2019 ANNUAL REPORT for the year ended 31 December 2019 Cover page in this report use the picture of the Ukranian painter Olga Kvasha CONTENT Letter to shareholders .............................................................5 REPORT ON OPERATIONS ASTARTA’s history .....................................................................6 Agriculture ................................................................................16 ASTARTA’s map of operations ..................................................7 Sugar .........................................................................................18 Key operational results ............................................................8 Soybean processing .................................................................20 Key financial results .................................................................9 Dairy ..........................................................................................22 Selected financial indicators and ratios .................................10 Shareholders and share price performance ..........................24 Corporate social responsibility ................................................25 Human rights ............................................................................28 Anticorruption policy ................................................................28 Whistleblowing .........................................................................28 Responding to climate changes ..............................................28 Energy consumption ................................................................29 Effluents and wastes ................................................................30 Water discharge ......................................................................30 Personnel ..................................................................................31 Trainings ...................................................................................32 Occupational safety .................................................................32 Material risk factors and threats .............................................33 Outlook and key challenges ....................................................35 CORPORATE GOVERNANCE REPORT ....................................39 CONSOLIDATED FINANCIAL STATEMENTS ...........................67 COMPANY FINANCIAL STATEMENTS ....................................155 INDEPENDENT AUDITOR REPORT .........................................168 АSTARTA Holding N.V. LETTER TO SHAREHOLDERS 4 • ANNUAL REPORT 2019 АSTARTA Holding N.V. Dear shareholders, Entering the new 2020 season, I would like to recap the 2019 results. Looking back, I must confess that last year was not easy, but at the same time, very motivating - our business had a clear task to mobilize internal resources, and the Company today is a more resilient business than a year ago. Bespoke system for the efficiency improvement (Lean-based) and further implementation of new IT-solutions in agribusiness management delivered us cost and resource savings. All these changes are dictated by today’s globalized environment, so we will continue to focus on the optimization of business processes through their simplification, transparency, automation, eliminating bureaucracy and increasing the speed of decision making. We are all aware that 2019 was very volatile as economic sentiment, political and climate risks continue to give rise to uncertainties in agricultural commodity markets. The local sugar market did not improve much in 2019: despite significant contraction of the sugar beet growing area in Ukraine, the prices remained subdued. However, we do expect tighter market conditions in the following years as the fundamentals of the industry are robust. In 2019 we successfully launched our storage and handling services for third parties in addition to keeping all of our harvest in the 550kt network of newly built grain and oilseeds storage facilities. This allows us to increase efficiency by lowering costs and preserving the quality of crops. In 2019 our revenues totaled EUR448m (+20% y-o-y) and EBITDA - EUR78m (+15% y-o-y). Capital discipline along with continued focus on productivity and costs resulted in the reduction of Net Debt (including lease liabilities) to EUR276m (-15% y-o-y) bringing Net Debt to EBITDA ratio to 3.5x from 4.8x in 2018. ASTARTA develops its business guided by the UN Global Sustainable Development Goals. What does it mean? It is an adherence to sustainable development principles in order to enjoy a competitive edge in the markets. It is important for the Company to stay at the forefront of business sustainability practices. In 2020, we continue to develop our vision in three priority areas: operational improvements, digitization and ESG compliance. I believe that these initiatives will find support from all our stakeholders and lay down solid fundamentals for our joint success. Sincerely yours, Viktor Ivanchyk Founder and CEO ANNUAL REPORT 2019 • 5 АSTARTA Holding N.V. ASTARTA’s HISTORY ASTARTA is one of the largest vertically-integrated agro-industrial include grain and oilseeds production, sugar production from sugar holdings in Ukraine. Since its foundation in 1993 the Company beet, soybean crushing, milk production, as well as grain and made significant progress in developing its key business segments oilseeds storage and handling services. as well as started new businesses. Today ASTARTA’s main activities 2015–2019 Extension of grain silo program 2014 2008–2013 Commissioned soybean Three sugar processing plant and plants acquired biogas complex 2003-2005 2006 2007 Acquisition of ASTARTA’s shares The Group actively expands operations by four sugar listed on Warsaw acquiring new agricultural companies and plants Stock Exchange increasing the area of leased agricultural land in its portfolio 1993 1999 1997 Foundation Acquisition of Start of the of the Company first sugar plant agricultural in Poltava business region 6 ASTARTA’S historY • ANNUAL REPORT 2019 АSTARTA Holding N.V. ASTARTA’s MAP OF OPERATIONS ASTARTA operates in several regions of Ukraine. Key assets are in he Poltava, Kharkiv, Khmelnitsky and Vinnytsya regions. Khmelnytskyi region 1 sugar plant Chernigiv region 45 ths ha leased land 5 ths ha leased land 3.7 ths cattle 2 grain silos Kyiv Vinnytsya region 1 sugar plant Kharkiv region 18 ths ha leased land 2 sugar plants 3.3 ths cattle 10 ths ha leased land grain silo Poltava region 4 sugar plants Soybean processing plant Bioenergy plant 132 ths ha leased land 16.9 ths cattle 4 grain silos ANNUAL REPORT 2019 • ASTARTA’S MAP OF operations 7 АSTARTA Holding N.V. KEY OPERATIONAL RESULTS GRAIN AND OILSEEDS SUGAR PRODUCTION, kt PRODUCTION, kt 790 910 786 1065 1014 355 505 463 352 302 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 SOYBEAN OIL AND MILK MEAL PRODUCTION, kt PRODUCTION, kt 147 158 153 158 169 34 39 39 40 44 103 107 110 106 96 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Soybean oil Soybean meal 8 KEY operational results • ANNUAL REPORT 2019 АSTARTA Holding N.V. KEY FINANCIAL RESULTS REVENUES, EBITDA, EURm EURm 314 369 459 372 448 131 152 120 68 78 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 NET DEBT, EURm, NET PROFIT, NET DEBT TO EBITDA, x EURm 4.8 3.5 1.3 1.0 1.1 220 136 173 146 130 324 276 16 83 62 (18) 1.7 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Net debt Net debt, ex lease Net debt/EBITDA ANNUAL REPORT 2019 • KEY FINANCIAL results 9 АSTARTA Holding N.V. SELECTED FINANCIAL INDICATORS AND RATIOS SUMMARY P&L EURk 2018 2019 Revenues, including 372 222 448 006 Agriculture 126 764 205 712 Sugar 119 436 116 893 Soybean 74 290 82 718 Dairy 29 309 34 603 Cost of sales, including (323 882) (399 751) Effect of AP remeasurement (36 845) (55 283) Changes in FV of BA and AP* 46 909 43 208 Gross profit 95 249 91 463 Gross profit margin 26% 20% EBIT 18 355 14 796 Depreciation & Amortisation 45 669 62 571 EBITDA, including 68 024 77 923 Agriculture 70 147 53 335 Sugar (286) 2 314 Soybean 5 865 7 385 Dairy (3 577) 15 610 EBITDA margin 18% 17% Financial costs (12 926) (16 639) Interest on lease liabilities (19 832) (22 635) Forex gain/(loss) (1 515) 24 899 Net profit (loss) (18 261) 1 691 Net profit (loss) margin (5%) 0.4% 10 SELECTED FINANCIAL indicators AND ratios • ANNUAL REPORT 2019 АSTARTA Holding N.V. SUMMARY BALANCE SHEET EURk 2018 2019 Right-of-use asset (mainly land) 110 396 142 035 Biological assets (non-current) 17 064 30 011 PP&E and other 276 701 300 193 Inventories, including RMI 234 939 193 681 Biological assets (current) 16 004 16 109 AR and other 76 290 64 206 Cash and equivalents 13 492 13 033 Total Assets 744 886 759 268 Equity 365 822 438 755 Long-term loans 554 591 Lease liability (mainly land) 79 004 103 391 Other 13 795 10 930 Non-current liabilities 93 353 114 912 ST debt and similar 232 627 148 811 Current lease liability (mainly land) 25 245 36 073 Other 27 839 20 717 Current liabilities 285 711 205 601 Total equity and liabilities 744 886 759 268 EBITDA 68 024 77 923 Lease liability (mainly land) 104 249 139 464 Readily Marketable Inventories — RMI 182 333 142 500 Net debt (incl. lease liabilities) 323 938 275 833 ND total/EBITDA (x) 4.8 3.5 Adjusted net debt = (ND-RMI) 141 605 133 333 Adj ND /EBITDA (x) 2.1 1.7 ANNUAL REPORT 2019 • SELECTED FINANCIAL indicators AND ratios 11 АSTARTA Holding N.V. SELECTED FINANCIAL INDICATORS AND RATIOS SUMMARY CASH FLOWS EURk 2018 2019 Pre-tax income (15 599) 822 D&A 45 669 62 571 Financial interest expenses, net