REGISTRAR QF COMPANIES ATS AGRIBUSINESS INVESTMENTS LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 TRUE COPY of the original Financial Statements Approved in the Annual General Meeting Ditector LIMITED ATS AGRIBUSINESS INVESTMENTS LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 CONTENTS PAGE Board of Directors and other of?cers 1 Report of the Board of Directors 2 3 Independent auditor's report 4 - 5 Statement of profit or loss and other comprehensive income 6 Statement of financial position 7 Statement of changes in equity 8 Statement of cash flows 9 Notes to the ?nancial statements 10 20 Additional information to the statement of profit or loss and other comprehensive income 21 - 24 ATS AGRIBUSINESS INVESTMENTS LIMITED BOARD OF DIRECTORS AND OTHER OFFICERS Board of Directors: Company Secretary: Independent Auditors: Legal Advisers: Registered of?ce: Bankers: Angela Avgousti (Cypriot) (appointed on 19 May 2014) Soulla Ktoridou (Cypriot) Spyrou (Cypriot) (resigned on 19 May 2014) A.T.S. Services Limited Deloitte Limited Certi?ed Pubiic Accountants and Registered Auditors Maximos Plaza, Tower 1, 3rd Floor 213 Arch. Makariou Avenue CY-3030 Limassol, Cyprus Antis Triantafyllides 8: Sons LLC Arch. Makariou Ill, 2-4 Capital Center, 9th Floor RC. 1065 Nicosia, Cyprus JP. Morgan Chase Bank, New York, USA European Bank for Reconstruction and Development, United Kingdom Credit Agricole Bank, Ukraine ATS AGRIBUSINESS INVESTMENTS LIMITED REPORT OF THE BOARD OF DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2014 The Board of Directors of ATS Agribusiness Investments Limited (the "Company") presents to the members its Annual Report together with the audited ?nancial statements of the Company for the year ended 31 December 2014. Incorporation The Company ATS Agribusiness Investments Limited was incorporated in Cyprus on 24 May 200? as a limited liability company under the Cyprus Companies Law, Cap. 113. Its registered of?ce is at Arch. Makariou Ill. 24 Capital Center. 9th floor PC. 1065, Nicosia. Cyprus. Principal activities The principal activities of the Company are that of investment holding and ?nancing. Review of the development and current position of the Company and description of the major risks and uncertainties The Company's development to date, ?nancial results and position as presented in the ?nancial statements are considered satisfactory. Additional details that relate to the operating environment of the Company as well as other risks and uncertainties are described in notes 20 and 22 of the ?nancial statements. Results The Company's results for the year are set out on page 6. Signi?cant events after the end of the financial year Any significant events that occurred after the end of the reporting period are described in note 25 to the ?nancial statements. Expected future developments of the Company The Board of Directors does not expect major changes in the principal activities of the Company in the foreseeable future. Existence of branches The Company does not maintain any branches. Dividends The Board of Directors does not recommend the payment of a dividend and the net pro?t for the year is retained. Share capital Authorised capital On 17 December 2014 the authorised share capital of the Company was increased by by 1.000 ordinary shares of nominal value of (E1 per share and by 20.000 redeemable preference shares of nominal value of?1 per share. Issued capital Upon incorporation on 24 May 2007 the Company issued to the subscribers of its Memorandum of Association 1.000 ordinary shares of each at par. On 1 January 2015 the Company issued 10.000 redeemable preference shares of nominal value ?1 at a premium of ?70.594 per share. Board of Directors The members of the Company's Board of Directors as at 31 December 2014 and at the date of this report are presented on page 1. On 19 May 2014. Ms Spyrou resigned and on the same date Ms Angela Avgousti was appointed in her place. In accordance with the Company's Articles of Association all directors presently members of the Board retire and being eligible offer themselves for re-election. There were no significant changes in the assignment of the responsibilities and remuneration of the Board of Directors. ATS AGRIBUSINESS INVESTMENTS LIMITED REPORT OF THE BOARD OF DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2014 Independent Auditors The independent auditors, Deloitte Limited. have expressed their willingness to continue in of?ce and a resolution authorising the Board of Directors to fix their remuneration will be submitted at the forthcoming Annual General Meeting. By order of Board of Directors, A.T.S. ER CES IMITED A.T. .Services Limi Secretary Nicosia, 14 October 2015 INVESTORS (3 Id Deloitte Limited IN PEOPLE 0 Maximos Plaza, Tower 1, 3rd Floor 213 Arch. Makariou Avenue Limassol, Cyprus Mail: 58466 Independent auditor's report Limassol. Cyprus Deloitte. AL 4? Tel.: +357 25 86 86 86 To the Members of ATS Agribusiness Investments Limited Fax: ?5725858500 infolimassol@deloitte.com Report on the financial statements We have audited the accompanying financial statements of the parent company ATS Agribusiness Investments Limited (the ?Company") on pages 6 to 20 which comprise the statement of financial position as at 31 December 2014, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Board of Directors' responsibility for the financial statements The Board of Directors is responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adOpted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of ?nancial statements that are free from material misstatement, whether due to fraud or error. Auditor?s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements that give a true and fair view 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. Basis for qualified opinion The Company has not prepared consolidated financial statements as required by the Cyprus Companies Law, Cap.113 and by the International Financial Reporting Standard 10 "Consolidated Financial Statements". In our opinion, the presentation of consolidated information is necessary for a proper understanding of the financial position, the financial performance and the cash flows of the Company and the Group. As stated in notes 10 and 12 to the financial statements, the investments in subsidiaries and equity loans receivable are carried at cost, less impairment if any. However despite indications for impairment of certain of the above assets, the management of the Company has not conducted separate and specific impairment tests to determine the amount, if any. of such impairment. We are not therefore in a position to assess whether the current value of the above assets is fairly stated. In addition, the Company's financial statements do not comply with the disclosure requirements of IAS 27 ?Separate Financial Statements", which require that a list of significant investments in subsidiaries including the name, country of incorporation or residence and proportion of ownership interest, and if different, proportion of voting power held, is disclosed. Board Members: Christis M. Christoforou {Chief Exoecutive Officer]. Eleftherios N. Philippou, Nicos S. Kyrialddes. Nicos D. Papakyriacou. Athos Costes Georghadjis. Anlonis Taliotis, Panos Papadopoulos, Pleris M. Markou. Niece Charalambcus. Nicos Spanoudls, Marla Paschalis. Alexis Agathocleous. Alkis Christodoulldes, Christakis loannou. Panicos Papamlchael. Christos Papamarlc?des, George Martides. Kerry Whyte, Andreas Georgiou. Christos Neocleous. Demetris Papapericleous. Andreas Andreou. Alecos Papaiexandrou, George Pantelides, Panaylota llaylanou. Agis Agathocleous. Michael Christotorou [Chairman Emeritus). Deloltte Urnited is the Cyprus member ?rm ol Deloitle Touche Tohmatsu Limited a UK private company limited by guarantee. whose member ?rms are legally separate and independent entitles. Please see mdeloitteoom?cylabout for a detailed description of the legal structure of OWL. Deloitte Limited is a private company, registered in Gyprus (Reg. No. 162812}. Of?ces: Nicosia. Limasgbl, Larnaca. Member of Deloitte Touche Tohmatsu Limited Deloitte. Independent auditor's report (continued) To the Members of ATS Agribusiness Investments Limited Qualified opinion In our opinion, except for the effect on the financial statements of the matters discussed to in the basis for qualified opinion paragraphs above, the financial statements give a true and fair view of the financial position of parent company ATS Agribusiness Investments Limited as at 31 December 2014, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113. Report on other legal requirements Pursuant to the additional requirements of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 and 2013, we report the following: . We have obtained all the information and explanations we considered necessary for the purposes of our audit, except in the case of the matters discussed in the basis for qualified opinion paragraphs. a In our opinion, proper books of account have been kept by the Company, so far as appears from our examination of these books, except in the case of the matters discussed in the basis for qualified opinion paragraphs. . The Company's financial statements are in agreement with the books of account. In our opinion, and to the best of our information and according to the explanations given to us, the ?nancial statements give the information required by the Cyprus Companies Law, Cap. 113, in the manner so required, except in the case of the matters discussed in the basis for qualified opinion paragraphs. a In our Opinion, the information given in the report of the Board of Directors is consistent with the financial statements. Other matter This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Section 34 of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 and 2013 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this rep may be divulged. Demetris Papapericleous Certified Public Accountant and Registered Auditor for and on behalf of Deloitte Limited Certified Public Accountants and Registered Auditors Limassol, 14 October 2015 ATS AGRIBUSINESS INVESTMENTS LIMITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2014 2014 2013 Note Interest income 4 78.241.835 86.061.607 interest expense (59.686.112) (83.280434) Net interest income 18.555.723 2.781.173 Other operating income 5 70.721 (28.843) Administration expenses (243.363) (29.159) Operating Pro?t 6 18.383.081 2.723.171 Finance costs 7 (272.247) (10.876) Pro?t before tax 18.110.834 2.712.295 income tax expense 8 (1.619.274) (564.638) Pro?t for the year 16.491.560 2.147.657 Other comprehensive income Total comprehensive income for the year 2.142.652 See accompanying notes on pages 10 to 20 to these ?nancial statements. 6 ATS AGRIBUSINESS INVESTMENTS LIMITED STATEMENT OF FINANCIAL POSITION 31 DECEMBER 2014 ASSETS Non-current assets Property, plant and equipment Investments in subsidiaries Investments in joint ventures Equity loans receivable Current assets Deferred expenditure Refundable taxes Cash and bank balances TOTAL ASSETS EQUITY AND LIABILITIES Equity and reserves Share capital Capital reserve Retained earnings Total equity Non-current liabilities Borrowings Loans from related companies Advances from shareholders Current liabilities Trade and other payables Payables to related companies Current tax liabilities Total liabilities TOTAL EQUITY AND LIABILITIES Note October 2015 the Board of Directors of ATS Agribusiness Investments statements for issue. Director 2014 2013 uss 449.001 - 4.844.132 5.180.385 215.568 215.568 936.808.034 876.380.479 942316.735 881776.432 - 705.550 304.240 - 13.136.625 12.588.600 13.440865 13.294150 955.757.600 895.070.582 2.501 2.501 882432.946 - J23.821.533 7.329.973 906.256.980 7.332.474 29.321.555 - 17.230.246 629.293 886.672.765 47.181.094 886.672.765 26.374 26.371 267.047 310.659 2.026.105 728.313 2.319.526 1.085.343 49.500.620 887738.108 955.757.600 895.070.582 Limited authorised these ?nancial See accompanying notes on pages 10 to 20 to these ?nancial statements. 7 ATS AGRIBUSINESS INVESTMENTS LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2014 Capital Retained Share capital reserve earnings Total U83 U85 U85 Balance at 1 January 2013 2.501 - 5.182.316 5.184.817 Total comprehensive income for the year - - 2.147.657 2.147.657 Balance at 31 December 2013 2.501 - 7.329.913. 4332.414 Totai comprehensive income for the year - - 16.491.560 16.491.560 Capital contribution from shareholders - 882432.946 - 882432.946 Balance at 31 December 2014 Companies which do not distribute 70% of their pro?ts after tax. as defined by the relevant tax law, within two years after the end of the relevant tax year, will be deemed to have distributed as dividends 70% of these pro?ts. Special contribution for defence at 20% for the tax years 2012 and 2013 and 17% for 2014 and thereafter will be payable on such deemed dividends to the extent that the shareholders (companies and individuals) are Cyprus tax residents. The amount of deemed distribution is reduced by any actual dividends paid out of the pro?ts of the relevant year at any time. This special contribution for defence is payable by the Company for the account of the shareholders. See accompanying notes on pages 10 to 20 to these ?nancial statements. 8 ATS AGRIBUSINESS INVESTMENTS LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2014 2014 2013 Note CASH FLOWS FROM OPERATING ACTIVITIES Pro?t before tax 18.110.834 2.712.295 Adjustments for: Depreciation expense 9 31.380 - Exchange difference arising on the translation - 10.876 Loss from the sale of investments in subsidiaries - 28.843 Interest income 4 (78.241.835) (86.061 .607) Interest expense 59.686.112 83.280.434 Amortization of EBRD front-end fee and expenses paid 7 246.679 Cash flows used in operations before working capital changes (166.830) (29.159) Increase in deferred expenditure - (705.550) Decrease in trade and other payables (43.610) (381.733) Cash ?ows used in operations (210.440) (1.116.442) Tax paid (625.722) (647.943) Net cash flows used in operating activities (836.162) (1.764.885) CASH FLOWS FROM INVESTING ACTIVITIES Payment for purchase of property. plant and equipment 9 (480.381) - Payment for purchase of investment in joint venture - (7.500) Payment for purchase of investments in subsidiaries 10 (1.913.886) (34.393) Loans granted (21.450.710) (124.790.426) Loans repayments received 28.726.398 22.266.348 Proceeds from sale of investments in subsidiaries - 10.000 interest received 10.539.199 103.087.391 Net cash flows from investing activities 15.420.620 531.420 CASH FLOWS FROM FINANCING ACTIVITIES Advances from shareholders (60.071.852) (23.278.402) Repayment of loans from related companies (4.500.000) Proceeds from borrowings 51 .729.090 - Interest paid (836.784) - EBRD front-end fee and expenses paid (356.887) - Net cash flows used in financing activities (14.036.433) (23.278402) Net increasei'(decrease) in cash and cash equivalents 548.025 (24.511.367) Cash and cash equivalents: At beginning of the year 12.588.600 37.099.967 At end of the year 14 ?mm See accompanying notes on pages 10 to 20 to these financial statements. 9 ATS AGRIBUSINESS INVESTMENTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 1. Incorporation and principal activities Country of incorporation The Company ATS Agribusiness Investments Limited (the "Company") was incorporated in Cyprus on 24 May 2007 as a limited liability company under the Cyprus Companies Law, Cap. 113. Its registered of?ce is at Arch. Makariou 2?4. Capital Center, 9th Floor, PC. 1065, Nicosia, Cyprus. Principal activities The principal activities of the Company are that of investment holding and ?nancing. 2. Significant accounting policies The principal accounting policies adopted in the preparation of these ?nancial statements are set out below. These policies have been consistently applied to all years presented in these ?nancial statements unless otherwise stated. Basis of preparation The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap. 113, except for the non-preparation of consolidated ?nancial statements as required by the Cyprus Companies Law, Cap. 113 and by the international Financial Reporting Standard IFRS10 "Consolidated Financial Statements". The financial statements have been prepared under the historical cost convention on a going concern basis taking into consideration the Company?s pro?tability of operations and access to ?nancial resources. including continued ?nancial support from its Shareholder. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates and requires management to exercise its judgment in the process of applying the Company?s accounting policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the ?nancial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions. actual results may ultimately differ from those estimates. Adoption of new and revised In the current year, the Company has adopted all of the new and revised International Financial Reporting Standards (IFRSs) that are relevant to its operations and are effective for accounting periods beginning on or after 1 January 2014. The adoption of these Standards did not have a material effect on the accounting policies of the Company. At the date of approval of these financial statements. standards and interpretations were issued by the International Accounting Standards Board which were not yet effective. The Board of Directors expects that the adoption of these accounting standards in future periods will not have a material effect on the ?nancial statements of the Company. Investments in subsidiaries A subsidiary is an enterprise over which the Company is in a position to control, through participation in the ?nancial and operating policy decisions of the investee. Investments in subsidiary companies are stated at cost less impairment, if any. Interests in joint ventures A joint venture is a contractual arrangement whereby the Company and other parties undertake an economic activity that is subject to joint control. that is when the strategic, ?nancial and operating policy decisions relating to the activities of the joint venture require the unanimous consent of the parties sharing control. Interest in joint ventures are stated at cost, less impairment if any. 10 ATS AGRIBUSINESS INVESTMENTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 2. Significant accounting policies (continued) Revenue recognition Revenues earned by the Company are recognised on the following bases: Income from investments in securities Dividend from investments in securities is recognised when the right to receive payment is established. Withheld taxes are transferred to pro?t or loss. interest from investments is recognised on an accrual basis. Pro?ts or losses from the sale of investments represent the difference between the net proceeds and the carrying amount of the investments sold and is transferred to the statement of comprehensive income. Unrealized gains and losses arising from changes in the fair value of investments are recorded through pro?t or loss. Interest income Interest revenue is recognised when it is probable that the economic bene?ts will flow to the Company and the amount of revenue can be measured reliably. Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. Dividend income Dividend income from investments is recognised when the shareholders' rights to receive payment have been established. Foreign currency translation (1) (2) Tax Functionaiand presentation currency Items included in the Company's financial statements are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The ?nancial statements are presented in United States Dollars (USES), which is the Company's functional and presentation currency. 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 pro?t or loss. Fluctuations resulting from changes in foreign exchange rate on market prices of securities held are included with the net realised and unrealised gain or loss of investments. The tax currently payable is based on taxable pro?t for the year. Taxable profit differs from pro?t as reported in pro?t or loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date. Property, plant and equipment Property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses. 11 ATS AGRIBUSINESS INVESTMENTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 2. Signi?cant accounting policies (continued) Property, plant and equipment (continued) Depreciation is calculated on the straight-line method so as to write off the cost of each asset to its residual value over its estimated useful life. The annual depreciation rates used are as follows: Hardware 20 Furniture. ?xtures and of?ce equipment 20 An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss. Financial instruments Financial assets and ?nancial liabilities are recognised on the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instrument. Investments Investments are recorded at cost initially and then adjusted to theirfair value. Any gain or loss from this adjustment is transferred to the income statement of the year. All investments are carried at fair value. except non-marketable securities, which are valued at cost. unless in the judgment of the management there has been an impairment in the value of such assets, in which case such impaired value shall be used instead of cost. Cash and cash eguivalents For the purpose of the statement of cash ?ows. cash and cash equivalents comprise cash at bank and in hand. Trade and other payables Trade and other payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method. Share capital Ordinary shares are classi?ed as equity. Dividends Dividend distribution to the Company's shareholders is recognised in the Company's financial statements in the year in which they are approved by the Company's shareholders. Equity loans Equity loans receivable are recorded at cost. less any impairment provision. All loans are recognised when cash is advanced to the borrower. Where in the opinion of the Directors the assets are impaired such that the recoverable amount is below the carrying value, this impairment is transferred to the income statement. Comparatives Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year. 12 ATS AGRIBUSINESS INVESTMENTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 3. 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. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a signi?cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: 0 Income taxes Judgment is required in determining the provision for income taxes. Where the ?nal tax outcome of these matters is different from the amounts that were initially recorded. such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. 0 Impairment of loans Loans granted by the Company are assessed for impairment when indications for such impairment exist. The Company uses its judgment in identifying the above indications and also uses a variety of methods and makes assumptions in estimating the recoverable amount of these loans in the event of impairment. 4. Interest income 2014 2013 USS Interest income 78.241.835 86061.60? 5. Other income 2014 2013 Loss from sale of investments in subsidiaries - (28.843) Expenses recharged 70.721 - 70.721 (28.843; 6. Operating profit 2014 2013 U85 Operating profit is stated after charging the following items: Directors' fees - Auditors? remuneration-current year 11.000 11 .000 7. Finance costs 2014 2013 Net foreign exchange transaction losses 25.568 10.876 Amortization of front?end fee and expenses on EBRD loan (Notes 13, 17) 246.679 272.247 10.876 13 ATS AGRIBUSINESS INVESTMENTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 8. Tax 2014 2013 U85 U88 Corporation tax - current year 382.759 350.062 Withholding tax provision for interest receivable 1.221.812 214.576 Underprovision of withholding tax on interest of previous years 14.703 - Charge for the year 1.613.274 564.638 The corporation tax rate is 12.5%. Under certain conditions interest income may be subject to defence contribution at the rate of 30%. In such cases this interest will be exempt from corporation tax. In certain cases, dividends received from abroad may be subject to defence contribution at the rate of 20% for the tax years 2012 and 2013 and 17% for 2014 and thereafter. 9. Property, plant and equipment Hardware Furniture, Total ?xtures and office equipment USS Cost Additions 451.852 28.529 480.381 Balance at 31 December 2014 451.852 28.529 480.381 Depreciation Charge for the year 29.647 1.733 31.380 Balance at 31 December 2014 29.647 1.733 31.380 Net book amount Balance at 31 December 2014 422.205 Balance at 31 December 2013 - 10. Investments in subsidiaries 2014 2013 U88 Balance at 1 January 5.180.385 5.195.711 Additions 3.904.085 34.393 Disposals (4.240.338) (49,719} 4.1.8.0385. The Company has a number of subsidiary companies which hold land for agribusiness development purposes in Eastern Europe. Investments in subsidiaries are stated at cost, less impairment if any. 1 1. Investments in joint ventures 2014 2013 USS Balance at 1 January 215.568 208.068 Additions - 7.500 215.553. 215.568 Investments in joint ventures are stated at cost, less impairment if any. 14 ATS AGRIBUSINESS INVESTMENTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 12. Equity loans receivable 2014 2013 Equity loans original amount 833.144.340 840.419.420 Equity loans - accrued interest 103.663.694 35.961.059 MW Equity loans receivable are stated at cost, less impairment if any. The loans were granted mainly to ?nance the long term operations of the companies in which the Company has also equity investments. The Company currently accrues interest on the above loans at rates ranging between per annum. Generally, the principal and interest are paid once the income is realised from the underlying assets of the enterprises, which have been ?nanced by way of these loans. An amount of (2013: of the above loans is pledged by the Company in favor of the European Bank for Reconstruction and Development with respect to a revolving loan facility given by EBRD to the Company as shown in note 13 to the ?nancial statements. The exposure of the Company to credit risk is reported in note 23 of the ?nancial statements. 13. Deferred expenditure 2014 2013 Balance at 1 January 705.550 - Front-end fees and expenses paid - 705.550 Transfer to borrowings (705.550) - - 705.550 Deferred asset represents front-end fees and expenses paid in connection with the loan agreement entered into with EurOpean Bank for Reconstruction and Development During 2014 the Company received $30,000.000 from EBRD and the deferred expenditure was transferred to borrowings from EBRD. Please refer to note 14 for further details. 14. Cash and bank balances Cash balances are analysed as follows: 2014 2013 Cash at bank and in hand 13.136.625 12.588.600 As per the provisions of the loan agreement with European Bank for Reconstruction and Development dated 30 September 2013, the Company shall deposit and maintain a specified bank account (the "Special Bank Account") in its name. The cash maintained in the Special Bank Account is pledged to EBRD at all times. ?15 ATS AGRIBUSINESS INVESTMENTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 15. Share capital 2014 2014 2013 2013 Number of Number of shares shares Authorised Ordinary shares of ?1 each 2.000 3.749 1.000 2.501 Reedemable preference shares of ?1 each 20.000 24.959 - - 22.000 28.708 1 .000 2.501 issued and fully paid Balance at 1 January 1.000 2.501 1.000 2.501 1.000 2.501 1.000 2.501 Authorised capital On 17 December 2014 the authorised share capital of the Company was increased by by 1.000 ordinary shares of nominal value of ?1 per share and by 20.000 redeemable preference shares of nominal value of 61 per share. Issued capital Upon incorporation on 24 May 2007 the Company issued to the subscribers of its Memorandum of Association 1.000 ordinary shares of ?1 each at par. On 1 January 2015 the Company issued 10.000 redeemable preference shares of nominal value ?1 at a premium of ?70.594 per share. 16. Capital reserve During 2014, the Company went through a restructuring by incorporating a new subsidiary. Amarista Limited. The Company's investment in subsidiary Agro DeveIOpment (Ukraine) Limited was disposed to Amarista Limited for a consideration of The amount receivable from Amarista Limited for the sale of the investment in Agro Development (Ukraine) Limited was set off against the advances from shareholder, NCH Agribusiness Partners, LP. As an effect, the difference between the above consideration and the carrying value of the disposed subsidiary of was accounted for as a capital contribution by the Company's shareholder as this was considered a Common Control transaction with owners. 17. Borrowings 2014 2013 Balance at 1 January - Additions 30.000.000 - Transfer from deferred asset of front-end fees and expenses paid (705.550) - Front?end fees and expenses paid (356.887) - Amortisation of front-end fees and expenses paid 246.678 - Interest accrued and charges 137.314 - Mia?- On 30 September 2013 the Company has entered into a revolving loan agreement with EBRD for a total commitment of The facility is divided into two trenches of maximum principal amount of and each. The ?nal maturity date is 11 December 2016 for Tranche 1 and 11 December 2014 for Tranche 2. The ?nal maturity date of Tranche 2 was extended to 11 December 2015 and may be extended to 11 December 2016. During 2013. Tranche 1 and Tranche 2 bore interest at the rate of 6.5% and 7.5% in excess of the London Interbank Offering Rate respectively. On 23 December 2013. the Company requested and EBRD agreed to cancel $5.000.000 of the committed amount effective from 1 January 2014. On 19 May 2014. the loan agreement has been amended and from 1 July 2014 interest rate for Tranche 1 and Tranche 2 became 8% and 9% in excess of the London Interbank Offering Rate, respectively. 16 ATS AGRIBUSINESS INVESTMENTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 17. Borrowings (continued) The Company shall maintain a Special Bank account for the purposes of the EBRD loan. The cash maintained in that Special Bank account will be pledged to EBRD at all times (Note 13). Although there was no outstanding loan balance as at 31 December 2013. the Company paid front-end fees and expenses of $705550, which were recognized as deferred expenditure in 2013. Those fees were transferred to EBRD loan during 2014. of that deferred expenditure were amortized during the year and have been recognized in the statement of pro?t or loss and other comprehensive income. Please refer to note 13 for further details. As at 31 December 2014 the outstanding loan balance was and the accrued interest was 18. Trade and other payables 2014 2013 Accruals 26.374 26.371 19. Current tax liabilities 2014 2013 Corporation tax (304.240) 27.541 Provision for withholding tax on interest receivable 2.026.105 700.772 ?1121-&&5? A 20. Operating Environment of the Company The Cyprus economy has been adversely affected from the crisis in the Cyprus banking system in conjunction with the inability of the Republic of Cyprus to borrow from international markets. These events led to negotiations between the Republic of Cyprus and the European Commission, the European Central Bank and the International Monetary Fund (the ?Troika") for ?nancial support which resulted into an agreement and the Eurcgroup decision of 25 March 2013. The decisions involved the formulation of an Economic Adjustment Program for the country entailing the provision of ?nancial assistance of up to ?10billion, the disbursements of which are subject to ongoing reviews by the Troika. Furthermore, the decisions included the restructuring of the two largest banks in Cyprus through a ?bail In?. During 2013 and 2014, the banking sector in Cyprus undertook signi?cant measures in anticipation of and subsequent to the EU-wide comprehensive assessment which consisted of thorough asset quality reviews and stress test and as a result was suf?ciently recapitalized. Nevertheless, the banking sector continues to face challenges imposed by the high level of non-performing loans and the availability of credit is limited. The Company holds its assets with non-Cyprus based foreign global banking and financial institutions and the Company has no exposure to Cyprus Banks, Cyprus sovereign debt and other assets related to the Cyprus economy. The Company?s management has considered the above developments and has concluded that these have no significant impact on the future ?nancial performance, cash flows, financial position of the Company. 21. Related party transactions As at 31 December 2014, the Company?s shareholder was NCH Agribusiness Partners, LP, a Company incorporated in Cayman Islands. which owned 100% of the Company?s shares. On 1 January 2015 Amarista Limited. a company incorporated in Cyprus. became the sole shareholder of the Company. NCH Agribusiness Partners, LP remains the ultimate shareholder of the Company. 17 ATS AGRIBUSINESS INVESTMENTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 21. Related party transactions (continued) The following transactions were carried out with related parties: 21.1 Equity loans receivable (Note 12) 2014 2013 Related companies 936308.034 876.380.479 Equity loans granted to related companies are provided on the terms disclosed in note 12 above. Interest accrued during the year ended 31 December 2014 was (2013: 21.2 Payables to related parties 2014 2013 Relationship Nature of transactions Subsidiary company Finance 267.047 262.235 Common control entities Finance - 48.424 267.047 310.659 21.3 Loans from related undertakings 2014 2013 Agro Trading AT Limited 17.230.246 - On 8 July 214 the Company obtained borrowings from related party Agro Trading AT Limited. During the year were received and US4.500.000 were repaid. The loan bears interest of 0.35% per annum and is repayable by 24 August 2019. interest charged during the year is 21.4 Advances from shareholders 2014 2013 NCH Agribusiness Partners. LP 629.293 886672.765 Shareholders advances are used to facilitate the investing and financing activities of the Company. To the extent that funds provided are used for investing activities no interest is charged. However to the extent that funds provided are used on the financing activities of the Company. interest is charged at a rate equal to the annual rate of interest that the Company receives for such loans or deposits, minus 0,35%. There is no ?xed repayment schedule and repayment is dependent upon recovering the equity loans receivable and realisation of the investments in the Company. The loan providers have con?rmed that it is not their intention to withdraw their funds before ensuring that the Company has suf?cient cash resources to meet its obligations to its other creditors. 22. Financial risk management Financial risk factors The Company is exposed to market risk. interest rate risk, credit risk, liquidity risk, currency risk and capital risk management arising from the ?nancial instruments it holds. The risk management policies employed by the Company to manage these risks are discussed below: 18 ATS AGRIBUSINESS INVESTMENTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 22. Financial risk management (continued) 22.1 Market and geographical risk Market price risk is the risk that the value of ?nancial instruments will ?uctuate as a result of changes in market prices. The Company's financial assets at fair value through pro?t or loss are susceptible to market price risk arising from uncertainties about future prices of the investments. The Company's market price risk is managed through diversi?cation of the investment portfolio. Investments held by the Company may be adversely affected by significant economic. political, regulatory and social uncertainties in the countries where it invests. The Company invests in Ukraine, Moldova. Romania and other emerging markets, as they present attractive opportunities for investment in agricultural-related real estate and assets. However, since November 2013, there have been mounting tensions and associated violence between Russia and Ukraine, which continued to deteriorate in the months following the annexation of the Crimea region, sparking Europe's most serious geopolitical crisis since the end of the Cold War. Despite the current upheaval in certain areas in Ukraine, these events have not impacted the business operations of the Company. The Company's investments are also subject to the risks incidental to the ownership and operation of agricultural-related assets and agricultural-related real estate. including risks associated with the general economic climate, local real estate conditions, geographic or market concentration, competition, the ability of the Company to manage the agricultural properties and government regulations. Furthermore. agriculture is a weather-dependent sector and extreme climate variability carries multi-dimensicnal impacts. Natural disasters and fluctuations in weather patterns can have a potentially devastating effect on agricultural production. Drought and the occurrence of natural disasters such as ?oods could lead to crop failures. famine, loss of property and life, mass migration and negative national economic growth. 22.2 Interest rate risk Interest rate risk is the risk that the value of ?nancial instruments will ?uctuate due to changes in market interest rates. Borrowings issued at variable rates expose the Company to cash flow interest rate risk. Borrowings issued at fixed rates expose the Company to fair value interest rate risk. The Company's management monitors the interest rate fluctuations on a continuous basis and acts accordingly. At the reporting date the interest rate pro?le of interest? bearing financial instruments was: 2014 2013 Fixed rate instruments Financial assets 833.144.340 840.419.420 Financial liabilities (17.229.090) (840.419.420) Variable rate instruments Financial liabilities (301100.000) M?h Interest rate risk of the Company is limited as the majority of the ?nancial assets and ?nancial liabilities are with related companies and both interest income and interest expense is ?xed in such a way that the Company always receives a net margin. 22.3 Credit risk Credit risk arises when a failure by counter parties to discharge their obligations could reduce the amount of future cash inflows from ?nancial assets on hand at the reporting date. The Company has no signi?cant concentration of credit risk. The Company has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history and monitors on a continuous basis the ageing pro?le of its receivables. The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: 2014 2013 Equity loans receivable 936.808.034 876380.479 Cash at bank 13.136.625 12.588600 19 ATS AGRIBUSINESS INVESTMENTS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 22. Financial risk management (continued) 22.4 Liquidity risk Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances pro?tability. but can also increase the risk of losses. Liquidity risk is minimal since the parent company has indicated its intention to continue providing ?nancial assistance to the Company to enable it to meet its obligations as they fall due. 22.5 Currency risk Currency risk is the risk that the value of ?nancial instruments will fluctuate due to changes in foreign exchange rates. At 31 December 2014, the Company held the majority of its monetary assets and liabilities in US Dollars and, therefore, was not exposed to any material currency risk. 22.6 Capital risk management The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance. The Company?s overall strategy remains unchanged from last year. 23. Contingent liabilities The Company had no contingent liabilities as at 31 December 2014. 24. Commitments The Company had no capital or other commitments as at 31 December 2014. 25. Signi?cant events after the end of the ?nancial year Change of shareholder 0n 1 January 2015 Amarista Limited became the sole shareholder of the Company. Issue of redeemable preference shares On 1 January 2015 the Company issued 10.000 redeemable preference shares of nominal value ?1 at a premium of ?70.594 per share. Independent auditor's report on pages 4 and 5 20 ATS AGRIBUSINESS INVESTMENTS LIMITED DETAILED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2014 2014 2013 Page Interest income 78.241.835 86.061.607 interest expense and other charges 22 (59.686.112) (83.280434) Net interest income 18.555.723 2.781.173 Other operating income Expenses recharged 70.721 - Loss from sale of investments in subsidiaries - (28.843) 18.626.444 2.752.330 Operating expenses Administration expenses 23 (243.363) (29.159) Operating Pro?t 18.383.081 2.723.171 Finance costs (272.247) (10.876) Net pro?t for the year before tax Jim?2.112.295 21 ATS AGRIBUSINESS INVESTMENTS LIMITED INTEREST EXPENSE AND OTHER CHARGES FOR THE YEAR ENDED 31 DECEMBER 2014 2014 2013 Expenditure Interest expense on EBRD loan 974.098 - Interest expense on other loans 58.710.858 83.280.434 Interest expense on related party ioans 1.156 - Total interest expense and other charges 1g! 22 ATS AGRIBUSINESS INVESTMENTS LIMITED OPERATING EXPENSES FOR THE YEAR ENDED 31 DECEMBER 2014 2014 2013 Administration expenses Staff salaries 75.338 - Sundry expenses 124.304 5.366 Auditors' remuneration-current year 11.000 11 .000 Legal fees 1.341 - Fines - 12.793 Depreciation 31.380 - #2243353. 23 ATS AGRIBUSINESS INVESTMENTS LIMITED COMPUTATION OF CORPORATION TAX FOR THE YEAR ENDED 31 DECEMBER 2014 Page Net pro?t per income statement 21 18.110834 Depreciation 31 .380 Unrealised foreign exchange losses 25.568 Interest imposed on back to back loan arrangements 71.790 Amortization of front end fee on EBRD loan 246.679 375.417 18.486.251 Less: Capital allowances 96.076 2010-2013 expenses recharged 39.388 (135.4641 Chargeable income for the year 18.358187 Converted into at 1.215628 ?1 Losses surrendered to Company from Group companies Amarista Limited (12.576801) Chargeable income 2.518.925 Calculation of corporation tax income Rate Total Total 6 0 Tax at normal rates: Chargeable income as above _2.518.925_ 12.50 314.865,63 382.759 Tax paid provisionally 4200.000 (275.000.00) (334.298) Credit claimed in respect of foreign tax (290139.00) (352.701) TAX REFUNDABLE 24