Ovostar Union : Financial Statements (Unaudited) for 3M ended 31 March 2024

OVOSTAR UNION PCL

AND IT'S SUBSIDIARIES CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 March 2024

CONTENTS

CONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOM………………………….………………….4

CONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION.………………………….……………………….5

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN QUITY………………………….……………………….….6

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CASH LOWS.………………………….……………………….…………….7

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS………………………….……………………8

Representation of the Members of the Board of Directors

Members of the Board of Directors of Ovostar Union Public Company Limited in accordance with Subsection (3c) and (7) of the Section (9) of the Law providing for transparency requirements in relation to information about issuers whose shares are admitted to trading on a regulated market (L.190 (I)/2007 ‐ "Transparency Law") herewith confirms that to the best of their knowledge:

The present consolidated condensed interim financial statements:

1. have been prepared in accordance with the applicable International Financial Reporting Standards as adopted by the European Union and in compliance with the requirements set forth in Subsection (4) of the Section (9) of the Transparency Law, and
2. give a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer and the undertakings included in the consolidated accounts taken as a whole.

June 05, 2024

Nicosia, Cyprus

……………………………	…………………………..	……………………………….
Borys Bielikov	Vitalii Veresenko	Karen Arshakyan
Chief Executive Officer,	Chairman of the Board,	Head of Audit Committee,
Executive Director	Non-executive Director	Non-executive Director

…..……………………….	……………………………….
Markiyan Markevych	Vitalii Sapozhnik
Non-executive Director	Chief Financial Officer

CONSOLIDATED	STATEMENT OF COMPREHENSIVE INCOME
CONDENSED INTERIM	FOR THE THREE MONTHS ENDED 31 MARCH 2024
FINANCIAL STATEMENTS	(IN USD THOUSAND, UNLESS OTHERWISE STATED)
			3 month ended	3 month ended
		Note	31 March 2024	31 March 2023
			(unaudited)	(unaudited)
Revenue from contracts with customers	8	35 670	47 304
Changes in fair value of biological assets	14	(5 700)	(16 910)
Cost of sales			(19 925)	(18 615)
Gross profit			10 045	11 779
Other operating income		9	187	174
Selling and distribution costs			(2 589)	(2 680)
Administrative expenses			(1 155)	(681)
Other operating expenses		10	(4)	(14)
Operating profit			6 484	8 578
Finance costs			(128)	(198)
Finance income			489	234
Foreign exchange (loss)/gain, net			152	404
Profit before tax			6 997	9 018
Income tax expense			(29)	(41)
Profit for the period			6 968	8 977
Other comprehensive income
Exchange differences on translation to presentation currency		(3 427)	(33)
Other comprehensive income for the period, net of tax		(3 427)	(33)
Total comprehensive income for the period, net of tax		3 541	8 944
Profit for the period attributable to:
Equity holders of the parent company		6 913	8 937
Non‐controlling interests		7	55	40
Total profit for the period			6 968	8 977
Other comprehensive income attributable to:
Equity holders of the parent company		(3 414)	(34)
Non‐controlling interests		7	(13)	1
Total other comprehensive income			(3 427)	(33)
Other comprehensive income attributable to:
Equity holders of the parent company		3 499	8 903
Non‐controlling interests		7	42	41
Total comprehensive income			3 541	8 944
Earnings per share:
Equity holders of the parent company		6 000 000	6 000 000
Basic and diluted, profit for the period attributable to ordinary equity		1,15	1,49
holders of the parent (USD per share)

……………………………	…………………………..	……………………………….
Borys Bielikov	Vitalii Veresenko	Karen Arshakyan
Chief Executive Officer,	Chairman of the Board,	Head of Audit Committee,
Executive Director	Non-executive Director	Non-executive Director

…..……………………….	……………………………….
Markiyan Markevych	Vitalii Sapozhnik
Non-executive Director	Chief Financial Officer

4

CONSOLIDATED	STATEMENT OF FINANCIAL POSITION
CONDENSED INTERIM	FOR THE THREE MONTHS ENDED 31 MARCH 2024
FINANCIAL STATEMENTS	(IN USD THOUSAND, UNLESS OTHERWISE STATED)
		Note		31 March 2024	31 December 2023	31 March 2023
			(unaudited)	(audited)	(unaudited)
Assets
Non‐current assets
Biological assets		14		6 392	9 118	4 537
Property, plant and equipment and intangible assets	15		26 894	27 936	30 739
Deferred tax assets		13		76	78	185
Total non‐current assets				33 362	37 132	35 461
Current assets
Inventories		16		14 011	13 561	12 977
Biological assets		14		2 632	3 232	6 880
Trade and other receivables		17		17 763	13 196	25 386
Prepayments to suppliers				1 740	2 580	666
Prepayments for income tax		18		1	1	1
Cash and cash equivalents			72 094	72 504	29 338
Total current assets				108 241	105 074	75 248
Total assets				141 603	142 206	110 709
Equity and liabilities
Equity
Issued capital				84	84	84
Share premium				30 933	30 933	30 933
Foreign currency translation reserve				(160 895)	(157 481)	(153 731)
Retained earnings				251 137	206 393	206 318
Result for the period				6 913	44 744	8 937
Equity attributable to equity holders of the parent			128 172	124 673	92 541
Non‐controlling interests		7		485	443	249
Total equity				128 657	125 116	92 790
Non‐current liabilities
Interest‐bearing loans and other financial liabilities	20		‐	‐	3 480
Deferred income				1 433	1 531	1 749
Deferred tax liability				231	238	269
Total non‐current liabilities				1 664	1 769	5 498
Current liabilities
Trade and other payables		21		10 657	9 690	7 296
Income tax payable				29	2 703	‐
Deferred income				197	203	211
Advances received		20		383	356	455
Interest‐bearing loans and other financial liabilities		16	2 369	4 459
Total current liabilities				11 282	15 321	12 421
Total liabilities				12 946	17 090	17 919
Total equity and liabilities				141 603	142 206	110 709

……………………………	…………………………..	……………………………….
Borys Bielikov	Vitalii Veresenko	Karen Arshakyan
Chief Executive Officer,	Chairman of the Board,	Head of Audit Committee,
Executive Director	Non-executive Director	Non-executive Director

…..……………………….	……………………………….
Markiyan Markevych	Vitalii Sapozhnik
Non-executive Director	Chief Financial Officer

5

CONSOLIDATED	STATEMENT OF CHANGES IN EQUITY
CONDENSED INTERIM	FOR THE THREE MONTHS ENDED 31 MARCH 2023
FINANCIAL STATEMENTS	(IN USD THOUSAND, UNLESS OTHERWISE STATED)
			Foreign			Result for		Non‐
	Issued	Share	currency		Retained	Total	Total equity
	capital	premium	translatio		earnings	the	controllin
		period		g interests
			n reserve
As at 31 December 2022 (audited)	84	30 933	(153 697)		200 147	6 246	83 713	208	83 921
Profit for the period	‐	‐	‐	‐	8 937	8 937	40	8 977
Other comprehensive income	‐	‐	(34)		‐	‐	(34)	1	(33)
Total comprehensive income	‐	‐	(34)		‐	8 937	8 903	41	8 944
Allocation of prior period result	‐	‐	‐	6 246	(6 246)	‐	‐	‐
Dividends	‐	‐	‐	(75)	‐	(75)	‐	(75)
As at 31 March 2023 (unaudited)	84	30 933	(153 731)		206 318	8 937	92 541	249	92 790
As at 31 December 2023 (audited)	84	30 933	(157 481)		206 393	44 744	124 673	443	125 116
Profit for the period	‐	‐	‐	‐	6 913	6 913	55	6 968
Other comprehensive income	‐	‐	(3 414)		‐	‐	(3 414)	(13)	(3 427)
Total comprehensive income	‐	‐	(3 414)		‐	6 913	3 499	42	3 541
Allocation of prior period result	‐	‐	‐	44 744	(44 744)	‐	‐	‐
As at 31 March 2024 (unaudited)	84	30 933	(160 895)		251 137	6 913	128 172	485	128 657

……………………………	…………………………..	……………………………….
Borys Bielikov	Vitalii Veresenko	Karen Arshakyan
Chief Executive Officer,	Chairman of the Board,	Head of Audit Committee,
Executive Director	Non-executive Director	Non-executive Director

…..……………………….	……………………………….
Markiyan Markevych	Vitalii Sapozhnik
Non-executive Director	Chief Financial Officer

6

CONSOLIDATED	STATEMENT OF CASH FLOWS
CONDENSED INTERIM	FOR THE THREE MONTHS ENDED 31 MARCH 2024
FINANCIAL STATEMENTS	(IN USD THOUSAND, UNLESS OTHERWISE STATED)
			3 month ended	3 month ended
		Note	31 March 2024	31 March 2023
			(unaudited)	(unaudited)
Operating activities
Profit before tax			6 997	9 018
Non‐cash adjustment to reconcile profit before tax to net cash flows:
Depreciation of property, plant and equipment and amortisation of intangible assets	735	799
Net change in fair value of biological assets	5 700	16 910
Disposal of property, plant and equipment	‐	1
Disposal of biological assets			650	188
Finance income			(489)	(234)
Finance costs			128	198
Foreign exchange loss/(gain)			(152)	(404)
Recovery of assets previously written‐off	(3)	(5)
Government subsidies			(128)	(135)
Impairment of doubtful accounts receivable and prepayments to suppliers	‐	3
Working capital adjustments:
Decrease in trade and other receivables	(5 010)	(2 681)
Decrease in prepayments to suppliers			779	2 340
Increase in inventories			(897)	(630)
Increase in trade and other payables and advances received	1 005	(1 042)
Cash generated from operating activities		9 315	24 326
Income tax paid			(2 702)	(658)
Net cash flows from operating activities		6 613	23 668
Investing activities
Purchase of property, plant and equipment	(619)	(159)
Increase in biological assets			(3 334)	(3 379)
Proceeds from repayment of loans issues	‐	4 249
Interest received			489	234
Net cash flows used in investing activities		(3 464)	945
Financing activities			(2 277)	(3 118)
Repayment of borrowings
Interest paid			(126)	(209)
Government subsidies			77	83
Payment of dividends			‐	(4 251)
Net cash flows used in financing activities		(2 326)	(7 495)
Net (decrease)/increase in cash and cash equivalents		823	17 118
Effect from translation into presentation currency		(1 233)	39
Cash and cash equivalents at 01 January		72 504	12 181
Cash and cash equivalents at 31 December		72 094	29 338

For translating transactions and balances into a presentation currency the Group applies IAS 21 "The Effects of Changes in Foreign Exchange Rates". Procedures and rules applied by the Group are specified in Note 2.3.

……………………………	…………………………..	……………………………….
Borys Bielikov	Vitalii Veresenko	Karen Arshakyan
Chief Executive Officer,	Chairman of the Board,	Head of Audit Committee,
Executive Director	Non-executive Director	Non-executive Director

…..……………………….	……………………………….
Markiyan Markevych	Vitalii Sapozhnik
Non-executive Director	Chief Financial Officer

7

1. Corporate information

Ovostar Union Public Company Limited (referred to herein as the "Company") is a limited liability company incorporated on 22 March 2011 in Amsterdam under the laws of the Netherlands. Following resolution of the Extraordinary Meeting of Shareholders held in Amsterdam on 30 August 2018 the Company was redomiciled to Cyprus and on 29 November 2018 was registered with the Register of Companies of the Republic of Cyprus as a company continuing in the Republic of Cyprus. As of 31 March 2021 the Company's registered address is 22 Ierotheou Street, Strovolos, Nicosia 2028, Cyprus.

Principal activities of the Group include egg production, distribution, egg products manufacturing and production of related products. The largest shareholder of the Company is Prime One Capital Ltd., a Cyprus based company whose principal activity is the holding of ownership interests in its subsidiary and strategic management.

The Group operates through a number of subsidiaries in Ukraine, Latvia, United Arab Emirates and British Virgin Islands (the list of the subsidiaries is disclosed in Note 7) and has a concentration of its business in Ukraine, where its production facilities are located. Subsidiary companies are registered under the laws of Ukraine, British Virgin Islands, Latvia and United Arab Emirates. The registered address and principal place of business of the subsidiary companies in Ukraine is 34 Petropavlivska Street, Kyiv, Ukraine.

Information on other related party relationships of the Group is provided in Note 23.

The consolidated condensed interim financial statements for the year ended 31 March 2024 were authorized by The Board of Directors on 05 June 2024

2. Basis of preparation

2.1. Statement of compliance and basis of measurement

The consolidated financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS EU" hereinafter).

Some of the companies of the Group that are registered in Ukraine maintain their accounting records under Ukrainian Accounting Standards ("UAS" hereinafter). UAS principles and procedures may differ from those generally accepted under IFRS EU. Accordingly, the consolidated financial statements, which have been prepared from the Group entities' UAS records, reflect adjustments necessary for such financial statements to be presented in accordance with IFRS EU.

The consolidated financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.

Items	Measurement bases
Biological assets	Fair value less costs to sell
Details of the Group accounting policies are included in Note 5.

2.2. Going concern basis

On February 24, 2022, russian troops launched a military invasion of Ukraine, which led to a full-scale war on the territory of the Ukrainian state. Today the war continues and its duration is unknown. Focusing on the continuity and sustainability of its business and maintaining value for all stakeholders, the Group has focused on such key areas as the safety of its employees and the food security of the country, giving priority to the uninterrupted supply of the population of Ukraine with egg products.

Having examined the existing and potential implications of the war for the Ukraine located businesses, the management of the Group have identified several points of specific concern that require careful analysis and assessment. They include, but are not limited to, the following:

• risks related to the personnel safety;
• risk of physical destruction of the production assets;
• risks of disruption of the supply and distribution chains;
• risk of liquidity and limited access to financing;

8

The Group's management continue to fulfill their duties without interruptions.

The Group fully complies with all sanctions rules and regulations regarding Russia and Belarus, including those introduced or published by various countries and organizations. In addition, the Group refrains from contacting individuals or entities on the sanctions list. In this situation, the Group does not expect any impact on the supply chain and payment flow.

The currently known impacts of the War on the Group are:

• the Group's major production facilities are located in Kyiv region, in Fastivskyi and Bilotserkivskyi districts, where no severe hostilities took place. The poultry houses in Vasilkiv and Stavyshche, as well as theegg-processing factory in Vasilkiv, remain physically undamaged and keep operating;
• the supporting facilities accommodating hatchery, poultry houses for parent flock and young layers have not been affected and are being used in accordance with the technological process;
• all Group inventory is in good condition and in safe storage;
• the Group has historically relied on the suppliers located in the central part of Ukraine, which implies efficient logistics and reasonably prompt deliveries to the production sites. Major contractors have not been affected by the hostilities and continue to fulfill their contractual obligations;
• the military action had no critical impact on the local distribution. The main distribution channel for the egg segment is the large national retail chains. Geographically the sales are concentrated in the central part of the country. The share of sales in the most affected regions does not exceed 10%;
• as of date of this report there are no signs of material deterioration of the payment discipline. The Group has sufficient recourses to meet its contractual obligations. Interest bearing liabilities towards the banks areserved timely.

The Group has taken the following actions in response to the current situation:

• optimized utilization of production facilities to meet domestic demand and export orders;
• the group has enough inventory for the production and sale of its products, as well as human resources in the foreseeable future;
• selling, general and administrative and other operating expenses, have been reduced to the minimum required to meet the primary needs of the Group's core business;

As of today, the Group has no liquidity problems.

After the start of a full-scale invasion, the Company was forced to reduce the herd in order to optimize the production and sale of its products. In Today, the Company's management to actively restore herd.

Management has prepared and reviewed, together with the directors, updated financial projections, including cash flow projections, taking into account the most likely and possible negative scenarios for the continued impact of the war on the business.

These forecasts were based on the following key assumptions:

• the further development of the war and the military invasion of Ukraine will allow the use of most of the Group's production capacity;
• the Group will be able to purchase a sufficient amount of agricultural products for poultry feed;
• road logistics routes that exist today will continue to be available;
• egg production for 2024 will be 1.648 million ( 1,573 million forecast in 2023);
• сapital investments for 2024 are planned in the amount of 2.2 million dollars (the fact for 2023 is 1.1 million dollars).

The developments of ongoing military offensive of the Russian Federation including their magnitude, intensity or the potential timing of the cessation of those actions are uncertain. The unpredictability of the further war development and its potentially significant magnitude represent a material uncertainty which may cast significant doubt about the ability of the Group to continue as going concern.

9

Despite the existing uncertainties arising from the future development of the military invasion, the management believes the above described analysis gives grounds to state that during at least 12 months after the date of the present report the Group will be able to realize its assets and discharge its liabilities in the normal course of business, thus going concern assumptionis applied to the financial statements for the three months ended March 31, 2024.

2.3. Functional and presentation currency.

The functional currency of the Company is U.S. dollar (USD). The consolidated financial statements are presented in the Company's functional currency, that is, U.S. dollar (USD). The functional currency of operating subsidiaries in Ukraine is the Ukrainian hryvnia (UAH), in Latvia the euro, in the UAE the US dollar. All values are rounded to the nearest thousand unless otherwise noted.

The USD has been selected as the presentation currency for the Group as: (a) management of the Group manages business risks and exposures, and measures the performance of its businesses in the USD; (b) the USD is widely used as a presentation currency of companies engaged primarily in agricultural; and (c) the USD is the most convenient presentation currency for non- Ukrainian users of these IFRS consolidated financial statements.

The Group translates its results and financial position into the presentation currency as follows:

• assets and liabilities, as well as the issued capital, for each statement of financial position presented (i.e. including comparatives) shall be translated at the closing rate at the date of that statement of financial position;
• income and expenses for each statement of comprehensive income or separate income statement presented (i.e. including comparatives) shall be translated at exchange rates at the dates of the transactions; and
• all resulting exchange differences shall be recognized in other comprehensive income.

During year ended 31 March 2024 and 2023, the exchange rate had`nt significant fluctuations. Consistent with IAS 21, if exchange rates fluctuate significantly, the use of the average rate for a period is inappropriate. Considering significant depreciation of Ukrainian currency against major foreign currencies and seasonality of sales, Management of the Group decided to translate income and expense items at average quarterly rates. On consolidation, the assets and liabilities of the subsidiaries are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average quarterly rates, unless the exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognized in "Other comprehensive income" and accumulated in the "Foreign currency translation reserve".

Relevant exchange rates are presented as follows:

				Average rate for the
1-	2-	31 March	1-st quarter	31 December		1-st quarter
st	st	2024	2024	2023	31 March 2023	2023
		(unaudited)	(unaudited)	(audited)	(unaudited)	(unaudited)
USD/UAH		39,2214	38,1727	37,9824	29,2549	28,5545
EUR/UAH		42,3670	41,4668	42,2079	32,5856	32,2788
USD/PLN		3,9789	3,9909	3,9398	4,1843	4,1269
USD/EUR		0,9267	0,9211	0,9061	0,8998	0,8915
USD/RON		4,6038	4,5784	4,4769	-	-

3. Basis of consolidation

The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31 March 2024. 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:

10