CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED) for the nine months ended 30 September 2019

Statement of the Members of the Board of Directors

Members of the Board of Directors of Ovostar Union Public Company Limited in accordance with the applicable provisions of the Law providing for transparency requirements in relation to information about issuers whose shares are admitted to trading on a regulated market (L.190 (Ι)/2007—"Transparency Law") herewith confirms that to the best of their knowledge the present unaudited interim financial statements

a) have been prepared in accordance with the International Financial Reporting Standard as adopted by the European Union; and
a) give a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, and the undertakings included in the consolidated accounts as a whole.

14 November 2019 Nicosia, Cyprus

Chief Executive Officer	Borys Bielikov
Director	Vitalii Veresenko
Director	Karen Arshakyan
Director	Sergiy Karpenko

Egg segment

Production

As of 30 September 2019 total flock of the Company reached 7.9 mln heads demonstrating 8% increase Y-o-Y (30-Sep-2018: 7.3 mln heads). The laying hens flock grew by 3% Y-o-Y and reached 6.7 mln heads (30-Sep-2018: 6.5 mln heads). During the nine months of 2019 the Company produced 1 191 mln eggs (9M 2018: 1 202 mln eggs).

Sales

The volume of shell eggs sold totaled to 888 mln (9M 2018: 1 056 mln eggs). The decrease is mainly accounted for by the reduction of trading activities in the reporting period. Export sales volume equaled 440 mln eggs or 50% of the total sales (9M 2018: 443 mln eggs and 42% respectively).

Average selling price of shell eggs fell by 9% Y-o-Y to 0.061 USD/egg (9M 2018: 0.067 USD/egg).

Shell eggs segment generated USD 53.6 mln revenue or 69% of total revenue (9M 2018: USD 67.7 mln and 72% respectively). The segment contributed USD 1.9 mln to profit before tax (9M 2018: USD 10.0 mln).

Egg products segment

Production

Over 9M 2019 the volume of eggs processed increased by 8% Y-o-Y to 432 mln eggs (9M 2018: 401 million). The Company produced 2 186 tons of dry and 10 535 tons of liquid egg products (9M 2018: dry products – 2 255 tons; liquid products – 9 026 tons).

Sales

Sales volume of dry egg products equaled 1 736 tons (9M 2018: 2 157 tons), out of which 1 235 tons, or 71%, were exported (9M 2018: 1 572 tons and 73% respectively).

Sales volume of liquid egg products equaled 10 453 tons (9M 2018: 8 867 tons), out of which 5 069 tons, or 48%, were exported (9M 2018: 4 325 tons and 49% respectively).

Average selling price of dry egg products decreased by 10% Y-o-Y to 4.39 USD/kg (9M 2018: 4.86 USD/kg); average selling price of liquid egg products fell by 3% Y-o-Y to 1.41 USD/kg (9M 2018: 1.46 USD/kg).

The egg products segment generated USD 24.0 mln (31%) of total revenue and contributed USD 0.7 mln to profit before tax (9M 2018: USD 3.9 mln).

Financial Performance

Revenue

During the nine months of 2019 the Company's revenue totaled to USD 77.6 mln, which is by 17% lower as compared to the previous year (9M 2018: USD 94.7 mln). The decrease is explained by a) lower volume of shell eggs sales due to significant reduction of trading operations; and b) negative selling price dynamic in the reporting period.

cost of sales and gross profit

Over the reporting period the cost of sales fell by 2% to USD 67.2 mln (9M 2018: USD 68.4 mln), which is accounted for by the decrease of sales volume. Gross profit amounted to USD 9.2 mln, a 61% decrease as compared to 9M 9M 2018.

Operating profit and EBITDA

Operating profit in the 9M 2019 was by 79% lower than in the 9M of 2018 and totaled to USD 3.2 mln (9M 2018: 15.2). EBITDA fell by 66% Y-o-Y to USD 5.9 mln (9M 2018: USD 17.3 mln).

Marginality

For the 9 months 2019 the margins were as follows:

EBITDA Margin	8%	(9M 2018: 18%);
Gross Profit Margin	12%	(9M 2018: 25%);
Net Profit Margin	3%	(9M 2018: 15%).

Cash flows

During the reporting period operating cash flow amounted to USD 13.6 mln. Cash flows used in investing activities equaled USD 18.2 mln. Cash flows used in financing activities amounted to USD 4.2 mln.

Net debt position

Cash and cash equivalents as at 30 September 2019 totaled to USD 5.9 mln, while total debt was USD 12.0 mln, resulting in net debt amounting to USD 6.1 mln.

Net profit

Net profit for the reporting period equaled USD 2.6 mln demonstrating 81% decrease as compared to the 9M 2018 (9M 2018: USD 13.8 mln).

CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED) for the nine months ended 30 September 2019

STATEMENT OF COMPREHENSIVE INCOME……………………………….7
STATEMENT OF FINANCIAL POSITION………………………………………8
STATEMENT OF CHANGES IN EQUITY………………………………………9
STATEMENT OF CASH FLOWS…….………………………………………………10
NOTES TO THE FINANCIAL STATEMENTS…………….……….…………11

CONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the nine months ended 30 September 2019 (in USD thousand, unless otherwise stated)

		9 months ended	9 months ended
	Note	30 September 2019	30 September 2018
		(unaudited)	(unaudited)
Revenue from contracts with customers Changes in fair value of biological assets	8 14	77 632 (1 235)	94 663 (2 559)
Cost of sales		(67 220)	(68 447)
Gross profit		9 177	23 657
Other operating income	9	3 594	201
Selling and distribution costs		(6 691)	(6 483)
Administrative expenses		(2 064)	(1 496)
Other operating expenses	10	(799)	(699)
Operating profit		3 217	15 180
Finance costs		(627)	(1 674)
Finance income		55	480
Profit before tax		2 645	13 986
Income tax expense	13	(41)	(141)
Profit for the period		2 604	13 845

Other comprehensive income
Items that are or may be reclassified to profit or loss:
Exchange differences on translation to presentation currency		19 317	(225)
Other comprehensive income for the period, net of tax		19 317	(225)
Total comprehensive income for the period, net of tax		21 921	13 620
Profit for the period attributable to:
Equity holders of the parent company		2 444	14 046
Non-controlling interests		160	(201)
Total profit for the period		2 604	13 845
Other comprehensive income attributable to:
Equity holders of the parent company		19 260	(221)
Non-controlling interests		57	(3)
Total other comprehensive income		19 317	(224)

Total comprehensive income attributable to:
Equity holders of the parent company		21 704	13 825
Non-controlling interests		217	(204)
Total comprehensive income		21 921	13 621
Earnings per share:
Weighted average number of shares		6 000 000	6 000 000
Basic and diluted, profit for the period attributable to ordinary equity holders of the parent (USD per share)		0.41	2.34

[signed] Borys Bielikov	Vitalii Veresenko	[signed]
Chief Executive Officer		Non-executive director

[signed]

Karen Arshakyan Sergii Karpenko

Non-executive director Non-executive director

[signed]

CONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

As at 30 September 2019 (in USD thousand, unless otherwise stated)

		30 September 2019	31 December 2018	30 September 2018
	Note	(unaudited)	(audited)	(unaudited)
Assets
Non-current assets
Biological assets	14	53 958	37 399	37 016
Property, plant and equipment and intangible assets	15	56 822	44 155	40 034
Deferred tax assets		132	152	114
Other non-current assets		52	66	-
Total non-current assets		110 964	81 772	77 168
Current assets
Inventories	16	12 839	15 375	13 348
Biological assets	14	15 216	16 390	13 819
Trade and other receivables	17	18 437	16 434	14 935
Prepayments to suppliers		2 195	1 228	1 853
Prepayments for income tax		30	28	21
Cash and cash equivalents	18	5 888	14 346	19 050
Total current assets		54 605	63 801	63 026

Total assets		165 569	145 573	140 194
Equity and liabilities
Equity
Issued capital	19	66	68	70
Share premium		30 933	30 933	30 933
Foreign currency translation reserve		(112 470)	(131 732)	(134 367)
Retained earnings		219 945	209 284	209 352
Result for the period		2 444	17 441	14 046
Equity attributable to equity holders of the parent		140 918	125 994	120 034
Non-controlling interests	7	1 035	818	503
Total equity		141 953	126 812	120 537
Non-current liabilities
Interest-bearing loans and other financial liabilities	20	3 251	5 206	7 259
Deferred tax liability		609	529	509
Total non-current liabilities		3 860	5 735	7 768

Current liabilities
Trade and other payables	21	10 551	8 198	6 869
Advances received		431	703	838
Interest-bearing loans and other financial liabilities	20	8 774	4 125	4 182
Total current liabilities		19 756	13 026	11 889
Total liabilities		23 616	18 761	19 657
Total equity and liabilities		165 569	145 573	140 194

[signed] [signed] Borys Bielikov Vitalii Veresenko Chief Executive Officer Non-executive director [signed] [signed] Karen Arshakyan Sergii Karpenko Non-executive director Non-executive director

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

For the nine months ended 30 September 2019 (in USD thousand, unless otherwise stated)

	Attributable to equity holders of the parent company
	Issued capital	Share premium	Foreign currency translation reserve	Retained earnings	Result for the period	Total	Non controlling interests	Total equity

As at 31 December 2017 (audited)	72	30 933	(132 271)	182 890	22 457	104 081	2 835	106 916
Profit for the period	-	-	-	-	14 046	14 046	(201)	13 845
Other comprehensive income	-	-	(221)	-	-	(221)	(3)	(224)
Total comprehensive income	-	-	(221)	-	14 046	13 825	(204)	13 621
Allocation of prior period result	-	-	-	22 457	(22 457)	-	-	-
Сhange in the structure of the Group	-	-	(1 877)	4 005	-	2 128	(2 128)	-
Exchange differences	(2)	-	2	-	-	-	-	-
As at 30 September 2018 (unaudited)	70	30 933	(134 367)	209 352	14 046	120 034	503	120 537

As at 31 December 2018 (audited)	68	30 933	(131 732)	209 284	17 441	125 994	818	126 812
Profit for the period	-	-	-	-	2 444	2 444	160	2 604
Other comprehensive income	-	-	19 260	-	-	19 260	57	19 317
Acquisition of a subsidiary	-	-	-	-	-	-	-	-
Total comprehensive income	-	-	19 260	-	2 444	21 704	217	21 921
Allocation of prior period result	-	-	-	17 441	(17 441)	-	-	-
Dividends (Note 19)	-	-	-	(6 780)	-	(6 780)	-	(6 780)
Exchange differences	(2)	-	2	-	-	-	-	-
As at 30 September 2019 (unaudited)	66	30 933	(112 470)	219 945	2 444	140 918	1 035	141 953

[signed] [signed]

Borys Bielikov Vitalii Veresenko

[signed]

Chief Executive Officer Non-executive director

[signed]

Karen Arshakyan Sergii Karpenko

Non-executive director Non-executive director

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CASH FLOWS

For the nine months ended 30 September 2019 (in USD thousand, unless otherwise stated)

	Note	9 months ended 30 September 2019 (unaudited)	9 months ended 30 September 2018 (unaudited)
Operating activities
Profit before tax		2 645	13 986
Non-cash adjustment to reconcile profit before tax to net cash flows:
Depreciation of property, plant and equipment & amortisation of intangible assets	11	2 690	2 083
Net change in fair value of biological assets	14	1 235	2 559
Disposal of property, plant and equipment		559	(11)
Disposal of biological assets		1 672	1 018
Finance income		(56)	(480)
Finance costs		627	1 675
Recovery of assets previously written-off	9	(486)	(54)
Impairment of doubtful accounts receivable and prepayments to suppliers	10	35	39
Impairment of property, plant and equipment	11	-	407
Working capital adjustments:
(Increase)/Decrease in trade and other receivables		(3 318)	13 064
Government subsidies		2 952	(1 151)
(Increase)/Decrease in prepayments to suppliers		(1 312)	934
Decrease in other non-current assets		15	-
Decrease/(Increase) in inventories		35	(3 264)
Decrease/(Increase) in trade and other payables and advances received		6 341	(13 178)
Net cash flows from operating activities		13 634 13 634	17 627 17 627

Investing activities
Purchase of property, plant and equipment		(8 803)	(8 521)
Increase in biological assets	14	(9 443)	(8 630)
Effect of acquiring new companies		-	5 773
Net cash flows used in investing activities		(18 246)	(11 378)
Financing activities
Proceeds from borrowings		4 859	-
Repayment of borrowings		(2 031)	(2 086)
Interest received		56	480
Interest paid		(353)	(500)
Payment of dividends		(6 730)	-
Net cash flows used in financing activities		(4 199)	(2 106)
Net (decrease)/increase in cash and cash equivalents		(8 811)	4 143
Effect from translation into presentation currency		353	(51)
Cash and cash equivalents at 01 January 2019		14 346	14 958
Cash and cash equivalents at 30 September 2019		5 888	19 050

For translating results and financial position into a presentation currency, the Group applies IAS 21 "The Effects of Changes in Foreign Exchange Rates". Procedures and rules applied by the Group are specified in Note 2.3.

[signed]	[signed]
Borys Bielikov	Vitalii Veresenko
Chief Executive Officer	Non-executive director
[signed]	[signed]
Karen Arshakyan	Sergii Karpenko

Non-executive director Non-executive director

(in USD thousand, unless otherwise stated)

1. Corporate information

Ovostar Union Public Company Limited (referred to herein as the "Company") is a limited liability company incorporated on 22 March 2011 in Amsterdam under the laws of the Netherlands. Following resolution of the Extraordinary Meeting of Shareholders held in Amsterdam on 30 August 2018 the Company was redomiciled to Cyprus and on 29 November 2018 was registered with the Register of Companies of the Republic of Cyprus as a company continuing in the Republic of Cyprus. As of 31 December 2018 the Company's registered address is 22 Ierotheou Street, Strovolos, Nicosia 2028, Cyprus.

Principal activities of the Group include egg production, distribution, egg products manufacturing and production of related products. The largest shareholder of the Company is Prime One Capital Ltd., Cyprus whose principal activity is the holding of ownership interests in its subsidiary and strategic management.

The Group operates through a number of subsidiaries in Ukraine, Latvia, United Arab Emirates and British Virgin Islands (the list of the subsidiaries is disclosed in Note 7) and has a concentration of its business in Ukraine, where its production facilities are located. Subsidiary companies are registered under the laws of Ukraine, British Virgin Islands, Latvia and United Arab Emirates. The registered address and principal place of business of the subsidiary companies in Ukraine is 34 Petropavlivska Street, Kyiv, Ukraine.

Information on other related party relationships of the Group is provided in Note 22.

The company is listed on Warsaw Stock Exchange.

The Group is controlled by the Beneficial Owners – Mr. Borys Bielikov and Mr. Vitalii Veresenko (hereinafter, the "Beneficial Owners")

The consolidated condensed interim financial statements for the nine months ended 30 September 2019 were approved by the Resolution of the Board of Directors at the Meeting of the Board of Directors, held on 14 November 2019.

2. Basis of preparation

2.1. Statement of compliance and basis of measurement

The consolidated condensed interim financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS EU" hereinafter).

The companies of the Group maintain their accounting records under Ukrainian Accounting Standards ("UAS" hereinafter). UAS principles and procedures may differ from those generally accepted under IFRS EU. Accordingly, the consolidated condensed interim financial statements, which have been prepared on the basis of the Group entities' UAS records, contain adjustments necessary for such financial statements to be presented in accordance with IFRS EU.

The consolidated condensed interim financial statements have been prepared on the historical cost basis except for the following items, that are measured on an alternative basis on each reporting date:

Items	Measurement bases
Biological assets	Fair value less costs to sell

Details of the Group accounting policies are included in Note 5.

2.2. Going concern basis

The financial statements are prepared on a going concern basis, under which assets are sold and liabilities are repaid in the ordinary course of business. The accompanying consolidated condensed interim financial statements do not include adjustments that would need to be made in case the Group was unable to continue as a going concern.

2.3. Functional and presentation currency

The functional currency of the Company is U.S. dollar (USD). The consolidated condensed interim financial statements are presented in the company's functional currency, that is, U.S. dollar (USD). The operating subsidiary have Ukrainian hryvnia (UAH) as their functional currency. All values are rounded to the nearest thousands, except when otherwise is indicated.

The USD has been selected as the presentation currency for the Group due to the following reasons: (a) management of the Group manages business risks and exposures, and measures the performance of its businesses in the USD; (b) the USD is widely used as a presentation currency of companies engaged primarily in agricultural business; and (c) the USD is the most convenient presentation currency for non-Ukrainian users of these IFRS consolidated condensed interim financial statements.

The Group translates its results and financial position into the presentation currency as follows:

assets and liabilities for each statement of financial position presented (i.e. including comparatives) shall be translated at the closing rate at the date of that statement of financial position;
income and expenses for each statement of comprehensive income or separate income statement presented (i.e. including comparatives) shall be translated at exchange rates at the dates of the transactions; and
all resulting exchange differences shall be recognized in other comprehensive income.

During nine months ended 30 September 2019 and 2018, the exchange rate had significant fluctuations. Consistent with IAS 21, if exchange rates

fluctuate significantly, the use of the average rate for a period is inappropriate. Considering significant fluctuations of the Ukrainian currency exchange rate against major foreign currencies and seasonality of sales, Management of the Group decided to translate income and expense items at average quarterly rates. On consolidation, the assets and liabilities of the Subsidiaries are translated at exchange rates prevailing on the reporting

OVOSTAR UNION PCL AND ITS SUBSIDIARIES CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

(in USD thousand, unless otherwise stated)

date. Income and expense items are translated at the average quarterly rates, unless the exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognized in "Other comprehensive income" and accumulated in the "Foreign currency translation reserve".

Relevant exchange rates are presented as follows:

	Closing rate as at 30 September 2019	Closing rate as at 31 December 2018	Closing rate as at 30 September 2018
	(unaudited)	(unaudited)	(unaudited)
USD/UAH	24.0828	27.6883	28.2983
EUR/UAH	26.3346	31.7141	33.1288
USD/PLN	4.0098	3.7581	3.6993
USD/EUR	0.9161	0.8738	0.8619
	Average rate for the 1-st quarter 2019	Average rate for the 2-st quarter 2019	Average rate for the 3-st quarter 2019
	(unaudited)	(unaudited)	(unaudited)
USD/UAH	25.2613	26.5615	27.3058
EUR/UAH	28.1009	29.8327	31.0293
USD/PLN	3.8907	3.8125	3.7917
USD/EUR	0.8996	0.8900	0.8807
	Average rate for the 1-st quarter 2018	Average rate for the 2-st quarter 2018	Average rate for the 3-st quarter 2018
	(unaudited)	(unaudited)	(unaudited)
USD/UAH	27.3490	26.1788	27.3203
EUR/UAH	31.8131	31.2706	33.5633
USD/PLN	3.7056	3.5771	3.4039
USD/EUR	0.8603	0.8391	0.8138

3. Basis of consolidation

The consolidated condensed interim financial statements comprise the financial statements of the Group and its subsidiaries as at 30 September 2019. Control is achieved when the Group 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. Specifically, the Group controls an investee if, and only if, the Group has:

Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)
Exposure, or rights, to variable returns from its involvement with the investee
The ability to use its power over the investee to affect its returns

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

The contractual arrangement with the other vote holders of the investee
Rights arising from other contractual arrangements
The Group's voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed for the period are included in the consolidated condensed interim financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income (OCI) is attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recognized in profit or loss. Any investment retained is recognized at fair value.

(in USD thousand, unless otherwise stated)

4. Use of estimates and assumptions

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, due to uncertainty about these estimates, actual results recorded in future periods may differ from such estimates.

These consolidated condensed interim financial statements include management's estimates regarding the value of assets, liabilities, revenues, expenses, and recognized contractual obligations. These estimates mainly include:

4.1. Impairment of property, plant and equipment

In accordance with IAS 36 "Impairment of Assets" the Group reviews the carrying amount of non-current tangible assets (mainly property, plant and equipment) to identify signs of impairment of these assets.

If there is an indication that an asset may be impaired, the Group uses a model of strategic planning in order to calculate the discounted cash flows (using the "value in use" method, as defined in IAS 36) and, thus, assess the recoverability of the carrying amount of property, plant and equipment. The model was based on budgets and forecasts approved by the management for the next 5 years.

Expected future cash flows reflect long-term production plans formed on the basis of past experience and market expectations. The plans take into account all relevant characteristics of poultry farming, including egg production, volume of egg processing, prices for main components of mixed fodder. Thus, the production capacity is the basis for forecasting the future production volume for each subsequent year and related production costs.

Levels of costs included in projected cash flows is based on current long-term production plans. When conducting impairment testing, recent levels of costs are taken into account, as well as the expected cost changes based on the current condition of operating activities and in accordance with the requirements of IAS 36. IAS 36 provides a number of restrictions on future cash flows, which may be recognized in respect of future restructuring and capital modernization expenses.

Below are the key assumptions that formed the basis for forecasting future cash flows in the models:

prices for main components of mixed fodder are based on internal forecasts of the Group's management;
production data (production of eggs, safety of livestock, meat production volume, production of egg products) based on internal forecasts of the Group's management from past experience;
selling prices for eggs, egg products and poultry meat are based on forecasts of the Group's management and market expectations.

Management believes that calculations of the recoverable amount are most sensitive to changes in such assumptions as the price of poultry meat, price of eggs and eggs product, price of poultry fodder and production data. Management believes that any reasonably possible change in key assumptions on which the recoverable amount of the Group is based will not cause the excess of carrying amount of the Group over its recoverable amount.

Application of IAS 36 requires extensive judgments by the management regarding estimates and assumptions related to future cash flows and discount rate. Given the nature of the current global economic environment, such assumptions and estimates have a high degree of uncertainty. Therefore, other similar assumptions may lead to significantly different results.

4.2. Fair value of biological assets

Estimation of fair value of biological assets is based on the discounted cash flow model. The fair value of biological assets might be affected by the fact that the actual future cash flows will differ from the current forecast, which typically occurs as a result of significant changes in any factors or assumptions used in the calculations.

Among such factors are:

differences between actual prices and price assumptions used in estimating net realizable value of eggs;
changes in productivity of laying hens;
unforeseen operational problems inherent in the branch specificity;
age of hens at the end of the reporting period;
changes in production costs, costs of processing and products sales, discount and inflation rates and exchange rates that could adversely affect the fair value of biological assets.

The key assumptions concerning biological assets based on discounted cash flow approach are presented as follows:

cost planning at each stage of poultry farming will remain constant in future periods;
egg production volume will not be significantly changed;
egg sale price in future periods;
long-term inflation rate of Ukrainian UAH in future periods;
discount rate for determining the present value of future cash flows expected from the biological assets (Note 14).

Management determined that calculations of the fair value of biological assets are the most sensitive to changes in such assumptions as the volume of egg production, cost planning and prices of eggs, eggs product and poultry meat. Management believes that any reasonably possible change in key assumptions will not cause any significant change in the fair value of biological assets.

CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

(in USD thousand, unless otherwise stated)

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy,

described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

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

Although some of these assumptions are obtained from published market data, the majority of these assumptions are estimated based on the Group's historical and projected results.

Fair value related disclosures for financial instruments and non-financial assets that are measured at fair value or where fair values are disclosed are summarized in Notes 14.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability

• In the absence of a principal market, in the most advantageous market for the asset or liability

4.3. Allowances for doubtful debts

The Group forms allowances for doubtful debts to cover any potential losses arising in case of buyer's insolvency. In assessing the adequacy of the allowance for doubtful debts the management takes into account overall current economy conditions, terms of balances for outstanding receivables, the Group's experience to write-off liabilities, customers' solvency and changes in the conditions of payment. Changes in the economy, industry or financial position of individual buyers may cause adjustment to the amount of allowance for doubtful debts reflected in the consolidated condensed interim financial statements.

4.4. Useful lives of property, plant and equipment

The Group estimates useful lives of property, plant and equipment at least at the end of each financial year and, if expectations differ from previous estimates, changes are recorded as changes in accounting estimates in accordance with IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors". These estimates can have a significant impact on the carrying amount of property, plant and equipment and depreciation expenses during the period.

4.5. Deferred tax assets

Deferred tax assets are recognized for all unused tax losses to the extent that the inflow of taxable profit is possible, at the expense of which these losses may be implemented. Significant judgments are required from the management in determining the amount of deferred tax assets that can be recognized on the basis of the possible terms of receipt and the level of future taxable profit together with the future tax planning strategy.

5. Summary of significant accounting policies

5.1 Recognition and measurement of financial instruments

Accounting policy applicable after 1 January 2018

Financial instruments: key measurement terms

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The best evidence of fair value is the price in an active market. An active market is one in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

Fair value of financial instruments traded in an active market is measured as the product of the quoted price for the individual asset or liability and the number of instruments held by the entity. This is the case even if a market's normal daily trading volume is not sufficient to absorb the quantity held and placing orders to sell the position in a single transaction might affect the quoted price.

Valuation techniques such as discounted cash flow models or models based on recent arm's length transactions or consideration of financial data of the investees are used to measure fair value of certain financial instruments for which external market pricing information is not available. Fair value measurements are analyzed by level in the fair value hierarchy as follows:

(i) Level one: Measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities,
(ii) Level two: Valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and
(iii) Level three: Valuations not based on solely observable market data (that is, the measurement requires significant unobservable inputs).

Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial instrument. An incremental cost is one that would not have been incurred if the transaction had not taken place. Transaction costs include fees and commissions paid to agents (including employees acting as selling agents), advisors, brokers and dealers, levies by regulatory agencies and securities exchanges, and transfer taxes and duties. Transaction costs do not include debt premiums or discounts, financing costs or internal administrative or holding costs.

(in USD thousand, unless otherwise stated)

Amortized cost is the amount at which the financial instrument was recognized at initial recognition less any principal repayments, plus accrued interest, and for financial assets less any write-down for incurred impairment losses. Accrued interest includes amortization of transaction costs deferred at initial recognition and of any premium or discount to the maturity amount using the effective interest method. Accrued interest income and accrued interest expense, including both accrued coupon and amortized discount or premium (including fees deferred at origination, if any), are not presented separately and are included in the carrying values of the related items in the consolidated condensed interim statement of financial position.

The effective interest method is a method of allocating interest income or interest expense over the relevant period, so as to achieve a constant periodic rate of interest (effective interest rate) on the carrying amount. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts (excluding future credit losses) through the expected life of the financial instrument or a shorter period, if appropriate, to the gross carrying amount of the financial instrument. The effective interest rate discounts cash flows of variable interest instruments to the next interest repricing date, except for the premium or discount, which reflects the credit spread over the floating rate specified in the instrument, or other variables that are not reset to market rates. Such premiums or discounts are amortized over the whole expected life of the instrument. The present value calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate.

Financial instruments: initial recognition

Financial instruments at fair value through profit or loss are initially recorded at fair value. All other financial instruments are initially recorded at fair value adjusted for transaction costs. 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. After the initial recognition, an ECL allowance is recognized for financial assets measured at amortized cost and investments in debt instruments measured at fair value through other comprehensive income, resulting in an immediate accounting loss.

All purchases and sales of financial assets that require delivery within the time frame established by regulation or market convention are recorded at trade date, which is the date on which the Group commits to deliver a financial asset. All other purchases are recognized when the entity becomes a party to the contractual provisions of the instrument.

The Group uses discounted cash flow valuation techniques to determine the fair value of loans to related parties that are not traded in an active market. Differences may arise between the fair value at initial recognition, which is considered to be the transaction price, and the amount determined at initial recognition using a valuation technique with level 3 inputs. If any differences remain after calibration of model inputs, such differences are amortized on a straight-line basis over the term of the currency swaps, loans to related parties. The differences are immediately recognized in profit or loss if the valuation uses only level 1 or level 2 inputs.

Accounting policy applicable before 1 January 2018

Financial assets and financial liabilities are recorded in the Group's consolidated condensed interim statement of financial position when the Group becomes a contractual party regarding the corresponding financial instrument. The Group records the acquisition and sale of financial assets and financial liabilities at the settlement date.

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

Fair value of investments that are actively traded in organized financial markets is calculated on the basis of current market value at the close of trading on the reporting date. Regarding investments in securities for which there is no active market, fair value is calculated using other methods of valuation of financial instruments. Such valuation methods include the use of information on recent market transactions between well informed, willing to commit such transaction, independent parties, or data about the current market value of another similar instrument, discounted cash flow analysis or other pricing models.

Accounting policy for subsequent revaluation of these items is disclosed below in the appropriate sections of accounting policy.

5.2 Financial assets

Accounting policy applicable after 1 January 2018

Financial assets: Classification and subsequent measurement: measurement categories

The Group classifies financial assets in the following measurement categories: FVTPL, FVOCI and AC. The classification and subsequent measurement of debt financial assets depends on:

(i) the Group's business model for managing the related assets portfolio and
(ii) the cash flow characteristics of the asset.

As at 31 December 2018 and 31 December 2017 the Group did not hold financial assets at FVOCI.

CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

(in USD thousand, unless otherwise stated)

Financial assets: Classification and subsequent measurement: business model

The business model reflects how the Group manages the assets in order to generate cash flows - whether the Group's objective is:

(i) solely to collect the contractual cash flows from the assets ("hold to collect contractual cash flows") or
(ii) to collect both the contractual cash flows and the cash flows arising from the sale of assets ("hold to collect contractual cash flows and sell") or, if neither of (i) and (ii) is applicable, the financial assets are classified as part of "other" business model and measured at FVTPL.

Business model is determined for a group of assets (on a portfolio level) based on all relevant evidence about the activities that the Group undertakes to achieve the objective set out for the portfolio available at the date of the assessment. Factors considered by the Group in determining the business model include the purpose and composition of a portfolio, past experience on how the cash flows for the respective assets were collected, how risks are assessed and managed, how the assets' performance is assessed and how managers are compensated.

Financial assets: Classification and subsequent measurement: cash flow characteristics

Where the business model is to hold assets to collect contractual cash flows or to hold contractual cash flows and sell, the Group assesses whether the cash flows represent solely payments of principal and interest ("SPPI"). Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are consistent with the SPPI feature. In making this assessment, the Group considers whether the contractual cash flows are consistent with a basic lending arrangement, i.e. interest includes only consideration for credit risk, time value of money, other basic lending risks and profit margin.

Where the contractual terms introduce exposure to risk or volatility that is inconsistent with a basic lending arrangement, the financial asset is classified and measured at FVTPL. The SPPI assessment is performed on initial recognition of an asset and it is not subsequently reassessed.

The Group holds the trade receivables with the objective to collect contractual cash flows and therefore measures them subsequently at amortized cost using the effective interest method. Details about the Group's impairment policies and the expected credit loss measurement are provided in Note 20.

Financial assets: Reclassification

Financial instruments are reclassified only when the business model for managing the portfolio as a whole changes. The reclassification has a prospective effect and takes place from the beginning of the first reporting period that follows after the change in the business model. The entity did not change its business model during the current and comparative period and did not make any reclassifications.

Financial assets: Credit loss allowance for ECL

The Group assesses, on a forward-looking basis, the ECL for debt instruments measured at AC and FVOCI and for the exposures arising from loan commitments and financial guarantee contracts, for contract assets. The Group measures ECL and recognizes Net impairment losses on financial and contract assets 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.

Financial assets of the Group that are subject to IFRS 9's new expected credit loss model are represented by trade receivables. The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade and other receivables and contract assets. Cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial.

Financial assets: Write-off

Financial assets are written-off, in whole or in part, when the Group exhausted all practical recovery efforts and has concluded that there is no reasonable expectation of recovery. The write-off represents a derecognition event. Indicators that there is no reasonable expectation of recovery include:

the counterparty experiences a significant financial difficulty as evidenced by its financial information that the Group obtains;
the counterparty considers bankruptcy or a financial reorganization;
there is adverse change in the payment status of the counterparty as a result of changes in the national or local economic conditions that impact the counterparty.

The Group may write-off financial assets that are still subject to enforcement activity when the Group seeks to recover amounts that are contractually due, however, there is no reasonable expectation of recovery.

Financial assets: Derecognition

The Group derecognises financial assets when (a) the assets are redeemed or the rights to cash flows from the assets otherwise expire or (b) the Group has transferred the rights to the cash flows from the financial assets or entered into a qualifying pass-through arrangement whilst (i) also transferring substantially all the risks and rewards of ownership of the assets or (ii) neither transferring nor retaining substantially all the risks and rewards of ownership but not retaining control.

(in USD thousand, unless otherwise stated)

Control is retained if the counterparty does not have the practical ability to sell the asset in its entirety to an unrelated third party without needing to impose additional restrictions on the sale.

Financial assets: Modification

The Group sometimes renegotiates or otherwise modifies the contractual terms of the financial assets. The Group 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 Group derecognizes the original financial asset and recognizes 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 Group also assesses whether the new loan or debt instrument meets the SPPI criterion. Any difference between the carrying amount of the original asset derecognized and fair value of the new substantially modified asset is recognized 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 Group 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 Group recalculates the gross carrying amount by discounting the modified contractual cash flows by the original effective interest rate (or credit-adjusted effective interest rate for POCI financial assets), and recognizes a modification gain or loss in profit or loss.

Accounting policy applicable before 1 January 2018

Initial recognition and measurement

Financial assets are recognized initially at transaction costs that are attributable to the acquisition of the financial asset.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the asset.

5.3 Effective interest rate method

The effective interest rate method is used to calculate the amortized cost of a financial asset and distribute interest income during the relevant period. The effective interest rate is the rate that enables discounting of estimated future cash receipts through the expected life of a financial asset or a shorter period, if applicable.

Revenues relating to debt instruments are recorded using the effective interest rate method, except for financial assets at fair value through profit or loss.

Financial assets at fair value through profit or loss - a financial asset is classified as at fair value through profit or loss if it is held for trading or designated at fair value through profit or loss.

A financial asset is classified as held-for-trading if it is:

purchased originally for the purpose of sale / repayment within a short period of time; or
a part of the portfolio of identified financial instruments that are managed together, and structure of which demonstrates the intention of profit earning in the short term; or
a derivative that is not classified as a hedging instrument and is not effective for these purposes.

A financial asset that is not a financial asset held-for-trading may be classified as a financial asset at fair value through profit or loss at the time of recognition in the accounting records if:

application of such classification eliminates or significantly reduces discrepancies in valuation or accounting, that otherwise might arise, or
a financial asset is a part of a group of financial assets, financial liabilities or both groups, which are managed and controlled on the basis of fair value in accordance with a documented risk or investment management strategy, and information about this group is provided internally on that basis, or
it exists in the framework of the contract containing one or more embedded derivatives, and IAS 39 "Financial Instruments: Recognition and Measurement" permits to classify the whole contract (asset or liability) as at fair value through profit or loss.

Financial assets at fair value through profit or loss are measured at fair value with arising gains or losses recognized in the consolidated condensed interim statement of comprehensive income. Net gains or losses recognized in the income statement include dividends and interest received on the relevant financial asset.

Held-to-maturity investments - investments held to maturity are measured at amortized cost using the effective interest rate method, less impairment, and income is recognized using the effective yield method. During the reporting periods presented in these financial statements, the Group had no investments of this category.

Loans and receivables - accounts receivable regarding principal activities, loans, borrowings and other receivables with fixed or determinable payments that are not quoted in an active market are classified as "loans and receivables". Loans and receivables are measured at amortized cost

CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

(in USD thousand, unless otherwise stated)

using the effective interest rate method less impairment and uncollectible debts. Interest income is recognized by applying the effective interest rate, except for short-term receivables for which the amount of such interest income is insignificant.

Unquoted investments available for sale are accounted for at cost if their fair value cannot be reliably measured.

5.4 Cash and cash equivalents

Cash and cash equivalents include cash on hand and cash in bank accounts and deposits with an original maturity date of three months or less and are stated at fair value.

5.5 Cash deposits

Cash deposits in the statement of financial position are held for the investment activities. For the purpose of the consolidated condensed interim financial statement of cash flows, short-term deposits are included in the investing activities.

5.6 Impairment of financial assets

Financial assets, except for financial assets at fair value through profit or loss, at each reporting date are assessed for signs indicating impairment. Impairment loss is recognized when there is objective evidence of reduction of the estimated future cash flows on this asset as a result of one or more events that occurred after the financial asset was recorded in the accounting. For financial assets at amortized cost, the amount of impairment is calculated as the difference between the asset's carrying amount and present value of the expected future cash flows discounted using the effective interest rate.

Impairment loss directly reduces the carrying amount of all financial assets, except for accounts receivable on principal activities, carrying amount of which is reduced due to the allowance formed. If the accounts receivable on principal activities are uncollectible, they are written-off against the related allowance. Subsequently received reimbursements of amounts previously written-off are recorded in credit of the allowance account. Changes in the carrying amount of the allowance account are recorded in the profit and loss.

Except for equity instruments available for sale, if in a subsequent period the amount of impairment loss decreases and such decrease can be objectively related to an event occurring after the impairment was recognized, the impairment loss previously recognized is recovered by adjusting the items in the income statement. In this case, the carrying amount of financial investments at the date of recovery of impairment cannot exceed its amortized cost, which would be reflected in the case, if impairment was not recognized.

In respect of equity securities available for sale, any increase in fair value after recognition of impairment loss relates directly to equity.

5.7 Writing-off of financial assets

The Group writes-off a financial asset only if rights for cash flows under the corresponding contract terminated the treaty or if a financial asset and corresponding risks and rewards are transferred to other organization. If the Group does not transfer or retain all the principal risks and rewards of ownership of the asset and continues to control the transferred asset, it shall record its share in the asset and related liability in the amount of possible payment of corresponding amounts. If the Group retains all the principal risks and rewards of ownership of the transferred financial asset, it shall continue to account for the financial asset, and reflect a secured loan on income earned.

5.8 Financial liabilities and equity instruments issued by the Group

5.8.1 Accounting as liabilities or equity

Debt and equity financial instruments are classified as liabilities or equity based on the substance of the corresponding contractual obligations.

5.8.2 Equity instruments

Equity instrument is any contract confirming the right for a share in the company's assets remaining after deduction of all its liabilities. Equity instruments issued by the Group are recorded in the amount of generated income net of direct expenses for their issue.

5.8.3 Liabilities under financial guarantee contracts

Liabilities under financial guarantee contracts are initially measured at fair value and subsequently recorded at the higher of:

cost of contractual obligations determined in accordance with IAS 37 "Provisions, Contingent Liabilities and Contingent Assets", and
cost, less, where applicable, accumulated depreciation reflected in accordance with the principles of revenue recognition set forth below.

5.8.4 Financial liabilities

Accounting policy applicable after 1 January 2018

Financial liabilities - measurement categories

Financial liabilities are classified as subsequently measured at amortized cost, except for (i) financial liabilities at fair value through profit or loss: this classification is applied to derivatives, financial liabilities held for trading (e.g. short positions in securities), contingent consideration recognized by an acquirer in a business combination and other financial liabilities designated as such at initial recognition and (ii) financial guarantee contracts and loan commitments. As of 31 December 2018 and 31 December 2017 the Group did not have financial guarantee contracts and loan commitments or financial liabilities at fair value through profit or loss.

(in USD thousand, unless otherwise stated)

Financial liabilities - derecognition

Financial liabilities are derecognized when they are extinguished (i.e. when the obligation specified in the contract is discharged, cancelled or expires).

An exchange between the Group and its original lenders of debt instruments with substantially different terms, as well as substantial modifications of the terms and conditions of existing financial liabilities, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new conversion features attached to the instrument and change in loan covenants are also considered. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognized as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortized over the remaining term of the modified liability.

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

Accounting policy applicable before 1 January 2018

Initial recognition and measurement

Financial liabilities are classified, at initial recognition as loans and borrowings, payables.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts.

A financial liability is classified as held for trading if it is:

assumed mainly to be repurchased within a short period of time; or
a part of the portfolio of identified financial instruments that are managed together, and structure of which demonstrates the intention of profit earning in the short term; or
a derivative that is not classified as a hedging instrument and is not effective for these purposes.

A financial liability that is not a financial liability held-for-trading may be classified as a financial liability at fair value through profit or loss at the time of recognition in the accounting records if:

application of such classification eliminates or significantly reduces discrepancies in valuation or accounting, that otherwise might arise, or
a financial liability is a part of a group of financial assets, financial liabilities or both groups, which are managed and controlled on the basis of fair value in accordance with a documented risk or investment management strategy, and information about this group is provided internally on that basis, or
it exists within the framework of the contract containing one or more embedded derivatives, and IAS 39 "Financial Instruments: Recognition and Measurement" permits to classify the whole contract (asset or liability) as at fair value through profit or loss.

Financial liabilities at fair value through profit or loss are measured at fair value with arising gains or losses recognized in the financial results. Net gains or losses recognized in the income statement include interest paid on a financial liability.

Other financial liabilities - other financial liabilities, including borrowings, are accounted for at fair value less transaction costs. Other financial liabilities are subsequently measured at amortized cost using the effective interest rate method, with the recognition of interest expenses using the effective (actual) yield.

5.8.5 Trade and other accounts payable

Trade payables are recognized when the counterparty fulfills its contractual obligations and measured at amortized cost using the effective interest rate.

5.8.6 Loans and borrowings

Loans and borrowings are initially recognized at fair value less costs incurred in the transaction. Subsequently, loans and borrowings are stated at amortized cost; any difference between proceeds (net of transaction costs) and the amount of repayment is reflected in the income statement over the period for which loans and borrowings are issued using the effective interest rate method. Loans and borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the obligation to at least one year after the date of balance sheet preparation.

5.8.7 Writing-off of financial liabilities

The Group writes-off financial liabilities only when they are repaid, cancelled or expire.

5.9 Foreign currency transactions

Transactions in currencies other than the functional currency are initially recorded at exchange rates set on the dates of these transactions.

(in USD thousand, unless otherwise stated)

Monetary assets and liabilities denominated in such currencies are translated at the rates applicable at the reporting date. All realized and unrealized gains and losses resulting from exchange rate differences are included in profit or loss for the period.

5.10 Biological assets

Biological assets represented by the commercial herd and herd replacements are recorded at fair value less estimated selling and distribution expenses. Estimate of fair value of biological assets of the Group is based on discounted cash flow models, according to which the fair value of biological assets is calculated using present value of the expected net cash flows from biological assets discounted at the appropriate rate.

The Group recognizes a biological asset only where it controls an asset as a result of past events; it is probable that the economic benefits from the asset will flow to the Group; fair value or cost of an asset can be estimated with reasonable certainty.

Profit or loss arising on initial recognition of biological assets at fair value less estimated selling and distribution expenses is included in the consolidated condensed interim income statement as incurred.

Agricultural products collected from a biological asset are measured at fair value less estimated selling and distribution expenses. Profit or loss arising on initial recognition of agricultural products at fair value, less estimated selling and distribution expenses, is recognized in the consolidated condensed interim statement of comprehensive income.

5.11 Inventories

Inventories consist mainly of raw materials, package and packing materials, agricultural produce and finished goods. Inventories are valued at the lower of cost and net realisable value.

Cost of goods includes the cost of acquisition and, where appropriate, costs incurred in bringing inventories to their present condition and location. Cost is calculated using the weighted average method. Initial cost of inventories includes the transfer of gains and losses on qualifying cash flow hedges, recognised in OCI, in respect to the purchases of raw materials.

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

5.12 Property, plant and equipment

Property, plant and equipment are recorded at historical cost or deemed cost, equal to fair value at the date of transition to IFRS, less accumulated depreciation and accumulated impairment losses. Historical cost of an asset of property, plant and equipment includes (a) the purchase price, including non-recoverable import duties and taxes net of trade and other discounts; (b) any costs directly related to bringing an asset to the location and condition, which allow its functioning in accordance with the intentions of the Group's management; (c) initial assessment of the costs of dismantling and removal in the asset of property, plant and equipment and restoring the occupied territory; this obligation is assumed by the Company either upon the acquisition of an asset, or as a result of its operation for a certain period of time for the purposes not related to the production of inventories during this period. Cost of assets created in-house includes cost of materials, direct labor costs and an appropriate proportion of production overheads.

Construction in progress includes costs directly related to the construction of property, plant and equipment, including distribution of variable overheads associated with the construction and prepayments for the property, plant and equipment. Construction in progress is not depreciated. These assets are depreciated from the moment when they are used in economic activity, on the same basis as depreciation on other assets.

Subsequently capitalised costs include major expenditures for improvements and replacements that extend the useful lives of the assets or increase their revenue generating capacity. Repairs and maintenance expenditures that do not meet the foregoing criteria for capitalisation are charged to the consolidated condensed interim financial statement of comprehensive income as incurred.

Depreciable amount is the cost of an asset of property, plant and equipment, or any other amount, less its residual value. The residual value of an asset is the estimated amount that the company would receive to date from the sale of an item of property, plant and equipment, less estimated costs of disposal if the asset reached the age and condition, in which, presumably, it will be at the end of its useful life. Assets under finance lease are depreciated over the shorter of estimated useful life on the same basis as own assets or over the period of the relevant lease.

Depreciation is provided to write-off the depreciable amount over the useful life of an asset and is calculated using the straight-line method. Useful lives of the groups of property, plant and equipment are as follows:

Buildings	10 - 40 years
Plant and equipment	5 - 25 years
Vehicles	3 - 10 years
Furniture and fittings	3 - 5 years
Construction in progress and uninstalled equipment	No depreciation

The residual value, useful life and depreciation method are reviewed at the end of each financial year. Impact of any changes arising from estimates made in prior periods is recorded as a change in an accounting estimate.

Gains or losses arising from disposal or liquidation of an asset of property, plant and equipment, are defined as the difference between sales proceeds and carrying amount of an asset and recognized in profit or loss.

(in USD thousand, unless otherwise stated)

5.13 Impairment of property, plant and equipment

At the end of each reporting period the Group identifies signs of possible impairment of assets. If any such indication exists, the Group reviews the carrying amount of its items of property, plant and equipment to determine whether any signs of impairment exist due to depreciation. If any such indication exists, the expected recoverable amount of an asset is estimated to determine the amount of impairment losses, if any.

In order to determine the impairment losses, assets are grouped at the lowest levels for which it is possible to identify separately the cash flows (cash generating unit).

The recoverable amount is the higher of fair value less selling and distribution expenses and value of an asset in use. In assessing the value of an asset in use, the estimated future cash flows associated with the asset, are discounted to their present value using pre-tax discount rate that reflects current market estimates of time value of money and the risks inherent in the asset.

If, according to the estimates, the recoverable amount of an asset (cash generating unit) is less than its carrying amount, the carrying amount of an asset (cash generating unit) is reduced to the recoverable amount. An impairment loss is recognized immediately in the income statement, except when the asset is recorded at a revalued amount. In this case the impairment loss is considered as a revaluation decrease.

In cases where impairment losses are subsequently reversed, the carrying amount of the asset (cash generating unit) is increased to the revised estimate of recovery amount, however, in such a way that the increased carrying amount does not exceed the carrying amount that would be determined, if an impairment loss was not recognized in respect of an asset (cash generating unit) in previous years. Reversal of impairment loss is recognized immediately in the income statement, except when the asset is recorded at a revalued amount. In this case, the reversal of an impairment loss is considered as a revaluation increase.

5.14 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Internally generated intangible assets are not capitalized and expenditure is reflected in the income statement in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognized in the income statement in the expense category consistent with the function of the intangible asset.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

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

Amortization is calculated on a straight line basis over the useful life of an asset, which is 10 years.

5.15 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

5.16 Leases

Leases are classified as finance leases when according to the terms of lease the lessee assumes all principal risks and rewards incident to ownership of the leased property. Other leases are classified as operating leases. Income and expenses associated with operating leases are accrued on a straight-line basis and recorded in the income statement over the lease term.

5.17 Group as a lessee

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in the statement of comprehensive income. Operating lease payments are recognized as an expense in the income statement evenly over the lease term.

5.18 Group as a lessor

Leases where the Group does not transfer substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same base as rental income. Contingent rents are recognized as revenue in the period in which they are earned.

(in USD thousand, unless otherwise stated)

5.19 Contingent assets and liabilities

Contingent liabilities are not recognized in the financial statements. Such liabilities are disclosed in the notes to the financial statements, except where the probability of outflow of resources embodying economic benefits is insignificant.

Contingent assets are not recognized in the financial statements, but disclosed in the notes to the extent that it is probable that the economic benefits will flow to the Group.

5.20 Provisions

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

The amount recognized as a provision is the best estimate of compensation necessary to repay a current liability on the reporting date, which takes into account all the risks and uncertainties inherent in this liability. In cases where the amount of provision is estimated using cash flows that can be required to repay current liabilities, its carrying amount represents the present value of these cash flows.

Where there is a possibility that one or all of the economic benefits necessary to recover the amount of provision will be reimbursed by a third party, the receivables are recognized as an asset if there is actual assurance that such reimbursement will be received and the amount of receivables can be measured reliably.

5.21 Revenue recognition

Revenue is income arising in the course of the Group's ordinary activities. Revenue is recognized in the amount of transaction price. Transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring control over promised goods or services to a customer, excluding the amounts collected on behalf of third parties.

Revenue is recognized net of discounts, returns and value added taxes, export duties, other similar mandatory payments.

Group's contracts with customers are fixed-price contracts and generally include both advance payment and deferred payment for the same contracts. Generally, the sales are made with a credit term of 30-60 days, which is consistent with the market practice and consequently trade receivables are classified as current assets.

A receivable is recognized when the goods are delivered or dispatched based on delivery terms as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due (Note 21). Contract assets are immaterial and therefore not presented separately in the consolidated financial statements.

A contract liability is an entity's obligation to transfer goods or services to a customer for which the entity has received consideration from the customer.

The five-step model framework

The core principle of IFRS 15 is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is delivered in a five-step model framework:

Identify the contract(s) with a customer
Identify the performance obligations in the contract
Determine the transaction price
Allocate the transaction price to the performance obligations in the contract
Recognize revenue when (or as) the entity satisfies a performance obligation.

Application of this guidance will depend on the facts and circumstances present in a contract with a customer and will require the exercise of judgment.

Step 1: Identify the contract with the customer

A contract with a customer are exist when:

the contract has been approved by the parties to the contract;
each party's rights in relation to the goods or services to be transferred can be identified;
the payment terms for the goods or services to be transferred can be identified;
the contract has commercial substance; and
it is probable that the consideration to which the entity is entitled to in exchange for the goods or services will be collected.

If a contract with a customer does not yet meet all of the above criteria, the Group continues as to re-assess the contract going forward to determine whether it subsequently meets the above criteria.

Step 2: Identify the performance obligations in the contract

At the inception of the contract, the Group assess as the goods or services that have been promised to the customer, and identify as a performance obligation:

a good or service (or bundle of goods or services) that is distinct;
or a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer.

(in USD thousand, unless otherwise stated)

Step 3: Determine the transaction price

The transaction price is the amount to which the Group expects to be entitled in exchange for the transfer of goods and services. When making this determination, the Group is consider past customary business practices.

Step 4: Allocate the transaction price to the performance obligations in the contracts

Where a contract has multiple performance obligations, the Group will allocate the transaction price to the performance obligations in the contract by reference to their relative standalone selling prices. If a standalone selling price is not directly observable, the Group will need to estimate it using an adjusted market assessment approach or the expected cost plus a margin approach.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

Revenue is recognized as control is passed, either over time or at a point in time.

Control of an asset is defined as the ability to direct the use of and obtain substantially all of the remaining benefits from the asset. These include: • using the asset to produce goods or provide services;

using the asset to enhance the value of other assets;
using the asset to settle liabilities or to reduce expenses;
selling or exchanging the asset;
pledging the asset to secure a loan; and
holding the asset.

The benefits related to the asset are the potential cash flows that may be obtained directly or indirectly.

5.22 Income tax

Income tax is calculated in accordance with the requirements of the applicable legislation of Ukraine. Income tax is calculated on the basis of financial results for the year adjusted to items that are not included in taxable income or that cannot be attributed to gross expenses. It is calculated using tax rates effective at the reporting date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base used to calculate taxable income. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recorded taking into account the degree of certainty in sufficient taxable income, which enables to realize temporary differences related to gross expenses.

Deferred tax is calculated at tax rates, which presumably will be applied during the sale of related assets or repayment of related liabilities.

Assets and liabilities on deferred income tax are offset when: a) the Group has a legally enforceable right to offset the recognized current income tax assets and liabilities; b) the Group intends either to perform settlement by offsetting counterclaims, or simultaneously sell the asset and settle the liability; c) deferred tax assets and liabilities relate to income taxes levied by the same taxation authority in each future period in which it is intended to repay or reimburse a significant amount of deferred tax liabilities and assets.

Deferred income tax is recognized in the income statement, except when it relates to items recognized directly in equity. In this case the deferred tax is also recognized in equity.

In 30 September 2019, Ukrainian corporate income tax was levied at a rate of 18% (2018: 18%)

Fixed agricultural tax: The majority of the Group companies that are involved in agricultural production (poultry farms and other entities engaged in agricultural production) benefit substantially from the status of an agricultural producer. These companies are exempt from income taxes and pay the Fixed Agricultural Tax instead (Note 13).

5.23 Value Added Tax

For the nine months ended 30 September 2019 and 2018, VAT was levied at two rates: 20% on Ukrainian domestic sales and imports of goods, works and services and 0% on export of goods and provision of works or services to be used outside Ukraine.

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

5.24 Government grants

Government grants are stated at fair value when there is reasonable assurance that the grant will be received.

Ukrainian legislation provides a variety of tax benefits and subsidies for agricultural companies. Such benefits and subsidies are approved by the Supreme Council of Ukraine, the Ministry of Agrarian Policy, Ministry of Finance, local authorities. Under the applicable legislation, agricultural producers are entitled to use VAT benefit regarding agricultural transactions.

Government grants related to VAT

Upon introduction of a new agricultural support system in early 2017, Ukraine canceled specific VAT subsidies.

Early in 2016, under this program, the Group's companies are subject to special tax treatment for VAT. The Group's enterprises, which qualify as agricultural producers, are entitled to retain the net VAT payable. VAT amounts payable are not transferred to the State, but credited to the entity's

(in USD thousand, unless otherwise stated)

separate special account to support the agriculture activities of the Group. Net result on VAT operations, calculated as excess of VAT liability over VAT credit is charged to profit or loss. VAT receivable exceeding VAT liability is used as a reduction in tax liabilities of the next period.

In 2017, the State Budget for agricultural support envisages that support automatically distributed among agricultural producers proportionally based on sales of agricultural products by those producers on a monthly basis. The budget subsidy for a sector is calculated on a monthly basis and is proportional to overall VAT paid. According to the Law of Ukraine On Agricultural Support, all agricultural producers that apply for the subsidy must be included in the State Registry of Budget Subsidy Recipients. An agricultural producer is defined as a farm or a company that derived 75% of its sales over the last 12 reporting periods (months) from sales of agricultural products. From 2017 onwards, budget subsidies will be provided until 1 January 2022. The agricultural producers will be engaged in the production of farm animals, as well as fruit and vegetable farmers. For each agricultural producer, the amount of the subsidy is not to exceed the amount of VAT tax paid by the producers, and will be distributed on a monthly basis.

Government grants are recognised as income over the periods necessary to match them with the related costs, or as an offset against finance costs when received as compensation for the finance costs for agricultural producers. To the extent the conditions attached to the grants are not met at the reporting date, the received funds are recorded in the Group's consolidated financial statements as deferred income.

Other government grants are recognised at the moment when the decision to disburse the amounts to the Group is made.

Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.

5.25 Partial compensation of interest rates on loans raised by the agricultural companies from financial institutions

The Group companies are entitled to compensation from the government of a share of interest expenses incurred on loans which were received for agricultural purposes. The amount of interest compensation depends on the term and purpose of the loan. Due to the fact that the payment of interest compensations depends on the capabilities of the country's budget, they are recognized on a cash basis as other operating income in the period of receipt.

5.26 Related party transactions

For the purposes of these consolidated condensed interim financial statements, the parties are considered to be related if one of the parties has a possibility to control or considerably influence the operational and financial decisions of the other company. While considering any relation which can be defined as related party transactions it is necessary to take into consideration the substance of the transaction not only their legal form.

5.27 Reclassification

Certain comparative information presented in the consolidated condensed interim financial statements for the nine month ended 30 September 2018 has been revised in order to achieve comparability with the presentation used in the consolidated condensed interim financial statements for the nine month ended 30 September 2019. Such reclassifications and revisions were not significant to the Group financial statements.

6. New and amended standards

(a) New and amended standards and interpretations adopted

The following new pronouncements are not expected to have any material impact on the Group when adopted:

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Amendments to IFRS 10 and IAS 28 (issued on 11 September 2014 and effective for annual periods beginning on or after a date to be determined by the IASB).
IFRS 17 "Insurance Contracts" (issued on 18 May 2017 and effective for annual periods beginning on or after 1 January 2021).
Amendments to the Conceptual Framework for Financial Reporting (issued on 29 March 2018 and effective for annual periods beginning on or after 1 January 2020).
Definition of a business Amendments to IFRS 3 (issued on 22 October 2018 and effective for acquisitions from the beginning of annual reporting period that starts on or after 1 January 2020).
Definition of materiality Amendments to IAS 1 and IAS 8 (issued on 31 October 2018 and effective for annual periods beginning on or after 1 January 2020).

(in USD thousand, unless otherwise stated)

7. Subsidiaries and Non-controlling interests

As at 30 September 2019, 2018 and 30 September 2018 the Group included the following subsidiaries:

Name of the company	Business activities	30 September 2019 (unaudited)	31 December 2018 (audited)	30 September 2018 (unaudited)
Limited Liability Company "Ovostar Union"	Strategic management of subsidiary companies in Ukraine	100.0%	100.0%	100.0%
Limited Liability Company "Ovostar"	Egg-products production and distribution (Ukraine)	100.0%	100.0%	100.0%
Limited Liability Company "Yasensvit"	Breeder farms, production of hatching eggs, farms for growing young laying flock and for laying flock, production and distribution of shell eggs, poultry feed production (Ukraine)	100.0%	100.0%	100.0%
Public Joint Stock Company "Poultry Farm Ukraine"	Production of shell eggs, assets holding (Ukraine)	92.0%	92.0%	92.0%
Public Joint Stock Company "Malynove"	Production of shell eggs, assets holding (Ukraine)	94.0%	94.0%	94.0%
Public Joint Stock Company "Krushynskyy Poultry Complex"	Trading company, egg trading – non operational activity (Ukraine)	76.0%	76.0%	76.0%
Limited Liability Company "Skybynskyy Fodder Plant"	Non-operational activity (Ukraine)	98.6%	98.6%	98.6%
"SIA" Ovostar Europe"	Trade company (Latvia)	89.0%	89.0%	89.0%
SIA "Gallusman"	Production of shell eggs (Latvia)	89.0%	89.0%	89.0%
SIA "EPEX"	Egg-products production (Latvia)	89.0%	89.0%	89.0%
International Food Trade Limited	Trade company (British Virgin Islands)	100.0%	100.0%	100.0%
OAE Food Trade FZE ©	Trade company (United Arab Emirates)	100.0%	100.0%	100.0%
Limited Liability Company "BVV EQUIPMENT"	Non-operational activity (Ukraine)	100.0%	100.0%	100.0%
Limited Liability Company "BV TRADING"	Non-operational activity (Ukraine)	100.0%	100.0%	100.0%

(in USD thousand, unless otherwise stated)

The following tables summarize the information relating to each of the Group`s subsidiaries that has material NCI, before any intra-group elimination:

30 September 2019 (unaudited)	PJSC "Poultry Farm Ukraine"	PJSC "Malynove"	PJSC "Krushynskyy Poultry Complex"	"SIA" OE Product"	SIA "Gallusman"	SIA "EPEX"	Intra-group eliminations	Total
NCI percentage
	8.0%	6.0%	24.0%	11.0%	11.0%	11.0%
Non-current assets	901	25 784	-	8	233	31
Current assets	3 088	5 707	216	5 016	179	103
Non-current liabilities	-	(284)	(3)	-	-	-
Current liabilities	(203)	(18 322)	12	(5 859)	(446)	(137)
Net assets	3 786	12 885	225	(835)	(34)	(3)
Carrying amount of NCI	304	773	54	(92)	(4)	-	-	1 035
Revenue	1 651	5 706	-	18 493	10	1
Profit (loss)	(1 417)	4 246	25	143	(27)	(6)
OCI	319	151	74	42	1	-
Total comprehensive
income	(1 098)	4 397	99	185	(26)	(6)
Profit allocated to NCI	(113)	255	6	16	(3)	(1)		160
OCI allocated to NCI	26	9	18	5	-	-		58
Cash flows from operating
activities	27	65	-	(598)	(95)	-
Cash flows from
investment activities	(25)	(65)	-	-	-	-
Effect from translation into presentation currency	-	-	-	(41)	(34)	-

30 September 2018 (unaudited)	PJSC "Poultry Farm Ukraine"	PJSC "Malynove"	PJSC "Krushynskyy Poultry Complex"	"SIA" OE Product"	SIA "Gallusman"	SIA "EPEX"	Intra-group eliminations	Total
NCI percentage
	8.0%	6.0%	24.0%	11.0%	11.0%	11,0%
Non-current assets	873	7 011	(243)	9	-	-
Current assets	4 673	1 376	542	5 674	19	4
Non-current liabilities	-	(40)	(3)	-		-
Current liabilities	(330)	(6 107)	4	(6 779)	(17)	(1)
Net assets	5 216	2 240	300	(1 096)	2	4
Carrying amount of NCI	418	134	72	(121)	-	-	-	503
Revenue	3 253	299	-	11 150	-	-
Profit (loss)	(862)	(49)	(3)	(1 162)	-	-
OCI	(54)	(15)	11	8	4	-
Total comprehensive income	(916)	(64)	8	(1 154)	4	-
Profit allocated to NCI	(69)	(3)	(1)	(128)	-	-		(201)
OCI allocated to NCI	(5)	(1)	2	1	-	-		(3)
Cash flows from operating activities Cash flows from investment	26	(837)	-	2 490	(16)	-
activities Effect from translation into	(25)	(65)	-	-	-	-
presentation currency Net (decrease)/ increase in	-	24	-	(228)	18	-
cash and cash equivalents	1	(878)	-	2 262	2	-

(in USD thousand, unless otherwise stated)

8. Segment information

All of the Group's operations are located within Ukraine.

Segment information is analyzed on the basis of the types of goods supplied by the Group's operating divisions. The Group's reportable segments under IFRS 8 are therefore as follows:

Egg operations segment 	sales of egg
	sales of chicken meat
 Egg products operations segment	sales of egg processing products
 Oilseed operations segment	sales of sunflower oil, rapeseed oil and related
	products

The accounting policies of the reportable segments are the same as the Group's accounting policies described in Note 5. Sales between segments are mainly carried out at market prices. Operating profit before tax represents segment result. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

For the purposes of monitoring segment performance and allocating resources between segments:

All assets are allocated to reportable segments.
All liabilities are allocated to reportable segments.

The following table presents revenue, results of operations and certain assets and liabilities information regarding segments for the nine months ended 30 September 2019 and 2018:

9 months ended 30 September 2019 (unaudited)	Operations segment
	Egg	Egg products	Oilseed	Consolidated
Revenue from contracts with customers	102 654	36 033	-	138 687
Inter-segment revenue	(49 061)	(11 994)	-	(61 055)
Revenue from external buyers	53 593	24 039	-	77 632

Profit before tax	1 922	723	-	2 645

	Operations segment
9 months ended 30 September 2018 (unaudited)	Egg	Egg products	Oilseed	Consolidated
Revenue from contracts with customers	112 042	36 246	840	149 128
Inter-segment revenue	(44 277)	(9 248)	(840)	(54 365)
Revenue from external buyers	67 765	26 998	-	94 763

Profit before tax	10 048	3 938	-	13 986

For the nine month ended 30 September 2019, 2018 no sales were settled by barter transactions.

(in USD thousand, unless otherwise stated)

Segment assets, liabilities and other information regarding segments as at 30 September 2019, 2018 and 30 September 2018 are presented as follows:

30 September 2019 (unaudited)	Operations segment
	Egg	Egg products	Oilseed	Consolidated

Total segment assets	146 689	18 717	163	165 569

Total segment liabilities	23 020	571	25	23 616
Addition to property, plant and equipment and
intangible assets	6 207	199	-	6 406
Net change in fair value of biological assets and
agricultural produce	(827)	(408)	-	(1 235)
Depreciation and amortization	(2 289)	(395)	(6)	(2 690)
Interest income	40	16	-	56
Interest on debts and borrowings	353	-	-	353
Income tax expense	-	(41)	-	(41)

31 December 2018 (audited)		Operations segment
	Egg	Egg products	Oilseed	Consolidated

Total segment assets	128 213	16 794	566	145 573

Total segment liabilities	17 665	1 096	-	18 761

30 September 2018 (unaudited)
	Egg	Egg products	Oilseed	Consolidated

Total segment assets	119 802	20 188	204	140 194

Total segment liabilities	19 061	571	25	19 657
Addition to property, plant and equipment and
intangible assets	6 535	1 997	-	8 532
Net change in fair value of biological assets and
agricultural produce	(1 715)	(844)	-	(2 559)
Depreciation and amortization	(1 866)	(210)	(6)	(2 082)
Interest income	452	28	-	480
Interest on debts and borrowings	(500)	-	-	(500)
Income tax expense	(30)	(111)	-	(141)

The Group presented disaggregated revenue based on the type of goods or services provided to customers and the geographical region of goods and services. Entities will need to make this determination based on entity-specific and/or industry-specific factors that would be most meaningful to their business.

The Group presented a reconciliation of the disaggregated revenue with the revenue information disclosed for each reportable segment.

(in USD thousand, unless otherwise stated)

Set out below is the disaggregation of the Group's revenue from contracts with customers:

9 months ended 30 September 2019 (unaudited)		Operations segment
	Egg	Egg products	Oilseed	Total

Type of goods or service
Goods	53 559	24 037	-	77 596
Services	34	2	-	36
			-
Total revenue from contracts with customers	53 593	24 039	-	77 632

Geographical markets
Ukraine	25 847	12 607	-	38 454
Export market	27 746	11 432	-	39 178

Total revenue from contracts with customers	53 593	24 039	-	77 632

9 months ended 30 September 2018 (unaudited)		Operations segment
	Egg	Egg products	Oilseed	Total
Type of goods or service
Goods	67 730	26 669	-	94 399
Services	35	229	-	264
Total revenue from contracts with customers	67 765	26 898	-	94 663
Geographical markets
Ukraine	40 731	11 340	-	52 071
Export market	27 034	15 558	-	42 592
Total revenue from contracts with customers	67 765	26 898	-	94 663

9. Other operating income

	Note	9 months ended 30 September 2019 (unaudited)	9 months ended 30 September 2018 (unaudited)
Income from refund under the special legislation:
Government subsidies	a)	2 952	-
Total income from refund under the special legislation		2 952	-
Gain on recovery of assets previously written off		486	54
Gain on disposal of property plant and equipment		4	17
Other income		152	130
Total		3 594	201

a)Government subsidy

According to the decree of the Cabinet of Ministers "On approval of the Procedure of using the funds provided in the state budget to support livestock, storage and processing of agricultural products, aquaculture" of February 7, 2018 No. 107 - the state partially refunds to the agricultural producers the cost of construction and reconstruction of production facilities.

(in USD thousand, unless otherwise stated)

10. Other operating expenses

	9 months ended 30 September 2019	9 months ended 30 September 2018
	(unaudited)	(unaudited)
Impairment of goodwill	-	(51)
Impairment of property, plant and equipment	-	(407)
Writing off fixed assets	(559)	-
Impairment of doubtful accounts receivable and prepayments to suppliers	(35)	(39)
Write-off of Accounts Receivable	(66)	(15)
Fines and penalties	(35)	(47)
Other expenses	(104)	(140)
Total	(799)	(699)

11. Amortisation and depreciation expenses

	9 months ended 30 September 2019 (unaudited)	9 months ended 30 September 2018 (unaudited)
Depreciation and amortisation:
Cost of sales	(2 375)	(1 991)
Selling and distribution costs	(54)	(13)
Administrative expenses	(261)	(78)
Total	(2 690)	(2 082)

12. Employee benefits expense

	9 months ended 30 September 2019 (unaudited)	9 months ended 30 September 2018 (unaudited)
Wages, salaries and social security:
Costs of production personnel	(6 094)	(4 400)
Costs of distribution personnel	(503)	(456)
Costs of administrative personnel	(820)	(586)
Total	(7 417)	(5 442)

(in USD thousand, unless otherwise stated)

13. Income tax

Companies of the Group that are involved in agricultural production pay the Fixed Agricultural Tax (the "FAT") in accordance with the applicable laws. The FAT is paid in lieu of corporate income tax, land tax, duties for geological survey works and duties for trade patents.

The FAT is calculated by local authorities and depends on the area and valuation of land occupied. This tax regime is valid indefinitely. FAT does not constitute an income tax, and as such, is recognized in the statement of comprehensive income in administrative expenses.

During the nine months ended 30 September 2019, the Group companies which have the status of the Corporate Income Tax (the "CIT") payers in Ukraine were subject to income tax at a 18% rate (30 September 2018: at a 18% rate). The deferred income tax assets and liabilities as of 30 September 2019 were measured based on the tax rates expected to be applied to the period when the temporary differences are expected to reverse.

The major components of income tax expense for the nine months ended 30 September 2019 and 2018 were:

	9 months ended 30 September 2019 (unaudited)	9 months ended 30 September 2018 (unaudited)
Current income tax	(2)	(104)
Deferred tax	(39)	(38)
Income tax (expense)/benefit reported in the income statement	(41)	(142)

14. Biological assets

As at 30 September 2019, 2018 and 30 September 2018 commercial and replacement poultry were presented as follows:

		30 September 2019		31 December 2018		30 September 2018
	Number,	(unaudited)	Number,	(audited)	Number,	(unaudited)
	thousand heads	Carrying value	thousand heads	Carrying value	thousand heads	Carrying value
Non-current biological assets
Replacement poultry
Hy-line	4 425	53 958	3 650	37 399	3 450	37 016
Total non-current biological assets	4 425	53 958	3 650	37 399	3 450	37 016
Current biological assets Commercial poultry
Hy-line	3 471	15 216	3 964	16 390	3 858	13 819
Total current biological assets	3 471	15 216	3 964	16 390	3 858	13 819
Total biological assets	7 896	69 174	7 614	53 789	7 308	50 835

Classification of biological assets into non-current and current component is based on the life cycle of a biological asset. Biological assets that will generate cash flow more than one year are classified as non-current biological assets, biological assets that will generate cash flow less than one year are classified as current biological assets.

Reconciliation of commercial and replacement poultry carrying values for the nine months ended 30 September 2019 and 2018 was presented as follows:

	9 months ended 30 September 2019 (unaudited)	9 months ended 30 September 2018 (unaudited)
As at 01 January 2019	53 789	46 419
Increase in value as a result of assets acquisition	324	326
Increase in value as a result of capitalization of cost	9 119	8 304
Income/(Losses) from presentation of biological assets at fair value	(1 235)	(2 559)
Decrease in value as a result of assets disposal	(1 672)	(1 018)
Exchange differences	8 849	(637)
As at 30 September 2019	69 174	50 835

(in USD thousand, unless otherwise stated)

For the nine months ended 30 September 2019 (in USD thousand, unless otherwise stated) the Group produced shell eggs in the quantity of 1 190 874 thousand items (30 September 2018: 1 202 178 thousand).

Fair value of biological assets was estimated by the Group's specialists which have experience in valuation of such assets. Fair value was calculated by discounting of expected net cash flow (in nominal measuring) at the moment of eggs produced, using corresponding discount rate which is equal to 23.00% (30 September 2018: 21.79%). Management supposes that sale price and production and distribution costs fluctuations will comply with forecasted index of consumer price in Ukraine. The major assumptions were performed on the basis of internal and external information and it reflected Management's assessment of the future agricultural prospect.

Biological assets of the Group are measured at fair value within Level 3 of the fair value hierarchy.

Value measurement is a maximum value exposed to the following assumptions which were used in fair value calculations of biological assets:

	Assumption as at 30 September 2019 (unaudited)	Assumption as at 30 September 2018 (unaudited)
Eggs sale price, USD per item (UAH per item)	0.069(1.69)	0.065 (1.696)
Discount rate, %	23.00%	22.02%
Long-term inflation rate of Ukrainian hrivnya, %	103.40%	100.72%

Based on the current situation in Ukraine that provides a high degree of uncertainty in relation to many of the assumptions in the biological assets revaluation model, and guided by the prudence concept, the Group used conservative approach for calculation of fair value of biological assets as at 30 September 2019.

Changes in key assumptions that were used in fair value estimation of biological assets had the following influence on the value of biological assets:

	9 months ended 30 September 2019 (unaudited)	9 months ended 30 September 2018 (unaudited)
1% decrease in egg sale price	(657)	(737)
1% increase in discount rate	(567)	(565)
1% increase in long-term inflation rate of Ukrainian hrivnya	342	235

15. Property, plant and equipment and intangible assets

During the nine months ended 30 September 2019, the Group's additions to property, plant and equipment amounted to USD 8 803 thousand (2018: USD 7 594 thousand). In particular the Group acquired equipment for poultry houses in the amount equal to USD 4 773 thousand (2018: USD 1 758 thousand) and capital expenditures in amount of USD 975 thousand (2018: 599 thousand) were incurred in connection with the reconstruction and improvement of the existing facilities and reconstruction of poultry buildings.

For the nine months ended 30 September 2019 and 30 September 2018 respectively the Group has put into operation fixed assets of book value equal to USD 9 045 thousand and USD 1 093 thousand respectively.

As at 30 September 2019 net book value of property plant and equipment which was used as collateral for bank loans is nil and property, plant and equipment via finance lease amount is nil (2018: USD nil).

As at 30 September 2019 construction-in-progress and uninstalled equipment also included prepayments for the property, plant and equipment which amounted to USD 1 454 thousand (2018: USD 321 thousand).

As at 30 September 2019, included within property, plant and equipment were fully depreciated assets with the original cost of USD 3 112 thousand (2018: USD 2 492 thousand).

On the 4th of June, fire broke out at the poultry farm in Vasilkiv, Kyiv region. As a result, a detached poultry house was destroyed.

On August, 07 fire broke in one of the detached poultry houses at the production site in Vasylkiv, Kyiv region. There are no casualties or injured. Impairment assessment

The Group reviews its property, plant and equipment each period to determine if any indication of impairment exists. Based on these reviews, there were no indicators of impairment as of 30 September 2019, 2018 and 30 September 2018.

(in USD thousand, unless otherwise stated)

16. Inventories

	30 September 2019	31 December 2018	30 September 2018
	(unaudited)	(audited)	(unaudited)
Raw materials	3 398	6 413	4 237
Agricultural produce and finished goods	5 905	5 454	6 242
Package and packing materials	1 525	1 380	1 264
Work in progress	283	198	240
Other inventories	1 850	2 036	1 499
(Less: impairment of agricultural produce and finished goods)	(122)	(106)	(104)
Total	12 839	15 375	13 348

17. Trade and other receivables

	30 September 2019	31 December 2018	30 September 2018
	(unaudited)	(audited)	(unaudited)
Trade receivables	10 669	12 232	11 782
VAT for reimbursement	7 682	4 028	2 502
Other accounts receivable	300	388	864
Credit loss allowance	(214)	(214)	-
Provision for doubtful accounts receivable	-	-	(213)
Total	18 437	16 434	14 935

18. Cash and cash equivalents

			30 September 2019	31 December 2018
	Note	(unaudited)	(audited)	(unaudited)
Cash in banks	a)	4 358	13 023	13 656
Restricted cash		1 517	1 313	-
Cash in deposit		-	-	5 384
Cash on hand		13	10	10
Total		5 888	14 346	19 050

	Currency	30 September 2019	31 December 2018	30 September 2018
		(unaudited)	(audited)	(unaudited)
Ukraine	UAH	466	576	333
Ukraine	USD	576	552	277
Ukraine	EUR	1 947	1 755	1 098
Total in Ukraine		2 989	2 883	1 708
Latvia	USD	711	843	2 066
Latvia	EUR	58	678	200
Total in		769	1 521	2 266
United Kingdom	USD	1 925	9 549	14 938
United Kingdom	EUR	88	236	111
United Kingdom	PLN	2	-	1
Total in United Kingdom		2 015	9 785	15 050
Denmark	USD	102	4	3
Total in Denmark		102	4	3
Netherlands	USD	-	143	13
Total in Netherlands		-	143	13
Total cash in banks		5 875	14 336	19 040

Notes on pages 11 - 34 form an integral part of these consolidated condensed interim financial statements 33

(in USD thousand, unless otherwise stated)

19. Equity

Issued capital and capital distribution

For the nine months ended 30 September 2019 there were no changes in issued capital.

As referred to in Note 1, the Company was incorporated on 22 March 2011.

The Company's authorized share capital amounts to EUR 225 000 and consists of 22 500 000 ordinary shares with a nominal value off EUR 0.01 each. As at 31 December 2011, 6 000 000 ordinary shares were issued and fully paid. In June 2011 the shares of the Company were listed on the Warsaw Stock Exchange.

As at 30 September 2019, 2018 and 30 September 2018 the shareholder interest above 5% in the Share capital of Company was as follows:

	30 September 2019	31 December 2018	30 September 2018
	(unaudited)	(audited)	(unaudited)
Prime One Capital Ltd.	67.93%	67.93%	67.93%
Generali Otwarty Fundusz Emerytalny	9.94%	9.94%	9.94%
FAIRFAX FINANCIAL Holdings Limited	5.35%	5.35%	5.35%
AVIVA Otwarty Fundusz Emerytalny Aviva BZ WBK	5.02%	5.02%	5.02%

Foreign currency translation reserve

The Company's share capital has been converted at the exchange rate prevailing at the reporting date. The EUR 60 000 (equivalent to 6 000 000 shares) has been converted into USD 64 450 (30 September 2018: USD 69 632). The result arising from exchange rate differences has been recorded in the "Foreign currency translation reserve".

The foreign currency translation reserve is used also to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

Share premium

As has been mentioned previously, in June 2011 the Group's shares have been placed on WSE. As a result, of the transaction, USD 33 048 thousand was raised while the IPO costs amounted to USD 2 115 thousand. In these financial statements funds raised as a result of IPO are reflected in share premium as at 31 December 2011. For the nine months ended 30 September 2019 and 2018, there were no movements in share premium.

Dividends payable by the Company

	30 June 2019	30 June 2019
	(unaudited)	(unaudited)
Dividends on ordinary shares declared
Final dividend ( 1,00 EUR per share )	6 000 tEUR	6 870 tUSD

On 7 June 2019 The Board of Directors approved of the interim dividend of 1 EUR per share, equivalent to approximately 6 000 tEUR/6 870 tUSD.

(in USD thousand, unless otherwise stated)

20. Interest-bearing loans and other financial liabilities

		Effective		30 September 2019	31 December 2018	30 September 2018
	Currency	interest rate, %	Maturity	(unaudited)	(audited)	(unaudited)
Current interest-bearing loans and other financial liabilities
Landesbank Berlin AG / AKA		2.25%+
Ausfuhrkredit-Gesellschaft mbH	EUR	EURIBOR (6m) 1.65%+	30.12.2021	2 337	2 450	2 485
Landesbank Berlin AG	EUR	EURIBOR (6m)	30.12.2020	1 550	1 651	1 673
UkrSibbank	EUR	2.95%	30.04.2020	1 297	-	-
UkrSibbank	EUR	2.95%	30.04.2020	1 378	-	-
PRIME ONE CAPITAL LIMITED	EUR	3%	20.07.2020	2 184
Other current loans	UAH	-	-	28	24	24
Total current interest-bearing loans and other financial liabilities				8 774	4 125	4 182

Non-current interest-bearing loans and other financial liabilities
Landesbank Berlin AG / AKA		2.25%+
Ausfuhrkredit-Gesellschaft mbH	EUR	EURIBOR (6m) 1.65%+	30.12.2021	3 251	4 456	5 687
Landesbank Berlin AG	EUR	EURIBOR (6m)	30.12.2020	-	750	1 572
Other long-term liabilities	EUR			-	-	-
Total non-current interest-bearing loans and other financial liabilities				3 251	5 206	7 259

Total interest-bearing loans and other financial liabilities				12 025	9 331	11 441

The Interest-bearing loans from Landesbank Berlin AG and AKA Ausfuhrkredit-Gesellschaft mbH has been covered of Euler Hermes AG.

Covenants

The Group's loan agreements contain a number of covenants and restrictions, which include, but are not limited to, financial ratios and other legal matters. Covenant breaches generally permit lenders to demand accelerated repayment of principal and interest.

As at 30 September 2019 and 2018 the Group was not in breach of any financial covenants which allow lenders to demand immediate repayment of loans.

Reconciliation of liabilities arising from financing activities. The table below details changes in the Group's liabilities arising from financing activities, including both cash and non–cash changes.

Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group's consolidated statement of cash flows as cash flows from financing activities:

	31 December 2018 (audited)	Financing cash flow payment	Financing cash flow received	Increase (as a result of accruals and other)	Other changes	Exchange differences	30 September 2019 (unaudited)

Interest-bearing loans	9 827	(2 031)	5 026	-	-	(545)	12 277
Interest expenses	(520)	-	-	222	-	18	(280)
Other borrowings	24	-	-	-	-	4	28
Total	9 331	(2 031)	5 026	222	-	(523)	12 025

(in USD thousand, unless otherwise stated)

Reconciliation of liabilities arising from financing activities (continued)

	31 December 2017 (audited)	Financing cash flow	Increase (as a result of accruals and other)	Other changes	Exchange differences	30 September 2018 (unaudited)
Interest-bearing loans	14 577	(2 086)	-	-	(445)	12 046
Interest expenses	(983)	-	335	-	19	(629)
Other borrowings	24	-	-	-	-	24
Total	13 618	(2 086)	335	-	(426)	11 441

21. Trade and other payables

	30 September 2019	31 December 2018	30 September 2018
	(unaudited)	(audited)	(unaudited)
Trade payables	8 725	6 701	5 624
Employee benefit liability	622	475	434
Liability for unused vacation	595	222	291
Taxes payable	258	517	212
VAT liabilities	204	188	184
Income tax payables	25	22	21
Other payables	122	73	103
Total	10 551	8 198	6 869

22. Related party disclosures

For the purposes of the present consolidated financial statements, the parties are considered to be related, if one of the parties has the ability to exercise control over the other party or influence significantly the other party in making financial and operating decisions. Considering the transactions with each possible related party, particular attention is paid to the essence of relationships, not merely their legal form.

Related parties may enter into transactions, which may not always be available to unrelated parties, and they may be subject to such conditions and such amounts that are impossible in transactions with unrelated parties.

According to the criteria mentioned above, related parties of the Group are divided into the following categories:

(A). Key management personnel;

(B). Companies which activities are significantly influenced by the Beneficial Owners;

(C). Other related parties.

The following companies and individuals are considered to be the Group's related parties as at 30 September 2019, and 2018:

(A). Key management personnel September 2019: Position:

Borys Bielikov	Executive Director / CEO
Vitalii Veresenko	Non-executive director
Karen Arshakyan	Non-executive director
Sergii Karpenko	Non-executive director
Yulia Flerova	First Deputy CEO
Vitalii Sapozhnik	Chief Financial Officer
Arnis Veinbergs	Deputy CEO in charge of Production activity
Vitalii Voron	Production director
Tatiyana Muravska	HR director

(in USD thousand, unless otherwise stated)

Key management personnel September 2018:	Position:
Borys Bielikov	Executive Director / CEO
Vitalii Veresenko	Non-executive director
Marc van Campen	Non-executive director
Sergii Karpenko	Non-executive director
Vladimir Polishchuk	Chief Financial Officer
Arnis Veinbergs	Deputy CEO in charge of Production activity
Vitalii Voron	Production director
Liliia Chernyak	HR director

(B). Companies which activities are significantly influenced by the Key management personnel

Aleksa LTD LLC

As at 30 September 2019, 31 December 2018 and 30 September 2018 trade accounts receivable from related parties and advances issued to related parties were presented as follows:

	30 September 2019 (unaudited)	31 December 2018 (audited)	30 September 2018 (unaudited)
Prepayments to related parties
(B). Companies which activities are significantly
influenced by the Beneficial Owners:
Aleksa LTD LLC	50	45	48
Total	50	45	48

(C). Other related parties:

For the nine months ended 30 September 2019, 2018 the Group has no other related parties.

23. Commitments and contingencies

Contingent liabilities

Operating environment.

Ukraine continued to limit its political and economic ties with Russia, given annexation of Crimea, an autonomous republic of Ukraine, and a frozen armed conflict with separatists in certain parts of Luhanska and Donetska regions. Amid such events, the Ukrainian economy demonstrated further refocusing on the European Union ("EU") market realizing all potentials of established Deep and Comprehensive Free Trade Area with EU, in such a way effectively reacting to mutual trading restrictions imposed between Ukraine and Russia. As a result, the weight of the Russian's export and import substantially fell from 18.2% and 23.3% in 2014 to around 7.7% and 14.2% in 2018, respectively.

In terms of currency regulations, the new currency law was adopted in 2018 and came into force on 7 February 2019. It purports to enable the NBU to promulgate more liberal currency regulation and soften a number of currency restrictions, such as: requirement to register loans obtained from nonresidents with the NBU, a 180-day term for making payments in foreign economic transactions, etc.

Further stabilization of the economic and political situation depends, to a large extent, upon success of the Ukrainian government's efforts, yet further economic and political developments are currently difficult to predict.

The management of the Group believes that the negative impact of the political and economic turmoil at the Group's entities is limited due to the Group's significant proportion of export sales, its access to the international financial markets and the significant distance of its main production sites from any conflict zones.

Taxation

Ukrainian tax authorities are increasingly directing their attention to the business community as a result of the overall Ukrainian economic environment. The local and national tax environment is constantly changing and subject to inconsistent application, interpretation and enforcement. Non-compliance with Ukrainian laws and regulations can lead to the imposition of severe penalties and fines. Future tax examinations could raise issues or assessments which are contrary to the Group companies' tax filings. Such assessments could include taxes, penalties and fines, and these amounts could be material. While the Group believes it has complied with local tax legislation, there have been many new tax and foreign currency laws and related regulations introduced in recent years which are not always clearly written.

Facing current economic and political issues, the Government has implemented certain reforms in the tax system of Ukraine by adopting the Law of Ukraine 'On Amending the Tax Code of Ukraine and Certain Laws of Ukraine', which is effective from 1 January 2015, except for certain provisions which will take effect at a later date.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (in USD thousand, unless otherwise stated)

Management believes that the Group has been in compliance with all requirements of effective tax legislation and currently is assessing the possible impact of the introduced amendments.

24. Subsequent events

As a result of the transaction conducted on Warsaw Stock Exchange on 3 October 2019, Generali OFE, a shareholder of the Company, increased the number of shares held by 59.400. Before the transaction Generali OFE held 596.509 shares (five hundred ninety six thousand five hundred and nine) which represented 9.94% shares and voting rights in the Company. After the transaction Generali OFE holds 655.909 shares (six hundred fifty five thousand nine hundred and nine) which represents 10.93% shares and voting rights in the Company. The Company has subsequently submitted notification on changes in majority holdings to the regulating authorities in Cyprus and Poland.

AI Terminal

Ovostar Union PLC

5746_rns_2019-11-14_1da82825-c5b7-4b26-bed5-11c9a56373ae.pdf

CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED) for the nine months ended 30 September 2019

Statement of the Members of the Board of Directors

Egg segment

Production

Sales

Egg products segment

Production

Sales

Financial Performance

Revenue

cost of sales and gross profit

Operating profit and EBITDA

Marginality

Cash flows

Net debt position

Net profit

CONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CASH FLOWS

1. Corporate information

2. Basis of preparation

2.1. Statement of compliance and basis of measurement

2.2. Going concern basis

2.3. Functional and presentation currency

OVOSTAR UNION PCL AND ITS SUBSIDIARIES CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

Relevant exchange rates are presented as follows:

3. Basis of consolidation

4. Use of estimates and assumptions

4.1. Impairment of property, plant and equipment

4.2. Fair value of biological assets

Among such factors are:

4.3. Allowances for doubtful debts

4.4. Useful lives of property, plant and equipment

4.5. Deferred tax assets

5. Summary of significant accounting policies

5.1 Recognition and measurement of financial instruments

Financial instruments: key measurement terms

Financial instruments: initial recognition

Accounting policy applicable before 1 January 2018

5.2 Financial assets

Accounting policy applicable after 1 January 2018

Financial assets: Classification and subsequent measurement: measurement categories

CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

Financial assets: Classification and subsequent measurement: business model

Financial assets: Classification and subsequent measurement: cash flow characteristics

Financial assets: Reclassification

Financial assets: Credit loss allowance for ECL

Financial assets: Write-off

Financial assets: Derecognition

Financial assets: Modification

Accounting policy applicable before 1 January 2018

Initial recognition and measurement

5.3 Effective interest rate method

5.4 Cash and cash equivalents

5.5 Cash deposits

5.6 Impairment of financial assets

5.7 Writing-off of financial assets

5.8 Financial liabilities and equity instruments issued by the Group

5.8.1 Accounting as liabilities or equity

5.8.2 Equity instruments

5.8.3 Liabilities under financial guarantee contracts

5.8.4 Financial liabilities

Accounting policy applicable after 1 January 2018

Financial liabilities - measurement categories

Financial liabilities - derecognition

Accounting policy applicable before 1 January 2018

Initial recognition and measurement

5.8.5 Trade and other accounts payable

5.8.6 Loans and borrowings

5.8.7 Writing-off of financial liabilities

5.9 Foreign currency transactions

5.10 Biological assets

5.11 Inventories

5.12 Property, plant and equipment