03 Review of Rusagro's business results
05 Corporate Governance
06 Consolidated Financial Statements

Financial results review

Rusagro annually prepares Consolidated and Parent Company IFRS financial statements published together with Independent Auditor’s Report. In 2021, the Company replaced PricewaterhouseCoopers Limited with KPMG Limited Chartered Accountants as an auditor.

According to the Auditor, the prepared consolidated financial statements gave a true and fair view of the consolidated financial position of ROS AGRO PLC and its subsidiaries as of 31 December 2021, and of its consolidated financial performance and its consolidated cash flows for the year ended in accordance with IFRS as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap 113.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as of 31 December 2021, thousands of Russian roubles

31.12.2021 31.12.2020
ASSETS
Current assets
Cash and cash equivalents 46,462,179 11,866,798
Restricted cash 47 143,637
Short-term investments 21,001,760 19,583,523
Trade and other receivables 12,558,401 9,512,286
Prepayments 5,414,032 2,941,224
Current income tax receivable 1,532,726 646,162
Other taxes receivable 8,321,193 5,506,675
Inventories 69,756,363 63,266,389
Short-term biological assets 7,752,670 5,734,979
Total current assets 172,799,371 119,201,673
Non-current assets
Property, plant and equipment 119,159,412 87,519,088
Inventories intended for construction 1,604,570 3,353,330
Right-of-use assets 7,346,538 6,934,567
Goodwill 2,364,942 2,364,942
Advances paid for property, plant and equipment 7,355,467 6,905,003
Long-term biological assets 2,744,863 2,528,128
Long-term investments 42,527,657 42,692,320
Investments in associates 359,782 257,782
Deferred income tax assets 4,835,268 3,566,168
Intangible assets 1,144,057 619,793
Other non-current assets 79,125 205,793
Total non-current assets 189,521,681 156,946,914
TOTAL ASSETS 362,321,052 276,148,587
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings 108,748,840 51,753,475
Lease liabilities 1,130,831 943,859
Trade and other payables 15,440,635 16,016,138
Current income tax payable 464,471 69,546
Other taxes payable 7,454,558 4,096,199
Provisions for other liabilities and charges 494,709 179,796
Total current liabilities 133,734,044 73,059,013
Non-current liabilities
Long-term borrowings 63,975,025 63,175,720
Government grants 9,325,530 8,536,899
Lease liabilities 5,535,014 4,855,508
Deferred income tax liabilities 1,876,244 487,049
Total non-current liabilities 80,711,813 77,055,176
TOTAL LIABILITIES 214,445,857 150,114,189
EQUITY
Share capital 12,269 12,269
Treasury shares (490,607) (490,607)
Share premium 26,964,479 26,964,479
Share-based payment reserve 1,313,691 1,313,691
Fair value reserve 49,486 49,486
Retained earnings 120,080,307 98,185,038
Equity attributable to owners of ROS AGRO PLC 147,929,625 126,034,356
Non-controlling interest (54,430) 42
TOTAL EQUITY 147,875,195 126,034,398
TOTAL LIABILITIES AND EQUITY 362,321 052 276,148 587

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR

ended 31 December 2021, thousands of Russian rouble (unless otherwise stated)

31.12.2021 31.12.2020
Sales 222,932,439 158,971,035
Net gain on revaluation of biological assets and agricultural produce 3,409,309 5,890,447
Cost of sales (169,248,281) (121,132,658)
Net (loss)/gain from trading derivatives (5) 10,552
Gross profit 57,093,462 43,739,376
Distribution and selling expenses (10,475,137) (9,760,841)
General and administrative expenses (10,975,898) (7,377,449)
Reversal of provision/(provision) for impairment of loans issued 4,574,481 (5,070,598)
Other operating income/(expenses), net 2,334,177 2,293,017
Operating profit 42,551,085 23,823,505
Interest expense (5,498,991) (4,804,995)
Interest income calculated using the effective interest method 6,511,247 5,122,640
Other similar interest income 2,099,641 2,042,176
Net loss from bonds held for trading (1,630) (15,698)
Other financial income/(expenses), net (705,356) (1,844,130)
Profit before income tax 44,955,996 24,323,498
Income tax expense (3,522,144) (26,771)
Profit for the year 41,433,852 24,296,727
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Gains less losses on investments in equity securities at fair value through other comprehensive income - 56,556
Income tax relating to other comprehensive income - (7 070)
Total comprehensive income for the year 41,433,852 24,346,213
Profit/(loss)is attributable to:
- Owners of ROS AGRO PLC 41,477,865 24,359,786
- Non-controlling interest (44,013) (63,059)
Profit for the year 41,433,852 24,296,727
Total comprehensive income/(loss) is attributable to:
- Owners of ROS AGRO PLC 41,477,865 24,409,272
- Non-controlling interest (44,013) (63,059)
Total comprehensive income for the year 41,433,852 24,346,213
Earnings per ordinary share for profit attributable to the owners of ROS AGRO PLC, basic and diluted (in RR per share) 1,541,57 905,39

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR

ended 31 December 2021, thousands of Russian rouble

31.12.2021 31.12.2020
Cash flows from operating activities
Profit before income tax 44,955,996 24,323,498
Adjustments for:
Depreciation and amortization 13,945,546 10,794,046
Interest expense 10,566,994 6,448,154
Government grants (7,846,960) (3,216,290)
Interest income (8,610,888) (7,164,816)
Net loss/(gain) on disposal of property, plant and equipment 4,424 (335,640)
Net gain on revaluation of biological assets and agricultural produce (3,409,309) (5,890,447)
Change in provision for impairment of loans issued (4,574,481) 5,070,598
Change in provision for net realizable value of inventory 1,240,531 732,238
Interest expense on leases 591,558 580,276
The result from early repayment of the loan - 131,363
Change in provision for impairment of receivables and prepayments 824,151 13,592
Foreign exchange loss /(gain), net (59,354) 1,698,846
Lost harvest write-off 272,407 188,536
Net loss from bonds held for trading 1,630 15,698
Change in provision for impairment of advances paid for property, plant and equipment 26,084 (29,620)
Change in other provisions 314,918 179,796
Gain on other investments (754,538) (560,568)
Realized deferred day-one gain (552,748) (993,558)
Loss on disposal of other assets 256,144 -
Gain on SolPro loans redemption (605,233) -
Other non-cash and non-operating expenses/(income), net 234,325 (87,031)
Operating cash flows before working capital changes 46,821,197 31,898,671
Change in trade and other receivables and prepayments (6,377,712) (1,920,133)
Change in other taxes receivable (2,814,518) (1,157,275)
Change in inventories (4,236,443) (13,280,552)
Change in biological assets (2,340,945) (1,888,960)
Change in trade and other payables 82,068 (209,572)
Change in other taxes payable 3,278,845 708,164
Cash generated from operations 34,412,492 14,150,343
Income taxes paid (3,679,541) (2,033,327)
Net cash from operating activities 30,732,951 12,117,016
Cash flows from investing activities
Purchases of property, plant and equipment (42,029,048) (12,405,295)
Purchases of intangible assets (1,042,618) (418,808)
Purchases of land lease rights (68,772) (86,729)
Proceeds from sales of property, plant and equipment 896,286 687,757
Purchases of inventories intended for construction (476,322) (1,660,923)
Change in cash on bank deposits (18,000,000) -
Purchases of associates (102,000) (92,712)
Purchases of bonds with maturity over three months - (197,523)
Proceeds from sales of bonds with maturity over three months 220,282 -
Purchases of loan issued (2,256,313) (13,829)
Loans repaid 22,959,494 1,012,854
Movement in restricted cash 140,894 (143,454)
Interest received 8,786,038 4,808,803
Dividends received 754,600 560,568
Purchases of other investments (19,083) -
Proceeds from sales of other investments 18,000 -
Proceeds from sales of other assets 217,591 -
Proceeds from sales of other investments 434,632 65,938
Net cash used in investing activities (29,566,339) (7,883,353)
Cash flows from financing activities
Proceeds from borrowings 107,856,022 77,932,773
Repayment of borrowings (52,668,951) (65,389,365)
Interest and other finance cost paid (4,591,935) (4,196,451)
Purchases of non-controlling interest (66,000) -
Dividends paid to owners of ROS AGRO PLC (19,417,565) (5,134,426)
Proceeds from government grants 2,879,218 2,192,483
Repayment of lease liabilities-principal (335,167) (123,044)
Other financial activities 21,631 -
Net cash from financing activities 33,677,253 5,281,970
Effect of exchange rate changes on cash and cash equivalents (248,484) 180,386
Net increase in cash and cash equivalents 34,595,381 9,696,019
Cash and cash equivalents at the beginning of the year 11,866,798 2,170,779
Cash and cash equivalents at the end of the year 46,462,179 11,866,798

ADJUSTED EBITDA INFORMATION BY SEGMENT

as of 31 December 2021

2021 Sugar Meat Agriculture Oil and Fat Other Eliminations Total
Sales 36,360,566 39,628,064 41,881,010 125,236,601 719,452 (20,893,254) 222,932,439
Net (loss) / gain on revaluation of biological assets and agricultural produce (370,486) 2,609,949 1,169,846 3,409,309
Cost of sales (26,850,141) (33,744,934) (18,773,771) (108,855,523) (371,867) 19,347,955 (169,248,281)
incl. Depreciation (2,766,162) (3,965,508) (2,547,072) (2,877,234) (9,186) (85,607) (12,250,769)
Net loss from trading derivatives (5) (5)
Gross profit 9,510,425 5,512,639 25,717,188 16,381,078 347,585 (375,453) 57,093,462
Distribution and Selling, General and administrative expenses (3,958,396) (5,728,548) (3,396,730) (7,463,073) (2,646,176) 1,741,888 (21,451,035)
incl. Depreciation and amortisation (72,862) (910,976) (357,854) (348,591) (90,102) 85,607 (1,694,778)
Other operating income/(expenses), net 677,174 1,353,391 598,467 (726,058) 27,175,376 (26,744,173) 2,334,177
incl. Reimbursement of operating costs (government grants) 576,559 516,862 546,424 495,720 2,135,565
Incl. Non-recurring other operating adjustment 105,924 489,812 (37,563) (1,368,049) 27,067,942 (25,805,013) 453,053
Reversal of provision for impairment of loans issued 4,574,481 4,574,481
Operating profit 6,229,203 1,137,482 22,918,925 8,191,947 29,451,266 (25,377,738) 42,551,085
Adjustments:
Depreciation and amortization included in Operating Profit 2,839,024 4,876,484 2,904,926 3,225,825 99,288 13,945,547
Non-recurring other operating adjustment (105,924) (489,812) 37,563 1,368,049 (27,067,942) 25,805,013 (453,053)
Net (loss)/ gain on revaluation of biological assets and agricultural produce 370,486 (2,609,949) (1,169,846) (3,409,309)
Reversal of provision for impairment of loans issued (4,574,481) (4,574,481)
Adjusted EBITDANot an IFRS measure. 8,962,303 5,894,640 23,251,465 12,785,821 (2,091,869) (742,571) 48,059,789

ADJUSTED EBITDA INFORMATION BY SEGMENT

as of 31 December 2020

2020 Sugar Meat Agriculture Oil and Fat Other Eliminations Total
Sales 28,112,519 32,434,214 34,347,506 79,726,251 631,108 (16,280,563) 158,971,035
Net (loss)/ gain on revaluation of biological assets and agricultural produce (681,302) 3,582,520 2,989,229 5,890,447
Cost of sales (21,238,160) (27,375,635) (19,059,850) (64,547,430) (477,625) 11,566,042 (121,132,658)
incl. Depreciation (2,605,853) (3,716,132) (2,861,216) (542,826) (10,639) (75,387) (9,812,053)
Net gain from trading derivatives 10,552 10,552
Gross profit 6,884,911 4,377,277 18,870,176 15,178,821 153,483 (1,725,292) 43,739,376
Distribution and Selling, General and administrative expenses (3,399,788) (2,713,324) (3,732,770) (6,730,675) (1,704,354) 1,142,621 (17,138,290)
incl. Depreciation and amortisation (83,738) (218,146) (386,864) (184,327) (184,305) 75,387 (981,993)
Other operating income/(expenses), net 602,466 653,934 459,868 (533,103) 15,582,175 (14,472,323) 2,293,017
incl. Reimbursement of operating costs (government grants) 179,564 104,836 299,020 347,210 930,630
incl. Non-recurring other operating adjustment) 425,102 459,983 71,372 (732,371) 15,526,199 (13,936,656) 1,813,629
Provision for impairment of loans issued (5,070,598) (5,070,598)
Operating profit 4,087,589 2,317,887 15,597,274 7,915,043 8,960,706 (15,054,994) 23,823,505
Adjustments:
Depreciation and amortisation included in Operating Profit 2,689,591 3,934,278 3,248,080 727,153 194,944 10,794,046
Non-recurring other operating adjustment (425,102) (459,983) (71,372) 732,371 (15,526,199) 13,936,656 (1,813,629)
Net (loss)/ gain on revaluation of biological assets and agricultural produce 681,302 (3,582,520) (2,989,229) (5,890,447)
Provision for impairment of loans issued 5,070,598 5,070,598
Adjusted EBITDANot an IFRS measure. 6,352,078 6,473,484 15,191,462 9,374,567 (1,299,951) (4,107,567) 31,984,073

SHORT-TERM BORROWINGS

31.12.2021 31.12.2020
Bank loans 90,806,471 32,762,452
Loans received from third parties 16,600 16,600
Interest accrued on borrowings from third parties 246 615
Current portion of long-term borrowings 17,925,523 18,973,808
Total 108,748,840 51,753,475

All short-term borrowings are at fixed interest rate. The above borrowings are denominated in the following currencies:

Interest rate 31.12.2021 Interest rate 31.12.2020
Russian Roubles 1.0–11.14% 108,748,840 1.0–11.14% 51,753,475
Total 108,748,840 51,753,475

Long-term borrowings

31.12.2021 31.12.2020
Bank loans 81,900,548 82,149,528
Less current portion of long-term borrowings from:
Bank loans (17,925,523) (18,973,808)
Total 63,975,025 63,175,720

All long-term borrowings are at fixed interest rate. The above borrowings are denominated in the following currencies:

Interest rate 31.12.2021 Interest rate 31.12.2020
Russian Roubles 1.0%-12.5% 63,975,025 1.0%-12.5% 63,175,720
Total 63,975,025 63,175,720

Net debt

31.12.2021 31.12.2020
Long-term borrowings 63,975,025 63,175,720
Short-term borrowings 108,748,840 51,753,475
Cash and cash equivalents (46,462,179) (11,866,798)
Bank deposits within long-term investments (14,071,101) (13,900,000)
Bank deposits within short-term investments (18,519,392)
Long-term bonds held for collect (19,900,000) (19,900,000)
Long-term bonds held for trading (165,129)
Short-term bonds held for collect (362,475) (197,523)
Net debtNot an IFRS measure. 73,408,718 68,899,745
including long-term Net debt 30,003,924 29,210,591
including short-term Net debt 43,404,794 39,689,154
Adjusted EBITDA 48,059,789 31,984,073
Net debt/ Adjusted EBITDANot an IFRS measure. 1.53 2.15