otherwise stated)
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 Company has fully settled its obligations on the Notes without incurring any additional liabilities, 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.
The condensed consolidated interim 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.
(cont.)
The exposure of the Group to the economic environment and possible impact is disclosed in note 25 to the condensed consolidated interim financial statements.
As a result of unstable economic environment in Ukraine, tax authorities in Ukraine pay more and more attention to the business cycles. In connection with this, tax laws in Ukraine are subject to frequent changes. Furthermore, there are cases of their inconsistent application, interpretation and execution. Noncompliance with laws and regulations may lead to severe fines and penalties.
The Company operates in the Cypriot tax jurisdiction and its subsidiaries in tax jurisdiction of the respective countries of incorporation. The Group's management must interpret and apply existing legislation to transactions with third parties and its own activities. Significant judgment is required in determining the provision for direct and indirect taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The Group's uncertain tax positions are reassessed by management at every reporting period end. Liabilities are recorded for income tax positions that are determined by management as more likely than not to result in additional taxes being levied if the positions were to be challenged by the tax authorities.
The assessment is based on the interpretation of tax laws that have been enacted or substantively enacted by the reporting period and any known court or other rulings on such issues. Liabilities for penalties, interest and taxes other than on income are recognised based on management's best estimate of the expenditure required to settle the obligations at the reporting period.
The Group considers that it operates in compliance with tax laws of Ukraine, although, a lot of new laws about taxes and transactions in foreign currency have been adopted recently, and their interpretation is rather ambiguous.
(in USD thousand, unless otherwise stated)
In the course of its economic activities, the Group is involved in legal proceedings with third parties. In most cases, the Group is the initiator of such proceedings with the purpose of preventing or mitigating of economic losses.
The Group's management considers that as at the reporting period end, active legal proceedings on such matters will not have any significant influence on its financial position.
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 30 June 2024 and 31 December 2023 the Group's entities had no liabilities for any supplementary pensions, health care, insurance benefits or retirement indemnities to its current or former employees.
Events referred to in note 25 to the condensed consolidated interim financial statements will continue to influence the Group's operations in 2021. While management believes it is taking all necessary measures to maintain the sustainability of the business in the current circumstances, a further deterioration of economic and political conditions in Ukraine could adversely affect the Group's results and financial position, so that it is currently impossible to predict.
On 30 August 2024 the Board of Directors of Agroton Public Limited approved and authorised these condensed consolidated interim financial statements for issue.
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