Solid progress in 
challenging times
Landkom International PLC 
Annual Report 2008
Landkom International PLC Annual Report 2008
www.landkom.com
IMPORTANT_Printer to adjust spine to fit 4 Landkom International PLC Annual Report 2008
01  Group highlights
02 Our business
04  Chairman’s statement
Business review
06  Chief Executive Officer’s review
10  Chief Financial Officer’s report 
12  Board of Directors
14  Directors’ report
16  Corporate governance statement
17  Remuneration report
19  Statement of Directors’ responsibilities
20  Independent Auditor’s report
21  Consolidated income statement
22  Consolidated balance sheet
23  Consolidated cash flow statement
24  Consolidated statement of changes in equity
25  Notes to the consolidated financial statements
43  Directors, officers and advisers
Landkom is a large scale 
producer of agricultural 
crops, principally oil seed 
rape and wheat, for supply 
to the global markets. We 
intend to become a leading 
agricultural commodity 
producer and to deliver 
profitability to shareholders. 
This report has been printed in the UK, our printers are Environmental 
Management System ISO 14001 accredited and Forest Stewardship 
Council (FSC) chain of custody certified. All inks used are vegetable  
based. This paper is environmentally friendly ECF (elemental chlorine free), 
wood free with a high content of selected pre-consumer recycled material.  
The mill is fully FSC certified. The paper is also completely biodegradable 
and recyclable.
Designed and produced by The College www.thecollege.uk.com
IMPORTANT_Printer to adjust spine to fit Annual Report 2008 Landkom International PLC 01
Group highlights
>   First major harvest completed achieving 
over 45,000 tonnes of grain 
>   30,950 hectares (ha) planted for harvest  
in 2009 – all agricultural inputs applied 
>   Positive crop audit at end of winter  
– crop in good condition with minimal 
winter damage 
>   Land bank restructuring underway to retain 
most profitable elements of 1 15,000 ha 
land bank
>   Significant cost cutting measures introduced 
in Q4 2008 with strong emphasis on cash 
conservation and generation 
>   Substantial investment in machinery, 
vehicles, logistics plus drying and storage 
facilities nearing completion
>   Cash position as at 31 December 2008,  
$4.2 million supplemented by a subsequent 
placing in March 2009 raising gross 
proceeds of $6.8 million
08
Revenue
$10.6m
07 $6.6m
08
Land leased
115,000
07 50,000
08
Net assets
$76m
07 $11 3m
08
Rapeseed and wheat planted
30,950
07 10,000 02 Landkom International PLC Annual Report 2008
The Group operates principally in Western Ukraine in prime, 
fertile lands within close proximity to the border with Poland 
and the EU. The Group’s existing land bank comprises solely 
traditionally high yielding agricultural land which for the most 
part has been allowed to fall derelict, due to lack of capital 
investment, since Ukraine gained independence in 1991.  
In 2008 the Group produced oil seed rape and wheat  
for sale to global markets.
The Group implements Western-style agronomy practices 
using modern agricultural equipment to carry out efficient, 
large scale farming techniques. With greater and more 
efficiently utilised field inputs of chemicals and fertiliser, the 
Group aims to achieve considerably greater yields and  
returns from the land compared to local producers. Increased 
agriculture activity leads to increased levels of employment 
and investment in the regions where we operate benefiting 
local villagers. At year end the Group secured control over  
a land bank of 1 15,000 hectares and had planted more  
than 30,000 hectares for harvest during 2009.
The Group’s farming operations are supervised by 
experienced international farmers but run by local farmers 
with lengthy experience of farming their respective regions. 
Strong relationships are maintained with local and regional 
authorities in the regions in which the Group operates. These 
relationships are key to the ongoing success of the business. 
 
The Group has invested significant capital of $54 million into 
equipment since incorporation in April 2007 and expects  
to see the benefits of this investment over the coming years. 
The Group continues to reduce costs to increase operational 
gearing and exposure to upside potential in the event of rises 
in agricultural commodity prices.
Our business
“The Group implements 
Western-style agronomy 
practices using modern 
agricultural equipment to 
carry out efficient, large 
scale farming techniques.” Annual Report 2008 Landkom International PLC 03
Landkom operates predominantly in Western Ukraine in the 
prime, fertile lands centred within reach of the city of L’viv.  
In addition, the Group has a second operating farming unit  
in Crimea which has similar fertile lands but is more suited  
to irrigated farming.
Ukraine has previously been a major supplier of agricultural 
produce based on deep, fertile, well drained soil. The climate 
in Western Ukraine offers near perfect temperature and 
rainfall characteristics with a typically continental climate  
of long cold winters followed by short springs and hot  
wet summers.
The proximity of the Carpathian mountain ranges increases  
the likelihood of regular rain compared to other regions  
of Ukraine. This is good for crops from a yield perspective  
and it also contributes to reduced risk of winter kill which 
occurs when very cold temperatures occur without adequate 
snow protection.
Our operating regions
П ідсу мо к
Лендком в основному працює на 
Західній Україні та здійснює додаткову 
діяльність в Криму. 
Клімат Західної України має майже 
ідеальні характеристики температури  
та кількості опадів.
Група впроваджує західні методи 
агрономії, застосовуючи сучасне 
сільськогосподарське устаткування 
для забезпечення ефективних 
технік ведення великомасштабних 
сільськогосподарських робіт. 04 Landkom International PLC Annual Report 2008
I am pleased to present the Group’s second annual report  
on the conclusion of its first full year as a quoted company  
on the AIM market of the London Stock Exchange.
Strategy overview
2008 was a year of two very different and unequal parts. 
During the first nine months, we continued to implement the 
original strategy to build the land bank rapidly and plant and 
harvest the first significant hectarage whilst maintaining the 
investment programme. 
The investment has been centred on agriculture and logistics 
equipment, drying and storage facilities, and crop inputs. 
These will enable the Group to carry out its scale farming 
operations into the future. Prior to the arrival of Landkom, 
many of the areas in which we operate had little or no  
useful infrastructure owing to the lack of investment over  
the preceding 20 years.
The long term objective remains unchanged: to become  
a leading oilseed and grain producer, supplying global 
markets. The Group seeks to utilise local land, labour and the 
favourable weather conditions to achieve profitable yields 
using high yield agronomic practices. By returning derelict 
land to production, we create employment, provide tax income 
for local authorities and create strong relationships with local 
communities and regional governments. Our operations are 
environmentally sustainable: all land is historically zoned as 
arable land and our crop rotation plan ensures nutrients in  
the land are replenished for long term use. 
Towards the end of the first harvest, the Board implemented  
a detailed strategic review to develop plans for the next phase 
and also to take account of the rapidly deteriorating market 
conditions and general economic environment. This deterioration 
had significantly reduced agricultural commodity prices, 
agricultural asset values and had a material impact on the 
availability of credit for working capital and trade facilities.
In light of the Group’s first full planting and harvesting 
experience and the economic environment, particularly as the 
demand for land was no longer increasing, the Board shifted 
Landkom’s strategic focus to concentrate on rationalising the 
land bank, focussing on efficiency in land usage, yield per 
hectare and cost controls to maximise profitability and cash- 
flow. During Q4 2008 and into Q1 2009, the Group has 
realigned the variable cost base to the current size of operations 
matching current market sentiments and opportunities. 
Chairman’s statement
Neil Balfour
Chairman 
П ідсу мо к
2008 рік складався з двох дуже різних 
та нееквівалентних періодів, із значним 
інвестуванням у перші дев’ять місяців 
і агресивним скороченням витрат у 
заключні місяці.
Фокус Групи перемістився на 
раціоналізацію земельних ресурсів, з 
покращенням ефективності використання 
землі і максимізацією грошових потоків.
Незважаючи на рекордну кількість 
опадів в основній зоні діяльності Групи, 
команда зібрала врожай понад 45,000 
тонн зерна.
Лендком є достатньо міцним для 
виробничого росту, враховуючи уроки, 
засвоєні протягом останніх 12 місяців.
“The Group is well set to 
carry out managed growth 
and the team is looking 
forward to implementing  
all the lessons learnt from 
the past 12 months...” Annual Report 2008 Landkom International PLC 05
Resources are now strictly applied to either crops or key 
strategic business projects such as storage and drying 
capability. The Board plans to release capital by divesting  
non core activities through joint venture or sale.
Operational highlights
Despite record rainfall in the harvest season and although  
the winter and spring wheat harvest proved to be very 
disappointing in terms of results and quality, the farming team 
brought in over 45,000 tonnes of grain in extremely difficult 
working conditions. A logistics fleet of over 220 lorries, buses, 
cars and tankers ensured the timely movement of people, 
machinery and grain. An agricultural fleet of 65 western 
tractors and 19 western combines is in place executing the 
farming operations. 
After completion of the harvest and as part of the revised 
strategy outlined above, the Group implemented an in-depth 
analysis of the cost and efficiency of all operations designed 
to focus on certain key areas. One such area is strict 
adherence to input application windows to ensure efficient  
use of all inputs. The new streamlined farming team with  
fewer overseas managers has achieved a year on year 
threefold increase in winter planting, whilst at the same time 
ensuring that all application windows are met.
Preparations for the 2009 harvest are significantly further 
advanced compared to last year with all drying and storage 
contracts concluded and with all outsourced combine  
contracts signed. 
Fundraising 
In March 2008, the Group successfully raised approximately 
$22 million of equity through a placing. Since the year  
end the Group raised an additional $6.8 million through  
the issuance of shares. 
Financial results
Our first full year financial statements show a large net loss 
and significant cash expenditure. This reflects our strategic 
focus in the first part of the year to implement a substantial 
investment programme to ensure the Group gained critical 
mass with infrastructure quickly. It is not representative of how 
the business is expected to perform in the future. The substantial 
cost reductions and strategy refocusing programmes initiated 
in the final months of 2008 have created a much leaner 
Landkom. At this early stage of the Group’s development,  
the Board has not recommended the payment of a dividend.
At 31 December 2008, the net cash of the Group was  
$4.2 million.
In order to provide a more accurate and easier to understand 
presentation of the Group’s financial performance, the Board 
has decided to change the accounting reference date to  
31 October, a time when the harvest has been completed  
and a substantial part of the winter crop planted. This will 
bring forward the financial reporting of the harvest results. 
The Group has continued constructive dialogue with the tax 
authorities regarding the VAT receivable. This non-recurring 
receivable relates to the spending on the establishment  
of the business. Although funds have yet to be remitted to the 
Group, after an in depth tax inspection, I can report that our 
2008 tax accounts have been signed off and the Group has 
now been moved onto a special agricultural VAT scheme 
which effectively avoids the requirement to claim VAT back in 
the future. We are pleased with the positive relationship which 
now exists with the tax authorities and continue to work with 
them to achieve the return of the receivable.
Board and people
As in any fast growing business there have been a number  
of Board and senior management changes during the course  
of the year. Warwick Smith resigned from the Board and  
his role as Finance Director in September 2008 and was 
succeeded by Stephen Pickup. Stephen has added a new 
dimension to the Board in driving cost cutting and cash 
management. With the reduction of emphasis on land 
acquisition, Konrad Nowicki has moved from Land Director  
to Managing Director Ukraine. The Executive team was 
supplemented in February 2009 with the important addition of 
Ben Adams to the Board as Farming Director. Non-Executive 
Director, David Mackie, resigned in February 2009. 
Over the year, many local Ukrainian farmers and technicians 
have been trained on our advanced western equipment and 
we will see the benefits of this in the future. The results 
achieved by the team at Landkom are outstanding given the 
operating environment in Ukraine, and I would like to thank 
them for their continued efforts on behalf of the Group.
Since the year end, Richard Spinks, the Chief Executive 
Officer, has announced his decision to step down as Chief 
Executive of Landkom following this year’s harvest and once  
a suitable replacement has been found. Richard has been the 
driving force behind the development of the business over the 
last few years but as it has matured, he believes that Landkom 
would benefit significantly from having a Chief Executive 
Officer with greater experience of delivering second phase 
corporate growth. This combined with a personal wish to build 
a broader portfolio of interests in Ukraine, has led him to take 
this difficult decision and to hand the business on in due course. 
Current trading and outlook
Despite the current economic environment, the Group has 
already established itself as a very substantial operation with 
high quality infrastructure in one of the world’s best regions  
for arable farming. 
The Group continues to reduce its cost base and to bring  
the costs of production down whilst maximising yields. The 
benefits of the new cost structure will become increasingly 
apparent in 2009. In the current volatile environment the 
Group needs to ensure growth is controlled whilst still taking 
advantage of the exciting opportunities that exist in the  
market place. The Group will continue to look at acquisition 
opportunities with complementary businesses but the current 
priority is to focus on the care of the crop in the ground  
and the harvest to generate the cash flow for next year’s 
operations. At this stage, it is too early to forecast the planting 
plans for 2009/2010, but the Board currently expects that  
the amount of hectarage to be planted this autumn will  
not be substantially larger than the current levels.
In April 2009, SAC completed its winter crop audit giving a 
positive opinion stating that the crop had emerged from the 
winter in ‘good condition with good weed control and crop 
health’. Crop damage was lower than last year’s already low 
levels of around 3 per cent of crop impacted. This compares 
favourably to industry norms of around 5 per cent. This is  
a testament to the agronomy and farming skills of our 
operational team and demonstrates the quality of both soils 
and climate in our operational area.
The Group is well set to carry out managed growth and the 
team is looking forward to implementing all the lessons learnt 
from the past 12 months and, weather permitting, delivering  
a successful harvest. 
Neil Balfour
Chairman of the Board
26 May 2009 06 Landkom International PLC Annual Report 2008
Welcome to the second Annual Report which presents the 
considerable progress the Group has made in 2008, including 
the gathering of the first scale harvest, the planting of 30,950 
hectares of winter crop and the further significant investment  
in and development of the Group’s operations in Ukraine.
Land remains the key resource of the business but as the 
dynamics of our markets changed during the year, as outlined 
in the Chairman’s statement, we needed to increase the 
proportion of the land bank being actively farmed. To that 
end, in the latter part of 2008, we ceased land lease 
acquisitions having met the year-end target of 1 15,000 
hectares. In January 2009, we took this a stage further by 
deciding to rationalise further the land bank by focussing on 
the most economic and fertile areas and disposing of some 
parts of the land bank that do not meet our strict revised 
criteria. Since January the group has reduced land under 
control to approximately 91,000 hectares, a successful first 
stage to the land bank restructuring. The Group will now 
embark on measured, controlled growth of planted area  
within the reducing land bank with a strong focus on  
delivering the profit potential of crop currently in the ground.
Operational review
Land bank
Ukraine is world famous for its formerly high agricultural 
output and, although through the 1980’s and 1990’s and early 
part of this decade investment was absent, the deep, rich and 
fertile “black earth” soil has remained. 
The west of Ukraine typically has high levels of precipitation 
which reduces the risk of winter kill over the cold winter 
months through regular snow cover, and provides excellent 
growing conditions in the summer through rainfall combined 
with high temperatures.
Business review
Chief Executive Officer’s 
review
Richards Spinks 
Chief Executive Officer
“The Group made 
considerable progress  
in 2008, including the 
gathering of the first scale 
harvest and the planting  
of 31,000 hectares  
of winter crop.” Annual Report 2008 Landkom International PLC 07
The Group acquires leasehold interests in the land it controls. 
The Group’s cultivated land lies predominantly in the west  
of Ukraine in close proximity to the EU border with Poland.  
In addition, the Group controls land with irrigation potential  
in Crimea.
As land is held through lease agreements, no value is 
attributed on the balance sheet to the value of the lease or  
the value of investment in the land through land preparation. 
Typical leases with individuals have a 15 year term and also 
include the right to buy in the event of regulations changing 
regarding the sale of freehold agricultural land. 
At the year end the Group controlled approximately 1 15,000 
hectares of land. Of this 1 15,000 hectares the average lease 
length was 9 years. The Group has invested in computer 
systems and staff for local authorities to ensure the speedy 
registration of leases. 
 
Regional farm bases are equally important as they provide 
secure areas to store and monitor crop inputs close to where 
the resources are required. During 2008, the Group acquired 
the freehold rights to 13 farm bases in regions where it leases 
land. The provision of these farm bases will provide cost 
savings in future years compared to 2008 when operations 
were run from our main Bily Kamin farm base.
Following the decision to rationalise the land bank, the land 
team has been reduced by around 25 per cent. The remaining 
staff are involved in the administration of land rental payments 
and maintaining local relationships. 
Strategy
Achievements
Establishment of major operations in Ukraine
The Group currently has over 30,000 hectares of crop in the 
ground. Equally importantly, the Group has developed the 
infrastructure to become a truly scale agriculture commodity 
producer. Preparation, in terms of storage and combines for the 
2009 harvest were in place by April 2009, months ahead of 
requirement and the previous year.
Restitution of derelict land back to agriculture use
A majority of the Group’s cropped areas were derelict prior to the 
Group’s investment. The Group has added to hectarages under 
cultivation within Ukrainian agriculture. All land is historically 
zoned for arable agriculture. Investment in the restitution of land  
is investment in future years of operations and the benefits will  
be seen over the coming years. 
Quality of training
The Group has committed considerable resource to ensure its  
staff are trained to the highest possible level on the Group’s 
advanced western equipment. Benefits, in terms of profitability,  
of this training will be realised over the coming years through 
increased efficiencies. The strong team of local Ukrainian farmers 
are working well with a small internationally experienced team  
of farmers and agronomists.
Harvest of 45,000 tonnes
Despite poor weather conditions, the team brought in a first harvest 
of over 45,000 tonnes of crop. The logistical effort was exemplary. 
Efficiencies and lessons learnt in the way the Group carried out the 
2008 harvest will lead to further improvements in future years.
Completion of own storage facility
Over $7 .5 million has already been invested into the Group’s 
storage facility. 20,000 tonnes of storage capacity will be 
operational by harvest together with advanced drying and cleaning 
facilities which have market leading intake rates. Equipment to 
double this storage and drying capacity has already been 
purchased and is on site awaiting installation.
Maintain relationships with authorities
Maintenance of relationships with authorities at all levels is key to 
the future success of the business. The two areas of most importance 
for relationships are with regard to land and tax. The Group still has 
a significant VAT receivable and will continue its efforts to have due 
funds returned.
Controlled growth
Although land planted this winter will not be substantially greater 
than that planted last year, the Group seeks to increase land under 
cultivation and to increase the proportion of land bank which 
generates cash flow. Combined with control of costs, this will 
maximise profitability and cash generation.
Continue to reduce costs to best in class
The Group reviews cost on a yield vs cost equation. Cost can be 
incurred but it must have a disproportionately positive impact on 
yield. Costs have been reduced significantly from the 2007/8 crop 
cycle but considerable further work is required to achieve best in 
class. This will come through cutting unnecessary expenditure and 
improving efficiency of land in use.
 
The future
In addition to its central operation in the west of Ukraine,  
the Group has also established a second, smaller operation  
in Crimea currently with around 5,000 hectares of land, 
3,500 hectares of which is currently planted predominantly 
with wheat. This farming operation is run on a low cost model 
independently from the farms in western Ukraine. Land was 
acquired as a working entity meaning the cost of restitution  
of derelict land has not been required. Tight financial controls 
are already in place. 
Our land in Crimea was formerly irrigated and has 
infrastructure, storage and drying facilities in place including  
a pumping station and piping. This farm is earmarked for 
modernisation of its irrigation infrastructure through the 
provision of new pivots which will allow the Group to supply 
water, fertiliser and chemicals directly onto the land through 
an irrigation system as the crop requires. The Group is 
collaborating with NYSE listed Lindsay Corporation  
on an initial 64 hectares irrigation trial in Crimea.
Crop sowing and maintenance
The Group utilises modern western agricultural equipment, 
quality seed, chemicals and fertilisers and latest agronomy 
techniques. In addition the farming operation employs  
330 local Ukrainian farmers carrying out different roles  
from agronomists, farm managers, vehicle drivers, mechanics  
and labourers. 
30,950 hectares of crop was planted in the autumn of 2008,  
a threefold increase over the same period in 2007 . The 
Group’s 15 agronomists are supplemented by advice from 
Scottish Agricultural College (“SAC”). SAC, with its permanent 
presence in Lviv, provides immediate consultancy advice  
on agronomy and best practice as and when required. 08 Landkom International PLC Annual Report 2008
In order to work the large fields, the Group has invested in  
a large fleet of western agricultural equipment including  
John Deere tractors, Claas Lexion combine harvesters and 
Horsch cultivator seeders. 
Multiple applications of fertiliser and chemical are applied  
on the fields throughout the year within specific windows to 
ensure optimal performance and return on investment. The 
data acquired during the 2008 harvest will enable the Group 
to continue to improve our crop management techniques. 
Weather is the greatest risk to the farming operation since 
weather can squeeze application windows and hinder 
harvesting. Weather risk lies principally around extended 
winter months, unseasonal frosts and heavy rain during the 
summer growing and harvesting. 
2008 Harvest
The west of Ukraine faced extremely demanding conditions 
during the summer of 2008. The heaviest rain in living 
memory fell and caused local disasters in many areas. Heavy 
rain delayed the harvest especially the wheat crop which 
suffered a significant degradation in quality along with much 
of the wheat grown in Ukraine. Additionally our operations 
had to manage the harvest of 4,000 hectares of spring wheat 
which did not prove to be a success. There are no plans to 
plant spring wheat again in the near future. Despite the 
weather, the Group did harvest 19,572 tonnes of high oil 
content OSR and 25,681 tonnes of wheat of different grades. 
 
Commodity prices have proven volatile in 2008. We signed 
an off-take agreement with Glencore for 9,000 tonnes of OSR, 
our principal value crop, at $540 per tonne (ex VAT). The 
Group exercised a 10% overallotment option on the OSR 
off-take contract with Glencore bringing the total to 9,900 
tonnes. This was an attractive price in the Ukrainian market  
in 2008. 
Business review
Chief Executive Officer’s 
review
continued
П ідсу мо к
30,950 га землі були засіяні восени 
2008 року, це в три рази більше, ніж за 
такий же період у 2007 році.
Капітальні витрати 2009 року були 
перенесені на 2008 рік, це означає, що 
у 2009 році непотрібно буде істотних 
капіталовкладень у бізнес.
Очікується, що власні складські 
приміщення Групи, місткістю 20,000 
тонн, будуть вчасно готові для 
цьогорічного врожаю.
Група надає велике значення передачі 
знань від незначної кількості фермерів 
з міжнародним досвідом до місцевих 
фермерів, що працюють на цій землі,  
в деяких випадках протягом десятиліть. Annual Report 2008 Landkom International PLC 09
Capital expenditure
2009 Capital Expenditure was brought forward into 2008 
owing to the shortage of machinery with which the Group  
was faced at the beginning of 2008, prior to the economic 
downturn and the fall in agricultural commodity prices.  
This means that 2008 year end cash is lower than expected 
but 2009 capital expenditure will be insignificant and 
concentrated mostly around the completion of our drying  
and storage facility in Krasne.
In addition to the Group’s investment in the agricultural fleet, 
the Group has also invested in a major service department.  
The Group has implemented strict servicing and maintenance 
schedules to minimise costly downtime during important 
application and harvest windows and also to prolong the  
life of equipment. Maintenance and spares are accounted  
for as costs and once used have no balance sheet value. 
Storage and logistics
There is a lack of modern drying and storage facilities in the 
west of Ukraine. Soviet style facilities tend to have poor intake 
rates for drying which severely limits their capacity to take  
the Group’s grain during the busy harvest period. Investment 
has only commenced with the increase of grain prices in  
recent times. 
The Group has developed strong relationships with silo owners 
in the regions. Contracts have been signed to cover the drying 
and storage of the entirety of this year’s crop. In addition, our 
own drying and storage facility by the rail side at Krasne is 
due to be completed before the harvest this summer. Krasne 
has a drying capacity of 50-100 tonnes per hour depending 
on moisture and storage of 20,000 tonnes. Equipment has 
been purchased and is on site which can double this drying 
and storage capacity.
The contracted and own storage capability is complemented 
by 5 flexible flat storage warehouses which can, in aggregate 
total hold up to 17 ,000 tonnes of grain and are used during 
the harvest as buffers in the event that silos cannot keep up 
with Landkom’s harvest rates. At other times, they are utilised 
for storage of crop inputs and vehicles.
The logistics effort to coordinate farming of 31,000 hectares 
over the Group’s operations is significant. A fleet of 220 
vehicles keeps the operations on the road. During peak times 
additional vehicles are to be contracted in.
Community development
The Group’s programme of regenerating land in Ukraine is 
providing employment and wealth creation for the local 
communities and regions where the Group leases land which 
is especially important during difficult economic conditions. 
We made significant contributions to social programmes in 
partnership with local people in some of Ukraine’s poorest 
villages and regions. In particular we help the very young and 
elderly in the communities where we lease land through 
donations and support to schools, orphanages and hospitals.
Management and employees
As an international business located in Ukraine, the Group 
places increasing importance in the sharing of knowledge 
between a small number of experienced expat farmers and 
local farmers who have been working the local land in some 
cases for decades. We believe that the matching of the wealth 
of knowledge between the two groups is the formula for 
profitable operations.
At the end of December the Group employed 740 people. 
Focus is on bringing the knowledge levels of employees to best 
in class and better utilising the human resource we currently 
have within the Group.
Richard Spinks
Chief Executive Officer
26 May 2009 10 Landkom International PLC Annual Report 2008
Stephen Pickup
Chief Financial Officer
Having taken responsibility for finance in September 2008,  
I have coordinated a new finance team and promoted a 
culture of cash conservation and efficiency throughout the 
business. I look forward to seeing the results of these efforts  
in future results.
Financial performance
Revenue in the 12 months to 31 December 2008, as shown  
in the consolidated income statement, was $10.6 million. 
Around $8.9 million of this sum was from the sales of OSR 
with the remainder being wheat and other crops in smaller 
quantities. At the year-end we had sold all significant stocks  
of OSR but held 17 ,245 tonnes of wheat and other crop in 
storage which is recognised as inventory on the balance sheet 
at fair value less cost to sell. At the date of this document all 
remaining crop in storage had been sold.
These results reflect the investment programme, costs and 
revenues of the 2007/8 crop cycle. The improved financial 
performance, based on improved financial budgeting, tight 
control and the lessons learnt from Landkom’s first scale crop, 
for the 2008/9 crop cycle will be seen in the next set of results.
The biological asset valuation loss in the income statement  
of $1 1.0 million is made up of two elements. The first is the 
estimation of the gain in fair value of the crop in the ground, 
planted in the autumn of 2008 amounting to $68,000. The 
second element of $1 1.1 million represents the difference 
between the value of the biological assets assumed at  
31 December 2007 and the actual value of those assets  
at the date of the harvest, the variance being attributed to 
increased costs, reduced price and lower than anticipated 
yields. The value of the biological asset at the time of harvest 
is a function of yields achieved and market prices at harvest.
The biological asset fair value of $13.4 million in the balance 
sheet at 31 December 2008 represents the expected fair value 
of the 2008/9 crop at harvest less future costs to be incurred, 
discounted back to 31 December 2008 and adjusted for the 
degree of growth achieved by 31 December 2008. 
Direct costs were $36.3 million in the year to 31 December 2008. 
Business review
Chief Financial Officer’s 
report
П ідсу мо к
Нова фінансова команда запровадила 
культуру заощадження коштів і 
ефективності у бізнесі.
Обсяг продажів за 12 місяців до 31 
грудня 2008 року склав $ 10.6 мільйонів.
Система скорочення витрат знизила 
щомісячний фонд оплати праці на  
57 %, а також Група прагне скоротити 
адміністративні витрати щонайменше  
на 30 % протягом 2009 року.
“Cost cutting has been  
a key focus for the 
management during the 
last few months of 2008 
and will have a material 
impact upon the Group’s 
performance in 2009.” Annual Report 2008 Landkom International PLC 11
Included in the $36.3 million are farming costs for the crop 
harvested in 2008 and land preparation costs relating to the 
work carried out in the financial year 2008. Depreciation  
was $4.7 million.
The breakdown of operational expenditure per hectare 
planted is, in the Board’s view, a better presentation of the 
Group’s operational performance. Therefore, a breakdown  
of the Group’s historic operational expenditure for its 2007 
winter planting is outlined below together with management 
targets for the current crop, which was planted in 2008 where 
the majority of inputs have already been applied. The target  
is to reduce the total cost per hectare by 38% as shown in  
the table below.
Total staff costs which are allocated in direct costs and 
administrative expenses, excluding non-cash share based 
payments, totalled $9.9 million. 
Cost cutting has been a key focus for the management during 
the last few months of 2008 and will have a material impact 
upon the Group’s performance in 2009. Staff costs in US$ in 
May 2009 are 57% lower than in May 2008. The Board’s 
aim over time is to have approximately 10 employees per 
1,000 hectares, lower than the current levels of 24 staff per 
1,000 hectares and much lower than the 34 per 1,000 
hectares at its peak in August 2008. The Group aims to 
reduce the 2008 administrative expenses of approximately 
$15.8 million by at least a third in the current financial year, 
having started this process in Q4 2008. 
Pre tax losses, excluding foreign exchange movement and 
share based payments, were $48.7 million. 
During the year, $75.1 million was spent on operations.  
$39.2 million was spent on the purchase of property, plant 
and equipment including farm equipment, expenditure on  
the Krasne drying and storage facility ($7 .5 million) and the  
purchase of 13 freehold farm bases. At the year end the 
Group had total fixed assets of $48.3 million which  
equates to 24 cents per share.
During the course of the year $21.7 million was raised from 
the issuance of new ordinary shares. In March 2009 the 
Group raised an additional $6.8 million for working  
capital purposes.
At 31 December 2008 net cash was $4.2 million.
Tax
VAT has been a well publicised issue facing many companies 
operating in Ukraine. Due to the high level of investment in the 
business, the Group quickly built up a large receivable of over 
$10 million. At the year end, due to fluctuating exchange 
rates, the balance was $9.0 million. The Group has been 
working closely with the tax authorities and after a very 
thorough tax inspection lasting a number of months, has now 
achieved approval of the 2008 tax accounts. This is the first 
step towards an initial partial payment of the Group’s VAT 
receivable. The Group plans to adopt a special agricultural 
VAT programme which effectively allows it to retain VAT 
receipts on sales. 
Accounting reference date
In order to improve timeliness of financial reporting, the Group 
is changing the accounting reference date to 31 October, a 
time when the harvest has been completed and a substantial 
part of the winter crop planted. This will best match the 
financial year to the annual farming cycle as well as bringing 
forward the reporting of the harvest results. The immediate 
impact of this will be a shortened 10 month period for the next 
audited results which will be published in Q1 2010. The results 
will be published, as expected, during September 2009 for 
the six month period ending 30 June 2009.
Hedging/derivatives
As and when appropriate, the Board uses financial instruments 
such as forward off-take contracts or financial derivatives to 
hedge against OSR and wheat prices as part of its pro-active 
and prudent management, but not to speculate.
Foreign exchange
2008 saw the Ukrainian hryvna lose its peg against the  
US dollar. At the year end the hryvna had fallen 79% from  
the year high. A majority of the Group’s revenues and crop 
inputs are correlated to the US$. Local costs such as labour 
and land rent are hryvna denominated and as such US$ costs 
have been reduced. Ukrainian legislation restricts the Group’s 
ability to hedge its exposure to the hryvna and accordingly  
the Group does not hedge its exposure to this foreign  
currency risk.
Stephen Pickup
Chief Financial Officer
26 May 2009
Costs per hectare
US$/ha  2007 Planting 2008 Planting Cost saving
Hectares planted  1 1,430 30,950 –
Cost of inputs (seed, chemical and fertiliser)  434 411 5%
Fuel  206 61 70%
Labour  219 73 67%
Harvesting/storage/drying/transportation  154 92 40%
Equipment maintenance  187 111 40%
Land & other  57 37 36%
Total cost per hectare  1,257 785 38% 12 Landkom International PLC Annual Report 2008
Neil Balfour
Non-Executive Chairman, aged 64
Mr Balfour is an Oxford MA, Barrister at Law and a former 
member of the European Parliament (1979-84). His early 
career was in merchant banking at Baring Brothers & Co 
(1969-74) and European Banking Company Ltd (1974-83) 
where his responsibilities were in international corporate 
governance. Since 1990 Mr Balfour has concentrated his 
activities in central Europe particularly in Poland, having 
created a number of funds in the fields of private equity, 
privatisation and property. He created and served as 
Chairman of KP Konsorcjum, the manager of one of the  
most successful of Poland’s 15 National Investment Funds.  
In 1999 Mr Balfour introduced the Spanish group Acciona  
to Poland’s construction and energy sectors and served for  
two years as President of Mostostal Warszawa SA, Acciona’s 
listed affiliate in Poland. In 2005, he founded Mermaid 
Properties, a private real estate investment and development 
company in Poland, managing assets with development  
values of over $250 million, of which he retains the  
controlling ownership interest. 
Richard Spinks
Chief Executive, aged 42
Mr Spinks is one of the Founders of the Group. He has 
extensive experience in eastern Europe with 15 years spent 
predominantly in Poland, the Baltic States, Russia and Ukraine. 
Previously, after approximately five years in the Royal Air 
Force, Mr Spinks was a director of business development  
at Lycos Bertelsmann GmbH. After founding vavo.com  
(an internet portal aimed at the over 45s), Mr Spinks moved  
to Poland to act as director for central and eastern Europe  
of British Seafood Group (2002-2005), with responsibility  
for frozen food products. Mr Spinks speaks fluent Russian, 
Ukrainian, Polish and Spanish and lives in Ukraine. 
 
Top row
Neil Balfour
Richard Spinks
Konrad Nowicki
Gerald Howarth
Second row
Stephen Pickup
Ben Adams
Laurence Holyoake
Board of Directors Annual Report 2008 Landkom International PLC 13
Stephen Pickup
Chief Financial Officer, aged 34
Mr Pickup has 10 years of experience in investment banking 
and company management, including five years in mergers 
and acquisitions at Deutsche Bank in London and Hong Kong. 
He has lived and worked in emerging markets for much of the 
last 15 years and splits his time between the UK and Ukraine. 
Stephen holds an MBA from INSEAD and speaks Russian, 
Chinese and French. Stephen was appointed to the Board  
in September 2008.
Konrad Nowicki
Managing Director Ukraine, aged 28
Mr Nowicki was educated at Warsaw School of Economics 
with a Master of Arts in Banking and Finance and is one  
of the Founders of the Group. With a background in finance, 
Mr Nowicki has worked with the other Founders on the 
business for three years and has a strong local knowledge.  
Mr Nowicki is fluent in Polish, English and Russian and  
is based in Ukraine.
Ben Adams
Farming Director, aged 38
Mr Adams has 14 years of international operational and 
management experience in farming businesses. He joined 
Landkom in March 2008 and was appointed to the Board  
in February 2009. Previously, Ben worked as Group Project 
Manager and Senior Site Manager for Gilmac in Australia 
and prior to that held senior farming positions at Almarai  
in Saudi Arabia. Ben has a National Certificate in Agriculture 
from Gurteen Agricultural College in Ireland, and certificates 
in Farm Management and Farm Husbandry from Cork Farm 
Centre. Mr Adams is based in Ukraine.
Gerald Howarth
Non-Executive Director, aged 61
After graduating from Southampton University (BA, English), 
Mr Howarth worked in international banking in the City 
of London, latterly for Standard Chartered Bank, where 
he was responsible for syndicated lending, before being 
elected to Parliament as the MP for Cannock & Burntwood, 
Staffordshire, in 1983. He was Parliamentary Private Secretary 
to the Energy Minister in 1987-1989 and to The Rt Hon 
Margaret Thatcher MP in 1991-1992. In 1992 he lost his seat 
and established a public affairs company with Lord Parkinson 
before returning to Parliament as the MP for Aldershot in 1997 . 
He served on the Home Affairs Select Committee 1997-2001 
and on the Defence Select Committee 2001-2003. Since 
2002 Mr Howarth has served as Shadow Defence Minister 
with responsibility for defence procurement and the RAF.  
He has also acted as a consultant to the coal producers’ 
organisation, Coalpro, and is currently an advisor to the 
Consumer Credit Association.
Laurence Holyoake
Non-Executive Director, aged 41
Mr Holyoake has over 15 years of banking and investment 
experience in Asia, north America and Europe. He worked 
initially with Barclays in London and then the leading global 
inter broker dealers CMTS and Inter Capital in Hong Kong.  
He co-founded the British Seafood Group in 1995 and  
in 2001 became Group Managing Director. From 2005  
to 2007 Laurence was instrumental in re-energising and 
significantly building BGC Partners’ US interest rate  
derivative market business. 14 Landkom International PLC Annual Report 2008
Directors’ report
The Directors submit their report and the consolidated financial 
statements of Landkom International Plc for the year ended  
31 December 2008. 
Landkom International Plc is a public listed company, 
incorporated and domiciled in the Isle of Man and quoted  
on AIM. 
Principal activities
The principal activities during the year were the acquisition  
of land leases in Ukraine for the planting and distribution  
of arable crops for the bio fuel and food markets. 
Results
The Group trading loss for the year after taxation was 
$55,976,000 (2007: $1,324,000).
Dividend
The Directors do not recommend payment of a dividend.
Business review and future developments
This is discussed in the Chairman’s statement and  
Chief Executive Officer’s review.
Directors
The following Directors have held office since 1 January 2008:
  Date of appointment
Richard Spinks
Keith Dawson (resigned 28 April 2008) 
Neil Balfour
David Mackie (resigned 10 February 2009) 
Gerald Howarth  
Konrad Nowicki  
Warwick Smith (resigned 3 September 2008) 8 April 2008
Laurence Holyoake  8 April 2008
Stephen Pickup   3 September 2008
Ben Adams  10 February 2009
Share capital
Full details of the authorised and issued share capital of the 
Company, including movements in the period, are set out  
in note 21 to the financial statements. 
The ordinary issued shares of Landkom International Plc  
were increased by 40,000,000 shares in March 2009.  
The additional shares were issued by way of a placing  
at 12p per share.
Substantial shareholdings
At 31 March 2009 the Company had been notified of the 
following interests amounting to 3% or more of the Company’s 
issued share capital:
Hunter Hall Investment Management Ltd   18.1%
Odey Asset Management LLP    8.5%
Invesco    8.6%
UBS Investment Bank    8.3%
Glenn Tempany    5.5%
Konrad Nowicki    5.3%
Richard Spinks    4.8%
Employees
The Group’s employees are its most important asset. Our policy 
is to employ the best people, irrespective of race, gender, 
nationality, disability or sexual preferences. Consultation with 
employees or their representatives occurs at all levels, with  
the aim of ensuring their views are taken into account when 
decisions are made that are likely to affect their interests. 
Financial risk management
Information in respect of the financial risk management 
objectives and policies of the Group, including the policy  
for hedging each major type of forecasted transactions for 
which hedge accounting is used and the exposure of the 
Group to market risk, credit risk, liquidity risk and cash flow 
risk is contained in note 3 to the financial statements. 
Research and development
The Group has retained the services of SAC Commercial 
Limited to provide agronomy crop science services. 
Development work has also been ongoing in the development 
of mapping facilities to accurately analyse the Group’s land 
bank, plan farming operations and implement farming plans.
Disabled employees
Applications for employment by disabled persons are given  
full and fair consideration for all vacancies, having regard  
to their particular aptitudes and abilities. In the event that an 
employee becomes disabled, every effort is made to retrain 
them in order that their employment with the Group may 
continue. Landkom employs a number of disabled persons in 
Ukraine in compliance with Ukraine employment regulations. 
On 31 December 2008 the Group employed 1 1 disabled 
persons (2007: 8 disabled persons). 
Environmental policy
Maintaining and improving the quality of the environment  
in which we live is an important concern for the Group, our 
staff, customers, suppliers, sub-contractors and communities  
in which we operate. We have adopted high standards of 
environmental practices and aim to minimise our impact  
on the environment wherever possible.  Annual Report 2008 Landkom International PLC 15
Health and safety
The Group recognises the importance of maintaining high 
standards of health and safety for everyone working within  
our business and also for anyone who may be affected by  
our businesses. Health and Safety is of particular importance 
to our employees. Consequently, each of our Farm Managers 
has appointed Health and Safety workers. 
Post balance sheet events
Post balance sheet events are described in note 35 to the 
financial statements.
Third party indemnity provision for Directors
Qualifying third party indemnity provision was in place for  
the benefit of all Directors of the Company for the year. 
Auditor
The Directors have resolved that Baker Tilly UK Audit LLP  
be re-appointed auditor. Baker Tilly UK Audit LLP has indicated 
its willingness to continue in office. 
Statement of disclosure of information to auditors
The Directors who were in office on the date of approval  
of the financial statements have confirmed that, as far as  
they are aware, there is no relevant audit information of  
which the auditors are unaware. Each of the Directors have 
confirmed that they have taken all steps that they ought to  
have taken as Directors in order to make themselves aware  
of any relevant audit information and to establish that it has 
been communicated to the Auditor. 
Electronic communication
The maintenance and integrity of the Landkom International Plc 
website is the responsibility of the Directors; the work carried 
out by the Auditors does not involve consideration of these 
matters and accordingly, the Auditors accept no responsibility 
for any changes that may have occurred to the financial 
statements since they were initially presented on the website. 
The Company’s website is maintained in compliance with  
AIM Rule 26.
Legislation in the United Kingdom governing the preparation 
and dissemination of financial statements may differ from 
legislation in other jurisdictions. 
By order of the Board
Stephen Pickup
Chief Financial Officer
26 May 2009 16 Landkom International PLC Annual Report 2008
Corporate governance statement
The policy of the Board is to manage the affairs of the Group 
having regard to the principles of the Combined Code on 
Corporate Governance best practice. This statement describes 
how the principles of corporate governance are applied to the 
Group given the Group’s size and the stage of development  
of the Group and its listing on the Alternative Investment Market. 
The Board of Directors
The Group is led by the Board comprising four Executive 
Directors and two Non-Executive Directors. 
Board meetings are held on a regular basis and no decision  
of any consequence is made other than by the Directors.  
All Directors participate in the key areas of decision making. 
The Board receives timely information on all material aspects 
about the Group to enable it to discharge its duties. 
All Directors submit themselves for re-election at the Annual 
General Meeting. 
Directors remuneration
The Company has established a Remuneration Committee  
the members of which and the activities of the committee  
are detailed in the Remuneration Report. 
Details of the remuneration of each Director are set out  
in the Remuneration Report. 
Accountability and audit
The Company has established an Audit Committee. The 
Chairman and Non-Executive Directors are responsible for 
reviewing the scope and results of the audit, its cost-
effectiveness and the independence and objectivity of the 
Auditors. A formal Statement of Independence is received  
from the external Auditor each year. 
Internal controls
The Board acknowledges its responsibility for establishing  
and monitoring the Group’s systems of internal control. 
Although no system of internal control can provide absolute 
assurance against material misstatement or loss, the Group’s 
systems are designed to provide the Directors with reasonable 
assurance that problems are identified on a timely basis  
and dealt with appropriately. 
The key procedures that have been established and which  
are designed to provide effective control are as follows:
•  Management structure – The Board meets regularly to  
discuss all issues affecting the Group
•  Investment appraisal – The Group has a clearly defined 
framework for investment appraisal and approval is  
required by the Board, where appropriate 
The Board regularly reviews the effectiveness of the systems  
of internal control and considers the major business risks and 
the control environment. No significant control deficiencies 
have come to light during the year and no weaknesses in 
internal financial control have resulted in any material losses, 
contingencies or uncertainties, which would require disclosure 
as recommended by the guidance for Directors on reporting  
on internal financial control. 
The Board considers that in light of the control environment 
described above, there is no current requirement for a separate 
internal audit function. The Board will continue to review the 
need to put in place an internal audit function.
Relations with shareholders
The Chairman is the Company’s principal spokesperson  
with investors, fund managers, the press and other interested 
parties. At the Annual General Meeting, private investors  
are given the opportunity to question the Board.
Going concern
Having made appropriate enquiries and having examined  
the major areas which could affect the Group’s financial 
position, the Directors are satisfied that the Group has 
adequate resources to continue in operation until forecasted 
harvest revenues are generated in the summer of 2009. 
Subsequent continued operations are reliant upon the harvest 
of biological assets which could be damaged or destroyed by 
unforeseen circumstances such as adverse weather conditions. 
The Directors are satisfied that the condition of the biological 
asset at the date of signing of these financial statements is 
sufficient to adopt the Going Concern basis in the preparation 
of the financial statements.  Annual Report 2008 Landkom International PLC 17
The Group has a Remuneration Committee consisting of the 
Chairman and the Non-Executive Directors. 
The Chairman and Non-Executive Directors are responsible  
for the consideration and approval of the terms of service, 
remuneration, bonuses, share options and other benefits  
of the other Directors. All decisions are made after giving  
due consideration to the size and nature of the business and 
the importance of retaining and motivating management. 
The Committee will meet at least once a year and at other 
times as appropriate. 
Directors‘ contracts and letters of appointment
  Date  Notice
  of contract period
Executive Directors: 
Richard Spinks 1 Sept 2007 12 months
Konrad Nowicki 1 Sept 2007 6 months
Stephen Pickup 1 June 2008 6 months
Ben Adams 16 May 2008 6 months
Warwick Smith 
 (resigned 3 Sept 2008) 8 April 2008 12 months
Keith Dawson 
 (resigned 28 April 2008) 1 Sept 2007 6 months
Non-Executive Directors:
Neil Balfour 15 Oct 2007 3 months
David Mackie 
 (resigned 10 February 2009) 15 Oct 2007 3 months
Gerald Howarth 15 Oct 2007 3 months
Laurence Holyoake 8 Feb 2008 3 months
Directors’ emoluments
The aggregate emoluments of the Directors of the Group,  
who served during the year, were as follows:
  
 Salaries  Bonuses Benefits Total
 $000 $000 $000 $000
 2008 2008 2008 2008
Executive Directors:     
Richard Spinks* 286 – 5 291
Konrad Nowicki* 239 – – 239
Keith Dawson (resigned) 49 – – 49
Warwick Smith (resigned) 82 – – 82
Stephen Pickup 89 – 1 90
  745 – 6 751
Non-Executive Directors:
Neil Balfour 78 – – 78
David Mackie (resigned) 56 – – 56
Gerald Howarth 56 – – 56
Laurence Holyoake 46 – 9 55
  236 – 9 245
Total Directors 
 emoluments 981 – 15 996
* Richard Spinks and Konrad Nowicki elected to defer  
50% of their salaries for the period from November 2008 to 
September 2009 to be paid after the completion of harvesting 
operations in 2009.
During the year compensation for loss of office was paid  
to Keith Dawson and Warwick Smith amounting to $74,000 
and $199,000 respectively. 
Emoluments for the Directors for the 8 month period ending  
31 December 2007:
 
 Salaries  Bonuses Benefits Total
 $000 $000 $000 $000
 2007 2007 2007 2007
Executive Directors:     
Gregory Coates (resigned) – – – –
Heather Kent (resigned) – – – –
Richard Spinks 141 – – 141
Konrad Nowicki 42 – – 42
Keith Dawson (resigned) 51 – – 51
Glen Tempany (resigned) 91 – – 91
David Guest (resigned) 88 – – 88
  413 – – 413
Non-Executive Directors:     
Neil Balfour 19 – – 19
David Mackie 13 – – 13
Gerald Howarth 13 – – 13
  45 – – 45
Total Directors  
emoluments 458 – – 458
Remuneration report 18 Landkom International PLC Annual Report 2008
Directors’ interest in share options
Director’s interests in share options of the Company as at 31 December 2008 were as follows:
 Balance at  Granted Lapsed/ Balance at  Date from
 31 Dec  during cancelled 31 Dec Date of which Expiry Exercise
Name of participant 2007  year  during year 2008 grant exercisable  date price
Keith Dawson 630,695 – – 630,695 22 Nov 07 22 Nov 08 22 Nov 12 52p
 630,695 – 630,695 – 22 Nov 07 22 Nov 09 22 Nov 13 65p
 630,695 – 630,695 – 22 Nov 07 22 Nov 10 22 Nov 14 78p
Neil Balfour 567 ,625 – – 567 ,625 22 Nov 07 22 Nov 08 22 Nov 12 52p
 567 ,625 – – 567 ,625 22 Nov 07 22 Nov 09 22 Nov 13 65p
 567 ,625 – – 567 ,625 22 Nov 07 22 Nov 10 22 Nov 14 78p
David Mackie 409,952 – – 409,952 22 Nov 07 22 Nov 08 22 Nov 12 52p
 409,952 – – 409,952 22 Nov 07 22 Nov 09 22 Nov 13 65p
 409,952 – – 409,952 22 Nov 07 22 Nov 10 22 Nov 14 78p
Gerald Howarth 409,952 – – 409,952 22 Nov 07 22 Nov 08 22 Nov 12 52p
 409,952 – – 409,952 22 Nov 07 22 Nov 09 22 Nov 13 65p
 409,952 – – 409,952 22 Nov 07 22 Nov 10 22 Nov 14 78p
Laurence Holyoake – 409,952 – 409,952 10 Jun 08 10 Jun 09 10 Jun 14 86p
 – 409,952 – 409,952 10 Jun 08 10 Jun 10 10 Jun 15 108p
 – 409,952 – 409,952 10 Jun 08 10 Jun 1 1 10 Jun 16 129p
Warwick Smith 630,695 – – 630,695 22 Nov 07 22 Nov 08 22 Nov 12 52p
 630,695 – – 630,695 22 Nov 07 22 Nov 09 22 Nov 13 65p
 630,695 – – 630,695 22 Nov 07 22 Nov 10 22 Nov 14 78p
Stephen Pickup – 666,667 – 666,667 29 Sep 08 29 Sep 09 29 Sep 14 30p
 – 666,667 – 666,667 29 Sep 08 29 Sep 10 29 Sep 15 30p
 – 666,667 – 666,667 29 Sep 08 29 Sep 1 1 29 Sep 16 30p
Konrad Nowicki – 250,000 – 250,000 29 Sep 08 29 Sep 09 29 Sep 14 30p
 – 250,000 – 250,000 29 Sep 08 29 Sep 10 29 Sep 15 30p
 – 250,000 – 250,000 29 Sep 08 29 Sep 1 1 29 Sep 16 30p
Richard Spinks – 333,333 – 333,333 29 Sep 08 29 Sep 09 29 Sep 14 30p
 – 333,333 – 333,333 29 Sep 08 29 Sep 10 29 Sep 15 30p
 – 333,333 – 333,333 29 Sep 08 29 Sep 1 1 29 Sep 16 30p
 7 ,946,757 4,979,856 1,261,390 1 1,665,223 
The closing price of Landkom International Plc shares at 31 December 2008 was 1 1.25p. During the period the Company’s 
ordinary shares ranged from 9p to 105p. In addition to the share options granted to the Directors the following have been 
granted to other employees within the Group.
 Balance at  Granted Lapsed/ Balance at  Date from
 31 Dec  during cancelled 31 Dec Date of which Expiry Exercise
 2007  year  during year 2008 grant exercisable  date price
 1,198,323 – 263,746 934,577 22 Nov 07 22 Nov 08 22 Nov 12 52p
 1,198,324 – 693,766 504,558 22 Nov 07 22 Nov 09 22 Nov 13 65p
 1,198,324 – 693,766 504,558 22 Nov 07 22 Nov 10 22 Nov 14 78p
 – 315,347 – 315,347 08 Feb 08 08 Feb 09 08 Feb 14 80p
 – 315,347 – 315,347 08 Feb 08 08 Feb 10 08 Feb 15 100p
 – 315,348 – 315,348 08 Feb 08 08 Feb 1 1 08 Feb 16 120p
 – 1,400,000 – 1,400,000 29 Sep 08 29 Sep 09 29 Sep 14 30p
 – 1,400,000 – 1,400,000 29 Sep 08 29 Sep 10 29 Sep 15 30p
 – 1,400,000 – 1,400,000 29 Sep 08 29 Sep 1 1 29 Sep 16 30p
 3,594,971 5,146,042 1,651,278 7 ,089,735 
The Company’s Remuneration Committee is responsible for the administration of the share option scheme. The rules of the 
scheme are the same for both Directors and employees. The share options granted will vest in three tranches on the anniversary 
of the grant for each of the three years ending after the date of the grant.
The total share options in issue of 18,754,958 represented 9.4% of the issued share capital of 200,008,935 shares at  
31 December 2008. 
On behalf of the Board
Gerald Howarth
Chairman of the Remuneration Committee
26 May 2009   
Remuneration report
continued Annual Report 2008 Landkom International PLC 19
Statement of Directors’ responsibilities
The Directors are responsible for preparing the annual report 
and financial statements in accordance with applicable laws 
and regulations.
The Directors are required to prepare group financial 
statements in accordance with International Financial Reporting 
Standards (‘IFRS’) as adopted by the European Union.
The group financial statements are required by IFRS as 
adopted by the European Union to present fairly the financial 
position and performance of the Group; applicable law 
provides in relation to the financial statements that references 
to the financial statements giving a true and fair view are 
references to their achieving a fair presentation.
The Directors must not approve the financial statements unless 
they are satisfied that they give a true and fair view of the state 
of the affairs of the group. 
In preparing the group financial statements, the Directors are 
required to:
a.  select suitable accounting policies and then apply them 
consistently;
b.  make judgements and estimates that are reasonable and 
prudent;
c.  state whether they have been prepared in accordance with 
IFRS adopted by the European Union subject to any material 
departures disclosed and explained in the Group Financial 
Statements; and
d.  prepare the group financial statements on the Going 
Concern basis unless it is inappropriate to presume that  
the Group will continue in business.
The Directors are responsible for keeping proper accounting 
records, which disclose with reasonable accuracy at any time 
the financial position of the Group. They are also responsible 
for safeguarding the assets of the Group and hence for taking 
reasonable steps for the prevention and detection of fraud  
and other irregularities.
The Directors are also responsible for the maintenance and 
integrity of the corporate and financial information included  
on the Group’s website.
  20 Landkom International PLC Annual Report 2008
Independent Auditor’s report to members  
of Landkom International PLC
We have audited the non statutory group financial statements 
of Landkom International Plc for the year ended 31 December 
2008 which comprise the consolidated income statement,  
the consolidated balance sheet, the consolidated cash flow 
statement, the consolidated statement of changes in equity and 
the related notes. These non statutory financial statements have 
been prepared under the accounting policies set out therein.
This report is made solely to the company’s members, as  
a body in accordance with our engagement letter with the 
company dated 27 February 2008. Our audit work has been 
undertaken so that we might state to the company’s members 
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 company and the company’s members as  
a body, for our audit work, for this report, or for the opinions 
we have formed.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report, 
and the group financial statements in accordance with 
applicable law and International Financial Reporting 
Standards (IFRSs) as adopted by the European Union (“EU”) 
are set out in the Statement of Directors’ Responsibilities. 
Our responsibility is to audit the non statutory financial 
statements in accordance with relevant legal and regulatory 
requirements and International Standards on Auditing (UK  
and Ireland). 
We report to you our opinion as to whether the non statutory 
financial statements give a true and fair view. We also report 
to you whether in our opinion the information given in the 
Directors’ Report is consistent with the financial statements.  
The information given in the Directors’ Report includes that 
specific information presented in the Chairman and Chief 
Executive’s Statement that is cross referenced from the Business 
Review section of the Directors’ Report.
In addition we report to you if, in our opinion, the company  
has not kept proper accounting records, if we have not 
received all the information and explanations we require  
for our audit, or if information specified by law regarding 
directors’ remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report  
and consider whether it is consistent with the audited non 
statutory financial statements. The other information comprises 
only the Directors’ Report, Chairman and Chief Executive’s 
Statement, Remuneration Report and the Corporate Governance 
Statement. We consider the implications for our report if we 
become aware of any apparent misstatements or material 
inconsistencies with the non statutory financial statements.  
Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International 
Standards on Auditing (UK and Ireland) issued by the Auditing 
Practices Board. An audit includes examination, on a test 
basis, of evidence relevant to the amounts and disclosures  
in the non statutory financial statements. It also includes an 
assessment of the significant estimates and judgements made 
by the directors in the preparation of the non statutory financial 
statements, and of whether the accounting policies are 
appropriate to the group’s circumstances, consistently applied 
and adequately disclosed.
We planned and performed our audit so as to obtain all the 
information and explanations which we considered necessary 
in order to provide us with sufficient evidence to give reasonable 
assurance that the non statutory financial statements are free 
from material misstatement, whether caused by fraud or other 
irregularity or error. In forming our opinion we also evaluated 
the overall adequacy of the presentation of information in the 
non statutory financial statements.
Opinion
In our opinion:
•  the group non statutory financial statements give a true  
and fair view, in accordance with IFRSs as adopted by the 
European Union, of the state of the group’s affairs as  
at 31 December 2008 and of its loss for the year then 
ended; and
•  the information given in the Directors’ Report is consistent 
with the non statutory financial statements. 
Emphasis of matter – Going concern
In forming our opinion on the financial statements, which  
is not qualified, we have considered the adequacy of the 
disclosures made in note 2.1 to the non statutory financial 
statements relating to the group’s ability to continue as a going 
concern. The group incurred a net loss of $55,976,000 during 
the year ended 31 December 2008 and recorded net cash 
outflows of $81,853,000. As explained in note 2.1, there is 
uncertainty regarding the cash flows that will arise from the 
2009 harvest. This condition indicates the existence of a 
material uncertainty which casts significant doubt about the 
group’s ability to continue as a going concern. The financial 
statements do not include adjustments that would result if the 
group was unable to continue as a going concern.
Baker Tilly UK Audit LLP
Registered Auditor
Chartered Accountants
2 Bloomsbury Street
London WC1B 3ST Annual Report 2008 Landkom International PLC 21
Consolidated income statement
for the year ended 31 December 2008
      Year ended  8 months ended 
      31 December  31 December
      2008  2007
  Note $000  $000
Continuing operations     
Revenue   10,645 1,567
(Losses)/gains arising from changes in value of biological assets  16 (11,036) 5,063
     
Direct costs  6 (36,318) (2,277)
Gross (loss)/profit    (36,709) 4,353
 
Distribution costs   (34) (144)
Administrative expenses   (15,750) (5,836)
Net foreign exchange losses   (4,578) (286)
    
Operating loss  7 (57,07 1) (1,913)
    
Finance income  8 1,875 606
Finance costs  9 (347) (17)
Share of loss from associate  14 (197) –
Loss before income tax   (55,740) (1,324)
Income tax expense  10 (236) –
Loss for period   (55,976) (1,324)
     
Attributable to:     
Equity holders of the Company   (55,748) (1,324)
Minority interests   (228) –
    (55,976) (1,324)
    
Loss per share (expressed in US$ per share)    
Basic loss per ordinary share  1 1 (28.2)c (1.3)c
Restated in pence per share    (19.5)p (0.6)p
Fully diluted loss per ordinary share  1 1 (28.2)c (1.3)c
Restated in pence per share   (19.5)p (0.6)p
      22 Landkom International PLC Annual Report 2008
Consolidated balance sheet
as at 31 December 2008
      2008 2007
  Note  $000  $000
Assets     
 
Non-current assets     
Property, plant & equipment  12 48,337 13,346
Intangible assets  13 280 169
Investment in associates  14 95 –
Available for sale investments  15 11 7 –
    48,829 13,515
    
Current assets     
Biological assets  16 13,358 7,302
Inventories  17 7,267 1,271
Trade and other receivables  18 1 1,124 7,070
Derivative financial instruments  19 – 34
Cash and cash equivalents  20 4,230 87,646
    35,979 103,323
Total assets   84,808 11 6,838
    
Equity     
Capital and reserves attributable to equity holders of the Company  
Share capital  21 411 389
Share premium  22 137,8 14 11 6, 998
Retained loss   (57,072) (1,324)
Share based payments reserve  23 2,754 335
Foreign exchange reserve  24 (7,894) (3,315)
Total equity attributable to equity holders   76,013 11 3,083
Minority interest   77 –
Total equity   76,090 11 3,083
    
Liabilities     
Non-current liabilities     
Other financial liabilities  25 156 125
    156 125
     
Current liabilities     
Trade and other payables  26 7,7 16 3,567
Other financial liabilities  25 846 63
    8,562 3,630
Total liabilities   8,718 3,755
Total liabilities and Shareholders’ equity   84,808 11 6,838
     
The financial statements on pages 21 to 42 were approved by the Board of Directors and authorised for issue on 
26 May 2009 and signed on its behalf by:
Richard Spinks Stephen Pickup
Chief Executive Officer Chief Financial Officer
  Annual Report 2008 Landkom International PLC 23
      Year ended  8 months ended
      31 December  31 December 
      2008 2007
  Note $000 $000
Cash flows from operating activities     
Loss before tax   (55,740) (1,324)
Adjustment for:     
 Depreciation and amortisation   4,916 487
 Loss on disposal of property, plant and equipment   127 –
 Share based payment charge  23 2,419 335
 Provision on receivable   153 –
 Share of loss in associate   197 –
 Effect of foreign exchange variances   (2,916) –
Fair value adjustment recognised in the income statement:  
 Biological asset   11,036 (5,063)
 Commodity derivatives   34 (34)
Non-operating activity income/expense recognised in income statement:  
 Finance income   8 (1,875) (606)
 Finance costs   9 176 17
 Gain/(loss) on realisation of currency options   42 –
Movements in working capital:     
 Increase in inventories   (5,996) (1,271)
 Increase in receivables   (3,856) (7,070)
 Increase in trade and other payables   4,148 3,755
Income tax expense   (236) –
Net additions to biological assets   (1 7,094) (2,239)
Net cash used in operations   (64,465) (13,013)
 
Cash flows from investing activities     
Purchase of property, plant and equipment   (39,227) (14,31 7)
Purchase of intangible assets   (201) (170)
Interest received   1,875 606
Loss on realisation of currency options   (42) –
Loans to associated companies   (172) –
Investment in associated companies   (293) –
Purchase of investments available for sale   (11 7) –
Net cash used in investing activities   (38,11 7) (13,881)
 
Cash flows from financing activities     
Proceeds from issue of ordinary shares   21,698 125,315
Payment of transaction costs   (860) (7, 928)
Finance costs   (176) (17)
Minority interest investment into Group   127 –
Net cash received from financing activities   20,789 1 1 7,3 70
      
Net (decrease)/increase in cash and cash equivalents   (81,853) 90,476
Cash & cash equivalent at beginning of period   87,646 –
Effect of foreign exchange variances   (1,563) (2,830)
Cash and cash equivalents at end of period  20 4,230 87,646
Consolidated cash flow statement
for the year ended 31 December 2008 24 Landkom International PLC Annual Report 2008
Consolidated statement of changes in equity
for the year ended 31 December 2008
       Total equity 
    Foreign  Share based  attributable to 
  Share  Share exchange payments Retained shareholders Minority Total
  capital premium reserve reserve earnings of parent interest equity
Balance at 10 April 2007 – – – – – – – –
Loss for the period – – – – (1,324) (1,324) – (1,324)
Currency translation differences – – (3,315) – – (3,315) – (3,315)
          
Total recognised income and expense – – (3,315) – (1,324) (4,639) – (4,639)
Proceeds from shares issued 389 – – – – 389 – 389
Premium from shares issued – 124,926 – – – 124,926 – 124,926
Share based payments charge – – – 335 – 335 – 335
Share issue costs – (7 ,928) – – – (7 ,928) – (7 ,928)
        
Balance at 31 December 2007 389 1 16,998 (3,315) 335 (1,324) 1 13,083 – 1 13,083 
Loss for the period – – – – (55,748) (55,748) (228) (55,976)
Currency translation differences – – (4,579) – – (4,579) – (4,579)
        
Total recognised income and expense – – (4,579) – (55,748) (60,327) (228) (60,555)
Minority interest on asset acquisition – – – – – – 25 25
Minority interest share  
 of shares issued in subsidiary – – – – – – 280 280
Proceeds from shares issued 22 – – – – 22 – 22
Premium from shares issued – 21,676 – – – 21,676 – 21,676
Share based payments charge – – – 2,419 – 2,419 – 2,419
Share issue costs – (860) – – – (860) – (860)
Balance at 31 December 2008 41 1 137 ,814 (7 ,894) 2,754 (57 ,072) 76,013 77 76,090 Annual Report 2008 Landkom International PLC 25
Notes to the consolidated financial statements
1. General information
1.1 Organisation and operations
Landkom International Plc (‘the Company’) is a public limited 
liability company and was incorporated in the Isle of Man  
on 10 April 2007 . Its Registered Office is at 1 1 Hope Street, 
Douglas and its principal place of business is 45 Promyslovo, 
Lviv, Ukraine. The principal activities of the Company and its 
subsidiaries (together ‘the Group’) are the acquisition of land 
leases in Ukraine for the growing and distribution of arable 
crops for the biofuel and food markets. 
1.2 Ukrainian business environment
Ukraine is experiencing political and economic change with 
the consequence that operations in Ukraine involve risks that 
are common in emerging markets. These consolidated financial 
statements reflect Management’s current assessment of the 
possible impact on the operations and the financial position  
of the Group.
2. Significant accounting policies
The principal accounting policies applied in the preparation  
of these consolidated financial statements are set out  
below. These policies have been consistently applied unless 
otherwise stated.
2.1 Basis of preparation
The consolidated financial statements of Landkom International 
Plc have been prepared in accordance with International 
Financial Reporting Standards (‘IFRS’) as adopted by the 
European Union. The consolidated financial statements have 
been prepared on the historical cost basis except for derivative 
financial instruments measured at fair value and biological 
assets measured at fair value less point of sale costs. 
The financial statements have been prepared on the Going 
Concern basis. Management have carried out a detailed 
analysis of the Group’s cash requirements until the point at 
which harvest revenues are expected to be realised, and 
believe the Group has sufficient cash resources to continue  
as a Going Concern. Management have a full expectation  
that revenues from crops harvested during 2009 will be 
sufficient to allow the Group to continue as a Going Concern 
for the foreseeable future. In making this assessment, 
management have also considered the likely timing of the  
VAT refund due to the Group from the Ukrainian tax 
authorities. As stated in note 18 it is expected that the full 
amount of $8,901,000 will be receivable within a year,  
either by cash reimbursement or through offset against output 
VAT. Should the Group be affected by destruction or severe 
damage to the crop through adverse weather, natural disaster 
or any other means, then the Going Concern basis may not  
be appropriate. 
The preparation of financial statements in conformity with  
IFRS requires the use of certain critical accounting estimates.  
It also requires Management to exercise its judgement in the 
process of applying the Group’s accounting policies. The  
areas involving a higher degree of judgement of complexity,  
or areas where assumptions and estimates are significant to  
the consolidated financial statements are disclosed in note 4. 
At the date of authorisation of these financial statements, the 
following Standards and Interpretations that have not been 
applied in these financial statements were in issue but not  
yet effective or endorsed (unless otherwise stated):
IFRS 1:  First-time Adoption of IFRS – Amendment; Cost  
of an investment in a subsidiary, jointly-controlled 
entity or associate (endorsed)
IFRS 1:  Revised IFRS 1 First-time Adoption of IFRS
IFRS 2:   Share based payment – Amendments relating to 
vesting conditions and cancellations (endorsed)
IFRS 3:   Business Combinations – Comprehensive revision 
on applying the acquisition method
IFRS 7:   Financial Instruments: Disclosures – Amendment; 
Reclassification of Financial Assets (endorsed)
IFRS 7:  Financial Instruments: Disclosures – Amendment; 
Reclassification of Financial Assets – Effective date 
and transition
IFRS 7:  Financial Instruments: Disclosures – Amendment; 
Improving Disclosures About Financial Instruments
IFRS 8: Operating segments (endorsed)
IAS 1:  Presentation of Financial Statements – 
Comprehensive revision including requiring a 
statement of comprehensive income (endorsed)
IAS 1:  Presentation of Financial Statements – Amendment; 
Puttable financial instruments and obligations 
arising on liquidation (endorsed)
IAS 23:  Borrowing Costs – Comprehensive revision to 
prohibit immediate expensing (endorsed)
IAS 27:  Consolidated and Separate Financial Statements 
– Amendments arising from IFRS 3
IAS 27:  Consolidated and Separate Financial Statements 
– Amendment; Cost of an investment in a 
subsidiary, jointly-controlled entity or associate 
(endorsed)
IAS 28:  Investments in Associates – Consequential 
amendments arising from IFRS 3
IAS 31:  Investments in Joint Ventures – Consequential 
amendments arising from IFRS 3
IAS 32:   Financial Instruments: Presentation – Amendment; 
Puttable financial instruments and obligations 
arising on liquidation (endorsed)
IAS 39:   Financial Instruments: Recognition and 
Measurement – Amendment; Reclassification of 
Financial Assets (endorsed)
IAS 39:   Financial Instruments: Recognition and 
Measurement – Amendment; Reclassification of 
Financial Assets – Effective date and transition
IAS 39:   Financial Instruments: Recognition and 
Measurement – Amendment; Eligible hedged items
IFRIC 15:   Agreements for the Construction of Real  
Estate Assets
IFRIC 16:  Hedges of a Net Investment in a Foreign Operation
IFRIC 17:  Distributions of Non-cash Assets to Owners
IFRIC 18:  Transfers of Assets from Customers
The Directors anticipate that the adoption of these Standards 
and Interpretations in future periods will have no material 
impact on the financial statements of the Group. 26 Landkom International PLC Annual Report 2008
Notes to the consolidated financial statements
continued
2. Significant accounting policies continued
2.2 Consolidation
Basis of consolidation
The consolidated financial statements incorporate the financial 
statements of the Company and entities controlled by the 
Company (its subsidiaries) made up to 31 December each 
year. Control is achieved where the Company has the power 
to govern the financial and operating policies of an investee 
entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the 
year are included in the consolidated income statement from 
the effective date of acquisition or up to the effective date  
of disposal, as appropriate. 
Where necessary, adjustments are made to the financial 
statements of subsidiaries to bring the accounting policies  
used into line with those used by the Group.
All intra-group transactions, balances, income and expenses 
are eliminated on consolidation.
Where subsidiaries have been acquired in order to gain 
control of assets, the transaction is considered to have been 
entered into at the fair value of the consideration paid and  
is accounted for as an asset purchase. Any excess cost over 
the book value of assets acquired is considered a fair value 
adjustment to the assets acquired. Where the cost of acquisition 
is below the book value of the assets acquired, the excess  
is accounted for as a provision against the relevant assets. 
2.3 Associates
Associates are entities over which the Group has significant 
influence. Significant influence is the power to participate in 
the financial and operating policies of an entity, but is not 
control or joint control over those policies. 
An investment in an associate is accounted for in the financial 
statements by the equity method of accounting and is initially 
recognised at cost. Identifiable assets, liabilities and contingent 
liabilities of the associate in an acquisition are measured  
at their fair values at the acquisition date. 
The Group’s share of its associates’ post-acquisition profits  
or losses is recognised in the income statement, and its share 
of post-acquisition movements in reserves is recognised in 
reserves. The cumulative post-acquisition movements are 
adjusted against the carrying amount of the investment.
When the Group’s share of losses in an associate equals  
or exceeds its interest in the associate, including any other 
unsecured receivables, the Group does not recognise further 
losses, unless it has incurred obligations or made payments  
on behalf of the associate.
2.4 Segment reporting
A business segment is a Group of assets and operations 
engaged in providing products or services that are subject to 
risks and returns that are different from those of other business 
segments. A geographical segment is engaged in providing 
products or services within a particular economic environment 
that are subject to risks and returns, which are different from 
those of segments operating in other economic environments.
2.5 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s 
entities are measured using the currency of the primary 
economic environment in which the entity operates (‘the 
functional currency’). The parent entity’s functional currency  
is Pound Sterling. The consolidated financial statements are 
presented in US Dollars.
(b) Transactions and balances
Foreign currency transactions are translated into the functional 
currency using the exchange rates prevailing at the dates of 
the transactions. Foreign exchange gains and losses resulting 
from the settlement of such transactions and from the 
translation at year end exchange rates of monetary assets  
and liabilities denominated in foreign currencies are 
recognised in the income statement, except when deferred  
in equity as qualifying cash flow hedges and qualifying net 
investments hedges.
Translation differences on non-monetary financial assets and 
liabilities are reported as part of the fair value gain or loss. 
Translation differences on non-monetary financial assets and 
liabilities such as equities held at fair value through profit or 
loss are recognised in profit or loss as part of the fair value 
gain or loss. Translation differences on non-monetary financial 
assets such as equities classified as available for sale are 
included in the fair value reserve in equity.
(c) Group companies
The results and financial position of all the Group companies 
(none of which has a currency of a hyperinflationary economy) 
that have a functional currency different from the presentation 
currency are translated into the presentation currency as follows:
•  assets and liabilities for each balance sheet are translated  
at the closing rate at the date of the balance sheet;
•  income and expenses for each income statement are 
translated at average exchange rates (unless this average  
is not a reasonable approximation of the cumulative effect  
of the rates prevailing on the transaction dates, in which 
case income and expenses are translated at the rate on  
the dates of the transactions);
•  all resulting exchange differences are recognised as  
a separate component of equity.  Annual Report 2008 Landkom International PLC 27
2. Significant accounting policies continued
2.5 Foreign currency translation continued
On consolidation, exchange differences arising from the 
translation of the net investment in foreign operations are taken 
to shareholders’ equity. When a foreign operation is partially 
disposed of or sold, exchange differences that were recorded 
in equity are recognised in the income statement as part of the 
gain or loss on sale. 
The principal exchange rates used in the preparation of the 
consolidated financial statements are as follows:
 
   31 December  31 December
   2008  2007
Pound Sterling 0.69 to US$1 0.495 to US$1
Ukrainian Hryvna 8.20 to US$1 5.05 to US$1
2.6 Property plant and equipment
Property, plant and equipment is stated at historical cost, less 
accumulated depreciation and accumulated impairment losses. 
Depreciation is provided on all property, plant and equipment, 
except freehold land and is calculated using the straight-line 
method to allocate their cost or revalued amounts to their 
residual values over their estimated useful lives as follows:
Buildings    3 – 50 years
Machinery   5 – 10 years
Furniture, fittings and equipment   3 – 5 years
Vehicles    3 – 10 years
The asset’s residual values and useful lives are reviewed,  
and adjusted, if appropriate, at each balance sheet date.  
An asset’s carrying amount is written down immediately to its 
recoverable amount if the asset’s carrying amount is greater 
than its estimated recoverable amount. Gains and losses on 
disposals are determined by comparing the proceeds with the 
carrying amount and are recognised within administrative 
expenses in the income statement.
Assets under construction are stated at cost less impairment 
losses. The cost of completed construction work is transferred 
to the appropriate category of property, plant and equipment. 
Depreciation commences when the relevant assets are 
available for use.
2.7 Leasing
Leases of property, plant and equipment which transfer 
substantially all the risks and rewards of ownership to the 
Group are classified as finance leases. Finance leases are 
classified as a financial liability and measured at amortised 
cost. Finance leases are capitalised at the inception of the 
lease at the lower of the fair value of the leased property, plant 
and equipment and the present value of the minimum lease 
payments and depreciated over the period of the lease. The 
resulting lease obligations are included in liabilities. Lease 
payments are apportioned between finance charges and 
reduction of the lease obligation so as to achieve a constant 
rate of interest on the remaining balance of the liability.
All other leases are classified as operating leases. Rentals 
payable under operating leases, net of lease incentives, are 
charged to the Consolidated Income Statement on a straight-
line basis over the period of the lease. Where property lease 
contracts contain guaranteed minimum incremental rental 
payments, the total committed cost is determined and is 
amortised on a straight-line basis over the life of the lease.
2.8 Intangible assets
Intangible assets are recognised when they are controlled 
through contractual or other legal rights, or are separable  
from the rest of the business, and the fair value can be  
reliably measured.
Applications and IT software
Acquired computer software licences are capitalised on the 
basis of the costs incurred to acquire and bring to use the 
specific software. These costs are amortised over their 
estimated useful lives (three to five years). Amortisation of 
intangible assets is charged to the income statement under  
the heading of administrative expenses.  28 Landkom International PLC Annual Report 2008
Notes to the consolidated financial statements
continued
2. Significant accounting policies continued
2.9 Impairment of property, plant and  
equipment and intangible assets
At each balance sheet date, the Group reviews the carrying 
amounts of its property, plant and equipment and intangible 
assets to determine whether there is any indication that those 
assets have suffered an impairment loss. If any such indication 
exists, the recoverable amount of the asset is estimated in order 
to determine the extent of the impairment loss, if any. Where 
the asset does not generate cash flows that are independent 
from other assets, the Group estimates the recoverable amount 
of the cash generating unit to which the asset belongs.  
An intangible asset with an indefinite useful life is tested for 
impairment annually and whenever there is an indication that 
the asset may be impaired. 
Recoverable amount is the higher of fair value less costs to  
sell and value in use. In assessing value in use, the estimated 
future cash flows are discounted to their present value using  
a pre-tax discount rate that reflects current market assessments 
of the time value of money and the risks specific to the asset for 
which the estimates of future cash flows have been adjusted.
If the recoverable amount of an asset (or cash-generating unit) 
is estimated to be less than its carrying amount, the carrying 
amount of the asset (cash-generating unit) is reduced to  
its recoverable amount. An impairment loss is recognised  
as an expense immediately, unless the relevant asset is carried 
at a revalued amount, in which case the impairment loss is 
treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying 
amount of the asset (cash-generating unit) is increased to  
the revised estimate of its recoverable amount, but so that the 
increased carrying amount does not exceed the carrying 
amount that would have been determined had no impairment 
loss been recognised for the asset (cash-generating unit) in 
prior years. A reversal of an impairment loss is recognised  
as income immediately, unless the relevant asset is carried  
at a revalued amount, in which case the reversal of the 
impairment loss is treated as a revaluation increase.
2.10 Inventories
Inventories are stated at the lower of cost and net realisable 
value. Cost is determined using the first in first out (FIFO) 
method. The cost of work in progress includes costs of 
preparing agricultural land, raw materials, direct labour,  
other direct costs and related production overheads (based on 
normal operating capacity). It excludes borrowing costs. Net 
realisable value is the estimated selling price in the ordinary 
course of business, less applicable variable selling expenses.
2.1 1 Biological assets
The Group classifies crops as biological assets. Biological 
assets are stated at their fair value, based on their current 
condition, less estimated point-of-sale costs. The fair value of 
biological assets is based on market selling price and direct 
costs required to bring the assets to saleable condition, 
discounted at an appropriate discount rate at the balance 
sheet date. Biological assets that are physically attached to 
land are recognised and measured at their fair value 
separately from the land.
The Group classifies livestock as biological assets. Livestock 
are accounted for at fair value less estimated point of sale 
costs. The fair value of cattle is determined by the size  
of the herd and market prices at the reporting date.
Where there is no reliable measure of the fair value of 
biological assets at the point of initial recognition, they are 
measured at cost less any impairment losses.
2.12 Trade receivables
Trade receivables, defined as loans and receivables in 
accordance with IAS 39 ‘Financial Instruments: Recognition 
and Measurement’, are recorded initially at fair value and 
subsequently measured at amortised cost. A provision for 
impairment of trade receivables is established when there is 
evidence that the Group will not be able to collect all amounts 
due according to the original terms of the receivables. The 
amount of the provision is the difference between the assets’ 
carrying amount and the present value of future cash flows 
discounted at the effective interest rate. The movement in the 
provision is recognised in the consolidated income statement. 
Any other trade receivables are recognised at their original 
amount less an allowance for any doubtful amounts. An 
allowance is made when collection of the full amount is no 
longer considered probable.
2.13 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held 
at call with banks, other short-term highly liquid investments 
with original maturities of three months or less, and bank 
overdrafts. Bank overdrafts are shown within borrowings in 
current liabilities on the balance sheet.
2.14 Financial liabilities and equity
Financial liabilities and equity instruments are classified 
according to the substance of the contractual arrangements 
entered into. An equity instrument is any contract that 
evidences a residual interest in the assets of the Group  
after deducting all of its liabilities. Annual Report 2008 Landkom International PLC 29
2. Significant accounting policies continued
2.15 Share capital
Ordinary shares are classified as equity. Equity instruments 
issued by the Company are recorded at the proceeds received, 
net of direct issue costs.
2.16 Trade payables
Trade payables, defined as financial liabilities in accordance 
with IAS 39, are recognised initially at fair value and 
subsequently measured at amortised cost using the effective 
interest method. All of the trade payables are non-interest 
bearing.
2.17 Borrowings
Borrowings are recorded at the fair value of the consideration 
received, net of issue costs. Finance charges are accounted  
for on an accrual basis in the consolidated income statement 
using the effective interest rate method and are added to the 
carrying amount of the instrument to the extent that they are  
not settled in the period in which they arise.
2.18 Taxation
The tax expense represents the sum of the tax currently 
payable and deferred tax. 
The tax currently payable is based on taxable profit for the 
year. Taxable profit differs from net profit as reported in the 
income statement, because it excludes items of income or 
expense that are taxable or deductible in other years and it 
further excludes items that are never taxable or deductible.  
The Group’s liability for current tax is calculated by using tax 
rates that have been enacted or substantively enacted by the 
balance sheet date.
Deferred tax is the tax expected to be payable or recoverable 
on differences between the carrying amount of assets and 
liabilities in the financial statements and the corresponding  
tax bases used in the computation of taxable profit, and is 
accounted for using the balance sheet liability method. 
Deferred tax liabilities are recognised for all taxable temporary 
differences and deferred tax assets are recognised to the 
extent that it is probable that taxable profits will be available 
against which deductible temporary differences can be 
utilised. Such assets and liabilities are not recognised if the 
temporary difference arises from the initial recognition of 
goodwill or from the initial recognition (other than in a business 
combination) of other assets and liabilities in a transaction 
which affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary 
differences arising on investments in subsidiaries and 
associates, and interests in joint ventures, except where  
the Group is able to control the reversal of the temporary 
difference and it is probable that the temporary difference  
will not reverse in the foreseeable future. 
Deferred tax is calculated at the tax rates that are expected  
to apply to the period when the asset is realised or the liability 
is settled. Deferred tax is charged or credited in the income 
statement, except when it relates to items credited or charged 
directly to equity, in which case the deferred tax is also dealt 
with in equity.
2.19 Employee benefits
(a) Pension obligations
Group companies do not operate private pension schemes. 
The Group makes contributions for the benefit of employees  
to Ukraine’s state pension fund, social security fund, security 
against injury fund and unemployment fund. These amounts 
are expensed as incurred.
(b) Termination benefits
Termination benefits are payable when employment is 
terminated by the Group before the normal retirement date,  
or whenever an employee accepts voluntary redundancy  
in exchange for these benefits. The Group recognises 
termination benefits when it is demonstrably committed to 
either terminating the employment of current employees 
according to a detailed formal plan without possibility of 
withdrawal; or providing termination benefits as a result  
of an offer made to encourage voluntary redundancy.
(c) Profit sharing bonus plans
The Group recognises a liability and an expense for  
bonuses and profit sharing, based on a formula that takes  
into consideration, key performance indicators and the profit 
attributable to Shareholders after certain adjustments.  
The Group recognises a provision where contractually  
obliged or where there is a past practice that has created  
a constructive obligation.
2.20 Share based payments
The Group has applied the requirements of IFRS 2: Share 
based payment. The Group issues equity-settled share based 
payments to certain employees. Equity-settled share based 
payments are measured at fair value at the date of grant.  
The fair value determined at the grant date of equity-settled 
share based payments is expensed on a straight-line basis  
over the vesting period, based on the Group’s estimate of 
shares that will eventually vest. Fair value is measured by the 
use of the binomial option pricing model. The expected life 
used in the model has been adjusted, based on Management’s 
best estimate of the effect of non-transferability, exercise 
restrictions and behavioural considerations. Further details  
of share options are included in note 23. 30 Landkom International PLC Annual Report 2008
Notes to the consolidated financial statements
continued
2. Significant accounting policies continued
2.21 Provisions
Provisions are recognised when the Group has a present  
legal or constructive obligation as a result of past events, it is 
probable that an outflow of resources will be required to settle 
the obligation and a reliable estimate of the amount can be 
made. If the effect is material, provisions are determined by 
discounting the expected future cash flows at an appropriate 
pre-tax discount rate.
2.22 Financial instruments
Financial assets and financial liabilities are recognised on the 
Group’s balance sheet when the Group has become party to 
the contractual provisions of the instrument. When considered 
appropriate the Group uses derivative financial instruments 
such as commodity options to hedge its risks associated  
with commodity prices. Such derivative financial instruments 
are initially recognised at fair value on the date on which  
a derivative contract is entered into and are subsequently 
re-measured at fair value. Derivatives are carried as assets 
when the fair value is positive and as liabilities when the fair 
value is negative.
Any gains or losses arising from changes in fair value on 
derivatives during the year that do not qualify for hedge 
accounting are taken directly to profit or loss. 
For the purpose of hedge accounting, hedges are classified  
as fair value hedges when hedging the exposure to changes  
in the fair value of a recognised asset or liability or an 
unrecognised firm commitment; or cash flow hedges when 
hedging exposure to variability in cash flows that is attributable 
to a particular risk associated with either a recognised asset  
or liability. 
At the inception of a hedge relationship, the Group formally 
designates and documents the hedge relationship to which  
the Group wishes to apply hedge accounting and the risk 
management objective and strategy for undertaking the 
hedge. The documentation includes identification of the 
hedging instrument, the hedged item or transaction, the nature 
of the risk being hedged and how the entity will assess the 
hedging instrument’s effectiveness in offsetting the exposure  
to changes in the hedged item’s fair value or cash flows 
attributable to the hedged risk. Such hedges are expected  
to be highly effective in achieving offsetting changes in fair  
value or cash flows and are assessed on an ongoing basis  
to determine that they actually have been highly effective 
throughout the financial reporting periods for which they  
were designated.
2.23 Available for sale investments
Available for sale investments are non derivatives that are 
either designated in this category or not classified in any  
of the other categories. They are included in non-current assets 
unless management intends to dispose of the assets within  
12 months of the balance sheet date. 
Regular purchases and sales of investments are recognised on 
trade date – the date on which the group commits to purchase 
or sell the asset. Investments are initially recognised at fair 
value plus transaction costs for all financial assets not carried 
at fair value through profit and loss. Financial assets carried  
at fair value through profit or loss are initially recognised  
at fair value, and transaction costs are expensed in the income 
statement. Investments are derecognised when the rights to 
receive cash flows from investments have expired or have been 
transferred and the Group had transferred substantially all risks 
and rewards of ownership. Available for sale financial assets 
and financial assets at fair value through profit or loss are 
subsequently carried at fair value. Loans and receivables are 
carried at amortised cost using the effective interest method. 
When securities classified as available for sale are sold or 
impaired the accumulated fair value adjustments recognised  
in equity are included in the income statement as gains and 
losses from investment securities. Interest on available for sale 
securities calculated using the effective interest method is 
recognised in the income statement. Dividends on available for 
sale equity instruments are recognised in the income statement 
when the Group’s right to receive payments is established. 
The fair values of quoted investments are based on current bid 
prices. If the market for the financial investment is not active 
(and for unlisted securities) the Group establishes fair value 
using valuation techniques. These include the use of recent 
arms length transactions, reference to other instruments that  
are substantially the same, discounted cash flow analysis, and 
option pricing models making maximum use of market inputs 
and relying as little as possible on entity specific inputs. 
The Group assesses at each balance sheet date whether there 
is objective evidence that a financial asset or group of financial 
assets is impaired. In the case of equity securities classified  
as available for sale a significant or prolonged decline in  
the fair value in the security below its cost is considered an 
indicator that the securities are impaired. If any such evidence 
exists for available for sale financial assets, the cumulative loss 
measured as the difference between the acquisition cost and 
the current fair value, less any impairment cost on the financial 
asset previously recognised in profit or loss – is removed from 
equity and recognised in the income statement. Impairment 
losses recognised in the income statement on equity instruments 
are not reversed through the income statement.  Annual Report 2008 Landkom International PLC 31
2. Significant accounting policies continued
2.24 Revenue recognition
Revenue comprises the fair value of the consideration received 
or receivable for the sale of goods or services in the ordinary 
course of the Group’s activities. Revenue is shown net of  
value added tax, returns, rebates and discounts and after 
eliminating sales within the Group. The Group recognises 
revenue when the amount of the revenue can be readily 
measured, it is probable that future economic benefits will flow 
to the entity and when specific criteria have been met for  
each of the Group’s activities as described below. The amount 
of revenue is not considered to be reliably measurable until  
all contingencies relating to the sale have been resolved.  
The Group bases its estimates on historical results, taking into 
consideration the type of customer, the type of transaction  
and the specifics of each arrangement.
(a) Sales of goods
The Group produces and sells a range of arable crops. Sales 
of goods are recognised when a Group entity has delivered 
products to the purchaser, the purchaser has full discretion  
over the channel and price to sell the products, and there are 
no unfulfilled obligations that could affect the purchaser’s 
acceptance of the products. Delivery does not occur until the 
produce has been delivered to the specified location, the  
risks of obsolescence and loss have been transferred to the 
purchaser, and either the purchaser has accepted the produce 
in accordance with the sales contract, the acceptance 
provisions have lapsed, or the Group has objective evidence 
that all criteria for acceptance have been satisfied.
(b) Sales of services
Revenue from time and materials contracts is recognised at  
the contractual rates as labour hours are delivered and direct 
expenses incurred. Revenue from fixed price contracts is 
recognised under the percentage of completion method and  
is based on the services performed to date as a percentage  
of the total services to be performed.
If circumstances arise that may change the original estimates  
of revenues, costs or extent of progress towards completion, 
estimates are revised. These revisions may result in increases  
or decreases in estimated revenues or costs and are reflected 
in income in the period in which the circumstances that give 
rise to the revision become known to management.
(c) Interest income
Interest income is accrued on a time basis by reference to  
the principal outstanding and at the effective interest rate 
applicable, which is the rate that exactly discounts estimated 
future cash receipts through the expected life of the financial 
asset to that asset’s net carrying amount.
2.25 Comparatives
The comparative period represents the period from 10 April 
2007 to 31 December 2007 . 
3. Financial risk management
3.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks: 
market risk (including foreign exchange risk, interest rate risk 
and price risk), credit risk and liquidity risk. The Group’s overall 
risk management programme focuses on the unpredictability  
of financial markets and seeks to minimise potential adverse 
effects on the Group’s financial performance.
Risk management is carried out by a central treasury 
department under policies approved by the Board. Group 
treasury identifies, evaluates and hedges financial risks in close 
co-operation with the Group’s operating units. The Board 
provides written principles for overall risk management,  
as well as written policies covering specific areas such as 
foreign exchange risk, interest rate risk and credit risk.
(a) Foreign exchange risk
The Group operates internationally and is exposed to foreign 
exchange risks arising from various currency exposures, 
primarily with respect to the Ukrainian Hryvna and Pound 
Sterling. Foreign exchange risk arises from future commercial 
transactions, recognised assets and liabilities and net 
investment in foreign operations. Ukrainian legislation restricts 
the Group’s ability to hedge its exposure to Hryvna currency 
exposure and accordingly the Group does not hedge its 
exposure to this foreign currency risk. 
With the above exception, management has set-up a policy to 
require Group treasury to manage the foreign exchange risk of 
Group companies against their functional currency. The Group 
has certain investments in foreign operations, whose net assets 
are exposed to foreign translation risk. 
Foreign exchange risk arises when future commercial 
transactions or recognised assets or liabilities are denominated 
in a currency that is not the functional currency. 32 Landkom International PLC Annual Report 2008
Notes to the consolidated financial statements
continued
3. Financial risk management continued
3.1 Financial risk factors continued
The exposure to foreign exchange risk at the reporting date is:
   UK  Euro  Ukraine  Total
   $000  $000  $000  $000
   2008 2007 2008 2007 2008 2007 2008 2007
Trade receivables  152 – – – 238 1,789 390 1,789
Other receivables  90 241 – – 10,410 5,040 10,500 5,281
Trade payables  (629) (1,183) (8) – (5,775) (631) (6,412) (1,8 14)
Accruals and other payables (347) (263) (6) – (787) (1,490) (1,140) (1,753)
Other financial liabilities  – – (795) – (207) (188) (1,002) (188)
Cash and cash equivalents 3,411 86, 9 11 – – 809 735 4,220 87,646
Total  2,677 85,706 (809) – 4,688 5,255 6,556 90,961
During 2008 the peg between the Ukrainian Hryvna and  
US Dollar was removed. As a result the Ukrainian Hryvna/ 
US Dollar exchange rate fluctuated between a minimum and 
maximum of 4.58 and 9.20 Hryvna to US$ 1. During 2007 
the Ukrainian Hryvna/US Dollar exchange rate was pegged 
resulting in no significant movement.
During 2008 the Pound Sterling/US Dollar exchange rate  
has fluctuated between a maximum and minimum of 0.69  
and 0.49 Pound Sterling to US$ 1 (2007: 0.51 to 0.47).
(b) Price risk
The Group is exposed to the commodity price risk of the 
arable crops that it produces. To manage its price risk arising 
from fluctuations in crop prices, the Group may enter into 
forward off-take contracts. The value of the Group’s biological 
assets and associated gain/loss in the income statement are 
affected by changes in commodity prices. The following table 
demonstrates how a 20% increase or decrease in commodity 
prices would impact these values:
 Change in  
 fair value gain/ Change in
 (loss) on biological biological asset
  assets recognised recognised on
 in the income statement the balance sheet
 $000 $000
Increase in price by 20%  2,370  2,370
Decrease in price by 20%  (2,370)  (2,370)
(c) Cash flow and fair value interest rate risk
As the Group has interest-bearing assets, the Group’s income 
and operating cash flows are partially dependent on changes 
in market interest rates. 
The Group’s interest rate risk arises from short-term deposits, 
which at the reporting date amounted to $3.2 million. A 1% 
change in interest rates would have resulted in an increase  
or decrease of less than $32,000.
The Group’s trade receivable and payable balances are non 
interest-bearing and are not guaranteed or underwritten.  
These amounts are presented in notes 18 and 26 respectively.
The Group has finance lease agreements which bear interest 
as detailed in note 25.
(d) Credit risk
Credit risk is managed on a Group basis. Credit risk arises 
from cash and cash equivalents and deposits with banks,  
as well as credit exposures to customers including, outstanding 
receivable and committed transactions. 
For term deposits with banks and financial institutions, only 
independently rated parties with a minimum rating of ‘A’  
are accepted. 
The table below shows the major counterparties at the  
balance sheet date.
  Balance   Balance
  at 31   at 31
  December   December
  2008  2007
 Rating  $000  Rating  $000 
Barclays Private Clients  
 Bank Int AA- 3,416 AA 86,902
Laiki Popular Bank Cyprus BBB 5 A 10
Ukraine Export Import  
 Export Bank  – 809 – 734
   4,230  87,646
      
For customers, an assessment of the credit quality of the 
customer is made, taking into account its financial position, 
past experience and other factors. Individual risk limits are  
set by the Board. The utilisation of credit limits are regularly 
monitored. No credit limits were exceeded during the reporting 
period and management does not expect losses from  
non-performance.
Trade receivables at the reporting date amounted to 
$390,000 (2007: $1.8m). Annual Report 2008 Landkom International PLC 33
3. Financial risk management continued
3.1 Financial risk factors continued
(e) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient 
cash and marketable securities and the availability of funding. 
Management monitors the Group’s rolling forecasts of the 
Group’s liquidity reserve on the basis of expected cash flow. 
Financial liabilities are due within one year and cash flows  
are expected to arise within one year.
The table below analyses the Group’s financial liabilities on  
a contractual gross undiscounted cash flow basis into maturity 
groupings based on period outstanding at the balance sheet 
date up to the contractual maturity date.
   Between  Between
  Less than  6 months 1 and 5
  6 months  and 1 year years
Year ended  
 31 December 2008  
Finance leases 25 821 156
Trade and other payables 5,387 1,648 –
  5,412 2,469 156
Year ended  
 31 December 2007    
Finance leases 14 49 125
Trade and other payables 3,141 425 –
  3,155 474 125
Sufficient cash is expected to be generated through the 
Group’s operating cycle, share issuance schemes, and  
effective cash management to meet the contractual cash  
flows disclosed above. 
4. Critical accounting estimates and judgements
Estimates and judgements 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
In preparing our financial statements the Group must select 
and apply various accounting policies which are described  
in Note 2. In order to apply our accounting policies the Group 
makes estimates and judgements concerning the future. The 
resulting accounting estimates will, by definition, seldom 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 discussed below.
(a) Biological assets
Biological assets (living crops) are measured at their fair  
value at each balance sheet date. The fair value of biological 
assets is determined based among other estimates on weather 
conditions, growth potential, harvesting, price development 
and discount rate. Changes in any estimates could lead  
to recognition of significant fair value changes in  
income statement.
(b) Deferred income tax assets
Management regularly assesses the likelihood that deferred 
tax assets will be recovered from future taxable income. No 
deferred tax asset is recognised when Management believe 
that it is more likely than not that a deferred asset will not be 
realised.
(c) Provision for impairment of trade receivables
An allowance is made for doubtful trade receivables. This 
allowance represents Management’s estimate of accounts 
receivable that, subsequent to the time of sale, may be of 
doubtful collectability because customers may not be able to pay.
(d) Allowance for inventory obsolescence
An allowance is established for obsolescence of inventory 
based on the estimated market value and assumptions about 
future demand and market conditions.
(e) Agricultural risk
Agricultural risk arises from the unpredictable nature of the 
weather, pollution and risks in the performance of crops.  
The Company’s principal operations are located in the prime, 
fertile lands of Western Ukraine and it adopts a portfolio 
approach to balance its oil seed rape production with other 
arable crops.
(f) Share based payments
The Group measures the cost of equity-settled transactions  
with employees by reference to the fair value of the equity 
instruments at the date at which they are granted. Estimating 
fair value requires determining the most appropriate valuation 
model for a grant of equity instruments, which is dependent  
on the terms and conditions of the grant. This also requires 
determining the most appropriate inputs to the valuation model 
including the expected life of the option, volatility and dividend 
yield and making assumptions about them. The assumptions 
and model used are disclosed in note 23.
5. Segmental information
At 31 December 2008 the Group’s operation is principally  
the growing of arable crops in Ukraine for both the biofuel  
and food markets. Accordingly the Directors consider that the 
Group operates in one business segment and one geographic 
segment.
   2008 2007
   $000 $000
Sale of arable crops   10,034 –
Cultivation services   – 1,567
Other income   6 11 –
Growing of arable crops –  
 fair value adjustment (see note 16)  (11,036) 5,063
    (391) 6,630
    34 Landkom International PLC Annual Report 2008
Notes to the consolidated financial statements
continued
6. Direct costs
   2008 2007
   $000 $000
Direct crop inputs  
 (Seed, Fertiliser & Chemicals)   12,310 –
Agricultural produce purchased for resale  941 –
Fuel   2,932 –
Staff costs   4,572 158
Harvest, drying and storage   1,610 –
Equipment maintenance   3,570 70
Land costs   2,381 –
Transportation   2,682 –
Agronomy   360 –
Depreciation   4,679 390
Other costs   281 1,659
    36,318 2,277
   
7. Operating loss
Operating loss has been derived after charging/(crediting) 
the following:
   2008 2007
   $000 $000
(Loss) / gain arising from changes in value  
 of Biological asset (see note 16)  11,036 (5,063)
   
Direct costs   
Operating leases – land    1,931 227
   
Administrative expenses   
Share based payments   2,419 335
Depreciation and amortisation   237 97
Employee benefit expense   
 Wages, salaries and fees   5,364 2,507
 Severance   495 –
 Social security   950 187
Fair value adjustment of commodity put option – 47
Other gains   – (4)
Auditors remuneration – see below  331 202
Gain on realisation of commodity put option (223) –
Loss on currency option   42 –
Operating leases – Buildings   164 18
   
Amounts payable to Baker Tilly UK Audit LLP and their 
associates in respect of both audit and non-audit services:
 
   2008 2007
   $000 $000
Audit of consolidated financial statements  270 182
Audit of subsidiary undertakings   43 20
Review of interim results   18 –
    331 202
In addition to the above the audit form received $210,000 in 
2007 for services relating to the company’s AIM listing, which 
was charged against the companies share premium account.
8. Finance income
   2008 2007
   $000 $000
Bank interest income on short-term deposits  1,875 606
    1,875 606
   
   
9. Finance costs
   2008 2007
   $000 $000
Interest expense on finance lease obligations 176 17
Interest expense on creditor payments  171 –
    347 17
   
10. Taxation
From incorporation on 10 April 2007 the Company has been 
resident in the Isle of Man, and is subject to a Nil tax rate. The 
tax charge for the year represents a payment on account of 
Ukraine tax liabilities, which the Group does not believe are 
recoverable in the foreseeable future. There is no tax charge in 
the prior period due to trading losses incurred. 
   2008 2007
   $000 $000
Deferred tax expense relating to the  
origination and reversal of temporary differences – –
   
The tax charge for the period can be reconciled  to the  
loss per the income statement as follows:  
Loss before tax   (55,740) (1,324)
Tax at the Ukrainian corporate  
 income tax rate of 25%   (13,935) (331)
Non deductible expenses   10,232 331
Loss carried forward   3,703 –
Irrecoverable payment on account  236 –
Tax expense for the period   236 –
   
See note 28 for deferred tax balances. Annual Report 2008 Landkom International PLC 35
11. Earnings per ordinary share
Adjusted basic and fully diluted loss per share have been calculated on the loss after taxation for the period and the weighted 
average number of ordinary shares in issue during the period. 
Adjusted loss per share before amortisation of intangible assets and share based payments charge has been presented in 
addition to the basic earnings per share since, in the opinion of the Directors, this provides shareholders with a more 
appropriate representation of the underlying earnings derived from the Group’s businesses.
      2008 2007
      Number  Number
   of shares  of shares
Weighted average number of shares in issue   197,736,743 1 0 1 ,03 7,387
   
   $000 $000
Loss after tax on ordinary activities   (55,748) (1,324)
   
Adjustments:   
 Amortisation of intangible assets   50 1
 Share based payments charge   2,419 335
  
Adjusted (loss)/earnings   (53,279) (988)
   
Basic & fully diluted loss per ordinary share (US$)   (0.282) (0.013)
  
Adjusted basic loss per ordinary share (US$)   (0.269) (0.010)
12. Property plant and equipment
      Assets Furniture, 
     Vehicles & under fittings & 
   Land Buildings machinery construction equipment Total
   $000 $000 $000 $000 $000 $000
Cost    
At 10 April 2007  – – – – – –
Additions  – 67 13,429 707 1 14 14,317
Exchange loss  – – (484) – – (484)
At 31 December 2007  – 67 12,945 707 114 13,833
Corporate asset acquisitions – 454 420 – 1 875
Effect of exchange rate movements – – (32) – (2) (34)
Additions  79 2,823 27 ,075 8,777 412 39,166
Transfers   – 1,248 – (1,248) – –
Disposals  – (80) (124) – (4) (208)
At 31 December 2008  79 4,512 40,284 8,236 521 53,632
Accumulated depreciation     
At 10 April 2007  – – – – – –
Depreciation charge  – 3 395 – 89 487
At 31 December 2007  – 3 395 – 89 487
Effect of exchange rate movements – – 26 – – 26
Depreciation charge  – 133 4,626 – 107 4,866
Disposals  – (36) (45) – (3) (84)
At 31 December 2008  – 100 5,002 – 193 5,295
Net book value:  
31 December 2008  79 4,412 35,282 8,236 328 48,337
31 December 2007  – 64 12,550 707 25 13,346
Depreciation expense of $187 ,000 has been charged to administrative expenses (2007: $97 ,000), and $4,679,000 to cost  
of sales (2007: $390,000).  36 Landkom International PLC Annual Report 2008
Notes to the consolidated financial statements
continued
12. Property plant and equipment continued
During the year the Group acquired four entities for the 
purpose of gaining control over the assets within those entities. 
The fixed assets acquired have been accounted for at the 
consideration paid representing the fair value of the  
assets acquired.
Included in the net book value amount in respect of assets  
held under finance leases and similar hire purchase contracts 
are the following.
    Vehicles 
   & machinery 
    $000
Net book value:  
31 December 2008    1,388
31 December 2007    266
  
Depreciation charge in the period  
 for these assets were: 
31 December 2008    130
31 December 2007    3
  
Capital expenditure contracted for, but not provided in the 
financial statements, is shown in note 32.
13. Intangible assets
    Software
    $000
Cost at 10 April 2007    –
Additions    170
Cost at 31 December 2007    170
  
Effect of exchange rate movement   (40)
Additions    201
Cost at 31 December 2008    331
  
Accumulated amortisation  
At 10 April 2007    –
Amortisation charge    1
At 31 December 2007    1
  
Amortisation charge     50
At 31 December 2008    51
  
Net book value at:  
31 December 2008    280
31 December 2007    169
  
14. Investment in associates
   2008 2007
   $000 $000
Aggregate amounts relating  
 to associates  
Total assets   927 –
Total liabilities   1,103 –
Revenue   1,098 –
Loss in year   (631) –
Post acquisition loss   (252) –
Cost of investment   293 –
Share of post-acquisition loss   (197) –
Carrying value at 31 December  95 –
    
Details of the companies associates at 31 December 2008  
are as follows:
   Proportion Proportion 
   of owner-  of voting
Name of Place of ship power  Principle
associate incorporation interest held activity
Podilya Kolodno LLC Ukraine 50% 50% Farm  
     activities
Dokychaevskyy Ukraine 89% 0% Farm  
 Cooperative    activities
The Group does not have voting control over Dokychaevskyy 
Cooperative, and therefore, does not account for it as  
a subsidiary.
15. Available for sale investments
   2008 2007
   $000 $000
Available for sale investments   
At start of period   – –
Additions   11 7 –
At 31 December   11 7 –
    
Investments represent the Groups 46% holding in 
Nadbuganskyy JSC. The investment is held at historic cost  
as there is no quoted market price or active market to measure 
fair value. The Board have assessed the asset for impairment 
and consider there are no grounds for impairment at this time. 
Management do not class the investment as an associate as 
they are not able to exert significant influence over the company.  Annual Report 2008 Landkom International PLC 37
16. Biological assets
The Group’s interests in biological assets are held in its  
Ukrainian subsidiaries. 
The majority of the Group’s biological assets are consumable 
winter crops that have been planted during the autumn and 
will be harvested during the following summer. Crops are 
accounted for at fair value less estimated point of sale costs. 
The fair value of biological assets at each reporting date is 
determined based on the area planted and market prices at 
the reporting date, and based on the crops’ location and 
condition, which includes estimates of biological transformation 
and yield potential. 
Fair value is estimated on the basis of the present value of 
expected net cash flows, discounted at an appropriate risk 
adjusted pre-tax discount rate. Changes in any estimates  
could lead to recognition of significant fair value changes  
in the income statement.
Other biological assets represent a small herd of cattle, which 
were acquired through asset acquisitions. Cattle are accounted 
for at fair value less estimated point of sale costs. The fair  
value of cattle is determined by the size of the herd and market 
prices at the reporting date.
  Cattle Crops  Total
  $000 $000 $000
Carrying value at 10 April 2007  – – –
Cultivation costs relating to 2007/2008  
 crops to December 2007  – 2,239 2,239
Fair value adjustment  – 5,063 5,063
Carrying value  
 at 31 December 2007  – 7,302 7,302
     
Biological assets acquired  
 through asset acquisitions  12 – 12
Other biological asset additions  37 – 37
Cultivation costs relating  
 to 2007/2008 crops   – 17 ,644 17 ,644
Net change in fair value due to price,  
 yield, maturity and cost changes – (1 1,104) (1 1,104)
     
Total 2007/2008 crop Biological asset 49 13,842 13,891
Harvest of biological assets  
 and transfer to inventory  – (13,842) (13,842)
     
Cultivation costs relating  
 to 2008/2009 crops  – 13,241 13,241
Fair value adjustment  – 68 68
     
Carrying value at 31 December 2008 49 13,309 13,358
     
Net change in fair value of biological  
 assets for the year ended  
 31 December 2008  – (1 1,036) (1 1,036)
     
During the period the Group harvested the following produce:
  Winter  Oil Seed Spring
  Wheat  Rape  Wheat
Quantity of produce/MT (in field) 19,707 19,572 5,974
Area of land harvested (Ha)  5,227 6,203 5,893
Yield MT/hectare  3.77 3.16 1.01
17. Inventories
   2008 2007
   $000 $000
Raw materials   5,579 1,253
Finished goods   1,688 –
Work in progress   – 18
    7,267 1,271
   
Raw materials consist of spare parts for property plant and 
equipment, agricultural chemicals, fertilisers. 
Finished goods consist of harvested agricultural produce. 
The value of inventory charged to the income statement  
during the year amounts to $17 ,369,000 for the year ended  
31 December 2008 (2007: $2,277 ,000).
18. Trade and other receivables
   2008 2007
   $000 $000
Trade receivables   390 2
Prepayments   850 2,751
Receivables from related parties   – 1,787
VAT recoverable   8,951 1,944
Other receivables   933 586
    1 1,124 7,070
   
The carrying amounts of the Group’s trade and other 
receivables are denominated in the following currencies:
   2008 2007
   $000 $000
Pound Sterling   556 240
Ukrainian Hryvna   10,568 6,830
    1 1,124 7,070
   
The maximum exposure to credit risk at the reporting date  
is the fair value of each class of receivable mentioned above. 
The Group does not hold any collateral as security. 
The Directors consider that the carrying amount of trade 
receivables approximates to their fair values and no provision 
for trade receivables has been made at either year end.  
Trade receivables at the balance sheet date are mainly aged 
less than 90 days. None of the trade receivables are past  
their normal due dates.  38 Landkom International PLC Annual Report 2008
Notes to the consolidated financial statements
continued
18. Trade and other receivables continued
The VAT recoverable is due from Ukrainian ($8,901,000)  
and UK ($50,000) authorities. The Directors consider that the 
amount due from Ukrainian authorities shall be recoverable 
within 1 year either by cash reimbursement or offset against 
output VAT on agricultural produce sales. 
19. Derivative financial instruments
The Group enters into commodity put options as part of its 
management of business risks. The fair value of put options  
at year end is the market value. 
   2008 2007
   $000 $000
Cost at acquisition   – 81
Change in fair value   – (47)
Fair value as at 31 December   – 34
   
As the hedges were not designated as effective the movement 
in fair value has been taken to the consolidated income 
statement.
20. Cash and cash equivalents
   2008 2007
   $000 $000
Cash at bank and on hand   1,045 894
Short-term deposits   3,185 86,752
    4,230 87,646
   
Cash and cash equivalents include the following for the 
purposes of the cash flow statement:
   2008 2007
   $000 $000
Cash and cash equivalents   4,230 87,646
21. Called up share capital
The total authorised share capital of the Company as at the 
reporting date is as follows:
  2008  2007
  Ordinary shares  Ordinary shares
Number of shares  
 of £0.001 each:   
Authorised 500,000,000 500,000,000
Allotted and fully paid 200,008,935 189,208,629
   
  $000  $000
Allotted and fully paid ordinary  
 shares of £0.001 each  411  389
      
The issued share capital has been increased as follows:
  
     Share
   Number Issue capital
Date Class of shares price $000
20 April 2007 A 50,862,500 0.1p 103
20 April 2007 B 34,500,000 20.0p 72
22 November 2007  103,846,129 52.0p 214
At 31 December 2007  189,208,629  389
18 March 2008  10,800,306 100.0p 22
At 31 December 2008  200,008,935  41 1
     
Upon listing the A and B class shares were converted to 
ordinary shares. Details of post year end share issues are in 
note 35. 
22. Share premium account
   2008 2007
   $000 $000
At start of period   116,998 –
Premium on shares issued  
 during the period   21,676 124,926
Share issue costs   (860) (7, 928)
    137,8 14 11 6, 998
   
   
23. Share based payments
Unapproved Company Share Option Plan (the Plan) 
The only share option scheme operated by the Company 
during the year was the Unapproved Share Option Plan 
established on 22 November 2007 . Options granted under  
the Plan become exercisable following the first, second or third 
anniversary of the date of the grant, and once vested may  
be exercised up to the fifth anniversary of the date of vesting. 
There are no performance conditions attaching to the awards. 
Further details are provided in the Remuneration Report. 
The following table illustrates the number and weighted 
average exercise prices (WAEP) of, and movements in, share 
options under the Plan during the year.
   2008  2007
  2008  WAEP 2007  WAEP 
  $000  (pence) $000 (pence)
Outstanding at  
 start of period 1 1,541,728 65 – –
Granted 10,125,898 46 1 1,54 1,728 65
Exercised – – – –
Forfeited  (2,912,668) 70 – –
Outstanding at  
 end of period 18,754,958 54 1 1,54 1,728 65
Exercisable at end  
 of period 3,583,494 52 – –
    
No options were exercised during 2008 (2007: Nil).
Options outstanding at 31 December 2008 had exercise 
prices of 30p to 129p (2007: 52p to 78p) and average 
contractual life of 6.25 years (2007: 6.9 years). Annual Report 2008 Landkom International PLC 39
23. Share based payments continued
Unapproved Company Share Option Plan (the Plan) continued 
Options were valued using the binomial option pricing model, 
but adjusted to model the particular features of the options. 
The principal inputs to the valuation model for the 2008 
awards were:
Risk Free Interest Rate   3.9 – 4.3% pa
Expected Volatility  50% pa
Dividend Yield  0% pa
Employee Turnover  0%
Early Exercise   Allowance made for individuals  
to exercise before the end  
of the exercise period
Expected volatility was determined by calculating the historical 
volatility of share prices for a group of comparable companies 
over a period commensurate with the expected lifetime  
of the awards.
The weighted average fair value of the options awarded in 
2008 valued in accordance with IFRS 2 was 16.9p and the 
weighted average expected life from grant date was 3.5 years. 
The Group recognised a total expense of $2,419,000  
(2007 – $335,000) in respect of the Plan.
Share based payment reserve
   2008 2007
   $000 $000
At start of period   335 –
Charged to income statement   2,419 335
At end of period   2,754 335
   
24. Foreign exchange reserve
   2008 2007
   $000 $000
At start of period   (3,315) –
Currency translation differences   (4,579) (3,315)
At end of period   (7,894) (3,315)
   
25. Other financial instruments
   2008 2007
   $000 $000
Present value of finance lease liabilities:   
Within one year   846 63
Between two and five years   156 125
    1,002 188
   
The Group’s finance leases bear fixed interest rates set at 
between 5% and 51% and are denominated in the following 
currencies:
   2008 2007
   $000 $000
Euro   795 –
Hryvna   207 188
    1,002 188
Finance leases are secured against those assets to which the 
finance lease relates.
26. Trade and other payables
   2008 2007
   $000 $000
Trade payables   6,412 1,8 14
Amounts due to related parties   – 1,483
Employee liabilities   258 –
Social security and other taxes   169 2
Accrued expenses   761 268
Other payables   116 –
    7,7 16 3,567
   
The Directors consider that the carrying amount of trade 
payables approximates to their fair value.
Trade payables become due as follows:
   2008 2007
   $000 $000
1 – 3 months   4,764 1,389
3 – 6 months   993 331
Over 6 months   655 94 40 Landkom International PLC Annual Report 2008
Notes to the consolidated financial statements
continued
27. Financial instruments recognised  
in the balance sheet
A. At 31 December 2008
     Loans 
     and other 
   Held for Available receivables/
    trading for sale (payables) Total
   $000 $000 $000  $000
Non-current  
 financial assets     
Financial asset investments – 1 17 – 1 17
    
Current financial assets    
 Trade and other receivables – – 1,1 14 1,1 14
 Cash and cash equivalents – – 4,230 4,230
    
Total financial assets – 117 5,344 5,461
    
Current financial liabilities    
 Trade and other payables – – 7 ,035 7 ,035
 Obligations under  
 finance leases – – 846 846
    
Non-current 
  financial liabilities   
 Obligations under  
 finance leases – – 156 156
    
Total financial liabilities – – 8,037 8,037
B. At 31 December 2007
     Other 
   Held  Available financial
   for trading for sale liabilities Total
   $000 $000  $000  $000
Non-current  
 financial assets   
Financial asset investments – – – –
    
Current financial assets    
Trade and other receivables – – 1,789 1,789
Cash and cash equivalents – – 87 ,646 87 ,646
Derivative financial assets 34 – – 34
    
Total financial assets 34 – 89,435 89,469
    
Current financial liabilities    
Trade and other payables – – 3,566 3,566
Obligations under  
 finance leases – – 63 63
    
Non-current financial  
 liabilities   
 Obligations under  
 finance leases – – 125 125
    
Total financial liabilities – – 3,754 3,754
 
28. Deferred income tax
Deferred income tax assets and liabilities are offset when there 
is a legally enforceable right to offset the current tax assets 
against current tax liabilities and when the deferred income 
taxes relate to the same fiscal authority. 
As at 31 December 2008 the Group had a potential deferred 
tax asset of $3,703,000 relating to trading losses available  
to carry forward. Due to political conditions in Ukraine the 
Directors view that this asset will not be realised and is, 
therefore, not recognised in these financial statements. 
As at 31 December 2008 the Group had no deferred tax 
liabilities. 
As at 31 December 2007 the Group had a deferred tax  
asset of $917 ,000 relating to the trading losses available to 
carry forward. The Group also had deferred tax liabilities  
of US$917 ,000 relating to the fair value adjustment in respect  
of biological assets. As both the assets and the liabilities  
relate to the Group’s operations in Ukraine and there is  
a legal right of set-off, the amounts have been netted in the 
financial statements.
29. Retirement benefit obligations
The Group did not have any retirement benefit obligations  
as at 31 December 2008 (2007: nil).
30. Directors and employees
   2008 2007
   $000 $000
Staff costs during the period were as follows:   
Wages, salaries and fees   7,798 2,507
Social security costs   1,523 187
Termination benefits   495 –
Share based payments   2,419 335
    12,235 3,029
   
The average number of employees during the period was:
 
Directors   7 4
Administration   123 37
Operatives   652 122
    782 163
   
Total number of employees at 31 December 740 249
   
Total amount for Directors’ remuneration and other benefits  
was as follows:
Emoluments for Directors’ services  
 – fees and salaries   996 458
   
The emoluments of the highest paid employee was $291,130 
(2007: $141,000).
    Annual Report 2008 Landkom International PLC 41
31. Leasing commitments
Operating lease commitments – Group as a lessee
The Group leases parcels of land under non-cancellable 
operating leases. The lease expenditure charged to the income 
statement during the period is disclosed in Note 7 . 
The future aggregate minimum lease payments under non-
cancellable operating leases are as follows:
   2008 2007
   $000 $000
Registered land leases:   
No later than 1 year   752 1,049
Later than 1 year and no later than 5 years 2,709 2,383
Later than 5 years   4,850 5,318
    8,311 8,750
   
Other operating leases – buildings:   
No later than 1 year   20 205
Later than 1 year and no later than 5 years 15 36
    35 241
   
   
32. Capital commitments
Capital expenditure contracted for at the balance sheet date, 
but not yet incurred is as follows:
   2008 2007
   $000 $000
Property plant & equipment   – 14,042
33. Corporate asset acquisitions
The subsidiaries included in these financial statements are  
as follows:
  Country of   Percentage of
  incorporation Activity ownership
Held at 31 December 2007:   
Charmaine  
 Investments Ltd Cyprus Holding company 100.00%
LK Ukraine Group Ltd Ukraine Farm operations 99.99%
Landkom UA Ltd Ukraine Land ownership 100.00%
  England &  
Landkom Services Ltd Wales Admin services 100.00%
   
Acquired or formed during the year:  
Bio Invest LLC Ukraine Farm operations 90.00%
Radalan land LLC Ukraine Farm operations 90.00%
Velych LLC Ukraine Farm operations 80.00%
Kozatskyi Kurin’ LK LLC Ukraine Farm operations 80.00%
Druzbha LLC Ukraine Farm operations 99.60%
Landkom Krym Ukraine Holding company 100.00%
Yasnaya Polyana  Ukraine Farm operations 88.77%
Romaniv Agro LLC Ukraine Farm operations 100.00%
Dobrosyn LLC Ukraine Farm operations 100.00%
Nazalezhnist PP Ukraine Farm operations 100.00%
Landkom Ukraine PP Ukraine Land ownership 100.00%
The Group acquired the net assets of Landkom Ukraine PP  
on 1 1 January 2008 (an entity previously under the control  
of key management personnel - Richard Spinks) for nominal 
consideration of UAH 1.
The Group has made a number of acquisitions during the year. 
In the view of the Directors the entities acquired do not satisfy 
the definition of a business as defined by IFRS 3 and 
consequently these acquisitions have been treated as asset 
purchases (see note 12) and are included in property, plant 
and equipment at cost to the group. 
34. Related party transactions
a. During the period the Group acquired an entity controlled 
by key management personnel (Landkom Ukraine PP –  
Mr Richard Spinks) for nominal consideration of UAH 1. In the 
opinion of the Directors the fair value of the assets acquired 
are greater than the consideration. 
Prior to the Group acquiring Landkom Ukraine PP the following 
transactions occurred: 
   2008 2007
   $000 $000
Sale of cultivation services   – 1,487
Purchase of agronomy services   – 1,782
Purchase of assets   – 145
Sales of services to related parties were made at the Group’s 
usual cultivation price lists. Purchases were made at market 
price, adjusted to reflect the quality of services purchased.
b. During the period the Group acquired a dwelling house and 
land plot from a close family member of the key management 
(Mr Richard Spinks). The Group paid consideration of 
$157 ,000 (UAH 748,661). In the opinion of the Directors the 
fair value of the assets acquired are greater than the 
consideration. 
c. The Group also acquired from key management personnel 
(Mr Richard Spinks) a residential flat. The Group paid 
consideration of $41,000 (UAH 202,000). In the opinion of 
the Directors the fair value of the assets acquired are greater 
than the consideration.
d. Warwick Smith resigned as a Director on 3 September 
2008 and received post employment benefits in the form  
of severance payments amounting to $198,983.
e. Keith Dawson resigned as a Director on 28 April 2008  
and received post employment benefits in the form of 
severance payments amounting to $73,729.  42 Landkom International PLC Annual Report 2008
Notes to the consolidated financial statements
continued
34. Related party transactions continued
f. Year end balances with related parties from sales/purchases 
of goods/services were:
   2008 2007
   $000 $000
Net receivables from related party:   
Landkom Ukraine PP  
 – Under control of Richard Spinks  – 31 2
Amounts due to related party:   
Richard Spinks   – 8
g. The remuneration of the Directors, who are the key 
management personnel of the Group is set out below in 
aggregate for each of the categories specified in IAS 24 
‘Related Party Disclosures’. Further information about the 
remuneration of individual Directors is provided in the 
Directors’ Remuneration Report on pages 17 to 18. 
   2008 2007
   $000 $000
Short-term employee benefits   996 458
Termination benefits   273 –
Share based payment charge   1,657 1 76
    2,926 634
35. Events after the balance sheet date
In March 2009, Landkom International Plc placed 40,000,000 
new ordinary shares of 0.1 pence each at 12p per share to 
raise gross proceeds of $6.86 million.
36. Management of capital
The Group’s objectives when managing capital are:
•  To maintain the entity’s ability to continue as a going 
concern, so that it can continue to provide a return for 
shareholders and benefits for other stakeholders, and
•  To provide an adequate return to shareholders by pricing 
products and services commensurately with the level of risk
The Group sets the amount of capital in proportion to risk.  
The Group manages the capital structure and makes 
adjustments to it in the light of changes in economic conditions 
and the risk characteristics of the underlying assets. In order  
to maintain or adjust the capital structure, the Group may 
adjust the amount of dividends paid to shareholders, return 
capital to shareholders, issue new shares, obtain or increase 
debt, or sell assets to reduce debt. 
37. Non cash items
During the period the Group entered into the following 
non-cash transactions:
   2008 2007
   $000 $000
Purchase of assets under finance lease  814 – Annual Report 2008 Landkom International PLC 43
Directors, officers and advisers
Directors
Non-Executive
Neil Balfour Chairman
Gerald Howarth Independent
Laurence Holyoake Independent
Executive
Richard Spinks Chief Executive Officer
Stephen Pickup Chief Financial Officer
Ben Adams Farming Director
Konrad Nowicki Land Director/Managing Director Ukraine
Registered office
1 1 Hope Street
Douglas IM1 1AQ
Isle of Man
UK
Auditor
Baker Tilly UK Audit LLP
Chartered Accountants
2 Bloomsbury Street
London 
WC1B 3ST
Solicitors
DLA Piper UK LLP
2 Noble Street
London 
EC2V 7EE
Nominated adviser
Liberum Capital Limited 
10th Floor, CityPoint
One Ropemaker Street
London
EC2Y 9HT
Registrars
Capita Registrars (IOM) Limited
3rd Floor, Exchange House
54-62 Athol Street
Douglas IM1 1JD
Isle of Man
British Isles 
Bankers
Barclays Private Clients International Limited
Barclays House
Victoria Street
Douglas 
IM99 1AJ 44 Landkom International PLC Annual Report 2008
Notes 4 Landkom International PLC Annual Report 2008
01  Group highlights
02 Our business
04  Chairman’s statement
Business review
06  Chief Executive Officer’s review
10  Chief Financial Officer’s report 
12  Board of Directors
14  Directors’ report
16  Corporate governance statement
17  Remuneration report
19  Statement of Directors’ responsibilities
20  Independent Auditor’s report
21  Consolidated income statement
22  Consolidated balance sheet
23  Consolidated cash flow statement
24  Consolidated statement of changes in equity
25  Notes to the consolidated financial statements
43  Directors, officers and advisers
Landkom is a large scale 
producer of agricultural 
crops, principally oil seed 
rape and wheat, for supply 
to the global markets. We 
intend to become a leading 
agricultural commodity 
producer and to deliver 
profitability to shareholders. 
This report has been printed in the UK, our printers are Environmental 
Management System ISO 14001 accredited and Forest Stewardship 
Council (FSC) chain of custody certified. All inks used are vegetable  
based. This paper is environmentally friendly ECF (elemental chlorine free), 
wood free with a high content of selected pre-consumer recycled material.  
The mill is fully FSC certified. The paper is also completely biodegradable 
and recyclable.
Designed and produced by The College www.thecollege.uk.com
IMPORTANT_Printer to adjust spine to fit Solid progress in 
challenging times
Landkom International PLC 
Annual Report 2008
Landkom International PLC Annual Report 2008
www.landkom.com
IMPORTANT_Printer to adjust spine to fit