ROS Agro : Independent Consolidated FR and Auditor Report of ROS AGRO PLC 2023

ROS AGRO PLC

International Financial Reporting Standards

Consolidated Financial Statements and

Independent Auditors' Report

31 December 2023

Contents
BOARD OF DIRECTORS AND OTHER OFFICERS
CONSOLIDATED MANAGEMENT REPORT
DIRECTORS' RESPONSIBILITY STATEMENT
INDEPENDENT AUDITORS' REPORT
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Financial Position	1
Consolidated Statement of Profit or Loss and Other Comprehensive Income	2
Consolidated Statement of Changes in Equity	3
Consolidated Statement of Cash Flows	4
Notes to the Consolidated Financial Statements
1.	Background	5
2.	Summary of significant accounting policies	8
3.	Cash and cash equivalents	23
4.	Short-term investments	24
5.	Trade and other receivables	24
6.	Prepayments	26
7.	Other taxes receivable	26
8.	Inventories	26
9.	Other current assets	26
10.	Biological assets	27
11.	Long-term investments	28
12.	Property, plant and equipment	30
13.	Right-of-use assets and lease liabilities	31
14.	Intangible assets	32
15.	Share capital, share premium and transactions with non-controlling interests	33
16.	Borrowings	34
17.	Trade and other payables	37
18.	Other taxes payable	37
19.	Government grants	38
20.	Sales	39
21.	Cost of sales	40
22.	Distribution and selling expenses	40
23.	General and administrative expenses	41
24.	Other operating income/(expenses), net	41
25.	Interest expense and other finance income/(costs), net	42
26.	Acquisition of subsidiary	42
27.	Goodwill	44
28.	Income tax	45
29.	Related party transactions	47
30.	Earnings per share	48
31.	Segment information	49
32.	Financial risk management	54
33.	Contingencies	61
34.	Commitments	62
35.	Subsequent events	62

ROS AGRO PLC

BOARD OF DIRECTORS AND OTHER OFFICERS

Board of Directors

Mr. Sergei Koltunov

Director

Ms. Axana Mansourian

Member of the Audit Committee

Managing Director

Ms. Mariia Egorova

Member of the Audit Committee

Director

Mr. Alexey Smagin

Member of the Audit Committee

Director

Board Support

The Company Secretary is available to advise all Directors to ensure compliance with the Board procedures.

Company Secretary

Fiduciana Secretaries Limited

8 Mykinon

CY-1065, Nicosia

Cyprus

Registered office

25 Aphrodite Street 3rd floor, Office 300 CY-1060, Nicosia Cyprus

ROS AGRO PLC

CONSOLIDATED MANAGEMENT REPORT

The Board of Directors presents its report together with the audited consolidated financial statements of ROS AGRO PLC (the "Company") and its subsidiaries (collectively the "Group") for the year ended 31 December 2023. The Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by International Accounting Standards Board ("IASB").

Principal activities

The principal activities of the Group are the agricultural production (cultivation of sugar beet, grain and other agricultural crops), cultivation of pigs, processing of raw sugar and production of sugar from sugar beet, vegetable oil production and processing.

Review of developments, position and performance of the Group's business

In 2023 revenue increased by RR 37,098,057 thousand or 15%. All segments except for Oil and Fat segment demonstrated an increase in revenue. The major contributor to the sales increase was the Agricultural segment where turnover was higher by RR 24,925,720 thousand or 78% comparing to the previous year. Revenue in the Sugar segment increased by 31%, in Meat segment increased by 11%. Revenue in Oil and Fat segment decreased by 18% comparing to the previous year. Consolidation of Nizhegorodskyi Maslozhirovoy Kombinat Group of companies (hereinafter - NMGK) contributed

1. 31,201,619 thousand to Group's revenue.

In 2023 Adjusted EBITDA increased by RR 11,544,715 thousand or 26% with positive dynamics in all segments except for Oil and Fat. The highest increase demonstrated the Agricultural division (by

1. 7,205,645 thousand or 74%) due to the increase in gross profits. Adjusted EBITDA in the Sugar division was higher by RR 3,476,151 thousand or 22%. Adjusted EBITDA in the Meat division doubled and reached RR 3,388,548 thousand. Adjusted EBITDA in the Oil and Fat segment decreased by 15%. Consolidation of NMGK contributed RR 5,191,417 thousand to Group's adjusted EBITDA.

In 2023 the Group investments in property, plant and equipment and inventories intended for construction amounted to RR 18,350,662 thousand on a cash basis. The Agricultural segment invested RR 8,380,912 thousand in acquisition of land, new agricultural machinery and equipment. Investments of RR 4,419,081 thousand were made in the Meat segment and were mainly related to pig farm construction in Primorsky Krai. Investments in the Oil and Fat division amounted to RR 3,227,142 thousand mainly related to purchases of machinery and equipment for production facilities renewal and maintenance. The Sugar segment invested RR 2,006,359 thousand in modernization of the sugar plants. Investments in property, plant and equipment and inventories intended for construction in NMGK amounted to RR 317,168 thousand.

Changes in the Group's structure

On 14 February 2023 LLC Vozrozhdenie was liquidated.

On 14 April 2023 the Group obtained 60.99% of ownership interest in JSC Astreya.

On 30 June 2023 the Group obtained 50% of ownership interest and control in Sethal Holdings Limited (Cyprus).

In September and October 2023 the Group obtained 100% of ownership interest in JSC Biotekhnologii (treated as an acquisition of assets).

For more details regarding the Group structure refer to Note 1 and Note 31 of the consolidated financial statements.

Principal risks and uncertainties

The Group's critical estimates and judgments and financial risk management are disclosed in Notes 2 and 32 to the consolidated financial statements. The Group's operating environment is disclosed in Note 1 to the consolidated financial statements.

The Group's contingencies are disclosed in Note 33 to the consolidated financial statements.

ROS AGRO PLC

CONSOLIDATED MANAGEMENT REPORT

Future developments

In 2023 and beyond, the Group plans to continue modernization and expansion of its production and storage facilities in all business segments. The Group plans to make further developments in the Far East region in agricultural and meat businesses.

Results

The Group's results for the year are set out on page 2 of the consolidated financial statements.

Human resources management and environmental protection

The Group offers its employees opportunities to realize their professional potential, improve their knowledge and skills, work on interesting innovative projects and be part of a cohesive team. Group management believes that one of the keys to a successful business is maintaining a balance between the high quality and efficient work of all employees who share common values and principles on one hand, and the Company's commitment to providing opportunities for career growth on the other. Group business divisions annually prepare and implement employee training and development plans based on the business's strategic and current objectives, as well as needs identified by comprehensive assessment. Based on the results of a comprehensive assessment, every employee draws up an individual development plan for a period of one to two years that lists all training and development activities that are intended to advance the employee's skills or pass on the knowledge they have gained.

The Group is committed to protecting the environment and minimizing the environmental impact of its operations in regions where it has a presence. All of the Group's divisions constantly monitor wastewater runoff and air quality, and are equipped with treatment facilities that meet all the standards of applicable environmental legislation. The Group has implemented guidelines for maximum allowable emissions and guidelines for waste generation and established sanitary buffer zones for warehouses storing crop protection agents. The Group also returns packaging from crop protection agents and fertilizer to counterparties and performs soil deacidification efforts on farmland.

The composition and diversity information of the Board of Directors of the Group

The authority and responsibilities of the Board of Directors are described in the Internal Rules of the Board of Directors.

On behalf of all shareholders and on the proposal or advice of the Management Board, the Board of Directors lays down the strategy and general policy of the Group. It also sets the Group's standards and monitors the implementation of that strategy.

It controls and gives direction to the management of the company and the Group and provides monitoring of risks.

It also ensures that the principles of good governance are respected.

The Board's acts are guided solely by a concern for the interests of the Company in relation to its shareholders, its customers and staff.

The Board of Directors is the decision-making body of our Group. Its role is to define the Group's strategic vision, assisted by a specialized committee (the Audit Committee). It is composed of 4 Directors, including 2 independent Directors and 1 managing Director. The Board offers a diverse and synergistic range of experience, nationalities and cultures and enables us to consider the interests of all our shareholders.

The Board has determined that, as a whole, it has the appropriate skills and experience necessary to discharge its functions. Directors have the experience required to contribute meaningfully to the Board's deliberations and resolutions. Independent Directors assist the Board by constructively challenging and helping develop strategy proposals.

ROS AGRO PLC

CONSOLIDATED MANAGEMENT REPORT

Dividends

Pursuant to its Articles of Association the Company may pay dividends out of its profits. In August 2013 the Board of Directors has approved a dividend policy with payout ratio of at least 25% of the Group's profit for the year applicable starting from the year ended 31 December 2013. On 13 September 2021 the Board of Directors has approved a new dividend policy with increased payout ratio to at least 50% of the Group's profit for the year. To the extent that the Company declares and pays dividends, owners of Global Depositary Receipts (hereafter also referred as "GDRs") on the relevant record date will be entitled to receive dividends payable in respect of Ordinary Shares underlying the GDRs, subject to the terms of the Deposit Agreement.

The Company is a holding company and thus its ability to pay dividends depends on the ability of its subsidiaries to pay dividends to the Company in accordance with the relevant legislation and contractual restrictions. The payment of such dividends by its subsidiaries is contingent upon the sufficiency of their earnings, cash flows and distributable reserves. The maximum dividend payable by the Company`s subsidiaries is restricted to the total accumulated retained earnings of the relevant subsidiary, determined according to the Russian law.

In 2023 the Company didn't distribute any dividends.

Share capital

There were no changes in the share capital of the Company during 2023 and 2022.

The role of the Board of Directors

The Company is governed by its Board of Directors (hereafter also referred as the "Board") which is collectively responsible to the shareholders for the successful performance of the Group.

The Board sets corporate strategic objectives, ensuring that the necessary financial and human resources

are in place for the Group	to meet its	objectives and reviewing management performance.
The Board of Directors sets	the Group's	values and standards and ensures all obligations

to shareholders are understood and met. The Board believes it maintains a sound system of internal control to safeguard the Group's assets and shareholders' investments in the Group.

Significant direct/indirect holdings

For the significant direct and indirect shareholdings held by the Company, please refer to Note 1 of the consolidated financial statements.

Members of the Board of Directors

The members of the Board of Directors at 31 December 2023 and at the date of this report are shown in the beginning of these consolidated financial statements.

In accordance with the Company's Articles of Association, one third of the Directors shall retire by rotation and seek re-election at each Annual General Meeting.

The Company's Directors' remuneration is disclosed in Note 29. There were no any significant changes to the Directors' remuneration during the year ended 31 December 2023.

Directors' Interests

As at 31 December 2023 directors had no interest in the Company.

ROS AGRO PLC

CONSOLIDATED MANAGEMENT REPORT

Audit Committee

The Board of Directors has established an Audit Committee. The Audit Committee is primarily responsible for (i) ensuring the integrity of our consolidated financial statements, (ii) ensuring our compliance with legal and regulatory requirements, (iii) evaluating our internal control and risk management procedures,

1. assuring the qualification and independence of our independent auditors and overseeing the audit process and (v) resolving matters arising during the course of audits and coordinating internal audit functions. The Audit Committee consists of three members appointed by the Board of Directors. The current members are Ms. Axana Mansourian, Ms. Mariia Egorova and Mr. Alexey Smagin.

Internal control and risk management systems in relation to the financial reporting process

The internal control and risk management systems relating to financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and to ensure compliance with applicable laws and regulations. The Audit Committee of the Board of directors of the Company reviews high-risk areas at least once a quarter. Reporting from various Group entities to the central office is supervised on an ongoing basis and procedures have been established for control and checking of such reporting. With each acquisition the Group seeks to adapt and incorporate the financial reporting system of the acquired operations quickly and efficiently.

Corporate Governance

Since 2011, the Company adopted the following codes: Code of Conduct on insider information and Code of Business Conduct and Ethics. In addition, since May 2014 the Company together with its subsidiaries and affiliates adopted a new edition of the Codes for mandatory compliance by all employees. In 2017 the Company adopted a new Code of Conduct and Business Ethics.

Non-Financial Information

The Group publishes its non-financial information Statement together with the Annual report on the Company's website, www.rusagrogroup.ru.

Events after the reporting date

The material events after the reporting date are disclosed in Note 35 to the consolidated financial statements.

Branches

The Company operated through its branches in the United Arab Emirates and Hong Kong during the year.

Treasury shares

On 25 August 2011 the Board unanimously resolved that it is in the best interest of the Company to buy back GDRs from the market for the total amount of up to USD 10 million increased to up to USD 30 million via subsequent Board's decision on 17 July 2012.

At 31 December 2023 and 2022, the Company held 2,135,313 of its own GDRs (approximately 427,063 shares) that is equivalent to RR 490,607 thousand, representing 1.6% of its issued share capital. The GDRs are held as 'treasury shares'.

No GDRs were transferred to the employees under the share option incentive scheme during 2023 and 2022.

During 2023 and 2022 the Company did not buy back any of its own GDRs from the market.

ROS AGRO PLC

CONSOLIDATED MANAGEMENT REPORT

Research and development activities

The Group launched research and development projects in the fields of IT, automation, and biotechnology for internal use that are presenting opportunities to reduce costs, improve product quality, and generate additional income.

By Order of the Board

___________________________

Axana Mansourian

Director of ROS AGRO PLC

Nicosia

1 March 2024

ROS AGRO PLC

DIRECTORS' RESPONSIBILITY STATEMENT

The Company's Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRS as adopted by IASB, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. This responsibility includes selecting appropriate accounting policies and applying them consistently; and making accounting estimates and judgements that are reasonable in the circumstances.

In preparing the consolidated financial statements, the Board of Directors is also responsible for assessing 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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Each of the Directors confirms to the best of his or her knowledge that the consolidated financial statements, which are presented on pages 1 to 62, have been prepared in accordance with IFRS as adopted by IASB, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company.

Further, the Board of Directors confirms that, to the best of its knowledge:

1. adequate accounting records have been maintained which disclose with reasonable accuracy the financial position of the Company and explain its transactions;
2. all information of which it is aware that is relevant to the preparation of the consolidated financial statements, such as accounting records and all other relevant records and documentation, has been made available to the Company's auditors;
3. the consolidated financial statements disclose the information required by IFRS as adopted by IASB in the manner so required; and
4. the Management Report has been prepared in accordance with the requirements of the Disclosure Rules as issued by the Financial Services Authority of United Kingdom have been entered into, and the information given therein is consistent with the consolidated financial statements.

By Order of the Board

___________________________

Axana Mansourian

Director of ROS AGRO PLC

Nicosia

1 March 2024