Raport.

IMC SA Raport okresowy kwartalny skonsolidowany 3/2017 QS

WYBRANE DANE FINANSOWE w tys. USD w tys. EUR 3 kwarta?(y) narastaj?co / 2017 okres od 2017-01-01 do 2017-09-30 3 kwarta?(y) narastaj?co / 2016 okres od 2016-01-01 do 2016-09-30 3 kwarta?(y) narastaj?co / 2017 okres od do kwarta?(y) narastaj?co / okres od do Revenue 81 540 80 254 Operating profit/(loss) 34 754 46 239 Profit/(loss) before income tax 27 603 29 580 Net profit/(loss) 27 605 29 942 Net cash flow from operating activity 25 118 19 716 Net cash flow from investing activity (3 873) (2 545) Net cash flow from financing activity (18 388) (13 688) Total net cash flow 2 857 3 483 Total assets 204 125 203 683 Share capital 59 56 Total equity 98 472 77 829 Non-current liabilities 35 752 56 417 Current liabilities 69 901 69 437 Weighted average number of shares 31 857 209 31 300 000 Profit/(loss) per ordinary share (in USD) 0,87 0,96 Book value per share (in USD) 3,11 2,52

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    IMC S.A. and its subsidiaries
    Condensed consolidated interim financial statements
    For the nine months ended 30 September 2017




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    2
    CONTENTS
    Pages
    Statement of Management responsibilities 3
    Management statement 4
    Consolidated management report 5
    Condensed consolidated interim financial statements
    for the nine months ended 30 September 2017
    Condensed consolidated interim statement of comprehensive income 12
    Condensed consolidated interim statement of financial position 13
    Condensed consolidated interim statement of changes in equity 14
    Condensed consolidated interim statement of cash flows 15
    Notes to the condensed consolidated interim financial statements 17




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    3
    Statement of Management responsibilities for preparation and approval of condensed consolidated
    interim financial statements for the nine months ended 30 September 2017
    Management of the Group of companies “IMC” (the Group) is responsible for preparing the condensed consolidated
    interim financial statements which reflect in all material aspects the financial position of the Group as at 30 September
    2017 , as well as the re sults of its activities, cash flows and changes in equity for the nine months then ended in
    accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union .
    In preparing condensed consolidated interim financial statement s the Group’s Management is responsible for:
    - selecting appropriate accounting policies and their consistent application;
    - making reasonable measurement and calculation;
    - following principles of IFRS as adopted by the European Union or disclosing all co nsiderable deviations from IFRS
    in the notes to condensed consolidated interim financial statements ;
    - preparing condensed consolidated interim financial statements of the Group on the going concern basis, except for
    the cases when such assumption is not appropriate;
    - accounting and disclosing in the condensed consolidated interim financial statements all the relations and transactions
    between related parties;
    - accounting and disclosing in the condensed consolidated interim financial statements all subseq uent events that
    would result in an adjustment or a disclos ure ;
    - disclosing all claims related to previous or potential legal proceedings;
    - disclosing in the condensed consolidated interim financial statements all the loans or guarantees to the Managemen t.
    The Group’s Management is also responsible for:
    - development, implementation and control over effective and reliable internal control system in the Group;
    - keeping accounting records in compliance with the legislation and accounting standards of the respective country of
    the Group’s registration;
    - taking reasonable steps within its cognizance to safeguard the assets of the Group;
    - detecting and preventing from fraud and other irregularities.
    These condensed consolidated interim financial statements as at 30 September 2017 prepared in compliance with IFRS
    as approved by the European Union are approved on behalf of the Group’s Management on 16 November 201 7.
    On behalf of the Management:
    Chief Executive Officer ALEX LISSITSA ______ signed ________
    Chief Financial Officer DMYTRO MARTYNIUK ______ signed ________




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    4
    Management statement
    This statement is provided to confirm that, to the best of our knowledge, the condensed consolidated interim financial
    statements for the nine months ended 30 September 2017 , and the comparable information, have been prepared in
    compliance with International Financial Reporting Standards as issued by the International Accounting Sta ndards Board
    and as adopted by the European Union and give a true, fair and clear view of Group’s assets, financial standing and net
    results, and that the direct ors’ report on the operations truly reflects the development, achievements and position of
    the Group, including a description of the key risk factors and threats.
    On behalf of the Management:
    Chief Executive Officer ALEX LISSITSA ______ signed ________
    Chief Financial Officer DMYTRO MARTYNIUK ______ signed ________




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    5
    Consolidated interim management report
    1. Operational and Financial Results
    2. Forecast report
    3. Selected Financial Data
    1. Operational and Financial Results
    The following table sets forth the Company’s results of operations derived from the Condensed consolidated interim financial statements :
    For the nine months ended
    Notes 30 September
    2017 30 September
    2016* Change in %
    CONTINUING OPERATIONS
    Revenue 6 81 540 80 254 2%
    Gain from changes in fair value of biological assets and
    agricultural produce, net 7 52 475 54 694 -4%
    Cost of sales 8 (82 866) (78 654) 5%
    GROSS PROFIT 51 149 56 294 -9%
    Administrative expenses 9 (6 853) (4 373) 57%
    Selling and distribution expenses 10 (6 397) (4 362) 47%
    Other operating income 11 929 2 539 -63%
    Other operating expenses 12 (2 859) (2 355) 21%
    Write -offs of property, plant and equipment (1 215) (1 504) -19%
    OPERATING PROFIT 34 754 46 239 -25%
    Financial expenses, net 15 (4 866) (9 563) -49%
    Effect of additional return 30 (3 221) (2 758) 17%
    Foreign currency exchange gain/(loss), net 16 936 (4 338) -122%
    PROFIT BEFORE TAX FROM CONTINUING
    OPERATIONS 27 603 29 580 -7%
    Income tax expenses, net 17 2 362 -99%
    NET PROFIT FOR THE PERIOD FROM
    CONTINUING OPERATIONS 27 605 29 942 -8%
    For the purposes of their analyses, the Company’s management use Normali sed Net profit , being Net profit adjusted for some expense items
    that are deemed to be substantially beyond their control, such as write -offs of property, plant and equipment and foreign currency exchange gains
    and losses, as well as items believed to be non -recurring. The non -recurring expenses currently include the effect of additional return on warrants
    (Note 30 to the condensed consolidated interim financial statements), as it is assumed that similar transactions will not be occurring in the
    foreseeable future.
    The Normali sed Net profit for the periods presented is calculated based on historical information derived from the condensed consolidated
    interim financial statements.
    The reconciliation to Normalised Net profit for the period (from continuing operations) is p resented as follows:
    For the nine months ended
    30 September
    2017 30 September
    2016 Change in %
    CONTINUING OPERATIONS
    Net profit for the period 27 605 29 942
    Write -offs of property, plant and equipment 1 215 1 504
    Foreign currency exchange (loss)/gain, net (936) 4 338
    Non recurring items:
    Effect of additional return 3 221 2 758
    Normalised Net profit 31 105 38 542 -19%




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    6
    The Company also uses normali sed Earnings before interest and taxes (EBIT) and normali sed Earnings before interest, taxes, depreciation and
    amortisation (EBITDA) as key measures of its performance.
    Earnings before interest and taxes (EBIT) is an indicator of a company's profitability, cal culated as revenue less expenses, the latter excluding
    tax and interest. To external users, EBIT provides information on the Company’s ability to generate earnings directly from it s operations,
    disregarding its cost of capital and the tax burden and thus m aking the Company’s results comparable to similar companies across the industry
    where those companies may have varying capital structures or tax environments. To the management, EBIT provides a performance measure
    additionally adjusted for expenses that ma y be deemed fixed (i.e. stemming from the given capital structure) or externally imposed by the
    environment (i.e. the tax burden).
    The Company calculates Normali sed EBIT by adjusting Net profit for the expense items that are deemed to be substantially beyond the control
    of management, as well as items believed to be non -recurring.
    The Normali sed EBIT for the periods presented is calculated based on historical information derived from the condensed consolidated interim
    financial statements.
    The reconci liation to Normalised EBIT for the period (from continuing operations) is presented as follows:
    For the nine months ended
    30 September
    2017 30 September
    2016 Change in %
    CONTINUING OPERATIONS
    Net profit for the period 27 605 29 942
    Write -offs of property, plant and equipment 1 215 1 504
    Foreign currency exchange (loss)/gain, net (936) 4 338
    Financial expenses, net 4 866 9 563
    Income tax expenses, net (2) (362)
    Non recurring items:
    Effect of additional return 3 221 2 758
    Normalised EBIT 35 969 47 743 -25%
    Earnings before interest, taxes, depreciation and amortisation (EBITDA) is calculated as revenue less expenses, the latter excluding tax,
    interest, depreciation and amortisation. Being a proxy to the operating cash flow before working capital changes, EBITDA is widely used as an
    indicator of a company's ability to generate cash f lows, as well as its ability to service debt. Consequently, to the management EBITDA serves as
    a measure to estimate financial stability of the Company. Besides, excluding the effect of depreciation and amortisation alon g with cost of capital
    and taxation provides to external users another measures comparable to similar companies regardless of varying tax environments, capital
    structures or depreciation accounting policies.
    The Company calculates Normali sed EBITDA by adjusting Net profit for the expense ite ms that are deemed to be substantially beyond the
    control of management, as well as items believed to be non -recurring.
    The Normali sed EBITDA for the periods presented is calculated based on historical information derived from the condensed consolidated in terim
    financial statements.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    7
    The reconciliation to Normalised EBITDA for the period (from continuing operations) is presented as follows:
    For the nine months ended
    30 September
    2017 30 September
    2016 Change in %
    CONTINUING OPERATIONS
    Net profit for the period 27 605 29 942
    Write -offs of property, plant and equipment 1 215 1 504
    Foreign currency exchange (loss)/gain, net (936) 4 338
    Financial expenses, net 4 866 9 563
    Income tax expenses, net (2) (362)
    Depreciation and amortization 6 786 8 523
    Non recurring items:
    Effect of additional return 3 221 2 758
    Normalised EBITDA 42 755 56 266 -24%
    Company’s Normalised Net profit, as well as Normalised EBIT and EBITDA decreased in 9m 2017 in comparison with 9m 2016 mainly due to
    increase in production cost and strengthening of UAH in 2017.
    * Certain amounts shown here do not correspond to the 9m201 6 financial statements and reflect adjustments made, refer to Note 5.
    Revenue
    The Company’s revenue from sales of finished products increased by 1% in nine -month period ended 30 September 2017 in comparison with
    previous period .
    The following table sets forth the Company’s sales revenue by products indicated:
    (in thousand USD)
    For the nine months ended
    30 September 2017 30 September 2016 Change in %
    Corn 59 992 54 447 10%
    Wheat 9 946 6 715 48%
    Sunflower 6 262 14 259 -56%
    Milk 1 154 2 471 -53%
    Potatoes 1 071 582 84%
    Soy beans 1 035 113 816%
    Cattle 315 1 008 -69%
    Other 1 471 455 223%
    81 246 80 050 1%
    The most significant portion of the Company’s revenue comes from selling corn, which represented 73,8 % in nine -month period ended 30
    September 2017 and 68% in nine -month period ended 30 September 2016 of total revenue.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    8
    The following table sets fo rth the volume of the Company’s main crops and revenues generated from the sales of such crops:
    (in thousand USD)
    For the nine months ended
    30 September 2017 30 September 2016
    Corn
    Sales of produced corn (in tonnes) 385 119 358 382
    Realization price (U.S. $ per ton) 156 152
    Revenue from produced corn (U.S. $ in thousands) 59 992 54 447
    Wheat
    Sales of produced wheat (in tonnes) 66 998 46 881
    Realization price (U.S. $ per ton) 148 143
    Revenue from produced wheat (U.S. $ in thousands) 9 946 6 715
    Soy beans
    Sales of produced soy beans (in tonnes) 2 802 302
    Realization price (U.S. $ per ton) 370 373
    Revenue from produced soy beans (U.S. $ in thousands) 1 035 113
    Sunflower
    Sales of produced sunflower (in tonnes) 19 853 49 033
    Realization price (U.S. $ per ton) 315 291
    Revenue from produced sunflower (U.S. $ in thousands) 6 262 14 259
    Potatoes
    Sales of produced potatoes (in tonnes) 13 213 8 077
    Realization price (U.S. $ per ton) 81 72
    Revenue from produced potatoes (U.S. $ in thousands) 1 071 582
    Other (produced only)
    Total sales volume (in tonnes) 16 757 3 866
    Total revenues (U.S. $ in thousands) 1 471 455
    Total sales volume (in tonnes) 504 742 466 541
    Total revenue from sale of crops (U.S. $ in thousands) 79 777 76 571
    Rev enue relating to sales of corn increased by 10% to USD 60,0 million in current period from USD 54,4 million in previous period, mainly due
    to an increase in sales volume (ton s) in 201 7.
    Revenue relating to sales of wheat increased by 48% to USD 9,9 million in current period from USD 6,7 million in previous per iod, mainly due
    to an increase in sales volume (tons) in 2017.
    Revenue relating to sales of sunflower decreased by 56% to USD 6,3 million in current period from USD 14,3 million in previous period, due to
    a decrease in sales volume (tons) in 2017.
    Revenue relating to sales of soy beans increased by 816 % to USD 1,0 million in current period fro m USD 0,1 million in previous period , due to
    an increase in sales v olume (ton s) in 201 7.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    9
    Cost of sales
    The Company’s cost of sales increased by 6% to USD 82,9 million in current period from USD 78,7 million in previous period . The following
    table sets forth the principal components of the Company’s cost of sales for the periods indicated:
    (in thousand USD)
    For the nine months ended
    30 September
    2017 30 September
    2016 Change in %
    Raw materials (69 874) (52 026) 34%
    Change in inventories and work -in-progress 15 455 (926) -1769%
    Rent (9 315) (8 814) 6%
    Depreciation and amortization (5 686) (7 190) -21%
    Fuel and energy supply (5 463) (3 634) 50%
    Wages and salaries of operating personnel and related charges (5 157) (4 170) 24%
    Third parties' services (1 453) (831) 75%
    Taxes and other statutory charges (723) (592) 22%
    Repairs and maintenance (593) (389) 53%
    Other expenses (57) (82) -31%
    (82 866) (78 654) 5%
    Increase in cost of sales mainly consists of increase in raw materials by 34% to USD 69,9 million in current period from USD 52,0 million in
    previous period . This was due to an increase in the amount of disposal of revaluation of agriculture produce and biological assets as a part of cost
    of sales (from USD 21 224 thousand in 2016 to USD 31 963 thousand in 2017 ).
    Gross profit
    The Company’s gross profit de creased to USD 51,1 million in current period from USD 56,3 million in previous period , an 9% year -on-year
    decrease. In relative terms, the total cost of sales went up 5% year -on-year.
    Administrative expenses
    Administrative expenses increased year -on-year to USD 6,9 million in current period from USD 4,4 million in previous period , reflecting an
    increase in wages and salaries of administrative personnel and related charges to USD 5,0 million from USD 2,9 million.
    Selling and distribution expenses
    Selling and distribution expenses increased year -on-year to USD 6,4 million in current period from USD 4,4 million in previous period , reflecting
    an increase in the volume of realization in 201 7.
    Other operating income
    The Company’s other operating income decreased by 63% to USD 0,9 million in current period from USD 2,5 million in previous period due to
    decrease in Income from write -offs of accounts payable, Income from subsidized VAT and Income from the exchange of property certificates .
    Other operating expenses
    Other operating expenses increased by 21% to USD 2,9 million in current period from USD 2,4 million in previous period reflecting an increase
    in charity expenses .




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    10
    Financial expenses, net
    The Company’s financial expenses, net decreased by 49% to USD 4,9 million in current period from USD 9,6 million in previous period . This
    decrease was related to the repayment of loans and bor rowings in 20 16-2017 .
    Foreign currency exchange loss, net
    Foreign currency exchange gain , net increase to USD 0,9 million in current period of foreign currency exchange gain from USD 4,3 million in
    previous period of the same losses . This increase reflected the strengthening of UAH in 201 7 in comparison with 201 6 – 7,4% of devaluation as
    at 30 September 2016 in comparison with 2,5% of revaluation as at 30 September 2017 .
    Cash flows
    The following table sets out a summary of the Company’s cash flows for the periods indicated:
    (in thousand USD)
    For the nine months ended
    30 September 2017 30 September 2016
    Net cash flows from operating activities 25 118 19 716
    Net cash flows from investing activities (3 873) (2 545)
    Net cash flows from financing activities (18 388) (13 688)
    Net increase in cash and cash equivalents 2 857 3 483
    Net cash flow from operating activities
    The Company’s net cash inflow from operating activities increased to USD 25,8 million in current period from USD 19,7 million in previous
    period . The increase in 201 7 was primarily attributable to increase in sales .
    Net cash flow from investing activities
    The Company’s net cash outflow from investing activities increased to USD 3,9 million in current period compared to net cash outflow of USD
    2,5 million in previous period . The increase in 201 7 was attributable to purchase of property, plant and equipment .
    Net cash flow from financing activities
    Net cash out flow from financing activities increased to USD 18,4 million in current period from USD 13,7 million in previous period . The increase
    in 201 7 was primarily due to changes of credit portfolio in the direction of long -term borrowings.
    2. Forecast report
    The Board of Directors of IMC S.A. (hereinafter "the Company") informs that the Company forecasts the following financials fo r FY 2017 ending
    31 December 2017:
    1. Revenue is forecast at USD 134 million +/ - USD 2 million .
    2. Net profit is forecast at USD 21 million +/ - USD 1 million .
    3. Total debt as of 31 December 2017 is forecast at USD 65 million .
    The Management Board confirmed foregoing guidelines.
    The Company will assess the feasibility of financial guidelines on a quarterly basis.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    11
    3. Selected Financial Data
    (in thousand USD)
    For the nine months ended 30 September 2017 30 September 2016
    I. Revenue 81 540 80 254
    II. Operating profit/(loss) 34 754 46 239
    III. Profit/(loss) before income tax 27 603 29 580
    IV. Net profit/(loss) 27 605 29 942
    V. Net cash flow from operating activity 25 118 19 716
    VI. Net cash flow from investing activity (3 873) (2 545)
    VII. Net cash flow from financing activity (18 388) (13 688)
    VIII. Total net cash flow 2 857 3 483
    IX. Total assets 204 125 203 683
    X. Share capital 59 56
    XI. Total equity 98 472 77 829
    XII. Non -current liabilities 35 752 56 417
    XIII. Current liabilities 69 901 69 437
    XIV. Weighted average number of shares 31 857 209 31 300 000
    XV. Profit/(loss) per ordinary share (in USD) 0,87 0,96
    XVI. Book value per share (in USD) 3,11 2,52




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    12
    CONDENSED C ONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
    For the nine months ended 30 September 2017
    (in thousand USD, unless otherwise stated)
    Note
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Restated*
    CONTINUING OPERATIONS
    Revenue 6 81 540 80 254
    Gain from changes in fair value of biological assets and agricultural produce,
    net 7 52 475 54 694
    Cost of sales 8 (82 866) (78 654)
    GROSS PROFIT 51 149 56 294
    Administrative expenses 9 (6 853) (4 373)
    Selling and distribution expenses 10 (6 397) (4 362)
    Other operating income 11 929 2 539
    Other operating expenses 12 (2 859) (2 355)
    Write -offs of property, plant and equipment (1 215) (1 504)
    OPERATING PROFIT 34 754 46 239
    Financial expenses, net 15 (4 866) (9 563)
    Effect of additional return 30 (3 221) (2 758)
    Foreign currency exchange gain/(loss), net 16 936 (4 338)
    PROFIT BEFORE TAX FROM CONTINUING OPERATIONS 27 603 29 580
    Income tax expenses, net 17 2 362
    NET PROFIT FOR THE PERIOD FROM CONTINUING
    OPERATIONS 27 605 29 942
    Net profit/(loss) for the period attributable to:
    Owners of the parent company 27 769 17 120
    Non -controlling interests (164) (430)
    Weighted average number of shares 31 857 209 31 300 000
    Basic profit per ordinary share (in USD) 0,87 0,96
    OTHER COMPREHENSIVE INCOME/(LOSS)
    Items that may be reclassified to profit or loss
    Effect of foreign currency translation 2 561 (7 218)
    Items that will no be reclassified to profit or loss
    Deferred tax charged directly to revaluation reserve 107 195
    TOTAL OTHER COMPREHENSIVE INCOME/(LOSS) 2 668 (7 023)
    TOTAL COMPREHENSIVE PROFIT 30 273 22 919
    Comprehensive income/(loss) attributable to:
    Owners of the parent company 30 451 23 299
    Non -controlling interests (178) (380)
    * Certain amounts shown here do not correspond to the 9m 201 6 condensed consolidated interim financial statements and reflect adjustments
    made, refer to Note 5
    __________ signed ____________
    Alex Lissitsa
    __________ signed ____________
    Dmytro Martyniuk
    Chief Executive Officer Chief Financial Officer




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    13
    CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
    As at 30 September 2017
    (in thousand USD, unless otherwise stated)
    Note 30 September
    2017 31 December
    2016 30 September
    2016 31 December
    2015
    Unaudited Audited Unaudited Audited
    Restated* Restated*
    ASSETS
    Non -current assets
    Property, plant and equipment 18 63 531 64 650 70 253 80 083
    Intangible assets 19 3 408 4 061 4 480 5 750
    Non -current biological assets 20 2 302 1 432 936 4 471
    Deferred tax assets 21 - - - 14
    Other non -current assets 22 965 1 817 402 434
    Total non -current assets 70 206 71 960 76 071 90 752
    Current assets
    Inventories 23 31 725 55 110 22 301 60 307
    Current biological assets 24 79 280 18 202 77 769 8 823
    Trade accounts receivable, net 25 2 562 276 7 938 966
    Prepayments and other current assets, net 26 13 313 9 208 10 916 7 088
    Prepayments for income tax 14 9 29 18
    Cash and cash equivalents 28 7 025 4 180 8 659 6 673
    Total current assets 133 919 86 985 127 612 83 875
    TOTAL ASSETS 204 125 158 945 203 683 174 627
    LIABILITIES AND EQUITY
    Equity attributable to the owners of
    parent company
    Share capital 29 59 56 56 56
    Share premium 29 512 24 387 24 387 24 387
    Revaluation reserve 39 042 43 217 44 873 49 972
    Retained earnings 156 891 126 825 133 601 97 935
    Effect of foreign currency translation (126 302) (128 876) (124 142) (116 874)
    Total equity attributable to the owners
    of parent company 99 202 65 609 78 775 55 476
    Non -controlling interests (730) (552) (946) (566)
    Total equity 98 472 65 057 77 829 54 910
    Non -current liabilities
    Long -term loans and borrowings 31 33 311 55 185 53 725 46 060
    Deferred tax liabilities 21 2 441 2 498 2 692 3 556
    Total non -current liabilities 35 752 57 683 56 417 49 616
    Current liabilities
    Current portion of long -term borrowings 31 9 317 9 846 19 675 31 493
    Short -term loans and borrowings 32 28 090 18 547 18 994 26 776
    Trade accounts payable 33 25 480 2 104 20 094 3 274
    Other current liabilities and accrued
    expenses 34 7 014 5 708 10 674 8 558
    Total current liabilities 69 901 36 205 69 437 70 101
    Total liabilities 105 653 93 888 125 854 119 717
    TOTAL LIABILITIES AND
    EQUITY 204 125 158 945 203 683 174 627
    * Certain amounts shown here do not correspond to the 9m 201 6 condensed consolidated interim financial statements and reflect adjustments
    made, refer to Note 5
    __________ signed ____________
    Alex Lissitsa
    __________ signed ____________
    Dmytro Martyniuk
    Chief Executive Officer Chief Financial Officer


    IMC S.A. AND ITS SUB SIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    14
    CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
    For the nine months ended 30 September 2017
    (in thousand USD, unless otherwise stated)
    Share
    capital
    Share
    premium
    Revaluation
    reserve
    Retained
    earnings
    Effect of
    foreign
    currency
    translation
    Total
    Non -
    controlling
    interests
    Total
    equity
    31 December 2015
    (audited, restated*) 56 24 387 49 972 97 935 (116 874) 55 476 (566) 54 910
    Profit (loss) for the period - - - 30 372 - 30 372 (430) 29 942
    Amortization of revaluation
    reserve
    - - (5 294) 5 294 - - - -
    Deferred tax charged directly
    to amortization of
    revaluation reserve
    - - 195 - - 195 - 195
    Other comprehensive
    income/(loss)
    - - - - (7 268) (7 268) 50 (7 218)
    Total comprehensive
    profit/(loss) (restated*)
    - - (5 099) 35 666 (7 268) 23 299 (380) 22 919
    30 September 2016
    (unaudited, restated*)
    56 24 387 44 873 133 601 (124 142) 78 775 (946) 77 829
    31 December 2016
    (audited) 56 24 387 43 217 126 825 (128 876) 65 609 (552) 65 057
    Issue of share capital 3 5 125 - - - 5 128 - 5 128
    Distribution of dividends - - - (1 985) - (1 985) - (1 985)
    Profit (loss) for the period - - - 27 769 - 27 769 (164) 27 605
    Amortization of revaluation
    reserve
    - - (4 282) 4 282 - - - -
    Deferred tax charged directly
    to amortization of
    revaluation reserve
    - - 107 - - 107 - 107
    Other comprehensive
    income/(loss)
    - - - - 2 574 2 574 (14) 2 561
    Total comprehensive
    profit/(loss)
    3 5 125 (4 175) 30 066 2 574 33 593 (178) 33 415
    30 September 2017
    (unaudited)
    59 29 512 39 042 156 891 (126 302) 99 202 (730) 98 472
    * Certain amounts shown here do not correspond to the 9m 201 6 condensed consolidated interim financial statements and reflect adjustments
    made, refer to Note 5
    __________ signed ____________
    Alex Lissitsa
    __________ signed ____________
    Dmytro Martyniuk
    Chief Executive Officer Chief Financial Officer



    IMC S.A. AND ITS SUB SIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    15
    CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
    For the nine months ended 30 September 2017
    (in thousand USD, unless otherwise stated)
    Note
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Restated*
    CASH FLOWS FROM OPERATING ACTIVITIES:
    Profit/(loss) before tax from continuing operations 27 603 29 580
    Adjusted to reconcile profit before tax with net cash used
    in operating activities:
    Gain from changes in fair value of biological assets and
    agricultural produce, net 7 (52 475) (54 694)
    Disposal of revaluation of biological assets and agricultural
    produce in the cost of sales, net 8 31 963 21 224
    Depreciation and amortization 13 6 786 8 523
    Interest expenses and other financial expenses 15 5 097 9 753
    Effect of additional return 3 221 2 758
    Write -offs of property, plant and equipment 1 215 1 504
    Foreign currency exchange loss/(gain), net (980) 4 413
    Gain on recovery of assets previously written off 11 (657) (762)
    Lost crops 12 539 387
    Loss on disposal of property, plant and equipment 12 508 234
    Deferred expenses on options 426 -
    Shortages and losses due to impairment of inventories 12 345 312
    Interest income 15 (232) (190)
    Income from write -offs of accounts payable 11 (168) (925)
    Write -offs of VAT 12 66 86
    Accruals for unused vacations 44 27
    Gain on disposal of inventories 11 (27) (19)
    Allowance for doubtful accounts receivable 12 11 22
    Income from the exchange of property certificates 11 - (321)
    Cash flows from operating activities before changes in
    working capital 23 284 21 912
    Changes in trade accounts receivable (2 205) (7 085)
    Changes in prepayments and other current assets 920 (4 328)
    Changes in inventories 5 894 34 811
    Changes in current biological assets (22 596) (34 794)
    Changes in trade accounts payable 23 379 17 413
    Changes in other current liabilities and accrued expenses 1 097 678
    Cash flows from operations 29 775 28 607
    Interest paid (4 637) (8 822)
    Income tax paid (19) (69)
    Net cash flows from operating activities 25 118 19 716
    * Certain amounts shown here do not correspond to the 9m 201 6 condensed consolidated interim financial statements and reflect adjustments
    made, refer to Note 5
    __________ signed ____________
    Alex Lissitsa
    __________ signed ____________
    Dmytro Martyniuk
    Chief Executive Officer Chief Financial Officer



    IMC S.A. AND ITS SUB SIDIARIES
    Condensed consolidated interim financial statements
    Notes on pages 17-59 form an integral part of these Condensed consolidated interim financial statements
    16
    CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
    For the nine months ended 30 September 2017
    (in thousand USD, unless otherwise stated)
    Note
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Restated*
    CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of property, plant and equipment (4 014) (2 642)
    Purchase of non -current biological assets - (38)
    Purchase of intangible assets (51) (226)
    Proceeds from disposal of property, plant and equipment 192 361
    Net cash flows from investing activities (3 873) (2 545)
    CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from long -term and short -term borrowings 28 587 59 631
    Repayment of long -term and short -term borrowings (45 012) (73 319)
    Issue of share capital 22 -
    Repayment of dividends (1 985) -
    Net cash flows from financing activities (18 388) (13 688)
    NET CASH FLOWS 2 857 3 483
    Cash and cash equivalents as at the beginning of the
    period 28 4 180 6 673
    Effect of translation into presentation currency (13) (1 497)
    Cash and cash equivalents as at the end of the period 28 7 025 8 659
    * Certain amounts shown here do not correspond to the 9m 201 6 condensed consolidated interim financial statements and reflect adjustments
    made, refer to Note 5
    __________ signed ____________
    Alex Lissitsa
    __________ signed ____________
    Dmytro Martyniuk
    Chief Executive Officer Chief Financial Officer




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    17
    1. Description of formation and business.
    IMC S.A. (the “Parent company ”) is a limited liability company registered under the laws of Luxembourg on 28 December 2010 for an unlimited
    period of time. IMC S.A. was formed to serve as the ultimate holding company of Unigrain Holding Limited and its subsidiaries. The registered
    address of IMC S.A. is L-2540, 26 -28 rue Edward Steichen, Luxembourg, Grand Duchy Luxembourg , its register number within the Registre de
    Commerce et des Sociétés du Luxembourg is RCS Lu B157843.
    IMC S.A. and its su bsid iaries (the “Group” or the “ IMC ”) is an integrated agricultural company in Ukraine. The main areas of the Group’s
    activities are:
    - cultivation of grain and oilseeds crops, potato production;
    - dairy farming;
    - storage and processing of grain and oilseeds crops.
    The Group is among Ukraine’s top -10 industrial milk producers. The grain and oilseeds crops produced by the Group are sold in both the
    Ukrainian and export markets.
    Until December 2010 there was no the holding company of the Group.
    In June 2009 in the co urse of the corporate reorganization Unigrain Holding Limited was established as a sub -holding company of the Group.
    Through the series of transactions Unigrain Holding Limited became the immediate parent of Burat -Agro, Ltd., Burat, Ltd., Chernihiv Industr ial
    Milk Company, Ltd., PRJSC Mlibor, PRJSC Poltava Kombi kormoviy Zavod and Zemelniy Kadastroviy Centr SA.
    In December 2010 IMC S.A. was registered as a holding company of the Group through the ownership of 100% of the voting shares in the
    company Unigrain Holding Limited .
    In June 2011 Unigrain Holding Limited acquired 100% of the voting shares in the company PAE Promin, PE Progress 2010, PAE Sla vutich. In
    November 2011 companies PAE Slavutich and PE Progress 2010 were merged to Chernihiv Industrial Milk Co mpany, Ltd and the company
    PAE Promin was merged to Burat -Agro, Ltd.
    In August 2011 trading company Aristo Eurotrading was formed.
    In December 2011 Unigrain Holding Limited acquired 100% of the voting shares in the company AF Kalynivska 2005, Ltd , AF Zhovt neva, Ltd,
    AF Shid -2005, Ltd, APP Virynske, Ltd, Pisky, Ltd., SE “Viry -Agro” and 80,61% of the voting shares in the compa ny PRJSC “Viryvske HPP”.
    In March 2012 Unigrain Holding Limited acquired 100% of the voting shares in the company Ukragrosouz KSM, Ltd.
    In June 2012 Unigrain Holding Limited acquired 100% of the voting shares in the company PAC Slobozhanschina Agro .
    In November 2012 the Group was restru ctured and 6 companies were joined to PAC Slobozhanschina Agro: AF Kalynivska -2005 Ltd, AF
    Zh ovtneva Ltd , AF Shid -2005 Ltd, AIE Vyrynske Ltd, Pisky Ltd, SE Vyry -Agro.
    In December 2012 Unigrain Holding Limited acquired 100% of the voting shares in the company Bluerice Limited. The following companies
    became the part of the Group, as their owner is Bluerice Limited: Agroprogress Holding Ltd, Agroprogress PE, Bobrovitsky Hlebzavod Ltd,
    Plemzavod Noviy Trostyanets Ltd, PRJSC “Bobrovitske HPP ”, Losinovka -Agro Ltd, Parafiyivka -Progres s Ltd, Nosovsky Saharny Zavod Ltd.
    In November 2013 trading company Negoce Agricole S.A. was formed.
    In December 2013 Losinovka -Agro Ltd was joined to Agroprogress PE.
    During the year 2013 the Group acquired the voting shares in the company AgroKIM Ltd and on 30 December 2013 the acquisition was completed
    and 100% of the voting shares were owned by the Group.
    In April 2014 Parafiyivka -Progress Ltd was joined to AgroKIM Ltd .
    In May 2015 Plemzavod Noviy Trostyanets Ltd was joined to AgroKIM Ltd.
    In May 2016 Ukragrosouz KSM Ltd was joined to Burat -Agro Ltd . (noted * in column cumulative ownership ratio, % as at 30 September 2016).
    In October 2016 Zemelniy Kadastroviy Centr PE and Agroprogress Holding Ltd left the Group . Bluerice Limited left the Group in December
    2016 .
    On 26 April 2017 IMC S.A. ( formally Industrial Milk Company S.A., hereinafter the Company) informs that official name of the Company has
    been changed from Industrial Milk Company S.A. to IMC S.A.
    All companies comprising the Group were under the control of the same beneficial owner Mr. Petrov A.L. as at all the reporting dates and have
    effectively operated as an operating group under common management.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    18
    The principal activities of the companies comprising the Group are as follows:
    Operating entity Principal activity Country of
    registration
    Year
    established/
    acquired
    Cumulative ownership ratio,
    %
    30
    September
    2017
    30
    September
    2016
    IMC S.A. Holding company Luxembourg 28.12.2010 100 100
    Burat -Agro Ltd. Agricultural and farming
    production Ukraine 31.12.2007 100 100
    Burat Ltd. Grain elevator Ukraine 31.12.2007 100 100
    Chernihiv Industrial Milk
    Company Ltd.
    Agricultural and farming
    production Ukraine 31.12.2007 100 100
    PrJSC Poltava Kombilormoviy
    Zavod
    Granting of PPE into finance
    lease Ukraine 31.12.2007 87,56 87,56
    PrJSC Mlibor Grain elevator Ukraine 31.05.2008 72,85 72,85
    Unigrain Holding Limited Subholding company Cyprus 02.06.2009 100 100
    Zemelniy Kadastroviy Centr PE
    Preparation of technical
    documentation concerning
    land issues
    Ukraine 23.11.2010 - 100
    Aristo Eurotrading Limited Trading company British Virgin
    Islands 30.08.2011 100 100
    PrJSC ''Vyryvske HPP" Grain elevator Ukraine 28.12.2011 80,61 80,61
    Ukragrosouz KSM Ltd Agricultural production Ukraine 29.03.2012 - *
    PAC Slobozhanschina Agro Agricultural production Ukraine 26.06.2012 100 100
    Bluerice Limited Subholding company Cyprus 28.12.2012 - 100
    Agroprogress Holding Ltd Subholding company Ukraine 28.12.2012 - 100
    Agroprogress PE Agricultural and farming
    production Ukraine 28.12.2012 100 100
    Bobrovitsky Hlebzavod Ltd Bakery production Ukraine 28.12.2012 100 100
    PrJSC ”Bobrovitske HPP” Grain elevator Ukraine 28.12.2012 92,83 92,83
    Nosovsky Saharny Zavod Ltd Storage facilities Ukraine 28.12.2012 100 100
    Negoce Agricole S.a r.l. Trading company Luxembourg 19.11.2013 100 100
    AgroKIM Ltd . Agricultural and farming
    production , grain elevator Ukraine 30.12.2013 100 100




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    19
    Today IMC is the vertically integrated and high -technology group of companies operating in Sumy, Poltava and Chernihiv region (northern and
    central Ukraine).
    The Group control s 140,4 thousand ha (136,6 thousand ha under processing of high quality arable l and ). As at 30 September 2017 the Group
    operates in three segments: crop farming, dairy farming, elevators and warehouses .
    The financial year of the Group begins on 01 January of each year and terminates on 31 December of each year.
    The Group’s condensed consolidated interim financial statements are public and available at:
    http://www.imcagro.com.ua/en/investor -relations/financial -reports .
    2. Basis of preparation of the condensed consolidated interim financial statements
    Statement of compliance
    These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards
    (“IFRS”) as issued by the Internationa l Accounting Standards Board (“IASB”) and as adopted by the European Union. The interim condensed
    consolidated financial statements for the nine months ended 30 September 2017 have been prepared in accordance with IAS 34 Interim Financial
    Reporting. The in terim condensed consolidated financial statements do not include all the information and disclosures required in the annual
    financial statements, and should be read in conjunction with the Group’s annual financial statements as at 31 December 2016.
    These condensed consolidated interim financial statements are based on principal accounting policies and critical accounting estimates and
    judgments that are set out below. These accounting policies and assumptions have been applied consistently to all periods pre sented in these
    condensed consolidated interim fi nancial statements .
    Companies comprising the Group which are incorporated in Ukraine maintain their accounting records in accordance with Ukraini an regulations.
    Ukraini an statutory accounting princip les and procedures differ from those generally accepted u nder IFRS. Accordingly, the condensed
    consolidated interim financial statements , which have been prepared from the Ukrainian statutory accounting records for the entities of the Group
    domiciled in Ukraine, reflect adjustments necessary for such financial s tatements to be presented in accordance with IFRS.
    Going concern
    These condensed consolidated interim financial statements have been prepared on a going concern basis, which contemplates the disposal of
    assets and the settlement of liabilities in the normal course of business. The recoverability of Group’s assets, as well as t he future operations of
    the Group, may be signific antly affected by the current and future economic environment. Management believes that Group has reliable access
    to sources of financing capable to support appropriate operating activity of Group entities. These condensed consolidated interim financial
    statements do not include any adjustments should the Group be unable to continue as going concern.
    Basis of measurement
    The condensed consolidated interim financial statements are prepared under historical cost basis except for the revalued amounts of property,
    plant and equipment, biological assets and agricultural produce.
    The Group’s management has decided to present and measure these condensed consolidated interim financial statements in United States Dollars
    (“USD”) for the purposes of convenience of users of these financial statements.
    Use of estimates
    The preparation of these condensed consolidated interim financial statements involves the use of reasonable accounting es timates and requires
    the Management to make judgments in applying the Group's accounting policies. These estimates and assumptions are based on Management’s
    best knowledge of current events, historical experience and other factors that are believed to be r easonable. Note 4 contains areas, related to a
    high degree of importance or complexity in decision -making, or areas where assumptions and estimates are important for amounts of revenues,
    expenses, assets and liabilities and the disclosure of contingent lia bilities at the end of the reporting period.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    20
    Foreign currency translation
    Functional and presentation currency
    Items included in the financial statements of each of the Group's companies are measured using the currency of the primary ec onomic
    environment in which the company operates ("the functional currency"). For the companies of the Group operating in Ukraine the Ukrainian
    Hryvna ("UAH") is the functional currency. For the companies operating in Cyprus and Luxembourg the functional currency is Eu ro ("E UR").
    These condensed consolidated interim financial statements are presented in the thousands of United States Dollars (“USD”), unless otherwise
    indicated.
    Foreign currency transactions and balances
    Transactions in foreign currencies are initially recorde d by the Group entities at their respective functional currency rates prevailing at the date of
    the transaction.
    Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of ex change ruling at t he
    reporting date. All exchange differences are taken to the statement of comprehensive income with the exception of all monetar y items that provide
    an effective hedge for a net investment in a foreign operation. These are recognised in other comprehensive income until the disposal of the net
    investment, at which time they are recognised in the statement of comprehensive income. Tax charges and credits attributable to exchange
    differences on those monetary items are also recorded in equity.
    Non -monetary ite ms that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the date s of
    the initial transactions. Non -monetary items measured at fair value in a foreign currency are translated using the exchange ra tes at the date when
    the fair value is determined.
    The principal exchange rates used in the preparation of these condensed consolidated interim financial statements are as follows:
    Translation into presentation currency
    The results and financial position of all the Group entities (none of which has the currency of a hyper -inflationary economy) that have a functional
    currency different from the presentation currency are translated into the presentation currency as follows:
    - assets and liabilities for each balance sheet presented are translated at the official rate at the date of the balance sheet;
    - income and expenses are translated at average exchange rate for the period, unless fluctuations in exchange rates during that period are significant,
    in which case income and expenses are translated at the rate on the dates of the transactions;
    - all the equity and provision items are translated at the rate on the dates of the transactions;
    - all resulting exchange differences are recognized as a separat e component of other comprehensive income;
    - in the consolidated statement of cash flows cash balances at the beginning and end of each presented period are translated at rates prevailing at
    corresponding dates. All cash flows are translated at average exchange rates for the periods presented. Exchange differences aris ing from the
    translation are presented as the effect of translation into presentation currency.
    Principles of consolidation
    Subsidiaries
    Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally acc ompanying a
    shareholding of more than one -half of the voting rights. The existence and effect of potential voting rights that are c urrently exercisable or
    convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which
    control is transferred to the Group. They are de -consolidated from the date that control ceases.
    The acquisition method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is me asured at the fair value
    of the assets given up, equity instruments issued and liabilities incurred or assumed at the date of acquisition, plus costs directly attributable to the
    acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are me asured at their fair values
    at the acquisition date. The excess of the cos t of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is
    recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, th e difference is recognized
    directly in the statement of comprehensive income.
    Currency
    30
    September
    2017
    Average for the nine
    months ended 30
    September 2017
    31 December
    2016
    30
    September
    2016
    Average for the nine
    months ended 30
    September 2016
    31 December
    2015
    UAH/ USD 26.521094 26.47106 27,190858 25,911879 25,43033
    24,000667



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    21
    Inter -company transactions, balances and unrealized gains on transactions between Group companies are eliminated. Accounting polici es of
    subsidiaries have been changed where necessary to ensure consistency wi th the policies adopted by the Group.
    Financial statements of Parent company and its subsidiaries, which are used while preparing the condensed consolidated interim financial
    statements , should be prepared as at the same date on the basis of consistent application of accounting policy for all companies of the Group.
    3. Summary of significant accounting policies
    Property, plant and equipment
    Property, plant and equipment are stated at their revalued amounts that are the fair value at the date of revaluatio n, less any subsequent accumulated
    depreciation and subsequent accumulated impairment losses. Any accumulated depreciation at the date of revaluation is restate d proportionately
    with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount.
    If there is no data about the market value of property, plant and equipment due to the nature of highly specialized machinery and equipment, such
    objects are evaluated according to acquisit ion expenses under present -day conditions, adjusted by an ageing percentage.
    Property, plant and equipment of acquired subsidiaries are initially recognised at their fair value which is based on valuati ons performed by
    independent professionally appraisers .
    Valuations are performed frequently enough to ensure that the fair value of a remeasured asset does not differ materially fro m its carrying amount
    as at reporting date.
    Increases in the carrying amount arising on revaluation of property, plant and equipm ent are recognised in other comprehensive income and
    accumulated in equity under the line Revaluation reserve. Decreases in the carrying amount as a result of a revaluation are i n profit or loss.
    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. Decrease related to previous increase of the same asset is recognized against other reserves directly in e quity.
    The revaluation surplus included in equity in respect of an item of property, plant and equipment is transferred directly to retained earnings as the
    asset is used by an entity (in the amount that is the difference between depreciation based on the revalued carrying amount o f the asset and
    depreciation based on the asset’s original cost) and when the asset is derecognized (in the full amount).
    Subsequent major costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only wh en it is probable that
    the se replacements will materially extend the life of property, plant and equipment or result in future economic benefits. The c arrying amount of
    the replaced part is derecognized. All other day -to-day repairs and maintenance are charged to the statement of c omprehensive income during the
    financial period in which they are incurred.
    Property, plant and equipment or their essential component are written -off in a case of their disposal or if future economic benefits from use or
    disposal of such asset are not expected. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal
    proceeds and the carrying amount of the asset) is included in the other incomes (expenses) in the statement of comprehensive income when the
    asset is derecognized.
    Depreciation of an asset begins when it is available for use, i .e., when it is in the location and condition necessary for it to be capable of operating
    in the manner intended by Management. Depreciation of an asset ceases when the asset is derecognized. Depreciation does not cease when the
    asset b ecomes idle or is retired from active use and held for disposal unless the asset is fully depreciated.
    Depreciation on assets is calculated using the straight -line method to allocate their revalued amounts to their residual values over their estimated
    usef ul lives, as follows:
    - Buildings 15-55 years
    - Machinery 5-30 years
    - Motor ve hicles 5-20 years
    - Other assets 5-20 years
    The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date.
    Land is not deprec iated.
    Construction in progress comprises costs directly related to the construction of property, plant and equipment, as well as th e relevant variable and
    fixed overhead costs related to the construction. These assets are depreciated from the moment when they are ready for operation.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    22
    Intangible assets
    Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination
    is their fair value as at the date of acquisition. Following initial recognition, intangible assets are carr ied at cost less any accumulated amortization
    and any accumulated impairment losses.
    Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal pro ceeds and the carrying
    amount of the asset an d are recognized in the statement of comprehensive income in other income (expenses) when the asset is derecognized.
    The Group determines whether the useful life of an intangible asset is finite or indefinite.
    Useful life of intangible assets is indefinite if the Group suggests that the period during which it is expected that the object of intangible assets
    will generate net cash inflows to the organization has no foreseeable limit. Intangible assets with indefinite useful lives a re not amortized, but
    revie wed for impairment.
    Amortisation of intangible assets is charged to the statement of comprehensive income on a straight -line basis over the estimated useful lives of
    intangible assets from the date they are available for use. The following estimated useful lives, which are re -assessed annually, have been determined
    for classes of finite -lived intangible assets:
    - Land lease rights 5-15 years
    - Computer software 5 years
    Impairment of property, plant and equipment and intangible assets
    The carrying amounts of property, plant and equipment and intangible assets are reviewed at each balance sheet date to determine whether there
    is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated in order to deter mine the extent of the
    impairment loss, if any. Where it is impossible to estimate the recoverable amount of an individual asset, the Group estimate s the recoverable
    amount of a cash -generating unit to which the asset belongs.
    The recoverable amount is the higher o f the fair value of an asset less costs to sell and its value in use. Value in use is the net present value of
    expected future cash flows, discounted on a pre -tax basis, using a rate that reflects current market assessments of the time value of money.
    An i mpairment loss is recognized whenever the carrying amount of an asset or its cash -generating unit exceeds its recoverable amount. Impairment
    losses are recognized in the statement of comprehensive income.
    A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable
    amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does n ot exceed its
    recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
    recognized for the asset in prior years. Such reversal is recognized in the statement of comprehensive income unless the asse t is carried at a
    rev alued amount, in which case the reversal is treated as a revaluation increase.
    Biological assets
    The biological assets are classified as non -current and current depending on the expected pattern of consumption of the economic benefits
    embodied in the biol ogical assets.
    The following categories of biological assets are distinguished by the Group:
    - Non -current biological assets of plant -breeding at fair value;
    - Non -current biological assets of cattle -breeding at fair value;
    - Current biological assets of plant -breeding measured at fair value;
    - Current biological assets of cattle -breeding measured at fair value.
    The Group assesses a biological asset at initial recognition and at each balance sheet date at fair value less estimated poin t-of-sale costs, except for
    the cases where the fair value cannot be determined with reasonable assurance.
    Gains or losses from movements in the fair value of biological assets less estimated selling and distribution expenses of the Group are recorded
    in the period they incurred in the statement of comprehensive income as Gain (loss) from changes in fair value of biological assets and agricultural
    produce, net .
    The Group capitalizes expenses between the reporting dates into the cost of biological assets.



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    23
    - Biological assets of plant -breeding
    The capitalized expenses include all the direct costs and overhead costs related to the farming division. Such costs may incl ude the
    following costs: raw materials (seeds, mineral fertilizers, fuel and other materials), wages and salaries ex penses of production personnel
    and related charges, amortization and depreciation, land lease expenses and other taxes, third parties’ services and other ex penses related
    to the cultivation and harvesting of biological assets of plant -breeding.
    - Biological assets of animal -breeding
    The capitalized expenses include all the direct costs and ove rhead costs related to the live stock breeding. The types of costs that are
    capitalized in the current biological assets of animal breeding are the following: fodder, means of protection of animals and artificial
    insemination, fuel and other materials, wages and salaries expenses of production personnel and related charges, amortization and
    depreciation, third parties’ services and other expenses related to the current biological assets of animal breeding.
    All expenses related to the non -current biological assets of cattle breeding are included into the cost of milk. Respectively the note 20 of non -
    current biological assets does not include any capitalized costs.
    The exp enses on works connected with preparation of the lands for future harvest are included in to the Inventories as work -in-progress. After
    works on seeding on these lands the cost of field preparation is reclassified to biological assets held at fair value.
    Agricultural produce
    The Group classifies the harvested product of the biological asse ts as agricultural produce. Agricultural produce is measured at its fair value less
    costs to sell at the point of harvest. The difference between the cost and fair value less costs to sell at the point of harv est of harvested agricultural
    produce is recogn ized in the statement of comprehensive income as Gain (loss) from changes in fair value of biological assets and agricultural
    produce, net .
    After the initial recognising as at the date of harvesting agricultural produce is treated as inventories. Agricultu ral produce measurement as at the
    date of harvest becomes inventories' cost to account.
    Inventories
    Inventories are measured at the lower of cost or net realizable value.
    The cost of inventories comprises all costs of purchase, costs of conversion and oth er costs incurred in bringing the inventories to their present
    location and condition.
    The cost of agriculture produce is its fair value less costs to sell at the point of harvesting.
    The cost of work in progress and finished goods includes costs of direc t materials and labor and other direct productions costs and related
    production overheads (based on normal operating capacity). Costs are capitalized in work in progress for preparing and treati ng land prior to
    seeding in the next period. Work in progress is transferred to biological assets once the land is seed ed.
    The cost of inventories is assigned by using FIFO method.
    Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion an d the estima ted costs
    necessary to make the sale.
    The Group periodically analyses inventories to determine whether they are damaged, obsolete or slow -moving or if their net realizable value has
    declined, and makes an allowance for such inventories. If such situation o ccurred, the sum remissive the cost of inventories should be reflected
    as a part of other expenses in statement of comprehensive income.
    Financial assets



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    24
    The Group's financial assets include cash and cash equivalents, trade and other accounts receivable, other receivables.
    Management determines the classification of financial assets at initial recognition and re -evaluates this designation at every balance sheet date.
    Financial assets are classified in the following category at the time of initi al recognition based on the purpose for which the financial assets were
    acquired:
     “Loans and receivables” that are non -derivative financial assets with fixed or determinable payments that are not quoted in an active
    market. This category includes l andings given that appeared owing to issuance of facilities to debtor. Receivables include trade and other
    accounts receivables.
    Financial assets are recognized initially at fair value plus directly attributable transaction costs.
    The category of financial assets “Loans and receivables” is subsequently measured as follow s:
    - Receivables are measured at amortized cost using the effective interest method, less allowance for impairment.
    - Borrowings issued are measured at amortized cost less impairment losses.
    Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or where the Group has t ransferred
    substantially all risks and rewards of ownership.
    Financial assets of the Group are assessed for indications of impairme nt at each reporting date. A financial asset is deemed to be impaired if there
    is objective evidence indicating that a loss event has occurred after initial recognition of the financial asset, and that th e loss event has a negative
    effect on the estimated future cash flows of the financial asset that can be reliably estimated.
    For “Loans and receivables” the amount of impairment is the difference between the asset’s carrying amount and the present va lue of estimated
    future cash flows, discounted at the original effective interest rate. For trade and other receivables, the carryi ng amount is reduced through the
    use of an allowance account and for borrowings the carrying amount is reduced directly by the impairment loss. If there is ob jective evidence that
    the Group is not able to collect all amounts due to the original terms of th e receivables, the allowance for impairment is established. When a
    receivable is determined to be uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written
    off are credited against the allowance acc ount. Forming of the allowance account is recognized in statement of comprehensive income as other
    operating expenses.
    Prepayments and other non -financial assets
    Prepayments are reflected at nominal value less VAT and accumulated impairment losses, other non -financial assets are reflected at nominal value
    less accumulated impairment losses.
    Prepayment s are classified as non -current assets when the goods or services relating to the prepayment are expected to be obtained after one year,
    or when the prepaymen t relates to an asset which will itself be classified as non -current upon initial recognition.
    If there is an indication that the assets, goods or services relating to a prepayment will not be received, the carrying valu e of the prepayment is
    written down accordingly and a corresponding impairment loss is recognised as a part of other expenses in statement of comprehensive incom e.
    Cash and cash equivalents
    Cash and cash equivalents include cash in bank and cash in hand, call deposits, other short -term hig hly liquid investments with original maturities
    of three months or less.
    Financial liabilities
    The Group’s financial liabilities include trade and other payables, loans and borrowings , share purchase warrant .
    Financial liabilities are recognized initially at fair value minus directly attributable transaction costs.
    The Group classif ies its financial liabilities as subsequently measured at amortized cost using the effective interest method except for share
    purchase warrant which is subsequently measured at fair value through profit or loss.
    Any difference between amount of received resources and sum to repayment is recorded as interest expenses in statement of com prehensive
    income at effective interest rate method during the period, when borrowings were rece ived.
    A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    25
    When an existing financial liability is replaced by another from the same lender on substantially different terms, or the ter ms of an existing liability
    are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new
    liability, and the difference in the respective carrying amounts is recognized in the inco me statement.
    Leases
    The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date: whether
    fulfillment of the arrangement is dependent on the use of a specific asset or assets or the ar rangement conveys a right to use the asset.
     Group as a lessee
    Leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are classified as
    finance leases. Assets held under finance lease are inc luded in property, plant and equipment since the commencement of lease at the
    lower of the fair value of leased property and present value of minimum lease payments. Lease payments are apportioned betwee n
    finance charges and reduction of the lease liabilit y so as to achieve a constant rate of interest on the remaining balance of the liability.
    Finance charges are recognized in the statement of comprehensive income.
    Leased assets are depreciated over the useful life of the asset. However, if there is no reas onable certainty that the Group will obtain
    ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset a nd the lease
    term.
    Operating lease payments are recognized as an expense in the stateme nt of comprehensive income on a straight -line basis over the lease
    term.
     Group as a lessor
    Leases where the Group does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating
    leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized
    over the lease term on the same bas is as rental income. Contingent rents are recognised as revenue in the statement of comprehensive
    income in th e period in which they are earned. Costs, including depreciation, incurred in earning the lease income are recognized as an
    expense.
    Government grants
    The Ukrainian legislation provides various tax benefits and grants for companies engaged in agricultur e. Such benefits and grants are approved by
    the Supreme Council of Ukraine, the Ministry of Agrarian Policy, Ministry of Finance and local authorities.
     Government grants related to plant -breeding
    Amount of such benefit is determined based on the number of hectares planted for the future harvest, taking into account the crop
    expected to be bred. The Group of companies recognizes this type of benefits upon the receipt of funds as other operating inc ome in
    the statement of comprehensive income.
     Government gran ts related to cattle -breeding
    Agricultural producers of poultry and livestock are eligible for government grants, depending on quantity of meat in live wei ght delivered
    to processing enterprises. The Group of companies recognizes these grants upon entitle ment to them as other operating income.
    Agricultural producers of poultry and livestock are also eligible for government grants for each animal unit of poultry and l ivestock,
    including slaughter for own needs or transfer to slaughter. The Group recognizes these grants upon the receipt of funds due to the
    uncertainty in amounts and timeframes of receipt.
     Government grants related to VAT
    According to the Ukrainian tax legislation, the agricultural enterprises (whose income from sale of agricultural products i s not less than
    75% of the total gross income, or enterprises which sell meat and milk products irrespective of the volume of such transactio ns) receive d
    benefits regarding VAT payment on agricultural operations. Correspondingly above, in Y2016 one part of VAT amount is to be paid
    to the State budget and other part of VAT amount being transferred to the entity’s special bank account and can be used to ma ke
    payments relating to the agricultural activities . As a result of these operations tax amounts are reco gnized in the statements of
    comprehensive income as other operating income .
    Since 01 January 2017 there were no VAT preferences for farmers.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    26
    Taxation
     Income tax
    Income tax expense represents the amount of the tax currently payable and deferred tax.
    Income tax expenses are recorded as expenses or income in the statement of comprehensive income, except when they relate to i tems
    directly attributable to other comprehensive income (in which case the amount of tax is taken to other comprehensive income), or when
    they arise at initial recognition of company acquisition.
    i. Current income tax
    Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recover ed
    from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
    substantively enacted, by the reporting date, in the countries where the Group operates and generates taxable income.
    ii. Deferred income tax
    Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of
    assets and liabilities and their carrying amounts for financial reporting purposes.
    Deferred tax liabilities are recognized for all taxable temporary differences, exc ept:
    - where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is
    not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable p rofit or loss;
    - in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the
    temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable
    future.
    Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused t ax
    losses, to the extent that it is probable that taxable profit will be available against which the deduct ible temporary differences,
    and the carry forward of unused tax credits and unused tax losses can be utilized except:
    - where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or
    liabilit y in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting
    profit nor taxable profit or loss;
    - in respect of deductible temporary differences associated with investments in subsidiaries, defer red tax assets are recognized
    only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable prof it will
    be available against which the temporary differences can be utilized.
    The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
    probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unre cognized
    deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future
    taxable profits will allow the deferred tax asset to be recovered.
    Deferred tax assets and liabilities are measured at the tax rates that are exp ected to apply in the year when the asset is realized
    or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporti ng date.
    Deferred tax assets and deferred tax liabilities are offset, if a le gally enforceable right exists to set off current tax assets against
    current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
     Single tax 4 th group (previously Fixed agricultural tax )
    According to effective legislation, the Ukrainian consolidated companies of the Group involved in production, processing and sale of
    agricultural products may opt for paying single tax 4 th group in lieu of income tax, land tax and some other local taxes if the reve nues
    from sale of their own agricultural products constitute not less than 75% of their total (gross) revenues. The single tax 4 th group is
    assessed at 0,95% on the deemed value of the land plot s owned or leased by the entity (0,81% in 2016) . As at 30 September 2017 , 5 of
    the companies comprising the Group were elected to pay single tax 4 th group (201 6: 5).
     Value added tax (VAT)
    VAT output equals to the total amount of VAT collected within a reporting period, and arises on the earlier of the date of shipping
    goods to a customer or the date of receiving payment from the customer. VAT input is the amount that a taxpayer is entitled t o offset
    against his VAT liability in a reporting period. Rights to VAT input arise on the earlier of the date of payment to the supplier or the
    date goods are received.
    Revenue, expenses and assets are recognized less VAT amount, except cases, when VAT arising on purchases of assets or service s, is
    not recoverable by tax authority; in this case VAT is recognized as part of p urchase costs or part of item of expenses respectively. Net
    amount of VAT, recoverable by tax authority or paid, is included into accounts receivable and payable, reflected in consolidated
    statement of financial position.
     Other taxes payable
    Other taxes pa yable comprise liabilities for taxes other than above, accrued in accordance with legislation enacted or substantively
    enacted by the end of the reporting period.
    Provisions



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    27
    Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow
    of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the
    obligation.
    Contingent assets and liabili ties
    Contingent liabilities are not recognized in the financial statements. The Group discloses information about contingent liabi lities in the Notes to
    financial statements if any , except for the cases where fulfillment of contingent liabilities is unlikely; because of the remoteness of the event
    (possible repayment period is more than 12 months).
    The Group constantly analyzes contingent liabilities to determine the possibility of their repayment. If the repayment of a liability, which was
    previously characterized as contingent, becomes probable, the Group records the provision for the period in which repayment o f the obligation
    has become probable.
    Contingent assets are not recognized in the finan cial statements, but disclosed in the Notes where there is a reasonable possibility of future
    economic benefits.
    Share capital
    Ordinary shares issued are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction.
    Any excess of the fair value of consideration received over the par value of shares issued is presented in financial statemen ts as Share premium.
    Dividends
    Dividends are recognized as a liability and deducted from shareholders’ eq uity at the balance sheet date only if they are declared before or on the
    balance sheet date. Dividends are disclosed when they are proposed before the balance sheet date or proposed or declared afte r the balance sheet
    date but before the condensed consoli dated interim financial statements are authorized for issue.
    Earning s per share
    Earnings per share are determined by dividing the net profit or loss attributable to the owners of parent company by the weig hted average number
    of shares outstanding during the reporting period.
    Revenue recognition
    The Group recognizes revenue when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow
    to the Group.
    Revenue is measured at fair value of consideration amount received or receivable for the sale of goods and services in the or dinary course of the
    Group's business activities. Revenue is recorded excluding taxes and duties on sales, discounts and returns.
     Sales of goods
    Revenue from sales of goods is recognised at the point of transfer of risks and rewards of ownership of the goods, normally when the
    goods are shipped. If the Group agrees to transport goods to a specified location, revenue is recognised when the goods are p assed to
    the customer at the destination point. The Group uses standardised INCOTERMS which define the point of risks and reward transfers.
     Rendering of services
    Revenue from rendering services is recognized on the basis of the stage of work completion under each contract. When financia l result
    can be measured reliably, revenue is recognized only to the extent of the amount of incurred charges, which can be recovered.
    Income from the exchange of property certificates



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    28
    When the items of property, plant and equipment are acquired in exchange for non -cash asset (property certificate), the initial value of such assets
    is estimated at fair value. The difference between the price paid for property certificates and the fair value of received items of property, plant and
    equipment is recognized as income in the period of the exchange operation.
    Borrowing costs
    Borrowing costs consist of interest and other costs that the Group incurs in connection with the borrowing of funds.
    Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a sub stantial period of time
    to ge t ready for its intended use or sale are capitalized as part of the cost of the respective assets. Investment income resultin g from temporary
    investment of received borrowing costs, until their expensing for the purchase of capital construction objects, sh all be deducted from the cost of
    raising borrowing costs that may be capitalized.
    All other borrowing costs are expensed in the period they occur.
    4. Critical accounting estimates and judgments
    The preparation of the Group’s condensed consolidated interim financial statements requires Management to make judgments, estimates and
    assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and the disclosure of contingent asse ts and liabilities at the
    end of the reporting period. H owever, uncertainty about these assumptions and estimates could result in outcomes that require a material
    adjustment to the carrying amount of the asset or liability affected in future periods.
    Used estimates and assumptions are reviewed by the Management of the Group on a continuous basis, by reference to past experiences, current
    trends and all available information that is relevant at the time of preparation of financial statement s. Adjustments to accounting estimates are
    recognized in the period in whi ch the estimate is revised if the change affects only that period or in the period of the revision and subsequent
    periods, if both periods are affected.
    In the process of applying the Group’s accounting policies, Management has made the following judgment s, estimates and assumptions which
    have the most significant effect on the amounts reflected in the condensed consolidated interim financial statements .
    Fair value of property, plant and equipment
    The Group engages an independent appraiser to determine the fair value of property, plant and equipment on a regular basis .
    The assessment is conducted in accordance with International Valuation Standards for property. The assessment procedure is ca rried out for all
    groups of property, plant and equipment. The fair value of items of property, plant and equipment is estimated on the basis of comparative and
    cost plus approaches.
    The comparative approach is based on an analysis of sales prices and offers of similar items of property, plant and equipment , taking i nto account
    the appropriate adjustments for differences between the objects of comparison and assessment item. Based on the application o f this approach,
    the fair value of property, plant and equipment is determined on the basis of their market value.
    The cost approach involves the definition of present value of costs of reconstruction or replacement of the assessment item with their further
    adjustment by the depreciation (impairment) amount. Based on the application of this approach, the fair value of cert ain items of property, plant
    and equipment is determined in the amount of the replacement of these items. The cost plus method is adjusted by the income m ethod data,
    which is based on the discounted cash flow model. This model is most sensitive to the disc ount rate, as well as to the expected cash flows and
    growth rates used for the extrapolation purposes. Judgments of the Group in determining the indices used in the appraisers' c alculations may have
    a significant effect on the determination of fair value o f property, plant and equipment, and hence on their carrying amount.
    The fair value of property, plant and equipment of all the Group's companies has been measured as at 31 December 201 5 by an independent
    appraiser LLC "Asset Expertise" (ODS Certificate No .439/15 as of 25 May 2015 issued by State Property Fund of Ukraine) (Note 1 8).
    Useful lives of property, plant and equipment



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    29
    Items of property, plant and equipment owned by the Group are depreciated using the straight -line method over their useful lives, which are
    calculated in accordance with business plans and operating calculations of the Group's Management with respect to th ose assets.
    The estimated useful life and residual value of non -current assets are influenced by the rate of exploitation of assets, servicing technologies,
    changes in legislation, unforeseen operational circumstances. The Group's management periodically r eviews the applicable useful lives. This
    analysis is based on the current technical condition of assets and the expected period in which they will generate economic b enefits to the Group.
    Any of the above factors may affect the future rates of depreciation , as well as carrying and residual value of property, plant and equipment.
    There were not any changes in accounting estimates of remaining useful lives of items of property, plant and equipment in reported periods .
    Impairment of property, plant and equipment and intangible assets
    The Group carries out revaluations on a regular basis and conducts a full valuation exercise if there is an indication of imp airment. An impairment
    review is conducted at the balance sheet date. To test property, plant and e quipment and intangible assets for impairment, the Group’s business
    is treated as three cash generating unit s: farming division, live stock breeding and storage and processing . The recoverable amount of the cash -
    generating unit is determined on the basis of value in use. The amou nt of value in use for the cash -generating unit is determined on the basis of
    the most recent budget estimates prepared by management and application of the income approach of valuation.
    As at 30 September 2017 and 201 6 impairment of property, plant and equipment and intangible assets was not identified (Note 1 8).
    Fair value of acquisition of subsidiaries
    The Group engages an independent appraiser to determine the fair value of identifiable assets acquired and liabilities assume d at the acquisition
    date. Acquisitions often result in significant intangible benefits for the Group, some of which qualify for re cognition as intangible assets. Significant
    judgment is required in the assessment and valuation of these intangible assets, often with reference to internal data and mo dels.
    The estimation of fair value of assets and liabilities is based upon quoted mark et prices and widely accepted valuation techniques, including
    discounted cash flows and market multiple analyses . Such estimates include assumptions about inputs to our discounted cash flow calculations,
    industry economic factors and business strategies.
    Fair value of biological assets
    Due to an absence of an active market for non -current biological assets for c attle -breeding and biological assets of plants -breeding in Ukraine, to
    determine the fair value of these biological assets, the Group used the discounted value of net cash flows expected from asse ts as at reporting
    date. Fair value is determined based on ma rket prices and a current market -determinated pre -tax rate as at the date of valuation.
    The fa ir value of current biological assets of cattle -breeding is measured using market prices as at reporting date. The fair value is determined
    based on market price s of livestock of similar age, breed and genetic merit.
    The income from recognition of biological assets at fair value for the nine months ended 30 September 2017 amounted to USD 39 841 thousand
    (USD 38 226 thousand for the nine months ended 30 September 2016 ) (Note 7).
    Fair value of agricultural produce
    The Group estimates the fair value of agricultural produce at the date of harvesting using the current quoted prices in an ac tive market. Costs to
    sell at the point of harvest are estimated based on expe cted future selling costs that depend on conditions of sales agreements. The fair value less
    costs to sell becomes the carrying value of inventories at the date of harvesting.
    The income from recognition of agricultural produce at fair value for the nine months ended 30 September 2017 amounted to USD 12 634
    thousand (USD 16 468 thousand for the nine months ended 30 September 2016) (Note 7) .
    Inventories



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    30
    As at the reporting date the Group assesses the need to reduce the carrying amount of inventories to their net realizable value. The measurement
    of impairment is based on the analysis of market prices for similar inventories existing at the reporting date and published in official sources. Such
    assessments can have a significant impact on the carrying am ount of inventories.
    Besides, at each balance sheet date, the Group assesses inventories for surplus and obsolescence and determines the allowance for obsolete and
    slow moving inventories. Changes in assessment can influence the amount of required allowanc e for obsolete and slow moving inventories either
    positively or negatively.
    At the reporting date the item Work -in-progress includes investments in the future harvest. The cost of these investments is based on expenses
    incurred during the current year. Inv estment valuation model includes a number of judgments of management about the benefits to be extracted
    from the utilization of such investments in the future. Management's estimates of the value of investments is based on the recommendations of
    scientific sources and agronomic calculations of the internal services of the Group.
    For the nine months ended 30 September 2017 shortages and losses due to impairment of inventories amounted to USD 345 thousand (USD 312
    thousand for the nine months ended 30 September 2016 ) (Note 1 2).
    Fair value of financial instruments
    The fair value of financial assets and liabilities is determined by applying various valuation methodologies. Management uses its judgment to make
    assumptions based on market conditions existing at each balance sheet date. Where the fair values of financial assets and financial liabilities
    recorded in the statement of financial position cannot be derived from active markets, they are determined using valuation te chniques including
    the dis counted cash flows model. Management uses discounted cash flow analysis for various loans and receivables as well as debt instruments
    that are not traded in active markets. The effective interest rate is determined by reference to the interest rates of ins truments available to the
    Group in active markets. In the absence of such instruments, the effective interest rate is determined by reference to the in terest rates of active
    market instruments available adjusted for the Group’s specific risk premium estima ted by Management.
    Fair value measurement
    Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction bet ween market participants at
    the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes
    place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advanta geous market for the asset
    or liability. The principal or the most advantageous market must be accessible to the Group.
    A fair value measurement of a non -financial asset takes into account a market participant’s ability to generate economic benefits by using the asset
    in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
    All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within t he fair value hierarchy,
    desc ribed as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
    • Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
    • Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
    observable.
    • Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobserva ble.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    31
    Imp airment of trade and other accounts receivable
    Management evaluates the recoverability of trade and other accounts receivable by estimating the likelihood of its collection . These estimations
    are based on an analysis of individual accounts. The amount of i mpairment is the difference between the asset’s carrying amount and the present
    value of estimated future cash flows, discounted at the original effective interest rate. Management estimates the future cas h flow by taking into
    consideration the following: analysis of trade and other accounts receivable in accordance with the contractual credit terms allowed to customers;
    the collection history of customers; the general economic conditions, the specifics of industry and the financial position of customers.
    As at 30 September 2017 allowances for accounts receivable were recognized in the amount of USD 44 thousand ( USD 53 thousand as at 30
    September 2016 ) (Note 2 7).
    Impairment of other financial and non -financial assets
    Management assesses whether there are any indicators of possible impairment of other financial and non -financial assets at each reporting date.
    If any events or changes in circumstances indicate that the current value of the assets may not be recoverable or the assets, goods or services
    relati ng to a prepayment will not be received, the Group estimates the recoverable amount of assets. If there is objective evidence that the Group
    is not able to collect all amounts due to the original terms of the agreement, the corresponding amount of the asse t is reduced directly by the
    impairment loss in the statement of comprehensive income. Subsequent and unforeseen changes in assumptions and estimates used in testing for
    impairment may lead to the result different from the one presented in the financial st atements.
    As at 30 September 2017 allowances for other financial and non -financial assets were recognized in the amount of USD 8 thousand (USD 13
    thousand as at 30 September 2016 ) (Note 2 7).
    Long -term VAT recoverable
    The Group classifies the VAT recoverable balance as current or non -current based on expectations as to whether it will be realised within 12
    months from the reporting date. In making this assessment, management considered past history of receiving VAT refu nds from the State budget.
    For VAT recoverable expected to be set off against VAT liabilities in future periods, Management based its estimates on detailed projections of
    expected excess of VAT output over VAT input in the normal course of the business.
    Taxation
    The Group mostly operates in the Ukrainian tax jurisdiction. The Company’s management must interpret and apply existing legis lation to
    transactions with third parties and its own activities. Significant judgment is required in determining the prov ision for direct and indirect taxes.
    There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of b usiness. The Group
    recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of
    these matters is different from the amounts that were initially recorded, such differences will affect the income tax and deferred tax provisions in
    the period in which such determinat ion is made.
    As a result of unstable economic situation in Ukraine, tax authorities in Ukraine pay more and more attention to the business cycles. In connection
    with it, tax laws in Ukraine are subject to frequent changes. Furthermore, there are cases of their inconsis tent application, interpretation and
    execution. Non -compliance with laws and norms may lead to serious fines and penalties accruals.
    Management at every reporting period reassessed t he Group ’s uncertain tax positions . Liabilities are recorded for income t ax positions that are
    determined by management as more likely than not to result in additional taxes being levied if the positions were to be chall enged by the tax
    authorities. The assessment is based on the interpretation of tax laws that have been enacte d or substantively enacted by the reporting period and
    any known Court or other rulings on such issues. Liabilities for penalties, interest and taxes other than on income are recog nised based on
    management’s best estimate of the expenditure required to set tle the obligations at the reporting period.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    32
    The Group considers that it operates in compliance with tax laws of Ukraine, although, a lot of new laws about taxes and tran sactions in foreign
    currency have been adopted recently, and their interpretation is rather ambiguous.
    In December 2010, the revised Tax Code of Ukraine was officially published. In its entirety, the Tax Code of Ukraine became e ffective on 1
    January 2011, while some of its provisions took effect later.
    The Group's management believes t he enactment of the Tax Code of Ukraine will not have a significant negative impact on the Group's financial
    results in the foreseeable future.
    Adoption of the Tax Code changes taxation system in Ukraine entirely. Quantity of taxes decreases almost twofo ld. Gradual decrease of base
    rates for all fiscal charges is stipulated within several years. Additional rate for tax on income of physical persons is ado pted. Regulations settling
    procedure of taxation covered by the Tax Code are cancelled. These changes substantially increase risks of incorrect interpretation of adopted
    Tax Code. As a result of future tax inspections additional liabilities may be revealed, which will not comply with tax statem ents of the Company.
    Such liabilities may comprise taxes themse lves, and also fines and penalties, and their amounts may be material.
    The Group's management believes the enactment of the Tax Code of Ukraine will not have a significant negative impact on the G roup's financial
    results in the foreseeable future.
    Starting from 1 September 2013, Ukrainian legislation implemented new transfer pricing rules. These rules introduce additiona l reporting and
    documentation requirements to transactions with related parties. In accordance with the new rules, the tax authorit ies obtain additional tools with
    the help of which they may claim that prices or profitability in transactions with related parties different from arm’s lengt h transactions. As the
    practice of implementation of the new transfer pricing rules has not yet de veloped and the wording of some clauses of the rules is unclear, the
    probability that the Group’s transfer pricing positions may be challenged by the tax authorities cannot be reliably estimated as of the date of
    authorization of these condensed consolidat ed interim financial statements for issue.
    Management is confident that the G roup complies with all transfer -pricing rules.
    Legal proceedings
    The Group's Management makes significant assumptions in estimation and reflection of the risk of exposure to contingent liabilities relate d to
    current legal proceedings and other unliquidated claims, as well as other contingent liabilities. Management's judgments are required in assessing
    the possibility of a secured claim against the Group or material obligations, as well as in determining probable amounts of f inal payment or
    obligations. Due to the uncertainties inherent in the evaluation process, actual expenses may differ from the initial calculations.
    These preliminary estimates are subject to changes as new information becomes available from the Group's internal specialists , if any, or from
    third parties, such as lawyers. Revisions of such estimates may have a sig nificant impact on future operating results.
    Operating environment
    In 2014, Ukraine was faced with political and economic turmoil. Crimea, an autonomous republic of Ukraine, was effectivel y annexed by the
    Russian Federa tion. Ukraine also suffered from military aggression from Russia and the collapse of law enforcement in Lugansk and Donetsk
    regions.
    The Ukrainian H ryvna devalued against major foreign currencies. The National Bank of Ukraine introduced a range of measures aimed at limitin g
    the outflow of customer deposits from the banking system, improving the liquidity of banks, and supporting the exchange rate of t he Ukrainian
    Hryvna.
    Significant external financing is required to support economic stabilization and the political situation depends, to a large extent, upon success of
    the Ukrainian government’s efforts; yet further economic and political developments a re currently difficult to predict and an adverse effect on the
    Ukrainian economy may continue.
    Management is monitoring the developments in the current environment and taking actions where appropriate.
    The Group does not have assets in Crimea, Donetsk and Lugansk regions.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    33
    New and amended standards and interpretations
    Standards and Interpretations in issue but not effective
    At the date of authorization of these condensed consolidated interim financial statements the following Standards and Interpretations, as well as
    amendments to the Standards, were in issue but not yet effective:
    Standards and Interpretations
    Effective for annual
    period beginning on or
    after
    IFRS 9 “Financial Instruments” 1 January 2018
    IFR S 15 “Revenue from contracts with customers” including amendments to IFRS 15: Effective date of IFRS 15 1 January 2018
    IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration 1 January 2018
    Amendments to IAS 40: Transfers of Investment Property 1 January 2018
    Amendments to IFRS 2: Classification and Measurement of Share -based Payment Transactions 1 January 2018
    Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insura nce Contracts 1 January 2018
    IFRS 16 “Leases” 1 January 2019
    Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint
    Venture Deferred indefinitely
    The Board of Directors is currently analyzing the impact of the adoption of these financial reporting standards on the financial statements of the
    Group.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    34
    5. Correction of previous periods errors
    During preparation of its consolidated financial statements for the year ended 31 December 2016, the Group has revealed an error in the
    accounting treatment of the share purchase warrant (Note 30).
    Comparative data fo r the year ended 31 December 2015 and for the nine months ended 30 September 2016 were recalculated in order to correct
    the error and to preserve comparability of information. The results are reflected retrospectively as a previous period restat ement. The results of
    reconciliation of the respective disclosure data are presented as follows.
    As at 31 December 2015 and for the year ended at that date:
    Changes in lines of consolidated statement of financial position and related notes
    Previously
    reported Impact of
    changes Restated
    Share purchase warrant 474 (474) -
    Long -term loans and borrowings 40 473 5 587 46 060
    Total 40 9 47 5 113 46 060
    Changes in lines of consolidated statement of comprehensive income and related notes
    Previously
    reported Impact of
    changes Restated
    Gain on reversal of share purchase warrant 409 (409 ) -
    Effect of additional return - (3 14 1) (3 14 1)
    Total 409 (3 5 50) (3 14 1)
    As at 3 0 September 201 6 and for the nine months ended at that date:
    Changes in lines of consolidated statement of financial position and related notes
    Previously
    reported Impact of
    changes Restated
    Additional return on financial liability 16 484 (16 484) -
    Long -term loans and borrowings 45 380 8 345 53 725
    Total 61 864 (8 139) 53 725
    Changes in lines of consolidated statement of comprehensive income and related notes
    Previously
    reported Impact of
    changes Restated
    Gain on reversal of share purchase warrant 474 (474) -
    Loss on recognition of additional return on financial liability (16 484) 16 484 -
    Effect of additional return - (2 758) (2 758)
    Total (16 010) 13 252 (2 758)




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    35
    6. Revenue
    Note
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Revenue from sales of finished products a 81 246 80 050
    Revenue from services rendered b 295 204
    81 540 80 254
    a) Revenue from sales of finished products was as follows:
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Corn 59 992 54 447
    Wheat 9 946 6 715
    Sunflower 6 262 14 259
    Milk 1 154 2 471
    Potatoes 1 071 582
    Soy beans 1 035 113
    Cattle 315 1 008
    Other 1 471 455
    81 246 80 050
    b) Revenue from services rend ered was as follows:
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Processing 91 80
    Transport 56 30
    Drying 38 5
    Storage 23 35
    Other 87 54
    295 204
    7. Gain from changes in fair value of biological assets and agricultural produce, net
    Note
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Current biological assets 24 38 884 38 784
    Agricultural produce 24 12 634 16 468
    Non -current biological assets 20 957 (558)
    52 475 54 694




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    36
    8. Cost of sales
    Note
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Raw materials a (69 874) (52 026)
    Change in inventories and work -in-progress b 15 455 (926)
    Rent (9 315) (8 814)
    Depreciation and amortization 13 (5 686) (7 190)
    Fuel and energy supply (5 463) (3 634)
    Wages and salaries of operating personnel and related
    charges 14 (5 157) (4 170)
    Third parties' services (1 453) (831)
    Taxes and other statutory charges (723) (592)
    Repairs and maintenance (593) (389)
    Other expenses (57) (82)
    (82 866) (78 654)
    a) Raw materials for the nine months ended 30 September 2017 includes disposal of the gain recorded on initial recognition of realized agriculture
    produce and biological assets (both of current and non -current) in the amount of USD 31 963 thousand (USD 21 224 thousand for the nine
    months ended 30 September 2016 ).
    b) Change in inventories and work -in-progress comprises changes in work -in-progress, agricultural produce and current biological assets. Book
    values of agricultural produce and biological assets as at the end of the reporting periods comprise fair value component ste mming from revaluation
    conducted for the purposes of initial recognition of agricultural produce and biolog ical assets at fair value.
    9. Administrative expenses
    Note
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Wages and salaries of administrative personnel and related
    charges 14 (5 035) (2 868)
    Professional services (446) (404)
    Repairs and maintenance (235) (95)
    Third parties' services (223) (188)
    Transport expenses (181) (160)
    Bank services (178) (166)
    Depreciation and amortisation 13 (164) (157)
    Other expenses (391) (335)
    (6 853) (4 373)




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    37
    10. Selling and distribution expenses
    Note
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Delivery costs (5 806) (3 863)
    Depreciation 13 (255) (203)
    Wages and salaries of sales personnel and related charges 14 (145) (120)
    Other expenses (191) (176)
    (6 397) (4 362)
    11. Other operating income
    Note
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Gain on recovery of assets previously written off a 657 762
    Income from write -offs of accounts payable 168 925
    Gain on disposal of inventories 27 19
    Income from subsidized VAT b - 294
    Income from the exchange of property certificates c - 321
    Other income 77 218
    929 2 539
    a) Gain on recovery of assets previously written off is represented by amounts of inventory surplus identified during the stoc ktaking , recovery of
    amounts previously recognizes as doubtful and insurance compensations.
    b) According to the Ukrainian tax legislation, the agricultural enterprises (whose income from sale of agricultural products i s not less than 75% of
    the total gross income, or enterprises which sell meat and milk products irrespective of the volume of such transactions) receive preferences
    regarding VAT payment on agricultural operations.
    In 2016 the VAT preferences have been partially preserved for farmers in 2016, allowing retaining a portion of VAT amounts as follows:
    - For crop farming operations - 85% of VAT amount is to be paid to the State budget, 15% of VAT amount being transferred to the
    entity’s special bank account and can be used to make payments relating to the agr icultural activities;
    - For live -stock breeding operations - 20% of VAT amount is to be paid to the State budget, 80 % of VAT amount being transferred to
    the entity’s special bank account and can be used to make payments relating to the agricultural activiti es;
    - For other agricultural activities - 50% of VAT amount is to be paid to the State budget, 50 % of VAT amount being transferred to the
    entity’s special bank account and can be used to make payments relating to the agricultural activities.
    Since 01 Janua ry 2017 there were no VAT preferences for farmers.
    c) Income from the exchange of property certificates represents the difference between the price paid for property certificates and the fair value
    of received items of property, plant and equipment and recognized as income in the period of the exchange operation.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    38
    12. Other operating expenses
    Note
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Depreciation 13 (661) (956)
    Lost crops (539) (387)
    Loss on disposal of property, plant and equipment (508) (234)
    Charity (434) (112)
    Shortages and losses due to impairment of inventories (345) (312)
    Write -offs of VAT (66) (86)
    Wages and salaries of non -operating personnel and related charges 14 (58) (63)
    Allowance for doubtful accounts receivable 27 (11) (22)
    Other expenses (237) (183)
    (2 859) (2 355)
    13. Depreciation and amortisation
    Note
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Depreciation
    Cost of sales 8 (4 878) (6 139)
    Other operating expenses 12 (661) (956)
    Selling and distribution expenses 10 (255) (203)
    Administrative expenses 9 (164) (156)
    Depreciation as a part of article "Lost crops" (20) (17)
    (5 978) (7 471)
    Amortisation
    Cost of sales 8 (808) (1 051)
    Administrative expenses 9 - (1)
    (808) (1 052)
    (6 786) (8 523)
    14. Wages and salaries expenses
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Wages and salaries (8 922) (6 037)
    Related charges (1 488) (1 194)
    (10 410) (7 231)
    The average number of employees, persons 2 393 2 696
    Remuneration of management 774 333




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    39
    The distribution of wages and salaries and related charges was as follows:
    Note
    For the nine months ended 30
    September 2017 For the nine months ended 30
    September 2016
    Wages and
    salaries and
    related charges,
    thousand USD
    Average
    number of
    employees,
    persons
    Wages and
    salaries and
    related charges,
    thousand USD
    Average
    number of
    employees,
    persons
    Operating personnel 8 (5 157) 1 748 (4 170) 2 058
    Administrative personnel 9 (5 035) 623 (2 868) 608
    Sales personnel 10 (145) 19 (120) 24
    Non -operating personnel 12 (58) 3 (63) 6
    As a part of article "Construction in progress" (15) - (10) -
    (10 410) 2 393 (7 231) 2 696
    15. Financial expenses, net
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Interest income on bank deposits 232 190
    Interest expenses on loans and borrowings (5 076) (9 060)
    Bond interest expenses - (470)
    Other expenses (22) (223)
    (4 866) (9 563)
    16. Foreign currency exchange (loss) /gain, net
    During the nine -month period ended 30 September 2017 the strengthening of Ukrainian Hryvnia took place - 7,4% of devaluation as at 30
    September 2016 in comparison with 2,5% of revaluation as at 30 September 2017 . As a result, during the nine -month period ended 30 September
    2017 the Group recognised net foreign exchange gain in the amount of USD 936 thousand (USD 4 338 thousand of loss for the nin e-month
    period ended 30 September 2016) in the condensed consolidated interim statement of comprehensive income.
    17. Income tax expenses
    The corporate income tax rate for nine -month period ended 30 September 2017 and 2016 was: 18% in Ukra ine, 12,5% in Cyprus, 21% in
    Luxemburg.
    The components of income tax expenses were as follows:
    For the nine
    months ended 30
    September 2017
    For the nine
    months ended 30
    September 2016
    Unaudited Unaudited
    Current income tax (11) (42)
    Deferred tax 13 404
    Income tax benefit (expenses) reported in the statement of comprehensive income 2 362
    Consolidated statement of other comprehensive income
    Deferred tax related to item charged or credit directly to other comprehensive income during
    year:
    Net gain on revaluation of property, plant and equipment 107 195



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    40
    18. Property, plant and equipment
    Land and
    buildings Machinery Motor
    vehicles Other Construction
    in progress Total
    Initial cost
    31 December 2015 (audited) 47 462 30 949 14 600 638 448 94 097
    Additions 585 2 850 1 190 66 843 5 534
    Disposals (1 548) (1 177) (315) (32) - (3 072)
    Transfer 1 27 - 2 (30) -
    Effect from translation into presentation
    currency (3 466) (2 315) (1 093) (57) (39) (6 970)
    30 September 2016 (unaudited) 43 034 30 334 14 382 617 1 222 89 589
    31 December 2016 (audited) 41 424 28 623 13 568 610 668 84 893
    Additions 206 3 198 709 92 940 5 145
    Disposals (658) (2 504) (289) (120) - (3 571)
    Transfer 195 118 18 12 (343) -
    Effect from translation into presentation
    currency 1 031 722 342 15 15 2 125
    30 September 2017 (unaudited) 42 198 30 157 14 348 609 1 280 88 592
    Accumulated depreciation
    31 December 2015 (audited) (4 970) (6 038) (2 457) (549) - (14 014)
    Depreciation for the period (1 449) (4 048) (1 909) (65) - (7 471)
    Disposals 360 485 128 21 - 994
    Effect from translation into presentation
    currency 387 512 213 43 - 1 155
    30 September 2016 (unaudited) (5 672) (9 089) (4 025) (550) - (19 336)
    31 December 2016 (audited) (5 761) (9 621) (4 330) (531) - (20 243)
    Depreciation for the period (1 346) (2 742) (1 795) (95) - (5 978)
    Disposals 202 1 210 179 71 - 1 662
    Effect from translation into presentation
    currency (143) (240) (106) (13) - (502)
    30 September 2017 (unaudited) (7 048) (11 393) (6 052) (568) - (25 061)
    Net book value
    31 December 2015 (audited) 42 492 24 911 12 143 89 448 80 083
    30 September 2016 (unaudited) 37 362 21 245 10 357 67 1 222 70 253
    31 December 2016 (audited) 35 663 19 002 9 238 79 668 64 650
    30 September 2017 (unaudited) 35 150 18 764 8 296 41 1 280 63 531
    As at 31 December 2015 an independent valuation of the Group’s land, buildings, Machinery and vehicles was performed in accor dance with
    International Valuation Standards by an independent appraiser LLC "Asset Expertise" (ODS Certificate No.439/15 as of 25 May 2015 issued by
    State Property Fund of Ukraine).
    As at 30 September 2017 and 3 0 September 2016 an impairment review was conducted by the management of the Group. Impairment test has
    been performed for the following Cash Generating Units: Crop farming, Dairy farming, Storage and processing. According to the results of the
    test impairment of PPE was not identified.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    41
    The recoverable amount was estimated based on the value in use model. The key assumptions used in the most recent value in us e were as follows:
    • The projections were based on most recent budget covering 7-year period .
    • The projections are USD -denominated .
    • The prices and expenses were adjusted for inflation on the basis of respective CPI in Ukrainian H ryvna terms and translated into US D.
    19. Intangible assets
    Computer
    software
    Property
    certificates
    Land lease
    rights Total
    Initial cost
    31 December 2015 (audited) 19 114 10 742 10 875
    Additions 1 226 - 227
    Disposals - (37) - (37)
    Effect from translation into presentation currency (2) (12) (792) (806)
    30 September 2016 (unaudited) 18 291 9 950 10 259
    31 December 2016 (audited) 17 383 9 482 9 882
    Additions - 52 - 52
    Disposals - (1) - (1)
    Effect from translation into presentation currency - 10 240 250
    30 September 2017 (unaudited) 17 444 9 722 10 183
    Accumulated amortisation
    31 December 2015 (audited) (13) (1) (5 111) (5 125)
    Amortisation for the period (1) - (1 051) (1 052)
    Effect from translation into presentation currency 1 - 397 398
    30 September 2016 (unaudited) (13) (1) (5 765) (5 779)
    31 December 2016 (audited) (13) (1) (5 807) (5 821)
    Amortisation for the period (1) - (807) (808)
    Disposals - - - -
    Effect from translation into presentation currency (1) - (145) (146)
    30 September 2017 (unaudited) (15) (1) (6 759) (6 775)
    Net book value
    31 December 2015 (audited) 5 112 5 632 5 750
    30 September 2016 (unaudited) 5 290 4 185 4 480
    31 December 2016 (audited) 4 382 3 675 4 061
    30 September 2017 (unaudited) 2 443 2 963 3 408
    Property certificates represent deeds supporting ownership right for property units of members of agricultural entity, which are intended for
    exchange by the Group companies on the property objects of this agricultural entity.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    42
    20. Non -current biological assets
    30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Non -current biological assets - animal -breeding
    Cattle 2 290 1 407 906
    Non -current biological assets - plant -breeding
    Perennial grasses 12 25 30
    Total non -current biological assets 2 302 1 432 936
    As at the reporting dates non -current biological assets of animal -breeding were presented as follows:
    30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Cattle
    Cattle, units 839 1 136 1 163
    Live weight, kg 316 071 421 508 429 884
    Book value 2 290 1 407 906
    Following changes took place in the non -current biological assets of animal -breeding:
    Cattle
    31 December 2015 (audited) 4 426
    Transfer (from (to) current biological assets) (1 169)
    Change in fair value (558)
    Effect from translation into presentation currency (1 793)
    30 September 2016 (unaudited) 906
    31 December 2016 (audited) 1 407
    Transfer (from (to) current biological assets) (370)
    Sale (137)
    Change in fair value 957
    Effect from translation into presentation currency 433
    30 September 2017 (unaudited) 2 290




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    43
    As at the reporting dates non -current biological assets of plant -breeding were presented as follows:
    30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Perennial grasses
    Area, ha 206 332 477
    Book value 12 25 30
    Following changes took place in the non -current biological assets of plant -breeding:
    Perennial grasses
    31 December 2015 (audited) 45
    Capitalized expenses 38
    Harvesting failure (32)
    Effect from translation into presentation currency (21)
    30 September 2016 (unaudited) 30
    31 December 2016 (audited) 25
    Capitalized expenses -
    Harvesting failure (14)
    Effect from translation into presentation currency 1
    30 September 2017 (unaudited) 12
    21. Deferred tax assets and liabilities
    The major components of deferred tax assets and liabilities were as follows:
    Deferred tax assets
    Provisions Total
    31 December 2015 (audited) 14 14
    Considering profit (loss) (14) (14)
    30 September 2016 (unaudited) - -
    31 December 2016 (audited) - -
    30 September 2017 (unaudited) - -
    Deferred tax liabilities



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    44
    Property, plant
    and equipment
    31 December 2015 (audited) (3 556)
    Considering profit (loss) 418
    Considering equity 195
    Effect of foreign currency translation 251
    30 September 2016 (unaudited) (2 692)
    31 December 2016 (audited) (2 498)
    Considering profit (loss) 13
    Considering equity 107
    Effect of foreign currency translation (63)
    30 September 2017 (unaudited) (2 441)
    22. Other non -current assets
    Note 30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Prepayments and other non -financial assets:
    Prepayments for property, plant and equipment 965 1 817 402
    23. Inventories
    Note 30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Agricultural produce a 26 755 46 037 18 038
    Agricultural materials 1 841 1 404 1 309
    Work -in-progress b 1 423 6 417 1 458
    Fuel 692 636 673
    Spare parts 488 268 402
    Raw materials 382 142 146
    Finished goods 14 17 23
    Other inventories 130 189 252
    31 725 55 110 22 301
    As at 30 September 2017 cost value of inventories amounting to USD 22 324 thousand ( USD 36 214 thousand as at 31 December 2016, USD
    14 982 thousand as at 30 September 2016).
    a) As at the reporting dates agricultural produce was presented as follows:



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    45
    30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Sunflower 12 502 27 3 176
    Soya 8 962 1 473 6 376
    Corn 2 379 42 763 4 026
    Wheat 1 123 17 3 142
    Potato 1 093 802 437
    Silage 426 537 662
    Hay 60 60 77
    Other 210 358 142
    26 755 46 037 18 038
    The fair value of agricultural produce was estimated based on market price as at date of harvest and is within level 1 of the fair value hierarchy.
    b) Work -in-progress includes expenses on works connected with preparation of the lands for the future harvest obtained from the biological
    assets of plant growing.
    24. Current biological assets
    30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Current biological assets of animal -breeding
    Cattle 1 884 1 246 2 375
    Other 4 12 10
    1 888 1 258 2 385
    Current biological assets of plant -breeding
    Corn 69 614 11 025 66 674
    Sunflower 5 288 - 5 509
    Potato 1 147 - 1 142
    Wheat 1 142 5 901 1 045
    Soya 110 - 968
    Grasses 42 18 45
    Other 49 - 1
    Total current biological assets of plant -breeding 77 392 16 944 75 384
    Total current biological assets 79 280 18 202 77 769
    As at the reporting dates current biological assets of animal -breeding were presented as follows:



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    46
    30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Cattle
    Cattle, units 604 1 074 2 595
    Live weight, kg 176 336 336 208 883 504
    Book value 1 884 1 246 2 375
    Other
    Number of animals, units 47 64 65
    Live weight, kg 3 834 10 475 11 085
    Book value 4 12 10
    Total book value 1 888 1 258 2 385
    Following changes took place in the current biological assets of animal -breeding:
    Cattle Other Total
    31 December 2015 (audited) 2 843 12 2 855
    Capitalized expenses 786 - 786
    Transfer (from (to) non -current biological assets) 1 169 - 1 169
    Sale (3 337) (1) (3 338)
    Slaughter (107) - (107)
    Change in fair value (302) - (302)
    Effect from translation into presentation currency 1 323 (1) 1 322
    30 September 2016 (unaudited) 2 375 10 2 385
    31 December 2016 (audited) 1 246 12 1 258
    Capitalized expenses 281 - 281
    Transfer (from (to) non -current biological assets) 370 - 370
    Sale (841) (8) (849)
    Slaughter (95) - (95)
    Change in fair value 1 172 (3) 1 169
    Effect from translation into presentation currency (249) 3 (246)
    30 September 2017 (unaudited) 1 884 4 1 888
    As at the reporting dates current biological assets of plant -breeding were presented as follows:



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    47
    30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Corn
    Area, ha 65 532 11 119 68 046
    Book value 69 614 11 025 66 674
    Sunflower
    Area, ha 5 925 - 6 017
    Book value 5 288 - 5 509
    Potato
    Area, ha 430 - 525
    Book value 1 147 - 1 142
    Wheat
    Area, ha 10 644 13 731 11 006
    Book value 1 142 5 901 1 045
    Soya
    Area, ha 140 - 910
    Book value 110 - 968
    Grasses
    Area, ha 314 414 649
    Book value 42 18 45
    Other
    Area, ha 200 - 6
    Book value 49 - 1
    Total book value 77 392 16 944 75 384
    Following changes took place in the current biological assets of plant -breeding:
    Corn Sunflower Wheat Soya Potato Grasses Other Total
    31 December 2015 (audited) - - 5 951 - - 15 2 5 968
    Capitalized expenses 35 860 11 505 4 319 3 359 1 227 460 18 56 748
    Revaluation at fair value at the date of
    harvest 2 111 10 192 601 3 443 121 - - 16 468
    Harvesting (4 447) (19 169) (10 268) (6 415) (718) (448) (19) (41 484)
    Harvest failure (18) (23) - (1) - (55) - (97)
    Change in fair value 34 511 3 439 - 601 534 - - 39 085
    Effect from translation into presentation
    currency (1 343) (435) 442 (19) (22) 73 - (1 304)
    30 September 2016 (unaudited) 66 674 5 509 1 045 968 1 142 45 1 75 384
    Corn Sunflower Wheat Soya Potato Grasses Other Total
    31 December 2016 (audited) 11 025 - 5 901 - - 18 - 16 944
    Capitalized expenses 38 563 12 899 5 201 6 653 1 179 204 235 64 934
    Revaluation at fair value at the date of
    harvest 552 8 098 704 2 517 763 - - 12 634
    Harvesting (14 046) (19 023) (11 095) (9 164) (1 608) (180) (186) (55 302)
    Harvest failure (1) (125) (1) - - - - (127)
    Change in fair value 33 346 3 449 - 105 815 - - 37 715
    Effect from translation into presentation
    currency 175 (10) 432 (1) (2) - - 594
    30 September 2017 (unaudited) 69 614 5 288 1 142 110 1 147 42 49 77 392



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    48
    Biological assets of the Group are measured at fair value within Level 3 of the fair value hierarchy. There were no transfers between any levels
    during the nine months ended 30 September 2017 .
    Description Fair value as at 30
    September 2017
    Valuation
    technique Unobservable inputs Range of unobservable
    inputs
    Crops in fields - corn 69 614 Cash flows
    Crops yield - tonnes per
    hectare 7,64
    Crops price per ton 145
    Crops in fields - sunflower 5 288 Cash flows
    Crops yield - tonnes per
    hectare 2,75
    Crops price per ton 333
    Crops in fields - soya 110 Cash flows
    Crops yield - tonnes per
    hectare 2,09
    Crops price per ton 388
    Crops in fields - potato 1 147 Cash flows
    Crops yield - tonnes per
    hectare 29
    Crops price per ton 94
    Cattle 4 174 Discounted
    cash flows
    Milk yield - kg per cow 7000 -7500 per year
    Milk price 0,26 USD per liter
    Discount rate 20,4%
    25. Trade accounts receivable, net
    Note 30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Trade accounts receivable 2 606 313 7 985
    Allowances for accounts receivable 27 (44) (37) (47)
    2 562 276 7 938
    26. Prepayments and other current assets, net
    Note 30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Prepayments and other non -financial assets:
    VAT for reimbursement 6 198 6 842 8 661
    Deferred expenses 4 681 - -
    Advances to suppliers 1 899 1 797 1 817
    Allowances for advances to suppliers 27 (1) (2) (6)
    12 777 8 637 10 472
    Other financial assets:
    Non -bank accommodations interest free 307 233 227
    Other accounts receivable 236 344 224
    Allowances for other accounts receivable 27 (7) (6) (7)
    536 571 444
    13 313 9 208 10 916
    De ferred expenses relate to the purchase option according to the Management Incentive Plan (see Note 29).



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    49
    27. Сhanges in allowances made
    Note 30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Allowances for trade accounts receivable 25 (44) (37) (47)
    Allowances for advances to suppliers 26 (1) (2) (6)
    Allowances for other accounts receivable 26 (7) (6) (7)
    (52) (45) (60)
    The movements of the allowances w ere as follows:
    Note
    For the nine
    months ended
    30 September
    2017
    For the nine
    months ended
    30 September
    2016
    Unaudited Unaudited
    As at the beginning of the period (45) (129)
    Accrual 12 (11) (22)
    Use of allowances 5 59
    Return of allowances - 25
    Effect from translation into presentation currency (1) 7
    As at the end of the period (52) (60)
    28. Cash and cash equivalents
    Currency 30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Cash in bank and hand UAH 3 730 1 185 5 682
    Cash in bank and hand USD 2 945 2 940 2 913
    Cash in bank and hand EUR 349 54 62
    Cash in bank and hand PLN 1 1 2
    7 025 4 180 8 659
    There were no restrictions on the use of cash and cash equivalents during the nine months ended 30 September 2017 and 201 6.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    50
    29. Equity
    Share capital
    IMC S.A. has one class of ordinary shares. The number of authorized, issued and fully paid shares as at 30 September 2017 is 3 3 178 000 (30
    September 201 6 – 31 300 000 ). All shares have equal voting rights. Par value of one share is USD 0,0018.
    30 September 2017
    (unaudited)
    31 December 2016
    (audited)
    30 September 2016
    (unaudited)
    % Amount % Amount % Amount
    AGROVALLEY LIMITED 65 38 68 38 68 38
    NATIONALE -NEDERLANDEN Powszechne Towarzystwo
    Emerytalne S.A. (previously ING PTE) * * 5 3 5 3
    Other shareholders (each one less than 5% of the share capital) 35 21 27 15 27 15
    100 59 100 56 100 56
    * As at 30 September 2017 the share of NATIONALE -NEDERLANDEN Powszechne Towarzystwo Emerytalne S.A. (previously ING PTE)
    ownership is less than 5%.
    A reconciliation of the number of shares outstanding at the beginning and at the end of the period:
    number of authorized, issued and fully paid shares
    For the nine
    months ended
    30 September
    2017
    For the nine
    months ended
    30 September
    2016
    As at the beginning of the period 31 300 000 31 300 000
    Changes for the period 1 878 000 -
    As at the end of the period 33 178 000 31 300 000
    Extraordinary shareholders meeting approved on 4 July 2017 a Management Incentive Plan providing to Management Team Members a n option
    to purchase in aggregate up to 1 878 000 new shares of IMC S.A. As a part of this incentive plan, 1 878 000 new ordinary s hares were issued with
    subscription price USD 0.0115 . As at the 30 September the purchase option was fully exercised with share price USD 2.73 .
    Share premium
    In 2011 IMC S.A. completed initial public offering of own shares on Warsaw Stock Exchange. Issue of share capital of IMC S.A. brought to the
    increase of share capital equaling to USD 10 thousand and share premium in amount of USD 24 387 thousand .
    In 2017 Management Incentive Plan was realized. Issue of new shares of IMC S.A. brought to the increase of share capital equaling to USD
    3 thousand and share premium in amount of USD 5 125 thousand.
    Revaluation reserve
    The fair value of Group’s property, plant and equipment has been measured as at 31 December 2015, 2010, 2009 by an independent appraiser.
    As at 31 December 2009 the related revaluation surplus of USD 14 766 thousand was initial ly recognized in equity, as a t 31 December 2010 it was
    additionally recognized in the amount of USD 4 326 thousand . As at 31 December 2015 the amount of USD 40 390 thousand was recognized as
    increase in revaluation reserve due to revaluation of PPE.
    The revaluation surplus included in equity in respect of an item of property, plant and equipment is transferred directly to retained earnings as the
    asset is used by an entity (in the amount that is the difference between depreciation based on the revalued carrying amount o f the asset and
    depreciation based on the asset’s original cost) and when the asset is derecognized (in the full amount).




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    51
    Effect of foreign currency translation
    Effect of foreign currency translation comprises all foreign exchange differences arising from the translation of the financi al statements into
    presentation currency.
    Dividend policy
    On 28 August 2017 the Board of Directors of IMC S.A. declare d an Interim Dividend Distribution for an aggregate amount of USD 1 985 156
    to be distributed equally to the Company's shareholders pro rata to their holding of shares (USD 0.0 6 per share) . On 27 September 2017 dividends
    were fully paid to shareholders.
    The Group intends to pay annual dividends starting from FY 2016 results with a dividend payout ratio up to 10% of net profit prov ided that the
    Group succeeds to receive dividend payment waivers from its creditors.
    Legal reserve
    From the annual net profits of the parent company, 5% have to be allocated to the legal reserve. This allocation shall cease to be required as soon
    and as long as such surplus reserve amounts to 10% of the capital. This reserve may not be distributed to th e shareholders.
    30. Share purchase warrant
    According to the Warrant Agreement entered into between the Group and IFC, IFC has the right to purchase up to 3 098 700 shares of IMC S.A.
    (representing equivalent of 9,90% of issued share capital) for a total amount up to USD 20 000 thousand. The warrant was exercisable at any time
    up to 19 December 2018.
    But according to the IFC Loan agreement if all of the warrants have not been exercised by 19 December 2018, and if only some of the warrants
    have been issued, the portion of the Additional return which shall be payable shall be calculated by multiplying USD 21 000 thousand by a fraction
    the numerator of which is equal to the number of warra nt shares not subscribed for pursuant to IFC loan agreement during the exercise period
    and the denominator of which is equal to the total number of warrant shares. This obligation to pay the additional return is an unconditional and
    independent debt obliga tion according to the IFC loan agreement.
    As at 30 June 2016 According to the Amendment to Loan agreement between IMC S.A. and International Financial Corporation the Additional
    Return should be paid by IMC S.A. to International Financial Corporation. Amou nt of Additional Return should be paid in a lump sum payment
    not later than 19 December 2018 in an amount USD 21 000 thousand or in two instalments as follows: USD 11 000 thousand on 19 December
    2018 and USD 11 800 thousand on 19 December 2019». IMC S.A. assumes to pay Additional Return in a lump sum payment. The warrants were
    cancelled in December 2016.
    In its previous treatment, the Group determined fair value of the share purchase warrant by applying Black -Scholes model to determine its value
    as an opti on to purchase shares, embedded in the loan with the non -resident bank IFC of USD 30 000 thousand. The Group also treated this
    value separately from the host instrument, recognizing a separate loss in the amount of initial fair value of the option, and the reafter recognizing
    changes in that fair value at a fair value through profit and loss. At the same time, the Group considered the obligation to pay the additional return
    of USD 21 000 thousand, included in the Warrant Agreement, as a contingent liability since it expected the IFC to exercise its warrants to buy
    shares. This judgment represented an error. In its corrected treatment, the Group considers the additional return of USD 21 000 thousand as an
    obligation associated with the IFC loan. Accordingly, i t has included it as an expected cash flow in calculation of the effective interest rate implicit
    in the loan, used in determining the amortized value of the loan instrument regarded as a whole. The effective interest rate thus determined is
    17,46% .
    In Sep tember 2017 new terms of payment of additional return were agreed. In accordance with new ter ms the amount of additional ret urn is USD
    19 742 748 and should be pa id in 5 portions starting September 2017 till June 2020. The amortized value of the loan instrument was regarded
    with effective interest rate of 18,46%.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    52
    31. Long -term loans and borrowings
    Currency 30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Secured
    Long -term bank loans USD 39 713 61 958 65 667
    Finance lease liabilities UAH, USD 2 915 3 073 5 225
    Bonds issued UAH - - 2 509
    Total long -term loans including current portion 42 628 65 031 73 401
    Current portion of long -term bank loans USD (6 851) (8 774) (14 859)
    Current portion of finance lease liabilities UAH, USD (2 466) (1 072) (2 308)
    Current portion of bonds issued UAH - - (2 509)
    Total current portion (9 317) (9 846) (19 676)
    Total long -term loans and borrowings 33 311 55 185 53 725
    Esse ntial terms of credit contracts
    Creditor Year of
    maturity Currency Nominal interest
    rate
    30 September 2017 (unaudited)
    Long -term liabilities Including current portion
    Non -resident bank 2020 USD 6M Libor+8,00% 37 522 6 456
    Ukrainian bank 2021 USD 7,00% 2 191 395
    39 713 6 851
    Creditor Year of
    maturity Currency Nominal interest
    rate
    31 December 2016 (audited)
    Long -term liabilities Including current portion
    Ukrainian bank 2017 USD 10,00% 5 5
    Non -resident bank 2018 USD 3M Libor+8,50% 20 000 8 000
    Ukrainian bank 2018 USD 12,00% 502 319
    Ukrainian bank 2018 USD 9,50% 333 300
    Ukrainian bank 2019 USD 8,50% 123 50
    Non -resident bank 2020 USD 6M Libor+8,00% 39 301 -
    Ukrainian bank 2021 USD 7,00% 1 694 100
    61 958 8 774




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    53
    Creditor Year of
    maturity Currency Nominal interest
    rate
    30 September 2016 (unaudited)
    Long -term liabilities Including current portion
    Ukrainian bank 2017 USD 6M Libor+9,50% 5 000 5 000
    Ukrainian bank 2017 USD 11,00% 598 598
    Ukrainian bank 2017 USD 10,00% 300 300
    Ukrainian bank 2018 USD 11,00% 615 600
    Ukrainian bank 2018 USD 12,00% 660 311
    Non -resident bank 2018 USD 3M Libor+8,50% 20 000 8 000
    Ukrainian bank 2019 USD 8,50% 149 50
    Non -resident bank 2020 USD 6M Libor+8,00% 38 345 -
    65 667 14 859
    Bonds issued 2016 UAH 13,25% 2 509 2 509
    68 176 17 368
    * Loan from non -resident bank consists of:
    - Basic loan amount of USD 30 000 thousand with 6M Libor+8,00% interest rate;
    - Additional return liabilities in the amount of USD 19 743 thousan d payable in instalments till June 2020 , interest free , discounted by 18,46%
    (as at 31 December 2016 and 30 September 2016 - the amount of USD 21 000 thousand payable as of 19 December 2018, interest free,
    discounted by 17,46%) .
    Some of long -term loans and borrowings are secured with pledges.
    Long -term loans and bonds issued out standing were repayable as follows:
    30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Within one year 6 851 8 774 17 368
    In the second to fifth year inclusive 32 862 53 184 50 808
    39 713 61 958 68 176
    The Group has committed to comply with loans covenants. As at 30 September 2017 and 30 September 2016 the Group was in compliance with
    all loans covenants.
    Finance lease liabilities were presented as follows:
    30 September 2017
    (unaudited) 31 December 2016 (audited) 30 September 2016
    (unaudited)
    Minimum
    lease
    payments
    Present value
    of minimum
    lease payments
    Minimum
    lease
    payments
    Present value
    of minimum
    lease payments
    Minimum
    lease
    payments
    Present value of
    minimum lease
    payments
    Within one year 2 621 2 466 1 399 1 072 2 721 2 308
    In the second to fifth year
    inclusive 473 449 2 098 2 001 3 096 2 917
    3 094 2 915 3 497 3 073 5 817 5 225
    Less future finance charges (179) - (424) - (592) -
    Present value of minimum lease
    payments 2 915 2 915 3 073 3 073 5 225 5 225




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    54
    32. Short -term loans and borrowings
    Currency 30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Secured
    Short -term bank loans USD 23 000 13 582 13 784
    Short -term bank loans UAH 5 090 4 965 5 210
    28 090 18 547 18 994
    Essential terms of credit contracts
    Creditor Currency Nominal interest rate 30 September 2017 (unaudited)
    Ukrainian bank USD 5,50% 10 000
    Ukrainian bank USD 5,25% 5 100
    Ukrainian bank USD 5,50% 5 000
    Ukrainian bank USD 5,25% 2 900
    23 000
    Ukrainian bank UAH 16,50% 5 090
    28 090
    Creditor Currency Nominal interest rate 31 December 2016 (audited)
    Ukrainian bank USD 10,20% 10 000
    Ukrainian bank USD 10,00% 3 582
    13 582
    Ukrainian bank UAH 20,00% 4 965
    18 547
    Creditor Currency Nominal interest rate 30 September 2016 (unaudited)
    Ukrainian bank USD 13,00% 10 000
    Ukrainian bank USD 10,00% 3 784
    13 784
    Ukrainian bank UAH 20,00% 5 210
    18 994
    All short -term bank loans are secured with pledges.




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    55
    33. Trade accounts payable
    30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Trade accounts payable 25 480 2 104 20 094
    34. Other current liabilities and accrued expenses
    30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Other liabilities:
    Advances from clients 1 069 1 616 3 683
    1 069 1 616 3 683
    Other accounts payable:
    Accounts payable for the lease of land and property rights 1 848 929 3 007
    Accounts payable for non -current tangible assets 1 030 1 267 1 617
    Wages, salaries and related charges payable 971 616 760
    Interest payable on bank loans 928 366 807
    Taxes payable 598 271 365
    Accruals for unused vacations 564 507 419
    Other accounts payable 6 136 16
    5 945 4 092 6 991
    7 014 5 708 10 674
    35. Related party disclosures
    According to existing criteria of determination of related parties, the related parties of the Group are divided into the fol lowing categories:
    a) Entities - related parties under common control with the Companies of the Group;
    b) Key management personne l.
    The Group performs transactions with related parties in the ordinary course of business. During the reporting period the Grou p did not perform
    any related parties transactions.
    Short -term r emuneration of key management personnel was as follows:
    For the nine
    months ended
    30 September
    2017
    For the nine
    months ended
    30 September
    2016
    Wages and salaries 759 246
    Related charges 15 87
    774 333
    The average number of employees, persons 6 6




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    56
    36. Information on segments
    A business segment is a separable component of a business entity that produces goods or provides services to individuals (or groups of related
    products or services) in a particular economic environment that is subject to risks and generates revenues other than risks and income of those
    components that are peculiar to other business segments.
    For the purpose of Management, the Group is divided into the following business segments on the basis of produced goods and rendered services,
    and consists of the foll owing 3 operating segments:
    - Farming division - a segment, which deals with cultivation and sale of such basic agricultural crops as corn and wheat;
    - Live stock breeding - a segment which deals with breeding and sale of biological assets and agricultural pr oducts of live farming. Basic
    agricultural product of live farming for sale in this segment is milk;
    - Storage and processing - a segment which deals with storage and processing of agricultural produce.
    Information on business segments for the nine months ended 30 September 2017 (unaudited) was the follow:
    Crop farming Dairy farming Elevators and
    warehouses Unallocated Total
    Revenue 141 245 1 468 3 021 - 145 734
    Intra -group elimination (61 468) - (2 726) - (64 194)
    Revenue from external buyers 79 777 1 468 295 - 81 540
    Gain from changes in fair value of biological
    assets and agricultural produce, net 50 349 2 126 - - 52 475
    Cost of sales (81 402) (1 086) (378) - (82 866)
    Gross income 48 724 2 508 (83) - 51 149
    Administrative expenses - - - (6 853) (6 853)
    Selling and distribution expenses - - - (6 397) (6 397)
    Other operating income - - - 929 929
    Other operating expenses - - - (2 859) (2 859)
    Write -offs of property, plant and equipment - - - (1 215) (1 215)
    Operating income of a segment 48 724 2 508 (83) (16 395) 34 754
    Financial expenses, net - - - (4 866) (4 866)
    Effect of additional return - - - (3 221) (3 221)
    Foreign currency exchange gain/(loss), net - - - 936 936
    Profit before tax 48 724 2 508 (83) (23 546) 27 603
    Income tax expenses, net - - - 2 2
    Net profit 48 724 2 508 (83) (23 544) 27 605




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    57
    Information on business segments for the nine months ended 30 September 2016 (unaudited) was the follow:
    Crop farming Dairy farming Elevators and
    warehouses Unallocated Total
    Revenue 142 737 3 479 1 816 - 148 032
    Intra -group elimination (66 166) - (1 612) - (67 778)
    Revenue from external buyers 76 571 3 479 204 - 80 254
    Gain from changes in fair value of biological
    assets and agricultural produce, net 55 554 (860) - - 54 694
    Cost of sales (74 631) (3 742) (281) - (78 654)
    Gross income 57 494 (1 123) (77) - 56 294
    Administrative expenses - - - (4 373) (4 373)
    Selling and distribution expenses - - - (4 362) (4 362)
    Other operating income - - - 2 539 2 539
    Other operating expenses - - - (2 355) (2 355)
    Write -offs of property, plant and equipment - - - (1 504) (1 504)
    Operating income of a segment 57 494 (1 123) (77) (10 055) 46 239
    Financial expenses, net - - - (9 563) (9 563)
    Effect of additional return - - - (16 010) (16 010)
    Foreign currency exchange gain/(loss), net - - - (4 338) (4 338)
    Profit before tax 57 494 (1 123) (77) (39 966) 16 328
    Income tax expenses - - - 362 362
    Net profit 57 494 (1 123) (77) (39 604) 16 690
    37. Lease of land
    The Group leases land for agricultural purposes from private individuals. Lease payments are calculated on the basis of monet ary valuation of the
    land considering the inflation factor. The average interest rate for lease of land of the Group is 5-10%% in 2 017 (5 -9%% in 2016) and depends
    on validity of the contract.
    Areas of operating leased land were as follows:
    30 September
    2017 31 December
    2016 30 September
    2016
    Location of land Unaudited Audited Unaudited
    Hectare Hectare Hectare
    Poltava region
    Land under processing 30 079 30 079 30 079
    Land for grazing, construction, other 2 009 2 009 2 009
    Chernihiv region
    Land under processing 81 938 81 938 81 938
    Land for grazing, construction, other 1 681 1 681 1 681
    Sumy region
    Land under processing 24 584 24 584 24 584
    Land for grazing, construction, other 113 113 113
    140 404 140 404 140 404




    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    58
    Future minimum lease payments for operating leases of land of agricultural designation considering existing at that date the inflation factor are as
    follows:
    30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Within one year 8 552 7 926 10 050
    In the second to fifth year inclusive 32 175 29 762 33 723
    Later than fifth year 29 845 25 942 26 555
    70 572 63 630 70 328
    38. Lease of property, plant and equipment
    The Group leases machinery fr om lease company. According to existing agreements the term of lease is 36 m onth s, the interest rate is 1M Libor
    minus 0,15%.
    Future minimum lease payments for operating leases of property, plant and equi pment were as follows:
    30 September
    2017 31 December
    2016 30 September
    2016
    Unaudited Audited Unaudited
    Within one year 268 1 105 1 383
    In the second to fifth year inclusive 71 210 130
    339 1 315 1 513
    39. Financial instruments
    Financial instruments as at 30 September 2017 and 201 6 were represented by the following categories:
    Financial instrument Category Measurement
    Financial assets
    Accounts receivable Loans and receivables Amortized cost
    Other financial assets Loans and receivables Amortized cost
    Cash and cash equivalents Loans and receivables Amortized cost
    Financial liabilities
    Loans and borrowings Financial liabilities Amortized cost
    Accounts payable Financial liabilities Amortized cost
    Other financial liabilities Financial liabilities Amortized cost
    The fair values of the Group’s financial assets and financial liabilities listed hereinbefore reflect the amounts that would be received to s ell the
    assets or paid to transfer the liabilities in an orderly transaction between market participants at the measurement date. T he fair values are based
    on inputs other than quoted prices that are observable for the asset or liability. These inputs include foreign currency exch ange rates and interest
    rates. The financial assets and financial liabilities are primarily valued using s tandard calculations / models that use as their basis readily observable
    market parameters. Industry standard data providers are the primary source for forward and spot rate information for both int erest rates and
    currency rates, with resulting valuations perio dically validated through third party or counterparty quotes.



    IMC S.A. AND ITS SUBSIDIARIES
    Condensed consolidated interim financial statements
    NOTES TO THE CONDENSED CONSOLIDAT ED INTERIM FINANCIAL STATEMENTS
    (in thousand USD, unless otherwise stated)
    59
    The Group’s non -derivative financial instruments included cash and cash equivalents, accounts receivable, other financial assets, accounts pa yable,
    other financial liabilities, loans and b orrowings. At 30 September 2017 and 2016 , the carrying value of these financial instruments, excluding long -
    term debt, approximates fair value because of the short -term maturities of these instruments. The major part of the long -term loans and borrowings
    has floating interest rates and other has fixed interest rates but they are corresponded to the market rate level, so the Mana gement of the Group
    believes that book value of long -term loans and borrowings approximates their fair value.
    40. Events after the balance sheet date
    There were no material events after the end of the reporting date, which have a bearing on the understanding of the financial statements.
    Conducting its normal operating activity, the Group considers important to highlight the following:
    Loans and borrowings and interests are repaid in the amount of USD 1 415 thousand .
    VAT for reimbursement is received in the amount of USD 777 thousand.



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WSZYSTKIE KOMUNIKATY SPÓŁKI
Informacje o spółce
Nazwa:IMC SA
ISIN:LU0607203980
NIP:
EKD:
Adres: 26-28 Rue Edward Steichen L-2540 Luksemburg
Telefon:+3522747848822
www:www.imcagro.com.ua
Kalendarium raportów
2019-11-14Raport za III kwartał
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