Minutes of the Shareholders’ Meeting on Friday 25^th November 2016 in Tårnsalen at Agri Nord

RE 1 Welcome from Chairman Preben Hansen

The tradition of the shareholders’ meeting once a year is to be maintained. We have finished the season and accelerated the process of getting a working budget drawn up based on the disastrous result for last year.

After 1 June – Jørgen Stougaard is acting CEO. We have been through a good process with many tasks for the Chairman and the Board of Directors. A major challenge with tight liquidity, especially in May, June and July. Waited on a large VAT credit and HA subsidy. Came through the period, but there were major challenges to pay the amount due. Subsequently, we had a complete handle on bills and paid everything in a timely manner. As decided at the Annual General Meeting in 2015, we chose a new accountant – also at the Oravita site, when it was in the sales process. Our business partner down there is BDO, and that is why it was also obvious to choose BDO here in DK.
Christian Brasholt from BDO started on 1^st June and was immediately deeply involved in the work, so he could get a good overview. External accounting was used in Romania, which is a requirement down there with an independent audit. What we saw was not impressive, and we have followed it very closely each month with our accountant here in DK.

We have made significant changes – our accounting must come in house. Completely hopeless, when you cannot extract information on a continuous basis from bookkeeping. 2016 is to end with the existing agreement – then we will start up in house. It will mean simplification in the daily work with much better follow-up.
Here in the week we have made an agreement with a new accountant, who has a connection with BDO in DK, so we can also control it from home.
The initiatives we are making will trigger the simplification and savings, but it takes time. It has filled much of the working day, but given a really good insight and the Board has worked very hard and intensely.
Jørgen Stougaard (JS) has taken on a lot with regards to contact to the operation down there and passing on info to the Chairman.

Jørgen Evald Jensen is running the plant part and Christian Brasholt has the economy. Questions are most welcome.

RE2 Detailed update on operations with Jørgen Stougaard CEO & Preben Hansen, Chairman.

Production managers are obligated to contact JS or PH when there are things that cannot be solved immediately, so we can try to solve it from DK. They must not let it wait and wait, it must be acted upon immediately.

We move machines between sites, so they are best utilised.

The Board setup 3 sub committees to distribute the tasks a little: Machinery, Recruitment and Sales Committee

Update on the cultivation of plants with Jørgen Evald Jensen

Season 2016 is a bit special.
Autumn 2015: Good establishment of wheat, winter barley sown a little late, but maize and sunflower sown on time at the beginning of April in an OK seedbed. Warm and wet season in the west and severe summer drought in the east. Subsoiler works great at loosening the soil.
Maize yield is well above the expected in the west.
Challenges with MFO requirement of 5% – rising to 7% in 2017. Legume count 0.3 – aftercrops 0.7. Aftercrops must not be sprayed, before they are soil treated, which means great challenges and a bad starting point for spring-sown cereal sowing. Soya will be an attempt to resolve it in a different way – similarly with alfalfa. A challenge for all Romanian farms and there is currently no optimal solution.
Realistic average yields: Wheat 6 tonnes/HA – Rapeseed 3 tonnes/HA – Maize 6 tonnes/HA – Sunflower 2.5 tonnes/HA and Soya 2 tonnes/HA.
We believe in Soya – some sites have harvested up to 4 tonnes/HA this year.
Had 83% winter crop this year, and this is also the plan for 2017. But due to the incredible amount of rain in October, there are still 800 HA we have not been able to sow due to the amount of water. Only 73% is sown. It is primarily replaced with more sunflower, but the more secure areas it is with maize.

8700 HA will be in operation in 2017.

See the results for the 3 sites on the attached PP.
In Videle, we have about 1 tonnes of Soya lying on the ground, as it was impossible to harvest optimally due to so much rain in the autumn.

Trial in Amaru with alfalfa, which is a big selling item down there, we have not included in the budget. Only on the worst land and in order to meet the requirements of MFO.

Morten Eshøj is responsible for the cultivation of plants in Oravita. The rapeseed yields are especially good and on a large area. MFO requirement is almost solved with grass, fences and aftercrops, and we transport a lot of aftercrops home.

SEASON 2017
Extremely wet autumn season will affect 2017. We are hoping for good weather in the spring.

Greatest challenges:

• Spring-sown cereals are uncertain due to the severe summer droughts (especially in the east)
• Increasing problems with periods of heavy rainfall
• Rising MFO requirements – 7% from the beginning of 2017
• If MFO is to be solved with aftercrops, it barely gives 25%
• Production equipment is beginning to wear.

What will it take to make improvements?

• Root depth must continue to be increased – soil solution
  • Great Plains Subsoiler every two years
  • It means significantly less water problems on the surface and better water supply in times of drought
  • Continue min. 75% area with winter cereals. Means better security – experience seen from other places also
• The last land with lime deficiency must be limed
• Continued focus on straightness, especially in the spring
• Hopeful that it will succeed well
  • Winter wheat, winter rapeseed
  • Working with the best solution to Greenings requirements.

Peas tried elsewhere – sown 10^th February and ready before the drought. We just do not have the land with sandy soil for early sowing.
Proposal from shareholder, on whether it is possible to make a collective protest against MFO?
JJE/JS: Big problem down there, hard to handle and get the rules out of them. It is not like in DK, where we must take the aftercrops. You get different answers depending on who you ask.

Rasmussen: We have planted alfalfa, where we have not been able to grow/make money on anything else? Crop distribution – can you rationalise and only grow one crop per site?
JJE: Hard to handle in practice, high risk and expensive to move machines, etc.
Ejnar Lyngby: How much is grown from the compaction?
PH: We own 10,600 HA and cultivate 8,700. Some is being leased out and some is not being used. We will never cultivate all 10,000 HA. Either it must be worth something, otherwise it should be leased out or sold for hunting. We have previously sold some that was too remote. We have leased more out for the upcoming season.
Henrik Grøntved: Production equipment – worn? What are your thoughts about this – renewal, etc.? We have too many different makes – doesn’t it result in challenges with regards to rep?
JS: Have tried with many different makes, but some result in big challenges with regards to spare parts and repairs. Now trying to unify it where we can get the best and fastest service – committee setup in the Board to manage it.

Re 4 – Presentation of the working budget by Christian Brasholt BDO (See PP)

Partner and State Authorised Accountant with BDO. Danish-owned company with offices in 30 towns in Denmark. Was elected at the AGM in May 2016.

PP shows ONLY a working budget that has been made in collaboration with the production managers.

WORKING BUDGET:
7 companies acting crosswise, but has no impact on the end result. Estimated result at the present is total 2,719,000. 8,747 HA is in field plans for the present – an increase in relation to previous.

Production volumes: Turnover of 56 million – alfalfa, etc., excluded due to too much uncertainty.

Mads Gårdskær: Is Salary and Adm 21% of the turnover?
JS: A year where we have turned the operation around and made significant changes – 2 accountants, leadership change, etc., means double wages and extra expenses.
Bo Arvin: Interest expense high – 5% – will it be negotiated? Should be 2.5 – 3%, can they get reasonable certainty?
CB: Set to 5% in DK – Romania 3.7-4%
PH: Interest rates should be as low as possible – we have set it so it may be slightly lower. We have needed extra cash flow this yea
r, and been pressed, making it difficult to negotiate with the banks. Maybe we should count on a little lower.
CB: It will be more accurate for the final budget at the AGM.
Ole Nielsen: With a result of less than 1% – we do not have much to make good with? Is there also a cash flow budget?
PH: There is ONLY a working budget presented, which is also presented for the first time here in the autumn. We just want to be at the forefront, have a direction and show what we can expect now.
CB: Investment needs – must also be assessed and taken into account. A status and cash flow budget will be made.
Ole Nielsen: Praise for presenting it now
Mikkel Søndergaard: You could show the historical, realised figures?
CB: Yes, when they are finally available we can make comparative figures. We do not know the figures for 2016, and cannot estimate it in more detail now.
Mads Gårdskjær: Restructuring – has taken place in 2016, and surely it will continue into 2017?
JS: Of course, there will be more and it will continue into 2017.
CB: There are lawyers employed down there, who also get a salary and are not under consulting services.
PH: It also costs money to get land in operation – incredibly comprehensive. In the future there will also be costs for lawyers.

Re 5: Any other business

PH: Appointment of new a director – there have been applications and the procedure continues.

The sale of Oravita: We are waiting for a final signature from the buyer. You will not get a name or a price. But, if it is successful, as we expect, there is an expectation of starting up a DD before Christmas. It will take a long time, but an extraordinary AGM will be convened for the sales contract that will be drawn up. We are in reasonable agreement and hope it succeeds. It has been worth the wait, when we look at the development. Our ambition was to buy something, make it ready and sell it. We still have two properties left with a high development potential, if we get Oravita sold.
Shareholder: Adm. and salary costs are high, are we not a little quick off the mark appointing a new director? Could you, for example, appoint a working director – know of others down there, where it functions optimally. Just a suggestion, if we only have 2 properties left.
JS/PH: We have included that in the considerations and that is why we have not rushed in and taken our time. Much depends on what happens.
Bent Hjort Knudsen: What about any means that are released from the sale?
JS/PH: Fiscal analysis made. We must obtain maximum money with a minimum payment of tax, and we have consulted others who know about it. Are very aware to do it in the best possible way.
Shareholder: Are we selling Oravita, so we still operate it? Are the remaining sites also for sale?
PH: No, it is not a condition of the sale that we have to do it.
JS: No, the rest are not for sale and it is not subject to the deed yet.
Ole Nielsen: Timeframe for the last 2 sites?
PH: We have to finish putting it in cadastre, so we will be just as sales ready here as in Oravita. There must not be land that does not have a value.
JS: There will be new programmes down there, which makes it simpler to get land in cadastre – maybe it will go faster, but we do not know.
Ole Nielsen: Maybe we should sell them as soon as possible?
PH: There are only 14% in cadastre compared to 100% in Oravita. We are trying to land it continually, and then we must take it up afterwards.
Niels Jørgen Andersen: Have you considered leasing out the rest?
JS: We are using a lot of resources with what we are doing now, as well as the turnaround in the office, so we have not looked at it yet.
PH: So we should probably have had another strategy. But with the right rental income on the whole farm, it is not impossible.
Bo Arvin: Will it not be difficult to get a positive operation on the two remaining? Has a decision been made on the distribution of dividends? Is RD still associated with Agri Invest?
PH: RD finished this week, but is still a shareholder. Distribution: Settling debt, something for shareholders and investment in the other – divided into 3 boxes. The shareholders want a distribution, but we must also keep running the rest.
Ole Nielsen: Current debt? Is it 70 million?
PH: DKK 60 million
Shareholder: Do we need to take on other operations – the last two are close to each other. For example, cattle or pig farming.
PH: We have not considered it, but we will bear that in mind.
JS: We must not make any investments before Oravita is sold.
Niels J. Andersen: Current crop stock?
PH: Approx. 19,000 – 20,000. We have sold rapeseed, maize and sunflower, and it is a little atypical to have sold maize right now, but the reason is that many have not yet harvested it. We follow prices all the time and sell when the time is right.
Flemming Christensen: Do you have buyers for what is in the east?
PH: No, and we have not worked seriously on it. Hard to get a proper offer without the land being in cadastre, since it requires a lot of documentation, etc.
Shareholder: We are faced with something that is questionable in operation – worrying?
PH: We have seen slightly more stable yields and it seems to a positive direction. Slightly higher crop prices. We are trying to “set aside” alfalfa and hope it succeeds.
Bent Hjorth: Cadastre is the most important thing.

Preben Hansen – thank you very much for your attendance and participation. Hope you have received the information you expected. We have done our best, and we believe we have a handle on the economy for 2017.

Minute-taker Birthe Dencker Sørensen