UkrProduct Annual Report 2024

FY2024 Annual Report · UkrProduct

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Annual Report

Ukrproduct Group
Annual Report 2024

Annual Report

Table of Contents

Chairman and Chief Executive Statements ..................................................................................... 3
The Board of Directors .................................................................................................................... 8
Remuneration Committee Report .................................................................................................. 10
Corporate Governance Report ....................................................................................................... 12
Corporate Social Responsibility Report ........................................................................................ 15
Directors’ Report ........................................................................................................................... 17
Statements of Directors’ Responsibilities ...................................................................................... 20
INDEPENDENT AUDITOR’S REPORT ..................................................................................... 21
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ...................................... 27
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................ 28
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................. 29
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................... 30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ............................................... 3131

Annual Report

Chairman Statement

The past year tested our people, our values, and our purpose like never before. As one of Ukraine’s
leading food producers, Ukrproduct operates not only as a business, but as part of the country’s national
infrastructure. We support food security, rural employment, and Ukraine’s export potential. Even under
the shadow of war, this purpose guided our actions.

Tragically, the year also brought personal loss. We mourn the members of our team and their families
who were lost to the war. We extend our heartfelt condolences to every employee who has suffered loss.
Their courage and resilience continue to inspire us, and we honour their memory through our ongoing
commitment to one another and to our mission.

Throughout the financial year ended 31 December 2024 (“FY 2024”), our teams kept our production
sites operational, often under missile strikes, blackouts, and disrupted supply chains. Our factories
continued to process milk from thousands of small farmers who depend on us. Our distribution adapted
quickly, finding new routes and workarounds to ensure supply continuity. Our employees regularly
attended survival training and adapted their routines to ensure business continuity and personal safety.
The courage, discipline, and dedication of our people has been nothing short of heroic.

From the beginning of the full-scale invasion, we made clear that our first responsibility was to our
employees and their families. In 2024, we continued to focus on safety, job preservation, and operational
resilience. We invested in emergency preparedness, staff wellbeing initiatives, and secure logistics
solutions. Despite these pressures, we upheld international standards of hygiene and food safety,
maintained our certification regime, and progressed with our digitalisation and process automation
journey to build long-term efficiencies.

In times of war, survival is strategy. The economic realities of 2024, including currency instability, supply
chain disruptions, and declining consumer confidence forced us to make tough decisions. We reduced
price promotions, prioritised margin stability, and carefully managed liquidity. As a result, while local
currency revenues grew 13%, our reported GBP revenue remained broadly stable at £37.1 million.
EBITDA declined 29% to £1.7 million, reflecting the strategic decision to preserve business capacity,
protect employment, and maintain critical production.

While profitability declined, our essential position in Ukraine’s dairy supply chain has only grown. We
launched new products, adapted our spreads and butter lines to market realities, and drove 31% growth
in beverages, particularly kombucha and kvass. Our new sandwich spreads category demonstrated
profitable growth, validating our innovation agenda.

We continue to face significant financial pressure, including ongoing breach of loan covenants with the
European Bank for Reconstruction and Development (EBRD). The Group has been in long-running
discussions to restructure the loan and accrued interest. In December 2024, the EBRD retrospectively
applied deferred fees dating back to 2016, bringing the total obligation to over €9.7 million (£8.1 million).

Annual Report

These charges, together with currency-related and impairment costs, contributed to a net loss of £2.0
million for FY2024.

Despite this, we retained the confidence of our suppliers, employees, and customers. Our net assets stand
at £2.0 million. Importantly, the EBRD has not sought to accelerate repayment, and our dialogue
continues. The EBRD has on numerous occasions reiterated its commitment to supporting Ukraine’s
recovery, preserving jobs, enhancing food security, and restoring the country’s export potential. We hope
these guiding principles will be reflected in our ongoing negotiations, and that the long-term role of
Ukrproduct as a pillar of national resilience will be recognised in any restructuring outcome.

In 2025, the operating environment is expected to remain fragile, but we are better prepared. We will
pursue a cautious capital allocation strategy, continue engaging with international partners and lenders,
and remain laser-focused on liquidity, resilience, and performance. We will continue to innovate,
modernise, and invest where it matters most, in our people, our customers, and our future.

Our goal is to emerge from this war a stronger, leaner, and more resilient business, one that continues to
serve the country with pride and purpose. We pay tribute to our employees, who risk their safety daily to
ensure production continues, exports flow, and Ukrainian families are fed. We thank our shareholders,
who continue to place their trust in us despite extraordinary volatility. We express deep appreciation to
our international partners and stakeholders, particularly the EBRD, for their continued engagement and
openness to dialogue, even in these most difficult circumstances.

Above all, we acknowledge the courage of those defending Ukraine on the front line, whose bravery
allows business, life, and hope to endure. We are united in our mission and unwavering in our purpose.
Ukrproduct will stand, for our people, our partners, and for Ukraine.

Rinat Abdrasilov
Non-Executive Chairman

Annual Report

Chief Executive Officer Statement

Ukrproduct Group Limited (“Ukrproduct”, the “Company” or, together with its subsidiaries, the
“Group”) is one of the leading Ukrainian producers and distributors of branded dairy foods and beverages
(kvass).

In the financial year ended 31 December 2024 (“FY2024”), Ukrproduct once again managed to increase
its revenue by 13% in local currency and thus developed significantly better than the market. However,
due to currency translation effects, reported revenue remained broadly stable at £37.1 million, compared
to £37.0 million in the previous year.

The processed cheese segment delivered £21.2 million in revenue in FY2024, a 15% year-over-year
decline, largely impacted by reduction of price promotions at the national level due to the rapid growth
in cost prices caused by sharp fluctuations in the dairy raw material market and the risks of loss-making
sales.

The butter segment achieved revenue of £5.2 million in FY2024 compared to the prior year £3.1 million.
Revenue growth for butter of 70% was primarily driven by increased production after a period of slight
stagnation, the market has become receptive to the higher supply.

Sales of spreads experienced a 12% decline in FY2024 and amounted to £4.0 million, reflecting
heightened market competition and evolving consumer preferences.

Ukrproduct expanded its sustainable product portfolio with a new sandwich spreads category in the fourth
quarter of FY 2023 that showed profitable growth, sales which amounted to £1.2 million in FY2024.

Sales generated from skimmed milk powder increased by 8% on a nominal basis to £1.4 million,
compared with £1.3 million in the previous year. In terms of volume, skimmed milk powder sales
decreased by 23% following the continued decline in the previous period. Prices for skimmed milk
powder only had limited scope for upward movement in FY2024 and the Group minimised its output of
this product for sale in favor of utilising semi-processed milk protein as an ingredient in the production
of processed cheese.

Kvass and other beverages sales rose by 31% year-over-year, reaching £2.3 million in revenue in
FY2024. The growth in sales was driven by positive market dynamics of kombucha sales, supported by
new product launches and strong brand positioning.

Administrative and selling expenses in FY2024 increased by 4% year-over-year, reaching £4.2 million
in FY2024. This increase was mainly attributable to higher payroll and payroll-related costs, as well as
an increase in insurance and consulting services. The changes in other types of expenses were mainly
driven by sales dynamics and regular business activities throughout FY2024.

Other operating expenses increased to £1.8 million in FY2024, compared to £1.1 million in the previous
year. Due to anticipated deterioration in the business outlook and increasing future risks for the business,

Annual Report

the Group recognised £1.1 million in net impairment losses on financial assets, reflecting provisions
made for accounts receivable and prepayments to suppliers. Additionally, this line includes £0.1 million
write-off of goods and £0.4 million provision for blocked VAT invoices.

Subsequently, EBITDA declined by 29% year-over-year, to £1.7 million in FY2024.

Finance expenses in FY2024 increased by 253% year-over-year, totaling £2.8 million (2023: £0.8
million), driven by substantial loan deferral fee charges from the EBRD, retrospectively applied for the
period from October 2016 to December 2024. In December 2024, notwithstanding the challenging
operating environment due to the war in Ukraine, the EBRD decided to exercise its right under the loan
agreement and charged loan deferred fees retrospectively from the period from 24 October 2016 to 2
December 2024.

As a result, the net loss after tax amounted to £2.0 million, a decline of £2.4 million compared to a profit
of £0.4 million in FY2023. The deterioration was mainly attributable to increased finance costs and lower
operating profit.

Financial Position

As of 31 December 2024, Ukrproduct reported net assets of £2.0 million, down from £4.5 million a year
earlier, with cash balances reduced to £0.1 million (FY2023: £0.4 million).

For the year ended 31 December 2024, the Group continued to be in breach of several provisions of the
loan agreement with the EBRD. The Group failed to repay Tranches A and B before the maturity dates
and has missed interest payments since 1 March 2022. In January 2025, EBRD notified the Group on a
further €2.4 million (£2.0 million), principally relating to loan deferral fee charges for the period from
October 2016 to December 2024. This brings the aggregate balance owed to the EBRD to over
€9.7 million (£8.1 million), inclusive of principal, interest and fees as at 31 December 2024.

The Group has been in dialogue with the EBRD since 2021 to potentially restructure the loan and accrued
interest and charges, and discussions continue. At present, the EBRD has taken no action to
accelerate repayment of the accumulated loan.

In January 2024, the Group signed a new facility of UAH 70.0 million (£1.4 million) with Ukrainian
bank, for general working capital purposes. The new facility has a significantly lower interest rate of 9%
(against 20% on the previous facility).

Annual Report

Outlook

In 2025, the Company expects the business environment to remain fragile, exacerbated by the ongoing
war in Ukraine and financial pressures. The Group will continue to follow a cautious capital allocation
policy, prioritise liquidity preservation, seek new financing opportunities, and focus on fulfilling its
existing obligations. We will also continue to strengthen our digital systems, automate operations, and
safeguard hygiene standards across all our production sites, a key part of preserving our export potential.

Oleksandr Slipchuk
Chief Executive Officer

Annual Report

The Board of Directors
As of the date of the approval of the 2024 Annual Report, the Board members are as follows:
Name
Position
Date appointed
Rinat Abdrasilov
Non-Executive Chairman
September 2024
Sergey Evlanchik
Executive Director
April 2008
Oleksandr Slipchuk
Chief Executive Officer
November 2004
Yuriy Hordiychuk
Chief Operational Officer
January 2013
Jack Rowell
Non-Executive Chairman (resigned in June 2024)
February 2005

All directors were re-elected at Annual General Meeting (AGM) on 1 August 2024.
Rinat Abdrasilov
Non-Executive Chairman – Appointed on September 1, 2024

Rinat Abdrasilov is a seasoned strategy professional with extensive leadership experience in corporate
governance, investor relations, strategy, and business transformation. With 25 years in international
strategy consulting, including roles with FTSE 100 companies, Rinat advanced to Senior Partner level
before transitioning to a non-executive career. Rinat has served as a non-executive director and advisor
to a range of organizations, including banks, Ukraine’s national postal operator, housing association,
international software companies, UK government trusts, as well as numerous charities and associations.
He holds a degree in Business Administration from the American University of Central Asia, an MBA
from the University of Cambridge, and a range of certifications in finance, project management, and
board governance.

Oleksandr Slipchuk
Chief Executive Officer

Oleksandr Slipchuk is responsible for the Group’s overall performance and strategy implementation and
is a founder of Ukrproduct Group. He studied at Far-Eastern High Engineering Marine School in USSR
and graduated as a maritime navigator in 1989. Together with Sergey Evlanchik, Oleksandr established
the securities house Alfa-Broker in 1994, developed the equity trading business and acquired initial stakes
in the companies that later became part of Ukrproduct Group. Later in 1998, Oleksandr took on the
executive positions at the Molochnik and the Starokonstantynivsky Dairy plants, Ukrproduct’s two main
operating assets.

Sergey Evlanchik
Executive Director

Sergey Evlanchik received his Master’s degree at Oxford University, where he studied Business
Administration at Said Business School. Together with Oleksandr Slipchuk, he established the equity
trading group, Alfa-Broker in 1994 and after the downturn of equity markets in 1998, Mr Evlanchik
refocused his activities on business development in the industrial sector of Ukraine, particularly within
the dairy industry, where he joined the companies that would subsequently form Ukrproduct Group in
2004. Sergey then led the Group to its successful listing on the AIM market of the London Stock
Exchange in 2005.

Annual Report

In 2011 under the leadership of Sergey Evlanchik the Group secured debt finance with EBRD focused
on
energy
and
production
efficiency
upgrade
of
the
existing
production
facilities.
Sergey is also a partner in Rengy Development that is focused on development of renewable projects –
mainly solar power generation in Ukraine.

Yuriy Hordiychuk

Chief Operational Officer

Yuriy Hordiychuk has been with the Group since 2002. Firstly, he was Director of Procurement, and in
2005 was promoted to Director of Production. The next significant step in the career of Mr. Hordiychuk
was taken in 2008, when the owners of Ukrproduct Group appointed him as Chief Operational Officer
of the Company. Yuriy has a successful track record of business administration and a degree in
“Production Organization Management”.

Senior Management

Olena Telychko
Chief Financial Officer

Olena has been with Ukrproduct since 2019, most recently serving as Deputy CFO and Head of
Reporting. On April 01, 2025 she was appointed as a CFO of the Company. Prior to joining the Company,
she held finance roles at Bunge Ukraine and has over 15 years of experience in financial reporting, audit
coordination, IFRS compliance, and systems implementation. She holds a Master's degree in
International Economics from Alfred Nobel University and a Diploma in International Financial
Reporting.

Annual Report

Remuneration Committee Report
This report is prepared by the Remuneration Committee of the Board and sets out the Group’s policy on
the remuneration of the Directors, with a description of service agreements and remuneration packages
for each Director in relation to the financial year ended 31 December 2024.
Remuneration Committee

The Remuneration Committee comprises one Non-Executive Director, Rinat Abdrasilov (who serves as
Committee Chairman), and one Executive Director, Sergey Evlanchik. In case of a split decision, the
Chairman holds the casting vote. This Committee is scheduled to meet at least twice per annum to advise
the Board on the Group’s remuneration strategy and to determine the terms of employment and total
remuneration of the respective Executive Directors of the Group and of its subsidiary companies,
including the granting of share options. Among others, the objective of this Committee is to attract, retain
and motivate Executives capable of delivering the Group’s objectives. The Remuneration Committee is
also responsible for the evaluation of the performance of Executive Directors.

The board members were invited to discuss issues on the Remuneration Committee, which held two
meetings during 2024.
Remuneration Policy
The Group’s remuneration policy is to provide remuneration packages which:

are designed to attract, motivate and retain high calibre Executives;

are competitive and in line with comparable businesses;

are rooted in practices exercised in countries where the Group operates;

intend to align the interests of the Executives with those of the shareholders by means of fixed and
performance related remuneration; and

set challenging performance targets and motivate Executives to achieve those targets both in the
short and long-term.
Base salary
The Committee on an annual basis reviews base salaries of the respective Executive Directors of the
Company and its subsidiaries, taking into account job responsibilities, competitive market rates and the
performance of the Executive concerned. Consideration is also given to the cost of living and the
Director’s professional experience. While determining the base salaries, the Committee also considers
general aspects of the employment terms and conditions of employees elsewhere in the Group.
Incentive Bonus Plans and Equity Arrangements
The Committee continues to plan to introduce long-term equity incentive arrangements to make the
overall Executive Remuneration structure more performance-related, more competitive and aligned with
shareholders’ interests subject to an improving environment in Ukraine.

Annual Report

Service contracts
The appointments of the respective Executive Directors of the Company and its subsidiaries are valid for
an indefinite period and may be terminated with three months’ notice given by either party at any time.
The Group’s policy, including for individual subsidiaries, for compensation for loss of office is to provide
compensation that reflects the Group’s or a subsidiary’s contractual obligations.
Bonus Scheme
The Committee has established a cash bonus scheme for Executive Directors based on the overall
performance of the Group and/or respective subsidiary company and attainment of the operating profit
targets. No bonus awards were made for FY2024.
Non-Executive Directors
The appointments of non-executive Directors are valid for an indefinite period and may be terminated
with three months’ notice given by either party, at any time. The decision to re-appoint, as well as the
determination of the fees of the non-executive Directors, rests with the Board. The non-executive
Directors may accept appointments with other companies, although any such appointment is subject to
the Board’s approval, terms, and conditions of Service Agreements.
Directors’ remuneration
Details of the Directors’ cash remuneration are outlined below. Information in the table has been audited.

Annual Salary/fee
Bonus
Non-cash
compensation
Total cash
remuneration
2024
2023
2024
2023
2024
2023
2024
2023
£ 000
£ 000
£ 000
£ 000
£ 000
£ 000
£ 000
£ 000
Executive
Oleksandr Slipchuk
90.0
90.0
-
45.0
-
-
90.0
135.0
Sergey Evlanchik
70.0
70.0
-
35.0
-
-
70.0
105.0
Yuriy Hordiychuk
31.3
50.3
-
30.0
-
-
31.3
80.3
191.3
210.3
-
110.0
191.3
320.3
Non-Executive
Jack Rowell**
21.3
45.0
-
-
-
-
21.3
45.0
Rinat Abdrasilov
8.0
-
-
-
-
-
8.0
-
General manager
Yuriy Hordiychuk*
28.7
9.7
-
-
-
-
28.7
9.7
*This relates to fees paid to Yuriy Hordiychuk for general management services under a separate contract
to his service contract.
**Jack Rowell served as Non-Executive Chairman untill June 19, 2024.
Share based payments
As at 31 December 2024 there are no outstanding options issued by Group.

Annual Report

Corporate Governance Report
Corporate Governance Policy
As an AIM-quoted company, the Company is required to apply a recognised corporate governance code,
demonstrating how the Group complies with such corporate governance code and where it departs from
it.

The Directors of the Company have formally made the decision to apply the Quoted Companies Alliance
Corporate Governance Code (the “QCA Code”). The Board recognises the principles of the QCA Code,
which focuses on the creation of medium to long-term value for shareholders without stifling the
entrepreneurial spirit in which small to medium sized companies, such as Ukrproduct Group Limited,
have been created. The Company will provide annual updates on its compliance with the QCA Code in
its Annual Report.

The Board
The Board now consists of three Executive Directors and a Non-Executive Chairman reflecting a blend
of different experience and backgrounds. The Board acknowledges that there is only one director Rinat
Abdrasilov who can be classified as an independent Non-Executive Director under the QCA guidelines.
The Board meets four times a year. At these quarterly meetings the Board, inter alia, discusses the
implementation of strategy, reviews financial progress and evaluates the individual and collective
accountability of the Board.

The Group’s day-to-day operations are managed by the Executive Directors. All Directors have access
to the Company Secretary and any Director needing independent professional advice in the furtherance
of their duties may obtain this advice at the expense of the Group.

The Board is satisfied that it has a suitable balance between independence on the one hand, and
knowledge of the Company on the other, to enable it to discharge its duties and responsibilities
effectively, and that all Directors have adequate time to fill their roles.

Details of the current Directors, their roles and background are set out on the Company’s website
at http://ukrproduct.com/en/investor-relations-aim-rule-26/board-of-directors/

The role of the Non-Executive Chairman is to provide leadership of the Board and ensure its effectiveness
on all aspects of its remit to maintain control of the Group. In addition, the Non-Executive Chairman is
responsible for the implementation and practice of sound corporate governance. The Non-Executive
Chairman is considered independent and has adequate separation from the day-to-day running of the
Group.

The role of the Chief Executive Officer is for the strategic development of the Group and for
communicating it clearly to the Board and, once approved by the Board, for implementing it. In addition,
the Chief Executive Officer is responsible for overseeing the management of the Group and its executive
management.

Annual Report

Application of the QCA Code

The Company remains committed to listening to, and communicating openly with, its shareholders to
ensure that its strategy, business model and performance are clearly understood. The AGM is a forum
for shareholders to engage in dialogue with the Board. The results of the AGM will be published via
RNS and on the Company’s website. Regular progress reports are also made via a Regulatory Information
Service. The point of contact for shareholders is Olena Telychko, Chief Financial Officer,
olena.telychko@ukrproduct.com.

The Company’s management maintains a close dialogue with local communities and its workforce.
Where issues are raised, the Board takes the matters seriously and, where appropriate, steps are taken to
ensure that these are integrated into the Company’s strategy.

Corporate Governance Committees
The Board has two committees comprising the following:

The Audit Committee
The terms of reference of the Audit Committee are to assist all the Directors in discharging the individuals
of appropriate ability and experience and to help in promoting the following:
 The Group’s financial and accounting systems provide accurate and up-to-date information on its
current financial position, including all significant issues and going concern;
 The integrity of the Group’s financial statements and any formal announcements relating to the
Group’s financial performance and reviewing significant financial reporting judgments contained
therein are monitored;
 The Group’s published financial statements represent a true and fair reflection of this position;
and taken as a whole are balanced and understandable, providing the information necessary for
shareholders to assess the Group’s performance, business model and strategy;
 The external audit is conducted in an independent, objective thorough, efficient and effective
manner, through discussions with management and the external auditor; and
 A recommendation is made to the Board for it to put to shareholders at a general meeting, in
relation to the reappointment, appointment and removal of the external auditor and to approve the
remuneration and terms of engagement of the external auditor.

Remuneration Committee
The terms of reference of the Remuneration Committee are to:
 recommend to the Board a framework for rewarding senior management, including Executive
Directors, bearing in mind the need to attract and retain individuals of the highest calibre and with
the appropriate experience; and
 ensure that the elements of the remuneration package are competitive and help in promoting the
Group.

Nominations Committee
Given the Company’s size, the Board has not considered it appropriate to have a Nominations Committee.

Annual Report

Internal control
The Directors acknowledge their responsibility for the Group’s system of internal control, which is
designed to ensure adherence to the Group’s policies whilst safeguarding the assets of the Group, in
addition to ensuring the completeness and accuracy of the accounting records. Responsibility for
implementing a system of internal financial control is delegated to Olena Telychko, the CFO. The
essential elements of the Group’s internal financial control procedures involve:
 Strategic business planning: strategic business planning is undertaken annually. This includes
financial budget for the following year.
 Performance review: the Directors aim to monitor the Group’s performance through the preparation
of monthly management accounts and regular reviews of expenditure and projections.
 The internal control system: the internal control system is further enforced by the Group’s internal
audit department with the main objectives of ensuring the safety of the Group’s assets and the
reliability of accounting records.

Departure from the QCA Code
In accordance with the AIM Rules for Companies, the Company departs from the QCA Code in the
following ways:

Principle 5: “Maintain the board as a well-functioning, balanced team led by the chair.”
The Company does not comply with the recommendation of Principle 5 that the Board should have at
least two independent nonexecutive directors. The Company only has one Non-Executive Director, the
Chairman, who is considered independent, but has three Executive Directors. The Executive Directors
have valuable industry knowledge and are integral to the running of the business. The Chairman has an
extensive business experience at the Board level.

Principle 7 – “Evaluate board performance based on clear and relevant objectives, seeking
continuous improvement.”
The Board is small and extremely focussed on implementing the Company’s strategy. However, given
the size and nature of the Company, the Board does not consider it appropriate to have a formal
performance evaluation procedure in place, as described and recommended in Principle 7 of the QCA
Code. The Board will closely monitor the situation as it grows.

Rinat Abdrasilov
Non-Executive Chairman

Annual Report

Corporate Social Responsibility Report
Corporate Social Responsibility
The Board is committed to developing and implementing corporate social responsibility (CSR) policies
aimed at:

Promoting equality and fairness among employees, partners and suppliers

Ensuring safe working conditions

Maintaining the Group’s corporate reputation and dedication to business ethics

Supporting the communities in which the Group operates

Establishing long-term and healthy relationships with the Group’s partners, customers and other
affiliated parties.
The main elements of the Group’s approach towards fulfilling the above objectives are as follows:
Employees

The Group is committed to ensuring equal opportunities to all its employees, both current and
prospective. Each employee’s efforts are highly valued and the Board believes that a diverse mix of the
workforce facilitates innovation, efficiency and teamwork. As a matter of corporate policy, regular
training and development workshops are conducted for Ukrproduct’s staff. These are aimed at all
employee groups, including managerial, technical and production personnel. The training programmes
encourage staff to progress up the career ladder and are central to the Group’s continuing growth and
success.

Health and safety

Management at business units within the Group are responsible for developing and maintaining the
underlying practices that provide for a safe working environment. Special attention is given to the
production facilities, where the equipment, including lighting, air conditioning, workspace and other
constituents, undergo constant reviews and improvements. Regular monitoring is carried out to ensure
that the required standards are met and that employees use the provided communication channels to
further improve their surrounding working conditions.

Customers

Customer satisfaction is at the core of the Group’s business model. Therefore, the Board is keen to
continue supplying the customers with high quality, affordable products required by current market
demands. The Group’s segmentation practices are aimed at segregating various customer groups in order
to meet their respective needs with maximum efficiency. In addition, regular market research and surveys
are conducted to ensure maximum value is consistently offered to customers.

Annual Report

Environment
The Group recognises the importance of good environmental practices and seeks to minimise any
negative impact that its operations or products might have on the production sites and surrounding areas.
The Group adopted the environmental laws and regulations of Ukraine to reduce, control and eliminate
various types of pollution and to protect natural resources. Ukrproduct monitors and controls all its
production facilities regularly in order to ensure that air quality is not adversely impacted by its
operations. The Group focuses on cutting water and energy consumption, as well as reducing the volumes
of waste. Collection and processing of waste have been organised through the local waste collection
plants. The Group’s development programme puts specific emphasis on acquiring and installing only the
most advanced and environmentally friendly production and auxiliary equipment.
Food safety
Food safety is one of key priorities for the Group. Ukrproduct is committed to produce high quality and
safe food and ensures that high standards are maintained within its supplier base. The certified food safety
management system in compliance with ISO 22000 was implemented by the Group. This system provides
the possibility of fully monitoring all production stages - from forage control and sound health of the
cattle to the final product distribution.
Community support
The Group is keen to further enhance and maintain its partnership with local communities by supporting
their initiatives and charitable events. The Group contributes cash donations and gifts, as well as
employee time, by encouraging staff to participate as volunteers.
ESG Roadmap

While the war has constrained long-term planning, Ukrproduct remains committed to aligning with
global ESG standards. In 2025–2026, the Group’s roadmap includes the introduction of basic
environmental monitoring (energy efficiency and emissions from transport), expanded reporting on
social impact (including employee wellbeing and safety training), and improved board oversight of ESG
matters. The food safety certifications and hygiene controls remain central to our ESG values. As Ukraine
recovers, the Group aim to align further with frameworks such as TCFD and GRI.

Annual Report

Directors’ Report

The Directors present their report and the audited consolidated financial statements of Ukrproduct Group
Limited (referred to as the “Сompany” and together with its subsidiaries, the “Group”) for the year ended
31 December 2024.

Principal Activities and Business Review

Ukrproduct is a holding company for a group of food and beverages businesses located in Ukraine. The
principal activities of the Group are the production and distribution of highly branded dairy foods and
beverages (kvass) in Ukraine and for export of milk powder. The Group is one of the leading branded
food producers in Ukraine with its own nationwide distribution network. More detailed commentary on
the Group’s activities during the year, its financial performance, future plans, and prospects are outlined
in the Chairman and Chief Executive Statements.

Results and Dividends

The results of the Group for the year are set out on the page 28. Net loss after tax for FY2024 amounted
to a loss of £2.0 million, a decrease of £2.4 million compared to FY2023 (profit: £0.4 million), stemming
from increased finance expenses in FY2024.

The Board has decided not to recommend the payment of a dividend in respect of the year ended
31 December 2024.

Directors
Details of members of the Board of Directors are shown on page 8.

The Directors’ interests in the share capital of the Company as at 31 December 2024 and 31 December
2023 are shown below:

Shares
Share options

2024
2023
2024
2023
Executive

Sergey Evlanchik
14,967,133
14,967,133
-
-
Oleksandr Slipchuk
14,939,133
14,939,133
-
-
Yuriy Hordiychuk
-
-
-
-
Non-executive

Jack Rowell
-
138,690
-
-
Rinat Abdrasilov
-
-
-
-

Powers of the Directors

Subject to the Company’s Memorandum and Articles of Association, Companies (Jersey) Law 1991, as
amended and any directions given by special resolution, the business of the Company shall be managed
by the Directors who may exercise all such powers of the Company. The rules in relation to the
appointment and replacement of Directors are set out in the Сompany’s Articles of Association.

Annual Report

Risks Facing the Group

The Group operates in an environment of heightened risk due to the ongoing war in Ukraine. The
principal risks and uncertainties facing the business are:
- Operational disruption: Missile attacks, blackouts, and damaged infrastructure can severely disrupt
production and logistics. Mitigation includes emergency preparedness training, generator back-up
systems, and alternate logistics routes.
- Currency instability: Exchange rate volatility impacts reported revenues and costs. The Group uses
internal planning scenarios to manage exposures.
- Loan covenant breaches: Ongoing negotiations with the EBRD aim to restructure legacy liabilities, with
risks of penalty charges or acceleration for repayment if restructuring is unsuccessful.
- Supply chain risk: Dependence on raw milk from small farmers requires ongoing supplier trust and
logistics continuity.
- Consumer demand decline: Wartime economic stress impacts spending. The Group counters this with
innovation in low-cost product categories and export resilience.
- Human capital and safety: Staff exposure to physical risk remains significant. We address this through
wellbeing programmes, safety protocols, and psychological support.
- Livestock health risks: As of the time of writing in 2025, a developing outbreak of cattle illness across
Europe presents a potential risk to milk production and trade flows, which may have downstream effects
on supply availability and input costs for the Group.

Employees
The Group is committed to ensuring provision of equal opportunities for all employees, which is reflected
by its selection, recruitment and training policies. The Group considers its employees to be one of its
most valuable assets and rewards high performance through competitive remuneration and incentive
schemes. The Directors also consider it a priority to give employees the opportunity to communicate
their ideas and opinions to all levels of management, both directly and through various surveys. The
average number of employees of the Group during the year ended 31 December 2024 was 813 (2023:
813, excluding seasonal employees).

Payment Policy
The Group has a general set of guidelines for paying its suppliers based on specific criteria. However, it
is normal practice to agree payment terms with a specific supplier when entering into a purchase contract.
The Group seeks to abide by the payment terms agreed whenever it is satisfied that the goods or services
have been provided in accordance with the agreed terms and conditions.

Going Concern

The financial statements have been prepared on a going concern basis, which assumes that the Group
will continue to operate for the foreseeable future and will be able to realize its assets and discharge its
liabilities in the normal course of business.

Annual Report

received notification in December 2024 of additional fee charges, bringing total liabilities to the EBRD
to over €9.7 million (£8.1 million).

While discussions with the EBRD regarding a possible debt restructuring have been ongoing since 2021,
no formal agreement has been reached. At present, the EBRD has taken no action to accelerate repayment
of the accumulated loan.

The Directors acknowledge that a material uncertainty exists, which may cast significant doubt about the
Group’s ability to continue as a going concern in particular relating to:
-
the absence of a formal debt restructuring agreement with the EBRD;
-
the potential impact of the ongoing war in Ukraine on trading conditions, supply chains, and
market stability;
-
the Group’s limited cash resources and reliance on successful implementation of its business
plans and financing strategy.

Based on the Group’s 2024 results, ongoing mitigating actions, and the current status of discussions with
lenders, the Directors have a reasonable expectation that the Group will continue to have adequate
resources to meet its obligations as they fall due for the foreseeable future. Accordingly, the Directors
consider it appropriate to prepare the financial statements on a going concern basis.

Annual General Meeting

Ukrproduct’s AGM will be held on 7 August 2025. The Notice of AGM will be sent to shareholders no
less than 21 days prior to the date of the meeting.

Auditors
Moore Stephens Audit and Assurance (Jersey) Limited was appointed as the Group’s auditors for the
2024 financial year by the resolution of the Directors held on 1 August 2024. A resolution to reappoint
them will be proposed at the forthcoming AGM.
Statement as to disclosure of information to the auditor
All of the current Directors have taken the necessary steps to make themselves aware of any information
needed by the Group's auditors for the purposes of their audit and to establish that the auditors are aware
of that information. The Directors are not aware of any relevant audit information of which the auditors
are unaware.

Rinat Abdrasilov

Non-Executive Chairman

29 May 2025

Statements of Directors’ Responsibilities

The Directors are responsible for the preparation of the consolidated financial statements in accordance
with applicable Jersey law and other regulations and enactments in force at the time. The Companies
(Jersey) Law 1991, as amended requires the Directors to prepare financial statements for each year in
accordance with Generally Accepted Accounting Principles. Under that law, the Directors have elected
to prepare the consolidated financial statements in accordance with UK adopted International Accounting
Standards. Under the Companies Law, the Directors must not approve the consolidated financial
statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group
and of its profit or loss for the period ended.
In preparing these consolidated financial statements, the Directors are required to:

select suitable accounting policies and then apply them consistently;

make judgments and estimates that are reasonable and prudent;

state that the financial information complies with UK adopted International Accounting
Standards, subject to any material departures disclosed and explained in the consolidated financial
statements; and

prepare the consolidated financial statements on the going concern basis unless it is inappropriate
to presume that the Group will continue in business.
The Board of Directors confirms that the Group has complied with the above-mentioned requirements in
preparing its consolidated financial statements.
The Directors are also responsible for:

implementing and maintaining an efficient and reliable system of internal controls in the Group;

keeping proper accounting records that disclose with reasonable accuracy at any time the financial
position of the Group;

taking reasonable steps to safeguard the assets of the Group and to prevent and detect fraud and
other irregularities; and

the maintenance and integrity of the Group's website.
On behalf of the Directors:

Rinat Abdrasilov

Non-Executive Chairman

29 May 2025

MOORE Stephens
Moore Stephens Audit and Assurance
(Jersey) Limited
1 Waveriey Place
Union Street, St Helier
Jersey, Channel Islands JE4 8SG
T+44 (0)1534 880088
E mail@moorestephens-jersey.com
www.moorestephensci.com
GST No: 0044828
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UKRPRODUCT GROUP LIMITED
Opinion
We have audited the consolidated financial statements of Ukrproduct Group Limited and its subsidiaries
(the "Group") for the year ended 31 December 2024 which comprise the consolidated statement of
comprehensive income, the consolidated statement of financial position as at 31 December 2024, the
consolidated statement of changes in equity, consolidated statement of cash flows and notes to the
financial statements including significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and UK adopted International Accounting Standards.
In our opinion, the consolidated financial statements:
. give a true and fair view, of the state of the Group's affairs as at 31 December 2024 and of its results
for the year then ended;
. have been properly prepared in accordance with UK adopted International Accounting Standards;
and
.
have been prepared in accordance with the requirements of the Companies (Jersey) Law 1 991
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor's
responsibilities for the audit of the consolidated financial statements section of our report. We are
independent of the Group in accordance with the ethical requh-ements that are relevant to our audit of
the consolidated financial statements in Jersey, including the FRC's Ethical Standard as applied to listed
entities, and we have fulfilled our ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
An overview of the scope of our audit
During our audit planning, we determined materiality and assessed the risks of material misstatement
in the'consolidated financial statements including the consideration of where Directors made subjective
judgements, for example, in respect of the assumptions that underlie significant accounting estimates
and" their assessment of future events that are inherently uncertain. We tailored the scope of our audit
in order to perform sufficient work to enable us to provide an opinion on the consolidated financial
statements as a whole taking into account the Group, its accounting processes and controls and the
industry in which it operates.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on the overall audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were addressed in the context of our audit
of the ffnancial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
An independent member firm of Moore Global Limited -
member firms in principal cities throughout the world.
The registered office address is: 1 Waverley Place, Union
Street. St. Helier. Jersey, Channel Islands JE4 8SG

Key Audit Matter
Going Concern
The consolidated financial statements have
been prepared on a going concern basis as
discussed in note 2. The Group is in a net
current liability position of financial position
amounted
to
£4.92
million
as
of
31 December 2024. We included the going
concern assumption as a key audit matter
given the continuing net current liability
position,
absence of a
formal
debt
restructuring agreement with EBRD and the
ongoing Russian military action in Ukraine
(Refer note 2.1 (b) to the consolidated
financial statements).
Risk of fraud in revenue recognition
Revenue
is material
and an important
determinant of the Group's performance and
profitability. This gives rise to inherent risk that
revenue recognised is overstated in order to
present more profitable results for the year.
The Group's revenue from local and export
sales of milk, dairy foods and beverages
amounted to £37.08 million, excluding the
charge of bonuses. Given the magnitude of
the amount and the inherent risk of revenue
overstatement,
we
consider
revenue
recognition to be a key audit matter (Refer to
notes 2.2.10 and 8).
How the matter was addressed in the audit
Key Observations
Our work performed and our conclusions in respect
of going concern have been detailed in 'Material
uncertainty related to going concern section' of our
audit report.
Our main audit procedures in respect of revenue
recognition were as follows:
.
We obtained an understanding of the
policies and procedures applied to
revenue
recognition,
as
well
as
compliance
therewith,
including
an
analysis of the effectiveness of the design
and implementation of controls related to
revenue recognition employed by the
Group;
.
We performed sample based tests of
details over the accuracy and occurrence
of sales during the year specially
responsive to the risk of fraud in revenue
occurrence;
.
We performed
analytical
procedures,
including gross profit margin analysis and
obtained
explanations
for significant
variances as compared to the previous
year;
.
We tested a sample of journal entries
relating to income recognition by reference
to supporting documents;
.
We performed sales cut-off procedures for
a sample of revenue transactions at the
year end in order to conclude on whether
they were recognized in the correct
accounting period; and,
.
We reviewed the disclosures related to
revenue included in the notes to the
consolidated financial statements.
Key Observations
We did not note any material issues arising from
the procedures performed in this area.

Risk of Management Override of Controls
Management is in unique position to
perpetrate fraud because of management's
ability to manipulate accounting records and
prepare fraudulent financial statements by
overriding controls that otherwise appear to be
operating effectively. Although the level of risk
of management override of controls will vary
from entity to entity, the risk is nevertheless
present in all entities. Due to the unpredictable
way in which such override could occur, it is a
risk of material misstatements due to fraud
and thus a significant risk. Also, the Group has
voluminous
transactions
and
requires
complex calculations.
Our main audit procedures in respect of
Management Override of Controls were as follows:
.
We have obtained understanding of the
financial reporting process.
.
We have reviewed opening balances and
completeness of journals.
.
We have reviewed high-risk journals as
part of our testing.
.
We have reviewed accounting estimates
and potential management bias.
Key Observations
We did not note any material issues arising from
the procedures performed in this area.
Risk of
Non-compliance
with
loan
covenants
The Group has loans from European Bank for
Reconstruction and Development (EBRD) and
there is a risk that the Group doesn't meet the
covenants as stated in the loan agreement.
Violation of the Group's loan covenants could
have a potential material unfavourable impact
to the Group.
During the review of loan agreements, we
noted that there is non-compliance with
certain covenant
contained within those
agreements, particularly on the missed
payments of principal and interests (Refer to
Note 24 to the consolidated financial
statements).
Our main audit procedures in respect of non-
compliance with loan covenants were as follows:
.
We have recalculated the loan covenant
and confirmed that they are according to
the terms of the loan.
.
We have reviewed the correspondences
with EBRD.
.
We have checked the contract with EBRD
in relation to their view and actions on the
breach of terms of the loan agreement
(loan covenants) and failure to pay interest
and capital repayments.
Key Observations
We have noted a material issue arising from the
procedures performed in this area. The specific
instance identified by our audit was: missed
principal and interest payments and ratio of debt
to EBITDA of 3.61 (requirement: <=3).
Risk of Subsequent Events
Due to the ongoing Russian invasion of
Ukraine, there is a risk that future escalation
of military actions and their duration could
have a material impact to the Group.
Our main audit procedures in respect of
Subsequent events were as follows:
.
We have obtained understanding of the
procedures management has established
to ensure that subsequent events are
identified.
.
We enquired of management whether any
subsequent events have occurred which
might affect the financial statements.
.
We have read the minutes of all relevant
meetings since the end of the reporting
period to identify any relevant subsequent
events, to include where applicable:
a. general meetings;
b. management meetings;
c. board meetings.
.
We read all management and interim
financial statements produced since the
end of the re ortin
eriod.

Key Observations
We did not note any material issues arising from
the procedures performed in this area.
Material uncertainty related to going concern
We draw attention to note 2.1 (b), in the consolidated financial statements, which indicates the absence
of a formal debt restructuring agreement with the European Bank for Reconstruction and Development
(EBRD), potential impact of the ongoing war in Ukraine, and the limited cash resources of the Group
and reliance on successful implementation of its business plans and financing strategy. These events
have continued after the year end. These events and conditions, along with other matters as set in note
2. 1 (b) to the consolidated financial statements, indicate that a material uncertainty exists that may cast
significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
In auditing the consolidated financial statements, we have concluded that the use of the going concern
basis of accounting in the preparation of the consolidated financial statements is appropriate. In
assessing the appropriateness of the going concern assumption used in preparing the consolidated
financial statements, our procedures included, amongst others:
.
Assessing the cash flow requirements of the Group over 12 months from expected signoff of
these consolidated financial statements;
.
Understanding what forecast expenditure is committed and what could be considered
discretionary;
.
Assessing the liquidity of existing assets on the consolidated statement of financial position that
can be used to repay the Group's obligations;
.
Considering the terms of the EBRD and other bank loan and trade finance facilities and the
amount available for drawdown as well as the probability of EBRD agreeing to restructure the
facilities;
.
Considering the impact of the ongoing military conflict in Ukraine to the Group's operations and
the Group's business continuity plan, if any;and,
.
Considering potential downside scenarios and the resultant impact on available funds.
Our responsibilities and the responsibilities of the directors with respect to going concern are described
in the relevant sections of this report.
Our application of materiality
We define materiality as the magnitude of misstatements in the consolidated financial statements that
makes it probable that the economic decisions of a reasonably knowledgeable person would be changed
or influenced. We use materiality to determine the scope of our audit and the nature, timing and extent
of our audit procedures and to evaluate the results of that work. Materiality was determined as follows:
Consolidated financial statements as a whole:
Materiality was calculated at £556, 000 which is approximately 1. 5% of Total Revenue. This benchmark
is considered the most appropriate because, based on our professional judgement, we considered that
this is the primary measure used by the users of the consolidated financial statements in assessing the
performance of the Group.
Communication of misstatements to the Board:
We agreed with the Directors that any misstatement above £27,800 identified during our audit will be
reported, together with any misstatement below that threshold that, in our view, warranted reporting on
qualitative grounds.
Other information
The Directors are responsible for the other information. The other information comprises the information
included in the annual report set out on page 3 to 20 other than the consolidated financial statements
and our auditor's report thereon. Our opinion on the consolidated financial statements does not cover
the other information and we do not express any form of assurance conclusion thereon.

In connection with our audits of the consolidated financial statements, our responsibility is to read the
other information identified above when it becomes available and, in doing so, consider whether the
other information is materially inconsistent with the consolidated financial statements, or our knowledge
obtained in the audits or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a
material misstatement of the consolidated financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies (Jersey) Law 1991
requires us to report to you if, in our opinion:
.
adequate accounting records have not been kept, or
.
returns adequate for our audit have not been received from branches not visited by us; or
.
the financial statements are not in agreement with the accounting records and returns; or
.
we have not received all the information and explanations we require for our audit.
Responsibilities of directors for the consolidated financial statements
As explained more fully in the Statement of Directors' Responsibilities on page 20, the Directors are
responsible for the preparation of the consolidated financial statements which give a true and fair view
and for such internal control as the Directors determine is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
Groups ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our
opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities,
including fraud
The objectives of our audit, in respect to fraud, are; to identify and assess the risks of material
misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence
regarding the assessed risks of material misstatement due to fraud, through designing and implementing
appropriate responses; and to respond appropriately to fraud or suspected fraud identified durins the
audit. However, ' the primary responsibility for the prevention and detection of fraud rests with both those
charged with governance of the entity and management.
Our approach was as follows:
. We obtained an understanding of the legal and regulatory frameworks that are applicable to the
Group and determined that the most significant are those that relate to the Companies (Jersey) Law
1991'and the AIM Rules for Companies. We also reviewed the laws and regulations applicable to
the Group that have an indirect impact on the financial statements.

. We gained an understanding of how the Group is complying with Companies (Jersey) Law 1991 and
the AIM Rules for Companies by making inquiries of management. We corroborated our inquiries
through our review of minutes of Board of Directors meetings and the review of various
correspondence examined in the context of our audit and noted that there was no contradictory
evidence.
. We assessed the susceptibility of the Group's financial statements to material misstatement,
including how fraud might occur, by meeting with management to understand where they considered
there was susceptibility to fraud. We also considered performance targets and their propensity to
influence management to manage earnings and revenue by overriding internal controls. We
performed specific procedures to respond to the fraud risk of inappropriate revenue recognition. Our
procedures also included testing a risk-based sample of journal entries that may have been posted
with the intention of overriding internal controls to manipulate earnings. These procedures were
designed to provide reasonable assurance that the financial statements were free from fraud or error.
.
Based on this understanding, we designed specific appropriate audit procedures to identify instances
of non-compliance with laws and regulations. This included making enquiries of management and
those charged with governance and obtaining additional corroborative evidence as required.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council's website at https://www. frc. org. uk/auditorsresponsibilities. This description
forms part of our auditor's report.
Use of our report
This report is made solely to the Group's shareholders as a body, in accordance with Article 113A of the
Companies (Jersey) Law 1991. Our audit work has been undertaken so that we might state to the
Group's shareholders those matters we are required to state to them in an auditor's report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Group and the Group's shareholders as a body, for our audit work, for this report,
or for the opinions we have formed.
Phillip Callow
For and on behalf of Moore Stephens Audit and Assurance (Jersey) Limited
1 Waverley Place
Union Street
St Helier
Jersey
Channel Islands
JE4 8SG
29 May 2025

27
The notes on pages 31 – 78 are an integral part of these consolidated financial statements.
Ukrproduct Group
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

Note
Year ended
Year ended
31 December
2024
31 December
2023
£ ‘000
£ ‘000

Revenue
8
37 082
36 992
Cost of sales
9
(29 962)
(30 140)
GROSS PROFIT
7 120
6 852
Administrative expenses
9
(1 930)
(1 569)
Selling and distribution expenses
9
(2 312)
(2 507)
Other operating expenses
9
(1 799)
(1 074)
PROFIT FROM OPERATIONS
1 079
1 702
Net finance expenses
11
(2 756)
(781)
Net foreign exchange loss
10
(219)
(435)
(LOSS)/PROFIT BEFORE TAXATION
(1 896)
486
Income tax
13
(142)
(96)
(LOSS)/PROFIT FOR THE YEAR
(2 038)
390
Attributable to:
Owners of the Parent
(2 038)
390
Non-controlling interests

-
-

Earnings per share from continuing and total operations:
Basic (pence)
26
(5.14)
0.98
Diluted (pence)
26
(5.14)
0.98

OTHER COMPREHENSIVE LOSS

Items that may be subsequently reclassified to profit or loss
Currency translation differences
(543)
(449)

OTHER COMPREHENSIVE LOSS, NET OF TAX
(543)
(449)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(2 581)
(59)
Attributable to:

Owners of the Parent
(2 581)
(59)
Non-controlling interests

-
-

28
The notes on pages 31 – 78 are an integral part of these consolidated financial statements.
Ukrproduct Group
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)
Note

As at

As at
31 December
2024
31 December
2023
£ ‘000
£ ‘000
ASSETS
Non-current assets

Property, plant and equipment
14
6 880
7 158
Intangible assets
15
338
501
7 218
7 659
Current assets

Inventories
17
3 522
2 783
Trade and other receivables
18
4 228
5 400
Current taxes
19
799
471
Other financial assets
20
28
38
Cash and cash equivalents
21
120
436
8 697
9 128
TOTAL ASSETS
15 915
16 787

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital
Treasury shares
22

4 282
(315)

4 282
(315)
Share premium
23
4 583
4 562
Translation reserve
23
(16 529)
(15 986)
Revaluation reserve
23
5 628
5 797
Retained earnings
4 324
6 194
TOTAL EQUITY
1 973
4 534

Non-Current Liabilities

Deferred tax liabilities
16
324
392
324
392
Current liabilities

Bank loans
24
5 572
5 777
Short-term payables

584

609
Trade and other payables
25
7 397
5 212
Current income tax liabilities

64
Other taxes payable
63
199
13 618
11 861
TOTAL LIABILITIES
13 942
12 253
TOTAL EQUITY AND LIABILITIES
15 915
16 787

These consolidated financial statements were approved and authorised for issue by the Board of Directors
on May 29, 2025 and were signed on its behalf by:

Oleksandr Slipchuk
Chief Executive Officer

29
The notes on pages 31 – 78 are an integral part of these consolidated financial statements.

Ukrproduct Group
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

Attributable to owners of the parent

Share
capital
Treasury
shares
Share
premium
Revaluation
reserve
Retained
earnings
Translation
reserve
Total
Non-
con-
trollin
g
interes
ts
Total
Equity

£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000

As At 31
December 2022
4 282
(315)
4 562
6 005
5 596
(15 537)
4 593
-
4 593
Profit for the year
-
-
-
-
390
-
390
-
390
Currency translation
differences
-
-
-
-
-
(449)
(449)
-
(449)
Total
comprehensive
income
-
-
-
-
390
(449)
(59)
-
(59)
Depreciation on
revaluation of
property, plant and
equipment
-
-
-
(208)
208
-
-
-
-
As At 31
December 2023
4 282
(315)
4 562
5 797
6 194
(15 986)
4 534
-
4 534
Profit for the year
-
-
-
-
(2 039)
-
(2 039)
-
(2 039)
Currency translation
differences
-
-

-
-
(543)
(543)
-
(543)
Other changes
-
-
21
-
-
-
21
-
21
Total
comprehensive
income
-
-
21
-
(2 039)
(543)
(2 561)
-
(2 561)
Depreciation on
revaluation of
property, plant and
equipment
-
-
-
(169)
169
-
-
-
-
As At 31
December 2024
4 282
(315)
4 583
5 628
4 324
(16 529)
1 973
-
1 973

30
The notes on pages 31 – 78 are an integral part of these consolidated financial statements.

Ukrproduct Group
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

Note

Year ended

Year ended
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Cash flows from operating activities
(Loss)/Profit before taxation
(1 896)
486
Adjustments for:
Exchange differences
10
219
435
Depreciation and amortization
9
625
697
Loss on disposal of non-current assets
9

(2)
-
Write off of receivables
9
1 093
58
Impairment of inventories
9
106
627
Interest income
11
(3)
(6)
Interest expense on bank loans
11
2 759
787
Operation cash flow before working capital changes
2 901
3 084
(Increase)/decrease in inventories
(845)
945
Increase in trade and other receivables
(234)
(2 245)
Decrease in trade and other payables
(539)
(366)
Changes in working capital
(1 618)
(1 666)
Cash generated from operations
1 283
1 418
Interest received
3
6
Income tax paid
(239)
(106)
Net cash generated from operating activities
1 047
1 318
Cash flows from investing activities
Purchases of property, plant and equipment and intangible assets
(848)
(582)
Proceeds from sale of property, plant and equipment
33
-
Repayments of loans issued
7
(6)
Net cash used in investing activities
(808)
(588)
Cash flows from financing activities
Interest paid
24
(206)
(312)
Net movement of borrowing
24
123
(4)
Net cash used in financing activities
(83)
(316)
Net increase in cash and cash equivalents
156
414
Effect of exchange rate changes on cash and cash equivalents
(472)
(381)

Cash and cash equivalents at the beginning of the year
436
403
Cash and cash equivalents at the end of the year
21
120
436

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
GROUP AND PRINCIPAL ACTIVITIES
(a)
Introduction
Ukrproduct Group Limited (the “Company”) is a public limited liability company registered in Jersey
with a registered office at 26 New Street, St Helier, Jersey, JE2 3RA, Channel Islands.
The Group’s overall management and production facilities are based in Ukraine, with the Head Quarters
in Kyiv. The Group commands leading positions in the Ukrainian processed cheese and packaged butter
markets and owns a range of widely recognisable trademarks in Ukraine, including “Nash Molochnik”
(translated as Our Dairyman), “Narodniy Product” (People’s Product) “Molendam” and “Vershkova
Dolina” (Creamy Valley). The average number of employees of the Group during the year ended
31 December 2024 was 813 (2023: 813).
(b)
Share capital
Significant shareholders of the Company as at 31 December are as follows:
Year ended
Year ended

31 December
2024
31 December
2023
Ukrproduct Group
Oleksandr Slipchuk
34.89%
34.89%
Sergey Evlanchik
34.96%
34.96%

As at 31 December 2024, 7.34% (2023: 7.34%) of the Company’s issued share capital was held in
treasury.
(c)
Ukrainian environment
In 2024, real GDP grew by 2.9% according to the State Statistics Service of Ukraine (hereinafter referred
to as the SSSU). On the one hand, GDP growth slowed down compared to 2023 (from 5.5% according
to revised SSSU data). On the other hand, the Ukrainian economy is recovering for the second year in a
row in conditions of full-scale war and constant Russian attacks on production facilities and
infrastructure. A slowdown in economic growth in 2024 was expected given the worsening security
situation, renewed electricity shortages, and poor harvests. Instead, the economy has been supported by
strong domestic demand, accommodative fiscal policy, significant business adaptability, and the NBU’s
efforts to ensure macrofinancial stability.
In December 2024, inflation in Ukraine accelerated to 12.0% year-on-year. In monthly terms, prices
increased by 1.4%. Actual inflation slightly exceeded the trajectory of the National Bank of Ukraine
forecast. The main reason for the deviation of the actual inflation from the forecast was a more significant
increase in the administered prices for goods and services and in the cost of market services due to further
growth in production costs, including those of energy and labor, as well as tax and regulatory changes.
According to the Ministry of Agrarian Policy and Food: the national cow population decreased by a
further 3.8% to approximately 1.24 million head. Small farms remained the most affected, while medium
and large agricultural enterprises recorded only a marginal decline of 0.9%.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

1.
GROUP AND PRINCIPAL ACTIVITIES (continued)
(c)
Ukrainian environment (continued)
Total milk production in Ukraine fell by 2.7%, amounting to about 7,210 thousand tonnes for the year.
This reflects continued structural shifts towards larger, more specialised farms with higher productivity,
partially offsetting the overall decline in livestock numbers.
In 2024, the average price of raw milk in Ukraine was US$42.45 per 100 kg, which is 20% more than in
2023. Although still slightly below EU levels, the gap with European prices narrowed to about 88-90%
of Polish prices by year-end.
Fresh dairy products rose by about 5-8%, cheeses by 6%, and butter increased in price by 12% in 2024
compared to the sharp jump in the previous year.
In 2024, Ukraine increased its exports of dairy products in physical quantities by 8% compared to the
previous year - to 117.73 thousand tonnes and by 14% in monetary terms - to US$295.03 million; export
volumes exceeded import volumes by US$4.73 million.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1. Basis of preparation
The consolidated financial statements have been prepared on a historical cost basis, except for significant
items of property, plant and equipment which have been measured using the fair value model. The
consolidated financial statements are presented in British Pounds Sterling (GBP) and all values are
rounded to the nearest thousand (£000) except where otherwise indicated.

(a) Statement of compliance
These consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards, International Accounting Standards and Interpretations issued by the International
Accounting Standards Board (IASB), as adopted by the United Kingdom (collectively “IFRS”).
The preparation of consolidated financial statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgment in the process of
applying the Group’s accounting policies. Further information is provided in Note 3.
(b)
Going concern

The financial statements have been prepared on a going concern basis, which assumes that the Group
will continue to operate for the foreseeable future and will be able to realise its assets and discharge its
liabilities in the normal course of business.

At 31 December 2024, net assets stood at £2.0 million, with cash balances of £0.1 million, reflecting
tight liquidity. The Group remained in breach of several provisions of its EBRD loan agreement and
received notification in December 2024 of additional fee charges, bringing total liabilities to the EBRD
to over €9.7 million (approximately £8.1 million).

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

2.1. Basis of preparation (continued)
(b)
Going concern (continued)
The Directors acknowledge that a material uncertainty exists, which may cast significant doubt about the
Group’s ability to continue as a going concern in particular relating to:
-
the absence of a formal debt restructuring agreement with the EBRD;
-
the potential impact of the ongoing war in Ukraine on trading conditions, supply chains, and
market stability;
-
the Group’s limited cash resources and reliance on successful implementation of its business
plans and financing strategy.

(c)
Consolidation Principles
The consolidated financial statements comprise the financial statements of Ukrproduct Group Limited
and its subsidiaries as at 31 December 2024.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date that such control ceases.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, the Group has:
-
Power over the investee (i.e., existing rights that give it the current ability to direct the relevant
activities of the investee);
-
Exposure, or rights, to variable returns from its involvement with the investee;
-
The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights result in control. To support this
presumption and when the Group has less than a majority of the voting or similar rights of an investee,
the Group considers all relevant facts and circumstances in assessing whether it has power over an
investee, including:
-
The contractual arrangement with the other vote holders of the investee;
-
Rights arising from other contractual arrangements;
-
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there
are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when
the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary.
Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are
included in the consolidated financial statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group
transactions are eliminated in full on consolidation. A change in the ownership interest of a subsidiary,
without a change of control, is accounted for as an equity transaction, that is, as transactions with owners
in their capacity as owners. Profit or loss and each component of other comprehensive income are
attributed to the owners of the parent and to the non-controlling interests.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

2.1. Basis of preparation (continued)
(c)
Consolidation Principles (continued)
Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests
even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments
are made to the financial statements of subsidiaries to bring their accounting policies into line with the
Group’s accounting policies.
If the Group loses control over a subsidiary, it:
- De-recognises the assets (including goodwill) and liabilities of the subsidiary;
- De-recognises the carrying amount of any non-controlling interests;
- De-recognises the cumulative translation differences, recorded in equity;
- Recognises the fair value of the consideration received.
- Recognises any investment retained in the former subsidiary at its fair value at the date when control is
lost;
- Recognises any surplus or deficit in profit or loss;
- Reclassifies the parent’s share of components previously recognised in other comprehensive income to
profit or loss.
The Group applies the acquisition method to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities
incurred to the former owners of the acquiree and the equity interests issued by the Group. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred.
Non-controlling interests represent a portion of profits or losses and net assets not owned by the Group.
Non-controlling interests are presented separately from parent share capital in equity in the consolidated
statement of financial position.
The consolidated financial statements of the Group include the following companies:
Group’s company

Country of
incorporation

Effective
ownership ratio

Principal activities
As at 31 December

2024
2023

Molochnik LLC*
Ukraine
100%
100%
Holder of some assets
Starokonstantinovskiy Molochniy Zavod
SC***

Ukraine

100%
100%

Production
Krasilovsky Molochny Zavod Private
Enterprise SC***

Ukraine

100%
100%

Holder of some assets
Molochaia Dolina LLC***
Ukraine
100%
100%
Owner of land assets
Zhiviy Kvas LLC**
Ukraine
100%
100%
Production
Alternative Investments MCVIF**
Ukraine
100%
100%
Asset management
Ukrproduct Group LLC

Ukraine

100%
100%

Holder of some assets and
operating companies
LinkStar Limited****

Cyprus

-
100%

Holder of Group's trademarks
and assets
Solaero Global Alternative Fund Limited

Cyprus

100%
100%

Holder of Group's trademarks
and assets
Dairy Trading Corporation Limited
BVI
100%
100%
Export operations
Ukrproduct Group LTD

Jersey

Parent company traded on
AIM

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

2.1. Basis of preparation (continued)
(c)
Consolidation Principles (continued)
* The Company is held through Ukrproduct Group LLC which is a 100%-owned subsidiary of the
Company.
** Subsidiary of Solaero Global Alternative Fund Limited, the Group's holder of trademarks and assets.
*** Subsidiaries of Alternative Investments MCVIF.
****LinkStar Limited was struck off on 13 September 2024.
2.2.Significant accounting policies
Significant accounting policies given below have been consistently applied by the Group in the
preparation of these financial statements, unless otherwise stated.
2.2.1. Foreign currency translation and transactions
(a) Functional and presentation currency
The Ukrainian Hryvnia is the currency of the primary economic environment in which the majority of
the Group companies operate.
Transactions in currencies that differ from the functional currency are considered to be foreign currency
transactions.
Management has considered what would be the most appropriate presentation currency for consolidated
financial statements and has concluded that the Group should use British Pounds Sterling (hereinafter
“GBP” or £) as the Group’s presentation currency. This is because the Ukrainian Hryvnia is not a major
convertible or recognisable currency outside of Ukraine, and also because the Group’s public shareholder
base is located predominantly in the UK.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange
gains or losses resulting from the settlement of such transactions and from the translation at the year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the
statement of comprehensive income, except when deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges. Foreign exchange gains and losses are presented in the consolidated
statement of comprehensive income within “Net foreign exchange gain (loss)”.
The financial results and financial position of the Group's companies are translated into the presentation
currency as follows:
- For the current year, all assets and liabilities are translated at the rate effective at the reporting date.
Income and expense items are translated at rates approximating to those ruling when the transactions
took place;
- Equity items are translated into the presentation currency using the historical rate;
- For comparative figures, all assets and liabilities are translated at the closing rate existing at the relevant
reporting date. Income and expense items are translated at rates approximating to those ruling when the
transactions took place;
- Income and expenses for each consolidated statement of comprehensive income are translated at
monthly average exchange rates; and

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

2.2. Significant accounting policies (continued)
(b) Transactions and balances (continued)
- All resulting exchange differences are recognised as a separate component of equity within "Translation
reserve".
The principal UAH exchange rates used in the preparation of consolidated financial statements are as
follows:
Currency

31 December 2024

Average exchange
rate for 2024

31 December 2023

Average exchange
rate for 2023
UAH/GBP
52,9460

51,3419
48,4883

45,4757
UAH/USD
42,0390

40,1590
37,9824

36,5750
UAH/EUR
43,9266
43,4588
42,2079
39,5619

Foreign currency can be freely converted within Ukraine at a rate close to the rate of the National Bank
of Ukraine. At present, the UAH is not a freely convertible currency outside Ukraine.

2.2.2. Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and at the bank. Bank overdrafts are included in
current liabilities in the consolidated statement of financial position.
2.2.3. Inventories
Inventories are carried at the lower of cost and net realisable value.
The Group's inventories are represented by the following nomenclature types:
• Raw materials include low-fat cheeses, starches, food stabilisers, milk fat substitutes, malted butters,
food phosphates, cooking fats and emulsifiers;
• Work in progress (including semi-finished products);
• Finished products include processed cheese, hard cheese, packaged butter, spreads, kvass, skimmed
milk powder and other beverages;
• Other inventories include packaging foils, sodium percarbonates, packaging containers and other
supplies.
Costs are calculated using the weighted average method and includes direct materials, direct labour and
an appropriate allocation of fixed and variable manufacturing overheads allocated on a basis of normal
operating capacity.
Net realisable value (NRV) represents the estimated selling price less all estimated costs of completion
and costs to be incurred in marketing, selling and distribution.
The cost of finished goods and semi-finished products comprises raw materials, direct labour, other direct
costs and related production overheads (based on normal operating capacity) but excludes borrowing
costs.
At each reporting date the Group analyses inventories to determine whether they are damaged, obsolete
or slow-moving or whether their net realisable value has declined.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

2.2. Significant accounting policies (continued)
2.2.4. Property, plant and equipment
All property, plant and equipment is recognised at cost at initial recognition.
Subsequent costs, including the costs of replacing or fixing a part, are only recognised as separate assets
if it is probable that separate future economic benefits will flow to the Group. All other repairs,
maintenance and subsequent costs are charged to profit or loss during the period in which they occur.
All property, plant and equipment are subsequently stated in the consolidated statement of financial
position at their revalued amounts, being the fair value at the date of revaluation, less any subsequent
accumulated depreciation and impairment losses. Revaluations are performed with sufficient regularity
such that the carrying amount does not differ materially from that which would be determined using fair
values at the reporting date.
Depreciation is calculated to write off the cost or valuation of the assets less their residual values over
their estimated useful life, using a straight-line method of depreciation on the following basis:

Group of property, plant and equipment
Useful life
Buildings
7 - 62 years
Plant and machinery
2 - 20 years
Vehicles
5 - 12 years
Instruments, tools and other equipment
2- 20 years

Land is not depreciated.
Depreciation rates, useful lives and residual values are reassessed each reporting date and adjusted when
necessary. There has been no change in the estimated useful life in the current period.
The Group assesses at each reporting date if there are any indicators of impairment for items of property,
plant and equipment. If there are indicators of impairment, the asset is assessed for impairment either
individually or, if it does not generate standalone cash flows, as part of a cash generating unit in line with
the principles included in note 2.2.14.
2.2.5. Intangible assets
Intangible assets are recognised at historical cost less accumulated amortisation and accumulated
impairment losses.
The Group recognises an item as an intangible asset if it meets the following criteria for recognition: it
is probable that the Group will receive future economic benefits associated with the asset and costs of
the asset can be reasonably estimated.
The Group identifies the following types of intangible assets:
• Computer software licenses;
• Rights to use natural resources;
• Trademarks.
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and
bring to use the specialised software.
Rights to use natural resources are capitalised on the basis of the costs incurred to acquire.
Trademarks are shown at historical cost.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

2.2. Significant accounting policies (continued)
2.2.1. Intangible assets (continued)
Costs of computer software licenses are amortised over their estimated useful lives using the straight-
line method (1-10 years), right of use natural resources (15-20 years).
Trademarks have finite useful lives and are carried at cost less accumulated amortisation. Amortisation
is calculated using the straight-line method to allocate the cost of trademarks over their estimated useful
lives (11-18 years).
2.2.6. Financial assets
Trade receivables without a significant financing component are recognised when they are initiated at
their transaction price. All other receivables are initially recognised at fair value, which generally equates
to transaction price, less any transaction costs.
Subsequent to initial recognition, trade and other receivables are measured at amortised cost as they are
held for the purpose of obtaining contractual cash flows, which are solely interest and principal.
Impairment is presented in a separate line in profit or loss.
Trade and other receivables are derecognised when:
• The contractual rights to cash flows from the financial asset expire, or
• the rights to the cashflows are transferred such that:
• substantially all the risks and rewards of ownership are transferred; or
• the Group neither transfers nor retains substantially all the risks and rewards of ownership and does
not retain control of the financial asset.
• Where the Group enters into transactions where trade and other receivables are transferred but it
retains all or substantially all the risks and rewards of the asset, those assets are not derecognised.
All other financial assets are initially recorded at fair value plus transaction costs. Fair value at initial
recognition is best evidenced by the transaction price. A gain or loss on initial recognition is only
recorded if there is a difference between fair value and transaction price which can be evidenced by other
observable current market transactions in the same instrument or by a valuation technique whose inputs
include only data from observable markets.
Impairment of financial assets
The Group has customers in a number of different markets. Where those customers operate in markets
that are less stable, credit risk is managed by shorter payment terms and restrictions on the amount per
order.
For trade receivables the Group has elected to apply the simpliﬁed approach to determining expected
credit losses and the loss allowance is calculated based on lifetime expected credit losses.
To measure the expected credit losses, the Group uses a provision matrix. The trade receivables have
been grouped based on shared credit characteristics, including size and location, and the loss rate for a
given number of days past due.
The expected loss rates are based on historical losses prior to the period in question. This information is
continuously rolled over to obtain the most up to date data. The loss rates are examined regularly by the
Group and changes in the assumptions used to calculate the allowance could lead to material changes in
the allowance required.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

2.2. Significant accounting policies (continued)
2.2.6. Financial assets (continued)
The Group has rebutted the general presumption that trade receivables overdue by more than 90 days are
in default and should be fully impaired. Instead, a financial asset is deemed to be in default when
contractual payments are more than 365 days past due. In such cases, a full allowance for expected credit
losses is recognised.
However, the Group also applies judgement in assessing default status and may consider a financial asset
to be in default prior to the 365-day threshold if internal or external indicators suggest that the recovery
of the outstanding contractual amounts is unlikely, irrespective of any credit enhancements available.
Financial assets are written off when there is no reasonable expectation of recovering the contractual cash
flows in full.
2.2.7. Financial liabilities
The Group classifies its financial liabilities into categories depending on the purpose for which the
liability was acquired. The Group has not classified any of its liabilities at fair value through profit and
loss.
Financial liabilities held at amortised cost include the following items:
- Trade payables and other short-term monetary liabilities, which are recognised at amortised cost.
- Bank borrowings, overdrafts, promissory notes and bonds issued by the Group are initially carried at
fair value, being the amount advanced net of any transaction costs directly attributable to the issue of the
instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the
effective interest rate method, which ensures that any interest expense over the period to repayment is at
a constant rate on the balance of the liability carried in the consolidated statement of financial position.
Financial liabilities are initially recognized at fair value, adjusted in case of borrowings for directly
attributable transaction expenses.
Trade and other accounts payable initially recognized at fair value, are subsequently accounted for at
amortized cost at effective interest rate method.
Borrowings and liabilities initially recognized at fair value less transaction costs, are subsequently
measured at amortized cost; any difference between the amount of received resources and the sum of
repayment is represented as interest cost using the effective interest rate method during the period, when
borrowings were received. A financial liability is derecognised when the obligation under the liability is
discharged, cancelled or expires.
2.2.8. Share capital
The ordinary shares are classified as share capital. The difference between the fair value of consideration
received and the nominal value of issued share capital is recognized as share premium.
2.2.9. Treasury shares
The price paid for treasury shares is deducted from Companies’ shareholders' equity until the shares are
cancelled or reissued. When treasury shares are sold or reissued, the amount received is recognized as an
increase in equity. Treasury stock is held at cost until retired or reissued.
Legal, brokerage, and other costs to acquire shares are not included in the cost of treasury stock. When
treasury stock is reissued, any gains are included as part of additional paid-in capital. Losses upon
reissuance reduce additional paid-in capital to the extent that previous net gains from the same class of
stock have been recognized and any losses above that are recognized as part of retained earnings.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

2.2. Significant accounting policies (continued)
2.2.10. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group
and the revenue can be reliably measured. Revenue is reflected in the amount of the fair value of assets
received.
Revenue (proceeds) from sale of products (goods, works and services) is not corrected by an amount of
related doubtful and uncollectible receivables. The amount of such debt is recognized as expenses of the
Group.
Revenue comprises the invoiced value of sales of goods and services net of value added tax, rebates and
discounts after eliminating sales within the Group. Revenues and expenses are recognized on an accrual
basis.
Sales revenue was presented as follows:
• Branded products – processed cheese, hard cheese, packaged butter and spreads;
• Beverages – kvass, other beverages;
• Non-branded products – skimmed milk powder, other skimmed milk products;
• Distribution services and other – resale of third-party goods and processing services.
The Group recognises revenue from main operating activities in accordance with the requirements of
IFRS 15 "Revenue from Contracts with Customers".
The Group sells dairy foods and beverages (kvass), so the performance obligation is satisfied at a certain
point in time rather than over time.
The following recognition criteria must be met before revenue is recognised:
Revenue from sale of products is recognised at the point in time when control of the asset is transferred
to the customer, generally on delivery of the products at the customer’s location or at the time of shipment
of products to the customer’s transport.
The time of payment for products is specified in each agreement separately. As a rule, this is a period of
up to 3 months.
There is no significant financing component for these contracts considering the length of time between
the customers’ payment and the transfer of products.
The Group doesn't receive non-cash consideration for products.
The Group has a loyalty programme, which allows customers to accumulate bonuses. Revenue is reduced
by the amount of accrued bonuses.
There are no contractual assets as the Group has no rights to compensation that is contingent on factors
other than the shipment of products and transfer of control. No contractual obligations arise either.
2.2.11. Expenses recognition
Expenses which can not be related directly to a gain in a certain period, are shown as a part of expenses
of the period they were incurred in.
If an asset provides economic benefits receivable during several reporting periods, expenses are
calculated by allocating its value on a systematic basis over respective reporting periods.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

2.2. Significant accounting policies (continued)
2.2.11. Expenses recognition (continued)
Writing off deferred expenses is made on a straight-line basis within the periods to which they relate,
during which the receipt of economic benefits is expected.
All borrowing costs are expensed. Net financial expenses are recorded in the consolidated statement of
comprehensive income.
2.2.12. Value added tax
Value added tax (VAT) is levied at two rates: 20% on Ukrainian domestic sales and imports of goods,
works and services and 0% on export of goods and provision of works or services to be used outside
Ukraine.
VAT output equals 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.
2.2.13. Tax
Taxation has been provided for in the consolidated financial statements in accordance with relevant
legislation currently in force. The charge for taxation in the consolidated statement of comprehensive
income for the year comprises current tax and changes in deferred tax.
Current tax is the amount of income tax payable/recoverable in respect of taxable profit/tax loss for the
period determined in accordance with rules established by the tax authorities in respect of which income
tax shall be paid/refundable.
Current tax liabilities and assets are measured at the amount expected to be paid to or recovered from the
taxation authorities, using the tax rates and laws that have been enacted, or substantively enacted, by the
reporting date.
Deferred tax assets and liabilities are calculated in respect of temporary differences using the balance
sheet liability method.
Assessment of deferred tax liabilities and deferred tax assets reflects the tax consequences that would
arise depending on the ways in which the Group assumes the reporting date of realisation or settlement
of the carrying value of its assets or liabilities.
The amount of deferred tax is based on the expected manner or realisation and using tax rates that have
been enacted or substantively enacted as at balance date and will be applicable when the deferred tax is
realised.
2.2.14. Impairment of assets
In respect of all assets, the Group conducts the following procedures ensuring accounting for these assets
at an amount, not exceeding their recoverable amount:
- at each reporting date the condition of these assets is analyzed for impairment;
- in case any impairment indicators exist, the amount of expected recoverable amount of such asset
is calculated to determine the amount of losses from impairment, if any. If it is impossible to
determine the amount of losses from impairment of a separate asset, the Group determines the
amount of estimated impairment of the cash-generating unit, to which the asset belongs.
The amount of expected recoverable amount is the higher of two estimates: net selling price and “value
in use” of the asset. In estimating value in use of asset, estimated future cash flows are discounted to their
current value using a pre-tax discount rate that reflects current market estimates of time value of money
and risks related to the asset.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

2.2. Significant accounting policies (continued)
2.2.14. Impairment of assets (continued)
If according to estimates the amount of expected recovery of assets (or a cash-generating unit) is less
than its book value, the book value of asset (or a cash-generating unit) is reduced to the amount of
expected recovery. Losses from impairment are recognised as expenses directly in the consolidated
statement of comprehensive income.
2.2.15. Related parties
A related party is a person or an entity that is related to the reporting entity:
A person or a close member of that person’s family is related to a reporting entity if that person has
control, joint control, or significant influence over the entity or is a member of its key management
personnel.
The Group classifies the related parties according to existing criteria in the following categories:
a) companies that directly or indirectly, through one or more intermediaries, exercise control over the
Group;
b) associates are companies whose activities are significantly influenced by the Group, but are neither
subsidiaries, nor joint ventures of the investor;
c) individuals, directly or indirectly holding ordinary shares that give them a possibility to significantly
influence the Group's activities;
d) key management personnel are persons having authority and responsibility for planning, managing
and controlling the activities of the Group;
e) companies, large blocks of shares with voting rights of which are owned directly or indirectly by any
person described in paragraphs (c) or (d), or a person influenced significantly by such persons; and
f) the entity, or any member of a group of which it is a part, provides key management personnel services
to the reporting entity or to the parent of the reporting entity.
2.2.16. 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 between 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 advantageous
market for the asset or liability.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial
statements are categorised within the fair value hierarchy, described 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 unobservable.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Group's consolidated financial statements requires management to make
judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However,
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.
In the process of applying the Group's accounting policies, management has made the following
judgments, which have the most significant effect on the amounts recognised in the consolidated financial
statements:
(a) Estimates of fair value of property, plant and equipment based on revaluation
The Group is required, periodically as determined by the Directors, to conduct revaluations of its
property, plant and equipment. Such revaluations are conducted by independent valuers who employ the
valuation methods in accordance with International Valuation Standards such as cost approach,
comparative (market) approach and revenue (income) approach.
(b)
Useful lives of intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are amortised or depreciated over their useful lives.
Useful lives are based on the management’s estimates of the period that the assets will generate revenue,
which are periodically reviewed for continued appropriateness. Due to the long life of certain assets,
changes to the estimates used can result in significant variations in the carrying value. Further information
is contained in Notes 14 and 15.
(c) Inventory
The Group reviews the net realisable value of, and demand for, its inventory on a quarterly basis to ensure
recorded inventory is stated at the lower of cost or net realisable value. Factors that could affect estimated
demand and selling prices are the timing and success of future technological innovations, competitor
actions, supplier prices and economic trends. Further information is contained in Note 17.
(d) Legal proceedings
In accordance with IFRS the Group only recognises a provision where there is a present obligation from
a past event, a transfer of economic benefits is probable and the amount of costs of the transfer can be
estimated reliably. In instances where the criteria are not met, a contingent liability may be disclosed in
the notes to the financial statements. Realisation of any contingent liabilities not currently recognised or
disclosed in the financial statements could have a material effect on the Group’s financial position.
Application of these accounting principles to legal cases requires the Group’s management to make
determinations about various factual and legal matters beyond its control. The Group reviews outstanding
legal cases following developments in the legal proceedings and at each reporting date, in order to assess
the need for provisions in its financial statements. Among the factors considered in making decisions on
provisions are the nature of litigation, claim or assessment, the legal process and potential level of
damages in the jurisdiction in which the litigation, claim or assessment has been brought, the progress of
the case (including the progress after the date of the financial statements but before those statements are
issued), the opinions or views of legal advisers, experience on similar cases and any decision of the
Group’s management as to how it will respond to the litigation, claim or assessment.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(continued)
(e) Income taxes
The Group is subject to income tax in several jurisdictions and significant judgment is required in
determining the provision for income taxes. During the ordinary course of business, there are many
transactions and calculations for which the ultimate tax determination is uncertain. As a result, the Group
recognises tax liabilities based on estimates of whether additional taxes and interest will be due. These
tax liabilities are recognised when, despite the Group’s belief that its tax return positions are supportable,
the Group believes that certain positions are likely to be challenged and may not be fully sustained upon
review by tax authorities. The Group believes that its accruals for tax liabilities are adequate for all open
audit years based on its assessment of many factors including past experience and interpretations of tax
law. This assessment relies on estimates and assumptions and may involve a series of complex judgments
about future events.
To the extent that the final tax outcome of these matters is different from the amounts recorded, such
differences will impact income tax expense in the period in which such determination is made. Further
information is contained in Notes 13 and 16.
(f) Quality claims
The Group supplies consumers and industrial customers in Ukraine with dairy products manufactured in
accordance with the current laws, food safety standards and technical requirements of the relevant
Ukrainian authorities.
The Group voluntarily applies non-domestic standards – ISO and HASSP – to some of the Group’s
operations. For the industrial customers both domestically and outside of Ukraine, the food products are
manufactured to the technical specifications agreed with the buyers in advance of the sale.
In instances where the quality criteria and/or technical specifications are not met or the delivery of
products are made close to expiry date, a quality claim may arise and the corresponding contingent
liability may be disclosed in the notes to the financial statements.
Realisation of any such contingent liabilities not currently recognised or disclosed in the financial
statements could have a material effect on the Group’s financial position. Application of these accounting
principles to quality claims requires the Group’s management to make determinations about the future
matters that may, at the time of determination, be beyond management’s control. Among the factors
considered in making decisions on quality claims provisions are: the nature of the claim, the quantifiable
variances in quality giving rise to a claim, the potential loss from satisfying the claim and any decision
of the Group’s management as to how it will respond to the claim.
(g) Transfer pricing
The transfer pricing methods, established by the Tax Code of Ukraine, are in line with the OECD
Guidelines. The Group exports dairy products and skimmed milk powder, and performs intercompany
transactions, which is in the scope of the Ukrainian TP regulations. The Group has submitted the
controlled transaction report for the year ended 31 December 2024 within the required deadline, and at
present the Group is preparing all necessary documentation-controlled transactions for the year ended
31 December 2024 as required by legislation. Management believes that the Group has been in
compliance with all requirements of effective tax legislation.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(continued)
(h) Impairment of non-financial assets
Management assesses whether there are any indicators of possible impairment of property, plant and
equipment and intangible assets with finite useful lives at each reporting date. If any events or changes
in circumstances indicate that the carrying amount of the assets may not be recoverable or the assets,
goods or services relating 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 asset is reduced directly by the
impairment loss in the consolidated statement of comprehensive income. Subsequent and unforeseen
changes in assumptions and estimates used in testing for impairment may lead to a result different from
the one presented in the consolidated financial statements.
(i) 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 consolidated statement of financial position cannot be derived from active markets, they are
determined using valuation techniques including the discounted cash flows model.
(j) 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 between 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 advantageous
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 consolidated financial statements are categorized within the fair
value hierarchy as the lowest level input that is significant to the entire fair value measurement.

4. ADOPTION OF NEW AND REVISED IFRS
Application of new standards
Generally, the accounting policies are consistent with those applied in the prior reporting year. Some new
standards and interpretations have become mandatory for adoption beginning on or after January 01,
2024. New and revised standards and interpretations, adopted by the Group for the first time as at
January 01, 2024, are provided below.
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
The amendments to IAS 1 clarify the criteria for classification of liabilities as current or non-current. In
particular, the amendments require an entity to consider its legal right to defer settlement of a liability at
the reporting date. If an entity has the legal right to defer settlement of a liability for at least 12 months,
the liability is classified as non-current.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

4.
ADOPTION OF NEW AND REVISED IFRS (continued)
Lease Liability in a Sale and Leaseback Transaction (Amendments to IFRS 16)
The amendments clarify the requirements for measurement of lease liabilities in a sale and leaseback
transaction. In particular, the amendments require lease payments to be allocated so that the amount of
revenue recognized corresponds only to the rights transferred to the lessor. This is aimed at avoiding
misinterpretation in the event of changes in future lease payments, especially if they include variable
payments that are not dependent on an index or rate. The amendments will increase transparency in the
financial statements and enhance their compliance with the economic substance of transactions.
Non-current Liabilities with Covenants (Amendments to IAS 1)
The amendments clarify the requirements regarding classification of liabilities in the financial statements
if the fulfillment of covenants is related to events after the reporting date. Liabilities related to covenants
are classified as non-current if all the terms of the agreement are met at the reporting date or if the creditor
has granted a grace period to cure the covenant breach of at least 12 months after the reporting date. This
helps to avoid incorrect classification of liabilities that are not actually required for immediate repayment.
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
The amendments clarify the requirements regarding the disclosure of supplier finance arrangements,
which allow business entities to transfer their obligations to suppliers to financial institutions. The
amendments are aimed at improving the transparency of cash flow reporting, classification of liabilities
and liquidity risks. The disclosures are required to include the terms of such agreements, the range of
payment terms, the amount of liabilities and the impact on financial performance.
IFRS and Interpretations issued but not yet effective
The Group did not adopt the following IFRS, Interpretations to IFRS and IAS, changes and amendments
to them, which were issued but not yet effective as at 1 January 2024. The Group plans to apply these
changes from the date when they become effective.
IFRS 18 "Presentation and Disclosures in Financial Statements"
Applicable to annual reporting periods beginning on or after January 01, 2027. IFRS 18 includes
requirements for all business entities applying IFRS for the presentation and disclosure of information in
the financial statements.
IFRS 19 "Subsidiaries without Public Accountability: Disclosures"
Applicable to annual reporting periods beginning on or after January 01, 2027. IFRS 19 specifies the
disclosure requirements which an eligible subsidiary is permitted to apply instead of the disclosure
requirements provided in other IFRS.
Lack of Exchangeability (Amendments to IAS 21)
Applicable to annual reporting periods beginning on or after January 01, 2025. The amendments contain
guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is
not exchangeable.
Amendments IFRS 9 and IFRS 7 regarding the classification and measurement of financial instruments
Applicable to annual reporting periods beginning on or after January 01, 2026. The amendments address
the accounting for financial instruments related to electricity that are dependent on weather conditions or
other environmental factors. The Group should reconsider its approach to accounting of such contracts,
including fair value measurement and disclosure requirements.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

4.
ADOPTION OF NEW AND REVISED IFRS (continued)
Annual Improvements to IFRS Accounting Standards — Volume 11
Applicable to annual reporting periods beginning on or after January 01, 2026. The improvements
comprise the following amendments:
IFRS 1: Hedge accounting by a first-time adopter
IFRS 7: Gain or loss on derecognition
IFRS 7: Disclosure of deferred difference between fair value and transaction price
IFRS 7: Introduction and credit risk disclosures
IFRS 9: Lessee derecognition of lease liabilities
IFRS 9: Transaction price
IFRS 10: Determination of a ‘de facto agent’
IAS 7: Cost method
The Group has analyzed the abovementioned standards and amendments and concluded that their
adoption will not have a significant impact on the consolidated financial statements during their first
adoption, since the Group's activities are not within the scope of the standards and amendments, except
as described below.
At the same time, IFRS 18 "Presentation and Disclosures in Financial Statements", issued in April 2024,
will become effective on January 01, 2027, and its implementation will have a significant impact on the
Group's financial statements. The standard sets out a single approach to presentation and disclosure aimed
at ensuring coherence and understandability of the financial statements. The Group is developing a
transition plan and expects significant changes in the structure of financial data presentation, which, in
turn, will require adaptation of internal reporting processes. The Group will continue to monitor further
clarifications and recommendations regarding the adoption of IFRS 18 to ensure its timely
implementation.
5.
FINANCIAL RISK MANAGEMENT

The principal risks facing the Group’s business are credit risk, liquidity risk and market risk, including
fair value or cash flow interest-rate risk, foreign exchange risk and commodity price risk. The main
purpose of the Group's risk management programme is to evaluate, monitor and manage these risks and
to minimize potential adverse effects on the Group's financial performance and shareholders. The Chief
Executive Officer of the Group is in charge of risk management and introduction of all policies as
approved by the Board of Directors.

(a) Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are
as follows:
-
trade and other receivables;
-
other financial assets;
-
cash and cash equivalents;
-
bank loans;
-
trade and other payables;
-
short-term payables;
-
interest payable.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

5. FINANCIAL RISK MANAGEMENT (continued)

(a) Principal financial instruments (continued)

The principal financial instruments are as follows:
Year ended
Year ended
31 December
2024

31 December
2023
£ ‘000
£ ‘000
Financial assets
Financial assets at amortised cost
- trade and other receivables (excluding non-financial assets)
3 595
4 722
- cash and cash equivalents
120
436
- other financial assets
28
38
3 743
5 196

Financial liabilities

Financial liabilities at amortised cost:
Year ended
Year ended

31 December
2024

31 December
2023

£ ‘000

£ ‘000
- short-term payables
584
609
- current bank loans
5 572
5 777
- trade and other payables (excluding non-financial liabilities)
2 939
3 545
- interest payable
3 260
846
12 355
10 777

(b) General objectives, policies and processes
The Group's overall risk management programme recognises the unpredictability of financial markets
and seeks to minimise potential adverse effects on the Group’s financial performance. Risk management
is carried out by the Group’s Chief Executive Officer (CEO) under policies approved by the Board of
Directors (the “Board”). The Group CEO identifies and evaluates financial risks in close co-operation
with the Group’s operating units.

The Board provides broad guidance and operating principles for overall risk management, as well as
written policies covering specific areas, such as foreign exchange risk, interest-rate risk, credit risk, and
investing excess liquidity.

The Board has overall responsibility for the determination of the Group’s risk management objectives
and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for
designing and operating processes that ensure the effective implementation of the objectives and policies
to the Group’s finance function. The overall objective of the Board is to set polices that seek to reduce
risk as far as possible without unduly affecting the Group’s competitiveness and flexibility. Further
details regarding these policies are laid out below.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

5. FINANCIAL RISK MANAGEMENT (continued)
(c) Credit risk
Credit risk is the risk that a counterparty will not be able to meet its obligations in full when due. The
Group is mainly exposed to credit risk from credit sales to customers in Ukraine.

The Group manages its credit risk through the Group’s risk assessment policy by evaluating each new
customer before signing a contract using the following criteria: trading history and the strength of own
balance sheet. The Group attempts to reduce credit risk by conducting periodic reviews which includes
obtaining external ratings and in certain cases bank references.

According to the Group’s risk assessment policy, implemented locally, every new customer is appraised
before entering contracts; trading history and the strength of their own balance sheet being the main
indicators of creditworthiness. While starting the commercial relationship with the Group, a new
customer is offered the terms that are substantially tighter than those for the existing customers and
stipulate, as a rule, the cash-on-delivery payments terms and no-returns policy (quality-related claims
exempted). If the relationship progresses successfully, the terms are gradually relaxed to fall in line with
the Group’s normal business practices and local specifics as required by the market.

The Group’s periodic review includes external ratings, when available, and in some cases bank
references. Purchase limits are established for each customer, which represents the maximum open
amount without requiring approval from the CEO. These limits are reviewed quarterly. Customers that
fail to meet the Group’s benchmark creditworthiness may transact with the Group on a prepayment basis
only.

Quantitative disclosures of the credit risk exposure in relation to trade and other receivables, which are
neither past due nor impaired, are made in Note 18. The Group does not rate trade receivables by category
or recoverability.

The Group uses the following indicators to determine that there is no reasonable expectation of recovery:
- the counterparty is declared bankrupt or liquidated
- the Group received the decision of the court authorities and, as a result of its execution, it was discovered
that the counterparty could not fulfill its obligations
- the period during which, according to the law, the Group can go to court to oblige the counterparty to
fulfill its obligations has expired.

The Group doesn’t have any trade and other receivables that have been already written off, but still
subject to enforcement activity.

In the future, the default rate on trade receivables overdue is expected to remain stable or even fall
because in Ukraine the Group deals increasingly with the modern-format retailers whose creditworthiness
is conducive to the payment discipline required by the Group.

Maximum exposure to the trade and other receivables component of credit risk at the reporting date is
the fair value of trade and other receivables. There is no collateral held as security or other credit
enhancements.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

5. FINANCIAL RISK MANAGEMENT (continued)
(c) Credit risk (continued)
The Group’s credit controllers monitor the utilisation of the credit limits on a daily basis by customer
and apply the delivery stop orders immediately if the individual limits are exceeded. The Group’s
procedure for recovery of the trade receivables past due includes the following steps:

- identification of the date and exact amount of the receivable past due, termination of all further
deliveries and forwarding to the customer of the details of the amount due and the notice of the failure
to pay - 3 days after the past due date;
- delivery to the customer of the formal claim for the amount overdue and the visit of the representative
of the commercial credit control department to the customer premises - 2 weeks thereafter;
- filing a claim to the commercial court for repayment of the amount overdue and late payment fees - 2
weeks thereafter;
- obtaining a court order for repayment of the amount due and collaboration with bailiff - 2 weeks
thereafter.

Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions.
The Group reviews the banks and financial institutions it deals with to ensure that standards of credit
worthiness are maintained.
Maximum exposure to the cash and cash equivalents and deposits with banks and financial institutions
component of credit risk at the reporting date is the fair value of the cash balances due from such banks
and financial institutions. There is no collateral held as security or other credit enhancements.

Cash at bank and short term deposits are kept on the accounts in the following banks:

Bank
Year ended
Year ended
Year ended
Year ended

31 December
2024
31 December
2023
31 December
2024
31 December
2023
Rating
Rating
£ ‘000
£ ‘000
JSC OTP Bank
uaAAA
uaAAA
9
7
PJSC Raiffeisen Bank Aval
uaAAA
uaAAA
4
33
CreditWest
uaAAA
uaAAA
79
237
Other
28
159
120
436

The Group does not enter into derivatives to manage credit risk, although in certain isolated cases may
take steps to mitigate such risks if it is sufficiently concentrated.
The Group is also exposed to a credit risk with regard to loans issued to third parties, related parties and
employees. This risk is considered to be low and is managed according to the Group’s risk assessment
policy.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

5. FINANCIAL RISK MANAGEMENT (continued)
(c) Credit risk (continued)
The Group’s exposure to credit risk, where the carrying value of financial assets is unsecured, is as shown
below:

Year ended
Year ended
Year ended
Year ended
31 December
2024
31 December 2024
31 December
2023
31 December 2023
£ ‘000
£ ‘000
£ ‘000
£ ‘000

Carrying Value
Maximum exposure
(unsecured)
Carrying Value
Maximum exposure
(unsecured)
Cash and cash equivalents
120
120
436
436
Trade receivables
3 162
3 162
4 358
4 358
Other receivables
433
433
364
364
Other financial assets
28
28
38
38
3 743

3 743
5 196

5 196

(d)
Liquidity risk

Liquidity risk is a function of the possible difficulty to be encountered in raising funds to meet financial
obligations. The Group’s policy is to ensure that it will always have sufficient cash to enable it to meet
its obligations as they fall due by maintaining the minimum cash balances and agreed overdraft facilities.
Detailed information is contained in Note 24.

The Group’s operating divisions (plants) have different liquidity requirement profiles. As the Group’s
products have short-cycled and long-cycled production, the liquidity risk of each plant is monitored and
managed centrally by the Group Treasury function. Each plant has a cash facility based on cash budgets
with the Group Treasury. The cash budgets are set locally and agreed by the CEO in advance.

The CEO (and the Board, if requested) receives rolling quarterly cash flow projections on a monthly
basis as well as information regarding the daily cash balances at each plant and overall.

In the ordinary course of business, the Group relies on a combination of the available overdraft facilities
and cash balances to fund the on-going liquidity needs. Capital expenditures are usually funded through
longer- term bank loans. In case of the inadequate cash balances and the overdraft facilities close to the
agreed ceilings, the Group is expected to revert to the emergency funding made available through
temporary freeze to the current portion of capital spending, immediate operating cost reductions,
postponement of payments to the third parties, and expansion of the overdraft ceilings. Although
undesirable and never occurring in the past, such emergency funding is the last resort on which the Group
may have to draw while ensuring the ongoing continuity of the business.
(e) Market risk

Market risk may arise from the Group’s use of interest bearing, tradable and foreign currency financial
instruments. Market risk comprises fair value interest rate risk, foreign exchange risk and commodity
price risk and is further assessed below:

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

5. FINANCIAL RISK MANAGEMENT (continued)
(e) Market risk (continued)
(i) Interest-rate risk
The Group’s interest-rate risk arises from short-term and long-term loans. The Group analyses the interest
rate exposure on a year basis. Detailed information is contained in Note 24.

A sensitivity analysis is performed by applying various interest rate scenarios to the borrowings. A
change of interest rate by 1 percentage points (being the maximum reasonably possible expectation of
changes in interest rates) would cause a decrease in interest expense by GBP 67 441 (decrease 2023:
-1% - decrease by GBP 57 770).

(ii) Foreign exchange risk
Regardless of the increase of sales in Ukraine, the Group's management believes that currency risk is
rather high. This risk can be expressed in the devaluation of national currencies, which affects the prices
of raw materials (vegetable fats), packaging materials, energy and fuel. The Group makes every effort to
minimize this risk by using various alternative raw materials and other components, both foreign and
domestic. An increase in export sales is another step taken to deal with exchange risks. All export sales
are made in a stable currencies.

Purchase of raw milk, main semi-processed products and other components of the cost price are produced
in Ukraine and are represented in UAH. All Group’s outstanding balances of the trade accounts payable
are in UAH. Currency analysis is provided in Note 29.

The Group has a long-term loan from EBRD, denominated in EUR and therefore the weakening of the
UAH can have a significant impact on financial results of the Group in future periods. The sensitivity
analysis shows that UAH depreciation against EUR by 10% would cause an exchange rate loss of GBP
398 thousand (2023 by 10%: GBP 154 thousand).

(iii) Commodity price risk

The Group principal raw material needs consist primarily of:
- materials needed to produce dairy products and beverage products, mainly raw milk, sugar, palm oil,
corn starch etc. Changes in market prices for these raw materials can adversely influence on Group’s
financial results. In terms of value, milk is the main raw material purchased from local producers or dairy
farms. Its price is set locally, over contractual periods that vary from one region to another. Other
materials are purchased through tenders or by comparing alternative offers from different suppliers.
- packaging materials such as foil corrugated packaging. Prices are influenced by supply and demand at
the global and regional levels, economic cycles.
- energy supplies.
(f) Operational risk
Operational risk is a risk arising from systems failure, human error, fraud or external events. When
controls fail to work, this could have legal consequences or lead to financial losses. The Group cannot
expect that all operational risks have been eliminated, but with the help of control system and by
monitoring the reaction to potential risks, the Group may manage such risks. The control system provides
an effective separation of duties, access rights, approval and verification, personnel training, and
valuation procedures.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

6.
CAPITAL MANAGEMENT POLICIES

The Group’s definition of the capital is ordinary share capital, share premium, accumulated retained
earnings and other equity reserves. The Directors view their role as that of corporate guardians
responsible for preservation and growth of the capital, as well as for generation of adequate returns to
shareholders.

The Group’s objectives when maintaining and growing capital are:
- to safeguard the Group's ability to continue as a going concern, so that it can continue to provide returns
for shareholders and benefits for other stakeholders;
- to identify the appropriate mix of debt, equity and partner sharing opportunities in order to balance the
highest returns to shareholders overall with the most advantageous timing of investment flows;
- to provide an adequate return to shareholders by delivering the products in demand by the customers at
prices commensurate with the level of risk and expectations of shareholders.

The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital
structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of the current trading environment. The Group’s core assets consist predominantly of the
property, plant and equipment – the resources that have proven their ability to withstand the competitive
erosion and inflationary pressure.

In order to maintain or adjust the capital structure, the Group may issue new shares, adjust the amount of
dividends paid to shareholders, repay the debt, return capital to shareholders or sell assets to improve the
cash position. Historically, the first three methods were used to achieve and support the desired capital
structure. The Group monitors capital on the basis of the net debt to equity ratio (D/E ratio). This ratio is
calculated as net debt to shareholder equity. Net debt is calculated as total debt (as shown in the statement
of financial position) less cash and cash equivalents.

Traditionally, the Group’s conservative strategy was to maintain the D/E ratio at 0.6 (60%) maximum.
The Directors believe that for the Group, as an operating company and a public entity, the maintenance
of the prudent debt policy is crucial in preserving the capital of the business.

As at 31 December 2024, the D/E ratio consists of approximately 7.006 improved compared to
31 December 2023 by 2.606 bp. In 2024 the management implemented long-term strategy to decrease
D/E ratio down to 0.6 (60%).

Year ended
Year ended
31 December
2024

31 December
2023
£ ‘000
£ ‘000
Total debt
13 942
12 253
Less: Cash and cash equivalents
(120)
(436)
Net debt
13 822
11 817
Total equity
1 973
4 534
D/E ratio
700.6%
260.6%

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

7. SEGMENT INFORMATION

At 31 December 2024, the Group was organised internally into four main business segments:

1) Branded products – processed cheese, hard cheese, packaged butter and spreads
2) Beverages – kvass, other beverages
3) Non-branded products – skimmed milk powder, other skimmed milk products
4) Distribution services and other –resale of third-party goods and processing services

The segment results for the year ended 31 December 2024 are as follows:

Branded
products
Beverages
Non-
branded
products
Distribution
services and
other
Un-
allocated
Total
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
Sales
31 639
2 693
1 359
1 391
-
37 082
Gross profit
6 075
517
261
267
-
7 120
Administrative expenses
(1 297)
(110)
(56)
(57)
(410)
(1 930)
Selling and distribution
expenses
(1 554)
(132)
(67)
(68)
(491)
(2 312)
Other operating expenses
-
-
-
-
(1 799)
(1 799)
Profit from operations
3 224
275
138
142
(2 700)
1 079
Finance expenses, net
-
-
-
-
(2 756)
(2 756)
Loss from exchange
differences
-
-
-
-
(219)
(219)
Profit before taxation
3 224
275
138
142
(5 675)
(1 896)
Taxation
-
-
-
-
(142)
(142)
Profit for the year
3 224
275
138
142
(5 817)
(2 038)
Segment assets
12 166
422
1 050
-
-
13 638
Unallocated corporate
assets
-
-
-
-
2 277
2 277
Consolidated total assets
12 166
422
1 050
-
2 277
15 915
Segment liabilities
4 212
-
-
359
-
4 571
Unallocated corporate
liabilities
-
-
-
-
8 799
8 799
Unallocated deferred tax
-
-
-
-
572
572
Consolidated total
liabilities
4 212
-
-
359
9 371
13 942
Depreciation and
amortization
334
13
278
-
-
625

The unallocated corporate liabilities represent bank loans, overdrafts and accruals.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

7. SEGMENT INFORMATION (continued)

The segment results for the year ended 31 December 2023 are as follows:

Branded
products
Beverages
Non-
branded
products
Distribution
services and
other
Un-
allocated
Total
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
Sales
32 592
1 826
1 318
1 256
-
36 992
Gross profit
5 866
897
(193)
282
-
6 852
Administrative expenses
(1 082)
(69)
(42)
(41)
(335)
(1 569)
Selling and distribution
expenses
(1 730)
(111)
(67)
(66)
(533)
(2 507)
Other operating expenses
-
-
-
-
(1 074)
(1 074)
Profit from operations
3 054
717
(302)
175
(1 942)
1 702
Finance expenses, net
-
-
-
-
(781)
(781)
Loss from exchange
differences
-
-
-
-
(435)
(435)
Profit before taxation
3 054
717
(302)
175
(3 158)
486
Taxation
-
-
-
-
(96)
(96)
Profit for the year
3 054
717
(302)
175
(3 254)
390
Segment assets
12 925
448
1 116
-
-
14 489
Unallocated corporate
assets
-
-
-
-
2 298
2 298
Consolidated total assets
12 925
448
1 116
-
2 298
16 787
Segment liabilities
3 601
-
-
307
-
3 908
Unallocated corporate
liabilities
-
-
-
-
7 820
7 820
Unallocated deferred tax
-
-
-
-
525
525
Consolidated total
liabilities
3 601
-
-
307
8 345
12 253
Depreciation and
amortization
372
14
311
-
-
697

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

7. SEGMENT INFORMATION (continued)

Secondary reporting format - geographical segments:

Sales by country (consignees)

Year ended

Sales by country (consignees)

Year ended
31 December 2024
31 December 2023
£ ‘000
£ ‘000
Ukraine
28 625
Ukraine
28 864
Turkey
2 955
Turkey
-
Azerbaijan
1 777
Azerbaijan
1 397
Republic of Iraq
1 213
Republic of Iraq
4 924
Netherlands
509
Netherlands
189
Republic of Moldova
469
Republic of Moldova
724
Jordan
227
Jordan
-
Lebanon
195
Lebanon
193
Poland
170
Poland
-
Czech Republic
84
Czech Republic
-
Tajikistan
84
Tajikistan
86
Israel
69
Israel
23
Georgia
65
Georgia
81
Armenia
7
Armenia
14
Singapore
-
Singapore
88
Saudi Arabia
-
Saudi Arabia
48
France
-
France
48
Other countries
633
Other countries
313
Total
37 082
Total
36 992

The majority of the Group’s assets and liabilities are in Ukraine. Sales to the countries in Europe represent
sales to international traders of milk powders located in Europe. These traders consequently resell the
milk powders to other countries worldwide. The Group has no single customers that exceed 10% of total
sales.

Non-current assets by country

Non-current asset by country

Net book value at
31 December 2024
Net book value at
31 December 2023
£ ‘000
£ ‘000
Ukraine
7 005
Ukraine
7 387
Cyprus
213
Cyprus
270
BVI
-
BVI
2
Total
7 218
Total
7 659

The amounts of additions to non-current assets amounting to GBP 862 thousand for 2024 (2023: GBP
582 thousand) mainly refers to Ukraine.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

8. REVENUE

For the years ended 31 December 2024 and 31 December 2023 sales revenue was presented as follows:

Year ended

Year ended
31 December 2024
31 December 2023
£ ‘000
£ ‘000
Branded (including bonuses)
33 165
33 768
Beverages (including bonuses)
2 823
2 165
Non-branded products
1 424
1 318
Distribution services
1 458
1 256
Gross revenue
38 870

38 507
Charges of bonuses
(1 788)
(1 515)
Total revenue (excluding bonuses)
37 082
36 992

Bonuses are compensation granted to the Group’s main customers within its distribution network.
Bonuses are accounted for based on a fixed percentage of the product sold by customers who comprise
retail networks and distributors. Cash compensation is paid on a periodic basis during the year.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

9. EXPENSES BY NATURE

For the years ended 31 December 2024 and 31 December 2023, items of expenses were presented as
follows:

Year ended

Year ended
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Cost of sales
(29 962)
(30 140)
Including:
Raw materials and consumables used, cost of goods sold, manufacture
overheads etc.

(26 915)

(27 302)
Wages and salaries, social security costs (Note 12)
(2 613)
(2 372)
Depreciation
(434)
(466)

Administrative expenses
(1 930)
(1 569)
Including:
Wages and salaries, social security costs (Note 12)
(713)
(666)
PR, nominated broker, secretary, legal services etc.
(402)
(316)
Security
(97)
(95)
Lease and current repair and maintenance
(63)
(50)
Bank service
(33)
(34)
Communication
(104)
(88)
Amortization and depreciation
(87)
(88)
Audit fees
(61)
(70)
Taxes and compulsory payments
(37)
(37)
IT materials, household expenses, reading materials
(39)
(14)
Other
(294)
(111)

Selling and distribution expenses
(2 312)
(2 507)
Including:

Delivery costs
(1 114)
(1 225)
Promotion
(317)
(389)
Wages and salaries, social security costs (Note 12)
(243)
(212)
Lease and current repair and maintenance
(64)
(69)
Packaging
(180)
(207)
Amortization and depreciation
(90)
(118)
Veterinary certificates, medical examination, permits
(39)
(33)
Impairment of inventories
(-)
(-)
Other
(265)
(254)

Other operating (expenses)/income
(1 799)
(1 074)
Including:
Impairment of inventories
(106)
(627)
Impairment of trade receivables (Note 18)
(1 093)
(58)
Penalties
(17)
(5)
Loss on disposal of non-current assets
(2)
(-)
Amortization and depreciation
(14)
(25)
Wages and salaries, social security costs (Note 12)
(2)
(1)
Write-off of input VAT
(124)
(195)
Provision for the VAT losses related to the impairment of inventory
(-)
(134)
Provision for blocked tax invoices
(444)
-
Other
3
(29)

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

10. NET FOREIGN EXCHANGE LOSS

For the years ended 31 December 2024 and 31 December 2023, net foreign exchange gain (loss), consists
of:

Year ended

31 December
2024

31 December
2023

£ ‘000

£ ‘000
Exchange difference in trade and other receivables

6
Exchange difference in trade and other payables
(35)

(58)
Exchange difference in bank loans and short-term payables
(197)

(417)
Effect of exchange rate changes and restatements on cash and cash
equivalents

(3)

34
Total net foreign exchange loss

(219)

(435)

11. NET FINANCE EXPENSES

For the years ended 31 December 2024 and 31 December 2023, financial (expenses) / income were
presented as follows:

Year ended

Year ended
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Finance expense
Interest expense on bank loans
(2 759)
(787)
Finance income
Interest income
3
6
Net finance expense recognised in the consolidated statement of
comprehensive income
(2 756)

(781)

Interest expense by bank
Year ended

Year ended
31 December
2024
31 December
2023
£ ‘000
£ ‘000
EBRD
(2 621)
(507)
Creditwest Bank
(138)
(280)
Total interest expense by bank
(2 759)
(787)

12. EMPLOYEE BENEFIT EXPENSES

For the years ended 31 December 2024 and 31 December 2023, employee benefit expenses were
presented as follows:

Year ended

Year ended
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Wages and salaries (including key management personnel)
(3 029)
(2 776)
Social security costs
(542)
(475)
Total
(3 571)
(3 251)
Average number of employees
813
813

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

12. EMPLOYEE BENEFIT EXPENSES (continued)

Year ended

Year ended
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Wages and salaries of operating personnel
(2 613)
(2 372)
Wages and salaries of administrative personnel
(713)
(666)
Wages and salaries of distribution personnel
(243)
(212)
Wages and salaries of personnel related to other operating expenses
(2)
(1)
Total
(3 571)
(3 251)

Wages and salaries of key management personnel:

For the year ended 31 December 2024, remuneration of the Group's key management personnel
amounted to GBP 220.6 thousand (2023: GBP 365.3 thousand).

Key management personnel received only short term benefits during the years ended 31 December 2024
and 31 December 2023. The key management personnel are those persons remunerated by the Group
who are members of the Board of Directors of the Company (Ukrproduct Group Limited).

13. INCOME TAX EXPENSES

For the years ended 31 December 2024 and 31 December 2023, income tax expenses were presented as
follows:

Year ended

Year ended
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Current tax charge – Ukraine
167
174
Current tax charge - non-Ukraine
54
17
Deferred tax relating to the origination and reversal of temporary
differences

(79)

(95)
Total income tax expenses
142
96

Differences in treatment of certain elements of financial statements by IFRS and Ukrainian statutory
taxation regulations give rise to temporary differences. The tax effect of the movement on these
temporary differences is recognised at the rate of 18% (2023: 18%).

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

13. INCOME TAX EXPENSES (continued)

The numerical reconciliation between tax charge and the product of accounting profit multiplied by the
applicable tax rate(s) is provided in the following table.

Year ended

Year ended
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Loss before tax:
Ukraine
109
1 129
Cyprus
(5)
(116)
Other (BVI, Jersey)
(2 000)
(527)
Loss before tax, total
(1 896)
(486)
Tax calculated at domestic tax rates applicable to profits in the relevant
countries

Ukraine (2024: 18%, 2023: 18%)
20
203
Cyprus (12,5%)
-
-
20
203
Tax calculated at domestic tax rates applicable to net income not
subject to tax and expenses not deductible for tax purposes

Ukraine
(106)
(124)
Cyprus
(54)
17
(160)
(107)
Tax charge

Ukraine
126
79
Cyprus
54
17
180
(96)
The weighted average applicable tax rate

Ukraine
18%
18%
Cyprus
12,5%
10%
BVI, Jersey
Nil
Nil

6%
28%

There are a number of laws related to various taxes imposed by both central and regional governmental
authorities. Although laws related to these taxes have not been in force for significant periods, the practice
of taxation and implementation of regulations are well established, documented with a sufficient degree
of clarity and adhered to by the taxpayers. Nevertheless, there remain certain risks in relation to the
Ukrainian tax system: few court precedents with regard to tax related issues exist; different opinions
regarding legal interpretation may arise both among and within government ministries and regulatory
agencies; tax compliance practice is subject to review and investigation by a number of authorities with
overlapping responsibilities.

Generally, tax declarations remain subject to inspection for an indefinite period. In practice, however,
the risk of retroactive tax assessments and penalty charges decreases significantly after three years. The
fact that a year has been reviewed does not preclude the Ukrainian tax service performing a subsequent
inspection of that year.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

13. INCOME TAX EXPENSES (continued)

The Group’s management believes that it has adequately provided for tax liabilities in the accompanying
financial statements; however, the risk remains that those relevant authorities could take different
positions with regard to interpretative issues.

During the period under review, the Ukrainian companies within the Group paid royalties and interest
charges on the outstanding credits to another Group company – Solaero Global Alternative Fund Limited
(Cyprus). These payments were not taxable in Ukraine due to the existing Double Taxation Treaty
between Ukraine and Cyprus.

14. PROPERTY, PLANT AND EQUIPMENT

In accordance with IAS 16 “Property, Plant and Equipment”, the Group carries out revaluations, with
sufficient regularity (at least once every five years) to ensure that the carrying amount of the item of
property, plant and equipment does not differ materially from fair value. An independent valuation of the
Group's property, plant and equipment was undertaken by Price Consulting LLC as at 1 December 2020.

As at 31 December 2024, the Group tested property, plant and equipment and capital investments for
impairment indicators, as a result of which management recognized that the recoverable amount of
property, plant and equipment and capital investments exceeds their carrying amount. Accordingly, for
the year ended 31 December 2024, no impairment losses on property, plant and equipment and capital
investments were recognized.
The Group is divided into two cash-generating units (CGU).

Dairy production

Dairy productions consists of production assets for butter, cheese, protein and skimmed dairy products:
- Production assets of SE Starokostyantynivski Dairy Plant and two other units in Zhytomir and Letychiv;
- Group vehicle park used for raw material and product transportation;
- “Nash Molochnik”, “Vershkova Dolyna” and “Narodny product” trade marks.

Beverage production

Beverage production combines the production assets of Live kvass “Arseniivsky”. It consists of:
- Production assets of “Zhyvyi Kvass” LTD and,
- “Arseniivsky” Trade mark.

Main assumptions used in value in use calculation

Value in use calculation for production both dairy products and beverages is sensitive to the following
assumptions:
Gross profit margin – Gross profit margin is based on 2024 budget value and takes into consideration
trends of value indexes for 2020-2024.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

14. PROPERTY, PLANT AND EQUIPMENT (continued)

Discount rate – Discount rate assumes current market estimates risks, specific for each CGU, inclusive
of cash cost and individual risks and corresponding assets excluded from the cash flow valuation. The
discount rate calculation is based on specific Group circumstances and operational segment and based
on from Weighted Average Cost of Capital (WACC). WACC takes into account both loan and owned
capital. The value of owned capital is calculated on the basis of predicted return on investment of Group
investors. Specific segment risks are included in usage of separate facts of beta-testing. Beta factors are
estimated annually using generally accessible market data. The WACC used in the model for both CGUs
is 21.5%.

Production value increase – is derived from published consumer price index for Ukraine or world price
tendencies for export product groups.

Increase of raw material price – forecast is obtained got from published consumer price index for Ukraine.

Predicted increase data – the data are based on published industry research in Ukraine and management
estimates.

Assumption regarding business segments – in so far as the directors are aware, forecasts in relation to
the growth rate of each business segment are based on a comparison with the forecast growth rates of the
Group’s competitors.

The growth of sales of branded products on the local market is related to the development of sales of the
brands “Nash Molochnik”, “Arseniivskyi” and “Molendam”. These brands generated more than 50% of
revenue.

Industry forecast is not used for kvass (beverage) sales forecasting, as the Group produces the unique
product “Zhyviy Kvass” that has no competitors in Ukraine by its nature. The model is based on
management’s forecasts including sensitivity analysis. Brand development plans include:
- Extension of brand presence in distribution networks;
- Kvass in kegs sales increase;
- Extension of beverage product range (production of white kvass);

The given product is dependent on weather conditions.

In so far as the directors are aware, the discounted future cash flows from each CGU is not expected to
be below its acquisition cost and, therefore, no impairment considerations have been included in the
valuation.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

14. PROPERTY, PLANT AND EQUIPMENT (continued)

As at 31 December 2024 and 31 December 2023, property, plant and equipment were presented as
follows:

Assets under
Construction
Land and
Buildings
Plant and
Machinery
Vehicles
Instruments,
tools and
other
equipment
Total
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
Cost or valuation
At 1 January 2023
31
3 354
4 610
410
1 081
9 486
Additions
554
-
-
-
-
554
Transfers to/from AUC
(528)
137
236
7
148
-
Disposals
-
(2)
(5)
(1)
(37)
(45)
Exchange differences on translation to
the presentation currency
(11)
(319)
(444)
(43)
(114)
(931)
At 31 December 2023
46
3 170
4 397
373
1 078
9 064
Accumulated depreciation

At 1 January 2023
-
338
628
208
396
1 570
Depreciation charge
-
66
195
36
266
563
Disposals
-
(1)
(3)
(1)
(5)
(10)
Revaluation depreciation
-
74
83
26
25
208
Exchange differences on translation to
the presentation currency
-
(40)
(87)
(42)
(256)
(425)
At 31 December 2023
-
437
816
227
426
1 906
Cost or valuation
At 1 January 2024
46
3 170
4 397
373
1 078
9 064
Additions
862
-
-
-
-
862
Transfers to/from AUC
(845)
175
596
31
43
-
Disposals
-
-
(19)
(12)
(14)
(45)
Exchange differences on translation to
the presentation currency
(5)
(273)
(399)
(44)
(103)
(824)
At 31 December 2024
58
3 072
4 575
348
1 004
9 057
Accumulated depreciation

At 1 January 2024
-
437
816
227
426
1 906
Depreciation charge
-
76
267
37
47
427
Disposals
-
-
(17)
(12)
(14)
(43)
Revaluation depreciation
-
68
56
27
21
172
Exchange differences on translation to
the presentation currency
-
(40)
(153)
(48)
(44)
(285)
At 31 December 2024
-
541
969
231
436
2 177
Net book value at 31 December 2024
58
2 531
3 606
117
568
6 880
Net book value at 31 December 2023
46
2 733
3 581
146
652
7 158
Net book value at 31 December 2022
31
3 016
3 982
202
685
7 916

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

14. PROPERTY, PLANT AND EQUIPMENT (continued)

As at 31 December 2024 the Group has no contractual commitments to purchase property, plant and
equipment.

Fixed assets with a net book value of GBP 5.491 thousand at 31 December 2024 (2023: GBP 5.880
thousand) were pledged as collateral for loans.

As at 31 December 2024 any prepayments for property, plant and equipment were included within Assets
under construction in the amount of GBP 1 thousand (2023: GBP 2 thousand).

As at 31 December 2024 fully depreciated assets have been included within property, plant and
equipment with the original cost of GBP 676 thousand (2023: GBP 626 thousand).

The net book value of property, plant, and equipment recognized at historical cost plus accumulated
depreciation would be as follows:

In 2020, the Group made a revaluation of fixed assets. An independent valuation of the Group's property,
plant and equipment was undertaken by Price Consulting LLC as at 01 December 2020.

Assets under
Construction
Land and Buildings
Plant and
Machinery
Vehicles
Instruments, tools
and other equipment
Total
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
Net book value at 31 December 2024
58
464
662
21
47
1 252
Net book value at 31 December 2023
46
520
681
28
87
1 362

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

15. INTANGIBLE ASSETS

As at the reporting dates intangible assets were presented as follows:
Computer
software

Rights to use
natural
resources
Trademarks
Total

£ ‘000
£ ‘000
£ ‘000
£ ‘000
Cost or valuation

At 1 January 2023
382
44
940
1 366
Additions
28
-
-
28
Disposals
-
-
-
-
Exchange differences on translation to the
presentation currency

(63)

(4)

(54)

(121)
At 31 December 2023
347
40
886
1 273

Accumulated amortization

At 1 January 2023
30
2
653
685
Amortization charge for the year
70
2
62
134
Disposals
-
-
-
-
Exchange differences on translation to the
presentation currency
(8)
-
(39)
(47)
At 31 December 2023
92
4
676
772
Cost or valuation

At 1 January 2024
347
40
886
1 273
Additions
-
-
-
-
Disposals
-
-
-
-
Exchange differences on translation to the
presentation currency

(30)

(3)

(21)
At 31 December 2024
317
37
898
1 252

Accumulated amortization

At 1 January 2024
92
4
676
772
Amortization charge for the year
81
2
60
143
Disposals
-
-
-
-
Exchange differences on translation to the
presentation currency
(10)
-
9
(1)
At 31 December 2024
163
6
745
914
Net book value at 31 December 2024
154
31
153
338
Net book value at 31 December 2023
255
36
210
501
Net book value at 31 December 2022
352
42
287
681

The total amortization periods of the intangible assets are as follows:
- Computer software 1-10 years;
- Trademarks 11-18 years;
- Right of use natural resources 15-20 years;

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

15. INTANGIBLE ASSETS (continued)

The Group performed its annual impairment test in December 2024 and 2023. The Group considers the
relationship between its market capitalisation and its book value, among other factors, when reviewing
for indicators of impairment. As at 31 December 2024, the market capitalisation of the Group was below
the book value of its equity, indicating a potential impairment of goodwill and impairment of the assets
of the operating segment.

Trademark “Zhyviy Kvas”

The recoverable amount of the trademark “Zhyviy Kvas” CGU, GBP 2 059 thousand as at 31 December
2024, has been determined based on a value in use calculation using cash flow projections from financial
budgets approved by senior management covering a five-year period. The projected cash flows have been
updated to reflect the recovering demand for products and services. The discount rate applied to cash
flow projections is 19.3% (2023: 20%). The growth rate used to extrapolate the cash flows of the unit
beyond the five-year period is 0%. As a result of the analysis, management did not identify an impairment
for this CGU.

Group of the trademarks within the “Dairy segment”

The recoverable amount of the three trademarks within the “Dairy segment” CGU, GBP 1 818 thousand
as at 31 December 2024, is also determined based on a value in use calculation using cash flow
projections from financial budgets approved by senior management covering a five-year period. The
projected cash flows have been updated to reflect the decreased recovering for products and services.
The pre-tax discount rate applied to the cash flow projections is 19.3% (2023: 20%). The growth rate
used to extrapolate the cash flows of the unit beyond the five-year period is 0 %. As a result of the
analysis, management did not identify an impairment for this CGU.

16. DEFERRED TAX ASSETS AND LIABILITIES

For the year ended 31 December 2024 and 31 December 2023, deferred tax assets and liabilities were
presented as follows:

As at 31
December 2024
£ ‘000

As at 31
December 2023
£ ‘000
Deferred tax assets at the beginning of the year
-

-
Deferred tax liability at the beginning of the year
392
530
Deferred tax liability recognised in SOCI during the year
(37)
(47)
Reduction in deferred tax due to decrease in property, plant and equipment
revaluation reserve because of amortization
(42)

(48)
Exchange differences on translation to the presentation currency
11
(43)
Deferred tax assets at the end of the year
-
-
Deferred tax liability at the end of the year
324
392

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

17. INVENTORIES

As at the reporting dates inventories were presented as follows:
As at

As at
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Raw materials
962

983
Finished goods
1 462
1 404
Semi-finished products
590
392
Other inventories
715
753
Provision for impairment of inventories
(207)

(749)
Total
3 522
2 783

Movement in the provision for inventories are as follows:
As at

As at
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Balance at the beginning of the period

749

99
(Reversal) /accrual of provision for slow moving items
(380)
702
Accrual /(reversal) of provision for impairment to net realisable value
106

(75)
Effect of translation to presentation currency
(268)

23
Balance at the end of the period
207
749

18. TRADE AND OTHER RECEIVABLES

As at

As at
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Trade receivables, gross
5 297
5 916
Allowance for impairment losses
(2 135)
(1 621)
Trade receivables, net
3 162

4 358
Other receivables, gross
451

434
Allowance for impairment losses
(18)

(70)
Other receivables, net
433

364
Prepayments, gross
848

678
Allowance for impairment losses
(215)
(-)
Prepayments, net
633

678
Total
4 228
5 400

The Group’s management believes that the carrying value of trade and other receivables is a reasonable
approximation of their fair value.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

18.TRADE AND OTHER RECEIVABLES (continued)

Maturity of trade receivables as at 31 December 2024 and 31 December 2023 is presented as follows:

Total
Non-
overdue
Past due debt
debt
<30
30-60
61-90
91-120
>120
days
Days
days
days
Days
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
£ ‘000
2024
5 297
4 661
366
-
-
-
270
2023
4 358
2 970
153
7
70
61
1 097

Expected credit losses were recognised for trade receivables. The movements in allowance for
impairment losses are as follows:

As at

As at
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Balance at the beginning of the year
1 331
1 627
Accrual
785
58
Use of allowances
(12)
-
Effect of translation to presentation currency
31
(354)
Balance at the end of the year
2 135
1 331

19. CURRENT TAXES

As at

As at
31 December
2024
31 December
2023
£ ‘000
£ ‘000
VAT receivable
513
291
Current income tax prepayments
16
18
Other prepaid taxes
270
162
Total
799
471

20. OTHER FINANCIAL ASSETS

As at

As at
31 December
2024
31 December
2023
Loans and receivables
£ ‘000
£ ‘000
Loans issued to third parties
28
38
Total
28
38

Loans issued are short term in nature, repayable on demand and are interest free.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

21. CASH AND CASH EQUIVALENTS (EXCLUDING BANK OVERDRAFTS)

As at the reporting dates cash and cash equivalents were presented as follows:
As at

As at
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Cash on hand - on UAH
18
29
Cash in bank - on UAH
88
287
Cash in Bank - in other currencies
14
120
Total
120
436

22. SHARE CAPITAL

As at the reporting dates share capital was presented as follows:

Authorised
As at
As at
As at
As at
31 December 2024
31 December 2024
31 December 2023
31 December 2023
Number '000
£ ‘000
Number '000
£ ‘000
Ordinary shares of 10p each
60 000
6 000
60 000
6 000

Issued and fully paid at beginning and end of the year
As at
As at
As at
As at
31 December 2024
31 December 2024
31 December 2023
31 December 2023
Number '000
£ ‘000
Number '000
£ ‘000
At beginning of the year
39 673
3 967
39 673
3 967
Own shares acquired during
the year
-
-
-
-
At end of the year (excluding
shares held as treasury
shares)
39 673
3 967
39 673
3 967

Treasury shares

As at
As at
As at
As at
31 December 2024
31 December 2024
31 December 2023
31 December 2023
Number '000
£ ‘000
Number '000
£ ‘000
At beginning of the year
3 145
315
3 145
315
At end of the year
3 145
315
3 145
315

Share capital and treasury shares are presented as separate lines in the consolidated statement of financial
position as at 31 December 2024.
As at 31 December 2024 and 31 December 2023 the Group held a total of 3,144,800 ordinary shares as
treasury shares and the total number of ordinary shares in issue (excluding shares held as treasury shares)
was 39,673,049.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

23. OTHER RESERVES

At the reporting date other reserves were presented as follows:

Share premium
Translation
reserve
Revaluation
reserve
Total other
reserves
£ '000
£ '000
£ '000
£ '000
At 1 January 2023
4 562
(15 537)
6 005
(4 970)
Depreciation on revaluation of property,
plant and equipment
-
-
(208)
(208)
Exchange differences on translation to the
presentation currency
-
(449)
-
(449)
At 31 December 2023
4 562
(15 986)
5 797
(5 627)
Depreciation on revaluation of property,
plant and equipment
-
-
(169)
(169)
Exchange differences on translation to the
presentation currency
-
(543)
-
(543)
Other changes
21
-
-
21
At 31 December 2024
4 583
(16 529)
5 628
(6 318)

Reserve
Description and purpose
Share premium
Amount subscribed for share capital in excess of nominal value.
Revaluation
Gains arising on the revaluation of the Group’s property, plant and equipment. The balance on
this reserve is wholly undistributable.
Translation

Amount of all foreign exchange differences arising from the translation of the financial
information of Group entities to presentation currency.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

24. BANK LOANS

As at 31 December 2024 the Group has two loans: the loan from Creditwest Bank in the amount of
GBP 1.322 thousand (in UAH 70.0 million) and the loan from the EBRD in the amount of
GBP 4.250 thousand (in EUR 5.123 thousand).

For the year ended December 31, 2024, the Group did not fulfill its obligations under the loan agreement
with the EBRD. The Group failed to repay Tranche A (aggregate €2.1 million principal, equivalent to
£1.7 million) and Tranche B (aggregate €3.3 million principal, equivalent to £2.7 million) before the
maturity date of 1 December 2024. The Group has missed interest payments since 1 March 2022. In
December 2024 EBRD notified the Group on a further €2.4 million (£2.0 million), principally relating to
loan deferral fee charges for the period from 24 October 2016 to 2 December 2024.

The Group has been in dialogue with the EBRD since 2021 to potentially restructure the loan, and accrued
interest and charges, and discussions continue. At present, the EBRD has taken no action to accelerate
repayment of the accumulated loan.

Fixed assets with a net book value of GBP 5.491 thousand at 31 December 2024 (2023: GBP 5.880
thousand) were pledged as collateral for loan.

Assets pledged as security for the EBRD loan include property and land in Starokonstantinov, equipment
for dairy production and production of hard cheese, as well as trademarks.

Bank
Currency
Type
Opening
date
Termination
date
Interest
rate
Limit
As At 31
December
2024
As at 31
December
2023
£ ‘000
£ ‘000
£ ‘000
EBRD
EUR
Loan
31.03.2011
01.12.2024
1% –
10.975%
6 886
4 250
4 463
Creditwest
Bank
UAH
Credit line
05.02.2018
05.02.2024
20%
1 341
-
1 314
Creditwest
Bank
UAH
Credit line
11.01.2014
11.07.2027
UIRD (3
month) +
9%
1 322
1 322
-
Total
5 572
5 777

The average interest rate as at 31 December 2024 was 11.7% (2023: 13.6%).

Future interest payments

Year ended
Year ended
31 December
2024

31 December
2023
£ ‘000
£ ‘000
In less than 1 year
1 672
1 250
In more than 1 year
-
-
Total
1 672
1 250

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

24. BANK LOANS (continued)

Maturity of financial liabilities
Year ended
Year ended
31 December
2024

31 December
2023
£ ‘000
£ ‘000
Overdue
4 250
1 627
In less than 1 year
1 322
4 150
In more than 1 year
-
-
Total
5 572
5 777

Interest rate profile of financial liabilities

Floating rate
Fixed rate
As at
As at
31 December 2024
31 December 2023
£ '000
£ '000
£ ‘000
£ ‘000
Overdue
4 250
-
4 250
1 627
Expiry within 1 year
1 322
-
1 322
4 150
Expiry in more than 1 year
-
-
-
-
Total
5 572
-
5 572
5 777

The currency profile of the Group's financial liabilities is as follows:
Floating rate
liabilities
Fixed rate
liabilities
Total as at 31
December 2024
Total as at 31
December 2023
£ '000
£ '000
£ '000
£ '000
UAH
1 322
-
1 322
1 314
EUR
4 250
-
4 250
4 463
Total
5 572
-
5 572
5 777
The book value and fair value of financial liabilities are as follows:
Book value as at
31 December
2024
Fair value as at
31 December
2024
Book value as at
31 December
2023
Fair value as at
31 December
2023
£ '000
£ '000
£ '000
£ '000
Bank loans
5 572
5 572
5 777
5 777
Total
5 572
5 572
5 777
5 777

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

24. BANK LOANS (continued)
Reconciliation of liabilities arising from financing activities
As at 31
December
2023
Financing
cash
flows
Accrual
of
interest
Foreign
exchange
move-
ment

Other
changes
Effect from
translation to
presentation
currency
As at 31
December
2024

£ '000
£ '000
£ '000
£ '000
£ '000
£ '000
£ '000
Bearing loans and
borrowings
5 777
123
-
195
(28)
(495)
5 572
Interest
835
(206)
674
36
-
(85)
1 254
Interest-bearing
loans and borrowings
6 612
(83)
674
231
(28)
(580)
6 826

25. TRADE AND OTHER PAYABLES

At the reporting date trade and other payables were presented as follows:
As at
As at
31 December
2024

31 December
2023
£ ‘000
£ ‘000
Trade payables
2 764
3 414
Prepayments received
221

132
Accruals
115

105
Interests payable
3 260
846
Provisions
862
584
Other payables
175
131
Total
7 397
5 212

The Group’s management believes that the carrying value of trade and other payables is a reasonable
approximation of their fair value.
For the year ended 31 December 2024, provisions were presented as follows:

Allowance
at the
beginning
of the
year
Accrual
Use of
allowances
(Reversal)
Effect of
translation
to
presentation
currency
Allowance
at the end
of the year
Provision for unused vacation
148
228
(200)
(13)
163
Provision for VAT
261
444
(144)
(32)
529
Provision for fines
73
76
(69)
(7)
73
Provision for audit services
76
47
(71)
(6)
46
Provision for other expenses and
payments

26
77
(49)
(3)
51
Total

584
872
(533)
(61)
862

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

25. TRADE AND OTHER PAYABLES (continued)

For the year ended 31 December 2023, provisions were presented as follows:

Allowance
at the
beginning
of the
year
Accrual
Use of
allowances
(Reversal)
Effect of
translation
to
presentation
currency
Allowance
at the end
of the year
Provision for unused vacation
117
212
(167)
(14)
148
Provision for VAT
97
278
(94)
(20)
261
Provision for fines
59
78
(57)
(7)
73
Provision for audit services
90
81
(87)
(8)
76
Provision for other expenses and
payments

62
84
(115)
(5)
26
Total

425
733
(520)
(54)
584

26. EARNINGS PER SHARE

Basic earnings per share have been calculated by dividing net profit attributable to the ordinary
shareholders by the weighted average number of shares in issue. The Group does not have any potentially
dilutive instruments.
Year ended
Year ended
31 December
2024
31 December
2023
£ ‘000
£ ‘000
Net profit/loss attributable to ordinary shareholders
(2 038)
390
Weighted number of ordinary shares in issue
39 673
39 673
Basic earnings per share, pence
(5.14)
0.98
Diluted average number of shares
39 673
39 673
Diluted earnings per share, pence
(5.14)
0.98

27. DIVIDENDS

Due to the business circumstances dictating prudence and cash conservation, the Board has decided not
to pay a final dividend in respect of the year ended 31 December 2024.

28. SHARE-BASED PAYMENTS

The Company operates an equity-settled share based remuneration scheme for employees. During 2024,
the Group did not issue options to any third parties. They were not exercised. There are no outstanding
options issued by the Group.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

29. CURRENCY ANALYSIS

Currency analysis for the year ended 31 December 2024 is set out below:

UAH
USD
GBP
EUR
Total
Assets

Trade and other receivables
3 269
138
188
-
3 595
Current taxes
798
-
-
-
798
Other financial assets
28
-
-
-
28
Cash and cash equivalents
110
-
-
10
120
Total assets
4 205
138
188
10
4 541
Liabilities

Bank borrowings
1 322
-
-
4 834
6 156
Trade and other payables
2 800
66
70
4
2 940
Current income tax liabilities
2
-
-
-
2
Other taxes payable
63
-
-
-
63
Total Liabilities
4 187
66
70
4 838
9 161

Currency analysis for the year ended 31 December 2023 is set out below:

UAH
USD
GBP
EUR
Total
Assets
Trade and other receivables
4 667
53
2
-
4 722
Current taxes
471
-
-
-
471
Other financial assets
38
-
-
-
38
Cash and cash equivalents
339
33
64
-
436
Total assets
5 515
86
66
-
5 667
Liabilities

Bank borrowings
1 314
-
-
5 072
6 386
Trade and other payables
3 401
19
99
26
3 545
Current income tax liabilities
64
-
-
-
64
Other taxes payable
199
-
-
-
199
Total Liabilities
4 978
19
99
5 098
10 194

The table below details the Group’s sensitivity to a 10% strengthening of Hryvnia rate against the US
dollar and 10% strengthening of Hryvnia rate against the Euro as at 31 December 2024 and 2023, and
would increase /decrease the amount of profits /or losses for the period by the amounts mentioned below.
This analysis was conducted based on the assumption that all other variables, in particular, interest rates,
remained unchanged. The change of the British pound exchange rate does not have an impact on the
result as all the balances in the British pound are attributable to the Group’s companies where the British
pound is a functional currency.

Increase/
decrease in rate
Effect on income before tax in
2024
Effect on income before tax in
2023
£ ‘000
£ ‘000
USD
10%
7
7
EUR
10%
(483)
(510)
USD
(10)%
(7)
(7)
EUR
(10)%
483
510

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

30.
RELATED PARTY TRANSACTIONS

A related party is a person or an entity that is related to the reporting entity:
A person or a close member of that person’s family is related to a reporting entity if that person has
control, joint control, or significant influence over the entity or is a member of its key management
personnel.
An entity is related to a reporting entity if, among other circumstances, it is a parent, subsidiary, fellow
subsidiary, associate, or joint venture of the reporting entity, or it is controlled, jointly controlled, or
significantly influenced or managed by a person who is a related party.

Remuneration of key management personnel is disclosed in Note 12.

The Group had no commercial relationships with the related parties in 2024. There were no guarantees
given to or provided by the Group to related parties and vice versa.

The ultimate controlling owners and beneficiaries of the related parties were Mr. Oleksandr Slipchuk and
Mr. Sergey Evlanchik.

31. COMMITMENTS AND CONTINGENCIES

(a) Economic environment
The Group carries out most of its operations in Ukraine. Laws and other regulatory acts affecting the
activities of Ukrainian enterprises may be subject to changes and amendments within a short period of
time. As a result, the assets and operating activity of the Group may be exposed to the risk in case if any
unfavourable changes that take place in the political and economic environment.

(b)
Retirement and other liabilities
Employees of the Group receive pension benefits from the Pension Fund, a Ukrainian Government
organization in accordance with the applicable laws and regulations of Ukraine. The Group is required
to contribute a specified percentage of the payroll to the Pension Fund to finance the benefits.

The only obligation of the Group with respect to this pension plan is to make the specified contributions
from salaries. As at 31 December 2024 the Group had no liabilities for supplementary pensions, health
care, insurance benefits or retirement indemnities to its current or former employees.

(c) Compliance with covenants
The Group is subject to covenants related primarily to its borrowings. For the year ended December 31,
2024, the Group did not fulfill its obligations under the loan agreement with the EBRD. The Group failed
to repay Tranche A (aggregate €2.1 million principal, equivalent to £1.7 million) and Tranche B
(aggregate €3.3 million principal, equivalent to £2.7 million) before the maturity date of 1 December
2024. The Group has missed interest payments since 1 March 2022. In December 2024 EBRD notified
the Group on a further €2.4 million (£2.0 million), principally relating to loan deferral fee charges for the
period from 24 October 2016 to 2 December 2024. The Group classified the loan from the EBRD as a
Current Liability following the breach of certain covenants and no formal waivers were received by the
Group from the bank. To the best of the Group’s management knowledge, as of today the EBRD has
taken no action to accelerate repayment of the loan.

Ukrproduct Group
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)

31.COMMITMENTS AND CONTINGENCIES (continued)

(d) Litigations and claims

The Group’s operations and financial position will continue to be affected by Ukrainian political
developments including the application of existing and future legislation and tax regulations.
Management believes that the Group has complied with all regulations and paid or accrued all taxes that
are applicable. In the ordinary course of business, the Group is subject to various legal actions and
complaints. Management believes that the ultimate liability, if any, arising from such actions or
complaints will not have a material adverse effect on the financial condition or the results of the Group’s
operations. Where the risk of outflow of resources is probable, the Group has accrued liabilities based on
management’s best estimate.

(e) Other

The amount of non-cancellable lease commitments is insignificant.

As at 31 December 2024 the Group does not possess any finance lease and hire purchase commitments,
capital commitments and guarantees.

32. SUBSEQUENT EVENTS

At the time of publication of the annual report the war between Ukraine and Russia is ongoing. The
Group continues to operate. The management of the Group controls all its operations.

Olena Telychko was appointed as a new CFO of Ukrproduct Group in April 2025.

As of the date of approval of these consolidated financial statements, the Group remains in active
negotiations with the EBRD regarding the restructuring of its outstanding loan obligations. While no
formal agreement has been reached as of the reporting date, the EBRD has not taken steps to accelerate
repayment of the accumulated loan.