Que en la Cláusula Cuarta de “EL CONVENIO” se dispuso que: los recursos presupuestarios

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the

circumstances.

4.1 CRITICAL ACCOUNTING ESTIMATES

AND ASSUMPTIONS

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below.

a) Fair value of biological assets

The Group’s biological assets are measured at fair value less point-of-sale costs at each balance sheet date (value at December 31, 2013 was EUR 13,946 thousand, value at December 31, 2012 was EUR 14,832 thousand). Due to the specifics of the agricultural production, fair value of some crops and animals cannot be determined reliably in their present status. The biological assets in the countries where the Group operates (Ukraine, Russia and Estonia) are mostly not traded on active market. Therefore the fair value is determined using the alternative methods described in Note 2.8. The use of alternative methods of fair value estimation requires the Group to refer to latest transactions and use price averages, or to use cost as an

approximation of fair value in case when little biological transformation has taken place since initial cost incurrence, e.g. within short time after seeding the crop. Because the carrying value of the biological assets in the plant cultivation is based on cost upon initial recognition, no variability analysis is relevant. Were the actual prices for the biological assets in animal husbandry higher by 10% from

management’s estimates, the net profit would increase by EUR 876 thousand (EUR 870 thousand in 2012), if the prices were lower by 10%, the net profit would decrease by the same amount.

b) Useful lives of property, plant and equipment

The depreciable items of property, plant and equipment amounted to EUR 46,862 thousand as at December 31, 2013 (EUR 53,228 thousand as at

December 31, 2012). The remaining balance includes land, which does not depreciate; and construction in process. Management has estimated useful lifetimes for depreciable property, plant and equipment. However, the actual useful lifetimes can be different than those estimated by the

management. If the average useful lifetime would be 10% longer (shorter) than estimated by the

management, it would decrease (increase) the depreciation charge by EUR 746 thousand (EUR 766 thousand in 2012).

c) Net realisable value and fair value less costs to sell of inventories

The Group has its agricultural produce in inventory as of the year end. The agricultural produce and inventories for commodities trading have been valued to fair value less costs to sell. The fair value of the grain is determined based on the market statistics published by APK-Inform or in case the Group had sold or had sales contracts for its inventory then those actual prices were used. Would the prices been lower than estimated by 10%, the value of the inventories would be EUR 263 thousand less and the equity smaller by the equal amount (in 2012: EUR 1,086 thousand).

d) Fair values of the assets and liabilities analysed in purchase price allocations in accounting for business combinations The Group has estimated the fair values of the assets and liabilities of the subsidiaries acquired in course of the business combinations. Because the subsidiaries have been bought from different counterparties on arm's length conditions, these different transactions provided additional

comparative basis for determining the fair values of assets and liabilities, in addition to the information disclosed in public by the competitors and that provided by consultants.

e) Distinction between the business combinations and asset purchases The Group decides at each purchase of majority share of a company or major group of assets whether the acquisition is a business combination or asset acquisition. The acquisition is classified as business combination when the assets acquired and liabilities assumed constitute a business. For each acquisition, the Group analyses whether it has inputs, processes applied to those inputs and

created outputs in place before acquisition with the main component being processes. Acquisition of a company owning property, plant and equipment or inventories without having in place processes to generate outputs is not considered a business combination.

f) Recoverable values of the non-current assets

In 2013 impairment test was carried out, no requirement for impairment was identified. The value-in-use method was applied to determine the recoverable values of non-current assets in operating clusters (cereals production Ukraine; cereals production Rostov; cereals production Penza; storage services and sales and trading; milk production Estonia, milk production Russia). Cash flows were projected in each cluster, including

revenues, operating expenses, investment requirements and working capital needs. The test demonstrated that the Group’s assets recoverable value is higher than the carrying amount in all of its operating segments. The Group has used in the model its target yields and 3-year average prices for cereals, except for 2014 where lower prices were used. The Group applied 2% long-term growth rate that has been aggregated from the long-term growth perspective in the respective country and estimation of the growth in food prices in relation to other inputs. The discount rates applied were the following: 16% in Ukraine, 11% in Russia and 7% in Estonia.

In 2012 the impairment testing was not necessary as the management of the Group did not identify any indication of impairment.

5. CASH AND CASH EQUIVALENTS

in EUR thousand 31.12.2013 31.12.2012

Cash on hand 19 46

Short-term bank deposits 4,978 8,144

4,997 8,190