Re. 1: Election of the Meeting Chairman
The Chairman bid welcome.
Jens Bigum was proposed as the Meeting Chairman by the Board and elected.
The notice to convene the meeting was issued in a timely manner on 2/5/2018 – no objections.
The Board proposed Leif Eltved and Lene Kjær from Agri Nord as vote counters, as well as shareholder Erling Sørensen. Approved by the assembly.
Items 2, 3 and 4 shall be dealt with under one. The Board’s proposal 1, was proposed before item 6 since it has an influence on the vote.

Re. 2: The Board’s report on the company’s activities during the past year by the Chairman.
Had expected to be able to show a plus, after the high devaluation last year.
We have been very realistic but could also see that we had challenges, especially in Amaru.

However, this year we present the highest operating profit ever at DKK 6.4 million, so the operation has progressed well on track – see page 11 of the Annual Report.

This year the exchange rate movement has unfortunately taken about DKK 4 million of the operating result – the lowest rate for a long
time where it went from 180 to 159. This means that the decrease in 2017 ended  in a total of 4 price points (refer to PP page 14)
There were also additional costs associated with the sale and split of DKK 1.5 million. The result shows a small minus and before tax and larger after since the companies must not be jointly taxed. We will optimise this as best we can in 2018.

We currently have the best liquidity so far, and the development of the VAT refund has been considerably better. Still trying to get the last home (refer to PP page 12).

The Group structure has become more streamlined, less admin and the operation is running in one company per property now. From 1/12 Steen has taken over responsibility for Amaru, so along with Videle, it means a better joint operation of the two properties in the east.

Presentation by Steen Hjemsted – SiteManager (refer to PP page 6-11)
Excellent autumn and satisfied with the crops. The snow disappeared at the end of March, followed by rain, which meant a lot of surface water. Large parts of the winter crops on the frozen land were fertilized, but since then it has been extremely dry.

Lost 10% of wheat in Videle and 10% of maize in Amaru – roots had rotted. They couldn’t take 1 month under water.

Oravita: The harvest looks to be average.

Videle also OK – had 20-50 mm of rain. Unfortunately, no rain in Amaru for 2 months. The wheat is ok, but the rapeseed has weak siliqua. Spring-sown crops are hit hard.

Future focus is on: Costs, the synergy between the 2 eastern sites, improvement of soil quality/potential, i.e. grubbing, liming and creating channels for water. It costs some money but is a must in order not to lose too many crops.

Sale of crops: Wheat and rapeseed increase a little – DKK 105/bread wheat – DKK 240 for rapeseed. Just around the budget.
Fertilizer has fallen slightly since last winter, and we expect to be able to buy it during the summer at an affordable price.

About investments –see overview in PP page 9). Working with a small number of mechanical machines, and to streamline the work, so we utilise the machines fully.

In the spring, we have worked intensely to get land in the cadastre – costs about EUR 2-350 per HA, refer to the overview in PP pages 10 and 11.

We have two lawyers and an office worker who works almost exclusively with cadastre.
The process is running better than expected, and we believe that we can get the 85% in the cadastre over the next 3 years.
Although our work is completed, it can take up to 6 months before we have the papers 100% in order, so it is a very slow process.

Preben Hansen, report continued:
We started last year with a sales process with the Chinese, but as previously announced, after completion of the DD, they announced that they should not invest out of the country, and there was no transaction. A new process has started again; we will return to this.

Re. VAT – there is no VAT on the sale of crops, which is why we will attempt to have the total VAT on purchases refunded. We had a credit balance of DKK 14.5 million in 2016 and DKK 11.1 million in 2017. We have had a large part paid back after the turn of the year, and that is why we are now only owed DKK 4.6 million. Due to uncertainties about the amount, as a precaution we have put aside DKK 3.7 million in the accounts. See PP page 13.

In order to simplify the ownership structure, we have been working for the last 1½ years to get the ownership in place. It has to be done in multiplsteps and takes a long time, but we will probably finish during 2018, where we have a focus on it rather than the recovery of VAT. We cannot do both at once, because there cannot be any change of ownership in the midst of recovery.

AI may only own 1 company 100%, which is why PH in the other companies must be designed for approx. 0.01%.

This season we have only had operation in 1 company per property which has been simpler than in the past, where the operation has been split into 2 companies per property.

Land values (Refer to PP pages 15-17)

Not much not happened, and we focus on what is not in operation. In 2017, we had 100 HA more in operation.
Gone from DKK 303 million to DKK 295 incl. exchange rate adjustment (DKK 4 million on operations and DKK 7 million on the balance sheet).
Land costs approx. DKK 30,000/HA, which is in operation, and it is certainly not on the high side. Expected sales price would probably be approx. DKK 42,000/HA.
Land that is not in the cadastre costs approx. DKK 25,000/HA. The prices posted are definitely not exaggerated compared to the market price, and it is currently still increasing. It’s important the land is in the cadastre, so we have a big task to solve here in the east.

Purchase and sale of land/Oravita
We are purchasing some land that lies between our plots. EUR 20,000 has been set aside for this (currently provides approx. EUR 2000-4000 per HA)

The apartment in Bucharest is up for sale, and there has been a bit of interest in the last month or so. When it was purchased, the block was in the country, but now slightly smaller and cheaper apartments have been built all around it. It has previously been used when we have been there, but it is cheaper to stay at a hotel.

We also have 175 HA of land that is not in the cadastre. The land is sold for EUR 4000/HA. In 326 small plots. Estimated that approx. 2/3 of it will be completed in 2018. The buyer pays the land rent until the sale is in place.

In Oravita, we have a new interested buyer, and the agreement (LOI/Term Sheet) regarding the transaction was sent on 23/5 with my signature. We hope we can soon go ahead with DD, where a plan has been made, but it’s still a slow process.

In order to be able to sell the land without taxation in Romania, there has to be a breakdown where AC is divided and the land that is sold, goes to the new company OFL. Started up last summer, and we were promised that it would be finished now. A few weeks ago, the Court announced that some information was missing. This has been corrected, but everything takes a long time. Once approved, 6500 plots will have the new company’s name. The office can take 50 plots per day, so it is approx. 130 days. We do not have a binding response, so it’s hard to say when the new owner can take over.

A solution must be found, and yesterday I sent a signed Term Sheet to the buyer after we had been writing back and forth for 1.5 months about how the transaction and DD shall proceed. Fortunately, this could be done by e-mail!

The future
Continued focus on operation and optimisation of the administration, where many initiatives have been taken, among other things, a new simplified chart of accounts. There are a number of laws to be observed in this area, but we will remove anything unnecessary in order to reduce administrative costs further in the coming years.
Therefore, we are also proposing one Board Member less. We will try to make the newsletters as comprehensive as possible, so we can perhaps avoid a shareholder meeting in the autumn. It’s perhaps a minor thing, but it can quickly cost a lot of money to hold it, and no costs are protected. If an important situation occurs, we can always convene a meeting.

Re. tax optimisation – we pay taxes for some companies while at the same time we have a minus in others with large historical tax deficits. The authorities seem more aggressive to foreigners, so we must constantly be on our toes.

We will maintain it at the shareholders’ meeting proposed plan to put land in the Cadastre in the east, which is also a significant but necessary cost.

Thanks to everyone who has worked hard for Agri Invest – employees, shareholders, accountant, etc.

Re. 3: Presentation of the audited Annual Report and management report for approval by Christian Brasholt from BDO
Re. 4: Decision on the application of profits or coverage of loss in accordance with the approved Annual Report

Also refer to the attached PP from BDO. 

Last year, there were some indications about soil conditions, but otherwise, the statement is largely similar to the 2016 statement, although with slightly different numbers.In 2016, we adjusted a total of approx. DKK 40 million – and it could have an effect on the comparison with 2017.The accountant in Romania makes reservations for land that is not in ownership – not for valuation.Owed VAT per 31/12/2017 of DKK 11.1 million is now down to DKK 5.1 million (March 2018).Profit for the year before tax DKK -287,000 and after tax -754,000.

What has primarily affected this year’s result can be seen in the Annual Report page 17:

• Non-budget-equivalent production at the Amaru site
• Generally depressed crop prices, which have not been budget-equivalent
• Negative exchange rate adjustment, mainly because of the development RON and DKK
• Costs incurred for the restructuring of the company for the purpose of the sales process
• Increased costs for consultants, etc., in connection with the continued adaptation of the company’s admin relationship
• The result for the year in 2017 was affected by a tax payment in the Romanian subsidiaries

New tax law is under implementation in Romania. It says that under certain conditions, a payable tax will be triggered, regardless of whether there is a profit or a loss.

Reg. turnover of approx. DKK 42 million because of a larger inventory in relation to 2016.

Provision of costs of double sales of land – withdrawn, which is why it is included as an income this year.

Debate:
Jan Ulrich: In case of a sale, have any considerations been made regarding the two eastern properties, further operation, economy, etc.? Do we have the economy for it?
PH: The best assessment is that we will be able to have a sound operation at the eastern sites. We certainly need water now, but due to the massive preparatory work, there isn’t much that has drowned. Last year had the best yields in Videle, so I certainly do not think we will be worse off.
Steen: Regarding drainage – a lot has been done in Amaru and will be done the next two years in Videle. Channels, grubbing and adding lime. Whether we can have the same result without Oravita, is hard to answer, but we also save costs here.
Jørgen Stougaard: We are now seeing the long-term effect of grubbing, etc. We only have one Dane in the east + Marius, who is Romanian. We get better utilisation and service with the purchased machines.Hans Sørensen: Re. channel excavation – are there any restrictions on excavating? So, should we just carry on?
Praise for the hard work involved in it.
Steen: We are working hard – also in Videle. We have many large channels in Amaru, and we are trying to draw water into an area.
Stougaard: The premises are waiting for us to do the work and pay for it.Valdemar Bogh: Small areas are sold without the cadastre for DKK 4000/HA. What is in cadastre in Oravita, we sell for DKK 6000. Can we find buyers for the other areas without putting it in the cadastre, perhaps Romanians?

Ole Bouet: The channels that were previously dug there have not been maintained, and they have become overgrown with reeds, etc. You are only talking about draining – can you do the opposite, and water in times of drought, and what is the cost?
Stougaard: When we looked at the land about 10 years ago, we also looked at the places where they watered from the Danube. Nobody ever calculated whether it was profitable, as it was controlled and paid for by the State, so we have no figures on it.
PH: It is atypical that we can sell at DKK 4000/HA. We can risk that they are HA that others have taken ownership of before the transaction has completed. We don’t get money for all 175 HA. Is it larger areas, so there is no interest in buying without cadastre.
Steen: Much of the land we cultivate today is not ours, but we have swapped the right of use with neighbours so that we do not own the land 100% that we cultivate today.

Ulrik Jakobsen: Thanked the Chairman for the report, great that the focus is on the daily operation, but do we have enough focus on the sale? Do we have an agent? How much did the new buyer offer?

Ole Skårhøj: A purchase agreement has been made for Oravita – so must know the economic situation.
Praise for focus on day-to-day operation. How does it look if things succeed?
PH: Regarding the agent — all the buyers we have had contact with, the agent was involved. All agents can come with buyers. For the new transaction, we also have agents – they provide the information that the buyer should have in connection with DD.
In the process beforehand, several different agents may make agreements, until there is something concrete. The price is the same as the Chinese.
The signed papers that were sent are just a description of how to do business, how it will be done, etc. This time the buyers are Romanian, so they know the situation. Reckon that DD will soon be able to go ahead – and then a purchase agreement can be drawn up.

Ole Skårhøj: If the deal goes through, how does the company then look?
PH: Then we are very well prepared and better than we are now. We have learned from the process, and if over the next 3 years we can have everything in the cadastre, will we have a more stable situation. The basic things are in order, so there should not be violent fluctuations in operation – it means a lot in a sales situation if we can demonstrate stability.

Bo Arvin: New buyers – what is the time horizon and are they valid buyers?
PH: No doubt that they are valid. It’s well known and something that will drive itself.
Time horizon – finished by the new year, but is the split in order? Would guess after the 2019 harvest.Report and accounts approved by a show of hands. No one demanded a written vote.

Re. 5: Presentation of the 2018 working budget by Christian Brasholt
(Refer to PP pages 21-26)

PH:The working budget has been very thoroughly prepared by BDO – updated since shareholder meeting in November.

Christian Brasholt: 

Bookkeeping is completely handled by the company’s own office. A new account plan (approx. Danish conditions) has been made for 2018, which should provide better transparency for all parties.

The budget has been prepared without taking into account that there is a sales process of Oravita. The budget has not taken into account the corrections on the “Danish land”, as well as exchange rate adjustment, together with the fact that there are no direct costs incorporated for the current, initiated sales process. 9100 HA/field plan against 8700 in 2017. Budgeted revenue of DKK 55 million.

Budgeted with a profit of DKK 4.4 million against the earlier presented budget at the shareholder meeting in November showed a result of DKK 5.5 million. The downward adjustment can primarily be attributed to the increased cost of fertilizer and lime, as well as a slight rate adjustment and adaptation of the field plan.

Debate:
Lars Jørgen Larsen: We started with debt-free properties, and we don’t even have EU subsidies?
PH: That should be history now – we became aware far too late, and the money box was probably too big. It is not reasonable, but we hope that it has turned around now and have great focus.Niels Saxtoft: We are 5 months into the financial year. Has the drought and prices had any impact on the result? Have you made considerations for these fluctuations, in recent years we have only seen budgets that were not kept to?

Jan Ulrich: Too high admin costs Can it even be successful – especially if we sell Oravita? Can easily see that there has been an enormous amount of work. Would it not be better with livestock production, with the history we have. It will cost approx. DKK 4-5 million to get it in the cadastre.
PH: We have not made corrections, it’s been dry, especially in Amaru, but it looks more normal in the other places. Don’t think it provides the basis for changing the budget, but we are aware and suits the cash flow.
Adm. Costs will be affected if Oravita goes away. We have only one choice here, to get this implemented as cheaply as possible, and we need to persevere and believe prices are realistic.
Christian Brasholt: What is sensitivity? – there are a great many things that can affect the budget, including changes in yield, prices and exchange rate. Costs are included from previous year’s records. The bookkeeping as of April shows no significant discrepancies in relation to the budget.

Bo Arvin: Approx. 4 years ago Torben Lauridsen suggested that we were going to rent out some of the land. Had we done that, we would have a plus of DKK 100 million today. We have to recognise that we can’t operate down there, despite a professional Board. Accelerate the sales process.
Ole Nielsen: Our capital is interest-bearing with less than 2% annually. Put it all up for sale as soon as possible. Should we spend 4-5 years more – a massive amount of work and many more costs?
How much of a dividend is there per share upon a sale – do you have a calculation?
Jens Bigum: The day we have a quite specific sale, the assembly should be convened and help to decide how the money should be used.
PH: It was not the strategy to rent out, but to buy, put into operation and run it. Machines have been purchased, installations made, etc., so it is, in fact, a completely different setup. For us to have an operating result this year of DKK 6.5 million, it must go in the right direction. We are doing everything we can to expedite the sale, but it just takes time. The surest way is to work hard on the cadastre – there are no buyers for such large properties without it.

Ole Bouet: Could anything happen about the EU subsidy – have we had it long enough. I’m not entirely sure about renting out. Agree with the strategy that we have had.
Valdemar Bogh: The livestock facility that was established – how are they assessed in a sales situation?
PH: You’re right, and we must see how it goes – the price is high enough. We have some in Oravita; they aren’t in many places. A valuer assessment will be made – it has cost us approx. EUR 4.5 million to make it.

Re. 6: Elections to the Board
Preben Hansen, Claus Nørgaard, Jens Bigum and Palle Kjærsgaard are up for election.
The latter does not wish to be re-elected.

Proposals for the Board:
Preben Hansen, Claus Nørgaard, Jens Bigum, Torben Lauridsen and Ole Skårhøj.
Ole Skårhøj excused himself from the vote.

The following were elected by the assembly:
Preben Hansen – 2968 votes
Claus Nørgaard – 2473 votes
Jens Bigum – 2303 votes

There were 1190 votes for Torben Lauridsen, who did not get in.
90 shareholders participated at the Annual General Meeting = 3358 votes = 52%.

Re. 7: Election of the accountant
The Board proposed the re-election of BDO with Chr. Brasholt at the forefront. The assembly agreed.
Ad 8: Eventuelle forslag fra bestyrelse eller aktionærer
(Refer to proposal 1 from the Board – PP page 28)

The proposal that only 3 members of the Board were elected instead of 4 in order to save costs. The proposal is in accordance with the Articles of Association, where the Board shall consist of 7-9 members.

The proposal should not be approved, but the Board want an expression of opinion.
The assembly agreed that only 3 are elected to the Board.

Re. 9: Any other business
PH: Re. the shareholders’ meeting, which in recent years has been held in November, it is suggested to have written information instead to save costs.
Torben Lauridsen: It is perfectly ok with digital correspondence instead – perhaps with a PP that can be sent. You can also create a dialogue here.
Bent Hjorth Knudsen: Thinks it should only be convened, if the Board has things they want to be discussed with the assembly. Otherwise, the full confidence the Board has a handle on it and informs. Approved by the assembly.

The Board is presented to the assembly.

Chr. Brasholt: There has been a lot of talk about the sale. You MUST have a handle on your land in order to sell it today. A secure process is to have a handle on your land.

Torben Lauridsen: The process of getting it in the cadastre, is it possible to speed it up, or is it going as fast as possible right now?
Steen: It’s not realistic to do it in 1 year – maybe we can do it faster than 3 years, but it’s hard to tell. If we are to do it faster, we need external help. It is very important that it is done properly – otherwise, it will be rejected.

Lars Bech Hansen: How have we got so much land that is not registered?
Stougaard: Most of the land in Oravita was in the cadastre. Only a very small part was in the cadastre in the east and in hindsight, it should have been started sooner.
Steen: It was not at all unusual to buy land without cadastre.

Bent Hjorth Knudsen: There was a very big difference in regions in Romania, whether it was in the cadastre or not. If you were in the region in question, you had to follow the rules that were there.
PH: I think we need to give it a bit of time and do everything that we can ourselves. It will be neither better nor cheaper by beginning to get a new workforce. We are doing everything we can to make sure that things succeed.The Chairman finally thanked everyone for the votes, Palle Kjærsgaard for his great, enriching and humorous work and congratulated the newly elected members of the Board. He also thanked Torben Lauridsen for standing for election.The Meeting Chairman said thank you for a good Annual General Meeting and good debates.

Minute taker: Birthe Dencker Sørensen

Enclosed: