2021 ANNUAL REPORT
Agromino A/S
Registration number: CVR no. 29801843
Kalvebod Brygge 32, DK-1560 København Ø
01.01.2021-31.12.2021
2021
ANNUAL
REPORT
2021 ANNUAL REPORT
PAGE 1
WE ARE
FARMERS AND
AGRIBUSINESS
MANAGERS
CONTENTS
Business Highlights 2
Financial Review 3
The Share 6
Corporate Social Responsibility 7
Financial History 10
Consolidated Financial Statements 11
Consolidated Balance Sheet 11
Consolidated Income Statement 12
Consolidated Statement of Comprehensive Income 13
Consolidated Statement of Changes in Equity 14
Consolidated Statement of Cash Flow 15
Contents of Notes to the Consolidated Financial Statements 16
Notes to the Consolidated Financial Statements 17
Financial Statements of the Parent Company 62
Management´s Statement 74
Independent Auditor´s Report 75
Definitions 78
2021 ANNUAL REPORT
PAGE 2
BUSINESS HIGHLIGHTS
• Net profit
1
of USD 10.9 million in the year 2021
compared to net profit of USD 1.2 million in 2020.
• EBITDA profit
1
of USD 23.3 million in the year
2021 compared to EBITDA profit of USD 20.1
million in 2020.
• EBITDA has been improved and the gap between
net profit and EBITDA has been widened with
IFRS 16 adoption since January 1, 2019.
Depreciations of right-of-use assets and financial
costs are recognized instead of operating lease
expenses for land.
• Historically worst performing cluster of all
Agromino clusters, i.e. Nikolaev cluster with circa
8.900 hectares and adjacent elevator used for
storage of Nikolaev production, was divested in
April 2021 to Prometey group. The purchase price
was confirmed by the parties on March 30, 2021
and amounted to USD 5.5 million with impact of
minus USD 1.6 million in company’s Net profit,
including amount of USD 7.8 million of currency
translation losses, recycled from Other
Comprehensive Income to Income Statement in
the year 2021.
• On April 20, 2021 company “LLC Resilient
Gorodylovychi” with circa 650 hectares was
divested to Private Enterprise “Zahidniy Buh” for
USD 0.555 million.
• Total land under control was about 45 thousand
hectares as of December 31, 2021
(55 thousand hectares as of December 31, 2020).
Decrease was caused by disposal of subsidiaries.
• On 28 April 2020 the President of Ukraine
signed new land law which leads to
discrimination of foreign investors in
Ukrainian agriculture. The key part of new
land legislation came into force in July 2021.
• The nominal value of parent company
Agromino A/S shares was decreased from
EUR 1 to EUR 0.1 and share capital was
reduced correspondingly from USD 28 061
thousand to USD 2 806 thousand (EUR
24 895 thousand to EUR 2 489 thousand).
Thus, historical losses were covered in
amount USD 25 255 thousand (EUR 22 406
thousand).
• On 1 June 2021, a decision to increase the
share capital to USD 8 696 thousand (EUR
7 469 thousand) by way of a cash
contribution of EUR 0.24 per nominally EUR
0.10 new share was adopted by Agromino’s
board of directors. Share premium increased
for USD 8 245 thousand (EUR 6 971
thousand) and was equal USD 179 418
thousand (EUR 132 583 thousand).
• In 2021 share premium was set off with
accumulated deficit for amount USD 87 155
thousand (EUR 89 147 thousand) based on
Agromino’s board of directors’ decision.
• On August 13, 2021 Mabon has been
registered in the shareholders’ register as
the sole owner of all shares in Agromino A/S.
1
Presented from continuing and discontinued operations.
- 11,2
12m 2019
12m 2020
12m 2021
12m 2018
2021 ANNUAL REPORT
PAGE 3
FINANCIAL REVIEW
The Group’s operations are divided into the
following operational segments: Ukraine
cereals (including storage and trading) and
milk production, and milk production in
Russia. The Group also had a 39.24%
shareholding in Trigon Dairy Farming Estonia
Ltd. (TDFE), which was sold on November 18,
2020. Thus, share of profit/loss of investments
accounted for using the equity method was not
recorded in 2021.
Revenues
Total revenue of the Group for 2021 at USD
51.0 million compared to USD 64.7 million for
2020 (from continuing and discontinued
operations).
Changes in biological assets/inventories
The current biological assets as of the year end
consist of winter crops sown for 2022 harvest.
Area under winter crops was 12 441 ha as of
December 31, 2021 (14 844 ha as of
December 31, 2020, including 4 265 ha at
company disposed in 2021).
Expenses
OPEX for 2021 increased by 7% in comparison
with 2020.
Net result
Agromino recorded net profit
1
of USD 10,9
million in 2021 compared to net profit of USD
1,2 million in 2020. And EBITDA
1
stood at a
profit of USD 23.3 million compared to a profit
of USD 20.1 million in 2020.
Assets
The consolidated assets of the Group as of
December 31, 2021, amounted to USD 111,2
million (USD 99.9 million at December 31,
2020). The reflected increase was caused
mainly by increase in grain for sale stock.
Fixed assets
Property, plant and equipment as of December
31, 2021, in the amount of USD 24.5 million
accounted for 22% of the total assets,
comprising of land, buildings, machinery,
equipment and construction in progress.
Right-of-use assets include land right-of-use
asset recognized under IFRS 16 and Land
usage rights from business acquisition of
Resilient in the end of the year 2019. Right-of
use assets equaled USD 24.5 million or 22 % in
total assets as of December 31, 2021.
Total land under control as at December 31,
2021 was around 45 thousand hectares. The
Group owns land in Russian Milk production
(near 2.5 thousand hectares). In Ukraine, the
land is covered with mostly medium to long-
term land lease contracts. There is 1.7
thousand hectares in ownership.
0 2 4 6 8 10 12
Seeds, fertilizers, chemicals
Employee benefits expense
Land tax and land rental
Animal feed
Repairs
Fuel, gas, electricity
Transportation, other services and materials
Office and administration expenses
Legal and consulting fees
Other expenses
OPEX (MUSD)
2021
2020
0
10
20
30
40
50
LAND IN UKRAINE
(Thousand hectares)
31.12.2019 31.12.2020 31.12.2021
2021 ANNUAL REPORT
PAGE 4
Inventories and biological assets
As of December 31, 2021, the inventories stood
at USD 30.9 million.
Biological assets of USD 2.5 million as of
December 31, 2021, comprised of the dairy
herd, grasslands and winter crops seeded for
2022 harvest. Fair value of biological assets
sown for next year harvest is determined by
present valuing the net cash flows expected to
be generated from the assets discounted at
average cost of short-term financing.
Assets classified as held for sale
As of December 31, 2021 assets of subsidiaries
in Russia (LLC Trigon Moloko and LLC Dobruchi-
2) were classified as assets held for sale, since
Management of the Group had intentions to sell
Russian milk production segment and
assessment of the sale could be considered as
highly probable.
In the end of 2020, the Group concluded
preliminary share-purchase agreements for
sale of corporate rights of companies,
operating in Nikolaev region, and of company,
operating in Lviv region. Assets, relating to that
companies, were classified as held for sale as
of December 31, 2020.
Liabilities and equity
Borrowings
The total borrowings of the Group as of
December 31, 2021, amounted to USD 0.7
million (USD 3.6 million as at December 31,
2020).
Equity
The total number of shares with par value of 0.10
EUR in the Company equaled to 74,685,369 as
of December 31, 2021.
Lease liabilities
Lease liabilities include current and non-current
lease liabilities recognized under IFRS 16
adoption by the Group.
Liabilities associated with assets
classified as held for sale
As of December 31, 2021 the Group classified
liabilities as associated with assets held for sale
in the amount USD 0.4 million in regards of
subsidiaries in Russia.
As of December 31, 2020 the Group classified
liabilities as associated with assets held for sale
in the amount USD 5.5 million. Those liabilities
related to companies disposed under
preliminary share purchase agreements signed
in the end of 2020.
Property,
plant and
equipment
Prepayments,
receivables and
other assets
Assets classified as held for
sale
Right-of-
use asset
Inventories
Biological assets
Equity
…
Lease
liability
Other liabilities
Cash
0%
20%
40%
60%
80%
100%
Assets Equity and liabilities
BALANCE SHEET STRUCTURE 31.12.2021
Property,
plant and
equipment
Prepayments,
receivables and
other assets
Assets
classified as
held for sale
Right-of-
use asset
Inventories
Biological assets
Equity
Borrowings
Lease
liability
Other liabilities
Cash
Liabilities associated
with assets held for sale
0%
20%
40%
60%
80%
100%
Assets Equity and liabilities
BALANCE SHEET STRUCTURE 31.12.2020
2021 ANNUAL REPORT
PAGE 5
Operational review
Harvested hectares
2017
2018
2019*
2020
2021**
Wheat
21 399
20 987
16 124
18 875
8 009
Sunflower
9 413
14 745
12 910
14 084
14 202
Rapeseed
7 570
1 822
2 137
2 808
1 567
Corn
1 179
1 013
4 727
11 504
10 315
Barley
335
-
-
261
61
Soya
3 550
2 537
6 001
1 016
3 505
Other
1 862
3 447
3 479
2 421
4 266
Total
45 308
44 551
45 378
50 969
41 925
Net production, t
2017
2018
2019*
2020
2021
Wheat
85 328
65 940
61 650
90 998
40 440
Sunflower
17 216
34 747
34 934
34 410
43 796
Rapeseed
14 943
1 850
3 429
6 695
3 865
Corn
6 239
6 253
38 659
64 392
80 161
Barley
726
-
-
1 255
221
Soya
3 658
4 954
11 048
2 182
8 624
Other
3 751
6 788
10 810
8 910
14 134
Total
131 861
120 532
160 530
208 842
191 241
Net yield, t/ha
2017
2018
2019*
2020
2021
Wheat
3.99
3.14
3.82
4.82
5.05
Sunflower
1.83
2.36
2.71
2.44
3.08
Rapeseed
1.97
1.02
1.60
2.38
2.47
Corn
5.29
6.17
8.18
5.60
7.77
Barley
2.17
-
-
4.80
3.62
Soya
1.03
1.95
1.84
2.15
2.46
Other
2.01
1.97
3.11
3.68
3.31
Total
2.91
2.70
3.54
4.10
4.56
* Resilient harvesting was included since October 17, 2019.
** Nikolaev and Gorodylovychi harvesting was excluded since April 2021
Additional information: Hectares in crops production only (milk production excluded)
1,97
1,02
1,60
2,38
2,47
3,99
3,14
3,82
4,82
5,05
1,83
2,36
2,71
2,44
3,08
5,29
6,17
8,18
5,60
7,77
1,03
1,95
1,84
2,15
2,46
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
9,00
2017 2018 2019 2020 2021
CROP NET YIELDS, t/ha
Rapeseed Wheat Sunflower Corn Soya
2021 ANNUAL REPORT
PAGE 6
Sales of grain and oilseeds (2021 and 2020 crop, 3rd party)
2021
Tonnes
Own
produced,
USD
thousand
Price*
USD/t
Tonnes
Third
party,
USD
thousand
Price
USD/t
Tonnes
Total
Revenue,
USD
thousand
Price
USD/t
Wheat
38 161
9 002
236
-
-
-
38 161
9 002
236
Barley
56
9
161
-
-
-
56
9
161
Sunflower
40 158
22 209
553
-
-
-
40 158
22 209
553
Corn
25 653
6 021
235
-
-
-
25 653
6 021
235
Rapeseed
3 905
2 409
617
-
-
-
3 905
2 409
617
Soya
3 013
1 827
606
-
-
-
3 013
1 827
606
Millet
10 194
2 525
248
-
-
-
10 194
2 525
248
Canary
374
236
631
-
-
-
374
236
631
Pea
2 716
722
266
-
-
-
2 716
722
266
Other
283
37
131
-
-
-
283
37
131
Total
124 513
44 997
361
-
-
-
124 513
44 997
361
Sales of grain and oilseeds (2020 and 2019 crop, 3rd party)
1
2020
Tonnes
Own
produced,
USD
thousand
Price
USD/t
Tonnes
Third
party,
USD
thousand
Price
USD/t
Tonnes
Total
Revenue,
USD
thousand
Price
USD/t
Wheat
88 591
17 842
201
-
-
-
88 591
17 842
201
Barley
1 140
187
164
-
-
-
1 140
187
164
Sunflower
55 801
21 402
384
-
-
-
55 801
21 402
384
Corn
83 377
14 457
173
-
-
-
83 377
14 457
173
Rapeseed
6 758
2 843
421
-
-
-
6 758
2 843
421
Soya
1 705
911
534
-
-
-
1 705
911
534
Millet
3 708
910
245
3 708
910
245
Sorgo
379
55
145
379
55
145
Other
760
17
23
-
-
-
760
17
23
Total
242 219
58 624
242
-
-
-
242 219
58 624
242
All prices exclude VAT, Domestic sales are ex elevator and export sales are CPT
THE SHARE
Share information
Major shareholders as at 31.12.2021
Country
No of shares
(thousands)
No of votes
(thousands)
MABON investiční fond s p.z.k.
Czech Republic
74 685
74 685
Total number
74 685
74 685
As at June 30, 2022 Mabon investiční fond s p.z.k. owns 74 685 thousands shares and holds the same
number of votes.
2021 ANNUAL REPORT
PAGE 7
CORPORATE SOCIAL RESPONSIBILITY
Statutory statement on social
responsibility in accordance with
section 99a of the Danish Financial
Statements Act
Agromino is a leading Agribusiness manager
involved in the full farming chain from land
acquisition, land operation, crop production, to
crop storage, marketing, and trading.
Agromino is committed to operating the
agricultural businesses under its control
utilizing environmentally and agronomically
sustainable production methods. Agromino will
continue to ensure that all its employees are
fully conversant with the aims set out in this
policy statement in order that all its activities
are compliant and represent best practice. In
2021, the expenses of employee training
totaled at USD 8 thousand (2020: USD 8
thousand), excluding the costs of internal
training as our top management also conducts
internal training courses for local specialists.
The Group management has a policy on social
responsibility with the following focus areas:
Anti-corruption and bribery
It is the policy of Agromino not to engage in
bribery or corruption and comply with
applicable anti-corruption laws. We support the
OECD Convention on Combating Bribery of
Foreign Public Officials in International
Business Transactions. We adhere to the UN
Global Compact principle 10: We shall work
against corruption in all its forms, including
extortion and bribery. Making, promising or
offering any payments, gifts or inducements
with the purpose of influencing someone (incl.
government officials, suppliers, clients, etc.) to
act improperly is strictly forbidden; the same
applies to accepting payments, gifts or
inducements. All payments should be
reasonable and fall within the acceptable
commercial practice. All such expenses have to
be properly recorded in the accounts. We do
not tolerate so-called facilitating payments (for
example small unofficial payments to officials
in order to speed up processes). Agromino does
not make political contributions. When
engaging in business relationships Agromino
chooses its partners with the same zero
tolerance approach to corruption and bribery.
The Group evaluates the risk of corruption and
bribery in the countries it operates and
continues to take measures to minimize this
risk. All funds received and paid by the Group
and its subsidiaries during the course of
business are strictly accounted and handled via
bank transfers exclusively to minimize the
possibilities of cash being taken in or out for the
purposes of bribery. In 2021, the Group
continued to ensure its adherence to such cash
management.
Human rights
The Group operates in countries where
businesses’ exposure to human rights
violations is limited. Consequently, the Group
does not conduct any activities, liaise or
contract with business partners or suppliers in
countries considered high-risk in terms of
human rights abuses. Therefore, there is no
separate formal human rights policy. However,
Agromino is respecting human rights and
supports the UN Global Compact principles for
human rights and labour. The rights include the
rights covered in the International Bill of
Human Rights and the principles concerning
fundamental rights set out in the International
Labour Organization’s Declaration on
Fundamental Principles and Rights at Work. In
2021 there were no registrations of violations
of human rights or incidents of discrimination
reported.
Health and safety
The Group health and safety policy provides a
brief overview of major principles in the field of
health and safety. According to the health and
safety policy, basic obligations of Agromino in
the area of health and safety are to provide:
• safe and healthy systems of work;
• safe and healthy work environment;
• adequate amenities;
• safe and healthy premises of work;
• safe and well-maintained plant and
machinery;
• safe methods of handling, storing and
transporting materials;
• adequate instruction and training for
employees;
• adequate supervision by competent and
trained personnel;
• relevant and adequate information for all
employees;
2021 ANNUAL REPORT
PAGE 8
• responsible person.
According to the health and safety policy, each
employee of the Group is encouraged to play a
vital and responsible role in maintaining a safe
and healthy workplace through:
• being involved in the workplace health and
safety system;
• sticking to correct procedures and
equipment;
• wearing appropriate clothing and
equipment as and when required;
• ensuring all accidents and incidents are
reported to direct superior and responsible
staff member;
• helping new employees, trainees and
visitors to the workplace understand the
right safety procedures and their objective;
• telling your direct superior immediately of
any health and safety concerns;
• keeping the workplace tidy to minimise the
risk of any trips and falls.
As Agribusiness managers the Group is fully
aware of the risks associated with grain
production, transport, and storage processes.
In 2021, there were no workplace accidents
reported in Ukraine and Russia. The Group,
however, continues to monitor and improve the
workplace safety situation. In 2021, The Group
continued to implement and follow strict work
safety regulations and provide proper training
and updates to employees in order to ensure
safety and avoid accidents. The Group employs
dedicated work safety officers to ensure
compliance with the policy.
Community involvement
Agromino contributes to making the
communities in which it operates better places
to live and do business. Agromino values
mutually beneficial relationships with
communities where it operates and strives to
engage or consult with communities regarding
business development plans that have a
material impact on those communities.
Agromino strives to support on a targeted basis
local municipalities and organizations taking
into account the availability of resources. For
example, the support can be in the form of
organising local events, buying equipment for
schools, helping with the renovation works of
public facilities, etc. A record of contributions
and donations is kept to monitor activities and
progress.
In 2021, the Group’s subsidiaries in Ukraine
have supported local municipalities and
organisations by
• reconstructing infrastructural objects in
villages;
• supporting the elderly in the regions of
Ukraine by providing them with
humanitarian food packages;
• making gifts for children in kindergartens
and schools;
• financial assistance and charitable projects
with local authorities (arranging cultural
events in villages etc).
Environment and climate change
Agromino is committed to operating the
agricultural businesses under its control
utilising environmentally and agronomically
sustainable production methods. We recognise
the need to honour the responsibilities we have
with respect to protecting the environment and
to the consumer by ensuring that the food we
produce is both safe and of a high standard. To
achieve this commitment, we ensure that all
our agronomists and managers are fully trained
with the most up to date technical information,
to ensure that there is the optimal use of seeds,
fertilisers, and pesticides so as to keep a sound
balance between production and the
environment. The crop rotations adopted are
carefully planned to ensure no build-up of
pests, diseases or weeds. We are highly water
conscious and at all times look to preserve this
most precious resource. All waste materials are
disposed of in an environmentally sensitive way
so as to minimise pollution of our planet.
The Group appreciates the environment and
climate situation as the technology evolves and
production increases and reassesses its
operational activities from this perspective
regularly. Principles to our business are the
following:
• The continued development of the
Telematics Management Department,
which has been a crucial support service for
the group for the past several years,
providing a cross-Group platform to enable
effective planning, monitoring and
reporting of all production related
operations
• Maintaining soil fertility is ensured by
having in place a sustainable rotation,
nutrient management plan, soil
management plan and crop protection
management plan. These are enforced by
2021 ANNUAL REPORT
PAGE 9
approving annual budgets where the
utilization of hectares and application of
nutrients and chemicals is detailed.
• Crop protection – chemicals are applied
strictly adhering to label recommendations
that specify which crops the chemical can
be applied to, application rate per hectare,
the permissible frequency of application
and harvest interval – i.e. the minimum
time period that has to be left between
application and harvest to ensure food
safety. Reduced application rates are used
when they have internally been proven to
be sufficient, which also assists to reduce
our environmental footprint.
• Nutrient management – appropriate
quantities and application practices are
used to ensure optimum growing
conditions, maintain soil fertility and
prevent pollution that would be caused by
over-application of nutrients.
• Fertilizer and Pesticide storage – national
regulations are followed that specify
maximum quantities permissible to store
and the required distance from habitation.
• Fuel consumption is monitored using real-
time GPS tracking of vehicles which enables
Management, for example, to monitor and
enforce optimum driving speeds and
engine revolutions which optimises fuel
consumption.
• Waste disposal – washed chemical,
fertilizer and seed packaging are delivered
to a special factory.
• Accident and emergency plan – in case of a
chemical spill there is an action plan listing
specific steps in each vehicle and all
relevant operatives have been trained in
the procedure.
The Group has acted in accordance with this
policy for several years. No environmental
incidents were reported in 2021. Agromino will
continue to ensure that all its employees are
fully conversant with the aims set out in this
policy statement in order that all its activities
are compliant and represent the best practice
possible.
Statutory statement on the
underrepresented gender in accordance
with section 99b of the Danish Financial
Statements Act
Agromino remains focus on encouraging
diversity at managerial levels. In line with
section 139a of the Danish Companies Act, the
Board of Directors, thus, has implemented a
target figure for the proportion of women, who
currently constitute the underrepresented sex
of the Board. It is the aim of the Board of
Directors of Agromino that 2 female will
become members of the Board of Directors or
Executive Board till 2023. Alternatively, within
said timeframe the aim is that the
underrepresented gender should represent at
least 20% of the members at the level of Board
of Directors or the Executive Board. Currently,
the Company Board of Directors and Executive
Board consists of men only and accordingly, the
Company has not progressed towards
stipulated target by 31 December 2021.
However, the Group operational top
management team consists of 3 key persons,
one of whom is female and two of whom is
male. Consequently, at year-end 2021, the
Group operational top management below the
Board of Directors and Executive Board was
covered by respectively 67% male managers
and 33% female managers.
Agromino remain to engage executives based
on the premise that the best-qualified
candidate is engaged irrespective of gender.
Agromino believes that the target will be
attained as part of a natural exchange of
executives and employees.
Statutory statement on data ethics
The extent of the digitalization and data
quantity is developing rapidly, which is making
demands on an unambiguous approach to the
processing and protection of data. The
management requests, that the Group is acting
in a responsible manner, also in this
connection, and at the same time is increasing
the transparency in relation to customers,
employees, and business partners. In order to
comply with this approach, a policy on data
ethics is in the process of being prepared and
is going to be implemented during 2022.
2021 ANNUAL REPORT
PAGE 10
FINANCIAL HISTORY
Income statement, USD thousand
2017
2018
2019
2020
2021
Revenue from continuing operations
35 042
29 863
39 880
58 894
47 850
EBIT from continuing operations
4 317
-10 943
6 630
13 091
16 090
Net financials from continuing
operations
-1 981
-1 299
-3 560
-10 636
-4 849
Net profit/loss
3 930
-11 281
2 980
1 163
10 870
Balance sheet, USD thousand
31.12.2017
31.12.2018
1
31.12.2019
31.12.2020
31.12.2021
Total assets
56 085
53 480
126 845
99 946
111 186
incl Non-current assets
31 988
29 176
87 356
73 544
69 262
incl Property, plant and equipment
17 918
14 437
29 565
26 345
24 545
Investment in property, plant and
equipment
5 321
2 955
5 602
7 247
4 407
Net debt (including accrued interest)
12 566
12 177
16 779
-3 788
-786
Total equity
37 414
36 747
59 135
53 422
87 175
Cash flow statement, USD
thousand
2017
2018
1
2019
2020
2021
Cash flows from operating activities
-1 304
1 973
12 440
31 042
9 429
Cash flows from investing activities
526
320
-7 041
-369
-6 961
Cash flows from financing activities
-987
-3 474
-6 429
-25 060
-8 374
Effects of exchange rate changes
-456
25
2 372
98
70
Cash and cash equivalents at
beginning of period
3 843
2 015
803
2 134
7 393
Cash and cash equivalents at end of
period
2 015
803
2 134
7 393
1 456
Key figures
31.12.2017
31.12.2018
1
31.12.2019
31.12.2020
31.12.2021
Number of shares, end of the period
(adjusted for reversed share split)
17 421 313
17 421 313
24 895 123
24 895 123
74 685 369
Total number of employees
835
735
1 028
923
738
Land under control, thousand hectares
57,8
47,1
55,3
54,5
44,8
Ratios
2017
2018
1
2019
2020
2021
Earnings per share (EPS), USD
(adjusted for reversed share split)
0,23
-0,64
0,16
0,05
0,15
Book value per share, USD (adjusted
for reversed share split)
2,12
2,09
2,36
2,13
1,17
Return on assets (ROA)
8%
-20%
3%
1%
10%
Return on equity (ROE)
11%
-30%
6%
2%
16%
Equity ratio, %
67%
69%
47%
54%
79%
Current ratio
1,46
1,58
1,32
1,24
4,60
Acid test
0,46
0,41
0,36
0,54
1,03
For definitions of the ratios please refer to page 78.
2021 ANNUAL REPORT
PAGE 11
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
in USD thousand
Note
31.12.2021
31.12.2020
1
31.12.2019
1
ASSETS
Current assets
Cash and cash equivalents
5,7
1 456
7 393
2 134
Trade and other receivables
6,7
7 914
4 190
8 558
Inventories
8
30 887
9 603
18 128
Biological assets
9
1 667
5 215
10 670
Assets held for sale
-
1
-
Current assets
41 924
26 402
39 490
Prepaid land rents and land usage rights
12
246
324
517
Other non-current prepayments and receivables
6,7
2 641
239
130
Biological assets
9
799
3 595
4 032
Intangible assets
10
13 946
6 426
3 915
Property, plant and equipment
11
24 545
26 345
29 565
Right-of-use asset
22
24 534
26 934
38 881
Investments in associates
28
-
-
10 316
Assets classified as held for sale
32
2 551
9 681
-
Non-current assets
69 262
73 544
87 356
Total assets
111 186
99 946
126 846
LIABILITIES
Trade and other payables
7,13
4 389
10 578
7 300
Borrowings
7,14
636
1 733
17 344
Current portion of lease liability
22
3 651
3 518
5 232
Liabilities associated with assets classified as held for
sale
32
433
5 546
-
Current liabilities
9 109
21 375
29 876
Trade and other payables
7,13
3
8 347
13 571
Borrowings
7,14
34
1 874
1 569
Lease liability
22
14 805
14 799
22 456
Deferred tax liabilities
16
60
63
239
Deferred income
-
66
-
Non-current liabilities
14 902
25 149
37 835
Total liabilities
24 011
46 524
67 711
EQUITY
Ordinary shares
17
8 696
28 061
28 061
Share premium
17
92 263
171 173
171 173
Other reserves
18
-51 881
-60 629
-53 753
Accumulated deficit
38 128
-85 606
-86 769
Capital and reserves attributable to equity
holders of the Group
87 206
52 999
58 712
Non-controlling interest in equity
-31
423
423
Total equity
87 175
53 422
59 135
Total equity and liabilities
111 186
99 946
126 846
The notes on pages 17 to 61 are an integral part of these consolidated financial statements.
1
recalculated due to change in presentation currency. See Note 2.2.(c)
2021 ANNUAL REPORT
PAGE 12
CONSOLIDATED INCOME STATEMENT
in USD thousand
Note
2021
2020
1
Continuing operations:
Revenue
19
47 850
58 894
Other income
19
514
587
Gain/loss of biological assets arising from changes in fair value less cost to
sell
9
-3 580
-2 113
Total revenue, other income and fair value adjustments
44 784
57 368
Net changes in inventories of agricultural produce and work in
process
8
20 312
-8 147
Cost of purchased goods for trading purposes
-325
-101
Raw materials and consumables used for production purposes
20
-25 864
-20 208
Employee benefits expense
21
-7 296
-7 252
Depreciation and amortization
-6 544
-6 233
Other administrative expenses
23
-1 877
-2 441
Other (losses)/gains - net
24
-7 100
105
16 090
13 091
Gains/losses from exchange rate differences
843
-3 823
Finance income
25
63
774
Finance costs
25
-5 755
-7 587
Share of profit/loss of investments accounted for using the equity method
28
-
-129
Profit/loss before income tax
11 241
2 326
Corporate income tax (expense)/profit
15
-197
7
Profit/loss for the period from continuing operations
11 044
2 333
Discontinued operations
Loss for the period from discontinued operations
32
-174
-1 170
Profit/Loss for the period
10 870
1 163
Attributable to:
Equity holders of the Company
10 870
1 163
Non-controlling interest
-
-
10 870
1 163
Profit/loss per share for profit/loss attributable to the equity
holders of the Company during the period (expressed in USD per
share)
0.14
0.05
The notes on pages 17 to 61 are an integral part of these consolidated financial statements.
1
recalculated due to change in presentation currency. See Note 2.2.(c)
2021 ANNUAL REPORT
PAGE 13
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
in USD thousand
2021
2020
1
Profit/Loss for the period
10 870
1 163
Other comprehensive income:
Items that will not be reclassified to profit or loss
Gain/Loss from revaluation of land of continuing operations
11,18
-8
-123
Items that may be subsequently reclassified to profit or loss
Currency translation differences (Note 3.1.1.(i))
18
967
-6 753
Currency translation difference recycled from Other Comprehensive Income to
Income Statement in relation to disposal of subsidiary
7 789
-
Other comprehensive expense/income for the period; net of tax
8 748
-6 876
Total comprehensive income/expense for the period
19 618
-5 713
Attributable to:
Equity holders of the Company
19 618
-5 713
Non-controlling interest
-
-
Total comprehensive income/expense for the period
19 618
-5 713
The notes on pages 17 to 61 are an integral part of these consolidated financial statements.
1
recalculated due to change in presentation currency. See Note 2.2.(c)
2021 ANNUAL REPORT
PAGE 14
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
Attributable to equity holders of the Company
in USD thousand
Share
capital
Share
premium
Other
reserves
Accumulated
deficit
Total
Non-
controlling
interest
Total
Equity
Balance at 31.12.2019
1
28 061
171 173
-53 753
-86 769
58 712
423
59 135
Profit/loss for the period
1
-
-
-
1 163
1 163
-
1 163
Other comprehensive expense
1
-
-
-6 876
-
-6 876
-
-6 876
Total comprehensive income
1
-
-
-6 876
1 163
-5 713
-
-5 713
Balance at 31.12.2020
1
28 061
171 173
-60 629
-85 606
52 999
423
53 422
Profit/loss for the period
-
-
-
10 870
10 870
-
10 870
Other Comprehensive Income
recycled to Income Statement in
relation to disposal of subsidiary
-
-
7 789
-
7 789
-
7 789
Other comprehensive income
-
-
959
-
959
-
959
Total comprehensive income
-
-
8 748
10 870
19 618
-
19 618
Shares nominal value decrease
(Note 17)
-25 255
25 255
-
-
Issuance of share capital (Note
17)
5 890
8 245
14 135
-
14 135
Transfer between equity
elements (Note 17)
-
-87 155
-
87 609
454
-454
-
Balance at 31.12.2021
8 696
92 263
-51 881
38 128
87 206
-31
87 175
The notes on pages 17 to 61 are an integral part of these consolidated financial statements.
1
recalculated due to change in presentation currency. See Note 2.2.(c)
2021 ANNUAL REPORT
PAGE 15
CONSOLIDATED STATEMENT OF CASH FLOW
in USD thousands
Note
2021
2020
1
Cash flows from operating activities
Cash receipts from customers
54 792
69 804
Cash paid to suppliers and employees
-45 480
-38 995
Income tax paid
15
-145
-18
Subsidies received
199
214
Interest received
25
63
37
Net cash used in/generated from operating activities
9 429
31 042
Cash flows from investing activities
Disposal of subsidiary, net of cash disposed of
5 993
10 851
Purchase of property, plant and equipment
11
-13 223
-11 368
Proceeds from sales of property, plant and equipment
11
269
148
Net cash generated from investing activities
-6 961
-369
Cash flows from financing activities
Proceeds from new shares issued
14 134
-
Proceeds from borrowings
14
9 705
8 676
Repayments of borrowings
14
-12 377
-21 400
Repayments of lease liabilities
14
-1 193
-1 525
Repayments of land lease liabilities
-4 463
-5 270
Interest paid
25
-281
-1 132
Proceeds and repayments of loans with related parties
-15 113
-3 999
Other movement
1 214
-410
Net cash used in financing activities
-8 374
-25 060
Net decrease/increase in cash and cash equivalents
-5 906
5 613
Effects of exchange rate changes on cash and cash equivalents
70
98
Classified as held for sale
-101
-452
Cash and cash equivalents at beginning of period
5
7 393
2 134
Cash and cash equivalents at end of period
5
1 456
7 393
The notes on pages 17 to 61 are an integral part of these consolidated financial statements.
1
recalculated due to change in presentation currency. See Note 2.2.(c)
2021 ANNUAL REPORT
PAGE 16
CONTENTS OF NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
1. General information ..................................................................................................... 17
2. Summary of significant accounting policies ..................................................................... 17
3. Financial risk management ........................................................................................... 28
4. Critical Accounting Estimates and Judgments .................................................................. 31
5. Cash and cash equivalents ............................................................................................ 34
6. Trade and other receivables .......................................................................................... 35
7. Financial instruments by category .................................................................................. 36
8. Inventories ................................................................................................................. 37
9. Biological assets .......................................................................................................... 38
10. Intangible assets ....................................................................................................... 40
11. Property, plant and equipment .................................................................................... 41
12. Prepaid land rents and land usage rights ...................................................................... 43
13. Trade and other payables ........................................................................................... 43
14. Borrowings ............................................................................................................... 44
15. Income tax ............................................................................................................... 46
16. Deferred tax.............................................................................................................. 48
17. Share capital ............................................................................................................. 49
18. Other reserves .......................................................................................................... 50
19. Revenue and other income .......................................................................................... 50
20. Raw materials and consumables used for production purposes ........................................ 50
21. Employee benefits expense ......................................................................................... 51
22. Right-of-use asset and lease liability ............................................................................ 51
23. Other administrative expenses .................................................................................... 52
24. Other (losses)/gains-net ............................................................................................. 52
25. Finance income and finance cost .................................................................................. 53
26. Contingencies ............................................................................................................ 53
27. Commitments............................................................................................................ 55
28. Interest in associate ................................................................................................... 55
29. Group structure ......................................................................................................... 56
30. Related party transactions .......................................................................................... 57
31. Fees to the auditors appointed by the shareholders ........................................................ 58
32. Assets held for sale and liabilities associated ................................................................. 58
33. Disposal of Subsidiaries .............................................................................................. 60
34. Events after the balance sheet date ............................................................................. 61
2021 ANNUAL REPORT
PAGE 17
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
1. GENERAL INFORMATION
Agromino A/S (The Company) is an integrated
soft commodities producer (operating
commercial cereals and dairy farms), storage
provider and trader with operations in Ukraine,
Russia (no farms etc. are in the Czech
Republic).
The parent company is a limited liability
company incorporated and domiciled in
Denmark. The address of its registered office is
c/o Advokatfirmaet Poul Schmith, Kalvebod
Brygge 32, DK-1560, Copenhagen, Denmark.
The company listed its shares on the Stockholm
First North Stock Exchange on May 18, 2007.
From December 8, 2010, the company’s shares
have been traded on the main market Small
Cap segment on NASDAQ Stockholm.
On 15 July 2020, Agromino announced its plan
to apply for delisting of Agromino’s shares. On
19 October 2020, Nasdaq Stockholm has
approved such application. The last day of
trading of Agromino’s shares was 30 October
2020. The Group’s owners were legal and
physical persons. On August 13, 2021 Mabon
has been registered in the shareholders’
register as the sole owner of all shares in
Agromino A/S.
These financial statements were authorised for
issue by the Board of Directors on June 30,
2022.
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
The principal accounting policies applied in the
preparation of these financial statements are
set out below. The policies have been
consistently applied to all the years presented
unless otherwise stated.
2.1 BASIS OF PREPARATION
This consolidated financial information of
Agromino A/S for 2021 ended December 31,
2021, has been prepared in accordance with
International Financial Reporting Standards
(IFRS) as adopted by the European Union and
further requirements in the Danish Financial
Statements Act. The consolidated financial
statements have been prepared under the
historical cost convention, as modified by the
revaluation of biological assets and land.
The reporting period of the consolidated
financial statements is the calendar year.
The Company prepares its separate financial
statements in accordance with IFRS as adopted
by the European Union and the further
requirements in the Danish Financial
Statements Act. Parent company financial
statements are presented after notes to the
consolidated financial statements in the same
set of financial statements.
The preparation of financial statements in
conformity with IFRS requires the use of certain
critical accounting estimates. It also requires
management to exercise its judgment in the
process of applying the Group’s accounting
policies. The areas involving a higher degree of
judgment or complexity, or areas where
assumptions and estimates are significant to
the consolidated financial statements are
disclosed in Note 4.
ADOPTION OF NEW OR REVISED STANDARDS
AND INTERPRETATIONS
The following amended standards that are
relevant to the Group became effective from 1
January 2021.
- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS
4 and IFRS 16 – Interest Rate Benchmark
Reform – Phase 2.
Their application did not have a material effect
on the disclosures or the amounts reported in
these financial statements.
The Group has not applied in advance any
other standards, interpretations or
amendments that have been issued but have
not yet entered into force
2021 ANNUAL REPORT
PAGE 18
New and revised IFRS Standards in issue but
not yet effective
At the date of authorisation of these financial
statements, the Group has not applied the
following new and revised IFRS Standards that
have been issued but are not yet effective:
IFRS 17 – Insurance Contracts (effective for
annual reporting periods beginning on or after
1 January 2023).
Amendments IFRS 4 – Extension of the
Temporary Exemption from Applying IFRS 9
(effective for annual reporting periods
beginning on or after 1 January 2023).
Amendments to IAS 1 – Classification of
Liabilities as Current or Non-current (applied
for annual periods beginning on or after 1
January 2023).
Amendments to IFRS 3 – Reference to the
Conceptual Framework (applied for annual
periods beginning on or after 1 January 2022).
Amendments to IAS 16 – Property, Plant and
Equipment: Proceeds before Intended Use
(applied for annual periods beginning on or
after 1 January 2022).
Amendments to IAS 37 – Onerous Contracts –
Costs of Fulfilling a Contract (applied for annual
periods beginning on or after 1 January 2022).
Amendments to IFRS 1 First-time Adoption of
International Financial Reporting Standards –
Subsidiary as a first-time adopter (applied for
annual periods beginning on or after 1 January
2022).
Amendments to IFRS 9 Financial Instruments
– Fees in the ’10 per cent’ test for
derecognition of financial liabilities (applied for
annual periods beginning on or after 1 January
2022).
Amendments to IAS 41 Agriculture – Taxation
in fair value measurements (applied for annual
periods beginning on or after 1 January 2022).
Amendment to IFRS 16 Leases COVID-19-
Related Rent Concessions (the amendment is
effective 1 June 2020 but, to ensure the relief
is available when needed most, lessees can
apply the amendment immediately in any
financial statements—interim or annual—not
yet authorised for issue).
Amendments to IAS 1 and IFRS Practice
Statement 2 – Disclosure of Accounting Policies
(effective for annual periods beginning on or
after 1 January 2023).
Amendments to IAS 8 – Definition of
Accounting Estimates (effective for annual
periods beginning on or after 1 January 2023).
The directors do not expect that the adoption
of the Standards listed above will have a
material impact on the financial statements of
the Group in future periods.
CONSOLIDATION
a) Subsidiaries
Subsidiaries are all entities over which the
group has control. The group controls an entity
when the group is exposed to, or has rights to,
variable returns from its involvement with the
entity and has the ability to affect those returns
through its power over the entity. Subsidiaries
are fully consolidated from the date on which
control is transferred to the group. They are
deconsolidated from the date that control
ceases.
The Group uses the acquisition method of
accounting to account for business
combinations. The consideration transferred for
the acquisition of a subsidiary is the fair values
of the assets transferred, the liabilities incurred
and the equity interests issued by the Group.
Any difference between fair value and the
carrying value of assets transferred is
recognised in the income statement. The
consideration transferred includes the fair
value of any asset or liability resulting from a
contingent consideration arrangement.
Acquisition-related costs are expensed as
incurred. Identifiable assets acquired and
liabilities and contingent liabilities assumed in
a business combination are measured initially
at their fair values at the acquisition date. On
an acquisition-by-acquisition basis, the Group
recognises any non-controlling interest in the
acquiree either at fair value or at the non-
controlling interest’s proportionate share of the
acquiree’s net assets. The excess of the
consideration transferred, the amount of any
non-controlling interest in the acquiree and the
acquisition-date fair value of any previous
equity interest in the acquiree over the fair
value of the Group’s share of the identifiable
net assets acquired is recorded as goodwill. If
this is less than the fair value of the net assets
of the subsidiary acquired in the case of a
bargain purchase, the difference is recognised
directly in the income statement.
Inter-company transactions, balances and
unrealised profits on transactions between
Group companies are eliminated. Losses are
also eliminated but considered whether they
indicate an impairment that requires
recognition in consolidated financial
statements. Accounting policies of subsidiaries
have been changed where necessary to ensure
2021 ANNUAL REPORT
PAGE 19
consistency with the policies adopted by the
Group.
b) Transactions with non-controlling interests
The Group treats transactions with non-
controlling interests as transactions with equity
owners of the group. For purchases from non-
controlling interests, the difference between
any consideration paid and the relevant share
acquired of the carrying value of net assets of
the subsidiary is recorded in equity. Gains or
losses on disposals to non-controlling interests
are also recorded in equity. When the group
ceases to consolidate or equity account for an
investment because of a loss of control, joint
control or significant influence, any retained
interest in the entity is remeasured to its fair
value with the change in carrying amount
recognised in profit or loss. This fair value
becomes the initial carrying amount for the
purposes of subsequently accounting for the
retained interest as an associate, joint venture
or financial asset. In addition, any amounts
previously recognised in other comprehensive
income in respect of that entity are accounted
for as if the group had directly disposed of the
related assets or liabilities. This may mean that
amounts previously recognised in other
comprehensive income are reclassified to profit
or loss. If the ownership interest in an associate
is reduced but the significant influence is
retained, only a proportionate share of the
amounts previously recognised in other
comprehensive income are reclassified to profit
or loss where appropriate.
c) Associates
Associates are all entities over which the group
has significant influence but not control or joint
control. This is generally the case where the
group holds between 20% and 50% of the
voting rights. Investments in associates are
accounted for using the equity method of
accounting (Note 2.1 d) below), after initially
being recognised at cost.
d) Equity method
Under the equity method of accounting, the
investments are initially recognised at cost
and adjusted thereafter to recognise the
group’s share of the post-acquisition profits or
losses of the investee in profit or loss, and the
group’s share of movements in other
comprehensive income of the investee in
other comprehensive income. Dividends
received or receivable from associates and
joint ventures are recognised as a reduction in
the carrying amount of the investment.
When the group’s share of losses in an equity-
accounted investment equals or exceeds its
interest in the entity, including any other
unsecured long-term receivables, the group
does not recognise further losses, unless it
has incurred obligations or made payments on
behalf of the other entity.
Unrealised gains on transactions between the
group and its associates and joint ventures
are eliminated to the extent of the group’s
interest in these entities. Unrealised losses
are also eliminated unless the transaction
provides evidence of an impairment of the
asset transferred. Accounting policies of
equity accounted investees have been
changed where necessary to ensure
consistency with the policies adopted by the
group.
The carrying amount of equity-accounted
investments is tested for impairment in
accordance with the policy described in Note
2.5.
Going concern statement
On 24 February 2022 Russian
Federation launched a full-scale military
invasion of Ukraine. For subsequent events
please refer to Note 34. Considering the
above, Agromino has assessed the going
concern assumption based on which the
financial statements have been prepared.
There is a significant uncertainty over
the future development of military invasion,
its duration and short and long-term impact
on the Group, its people, operations, liquidity,
and assets. There could be multiple scenarios
of further developments of the current
situation with unknown likelihood and the
magnitude of the impact on the Group might
be from significant to severe.
However, in order to support Group’s
ability to continue as going concern,
Management has prepared actualized budget
for the year 2022 as of the end of April 2022,
which shows the ability of the Group to
operate as going concern. The Group’s key
personnel and top managers continue
working. None of the Group's critical facilities
or infrastructure has suffered any significant
damage. The business processes have been
reorganised to adjust to the existing
challenges and to provide continuity to the
Group’s activities.
As of the date of these financial
statements, the Group successfully finished
the spring sowing campaign on 17,6 thousand
hectares, the sowing was not performed on
2021 ANNUAL REPORT
PAGE 20
land under occupation (12 thousand
hectares). In order to minimize storage and
optimize logistic, the Group made some
changes to sowing plan and implemented
them into reality – 2,3 thousand hectares
planned for corn were changed for mustard.
As a result of military actions, Black Sea
ports in Ukraine suspended their operations,
making export through the sea terminals
temporarily inaccessible. Military activity in
the southern part of Ukraine currently remains
high risky for resuming export operations
through sea ports, operations of which are
temporarily suspended. As of December 31,
2021 the Group had significant balances of
grain for sale, however is not able to sell
similar volumes as in the last year due to
suspension of sea ports operations.
Management is therefore currently actively
working on sale of grain of 2021 year harvest,
rearranging its delivery routes, setting up new
logistic procedures and in search for new
counterparties Thus, as of the date of these
financial statements, more than 50 % of grain
has been sold, the Group have concluded
contracts for sale of more than 30 % of grain.
The Group is managing logistic to transport
grain through land borders (Poland and
Romania) by railcars and trucks. Hence, it
may take longer for the Group to sell its stock
of inventory than expected. In case Black Sea
ports do not resume their operations within
the next months, management will continue
working together with global agri traders and
shipment companies on securing alternative
ways of exporting Ukrainian agri products
given a significant global demand of those.
Management has reorganized the
business process and prepared adjusted cash
flow forecast till April 2023 based on the
following key assumptions: no further
escalation of military actions that could
severely affect the Group's assets, ability to
run sowing and harvesting campaigns; usage
of alternative export routes via land borders
and other ports; availability of railway roads
and roads.
Management maintains a fruitful
relation with the banks. During 2022 the
Group managed to obtain bank loans of USD
7 667 thousand, EUR 2 550 thousand, and
even UAH 105 000 thousand after February
24, 2022 .
Although the Group’s financial
performance was strong in 2021 calendar
year, military actions occurring after the
balance sheet date create material
uncertainty for the Group in the future. There
is the risk of damage of assets, loss of
inventory either physical loss as a result of
military actions, or appropriation for military
needs under the Martial Law in Ukraine, ability
of Black Sea ports to resume its operations,
availability of alternative export routes and
disruptions of the sowing and harvesting
campaign for the Group and for Ukraine in
general. The full extent of the impact of
further development of military actions on the
Group’s business is unknown, but its
magnitude might be severe. Management
acknowledges that future development of
military actions and their duration represent a
single source of material uncertainty which
may cast significant doubt about the Group’s
ability to continue as a going concern and,
therefore, the Group may be unable to realise
its assets and discharge its liabilities in the
normal course of business. Despite the single
material uncertainty relating to the war in
Ukraine, management is continuing taking
actions to minimize the impact on the Group
and thus believes that application of the going
concern assumption for the preparation of
these financial statements is appropriate.
2.2 FOREIGN CURRENCY
TRANSLATION
a) Functional currency
Items included in the financial statements of
each of the Group’s entities are measured
using the currency of the primary economic
environment in which the entity operates (‘the
functional currency’). The functional
currencies of group entities are the following:
for Estonian subsidiaries the Euro, for
Ukrainian subsidiaries the Ukrainian hryvna,
for Russian subsidiaries the Russian rouble,
for Cypriot subsidiaries the Euro, for Czech
Republic the Czech koruna and for Danish
parent company the Euro.
b) Transactions and balances
Foreign currency transactions are translated
into the functional currency using the
exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and
losses resulting from the settlement of such
transactions and from the translation at year-
end exchange rates of monetary assets and
liabilities denominated in foreign currencies
are recognised in the income statement.
Foreign exchange gains and losses that relate
to borrowings and cash equivalents are
presented in the income statement within
‘Gains/losses from exchange rate differences’.
All other foreign exchange gains and losses
are presented in the income statement within
‘Other (losses)/gains – net.
c) Presentation currency
The results and financial position of all the
Group entities (none of which has the currency
2021 ANNUAL REPORT
PAGE 21
of a hyperinflationary economy) that have a
functional currency different from the
presentation currency are translated into the
presentation currency as follows:
(a) assets and liabilities for each balance
sheet presented are translated at the
closing rate at the date of that balance
sheet;
(b) income and expenses for each income
statement are translated at average
exchange rates of a month or a longer
period as appropriate (unless this
average is not a reasonable
approximation of the cumulative effect
of the rates prevailing on the
transaction dates, in which case
income and expenses are translated at
the rate on the dates of the
transactions); and
(c) all resulting exchange differences are
recognised in other comprehensive
income.
On consolidation, exchange differences arising
from the translation of the net investment in
foreign operations and of borrowings are taken
to shareholders’ equity. When a foreign
operation is partially disposed of or sold,
exchange differences that were recorded in
Other comprehensive income are recognised in
the income statement as part of the gain or loss
on the sale.
Goodwill and fair value adjustments arising on
the acquisition of a foreign entity are treated as
assets and liabilities of the foreign entity and
translated at the closing rate.
In the year 2021 Agromino decided to change
its presentation currency from EUR to USD due
to Group perspective:
- Main revenue of the Group is generated
from grain sales and grain prices are mainly
denominated in USD or are related to USD
fluctuation. Bank loans of the Group were also
mostly denominated in USD historically.
The consolidated financial statements are
presented in USD, which became to be the
presentation currency for the group, and thus
comparative information was translated in USD
also.
Comparative amounts were translated from
EUR to USD in order to put them into
correspondence:
- Assets and liabilities were translated
using exchange rate USD/EUR (per
European Central Bank) as of each
reporting date. There are three balance
sheet dates presented in these
consolidated financial statements due
to it.
- Income and expenses were translated
using average exchange rate USD/EUR
(per European Central Bank) for each
corresponding year presented.
- Accumulated earnings (deficit)
translated based on financial result for
each corresponding historical reporting
year using average exchange rate
USD/EUR (per European Central Bank)
for each corresponding year.
Translation was made since the first
reporting date 31/12/2006 at which
consolidated report of the Group was
prepared.
2.3 PROPERTY, PLANT AND EQUIPMENT
All property, plant and equipment except for
land is stated at historical cost less depreciation
and impairment, where required. Historical cost
includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s
carrying amount or recognised as a separate
asset, as appropriate, only when it is probable
that future economic benefits associated with
the item will flow to the Group and the cost of
the item can be measured reliably. The carrying
amount of the replaced part is derecognised. All
other repairs and maintenance are charged to
the income statement during the financial
period in which they are incurred.
The land is not depreciated. Depreciation on
other assets is calculated using the straight-line
method to allocate their cost to their residual
values over their estimated useful lives, as
follows:
• Buildings 25-40 years
• Machinery 7-20 years
• Vehicles 3-5 years
• Furniture, fittings and equipment 3-8 years
The assets’ residual values and useful lives are
reviewed, and adjusted if appropriate, at each
balance sheet date.
An asset’s carrying amount is written down
immediately to its recoverable amount if the
asset’s carrying amount is greater than its
estimated recoverable amount (Note 2.5).
Gains and losses on disposals are determined by
comparing the proceeds with the carrying
2021 ANNUAL REPORT
PAGE 22
amount and are recognised within Other
gains/losses – net, in the income statement.
General and specific borrowing costs directly
attributable to the acquisition, construction or
production of qualifying assets, which are assets
that necessarily take a substantial period of time
to get ready for their intended use or sale, are
added to the cost of those assets, until such time
as the assets are substantially ready for their
intended use or sale.
FAIR VALUE OF LAND
Land is carried using the revaluation method.
Under the revaluation method, an increase in
an asset’s carrying amount as a result of a
revaluation is recognised in other
comprehensive income and accumulated in
equity under other reserves. However, the
increase is recognised in profit or loss to the
extent that it reverses a revaluation decrease
of the same asset previously recognised in
profit or loss. A decrease in an asset’s carrying
amount as a result of a revaluation is
recognised in profit or loss. However, the
decrease is recognised in other comprehensive
income to the extent of any credit balance
existing in the revaluation surplus in respect of
that asset. The decrease recognized in other
comprehensive income reduces the amount
accumulated in equity under other reserves
(Note 18).
Valuations are performed with sufficient
regularity to ensure that the fair value of a
revalued asset does not differ materially from
its carrying amount.
When revalued assets are sold, the amounts
included in other reserves are transferred to
retained earnings.
2.4 INTANGIBLE ASSETS
a) Licenses
Acquired computer software licences are
capitalised on the basis of the costs incurred to
acquire and bring to use the specific software.
These costs are amortised over their estimated
useful lives of two to ten years.
b) Land-usage rights under emphyteusis
Land-usage rights under emphyteusis are
capitalised on the basis of the costs incurred.
Land-usage rights are amortised over their
estimated useful lives to forty-nine years.
2.5 . IMPAIRMENT ON NON-FINANCIAL
ASSETS
Assets that are subject to depreciation and land
are reviewed for impairment whenever events
or changes in circumstances indicate that the
carrying amount may not be recoverable. An
impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable
amount is the higher of an asset’s fair value
less costs of disposal and value in use. For the
purposes of assessing impairment, assets are
grouped at the lowest levels for which there are
separately identifiable cash flows (cash-
generating units). Non-financial assets other
than goodwill that suffered impairment are
reviewed for possible reversal of the
impairment at each reporting date.
2.6 FINANCIAL ASSETS
a) Classification
The Group classifies its financial assets in the
following categories: loans and receivables.
The classification depends on the purpose for
which the financial assets were acquired.
Management determines the classification of its
financial assets at initial recognition. Loans and
receivables are non-derivative financial assets
with fixed or determinable payments that are
not quoted in an active market. They are
included in current assets, except for maturities
greater than 12 months after the balance sheet
date. These are classified as non-current
assets. The Group's loans and receivables
comprise “Trade and other receivables” (see
Note 6) and Cash and cash equivalents (see
Note 5) in the balance sheet. See Note 2.10 for
measurement of trade receivables.
b) Recognition and measurement
Regular purchases and sales of financial assets
are recognised on the trade-date – the date on
which the Group commits to purchase or sell
the asset. Investments are initially recognised
at fair value plus transaction costs for all
financial assets not carried at fair value through
profit or loss. Financial assets are derecognised
when the rights to receive cash flows from the
investments have expired or have been
transferred and the Group has transferred
substantially all risks and rewards of
ownership. Loans and receivables are carried at
amortised cost using the effective interest
method.
The Group assesses at each balance sheet date
whether there is objective evidence that a
2021 ANNUAL REPORT
PAGE 23
financial asset or a group of financial assets is
impaired. Impairment testing of trade
receivables is described in Note 2.10.
c) Impairment of financial assets carried at
amortised cost
The Group assesses at the end of each
reporting period whether there is objective
evidence that a financial asset or group of
financial assets is impaired. A financial asset or
a Group of financial assets is impaired and
impairment losses are incurred only if there is
objective evidence of impairment as a result of
one or more events that occurred after the
initial recognition of the asset (a ‘loss event’)
and that loss event (or events) has an impact
on the estimated future cash flows of the
financial asset or Group of financial assets that
can be reliably estimated. Evidence of
impairment may include indications that the
debtors or a group of debtors are experiencing
significant financial difficulty, default or
delinquency in interest or principal payments,
the probability that they will enter bankruptcy
or other financial reorganisation.
For loans and receivables category, the amount
of the loss is measured as the difference
between the asset’s carrying amount and the
present value of estimated future cash flows
(excluding future credit losses that have not
been incurred) discounted at the financial
asset’s original effective interest rate. The
carrying amount of the asset is reduced and the
amount of the loss is recognised in the
consolidated income statement. If in a
subsequent period, the amount of the
impairment loss decreases and the decrease
can be related objectively to an event occurring
after the impairment was recognised, the
reversal of the previously recognised
impairment loss is recognised in the
consolidated income statement.
2.7 AGRICULTURE AND BIOLOGICAL
ASSETS
Agricultural activity is defined by the
management as an activity of the biological
transformation of biological assets for sale into
agricultural produce or into additional biological
assets. Agricultural produce is defined as the
harvested product of the Group’s biological
assets and a biological asset is defined as a
living animal or plant. The Group has
determined the groups of its biological assets
to be livestock and growing crops.
Biological assets are measured on initial
recognition and at each balance sheet date at
its fair value less cost to sell. Agricultural
produce harvested from the Group’s biological
assets is measured at its fair value less cost to
sell and is subsequently recorded as inventories
and measured in accordance with the
accounting principles of inventory (Note 2.9).
If an active market exists for a biological asset
or agricultural produce, the quoted price in that
market is the appropriate basis for determining
the fair value of that asset. If an active market
does not exist the most proximate market
transaction price, provided that there has not
been a significant change in economic
circumstances between the date of that
transaction and the balance sheet date, is used
in determining fair value.
A gain or loss arising on initial recognition of a
biological asset at fair value less cost to sell and
from a subsequent change in fair value less
cost to sell is included in profit or loss for the
period in which it arises as “Gain/loss of
biological assets arising from changes in fair
value less cost to sell”.
The biological assets are recorded as current
and non-current biological assets based on the
operational cycle of the respective biological
assets. In general, biological assets of growing
plants are recognised as current assets
because the operational cycle is less than 12
months. Dairy herd is recorded as a non-
current biological asset.
a) Livestock and dairy herd
Livestock is measured at their fair value less
estimated point-of-sale costs. The fair value
measurements are categorized under Level 2 in
the fair value hierarchy, as defined by IFRS 13.
b) Crops – cereals and grassland
Crops are measured at their fair value less cost
to sell. The fair value measurements are
categorized under Level 3 in the fair value
hierarchy, as defined by IFRS 13. Fair value of
biological assets sown for next year harvest by
present valuing the net cash flows expected to
be generated from the assets discounted at
average cost of short-term financing.
The Group’s grasslands qualify as bearer plants
under the definition in IAS 41 Agriculture and
are therefore accounted for under the rules for
plant and equipment. The grasslands are
carried at cost less depreciation. Grasslands
are depreciated for a period of 3 years.
2021 ANNUAL REPORT
PAGE 24
2.8 GOVERNMENT GRANTS
a) Government grants related to agricultural
activity
An unconditional government grant related to
a biological asset measured at its fair value less
cost to sell is recognised as income when the
government grant becomes receivable
(government grants for the dairy herd, general
area-aid subsidies). If a government grant
related to a biological asset measured at its fair
value less cost to sell, is conditional, including
whereby a government grant requires a Group
company not to engage in specified agricultural
activity, the Group recognizes the government
grant as income when the conditions attaching
to the government grant are met (investment
subsidies, area-aid environmental subsidies)
and until then aid received is recognized as a
liability.
b) Government grants related to purchase of
property, plant and equipment
Grants from the government are recognised at
their fair value where there is a reasonable
assurance that the grant will be received and
the group will comply with all attached
conditions. Government grants relating to
property, plant and equipment are included in
non-current liabilities as deferred government
grants and are amortised to the income
statement on a straight-line basis over the
expected lives of the related assets.
2.9 INVENTORIES
a) Agricultural produce
i. Milk
Milk is initially measured at its fair value
less cost to sell at the time of milking and
subsequently recorded as inventories and
measured at the lower of cost and net
realisable value. The fair value of milk is
determined based on market prices in the local
area.
ii. Grain- own produced (harvested)
Grain and feeds produced by the Group
are initially measured at its fair value less cost
to sell at the time of harvest and recorded in
inventories until sold to third parties or used
internally for feeding animals or for seeds.
Grains and feed produced by the Group are
subsequently measured at net realisable value.
The net realisable value of feed is determined
based on market prices in the local area. The
net realisable value of grain is determined
based on quoted prices on the nearest market
or if multiple markets are available, in the
market where the Group’s company expects to
sell the produce.
b) Grain – purchased from third parties
Purchased grain from third parties is initially
recorded at the purchase price and
subsequently measured at a fair value less cost
to sell. The fair value of grain is determined
based on quoted prices on the nearest market
or if multiple markets are available, on the
most advantageous market.
c) Work-in-progress related to field
preparation
Cost of agricultural preparation on fields before
seeding is recorded as work-in-progress in
inventories. Work in progress comprises raw
materials, direct labor costs and other direct
costs (based on normal operating capacity).
After seeding the cost of field preparation is
reclassified as biological assets (Note 2.7 b)).
d) Raw materials
Inventories are stated at the lower of cost and
net realisable value. Cost is determined using
weighted average cost method. Net realisable
value is the estimated selling price in the
ordinary course of business, less applicable
variable selling expenses.
2.10 TRADE RECEIVABLES
Trade receivables are amounts due from
customers for merchandise sold or services
performed in the ordinary course of business.
If the collection is expected in one year or less
(or in the normal operating cycle of the
business if longer), they are classified as
current assets. If not, they are presented as
non-current assets.
Trade receivables are recognised initially at fair
value and subsequently measured at amortised
cost using the effective interest method, less
provision for impairment.
2.11 CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in
hand, deposits held at call with banks, other
short-term highly liquid investments with
original maturities of three months or less.
Deposits over three months are classified as
cash and cash equivalents if they are readily
convertible to a known amount of cash and are
subject to insignificant risk of changes in value.
2.12 SHARE CAPITAL
Ordinary shares are classified as equity.
Incremental costs directly attributable to the
2021 ANNUAL REPORT
PAGE 25
issue of new shares or options are shown in
equity as a deduction, net of tax, from the
proceeds.
2.13 TRADE PAYABLES
Trade payables are obligations to pay for goods
or services that have been acquired in the
ordinary course of business from suppliers.
Accounts payable are classified as current
liabilities if payment is due within one year or
less. If not, they are presented as non-current
liabilities.
Trade payables are recognised initially at fair
value and subsequently measured at amortised
cost using the effective interest method.
2.14 BORROWINGS
Borrowings are recognised initially at fair value,
net of transaction costs incurred. Borrowings
are subsequently stated at amortised cost; any
difference between the proceeds (net of
transaction costs) and the redemption value is
recognised in the income statement over the
period of the borrowings using the effective
interest method.
Borrowings are classified as current liabilities
unless the Group has an unconditional right to
defer settlement of the liability for at least 12
months after the balance sheet date.
Borrowings are removed from the balance
sheet when the obligation specified in the
contract is discharged, canceled or expired. The
difference between the carrying amount of a
financial liability that has been extinguished or
transferred to another party and the
consideration paid, including any non-cash
assets transferred or liabilities assumed, is
recognised in the Income statement as finance
income or finance cost. Where the terms of a
financial liability are renegotiated and the
entity issues equity instruments to a creditor to
extinguish all or part of the liability (debt for
equity swap), a gain or loss is recognised in the
Income statement, which is measured as the
difference between the carrying amount of the
financial liability and the fair value of the equity
instruments issued.
2.15 CURRENT AND DEFERRED INCOME
TAX
The tax expense for the period comprises a
current and deferred tax. Tax is recognised in
the income statement, except to the extent
that it relates to items recognised in other
comprehensive income or directly in equity. In
this case, the tax is also recognised in other
comprehensive income or equity, respectively.
a) Corporate income tax
The current income tax charge is calculated on
the basis of the tax laws enacted or
substantively enacted at the balance sheet date
in the countries where the Company and its
subsidiaries operate and generate taxable
income. Management periodically evaluates
positions taken in tax returns with respect to
situations in which applicable tax regulations
are subject to interpretation and establishes
provisions where appropriate on the basis of
amounts expected to be paid to the tax
authorities.
The Income tax rate in Ukraine is 18%, in
Russia 20%, in Denmark 22% and in Cyprus
12.5%. Agricultural producers in both Ukraine
and Russia are exempted from the ordinary
corporate income tax system if they meet the
requirements to be recognised as agricultural
producers (Note 2.15 b)). The income tax in
Estonia is calculated only on distributed
earnings with the effective rate 20/80 of the
distributed amount. From 2019, a tax rate of
14/86 can be applied to dividend payments.
The more beneficial tax rate can be used for
dividend payments in the amount of up to the
average dividend payment during the three
preceding years that were taxed at the tax rate
of 20/80.
Deferred income tax is provided in full, using
the liability method, on temporary differences
arising between the tax bases of assets and
liabilities and their carrying amounts in the
consolidated financial statements. However,
the deferred income tax is not accounted for if
it arises from initial recognition of an asset or
liability in a transaction other than a business
combination that at the time of the transaction
affects neither accounting nor taxable profit nor
loss. Deferred income tax is determined using
tax rates (and laws) that have been enacted or
substantially enacted by the balance sheet date
and are expected to apply when the related
deferred income tax asset is realised or the
deferred income tax liability is settled.
Deferred income tax assets are recognised to
the extent that it is probable that future taxable
profit will be available against which the
temporary differences can be utilised.
Deferred income tax is provided on temporary
differences arising on investments in
subsidiaries and associates, except where the
timing of the reversal of the temporary
2021 ANNUAL REPORT
PAGE 26
difference is controlled by the Group and it is
probable that the temporary difference will not
reverse in the foreseeable future.
Deferred income tax assets and liabilities are
offset when there is a legally enforceable right
to offset current tax assets against current tax
liabilities and when the deferred income taxes
assets and liabilities relate to income taxes
levied by the same taxation authority on either
the taxable entity or different taxable entities
where there are an intention and ability to
settle the balances on a net basis.
b) Agricultural tax regimes in Ukraine and
Russia
Both in Ukraine and Russia companies are
exempt from ordinary corporate income tax
regime if they meet criteria to be recognised as
agricultural producers.
In Ukraine, a company is considered to be an
agricultural producer if it derived at least 75%
of its revenue in the previous tax year from the
sales of the self-produced agricultural product.
Simplified agricultural tax means that the
agricultural producer pays tax based not on its
profits, but on the total area used for
agricultural production.
In Russia, a company can apply for the
agricultural tax regime if it meets the criteria of
an agricultural company. However, the
companies on a general tax regime having the
revenue from sales of self-produced
agricultural produce have reduced tax rates.
2.16 EMPLOYEE BENEFITS
a) Pension obligations and other post-
employment obligations
The Group does not operate pension schemes
and does not provide post-retirement benefits
to their retirees. Pension obligations may arise
due to a legal obligation to pay for the
incapability to work because of an accident.
The Group has legal obligation to pay
contributions to the state pension funds
according to the local regulations of each
country of location. The contributions to the
local pension funds are treated as social
security tax payments.
b) Termination benefits
Termination benefits are payable when
employment is terminated by the Group before
the normal retirement date, or whenever an
employee accepts voluntary redundancy in
exchange for these benefits.
2.17 PROVISIONS
Provisions for environmental restoration,
restructuring costs, and legal claims are
recognised when: the Group has a present legal
or constructive obligation as a result of past
events; it is probable that an outflow of
resources will be required to settle the
obligation, and the amount can be reliably
estimated. Restructuring provisions comprise
lease termination penalties and employee
termination payments. Provisions are not
recognised for future operating losses.
Provisions are measured at the present value
of the expenditures expected to be required to
settle the obligation using a pre-tax rate that
reflects current market assessments of the
time value of money and the risks specific to
the obligation. The increase in the provision
due to the passage of time is recognised as
interest expense.
2.18 REVENUE RECOGNITION
Revenue is income arising in the course of the
Group’s ordinary activities. Revenue is
recognised 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 recognised 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 mainly to 2-5 business
days, which is consistent with the market
practice and consequently trade receivables
are classified as current assets.
A receivable is recognised 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 6). 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. Contract liabilities are
included in trade and other payables line item
as advances from customers (Note 13).
2021 ANNUAL REPORT
PAGE 27
a) Sales of goods – agricultural produce
The Group’s main revenue arises from the sales
of agricultural produce – grain and milk. The
agricultural produce is subject to quality control
at the point of sale and the sales value is
depending on the quality. Sales are recognised
when control of the good has transferred, being
when the goods are delivered to the customer,
the customer has full discretion over the goods,
and there is no unfulfilled obligation that could
affect the customer's acceptance of the goods.
Delivery occurs when the goods have been
shipped to the specific location, the risks of
obsolescence and loss have been transferred to
the customer, and either the customer has
accepted the goods in accordance with the
contract, the acceptance provisions have
lapsed, or the Group has objective evidence
that all criteria for acceptance have been
satisfied.
b) Sales of biological assets
The Group sells living animals for slaughter.
The revenue from sales of living animals is
recognised after the animals have been
delivered to the slaughterhouse.
c) Sales of services
The Group occasionally sells services to other
agricultural producers. Revenue from the
services is recognised when the service has
been provided.
d) Interest income
Interest income is recognised on a time-
proportion basis using the effective interest
method. When a receivable is impaired, the
Group reduces the carrying amount to its
recoverable amount, being the estimated
future cash flow discounted at the original
effective interest rate of the instrument and
continues unwinding the discount as interest
income. Interest income on impaired loans is
recognised using the original effective interest
rate.
e) Dividend income
Dividend income is recognised when the right
to receive payment is established.
2.19 LEASES
The Group is a party to lease contracts as a
lessee for, the land plots.
Leases are recognized, measured and
presented in line with IFRS 16 Leases.
Land lease rights are measured at cost less any
accumulated depreciation and any
accumulated impairment losses and adjusted
for any re-measurement of the lease liability.
The Group depreciates the land lease rights
from the commencement date to the earlier of
the end of the useful life of the land lease right
asset or the end of the lease term on a straight-
line basis.
The finance cost is charged regarding lease
liabilities to profit or loss over the lease period.
The lease payments are discounted using the
borrowing cost as published by National Bank
of Ukraine on its official web-site
(www.bank.gov.ua) since the interest rate
implicit in the lease could not be determined.
2.20 DIVIDEND DISTRIBUTION
Dividend distribution to the Group’s
shareholders is recognised as a liability in the
Group’s financial statements in the period in
which the dividends are approved by the
Group’s shareholders.
2.21 NON-CURRENT ASSETS HELD FOR
SALE AND DISCONTINUED
OPERATIONS
Non-current assets (or disposal groups) are
classified as held for sale if their carrying
amount will be recovered principally through a
sale transaction rather than through continuing
use and a sale is considered highly probable.
They are measured at the lower of their
carrying amount and fair value less cost to sell,
except for assets such as deferred tax assets,
assets arising from employee benefits, financial
assets.
An impairment loss is recognised for any initial
or subsequent write-down of the asset (or
disposal group) to fair value less cost to sell. A
gain is recognised for any subsequent increases
in fair value less cost to sell of an asset (or
disposal group), but not in excess of any
cumulative impairment loss previously
recognised. A gain or loss not previously
recognised by the date of the sale of the non-
current asset (or disposal group) is recognised
at the date of derecognition.
Non-current assets (including those that are
part of a disposal group) are not depreciated or
amortised while they are classified as held for
sale. Interest and other expenses attributable
to the liabilities of a disposal group classified as
held for sale continue to be recognised.
2021 ANNUAL REPORT
PAGE 28
Non-current assets classified as held for sale
and the assets of a disposal group classified as
held for sale are presented separately from the
other assets in the balance sheet. The liabilities
of a disposal group classified as held for sale
are presented separately from other liabilities
in the balance sheet.
A discontinued operation is a component of the
entity that has been disposed of or is classified
as held for sale and that represents a separate
major line of business or geographical area of
operations, is part of a single coordinated plan
to dispose of such a line of business or area of
operations, or is a subsidiary acquired
exclusively with a view to resale. The results of
discontinued operations are presented
separately in the statement of profit or loss.
3. FINANCIAL RISK MANAGEMENT
3.1 FINANCIAL RISK FACTORS
The Group’s activities expose it to a variety of
financial risks: market risk (including currency
risk, commodity price risk, cash flow interest
rate risk, fair value interest rate risk), credit
risk, liquidity risk and capital repatriation risk.
The Group’s overall risk management program
acknowledges the unpredictability of financial
markets and on the basis of the current
business operations of the Group, the
management is following financial risk
management policies to minimise potential
adverse effects on the Group’s financial
performance from unpredictable fluctuations in
the financial markets. The Group’s centralised
controlling and risk management function
carries out risk management activities on a
day-to-day basis in close cooperation with the
regional management members.
1. Market risk
(i) Foreign exchange risk
The Group operations in Ukraine and Russia are
exposed to foreign exchange risk arising
primarily from exposures to the US dollar,
Euro, Russian rouble, and Ukrainian hryvna.
Foreign exchange risks from US dollar, Euro,
Russian rouble, and Ukrainian hryvna arise
mainly from recognised assets and liabilities.
The Group has not implemented any formal
currency risk management policies.
The average value of US dollar relative to euro
depreciated by 3.5% in 2021 (depreciated in
2020 by 2.0%)
The average value of Ukrainian hryvna relative
to euro depreciated by 4.5% in 2021
(depreciated in 2020 by 6.7%).
The average value of Russian rouble relative to
euro depreciated by 5.4% in 2021 (depreciated
in 2020 by 14.2%).
As at 31 December 2021, the exchange rate of
Ukrainian hryvna was 27,3023 UAH/USD (as at
31 December 2020 - 28,3103 UAH/USD) and
exchange rate of Russian rouble was 75,3138
RUB/USD (as at 31 December 2020 - 74,5392
RUB/USD).
As at 31 December 2021, the exchange rate of
Ukrainian hryvna was 30,9226 UAH/EUR (as at
31 December 2020 - 34,7396 UAH/EUR) and
exchange rate of Russian rouble was 85,3004
RUB/EUR (as at 31 December 2020 - 91,4671
RUB/EUR).
The total recognised decrease in equity from
currency translation differences amounted to
USD 52 550 thousand at December 31, 2021
(USD 61 306 thousand at December 31, 2020
1
)
(Note 18).
(ii) Commodity price risk
The Group is exposed to commodities price risk
because of the significant size of its business
operations in the production of cereals. In case
cereals produced by the Group are primarily
exported, a significant share of the Group’s
revenues will be exposed to global fluctuations
in agricultural commodity prices. The milk
production operations of the Group are to a
lesser extent affected by global commodity
prices since the raw milk is sold regionally and
cannot be exported over long distances.
2021 ANNUAL REPORT
PAGE 29
The Group’s strategy is not to hedge against
any commodity price movements in order to
provide its shareholders a direct exposure to
the fluctuation in the market. Unlike traditional
large-scale farming enterprises that have
typically used a financial hedging strategy to
protect against adverse price fluctuations or
the risks inherent in a highly seasonal business,
the Group does not engage in any commodity
hedging. The Group believes that its diversified
crop rotation system and its combination of
cereal production and dairy farming provide its
business with sufficient operational stability.
(iii) Cash flow and fair value interest rate
risk
As the Group has no significant floating
interest-bearing assets, the Group’s income
and operating cash flows are substantially
independent of changes in market interest
rates.
The Group’s interest rate risk arises from
borrowings (Note 14). Borrowings issued at
variable rates expose the Group to cash flow
interest rate risk. The Group analyses its
interest rate exposure on a dynamic basis.
Various scenarios are simulated taking into
consideration refinancing, renewal of existing
positions and alternative financing.
At 31 December 2021, if interest rates on
floating interest rate borrowings at that date
had been 0.5% higher with all other variables
held constant, net loss for the year would have
been USD 3 thousand higher (2020
1
: USD 14
thousand higher), as a result of higher interest
expense on floating rate borrowings.
The breakdown between floating and fixed interest rates for the existing borrowings of the Group is
shown below:
in USD thousand
31.12.2021
31.12.2020
1
Borrowings and finance leases (outstanding amount)
Floating rate
670
2 735
incl. related to LIBOR
610
2 735
incl. related to EURIBOR
60
-
Fixed rate
-
872
670
3 607
2. Credit risk and counterparty business risk
Credit risk for the Group arises from cash and
cash equivalents, deposits with banks and
financial institutions and customers, including
outstanding receivables and committed
transactions. In respect of banks and financial
institutions, the Group’s policy is to work with
institutions, which have an internationally
reputable strategic shareholder as the majority
investor. (See also Note 5 for details).
3. Liquidity risk
The Group’s main liquidity risks derive from the
cyclical nature of agricultural production. Field-
works in spring and harvest in autumn entails
concentration of costs and working capital need
in the spring season and concentration of
revenues in the autumn season. The cyclicality
is stronger in cereals production and much
lower in dairy production, as dairy production
revenues accrue evenly throughout the whole
operating year. The Group has been lowering
the cyclicality also in cereals production by
acquiring its own warehousing infrastructure to
store grain for longer time periods and to be
able to sell cereal products more evenly
throughout the year. The management
monitors the liquidity risk by following the main
key performance indicators on a continuous
basis, including cash flows.
The undiscounted gross payments of all
borrowings and trade payables are presented
in the included tables. The amounts include
interest payments.
2021 ANNUAL REPORT
PAGE 30
in USD thousand
Total
31.12.2021
On
demand
and less
than 6
months
between
6 and 12
months
between
1 and 2
years
between
2 and 10
years
Maturity
Interest rate
Borrowings and
finance leases
(Note 14)
709
494
172
43
-
incl. related to
EURIBOR
60
60
-
-
-
2022
7days EURIBOR +
1,6%
incl. related to
LIBOR
386
386
-
-
-
2022
2,8%-3,74%%
incl. related to
LIBOR
263
48
172
43
-
2023
1mLIBOR + 4,4%
Payables (Note 13)
1 647
1 451
193
3
-
2022
no interest rate;
5% for amount of
loans from related
parties
Total
2 356
1 945
365
46
-
in USD thousand
Total
31.12.2020
1
On
demand
and less
than 6
months
between
6 and 12
months
between
1 and 2
years
between
2 and 10
years
Maturity
Interest rate
Borrowings and
finance leases
(Note 14)
3 893
313
1 569
1 431
580
incl. related to
LIBOR
1 012
18
994
-
-
2021
3mLIBOR+3.4%
incl. related to
LIBOR
1 421
23
185
710
503
2025
3mLIBOR+3.3%
incl. related to
LIBOR
537
67
190
280
-
2021-2023
1mLIBOR + 4,4%-
6,1%
inc. with fixed
interest rate
923
205
200
441
77
2024
5%
Payables (Note 13)
16 463
1 145
6 970
-
8 348
2021-2029
no interest rate;
5% for amount of
loans from related
parties
Total
20 356
1 458
8 539
1 431
8 928
3.2 CAPITAL MANAGEMENT
The Group considers as capital its equity and
borrowings.
in USD thousand
31.12.2021
31.12.2020
1
Borrowings (Note
14)
670
3 607
Total shareholders´
equity
87 175
53 422
Capital repatriation risk
The capital repatriation risk derives from the
Group’s investments into Ukrainian and Russian
subsidiaries. Potential changes in the political
environment in Ukraine or Russia may impose
restrictions on repatriating capital invested as it
was historically.
3.3 FAIR VALUE ESTIMATION
The different levels for assets carried at fair
value have been defined as follows:
• Quoted prices (unadjusted) in active
markets for identical assets or liabilities
(Level 1).
• Inputs other than quoted prices included
within level 1 that are observable for the
asset or liability, either directly (that is, as
2021 ANNUAL REPORT
PAGE 31
prices) or indirectly (that is, derived from
prices) (Level 2).
• Inputs for the asset or liability that are not
based on observable market data (that is,
unobservable inputs) (Level 3).
See Note 11 for disclosures of the land that is
measured at fair value, Note 8 for inventories,
Note 9 for biological assets and Note 14 for
borrowings.
4. CRITICAL ACCOUNTING ESTIMATES AND
JUDGMENTS
Estimates and judgments are continually
evaluated and are based on historical
experience and other factors, including
expectations of future events that are believed
to be reasonable under the circumstances.
4.1 CRITICAL ACCOUNTING
ESTIMATES AND ASSUMPTIONS
The Group makes estimates and assumptions
concerning the future. The resulting accounting
estimates will, by definition, rarely equal the
related actual results. The estimates and
assumptions that have a significant risk of
causing a material adjustment to the carrying
amounts of assets and liabilities within the next
financial year are outlined below.
a) Fair value of biological assets
The Group’s biological assets are measured at
fair value less cost to sell at each balance sheet
date (value at December 31, 2021 was
USD 2 466 thousand and value at December
31, 2020
1
was USD 8 810 thousand) (Note 9).
Variability analysis:
Were the actual prices for the biological assets
in animal husbandry higher by 10% from
management’s estimates, the fair value would
increase by USD 80 thousand (by USD 347
thousand in 2020
1
), if the prices were lower by
10%, the fair value would decrease by the
same amount.
Were the actual crop yields or prices in crop
cultivation higher by 10 % from management
estimates, the fair value would increase by USD
912 thousand as of December 31, 2021 (by
USD 1 082 thousand as of December 31,
2020
1
), if crop yields or prices were lower by
10 %, the fair value would decrease for the
same amount.
Were the actual cost per ha in crop cultivation
higher by 10 % from management estimates,
the fair value would decrease by USD 749
thousand as of December 31, 2021 (by USD
455 thousand as of December 31, 2020
1
), if
crop yields were lower by 10 %, the fair value
would increase for the same amount.
b) Useful lives of property, plant, and
equipment
The depreciable items of property, plant, and
equipment amounted to USD 19 860 thousand
as at December 31, 2021 (USD 21 078
thousand as at December 31, 2020
1
) (Note
11). The remaining balance includes land,
which does not depreciate; and construction in
process. Management has estimated useful
lifetimes for depreciable property, plant, and
equipment. However, the actual useful
lifetimes can be different than those estimated
by the management. If the average useful
lifetime would be 10% longer (shorter) than
estimated by the management, it would
decrease (increase) the depreciation charge by
USD 347 thousand (decrease/increase by USD
325 thousand in 2020
1
).
c) Net realisable value and fair value less cost
to sell of inventories
The Group has its agricultural produce in
inventory as of the year-end (Note 8). The
agricultural produce and inventories for
commodities trading have been valued to fair
value less cost to sell. The fair value of the
grain is determined based on the market
statistics published by APK-Inform or in case
the Group had sold or had sales contracts for
its inventory then those actual prices were
used. Would the prices be lower (higher) than
estimated by 10%, the value of the inventories
would be USD 2 052 thousand less (more) and
the equity smaller (bigger) by the equal
amount (in 2020
1
: USD 238 thousand).
d) Recoverable values of property, plant, and
equipment
For the assets in Ukraine impairment test was
carried out as of December 31, 2021. The
value-in-use method was applied to determine
2021 ANNUAL REPORT
PAGE 32
the recoverable values of non-current assets.
Cash flows were projected, including revenues,
operating expenses, investment requirements
and working capital needs. The Group used in
the model its target yields and prices based on
forecasts. The Group applied 5% long-term
growth rate. The discount rate applied was
18.50%. The test demonstrated that the assets
value in use was higher than the carrying
amount of these assets.
Major sensitive inputs 2021:
USD thousand
Change
Impairment
Increase in discount rate
2pp
no
Decrease in terminal
growth rate
1pp
no
No impairment indicators were identified for
assets in Ukraine as of December 31, 2020.
Assets in milk production in Russia were
classified as assets held for sale as of December
31, 2021 (Note 32).
For the assets in milk production in Russia
impairment test was carried out in 2020. The
value-in-use method was applied to determine
the recoverable values of non-current assets.
Cash flows were projected, including revenues,
operating expenses, investment requirements
and working capital needs. The Group used in
the model its target yields and prices for milk
based on forecasts. The Group applied 4%
long-term growth rate that has been
aggregated from the long-term growth
perspective in Russia and estimation of the
growth in food prices in relation to other inputs.
The discount rate applied was 16.01%.
The test demonstrated that the assets value in
use in Russia was higher than the carrying
amount of these assets as of as of December
31, 2020.
In 2020, the following reasonable changes in
major sensitive inputs would have caused the
decrease of the recoverable amount below the
carrying amount:
Major sensitive inputs 2020
1
:
USD thousand
Change
Impairment
Increase in discount rate
2pp
-904
Decrease in milk price from
2021 onwards
5%
-1 908
Decrease in terminal growth
rate
1pp
-329
e) Fair value of land
The fair value of land is reliant on significant
assumptions and unobservable inputs. See
Note 11.1 for the measurement of fair value of
land and financial impact of a potential change
in the value per hectare.
4.2 OTHER RISK FACTORS
RISKS RELATED TO UKRAINIAN LAND
28 April 2020 the President of Ukraine signed
new land law which leads to discrimination of
foreign investors in Ukrainian agriculture. The
key part of new land legislation came into force
in July 2021.
RISKS RELATED TO LAND OWNERSHIP IN
RUSSIA
Russian law does not allow a foreign entity nor
a foreign controlled Russian entity to own
agricultural land in Russia. A Russian entity is
considered a foreign-controlled entity when
more than 50 percent of its share capital is
owned by a foreign entity.
The Russian agricultural land (Note 32) of the
Group is currently owned by Russian operating
company, which is wholly-owned subsidiary of
the holding company incorporated in Russia.
The holding company is, in turn, owned by the
non-Russian parent companies. While this
structure technically complies with the Russian
law restriction on the foreign ownership of
Russian agricultural land, no assurances can be
given that the ownership structure could not be
challenged on the basis that they possibly
violate the spirit of the law. The Russian courts
and legal system generally tend to adopt a
formal approach to legislative interpretation.
However, no assurance can be given as to how
a Russian court would treat each particular
situation brought to its consideration or as to
future developments in the Russian legal
system which may give greater weight to
substance over form.
4.3 SITUATION IN UKRAINE AND
RUSSIA AND POTENTIAL IMPACT ON THE
GROUPS´S OPERATIONS
Ukraine
During last years, the Ukrainian economy
started to demonstrate certain signs of
recovery and growth following the significant
2021 ANNUAL REPORT
PAGE 33
decline in 2014-2016. After recovering during
2016-2019 in 2020, the economy of Ukraine
was negatively affected by the global economic
crisis, burdened by the COVID-19 pandemic.
The inflation rate in Ukraine during 2021
amounted to 10.0% (as compared to 5.0% in
2020).
The National Bank of Ukraine (“NBU”)
implements currency liberalization measures to
boost the economic growth. In 2018-2019, the
national currency – Ukrainian hryvnia – has
strengthened, particularly, against US dollar
and Euro. Further, the NBU has gradually
decreased its key interest rate from 18% p.a.
in September 2018 to 6% p.a. in June 2020.
Nevertheless, main risks affecting the
sustainability of the economic growth are
represented by the continuing Russian military
aggression against Ukraine; lack of the clear
consensus as to the directions of the
institutional reforms and low level of capital
inflow.
The impact of Russian military aggression
against Ukraine in some areas of Lugansk and
Donetsk regions that started in spring 2014 is
still in progress; parts of Lugansk and Donetsk
regions remain under control of self-proclaimed
republics and Ukrainian government is not able
to enforce the law of Ukraine on those
territories. In March 2014 the series of events
led to annexing the Crimea to the Russian
Federation, which was not recognized either by
Ukraine or many other countries. Resulting
from the above, operations in Ukraine are
accompanied by risks non-relevant for other
economies.
In March-April and October-November 2021,
Russian Federation started to mass thousands
of military personnel and equipment near its
border with Ukraine, representing the highest
force mobilization since the country's
annexation of Crimea in 2014. By December
2021, more than an estimated 100 thousand of
Russian troops were stationed near the border
with Ukraine. Many Western governments have
called on their citizens to leave Ukraine. At the
same time, the government of Russia has
repeatedly denied that it has any plans to
invade Ukraine.
Management is monitoring the developments in
the current environment and taking actions,
where appropriate, to minimize any negative
effects to the extent possible. The further
adverse developments of these events are
described in Note 34 Subsequent events.
Russia
The Russian Federation displays certain
characteristics of an emerging market. Its
economy is particularly sensitive to oil and gas
prices. The legal, tax and regulatory
frameworks continue to develop and are
subject to frequent changes and varying
interpretations. In 2021 inflation equaled to 8.4
% (4.9 % in 2020). Considering the sensitivity
of the economy to oil and gas prices, the
economic situation in the future is difficult to
predict and management’s current
expectations and estimates could differ from
actual results. Management is taking necessary
measures to ensure sustainability of the
Group’s operations.
4.4. COVID-19 OUTBREAK
On 11 March 2020, the WHO declared the
COVID-19 outbreak to be a pandemic. During
2021 COVID-19 pandemic continued to have a
significant impact on the economy of Ukraine.
However, against the background of the
implementation of the vaccination plan and the
abolition of a significant number of restrictions
related to COVID-19 and a global economic
recession caused by the COVID-19 pandemic,
there is a recovery of Ukraine's economy.
The Management assessed the impact of
COVID-19 on its Company’s assets
impairment, its revenues and its ability to
generate sufficient cash flow to settle its
liabilities when they are due and to maintain its
operations in the foreseeable future. As of the
date of the issue of this financial statements,
the Company’s operations have not been
significantly impacted.
Management continues to make efforts to
mitigate the economic disruption impacts of the
COVID-19 pandemic to the Company;
however, there are factors beyond its
knowledge or control, including the duration
and severity of this outbreak, any such similar
outbreak, as well as further governmental and
regulatory actions taken.
2021 ANNUAL REPORT
PAGE 34
5. CASH AND CASH EQUIVALENTS
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
Cash on hand
2
6
5
Short-term bank deposits
1 454
7 387
2 129
1 456
7 393
2 134
Short-term bank deposits include cash balances at bank accounts, bearing interest of 0%-3.5% on
annualized base (in 2020 0% – 3.5 %)
The credit quality of cash at bank according to banks external credit rating (Moody’s) is given in the
following table:
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
A1*
57
42
3
Aa2*
-
50
142
Aa3*
29
739
9
Baa1*
1 168
6 392
703
Baa3*
-
6
619
Ba1
-
33
76
B2
-
93
-
B3
48
5
8
Caa1
-
-
6
Caa2
28
-
402
Other
124
27
161
1 454
7 387
2 129
* As at December 31, 2021, the parent company ratings were used for the money at AS SEB Bank
(Estonia), AS Swedbank (Estonia), PJSC OTP Bank (Ukraine) and PJSC Credit Agricole Bank (Ukraine)
(the same as of December 31, 2020).
The split of cash between currencies:
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
Ukrainian hryvna
681
385
734
US dollar
700
3 467
604
Euro
69
3 460
710
Russian rouble
-
39
62
Other currencies
6
42
24
1 456
7 393
2 134
2021 ANNUAL REPORT
PAGE 35
6. TRADE AND OTHER RECEIVABLES
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
Trade receivables
825
549
871
Other receivables
810
243
1 062
Prepayments for taxes
4 327
2 373
4 353
Prepayments to suppliers
4 593
1 264
2 402
Total receivables and prepayments
10 555
4 429
8 688
Less non-current portion:
Prepayments for non-current assets
-2 641
-152
-25
Other receivables
-
-87
-105
Total non-current portion
-2 641
-239
-130
Current portion
7 914
4 190
8 558
The fair values of trade and other receivables are
not materially different from the carrying values
based on the expected discounted cash flows. All
non-current receivables are due within more
than one year from the balance sheet date. Non-
current prepayments will realize in non-current
assets, like property, plant, and equipment. As
of December 31, 2020
1
, VAT receivable in
amount of USD 87 thousand is presented in non-
current portion of total trade and other
receivables. For a breakdown of trade and other
receivables by category please refer to Note 7.
The ageing of trade receivables is as follows:
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
including receivables not due
494
360
818
including receivables overdue up to 3 months
276
112
19
including receivables overdue up 3 to 6 months
-
7
1
including receivables overdue over 6 months
55
70
33
The ageing of other receivables is as follows:
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
including receivables not due
798
241
336
including receivables overdue up to 3 months
10
-
-
including receivables overdue over 6 months
2
2
726
Overdue trade receivables are not considered
impaired based on the individual assessment of
each significant receivable.
The credit quality of trade receivables that are
not overdue can be assessed by reference to
external credit ratings (if available) or to
historical information about counterparty default
rates:
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
Group 1
68
172
289
Group 2
426
188
528
Group 3
-
-
1
Total unimpaired trade receivable
494
360
818
Group 1 – new customers/related parties (less than 6
months).
Group 2 – existing customers/related parties (more than 6
months) with no defaults in the past.
Group 3 – existing customers/related parties (more than 6
months) with some defaults in the past. All defaults were
fully recovered.
2021 ANNUAL REPORT
PAGE 36
As at December 31, 2021, Other receivables not
due are from counterparties with no or some
defaults in the past (no or some defaults in the
past in as at December 31, 2020).
in USD thousand
2021
2020
1
At January 1
-
-17
Provision for receivables impairment
-
-
Receivables written off during the year as uncollectible
-
-
Provision recovery
-
17
Currency translation differences
-
-
At December 31
-
-
The carrying amounts of the Group’s trade and other receivables are denominated in the following
currencies:
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
US dollar
443
178
1 032
Russian rouble
-
115
164
Ukrainian hryvna
829
498
727
Euro
359
1
1
Czech koruna
4
-
9
1 635
792
1 933
The maximum exposure to credit risk arising
from trade and other receivables at the reporting
date is the carrying amount of each class of
receivable mentioned above. The Group does
not hold any collateral as security for the trade
receivable
7. FINANCIAL INSTRUMENTS BY CATEGORY
In USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
Assets as per balance sheet
Loans and
receivables
Loans and
receivables
Loans and
receivables
Cash and cash equivalents (Note 5)
1 456
7 393
2 134
Trade and other receivables excluding prepayments (Note 6)
1 635
792
1 933
3 091
8 185
4 067
31.12.2021
31.12.2020
1
31.12.2019
1
Liabilities as per balance sheet
Financial
liabilities at
amortised
cost
Financial
liabilities at
amortised
cost
Financial
liabilities at
amortised
cost
Trade and other payables excluding social security, other
taxes and prepayments from clients (Note 13)
1 647
16 463
18 164
Borrowings excluding lease liabilities (Note 14)
60
3 158
16 702
Lease liabilities (Note 14)
610
449
2 211
Land lease liability (Note 22)
18 456
18 317
27 688
20 773
38 387
64 765
Prepayments are excluded as this analysis is required only for financial assets.
2021 ANNUAL REPORT
PAGE 37
8. INVENTORIES
Inventory breakdown, USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
Grain for sale
20 523
2 382
11 901
Raw materials, supplies
6 682
4 456
4 427
Fieldworks in process
3 682
2 765
1 800
Total
30 887
9 603
18 128
Incl. own produced inventory
24 895
5 814
14 424
in USD thousand
2021
2020
1
At 1 January
5 814
14 424
Changes in balances of finished product stocks**:
21 935
-5 099
- Agricultural production recognized at the fair value (Note 9)
39 424
34 449
- Dairy production recognized at the fair value
5 832
5 307
- Capitalization of costs to fieldworks in process
3 960
7 529
- Reclassification from fieldworks in process to biological assets at the
moment of seeding
-2 853
-6 034
- Cost of own production on realization to third parties
-25 095
-46 677
- Inventory revaluation
667
327
For internal use*
-2 035
-1 469
Classified as assets held for sale
-782
-179
Currency translation differences
-37
-1 863
At 31 December
24 895
5 814
*Own produced inventory for internal use includes seeds, fertilizer and animal feed, which are presented in the
Income statement on the line Raw materials and consumables used for production purposes (Note 20).
** Changes in balances of finished product stocks include amount USD 1 623 thousand from discontinued operations.
Changes in balances of finished products from continuing operations is USD 20 312 thousand for the year 2021 (USD
3 048 thousand from discontinued operations and USD (8 147) thousand from continuing operations in 2020
1
).
Inventories that are measured at fair value are
categorized under Level 2 in the fair value
hierarchy, as defined by IFRS 13.
Grain for sale is revalued by the Group on each
balance sheet date using contracted and market
prices. Market prices were retrieved from APK-
Inform as at the end of January for both years
as the year-end prices do not reflect the real
market situation due to the long holiday season
in Ukraine and therefore the very low volume of
trades. Own produced inventories are measured
at net realizable value. In determining the NRV
(net realizable value), the Group also considers
existing sales agreements at balance sheet date,
and actual sales transactions by the Group
shortly after the balance sheet date.
As at December 31, 2021 and as at December
31, 2020, inventories were not pledged at a
carrying value for the benefit of the bank.
Breakdown of the grain for sale, agricultural produce
inventory, 31.12.2021
Grain for sale,
agricultural
produce, USD
thousand
Tonnes
Average
price used,
USD/t
Wheat
192
694
276
Barley
2
7
245
Sunflower
2 836
4 413
643
Corn
12 136
54 575
222
Rapeseed
18
27
659
Soya
3 061
5 193
589
Canary
22
47
477
Millet
2 237
8 830
253
Other
19
294
67
Total
20 523
74 080
277
2021 ANNUAL REPORT
PAGE 38
Breakdown of the grain for sale, agricultural produce
inventory, 31.12.2020
1
Grain for sale,
agricultural
produce, USD
thousand
Tonnes
Average
price used,
USD/t
Wheat
67
289
234
Barley
12
54
227
Sunflower
320
511
627
Corn
128
706
181
Rapeseed
13
37
365
Soya
4
10
368
Millet
1 817
9 032
201
Other
21
276
71
Total
2 382
10 915
218
Breakdown of the grain for sale, agricultural produce
inventory, 31.12.2019
1
Grain for sale,
agricultural
produce, USD
thousand
Tonnes
Average
price used,
USD/t
Wheat
219
1 371
160
Barley
26
173
149
Sunflower
7 162
22 460
319
Corn
3 554
25 648
139
Rapeseed
7
17
396
Soya
13
41
329
Other
920
4 773
193
Total
11 901
54 483
218
9. BIOLOGICAL ASSETS
in USD thousand
Plant
cultivation
Animal
husbandry
Total
Carrying amount at 31.12.2020
1
5 339
3 471
8 810
Non-current biological assets
124
3 471
3 595
Current biological assets
5 215
-
5 215
12m 2021
Decrease due to subsidiary disposal
-616
-
-616
Reclassified to assets held for sale
-100
-3 056
-3 156
Gain/loss arising from changes in fair value less estimated point
of sale costs of biological assets*:
-3 021
388
-2 633
- Increases due to new plantations/birth
36 573
1 132
37 705
- Harvest (Note 8)
-39 424
-
-39 424
- Decreases due to written-off biol.assets
-170
-1 002
-1 172
- Other changes in fair value
-
258
258
Currency translation differences
68
-7
61
Carrying amount at 31.12.2021
1 670
796
2 466
Non-current biological assets
3
796
799
Current biological assets
1 667
-
1 667
*Gain/loss of biological assets arising from changes in fair value less cost to sell comprises of amount
USD (3 580) thousand from continuing operations and amount USD 947 thousand from discontinued
operations in 2021.
2021 ANNUAL REPORT
PAGE 39
in USD thousand
Plant
cultivation
Animal
husbandry
Total
Carrying amount at 31.12.2019
1
10 764
3 938
14 702
Non-current biological assets
94
3 938
4 032
Current biological assets
10 670
-
10 670
12m 2020
1
Reclassified to assets held for sale
-1 055
-
-1 055
Gain/loss arising from changes in fair value less estimated point
of sale costs of biological assets*:
-2 631
196
-2 435
- Increases due to new plantations/birth
31 935
959
32 894
- Harvest (Note 8)
-34 449
-
-34 449
- Decreases due to written-off biol.assets
-117
-1 367
-1 484
- Other changes in fair value
-
604
604
Currency translation differences
-1 739
-663
-2 402
Carrying amount at 31.12.2020
1
5 339
3 471
8 810
Non-current biological assets
124
3 471
3 595
Current biological assets
5 215
-
5 215
*Gain/loss of biological assets arising from changes in fair value less cost to sell comprises of amount
USD (2 113) thousand from continuing operations and amount USD (322) thousand from discontinued
operations in 2020
1
.
Animals, pcs
Winter
crops,
hectares
Physical quantities at 31.12.2021
3 649
12 441
Physical quantities at 31.12.2020
3 696
10 579
Biological assets on 4 265 ha were classified as held for sale as of December 31, 2020.
As at the balance sheet date, Current biological
assets in plant cultivation include winter crops
seeded for the next harvest. Non-current
biological assets in plant cultivation include
grasslands, which are used for harvesting
animal feed. Non-current assets in animal
husbandry include dairy herd, both mature and
immature. Animal husbandry is measured at
fair value less cost to sell.
The gain arising from changes in fair value
includes changes in both physical quantities
due to the growth of plants/animals and
changes in market prices of the biological
assets.
Fair value of biological assets sown for next
year harvest is determined by present valuing
the net cash flows expected to be generated
from the assets discounted at average cost of
short-term financing. The fair value of
biological assets is determined by the Group’s
own agricultural and IFRS experts. The
valuation of the biological assets (winter wheat
and winter rapeseed) is within level 3 of the fair
value hierarchy.
Winter crops seeded in 2021 for the next year
are determined by valuing the net cash flows
expected to be generated from the assets
discounted at average cost of short-term
financing.
The following inputs and assumptions were
made to determine the fair value of biological
assets:
- revenue from the crops sales is projected
based on the expected volume of crop
harvested;
- prices are projected based on budget data for
next year;
- production and costs to sell are projected
based on budget data for next year;
-a discount rate 16.5% is applied in
determining fair value of biological assets as of
December 31, 2021 (12.63% as of December
31, 2020).
The significant unobservable inputs used in the
fair value measurement of the crops as of
31.12.2021 are as follows:
Yields of crops (4,03 tons per hectare for winter
wheat, 1,94 tons per hectare for winter
rapeseed).
2021 ANNUAL REPORT
PAGE 40
Prices of crops (UAH 5 865 per ton for winter
wheat and UAH 14 906 per ton for winter
rapeseed).
Inputs used in the fair value measurement of
the crops for comparative reporting date
December 31, 2020 were as follows:
Yields of crops (4,83 tons per hectare for winter
wheat, 2,65 tons per hectare for winter
rapeseed, 4,5 tons per hectare for winter
barley).
Prices of crops (UAH 4 541 per ton for winter
wheat, UAH 11 026 per ton for winter rapeseed
and UAH 3 645 per ton of winter barley).
The fair value of the livestock is based on the
valuation from the independent valuator. The
valuator used the market prices of livestock of
similar age, breed and genetic merit based on
the relevant market, taking into account
transaction prices on the most advantageous
market, and the market situation in the dairy
sector. The fair value measurements are
categorized under Level 2 in the fair value
hierarchy, as defined by IFRS 13. In 2021, the
gain from revaluating 3 649 animals was
recorded at USD 258 thousand in the Income
Statement (in 2020
1
the gain from revaluating
3 696 animals in amount USD 306 thousand in
the Income Statement). In total, the fair value
of the herd (3 649 animals), as of December
31, 2021, stood at USD 3 853 thousand (USD
3 471 thousand as at December 31, 2020
1
). As
of December 31, 2021 part of the herd with fair
value of USD 3 056 thousands was classified as
assets held for sale.
As at December 31, 2021 biological assets were
not pledged for a benefit of the bank. As at
December 31, 2020
1
, biological assets in
Ukraine were pledged at a value of USD 1 162
thousand for the benefit of the bank.
In the year 2021 harvest of cereals was at the
level of 191 241 net tonnes (2020: 208 842 net
tonnes). Milk production for the year 2021 was
14 385 tonnes (14 586 tonnes for the year
2020).
10. INTANGIBLE ASSETS
In 2021 the Group concluded emphyteusis
agreements for 2 652 ha. As of December 31,
2021 there were 7 108,37 ha under
emphyteusis agreements.
in USD thousand
Software
Land-usage
rights under
emphyteusis
Total
31.12.2020
1
Cost
110
6 533
6 643
Accumulated amortization
-97
-120
-217
Net book amount
13
6 413
6 426
2021
Additions
-
7 501
7 501
Amortization charge
-2
-164
-166
Disposal
-
-70
-70
Classified as held for sale
-
-
-
Currency translation
differences
1
254
255
Closing net book amount
12
13 934
13 946
31.12.2021
Cost
135
14 216
14 351
Accumulated amortization
-123
-282
-405
Net book amount
12
13 934
13 946
2021 ANNUAL REPORT
PAGE 41
in USD thousand
Software
Land-usage
rights under
emphyteusis
Total
31.12.2019
1
Cost
120
3 952
4 072
Accumulated depreciation
-113
-44
-157
Net book amount
7
3 908
3 915
2020
1
Additions
10
3 717
3 727
Amortization charge
-2
-88
-90
Disposal
-
-49
-49
Classified as held for sale
-
-230
-230
Currency translation
differences
-2
-845
-847
Closing net book amount
13
6 413
6 426
31.12.2020
1
Cost
110
6 533
6 643
Accumulated depreciation
-97
-120
-217
Net book amount
13
6 413
6 426
11. PROPERTY, PLANT AND EQUIPMENT
The Group’s acquisitions of property, plant and
equipment during 2021 amounted to
USD 4 407 thousand (USD 7 247 thousand in
2020
1
).
During 2020 and 2021 there were no significant
changes at land market, thus land carrying
value as of December 31, 2021 is considered to
be as fair (as of December 31, 2019 land was
revaluated using the market approach by
independent valuators).
in USD thousand
Land
Buildings
Vehicles &
machinery
Furniture,
fittings &
equipment
Construction
in process
Total
31.12.2020
1
Cost
4 229
11 358
34 818
1 442
1 038
52 885
Accumulated depreciation
-
-4 598
-20 722
-1 220
-
-26 540
Net book amount
4 229
6 760
14 096
222
1 038
26 345
2021
Additions
270
189
3 468
114
366
4 407
Classified as held for sale
-696
-2 179
-575
-
-20
-3 470
Disposals
-5
-16
-94
-1
-
-116
Reclassification balance sheet
items/between groups
-
9
369
3
-381
-
Depreciation charge
-
-684
-2 644
-149
-
-3 477
Currency translation
differences
-160
526
446
-
44
856
Closing net book amount
3 638
4 605
15 066
189
1 047
24 545
31.12.2021
Cost
3 638
6 009
30 796
1 279
1 047
42 769
Accumulated depreciation
-
-1 404
-15 730
-1 090
-
-18 224
Net book amount
3 638
4 605
15 066
189
1 047
24 545
2021 ANNUAL REPORT
PAGE 42
in USD thousand
Land
Buildings
Vehicles &
machinery
Furniture,
fittings &
equipment
Construction
in process
Total
31.12.2019
1
Cost
4 377
11 707
33 028
1 446
1 145
51 703
Accumulated depreciation
-
-3 581
-17 563
-994
-
-22 138
Net book amount
4 377
8 126
15 465
452
1 145
29 565
2020
1
Additions
259
2 449
4 021
53
465
7 247
Classified as held for sale
-29
-580
-649
-24
-39
-1 321
Disposals
-40
-21
-177
-1
-
-239
Reclassification balance sheet
items/between groups
-
8
335
-
-343
-
Depreciation charge
-
-827
-2 239
-187
-
-3 253
Currency translation
differences
-338
-2 395
-2 660
-71
-190
-5 654
Closing net book amount
4 229
6 760
14 096
222
1 038
26 345
31.12.2020
1
Cost
4 229
11 358
34 818
1 442
1 038
52 885
Accumulated depreciation
-
-4 598
-20 722
-1 220
-
-26 540
Net book amount
4 229
6 760
14 096
222
1 038
26 345
For the assets in Ukraine impairment test was
carried out as of December 31, 2021. The
value-in-use method was applied to determine
the recoverable values of non-current assets.
Cash flows were projected, including revenues,
operating expenses, investment requirements
and working capital needs. The Group applied
5% long-term growth rate. The discount rate
applied was 18.5%. The test demonstrated that
the assets value in use was higher than the
carrying amount of these assets. No
impairment indicators were identified for
property, plant and equipment in Ukraine as of
December 31, 2020.
For the assets in milk production in Russia
impairment test was carried out in 2020 (Note
4.1(d)). As of December 31, 2021 assets in
milk production were classified as held for sale.
Land in Russian Milk production was not
mortgaged in 2021 and 2020. Machinery in
Russia were not pledged as of December 31,
2021 and December 31, 2020. Land, buildings,
machinery, vehicles and equipment in Ukraine
were pledged at a carrying value of USD 5 328
thousand (2020
1
: USD 10 092 thousand).
The net book value of assets leased (vehicles
and machinery) as at December 31, 2021,
stood at USD 1 597 thousand (as at December
31, 2020
1
, USD 860 thousand).
11.1 FAIR VALUE OF LAND
The fair value of freehold land as at December
31, 2021, is USD 4 334 thousand (USD 4 229
thousand as at December 31, 2020
1
). Out of
land as of December 31, 2021 USD 696
thousand was classified as held for sale.
Fair value is based on active market prices,
adjusted, if necessary, for any difference in the
nature, location or condition of the specific
asset. If this information is not available, the
Group uses alternative valuation methods,
such as recent prices on less active markets or
discounted cash flow projections. The valuation
of the land in Russian Dairy cluster as at
December 31, 2019, was performed by
Company “Price Consulting” LLC. The valuation
of the land in Ukraine as at December 31, 2019
was performed by Company “Proconsul” LLC.
Sales comparison approach was applied for the
land. It is a valuation methodology whereby the
subject property is compared to recently sold
or to sales quotes of properties of a similar
nature with fair value determined through the
application of positive and negative
adjustments for their differing attributes.
2021 ANNUAL REPORT
PAGE 43
Unobservable inputs within the sales
comparison approach:
Size adjustment – the valuer’s assessment of
the price differential between the valued
property and compared property attributable to
their size difference.
Location adjustment – the valuer’s assessment
of the price differential between the valued
property and compared property attributable to
differences in their location.
Bargaining discount – the valuer’s assessment
of the average price discount generally
obtained compared to quoted asking prices of
property.
Relationship of unobservable inputs to fair
value: The fair value measurements listed
above are all sensitive to a significant increase
(decrease) in the unobservable inputs. The
higher the rate per hectare, the higher the fair
value.
If the value per hectare had been 10%
higher/lower, the fair value of land as at
December 31, 2021, would have been USD 70
thousand higher/lower in Russia and USD 364
thousand higher/lower in Ukraine.
During 2021 and 2020 there were no significant
changes at land market. Land was not
revaluated by independent appraisers as of
December 31, 2021. Thus, carrying value of
land as of December 31, 2021 is considered to
be as fair.
12. PREPAID LAND RENTS AND LAND USAGE
RIGHTS
The Group’s land in Ukraine is used mainly
based on lease agreements. The Group has
made prepayments or has recognised land
usage rights in business combinations to get
access to that land in previous periods. These
prepayments and land usage rights are
amortised during the period of the lease.
in USD thousand
31.12.2021
31.12.2020
1
Balance at the beginning of the period
324
517
Amortization recognised
-89
-114
Unrealised exchange rate differences
11
-79
Balance at the end of the period
246
324
13. TRADE AND OTHER PAYABLES
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
Trade payables
638
784
748
Prepayments from clients
8
283
19
Social security and other taxes
1 720
1 020
1 603
Accrued expenses
1 219
1 349
1 565
Amounts due to related parties (Note 30)
726
15 311
15 856
Other payables
81
178
1 080
4 392
18 925
20 871
Less: non-current portion (Note 30)
-3
-8 347
-13 571
4 389
10 578
7 300
As of December 31, 2021 payables to related
parties are denominated: USD 702 thousand in
Euro and USD 24 thousand in Czech Koruna.
As of December 31, 2020
1
non-current portion
is presented by payables to related parties and
is denominated: USD 7 960 thousand in Euro
and USD 387 thousand in Czech koruna.
Current amount USD 6 964 thousand to related
party is denominated in Euro.
The carrying amounts of the Group’s financial
liabilities (trade and other payables, excluding
prepayments, tax liabilities and payables to
employees) are denominated in the following
currencies:
2021 ANNUAL REPORT
PAGE 44
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
Russian rouble
-
358
297
Ukrainian hryvna
788
585
1 413
Euro
847
15 130
7 426
Czech koruna
12
390
9 051
1 647
16 463
18 187
14. BORROWINGS
The total borrowings of the Group as at
December 31, 2021, amounted to USD 670
thousand (USD 3 607 thousand as at December
31, 2020
1
).
Details of the borrowings’ currencies, interest
rates, and maturities are shown in the included
tables. Total finance costs in 2021 amounted to
USD 264 thousand (USD 1 038 thousand in
2020
1
) (Note 25).
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
Current
Bank borrowings
60
1 522
16 152
Finance lease payables
576
211
1 192
636
1 733
17 344
Non-current
Bank borrowings
-
1 636
550
Finance lease payables
34
238
1 019
34
1 874
1 569
Total borrowings
670
3 607
18 913
31.12.2021, in USD thousand
31.12.2021
Maturity
Interest rate
EUR-nominated
60
2022
7days EURIBOR + 1,6%
UAH-nominated
382
2022
2,8%-3,74%
UAH-nominated
228
2023
1mLIBOR + 4,4%
670
Less: non-current portion
34
636
Less accrued interest
-
Current portion excl accrued interest
636
31.12.2020
1
, in USD thousand
31.12.2020
1
Maturity
Interest rate
USD-nominated
872
2024
5%
USD-nominated
981
2021
3mLIBOR+3,4%
USD-nominated
1 304
2025
3mLibor+3,3%
UAH-nominated
450
2021-2023
1mLIBOR + 4,4%-6,1%
3 607
Less: non-current portion
1 874
1 733
Less accrued interest
-10
Current portion excl accrued interest
1 723
2021 ANNUAL REPORT
PAGE 45
31.12.2019
1
, in USD thousand
31.12.2019
1
Maturity
Interest rate
RUB-nominated
155
2020-2021
5%-25,8%
USD-nominated
6 636
2020-2022
5%-6,5%
EUR-nominated
2 718
2020
5%
EUR-nominated
1 140
2020
1M EURIBOR + 1,6%
EUR-nominated
765
2020
7days EURIBOR + 1,6%
USD-nominated
895
2021
12,59% - 12,62%
USD-nominated
5 424
2020
1mLIBOR+3,5%
UAH-nominated
1 180
2020-2023
1mLIBOR + 4,4%-9,4%
18 913
Less: non-current portion
1 569
17 344
Less accrued interest
-70
Current portion excl accrued interest
17 274
31.12.2021
31.12.2020
1
31.12.2019
1
Bank
borrowings
Lease
payables
Bank
borrowings
Lease
payables
Bank
borrowings
Lease
payables
Floating rate:
– Expiring within one year
60
576
1 145
211
7 329
639
– Expiring beyond one year
-
34
1 140
238
-
540
Fixed rate:
-
-
– Expiring within one year
-
-
377
-
8 821
552
– Expiring beyond one year
-
-
496
-
552
480
60
610
3 158
449
16 702
2 211
31.12.2021
31.12.2020
1
31.12.2019
1
in USD thousand
Bank
borrowings
Lease
payables
Bank
borrowings
Lease
payables
Bank
borrowings
Lease
payables
US dollar
-
-
3 158
-
12 005
949
Euro
60
-
-
-
4 623
-
Russian rouble
-
-
-
-
74
82
Ukrainian hryvna
-
610
-
449
-
1 180
60
610
3 158
449
16 702
2 211
in USD thousand
Cash
Leases
due
within 1
year
Leases due after 1
year
Borrow.
due
within 1
year
Borrow.
due after
1 year
Total
Net debt as at 31
December 2020
1
*
7 393
-211
-238
-1 511
-1 635
3 798
Cash flows
-5 906
1 193
-
594
2 078
-2 041
Acquisitions-finance
leases and lease
incentives
-
-1 340
-117
-
-
-1 457
Foreign exchange
adjustments
70
-8
-6
857
-443
470
Other non-cash
movements
-
-240
227
-
-
-13
Classified as assets
held for sale
-101
30
100
-
-
29
Net debt as at 31
December 2021*
1 456
-576
-34
-60
-
786
* Net debt reconciliation is shown excluding the interest liability
2021 ANNUAL REPORT
PAGE 46
in USD thousand
Cash
Leases due
within 1
year
Leases due
after 1 year
Borrow.
due within
1 year
Borrow.
due after 1
year
Total
Net debt as at 31
December 2019
1
*
2 134
-1 180
-1 020
-16 095
-549
-16 710
Cash flows
5 613
1 524
-
14 364
-1 641
19 860
Foreign exchange
adjustments
98
-289
529
566
209
1 113
Other non-cash
movements
-452
-266
253
-346
346
-465
Net debt as at 31
December 2020
1
*
7 393
-211
-238
-1 511
-1 635
3 798
* Net debt reconciliation is shown excluding the interest liability
** Most of the amount is related to the factoring
Total future finance lease minimum payments
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
up to 12 months
605
258
1 431
1-5 years
43
280
1 175
648
538
2 606
Future interests
37
88
395
Present value of the lease
611
450
2 211
The fair value of borrowings equals their
carrying amount, as the impact of discounting
is not significant or market rates are not
significantly different from actual borrowing
rates. The borrowings are classified as Level 3
under the fair value hierarchy, as defined by
IFRS 13.
15. INCOME TAX
in USD thousand
2021
2020
1
Current tax:
Current tax on profits for the year
84
1
Adjustments in respect of prior years
128
-5
Income tax expenses from discontinued operations
-9
-
Total current tax
203
-4
Deferred tax (Note 16):
Origination and reversal of temporary differences
-6
-11
Transfer to discontinued operations
-
8
Total deferred tax
-6
-3
Income tax expense/(profit)
197
-7
2021 ANNUAL REPORT
PAGE 47
The tax on the group’s profit before tax differs from the theoretical amount that would arise using the
weighted average tax rate applicable to profits of the consolidated entities as follows:
in USD thousand
2021
2020
1
Profit/loss before tax*
11 075
1 149
Profit/Loss before tax from entities not subject to Income tax by statutory
legislation
12 117
-1 499
Profit/loss before tax from entities subject to income tax
-1 042
2 648
Tax calculated at domestic tax rates applicable to profits in the respective
countries
284
795
Tax effects of:
Income not subject to tax
-1 126
-1 524
Expenses not deductible for tax purposes
602
208
Utilisation of previously unrecognised tax losses
-406
-
Tax losses for which no deferred income tax asset was recognised
724
530
Adjustments in respect of prior years
128
-24
Transfer to discontinued operations
-9
8
Tax charge
197
-7
* Profit/loss before tax comprises USD 11 241 thousand from continuing operations and USD (166)
thousand from discontinued operations in 2021
1
Profit/loss before tax comprises USD 2 326 thousand from continuing operations and USD (1 177)
thousand from discontinued operations in 2020
1
The Group does not have material deferred tax
assets or liabilities in companies, which are
active in agricultural production. This is due to
the following reasons:
1) The Group companies in Estonia are subject
to income tax only when the profits are
distributed. No corporate income tax is
imposed on earnings; therefore, there are no
temporary differences between the tax and
accounting bases of assets and liabilities.
2) All of the Group companies in Ukraine that
are producing agricultural produce are not
subject to income tax but to the unified
agricultural tax. The agricultural tax is based on
hectares of arable land the company uses, not
on its earnings and therefore no deferred tax
arises. All other companies in Ukraine
(companies that are related to sales and
trading and storage elevators) are under
regular tax regime and subject to income tax.
3) The Group company in Russia, except for
sub-holding company, is subject of the
agricultural tax and not income tax.
Agricultural tax regime means that the
agricultural producer pays tax only from non-
agricultural profits. Major income not subject to
tax relates to currency translation differences.
Major expenses not deductible for tax purposes
related to interests on intra-group borrowings.
4) The Group companies in Czech republic are
subject to income tax at rate 19% . The Group
companies in Czech republic are holding
companies which generate accounting losses.
The non-tax duductible expenses are
permanent (refreshment and non-deductible
part of paid interest) so there are no temporary
differences between the tax and accounting
bases of assets and liabilities
2021 ANNUAL REPORT
PAGE 48
16. DEFERRED TAX
The analysis of deferred tax assets and deferred tax liabilities is as follows:
in USD thousand
2021
2020
1
Deferred tax assets:
– Deferred tax assets to be recovered after more than 12 months
-
-
– Deferred tax asset to be recovered within 12 months
-
-
-
-
Deferred tax liabilities:
– Deferred tax liability to be recovered after more than 12 months
60
63
– Deferred tax liability to be recovered within 12 months
-
-
60
63
Deferred tax liabilities (net)
60
63
The gross movement on the deferred income tax account is as follows:
in USD thousand
2021
2020
1
At 1 January
63
239
Currency translation differences
3
-41
Income statement charge related to change in deferred tax assets/ liability
(Note 15)
-6
-11
Tax charge /(credit) relating to components of other comprehensive income
-
-
Classified as associated with assets classified as held for sale
-
-124
At 31 December
60
63
Deferred income tax assets are recognised for
tax loss carry-forwards to the extent that the
realisation of the related tax benefit through
future taxable profits is probable. The group did
not recognise deferred income tax assets of
USD 693 thousand (USD 569 thousand in
2020
1
) in respect of losses amounting to USD
4 673 thousand (USD 2 835 thousand in 2020
1
)
that can be carried forward against future
taxable income. The accumulated amount of
tax losses where tax asset was not recognized
as at December 31, 2021 was USD 25 675
thousand (2020
1
: USD 30 890 thousand) that
can be carried forward against future taxable
income. Losses amounting to USD 25 505
thousand (USD 29 722 thousand in 2020
1
)
have unlimited usage and the rest of losses will
expire during 1 to 5 years.
2021 ANNUAL REPORT
PAGE 49
The movement in deferred income tax assets and liabilities during the year is as follows:
Deferred tax liabilities
Accelerated
tax
depreciation
Other
Total
At 31 December 2019
1
208
31
239
Charged/(credited) to the income statement
-11
-
-11
Currency translation differences
-53
3
-50
Classified as associated with assets classified as held for sale
-115
-
-115
At 31 December 2020
1
29
34
63
Charged/(credited) to the income statement
-6
-
-6
Currency translation differences
3
-
3
At 31 December 2021
26
34
60
Deferred tax assets
Other
Total
At 31 December 2019
1
-
-
Charged/(credited) to the income statement
-
-
Currency translation differences
-
-
At 31 December 2020
1
-
-
Charged/(credited) to the income statement
Currency translation differences
-
-
At 31 December 2021
-
-
17. SHARE CAPITAL
in USD thousand
Number of
shares
Incl. ordinary
shares
Share
capital
Share
premium
Total
31.12.2019
1
24 895 123
24 895 123
28 061
171 173
199 234
31.12.2020
1
24 895 123
24 895 123
28 061
171 173
199 234
31.12.2021
74 685 369
74 685 369
8 696
92 263
100 959
As at December 31, 2021, the total number of
issued shares was 74,685,369 with a par value
of 0.10 EUR (as of December 31, 2020:
24,895,123 shares with a par value of 1 EUR per
share). All shares have been fully paid.
In the year 2021 the decision was made to
decrease nominal value of parent company
Agromino A/S share. The nominal value of shares
was decreased from EUR 1 to EUR 0.1 and share
capital was reduced correspondingly from USD
28 061 thousand to USD 2 806 thousand (EUR
24 895 thousand to EUR 2 489 thousand). Such
a decrease resulted in share premium increase
for USD 25 255 thousand (EUR 22 406
thousand) and then share premium increase was
set off against accumulated deficit.
On 1 June 2021, a decision to increase the share
capital to USD 8 696 thousand (EUR 7 469
thousand) by way of a cash contribution of EUR
0.24 per nominally EUR 0.10 new share was
adopted by Agromino’s board of directors.
In August 2021 share premium was set off with
accumulated deficit for amount USD 87 155
thousand (EUR 89 147 thousand).
The shares of Agromino A/S were listed on the
main market of Small Cap segment on NASDAQ
Stockholm. On 15 July 2020, Agromino
announced its plan to apply for delisting of
Agromino’s shares. On 19 October 2020, Nasdaq
Stockholm has approved such application. The
last day of trading of Agromino’s shares was 30
October 2020.
2021 ANNUAL REPORT
PAGE 50
18. OTHER RESERVES
in USD thousand
Revaluation
of land*
Translation
differences
Total
31.12.2019
1
800
-54 553
-53 753
Currency translation differences
-6 753
-6 753
Revaluation of land (Note 11)
-123
-123
31.12.2020
1
677
-61 306
-60 629
Currency translation differences
-8
967
959
Currency translation difference recycled from
Other Comprehensive Income to Income
Statement in relation to disposal of subsidiary
-
7 789
7 789
31.12.2021
669
-52 550
-51 881
As at December 31, 2021, land reserve (related
to land in ownership) amounts to USD 669
thousand (December 31, 2020
1
: USD 677
thousand) included in Other reserves
attributable to the holders of the parent.
19. REVENUE AND OTHER INCOME
in USD thousand
2021
2020
1
Sales of cereals
44 997
56 229
Sales of milk
2 047
1 865
Revenue from elevator services
286
334
Other revenue
520
466
TOTAL revenue
47 850
58 894
Subsidies
-
-
Other income
514
587
Total other income
514
587
In 2021, 58% of revenue is generated from sales
to customers in Ukraine and 42 % - export sales
(in 2020 – 51 % and 49 % correspondingly).
Revenues of USD 8 740 thousand (2020
1
: USD
12 710 thousand) are derived from one
external customer, revenues of USD 4 908
thousand (2020
1
: USD 6 871 thousand) are
derived from the second external customer and
revenues of USD 4 145 thousand (2020
1
: 6 177
thousand) are derived from the third external
customer.
20. RAW MATERIALS AND CONSUMABLES USED
FOR PRODUCTION PURPOSES
in USD thousand
2021
2020
1
Seeds, fertilizers, chemicals
10 741
8 633
Animal feed
1 307
1 085
Repairs
1 990
2 013
Fuel, gas, electricity
3 554
2 031
Land tax and land rental
1 483
1 144
Other services and materials
6 789
5 302
25 864
20 208
2021 ANNUAL REPORT
PAGE 51
21. EMPLOYEE BENEFITS EXPENSE
in USD thousand
2021
2020
1
Wages and salaries
6 030
6 034
Social security costs
1 266
1 218
7 296
7 252
Remuneration to the Board of Directors and
Executive Board is disclosed in Note 30.
22. RIGHT-OF-USE ASSET AND LEASE
LIABILITY
Amounts recognized in the balance sheet
The balance sheet shows the following amounts relating to land leases:
in USD thousand
31.12.2021
31.12.2020
1
31.12.2019
1
Right-of-use assets
Land
16 965
16 959
27 090
Land usage rights from business acquisition*
7 569
9 975
11 791
24 534
26 934
38 881
Land lease liabilities
Non-current
14 805
14 799
22 456
Current portion
3 651
3 518
5 232
Total lease liabilities
18 456
18 317
27 688
*The Group has recognized land usage rights
related to the acquisition of Resilient as of the
date of acquisition October 17, 2019 . Balance
value of land usage rights acquired was USD 7
569 thousand as of December 31, 2021 (USD
9 975 thousand as of December 31, 2020
1
).
Land usage rights acquired in amount USD 1
005 thousand were reclassified as assets held
for sale as of December 31, 2020
1
.
Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
in USD thousand
2021
2020
1
Depreciation charge of right-of-use assets (under IFRS 16)
1 563
1 968
Depreciation charge of land-usage rights from business combinations
1 711
1 768
Interest expense on land lease liabilities (included in finance cost)
3 222
4 719
2021 ANNUAL REPORT
PAGE 52
Movements for the right-of-use assets were the following:
in USD thousand
2021
2020
1
Cost as of 1 January
31 713
41 094
Accumulated depreciation
-4 779
-2 213
Net book value as at 1 January
26 934
38 881
Additions to the right-of-use assets
-
43
Depreciation
-3 273
-3 736
Other movements (including changes to agreements)
2 144
2 179
Disposals
-1 204
-943
Classified as assets held for sale
-
-5 486
Currency translation differences
-67
-4 004
Cost as of 31 December
32 230
31 713
Accumulated depreciation
-7 696
-4 779
Net book value as at 31 December
24 534
26 934
Movements for the land lease liability were the following:
in USD thousand
2021
2020
1
Land lease liability as at 1 January
-18 317
-27 688
Non-current
-14 799
-22 456
Current
-3 518
-5 232
Additions due to new agreements
-
-43
Financial costs from continuing operations
-3 204
-3 650
Financial costs from discontinued operations
-19
-1 069
Other movements (including changes to agreements)
-2 144
-2 179
Disposals
1 328
1 111
Repayment
4 463
5 270
Classified as assets held for sale
-
5 245
Currency translation differences
-563
4 686
Land lease liability as at 31 December
-18 456
-18 317
Non-current
-14 805
-14 799
Current
-3 651
-3 518
23. OTHER ADMINISTRATIVE EXPENSES
in USD thousand
2021
2020
1
Legal and consulting fees
628
1 076
Office and administration expenses
1 126
1 150
Other expenses
123
215
1 877
2 441
24. OTHER (LOSSES)/GAINS-NET
in USD thousand
2021
2020
1
Write down of doubtful receivables and prepayments
-74
469
Foreign exchange losses/gains net
296
-172
Gain on disposal of subsidiaries (Note 33)
5 849
-
Currency translation difference recycled from Other Comprehensive Income
to Income Statement in relation to disposal of subsidiaries
-7 789
-
Assets held for sale impairment (Note 32)
-5 392
-
Other losses / gains net
10
-192
-7 100
105
2021 ANNUAL REPORT
PAGE 53
25. FINANCE INCOME AND FINANCE COST
in USD thousand
2021
2020
1
Interest income
63
279
Other financial income
-
495
63
774
Interest expense at effective interest rate:
Finance lease liabilities
-44
-194
Bank borrowings
-220
-811
Lease liabilities (Note 22)
-3 204
-3 650
Related parties (Note 30)
-2 271
-2 899
Other finance costs
-16
-33
-5 755
-7 587
26. CONTINGENCIES
TAXES
UKRAINE:
Tax legislation. Ukrainian tax, currency, and
customs legislation is subject to varying
interpretations, and changes, which can occur
frequently. Management’s interpretation of
such legislation as applied to the transactions
and activity of the Group may be challenged by
the relevant regional and central authorities.
The tax authorities in Ukraine may be taking a
more assertive position in their interpretation
of the legislation and assessments, and it is
possible that transactions and activities that
have not been challenged in the past may be
challenged. As a result, significant additional
taxes, penalties, and interest may be assessed.
Fiscal periods remain open to review by the
authorities in respect of taxes for three
calendar years preceding the year of review.
Under certain circumstances, reviews may
cover longer periods.
The tax consequence of transactions for
Ukrainian taxation purposes is frequently
determined by the form in which transactions
are documented and the underlying accounting
treatment prescribed by Ukrainian GAAP.
One of the Group companies acts as claimant
in lawsuit with the tax authorities. Based on the
results of the documentary inspection
concerning the period from October 1, 2016 to
September 30, 2019, the State Tax Authority
of Ukraine in Kyiv issued tax decision regarding
decrease in negative value of object of
corporate income tax in the total amount of
USD 3 461 thousand. The same decision also
set out that the respective Group company’s
VAT liability should increase by the amount of
USD 97 thousand and should pay penalties in
the total amount of USD 37 thousand.
The Group disagreed with assessment made by
the State Tax Authority in Kyiv and,
accordingly, respective Group company filed an
administrative lawsuit with the District
Administrative Court of Kyiv to cancel the
above decisions.
On December 8, 2020, the District
Administrative Court of Kyiv decided to cancel
part of the decision concerning the income tax
and maintained in force part concerning the
VAT assessment.
This decision was appealed by the Group (in
part concerning the VAT) and was upheld by
the decision of the Sixth Appeal Administrative
Court on April 6, 2021.
Negative consequences of the decision on the
Group in part concerning VAT were reflected by
the respective Group company in its financial
statements in April 2021 and the corresponding
amounts of payments were paid to the state
budget. However, the Group company filed a
cassation appeal to the Supreme Court of
Ukraine and is persuaded that the assessment
of the case made by the first instance court and
appellate court was incorrect and, hence,
decisions will be overturned by the Supreme
Court of Ukraine. If that will occur, the VAT
payments made by the company in April 2021
will be returned to the company.
2021 ANNUAL REPORT
PAGE 54
RUSSIA:
Tax legislation. Russian tax legislation is
subject to varying interpretations, and
changes, which can occur frequently.
Management’s interpretation of such legislation
as applied to the transactions and activity of
the Group may be challenged by the relevant
authorities.
The Russian tax authorities may be taking a
more assertive and sophisticated approach in
their interpretation of the legislation and tax
examinations. This includes them following
guidance from the Supreme Arbitration Court
for anti-avoidance claims based on reviewing
the substance and business purpose of
transactions. Combined with a possible
increase in tax collection efforts to respond to
budget pressures, the above may lead to an
increase in the level and frequency of scrutiny
by the tax authorities. In particular, it is
possible that transactions and activities that
have not been challenged in the past may be
challenged. As a result, significant additional
taxes, penalties, and interest may be assessed.
Fiscal periods remain open to review by the
authorities in respect of taxes for three
calendar years preceding the year of review.
Under certain circumstances, reviews may
cover longer periods.
Russian transfer pricing legislation provides the
possibility for tax authorities to make transfer
pricing adjustments and impose additional tax
liabilities in respect of all controllable
transactions, the list of which is established by
the Russian Tax Code.
Controllable transactions include transactions
with interdependent parties, all cross-border
transactions (irrespective whether performed
between related or unrelated parties),
transactions where the price applied by a
taxpayer differs by more than 20% from the
price applied in similar transactions by the
same taxpayer within a short period of time,
and barter transactions. There is no formal
guidance as to how these rules should be
applied in practice. The arbitration court
practice has not yet taken shape.
Tax liabilities arising from transactions between
companies are determined using actual
transaction prices. It is possible with the
evolution of the interpretation of the transfer
pricing rules in the Russian Federation and the
changes in the approach of the Russian tax
authorities, that such transfer prices could be
challenged. Given the brief nature of the
current Russian transfer pricing rules, the
impact of any such challenge cannot be reliably
estimated; however, it may be significant to
the financial position and/or the overall
operations of the entity.
ESTONIA:
The tax authorities may at any time inspect the
books and records within three to five years
subsequent to the reported tax year and may
impose additional tax assessments and
penalties on Estonian subsidiaries of the Group.
The Group's management is not aware of any
circumstances which may give rise to a
potential material liability in this respect
2021 ANNUAL REPORT
PAGE 55
27. COMMITMENTS
Within the framework of the share purchase
agreement (SPA) for the acquisition of 100% of
shares of Resilient a.s. (Shares) in October
2019 a pledge over the Shares was established
by the Company in favour of Mabon investiční
fond s proměnným kapitálem a.s. (Mabon).
Mabon is controlled by Mr. Petr Krogman, who
is also the Chairman of the Agromino‘s Board
of Directors.
The pledge shall secure potential future
liabilities of the Company towards Mabon which
may arise mainly in case of substantial breach
of limited warranties by Agromino under the
SPA. No liabilities towards Mabon under the
framework of the SPA exist on the date of this
report. The Company assesses the risk of
origination of substantial liabilities under the
framework of the SPA as very low.
Consequently, the Company assesses the risk
of pledge realization as very low.
During the process of the SPA negotiation
applicable disqualification rules were respected
by the Company.
28. INTEREST IN ASSOCIATE
In November, 2020 the Group sold its shares in
associated company. Carrying amount of
investment at the date of disposal was USD 10
502 thousand.
The Group’s interest in Trigon Dairy Farming
Estonia was carried using the equity method.
In 2020
1
, Group's share in the loss of the
associate stood at USD 129 thousand.
Summarised income statement
in USD thousand
2020
1
Revenue
11 766
Profit/(loss) before income tax
-329
Income tax expense/income
-
Post-tax profit/loss
-329
Other comprehensive income/expense
-
Total comprehensive income/expense
-329
Total comprehensive income allocated to non-controlling interests
-
* data include period when Agromino had shares in associated company
Reconciliation to carrying amounts:
As at December 31
in USD thousand
2020
1
Opening net assets
36 576
Sales of intra-company PPE
-
Profit/(loss) for the period
-329
Other comprehensive income/expense
-
New capital invested
-
Closing net assets
36 247
Group’s share in %
39.24%
Group’s share in EUR thousand
14 223
Adjustment to equity value
-3 721
Disposal
-10 502
Carrying amount
-
2021 ANNUAL REPORT
PAGE 56
29. GROUP STRUCTURE
The Group’s parent company Agromino A/S
registered in Denmark.
As of December 31, 2021, and 2020, the Group included the following companies:
Country of
registration
Segment
Ownership
percentage
in 2021
Ownership
percentage
in 2020
Legal
Status in
the Group
Agromino A/S
Denmark
-
100%
100%
Parent
company
LLC Trigon Farming Kharkiv
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Trigon Agro 2
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Agro Capital Center
Ukraine
Ukraine
-
100%
Subsidiary
LLC Kirovograd agroinvestment
company
Ukraine
Ukraine
-
100%
Subsidiary
Private Enterprise Trigon Farming
Molniya
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Trigon Farming
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Trigon-Export
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Kovyagovskoye Zerno
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Kovyaqovskoуe
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Vovchanskiy Combinat
Khliboproduktiv
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Yavkino Holding
Ukraine
Ukraine
-
100%
Subsidiary
OJSC Yavkinskiy elevator
Ukraine
Ukraine
-
99.42502%
Subsidiary
LLC Resilient
Ukraine
Ukraine
99.99%
99.99%
Subsidiary
LLC Resilient Agro
Ukraine
Ukraine
100%
100%
Subsidiary
Private Rental Agricultural
Enterprise Sydory
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Oliynykova Sloboda,
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Resilient Gorodylovychi
Ukraine
Ukraine
-
100%
Subsidiary
LLC Gorodylovychi
Ukraine
Ukraine
-
100%
Subsidiary
LLC Resilient Pryvitiv
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Resilient Stara Synyava
Ukraine
Ukraine
100%
100%
Subsidiary
Private enterprise, Trans Agro
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Resilient Matyushi
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Saturn Agrokom
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Agrocompany Bilotserkivska
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Resilient Bilotserkivska
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Pryvitivske
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Agrocompany Matyushi
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Resilient Oliynykova Sloboda
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Resilient Sydory
Ukraine
Ukraine
100%
100%
Subsidiary
LLC Trigon Moloko
Russia
Milk production
100%
100%
Subsidiary
LLC Dobruchi-2
Russia
Milk production
100%
100%
Subsidiary
Resilient a.s.
Czech
Republic
-
100%
100%
Subsidiary
Rimela International s.r.o.
Czech
Republic
-
-
100%
Subsidiary
TC Farming Ukraine Ltd.
Cyprus
-
100%
100%
Subsidiary
TC Farming Russian Ltd.
Cyprus
-
100%
100%
Subsidiary
Trigon Dairy Farming Ltd.
Estonia
Milk production
-
100%
Subsidiary
Trigon Farming Aktsiaselts.
Estonia
-
100%
100%
Subsidiary
In the year ended December 31, 2021 the Group
divested group companies LLC Agro Capital
Center, LLC Yavkino Holding, OJSC Yavkinskiy
elevator, LLC Resilient Gorodylovychi (Note 33),
LLC Kirovograd agroinvestment company
(immaterial net assets as of the date of
disposal), LLC Gorodylovychi (immaterial net
assets as of the date of disposal). Trigon Dairy
Farming Ltd. was merged to Trigon Farming
Aktsiaselts, company Rimela International s.r.o.
was merged to Resilient a.s.
2021 ANNUAL REPORT
PAGE 57
30. RELATED PARTY TRANSACTIONS
Associate Ltd Trigon Dairy Farming Estonia (a
holding company for milk production operations
in Estonia where the Group had a 39.24% stake)
was considered a related party till the date of
sale of associate company shares.
Other related parties comprise of companies
which are controlled by the Group´s
management personnel or the members of the
Board of Directors.
During the reporting period the Group had not
sales and purchases operations with related
parties.
The following table sets forth the aggregate gross amounts of salaries and other remuneration by the
Group to the members of its Board of Directors and Executive Board in 2021 and in 2020.
in USD thousand
Salary (incl
social security
costs)
Total
2021
Members of Board of Directors
51
51
Members of the Executive Board
273
273
324
324
2020
1
Members of Board of Directors
57
57
Members of the Executive Board
265
265
322
322
As of December 31, 2021, the Group had
liability to Board of Directors members in the
amount of USD 12 thousand (USD 16 thousand
as of December 31, 2020
1
)
Loans from related parties (Companies under control of Members of Board
of Directors)
in USD thousand
2021
2020
1
Beginning of the year
15 311
15 856
Loans advanced
8 012
13 694
Loan repayments made
-23 125
-17 693
Interest charged
426
922
Long-term loan discount write off
1 871
1 977
Interest paid
-1 224
-248
Currency translation differences
-545
803
End of the period
726
15 311
Loans from related parties have maturity within
year 2022. Interest rate is 5% per loan
contracts (5 % in 2020).
Long-term loans from related parties as of
December 31, 2020 were measured at their fair
value by discounting them at the effective rate
6.71%. In 2021 long-term loans were fully
repaid.
2021 ANNUAL REPORT
PAGE 58
31. FEES TO THE AUDITORS APPOINTED BY THE
SHAREHOLDERS
In 2021 expenses to auditors were:
in USD thousand
2021
2020
1
Audit, assurance engagements and other services
107
110
Beierholm and Baker Tilly were not elected as the statutory auditor, and thus did not audit the annual
report for the following companies:
• LLC Dobruchi-2
• Trigon Farming AS
32. ASSETS HELD FOR SALE AND LIABILITIES
ASSOCIATED
As of December 31, 2021 assets and liabilities of
subsidiaries in Russia (LLC Trigon Moloko and
LLC Dobruchi-2) were classified as assets held
for sale, since Management of the Group has
intentions to sell Russian milk production
segment and assessment of the sale can be
considered as highly probable.
In year 2020 Agromino concluded preliminary
agreements for sale of its subsidiaries LLC
Yavkino Holding, LLC Yavkinsky elevator, LLC
Agro Capital Center and LLC Resilient
Gorodylovychi.
Thus, as of December 31, 2020 assets and
liabilities of these companies were classified as
assets held for sale and liabilities associated with
assets held for sale correspondingly.
The major classes of assets and liabilities of
subsidiaries to be disposed as of December 31,
2021 and December 31, 2020 were as follows:
in USD thousand
31 December
2021
31 December
2020
1
Cash and cash equivalents
101
452
Trade and other receivables
290
248
Inventories
1 026
283
Biological assets
3 157
1 134
Property, plant and equipment
3 470
1 419
Other non-current prepayments and receivables
-
5
Intangible assets
-
247
Right-of-use assets
-
5 894
Total assets classified as held for sale
8 044
9 681
Trade and other payables
-16 091
-177
Lease liability (current and non-current)
-128
-5 245
Deferred tax liabilities
-54
-125
Total liabilities associated with assets
classified as held for sale
-16 273
-5 546
Intragroup accounts receivable and payable
eliminated on consolidation, net
15 739
-3 076
Net assets of disposal group
7 510
1 058
Assets held for sale impairment
-5 392
-
Net assets of disposal group after impairment
2 118
1 058
Net assets of disposal group were impaired to
its recoverable value. Amount of consideration
to be expected to be received by the Group as
a result of net assets disposal is considered as
2021 ANNUAL REPORT
PAGE 59
recoverable. Thus, impairment in amount USD
5 392 thousand was recognized in 2021.
The combined results of the discontinued
operations are set out below.
Results from discontinued operations for year ended 31 December:
in USD thousand
2021
2020
1
Discontinued operations:
Revenue
3 172
5 788
Other income
219
263
Gain/loss of biological assets arising from changes in fair value less cost to
sell
945
-321
Total revenue, other income and fair value adjustments
4 336
5 730
Net changes in inventories of agricultural produce and work in
process
1 624
3 048
Cost of purchased goods for trading purposes
-
-
Raw materials and consumables used for production purposes
-4 251
-6 050
Employee benefits expense
-919
-1 612
Depreciation and amortization
-604
-934
Other administrative expenses
-91
-162
Other (losses)/gains - net
5
-146
100
-126
Gains/losses from exchange rate differences
-5
24
Finance income
-
-
Finance costs (Note 22)
-262
-1 076
Share of profit/loss of investments accounted for using the equity method
-
-
Profit/loss before income tax
-167
-1 178
Corporate income tax
-7
8
Profit/loss for the period from
-174
-1 170
Revenue from grain sales of subsidiaries to be
disposed that went through intergroup
operations was USD 8 thousand in 2021 year,
and USD 3 461 thousand in 2020
1
.
Cash flows from discontinued operations for year ended 31 December
in USD thousand
2021
2020
1
Net cash (outflows)/inflows from operating activities
-367
-240
Net cash outflows from investing activities
-114
-605
Net cash inflows/(outflows) from financing activities
-28
-1 076
Net decrease in cash and cash equivalents
-509
-1 921
2021 ANNUAL REPORT
PAGE 60
33. DISPOSAL OF SUBSIDIARIES
In April 2021 the Group divested group
companies LLC Agro Capital Center, LLC
Yavkino Holding, OJSC Yavkinskiy elevator, LLC
Resilient Gorodylovychi.
The net assets of subsidiaries disposed at the
date of disposal were as follows:
in USD thousand
2021
ASSETS
Current assets
Cash and cash equivalents
39
Trade and other receivables
194
Inventories
562
Biological assets
1 758
Current assets
2 553
Other non-current prepayments and receivables
5
Intangible assets
255
Property, plant and equipment
1 017
Right-of-use asset
5 935
Non-current assets
7 212
Total assets
9 765
LIABILITIES
Trade and other payables
3 620
Current portion of lease liability
1 000
Current liabilities
4 620
Lease liability
4 715
Deferred tax liabilities
128
Non-current liabilities
4 843
Total liabilities
9 463
Net assets derecognised
302
Consideration received:
Cash
6 151
in USD thousand
2021
Consideration received
6 151
Net assets derecognised
-302
Gain on disposal (Note 24)
5 849
Currency translation difference recycled from Other Comprehensive
Income to Income Statement in relation to disposal of subsidiary
(Note 24)
-7 789
Result of subsidiaries disposal
-1 940
2021 ANNUAL REPORT
PAGE 61
34. EVENTS AFTER THE BALANCE SHEET DATE
On 21 February 2022 Russian President has
announced the recognising the independence
of two regions of Ukraine - the self-proclaimed
Donetsk People’s Republic and Luhansk
People’s Republic and ordered troops into two
rebel-held eastern regions. Several countries
have announced penalising Russia with
sanctions in response. On 23 February 2022
the National Security and Defense Council of
Ukraine called for a state of emergency. On 24
February 2022 Russian President has
announced the “special military operation” into
Ukraine, which in fact meant the beginning of
the Russian Federation’s premeditated,
unprovoked war on Ukraine. Russian forces
have launched a major military assault on
Ukraine immediately, with reports of missile
strikes and explosions in major cities of
Ukraine. President of Ukraine Volodymyr
Zelenskyy signed Decree № 64/2022 "On the
imposition of martial law in Ukraine" which was
approved by Verkhovna Rada. Currently, the
Ukrainian military continue resistance to
Russian forces. At the same time, the Western
world together with traditional neutral counties
(Japan, Switzerland, etc.) are targeting
Russia's economy, financial institutions and
individuals, imposing sanctions against Russia
over its invasion of Ukraine. Moreover, the
number of international companies are
suspending their activities in Russia.
As of the date of signing this annual report,
Russian military forces invasion to Ukraine
effected Group operations.
16.6 thousand hectares of land in cultivation is
located on the territory under Russian
occupation (Kharkiv region, Vovchansk),
including 4.5 thousand hectares with biological
assets of winter wheat and winter rapeseed
(fair value of USD 940 thousand as of
December 31, 2021) and land under fieldworks
in process. Land in Russian occupation is with
the lowest harvest yield for the Group.
There is no losses of grain for sale, but
exportation of grain stock is blocked in
Vovchansk region in occupation:
- Millet – 3 302 tonnes with value of USD
835 thousand as of December 31,
2021;
- Corn – 68 tonnes with value of USD 15
thousand as of December 31, 2021.
There are also stocks of raw materials, supplies
in Vovchansk region in occupation in amount
USD 1 526 thousand.
As of the date of signing this report there is no
destroyed or damaged assets of the Group.
One company of the Group (LLC Vovchanskiy
Combinat Khliboproduktiv) is fully located in
region in occupation. It is one of three elevators
owned by the Group with total capacity of 33.9
thousand tonnes and property, plant and
equipment for carrying value of USD 2 599
thousand as of December 31, 2021. There are
also other also other property, plant and
equipment assets in occupied territory of
Ukraine (Kharkiv region, Vovchansk), that were
used to serve cultivation of land that is now in
occupation.
The final resolution and the effects of these
events are difficult to predict, but they may
have further severe effects on the Ukrainian
economy and the Group’s business.
Management continues to make efforts to
identify and mitigate impacts to the Group,
however, there are factors beyond its
knowledge or control, including the duration
and severity of warfare, as well as further
governmental and diplomacy actions taken.
In June 2022 a share purchase agreement for
the sale of company LLC “Trigon Moloko”
(Russian milk segment, since LLC “Trigon
Moloko” is 100 % holder of LLC Dobruchi-2)has
been signed. The consideration for sale of
Russian milk segment is about USD 2,1 million
(RUB 101 thousand for sale of LLC “Trigon
Moloko” corporate rights and about EUR 2 000
thousand for further sale of receivables from
LLC “Dobruchi-2” by the Group).
As of December 31, 2021, the net assets of the
Russian milk segment stood at USD 2.1 million
and thus, the preliminarily estimated effect
from the transaction is about zero. However,
the cumulative amount of the exchange
differences (preliminary estimated amount
USD -10.5 million) recognized in previous
periods in Other Comprehensive
Income(losses) and accumulated in the
separate component of the Equity, has to be
recycled to the Income Statement in 2022.
2021 ANNUAL REPORT
PAGE 62
FINANCIAL STATEMENTS OF THE PARENT
COMPANY
STATEMENT OF FINANCIAL POSITION OF THE
PARENT COMPANY
in USD thousand
Note
31.12.2021
31.12.2020
1
01.01.2020
1
ASSETS
Current assets
Cash and cash equivalents
5
66
50
135
Trade and other receivables
7
3 930
5 041
7 161
3 996
5 091
7 296
Non-current assets
Investments in subsidiaries
6
56 423
56 211
71 231
56 423
56 211
71 231
Total assets
60 419
61 302
78 527
LIABILITIES
Current liabilities
Trade and other payables
8
3 510
5 004
4 846
Borrowings
9
1 141
1 022
3 216
4 651
6 026
8 062
Non-current liabilities
Borrowings
9
-
7 474
-
-
7 474
-
Total liabilities
4 651
13 500
8 062
EQUITY
Capital and reserves attributable to equity
holders of the Company
Ordinary shares
10
8 696
28 061
28 061
Share premium
10
92 263
171 173
171 173
Other reserves
-43 222
-39 022
-43 508
Accumulated deficit
-1 969
-112 410
-85 261
Total equity
55 768
47 802
70 465
Total equity and liabilities
60 419
61 302
78 527
The notes on pages 65 to 73 are an integral part of the parent company financial statements.
2021 ANNUAL REPORT
PAGE 63
STATEMENT OF THE COMPREHENSIVE INCOME OF
THE PARENT COMPANY
in USD thousand
Note
2021
2020
1
Revenues
11
12
11
Other income
-
13
Employee benefits expense
12
-251
-258
Other expenses
-249
-626
Impairment losses
14
-1 865
-25 959
Gains/losses from exchange rate differences
180
-209
Interest income
13
75
80
Interest expense
13
-252
-169
Profit/loss from sale of investments
584
-32
Net loss before income tax
-1 766
-27 149
Corporate income tax
-203
-
Net loss for the period
-1 969
-27 149
Other comprehensive income
-4 200
4 486
Total comprehensive loss for the period
-6 169
-22 663
STATEMENT OF CHANGES IN EQUITY FOR THE
PARENT COMPANY
In USD thousand
Share
capital
Share
premium*
Other
reserves
Accumulated
deficit
Total
Balance at 01.01.2020
1
28 061
171 173
-43 508
-85 261
70 465
Issuance of share capital
-
-
-
-
-
Total comprehensive income (loss) for the period
-
-
4 486
-27 149
-22 663
Balance at 31.12.2020
1
28 061
171 173
-39 022
-112 410
47 802
Shares nominal value decrease
-25 255
-
-
25 255
-
Issuance of share capital
5 890
8 245
-
-
14 135
Total comprehensive income (loss) for the period
-
-
-4 200
-1 969
-6 169
Transfer between equity elements
-
-87 155
-
87 155
-
Balance at 31.12.2021
8 696
92 263
-43 222
-1 969
55 768
* Share premium can be distributed as dividend.
The notes on pages 65 to 73 are an integral part of the parent company financial statements.
2021 ANNUAL REPORT
PAGE 64
STATEMENT OF CASH FLOWS OF THE PARENT
COMPANY
In USD thousand
Note
2021
2020
1
Cash flows from operating activities
Cash receipts from customers
11
21
35
Cash paid to suppliers and employees
12,13,16
-488
-1 181
Income tax paid
-129
-
Net cash used in/generated from operating
activities
-596
-1 146
Cash flows from investing activities
Contribution to share capital of subsidiary
15
-5 874
-5 891
Acquisition of subsidiary, net of cash acquired
15
-
-12
Sale of subsidiary
620
-
Loans issued to subsidiaries
15
-1 194
-434
Loans issued to related parties
15
-601
-
Proceeds from share capital decrease of subsidiary
296
-
Proceeds from loan repayments from subsidiaries
15
260
1 852
Proceeds from interest repayments from subsidiaries
15
231
1 064
Net cash used in/generated from investing
activities
-6 262
-3 421
Cash flows from financing activities
Loans received from subsidiaries
15
59
-
Loans received from related parties
15
4 152
5 560
Loans repaid to subsidiaries
15
-2 363
-
Interest repaid to subsidiaries
15
-7
-
Loans repaid to related parties
15
-8 680
-1 085
Interest repaid to related parties
-413
-
Shares issue
14 134
-
Net cash generated from used in financing
activities
6 882
4 475
Net increase in cash and cash equivalents
24
-92
Effects of exchange rate changes on cash and cash
equivalents
-8
7
Cash and cash equivalents at beginning of period
5
50
135
Cash and cash equivalents at end of period
5
66
50
The notes on pages 65 to 73 are an integral part of the parent company financial statements.
2021 ANNUAL REPORT
PAGE 65
NOTES TO THE FINANCIAL STATEMENTS OF
THE PARENT COMPANY
1. GENERAL INFORMATION
The Company was established on December
11, 2006. Agromino A/S (“the Company”) is
the parent company of the Agromino Group.
The Company is a limited liability company
incorporated and domiciled in Denmark. The
address of its registered office is c/o
Advokatfirmaet Poul Schmith, Kalvebod Brygge
32, DK-1560, Copenhagen, Denmark.
The Parent Company has in 2011 established a
branch "Agromino Eesti Filiaal" in Estonia.
The Company prepares its separate financial
statements in accordance with IFRS and further
requirements in the Danish Financial
Statements Act.
The principal accounting policies applied in the
preparation of these financial statements are
set out below.
2. ACCOUNTING PRINCIPLES
Basis of preparation of the financial statements
of the parent company
The financial statements of Agromino A/S have
been prepared in accordance with International
Financial Reporting Standards, as adopted by
the EU (IFRS) and further requirements in the
Danish Financial Statements Act. The parent
company has applied the same accounting
policies as the Group, except for the
investments in subsidiaries as described below.
See Note 2 to the Consolidated Financial
Statements, for the summary of significant
accounting policies of the Group.
Long-term investments in subsidiaries and
associate companies
In the separate financial statements of the
parent company, the investments in
subsidiaries are recognised and measured at
cost. Equity interests in foreign currencies are
translated to the reporting currency using the
historical exchange rate prevailing at the time
of the transaction. Where cost exceeds the
recoverable amount, the carrying value is
written down to the recoverable amount.
Dividends from investments in subsidiaries,
joint ventures, and associates are recognized
as income in the financial year when the
dividends are distributed.
3. CRITICAL ACCOUNTING ESTIMATES
An impairment test was performed at
investments in subsidiaries as at December 31,
2021, and 2020.
Based on the test performed impairment of
investments in Cyprus subsidiary and Russian
subsidiary was recognized in 2021 (impairment
of investments in Cyprus subsidiary was
recognised in 2020) (Note 14).
The parent company has in the model used its
target yields and prices for cereals and milk
based on forecasts. The parent company has
applied 5.0% long-term growth rate that has
been aggregated from the long-term growth
perspective in the respective country and
estimation of the growth in food prices in
relation to other inputs for Ukrainian segment.
The discount rates applied in Ukraine 18,5%
(15.67% in 2020).
2021 ANNUAL REPORT
PAGE 66
4. FINANCIAL RISK MANAGEMENT
Financial risk management principles of
Agromino A/S correspond to the principles used
for the whole Group. For further information on
the financial risk management principles used
please refer to the consolidated financial
statements Note 3. For details concerning the
parent company please refer to the other Notes
of the financial statements of the parent
company.
The Company is exposed to foreign exchange
risk arising primarily from exposures to the US
dollar. Refer to Notes 7,8,9 for the amounts of
assets and liabilities nominated in the US
dollar.
5. CASH AND CASH EQUIVALENTS OF THE PARENT
COMPANY
in USD thousand
31.12.2021
31.12.2020
1
01.01.2020
1
Cash at bank and on hand
66
50
135
66
50
135
As at December 31, 2021 (and December 31, 2020) there was no cash on bank deposits. The credit
rating (Moody`s) of the banks where the cash was held was A1 for USD 55 thousand and Aa3 for USD
11 thousand.
6. LONG TERM INVESTMENTS IN SHARES OF
SUBSIDIARIES
Breakdown of investments in subsidiaries by companies is given in the table below:
in USD thousand
31.12.2021
31.12.2020
1
01.01.2020
1
TC Farming Ukraine Ltd.
13
1 318
26 738
Ltd Trigon Dairy Farming
-
17 603
16 115
LLC Trigon Security
-
-
31
Trigon Farming Ltd.
18 724
2 684
2 457
LLC Trigon Moloko
1
632
579
LLC Kovyaqovskoуe
2 552
310
285
RESILIENT A.S.
20 952
20 536
14 531
LLC Trigon Farming Kharkiv
9 031
8 989
8 229
CJSC Vovchanskiy Combinat Khliboproduktiv
2 013
2 182
506
PAC Molniya-1
1 770
1 914
1 753
LLC Resilient Gorodolovichi
-
36
-
LLC Trigon Farming
793
-
-
LLC Kovyagivske Zerno
567
-
-
LLC Trigon Agro 2
7
7
7
56 423
56 211
71 231
During 2021 The Company has made share
capital contributions into subsidiaries in
amount of USD 6 639 thousand, including non-
monetary contribution in amount of USD 768
thousand (EUR 5 613 thousand). In 2021 The
Company sold its share in LLC Agro Capital
Center and in LLC Resilient Gorodylovychi.
Subsidiary Ltd Trigon Dairy Farming was
merged to Trigon Farming Ltd.
In 2020 The Company has made share capital
contributions into subsidiaries in amount of
USD 5 891 thousand (EUR 5 158 thousand).
Also in 2020 acquired 100% of LLC Resilient
Gorodylovychi for a consideration of USD 33
thousand (EUR 29 thousand) and disposed LLC
Trigon Security for USD 114 (EUR 100).
2021 ANNUAL REPORT
PAGE 67
Impairment of investments in subsidiaries have
been recognized in 2021 and 2020 (Note 14).
.
As of December 31, 2021, the parent company owned directly the following companies:
2021
Country of
registration
Segment
Ownership
persentage
Legal Status
in the Group
LLC Kovyaqovskoуe
Ukraine
Ukraine
100%
Subsidiary
LLC Kovyaqovskoуe Zerno
Ukraine
Ukraine
100%
Subsidiary
LLC Trigon Farming Kharkiv
Ukraine
Ukraine
99,85%
Subsidiary
CJSC Vovchanskiy Combinat
Khliboproduktiv
Ukraine
Ukraine
100%
Subsidiary
PAC Molniya-1
Ukraine
Ukraine
100%
Subsidiary
LLC Trigon-Export
Ukraine
Ukraine
100%
Subsidiary
LLC Trigon Farming
Ukraine
Ukraine
100%
Subsidiary
LLC Trigon Agro 2
Ukraine
Ukraine
8,78%
Minority
interest
LLC Trigon Moloko
Russia
Milk production
99%
Subsidiary
Resilient a.s.
Czech Republic
-
100%
Subsidiary
Trigon Farming Ltd.
Estonia
-
100%
Subsidiary
TC Farming Ukraine Ltd.
Cyprus
-
100%
Subsidiary
TC Farming Russia Ltd.
Cyprus
-
100%
Subsidiary
As of December 31, 2020, the parent company owned directly the following companies:
2020
Country of
registration
Segment
Ownership
percentage
Legal
Status in
the Group
LLC Kovyaqovskoуe
Ukraine
Ukraine
100%
Subsidiary
LLC Kovyaqovskoуe Zerno
Ukraine
Ukraine
100%
Subsidiary
LLC Trigon Farming Kharkiv
Ukraine
Ukraine
99,85%
Subsidiary
CJSC Vovchanskiy Combinat
Khliboproduktiv
Ukraine
Ukraine
100%
Subsidiary
PAC Molniya-1
Ukraine
Ukraine
100%
Subsidiary
LLC Trigon-Export
Ukraine
Ukraine
100%
Subsidiary
LLC Trigon Farming
Ukraine
Ukraine
100%
Subsidiary
LLC Agro Capital Center
Ukraine
Ukraine
1,73%
Minority
interest
LLC Trigon Agro 2
Ukraine
Ukraine
8,78%
Minority
interest
LLC Resilient Gorodolovichi
Ukraine
Ukraine
100%
Subsidiary
LLC Trigon Moloko
Russia
Milk production
99%
Subsidiary
Resilient a.s.
Czech Republic
-
100%
Subsidiary
Ltd Trigon Dairy Farming
Estonia
Milk production
69%
Subsidiary
Trigon Farming Ltd.
Estonia
-
100%
Subsidiary
TC Farming Ukraine Ltd.
Cyprus
-
100%
Subsidiary
TC Farming Russia Ltd.
Cyprus
-
100%
Subsidiary
2021 ANNUAL REPORT
PAGE 68
7. TRADE AND OTHER RECEIVABLES
in USD thousand
31.12.2021
31.12.2020
1
01.01.2020
1
Current receivables:
Receivables from subsidiaries (Note 15)
1 430
3 693
2 834
Short-term loans given to subsidiaries (Note 15)
2 139
1 266
3 566
Short-term loans given
359
-
730
Total current receivables
3 928
4 959
7 130
Current prepayments:
Prepayments
-
-
-
Prepayments for indirect taxes
2
82
31
2
82
31
Total current receivables and prepayments
3 930
5 041
7 161
Breakdown of the receivables from subsidiaries and group companies by companies is given below:
in USD thousand
31.12.2021
31.12.2020
1
01.01.2020
1
TC Farming Ukraine Ltd.
1 463
1 524
1 396
Trigon Dairy Farming Ltd.
1 274
37
1 140
LLC Trigon Farming Kharkiv
29
2 194
3 222
LLC Dobruchi
5
1 172
629
TC Farming Russia Ltd
46
32
13
Resilient a.s.
752
-
-
Total receivables
3 569
4 959
6 399
During 2021 and 2020 no receivables or loans
from the group companies were impaired.
Trade and other receivables are not due as at
December 31, 2021, and December 31, 2020.
The carrying amounts of the trade and other receivables were denominated in the following
currencies:
in USD thousand
31.12.2021
31.12.2020
1
01.01.2020
1
US dollar
1 462
2 194
3 221
Czech koruna
116
-
-
Euro
2 352
2 847
3 940
3 930
5 041
7 161
2021 ANNUAL REPORT
PAGE 69
8. TRADE AND OTHER PAYABLES
in USD thousand
31.12.2021
31.12.2020
1
01.01.2020
1
Trade payables
2
66
3
Trade payables to related parties (Note 15)
3 277
3 550
3 553
Social security and other taxes
79
5
1
Accrued expenses
129
145
143
Amounts due to related parties (Note 15)
23
1 238
1 146
3 510
5 004
4 846
Less: non-current portion
-
-
3 510
5 004
4 846
The carrying amounts of the trade and other payables were denominated in the following currencies:
in USD thousand
31.12.2021
31.12.2020
1
01.01.2020
1
US dollar
-
-
303
Euro
3 510
5 004
4 543
3 510
5 004
4 846
9. BORROWINGS
in USD thousand
31.12.2021
31.12.2020
1
01.01.2020
1
Current
Borrowings from subsidiaries (Note 15)
965
1 022
907
Borrowings from Related parties (Note 15)
176
-
2 309
Finance lease payables
-
-
-
1 141
1 022
3 216
Non-current
Borrowings from Related parties (Note 15)
-
7 474
-
-
7 474
-
Total borrowings
1 141
8 496
3 216
in USD thousand
31.12.2021
31.12.2020
1
01.01.2020
1
Euro
1 141
8 496
3 216
1 141
8 496
3 216
10. SHARE CAPITAL OF THE PARENT COMPANY
in USD thousand
Number of
shares
Incl.
ordinary
shares
Share
capital
Share
premium
Total
31.12.2019
1
24 895 123
24 895 123
28 061
171 173
199 234
31.12.2020
1
24 895 123
24 895 123
28 061
171 173
199 234
31.12.2021
74 685 369
74 685 369
8 696
92 263
100 959
As at December 31, 2021, the total number of
issued shares was 74,685,369 with a par value
2021 ANNUAL REPORT
PAGE 70
of 0.10 EUR (as of December 31, 2020:
24,895,123 shares with a par value of 1 EUR per
share). All shares have been fully paid.
In the year 2021 the decision was made to
decrease nominal value of parent company
Agromino A/S share. The nominal value of
shares was decreased from EUR 1 to EUR 0.1
and share capital was reduced correspondingly
from USD 28 061 thousand to USD 2 806
thousand (EUR 24 895 thousand to EUR 2 489
thousand). Such a decrease resulted in share
premium increase for USD 25 255 thousand
(EUR 22 406 thousand) and then share
premium increase was set off against
accumulated deficit.
On 1 June 2021, a decision to increase the share
capital to USD 8 696 thousand (EUR 7 469
thousand) by way of a cash contribution of EUR
0.24 per nominally EUR 0.10 new share was
adopted by Agromino’s board of directors.
In August 2021 share premium was set off with
accumulated deficit for amount USD 87 155
thousand (EUR 89 147 thousand).
The shares of Agromino A/S were listed on the
main market of Small Cap segment on NASDAQ
Stockholm. On 15 July 2020, Agromino
announced its plan to apply for delisting of
Agromino’s shares. On 19 October 2020,
Nasdaq Stockholm has approved such
application. The last day of trading of
Agromino’s shares was 30 October 2020.
11. REVENUE
in USD thousand
2021
2020
1
Sales of services
12
11
TOTAL revenue
12
11
Sale of services includes revenue from related
parties in amount USD 12 thousand (2020:
USD 11 thousand) (Note 15)
12. EMPLOYEE BENEFITS EXPENSE
in USD thousand
2021
2020
1
Fees of Members of Board of Directors and
Executive Board (Note 15)
146
152
Social security costs related to fees of Members of
Board of Directors and Executive Board (Note 15)
34
26
180
178
Wages and salaries
53
62
Social security costs
18
18
71
80
251
258
2021 ANNUAL REPORT
PAGE 71
13. FINANCE INCOME AND FINANCE COST
in USD thousand
2021
2020
1
Interest income from group companies (Note 15)
71
80
Interest income from related parties (Note 15)
4
-
TOTAL interest income
75
80
Interest expense from group companies (Note 15)
-43
-34
Interest expense from related parties (Note 15)
-209
-135
TOTAL interest expense
-252
-169
14. IMPAIRMENT LOSSES
in USD thousand
2021
2020
1
Impairment of investments (Note 6)
-1 865
-25 959
-1 865
-25 959
15. RELATED PARTY TRANSACTIONS
in USD thousand
Sales and purchases
2021
2020
1
Sale of services to group companies (Note 11)
12
11
Including re-charged expenses
1
-
Loss from sale of investments (Note 6,14)
-
-32
Interest income from group companies (Note 13)
71
80
Interest income from related parties (Note 13)
4
-
Interest expense from group companies (Note 13)
-43
-34
Interest expense from related parties (Note 13)
-209
-135
Cash flow transactions
Contribution to share capital of subsidiary
-5 874
-5 891
Cash paid to subsidiaries
-
-318
Loans issued to subsidiaries
-1 194
-434
Loans issued to related parties
-601
-
Proceeds from loan repayments from subsidiaries
-
1 852
Proceeds from interest repayments from subsidiaries
-
1 064
Loans received from subsidiaries
59
-
Loans received from related parties
4 152
5 560
Loans repaid to subsidiaries
-2 363
-
Interest repaid to subsidiaries
-7
-
Loans repaid to related parties
-8 680
-1 085
Interest repaid to related parties
-413
-
2021 ANNUAL REPORT
PAGE 72
The following table sets forth the aggregate
gross amounts of salaries and other
remuneration to the Board of Directors and
Executive Board in 2020 and 2019.
.
in USD thousand
Salary (incl
social security
costs)
Total
2021
Members of Board of Directors
51
51
Members of the Executive Board
129
129
180
180
2020
1
Members of Board of Directors
57
57
Members of the Executive Board
121
121
178
178
Balances from subsidiaries and other group companies
in USD thousand
31.12.2021
31.12.2020
1
01.01.2020
1
Receivables (Note 7)
1 430
3 693
2 834
Loan receivables (Note 7)
2 139
1 266
3 565
Payables (Note 8)
3 299
4 788
4 699
Borrowings (Note 9)
964
1 022
907
Balances from other related parties
31.12.2021
31.12.2020
1
01.01.2020
1
Payable to related parties
176
7 474
2 309
16. FEES TO THE AUDITORS OF THE PARENT COMPANY
in USD thousand
2021
2020
1
Audit
-96
-88
-96
-88
17. COMMITMENTS
Surety agreement was concluded between the
Company and JSC «UKRSIBBANK» on 28 May
2015. Under surety agreement Agromino A/S
shall be liable to the Bank in case of breach of
the Debt obligations by its subsidiaries under
Loan Agreement #11463843000 dated 23
December 2013 with general loan limit USD 7
000 thousand.
Surety agreement #253 CL/S2 was concluded
between the Company and JSC “CREDIT
AGRICOLE BANK” on 12 February 2019. Under
surety agreement Agromino A/S shall be liable
to the Bank in case of breach of the Debt
obligations by its subsidiaries under
Agreement on rendering of banking services
#253 CL dated 07 December 2012 with
general loan limit USD 8 000 thousand.
Surety agreement #463 CL/S1 was concluded
between the Company and JSC “CREDIT
AGRICOLE BANK” on 14 January 2022. Under
surety agreement Agromino A/S shall be liable
to the Bank in case of breach of the Debt
obligations by its subsidiaries under
2021 ANNUAL REPORT
PAGE 73
Agreement #463 CL dated 14 January 2022
with general loan limit USD 10 000 thousand.
Within the framework of the share purchase
agreement (SPA) for the acquisition of 100%
of shares of Resilient a.s. in the end of the year
2019 (Shares) a pledge over the Shares was
established by the Company in favour of
Mabon investiční fond s proměnným kapitálem
a.s. (Mabon). Mabon is controlled by Mr. Petr
Krogman, who is also the Chairman of the
Agromino‘s Board of Directors.
The pledge shall secure potential future
liabilities of the Company towards Mabon
which may arise mainly in case of substantial
breach of limited warranties by Agromino
under the SPA. No liabilities towards Mabon
under the framework of the SPA exist on the
date of this report. The Company assesses the
risk of origination of substantial liabilities
under the framework of the SPA as very low.
Consequently, the Company assesses the risk
of pledge realization as very low.
During the process of the SPA negotiation
applicable disqualification rules were
respected by the Company.
2021 ANNUAL REPORT
PAGE 74
MANAGEMENT´S STATEMENT
The Board of Directors and Executive Board
have today considered and adopted the Annual
Report of Agromino A/S for the financial year 1
January – 31 December 2021.
The Annual Report is prepared in accordance
with International Financial Reporting
Standards (IFRS) as adopted by the EU.
Moreover, the Annual Report is prepared in
accordance with further requirements in the
Danish Financial Statements Act.
In our opinion, the Consolidated Financial
Statements and the Financial Statements give
a true and fair view of the financial position at
31 December 2021 of the Group and the
Company and of the results of the Group and
Company operations and cash flows for the
financial year 1 January – 31 December 2021.
In our opinion, Management’s Review includes
a true and fair account of the development in
the operations and financial circumstances of
the Group and the Company, of the results for
the year and of the financial position of the
Group and the Company as well as a
description of the most significant risks and
elements of uncertainty facing the Group and
the Company.
The Annual Report was adopted at the Annual
General Meeting.
June 30, 2022
__________________ __________________ ___________________
__________
Petr Krogman Jan Urban Jiri Vyskočil
Chairman of the Vice-Chairman of the Member of the
Board of Directors Board of Directors Board of Directors
__________________ _________________________
Petr Toman Rastislav Pagáč
Chief Executive Officer Executive Board Member
2021 ANNUAL REPORT
PAGE 75
INDEPENDENT AUDITOR´S REPORT
To the shareholders of Agromino A/S
OPINION
We have audited the consolidated financial
statements and the financial statements of
Agromino A/S for the financial year 1 January
2021 - 31 December 2021, which comprise the
income statement, statement of
comprehensive income, balance sheet,
statement of changes in equity and notes to the
consolidated financial statements and the
financial statements, including a summary of
significant accounting policies, for the group
and the company as well as the consolidated
cash flow statement. The consolidated financial
statements and the financial statements are
prepared in accordance with International
Financial Reporting Standards (IFRS) as
adopted by the European Union and further
requirements in the Danish Financial
Statements Act.
In our opinion, except for the possible effects
of the matter described in the ‘Basis for
qualified opinion’ section of our report, the
accompanying consolidated financial
statements and financial statements give a true
and fair view of , the group’s and the company’s
financial position as at 31 December 2021 and
of the results of the group’s and the company’s
operations as well as the consolidated cash
flows for the financial year 1 January 2021 - 31
December 2021 in accordance with
International Financial Reporting Standards
(IFRS) as adopted by the European Union and
further requirements in the Danish Financial
Statements Act.
BASIS FOR QUALIFIED OPINION
We have not obtained sufficient appropriate
audit evidence that receivables of VAT in the
amount of USD 3 268 thousand included within
item “Prepayments for taxes” in the line "Trade
and other receivables" as Current Assets in the
Balance Sheet can be realised to reduce VAT
liabilities or reimbursed within 12 months after
the reporting date. We also were unable to
ascertain the extent of recoverability of the
amount and therefore have not obtained
sufficient appropriate audit evidence that there
is no impairment to be recognised as at 31
December 2021. As a result, we were unable to
determine whether any adjustments were
required for this amount, nor to estimate the
impact of such adjustments on current and
non-current assets of the Balance Sheet as at
31 December 2021, and to assess the impact
of such adjustments on profit and losses and
taxation for the year ended 31 December 2021.
We conducted our audit in accordance with
International Standards on Auditing and the
additional requirements applicable in Denmark.
Our responsibilities under those standards and
requirements are further described in the
‘Auditor’s responsibilities for the audit of the
consolidated financial statements and the
financial statements’ section of the auditor’s
report. We are independent of the group and
the company in accordance with the
International Ethics Standards Board for
Accountants’ International Code of Ethics for
Professional Accountants (IESBA Code) and the
additional ethical requirements applicable in
Denmark, and we have fulfilled our other
ethical responsibilities in accordance with these
requirements and the IESBA Code.
We believe that the audit evidence we have
obtained is sufficient and appropriate to
provide a basis for our opinion.
MATERIAL UNCERTAINTY REGARDING
GOING CONCERN ASSUMPTION
Agromino A/S is subject to material impact due
to the war in Ukraine. Without modifying our
opinion, we draw attention to the information
in note 2.1 in which the management accounts
for the material uncertainty which exists
regarding the impact of the war of the
company’s ability to continue as a going
concern. These circumstances and the other
matters mentioned in note 34 regarding events
after the balance sheet date mean that there is
material uncertainty about the company’s
ability to continue as a going concern
We agree with the management as to the
description of uncertainties and the choice of
accounting policies.
2021 ANNUAL REPORT
PAGE 76
EMPHASIS OF MATTER
Agromino A/S is subject to material impact due
to the war in Ukraine with unstable production
conditions and market conditions. Without
modifying our opinion, we refer to the mention
in note 4.3 regarding the situation in Ukraine
and Russia and potential impact on the
Group´s operationsand note 34 regarding
events after the balance sheet date. The
assessments regarding the impact of these
circumstances are subject to material
uncertainty, and the actual impact may
therefore deviate considerably from the
estimated impact on the group’s activities.
We agree with the management as to the
description of uncertainties in notes 4.3 and 34.
MANAGEMENT’S RESPONSIBILITIES FOR
THE CONSOLIDATED FINANCIAL
STATEMENTS AND THE FINANCIAL
STATEMENTS
The management is responsible for the
preparation of the consolidated financial
statements and the financial statements that
give a true and fair view in accordance with the
International Financial Reporting Standards
(IFRS) as adopted by the European Union and
further requirements in the Danish Financial
Statements Act. and for such internal control
as the management determines is necessary to
enable the preparation of consolidated financial
statements and financial statements that are
free from material misstatement, whether due
to fraud or error.
In preparing the consolidated financial
statements and the financial statements, the
management is responsible for assessing the
group’s and the company’s ability to continue
as a going concern, disclosing, as applicable,
matters related to going concern and using the
going concern basis of accounting unless the
management either intends to liquidate the
group and the company or to cease operations,
or has no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE
AUDIT OF THE CONSOLIDATED
FINANCIAL STATEMENTS AND THE
FINANCIAL STATEMENTS
Our objectives are to obtain reasonable
assurance about whether the consolidated
financial statements and the financial
statements as a whole are free from material
misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that
an audit conducted in accordance with
International Standards on Auditing and the
additional requirements applicable in Denmark
will always detect a material misstatement
when it exists. Misstatements can arise from
fraud or error and are considered material if,
individually or in the aggregate, they could
reasonably be expected to influence the
economic decisions of users taken on the basis
of these consolidated financial statements and
financial statements.
As part of an audit conducted in accordance
with International Standards on Auditing and
the additional requirements applicable in
Denmark, we exercise professional judgment
and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material
misstatement of the consolidated financial
statements and the financial statements,
whether due to fraud or error, design and
perform audit procedures responsive to
those risks, and obtain audit evidence that
is sufficient and appropriate to provide a
basis for our opinion. The risk of not
detecting a material misstatement resulting
from fraud is higher than for one resulting
from error, as fraud may involve collusion,
forgery, intentional omissions,
misrepresentations or the override of
internal control.
• Obtain an understanding of internal control
relevant to the audit in order to design audit
procedures that are appropriate in the
circumstances, but not for the purpose of
expressing an opinion on the effectiveness
of the group’s and the company’s internal
control.
• Evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related
disclosures made by the management.
• Conclude on the appropriateness of the
management’s use of the going concern
basis of accounting in its preparation of the
consolidated financial statements and
financial statements and, based on the audit
evidence obtained, whether a material
uncertainty exists related to events or
conditions that may cast significant doubt
on the group’s and the company’s ability to
2021 ANNUAL REPORT
PAGE 77
continue as a going concern. If we conclude
that a material uncertainty exists, we are
required to draw attention in our auditor’s
report to the related disclosures in the
consolidated financial statements and the
financial statements or, if such disclosures
are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence
obtained up to the date of our auditor’s
report. However, future events or conditions
may cause the group and the company to
cease to continue as a going concern.
• Evaluate the overall presentation, structure
and content of the consolidated financial
statements and the financial statements,
including the disclosures in the notes, and
whether the consolidated financial
statements and the financial statements
represent the underlying transactions and
events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence
regarding the financial information of the
entities or business activities within the
group to express an opinion on the
consolidated financial statements. We are
responsible for the direction, supervision
and performance of the group audit. We
remain solely responsible for our audit
opinion.
We communicate with those charged with
governance regarding, among other matters,
the planned scope and timing of the audit and
significant audit findings, including any
significant deficiencies in internal control that
we identify during our audit.
STATEMENT REGARDING THE
MANAGEMENT’S REVIEW
The management is responsible for the
management’s review.
Our opinion on the consolidated financial
statements and the financial statements does
not include the management’s review, and we
do not express any form of opinion on the
management’s review.
In connection with our audit of the consolidated
financial statements and the financial
statements, it is our responsibility to read the
management’s review and in this connection
consider whether the management’s review is
materially inconsistent with the consolidated
financial statements or the financial statements
or the knowledge we have obtained during our
audit, or in any other way appears to be
materially misstated.
Furthermore, it is our responsibility to consider
whether the management’s review contains the
information required under International
Financial Reporting Standards (IFRS) as
adopted by the European Union and further
requirements in the Danish Financial
Statements Act.
Based on the work performed, we believe that
the management’s review is in accordance with
the consolidated financial statements and the
financial statements and has been prepared in
accordance with the provisions of the
International Financial Reporting Standards
(IFRS) as adopted by the European Union and
further requirements in the Danish Financial
Statements Act. We have not detected any
material misstatement in the management’s
review.
Aalborg, June 30, 2022
Beierholm
Statsautoriseret Revisionspartnerselskab
CVR no. 32 89 54 68
Henrik Bjørn
State Authorized Public Accountant
MNE no. Mne28606
2021 ANNUAL REPORT
PAGE 78
DEFINITIONS
Acid test
(Total current assets – Inventories (inventories including biological
assets)-Assets held for sale (including Assets of disposal group classified
as held for sale)/Total current liabilities. The acid test or quick ratio
measures a company’s ability to use its near cash or quick assets to
immediately extinguish or retire its short-term liabilities (liabilities due
within the next twelve months).
Current ratio
Total current assets/Total current liabilities. The current ratio measures
a company’s ability to meet short-term obligations (liabilities due within
the next twelve months).
Earnings per share
Net result attributable to the shareholders of the Company/ year-end
number of common shares outstanding during the period (in accordance
with IAS 33). Earnings/loss per share for profit attributable to the equity
holders of the Company during the year, both basic and diluted.
EBITDA
EBITDA is calculated by adding to the operating profit the annual
depreciation of the fixed assets and amortisation of land-related long-
term prepayments.
EBIT
EBIT is calculated as the operating profit and does not include finance
income/cost, gains/losses from exchange rate differences and share of
profit/loss of investments accounted for using the equity method
Equity ratio
Total equity/Total assets. The equity ratio indicates how much debt a
company uses to finance its assets relative to equity.
Net debt
Total borrowings and the fair value of derivative financial instruments
(including Liabilities directly associated with assets classified as held for
sale -Cash and cash equivalents. Net debt is a measure of a company's
ability to repay its debts if they were all due today.
Return on assets
(ROA)
Net profit attributable to the owners of the parent company/Average total
assets. Return on assets compares income with total assets measuring
management’s ability and efficiency in using the firm’s assets to generate
profits.
Return on equity
(ROE)
Net profit attributable to the owners of the parent company/Average
equity excluding minority interest. Return on equity relates income with
the equity capital measuring management´s ability and efficiency in
generating a return to the shareholders of the Company
Book value per share
Total Stockholders’ equity/ year-end number of common shares
outstanding during the period (in accordance with IAS 33). The book
value per share measures the per share value of a company based on its
equity available to shareholders.
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