9 May
2017
AfriAg Global PLC
(“AfriAg Global” or the
“Company”)
Audited final
results for the year ended 31 December
2016
Chairman’s report (incorporating the strategic
review)
This has been an excellent year for the Company business growth
as a global agri-logistics logistics provider, and I am pleased to
present the annual report and financial statements for AfriAg
Global plc (the “Company” and, together with its wholly owned
subsidiaries, the “Group”) for the year ended 31 December 2016.
Our global distribution footprint has expanded considerably
during the year, as we moved to distributing perishable food
products by road, air and sea for and to global customers
(South Africa, Mauritius, Mozambique, Zimbabwe, Zambia, DRC, Kenya, USA,
UK, France, Holland, Russia, Japan, New
Zealand and others).
AfriAg Marketing had a very strong year, with revenues growing
54% to £3.035 million during the period, a significant increase
from the previous year’s reported revenue of £1.977 million.
Specialist global agri-logistics group AfriAg SA, continues to
grow at a fast pace and has developed into a significant global
logistics enterprise. It has reported a 91% increase in full year
revenues to £11.704 million for the twelve months ended
31 December 2016, versus revenues of
£6.122 million for the previous year, with a gross profit of
£927,000 (2015: £552,000) and a net profit for the year of £104,000
(2015: £359,000). The Company has equity-accounted for its 40%
share of this profit for 2016, being £42,000.
Gross profit for the Group also increased significantly to
£334,000 compared to the £50,000 reported for the previous
year.
Group Results for the period:
- The Group’s gross turnover has increased by over 54% to £3.035
million for the year (2015 - £1.977 million).
- The Group’s net loss after taxation for the year was £9,000
(2015 - £96,000 loss).
- The Group’s current assets including cash at 31 December 2016 amounted to £1,261,000 (2015 -
£810,000).
- The Group’s 40% owned agri-logistics investment, AfriAg (Pty)
Ltd, gross turnover increased 91% to £11.704 million (2015 - £6.122
million) and reported a net profit of £104,000 (2015 -
£359,000).
Strategic Review for the Period:
AfriAg Global was formed only 4 years ago with the view of
establishing a global agri-logistics company, with the principal
aim of exporting African perishable food products to the global
market place. We are now seeing this business plan coming together
as envisaged and are now rapidly expanding our operations to
providing elite logistic solutions for the timely movement of
perishable food not only from Africa to the world but also from the world in
to Africa.
At the heart of our business is our own global network, fleet
and staff based in Johannesburg at
our large modern facilities near O.R. Tambo International Airport.
The AfriAg HQ is a full-service logistics facility equipped with
the latest facilities to meet our customer’s demanding needs.
And our global partner network spans strategic road, air and sea
routes harnessing our resources across this network enables us to
deliver bespoke logistics solutions for our customers.
We have strong relationships with our freight counterparties and
their branches, fleet, facilities and infrastructure in locations
across Europe, Asia, North Americas, and the Middle East.
AfriAg has grown to supply our customers with world class global
logistics delivering across our global footprint, international and
domestic freight transport services, distribution and refrigerated
warehousing services through to remote haulage logistics, aviation
and marine logistics support services.
Delivering these services are our main priority. Collectively,
they enable us to efficiently and effectively deliver the solutions
our customers are looking for, right around the world.
AfriAg Marketing Pty Ltd (100% owned
by AfriAg Global Plc):
AfriAg Marketing has experienced an excellent year of trading,
increasing revenues to ZAR 60.562
million (£3.035 million) in 2016, compared to ZAR 38.395 million (£1.977 million) in 2015. This
54% increase in revenue not only demonstrates strong development,
it also reinforces the belief that the company’s low-overhead,
grower-focused structure works in today’s market. The model has
been keenly welcomed by both growers and end clients.
This year, the business has been active in the export,
distribution and trading of blueberry, passion fruit, pineapple,
apple, strawberry, butternut, peas, fine beans, mange tout, sugar
snap, baby corn, chillies, baby veg, and herbs.
As well as the UK, the company is now supplying Switzerland, the
Netherlands, New Zealand,
Russia, and the USA (New York
and Los Angeles).
In this respect, the addition of a UK office has proven very
beneficial in terms of range development and in driving the
business into more strategic markets. This maximises the potential
of the growers, and the appetite from the market for a more direct
relationship with growers has also been welcomed.
Profit levels remained good at ZAR 2.057
million (£105,000) despite a forex loss of ZAR 1.297 million (£67,000) caused by the
immediate fall-out from the UK’s Brexit vote. The recovery from
this exchange rate issue showed that the foundations of the
business are strong and augurs well for ongoing growth.
The company’s core ethos (of maximising the return to growers,
paying them on the best terms available, and ensuring that end
clients get exactly what they want) is reaping its reward. Both
sides are coming back and asking for more. This we feel is the main
reason for continued success and will remain our motivation.
The coming year promises more exciting times as the company
builds on the foundations laid. The decision to drive into more
diverse markets worldwide during periods of economic uncertainty is
opening the door to significant growth, and our in-house logistics
strength undoubtedly adds huge value. This stands out as a
relatively unique offering in the market place. It remains clear
that the model is both working and gaining momentum.
AfriAg (Pty) Limited (40% owned by
AfriAg Global Plc):
AfriAg SA is a truly global and fast growing logistics business.
Road haulage, air freight and sea freight of fresh and frozen food
in to and out of Africa and to
many destinations around the world.
AfriAg SA now operates logistics services to many major global
cities and ports around the globe. The company has turned into a
truly global enterprise and we seeing tremendous growth across many
markets. We are now one of the largest air freighters of perishable
food out of southern Africa using
some of the world’s largest airlines and providing bespoke first
world logistics to destinations all over the world through our
rapidly expanding global network of airlines and agents.
AfriAg SA had an outstanding trading year in 2016, reporting an
increase of 91% in revenues to £11.704 million in the full year to
31 December 2016, versus revenue of
£6.122 million for the previous year, with a gross profit of
£927,000, a net profit for the year of £104,000. The Company has
equity-accounted for its 40% share of this profit for 2016, being
£42,000.
Public Trading Platform for the
Company’s shares:
On 25 January 2016, the Company
posted a circular to Shareholders convening a general meeting on
16 February 2016 proposing that
Shareholder’s should vote to cancel the admission of the Company's
Ordinary Shares to trading on AIM under AIM Rule 41.
The Company’s Board had determined that in their view and given
the size and stage of development of the Company, that the ISDX
Growth Market (now renamed NEX Exchange Growth Market) provides
Shareholders with the most appropriate listing platform on which to
promote the Company's growth strategy.
On 16 February 2016, the Company’s
Shareholders voted in favour at that General Meeting to delist from
the London AIM market.
The Company’s shares ceased trading on AIM market on
24 February 2016 and remain trading
on London’s NEX Exchange Growth Market under the Ticker Symbol
“AFRI”.
Change of Name:
The Company changed its name on 25 July
2016, from AfriAg Plc to AfriAg Global Plc to reflect the
dramatic changes seen by the business since its birth from an
African centric bespoke food logistics business to one that now
provides global logistics, food sales, marketing and bespoke
distribution services to many corporations and food wholesalers
around the world.
The Company’s ticker symbol on the London ISDX Growth Market
(now called NEX Exchange Growth Market) remained unchanged as
“AFRI” and the Company’s new website changed to
www.afriagglobal.com.
Outlook
The Company anticipates another year of strong growth. The
Company also intends to identify further investments in the African
agri-logistics sector, to enhance the AfriAg brand, which has now
become very well established.
The Board would like to take this opportunity to thank our
shareholders, staff and consultants for their continued support and
I look forward to reporting further significant progress over the
next period and beyond.
David Lenigas
Executive Chairman
Consolidated statement of
comprehensive income for the period to 31
December 2016
__________________________________________________________________________________________
|
|
Year ended
31 December
2016 |
Year ended
31 December
2015 |
|
Note |
£’000 |
£’000 |
|
|
|
|
Revenue |
4 |
3,035 |
1,977 |
Cost of sales |
|
(2,701) |
(1,927) |
|
|
|
|
Gross Profit |
|
334 |
50 |
|
|
|
|
Administration expenses |
|
(367) |
(313) |
Share Based Payment Charge |
|
98 |
- |
|
|
|
|
Operating (loss) |
4-5 |
(131) |
(263) |
|
|
|
|
Share of associate result |
13 |
42 |
143 |
Investment income |
7 |
85 |
26 |
Finance costs |
8 |
(5) |
(2) |
|
|
|
|
(Loss) before taxation |
|
(9) |
(96) |
|
|
|
|
Taxation |
9 |
- |
- |
|
|
|
|
|
|
|
|
(Loss) for the period
attributable to equity holders of the parent |
|
(9) |
(96) |
|
|
|
|
Other comprehensive
income |
|
|
|
Gain on revaluation of available for
sale investments |
|
5 |
36 |
Transfer to income statement |
|
(55) |
(7) |
Translation exchange
gain/(loss) |
|
160 |
(102) |
Other comprehensive income for
the period net of taxation |
|
110 |
(73) |
|
|
|
|
Total comprehensive income for
the year attributable to equity holders of the parent |
|
101 |
(169) |
|
|
|
|
Loss per share |
|
|
|
Basic and diluted (pence) |
10 |
(0.001) |
(0.01) |
|
|
|
|
The accompanying accounting policies and notes form part of
these financial statements.
Consolidated statement of financial
position at 31 December 2016
__________________________________________________________________________________________
|
|
31
December |
31
December |
|
|
2016 |
2015 |
|
Note |
£’000 |
£’000 |
Non-current
assets |
|
|
|
Property, plant &
equipment |
11 |
5 |
2 |
Investments in
associates |
13 |
1,518 |
1,476 |
|
|
1,523 |
1,478 |
|
|
|
|
Current
assets |
|
|
|
Inventory |
15 |
9 |
- |
Trade and other
receivables |
16 |
976 |
385 |
Available for sale
assets |
14 |
35 |
177 |
Cash and cash
equivalents |
|
240 |
248 |
|
|
1,261 |
810 |
|
|
|
|
Total
assets |
|
2,783 |
2,288 |
|
|
|
|
Current
liabilities |
|
|
|
Trade and other
payables |
17 |
(987) |
(691) |
|
|
(987) |
(691) |
Net current
assets |
|
274 |
119 |
|
|
|
|
Net assets |
|
1,796 |
1,597 |
|
|
|
|
Equity |
|
|
|
Share capital |
18 |
1,381 |
1,381 |
Share premium
account |
|
8,528 |
8,528 |
Share based payment
reserve |
|
279 |
213 |
Revaluation
reserves |
|
(36) |
14 |
Foreign currency
reserve |
|
37 |
(123) |
Retained earnings |
|
(8,393) |
(8,416) |
|
|
1,796 |
1,597 |
The financial information contained within this announcement has
been extracted from the audited financial information of the
Company.
The directors of the Company accept responsibility for the
contents of this announcement.
-ENDS-
AfriAg Global
Plc
David Lenigas (Executive Chairman)
Anthony Samaha (Finance Director)
Hamish Harris
Donald Strang |
+44 (0)20 7440
0640 |
Peterhouse Corporate
Finance Limited
Guy Miller
Fungai Ndoro
|
+44 (0)20 7469
0930 |
Notes to the financial statements
__________________________________________________________________________________________
1 |
General
information |
|
AfriAg
Global plc is a company incorporated in the Isle of Man under the
Isle of Man Companies Act 2006. The address of its registered
office is 34 North Quay, Douglas, Isle of Man, IM1 4LB. The
Company's ordinary shares are traded on the NEX Exchange Growth
Market as operated by NEX Exchange Ltd (“NEX”). On 19 July 2016,
the Company changed its name from Afriag Plc to Afriag Global Plc
by way of a statutory notice of change of name filed at Isle of Man
Registry.
The financial statements of Afriag Global plc for the year ended 31
December 2016 were authorised for issue by the Board on 9 May 2017
and the statements of financial position signed on the Board's
behalf by Mr. David Lenigas and Mr Donald Strang. |
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Investing policy
AfriAg plc, was re-classified as an Investing Company and the
following investing strategy has been approved by shareholders:
The Directors intend to seek to acquire a direct and/or an indirect
interest in businesses involved in agriculture generally and the
production, processing, logistics and distribution of agricultural
produce.
The Company will initially focus on opportunities in Europe, Africa
and the Middle East but will consider possible opportunities
anywhere in the world.
The Company may invest by way of purchasing quoted shares in
appropriate companies, outright acquisition or by the acquisition
of assets, including the intellectual property, of a relevant
business, or by entering into partnerships or joint venture
arrangements. Such investments may result in the Company acquiring
the whole or part of a company (which in the case of an investment
in a company may be private or listed on a stock exchange, and
which may be pre-revenue), and such investments may constitute a
minority stake in the company, partnership and/or joint venture in
question. The Company will not have a separate investment
manager.
The Company may be both an active and a passive investor depending
on the nature of the individual investments. Although the Company
intends to be a medium to long-term investor, the Directors will
place no minimum or maximum limit on the length of time that any
investment may be held and therefore shorter term disposal of any
investments cannot be ruled out.
There will be no limit on the number of businesses into which the
Company may invest, and the Company’s financial resources may be
invested in a number of propositions or in just one investment.
Investments may be in all types of assets and there will be no
investment restrictions. The Company will require additional
funding as investments are made and new opportunities arise. The
Directors may offer new Ordinary Shares by way of consideration as
well as cash, thereby helping to preserve the Company’s cash
resources for working capital. The Company may in appropriate
circumstances, issue debt securities or otherwise borrow money to
complete an investment. The Directors do not intend to acquire any
cross-holdings in other corporate entities that have an interest in
the Ordinary Shares. |
|
Statement of
compliance with IFRS |
|
The
financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union and as applied in accordance with the provisions
of the Companies Act 2006. The principal accounting policies
adopted by the Company are set out below. |
Notes to the financial statements
(continued)
__________________________________________________________________________________________
|
New standards, amendments and interpretations adopted by
the Company
No new and/or revised Standards and Interpretations have been
required to be adopted, and/or are applicable in the current year
by/to the Company, as standards, amendments and interpretations
which are effective for the financial year beginning on 1 January
2016 are not material to the Company.
New standards, amendments and interpretations not yet
adopted
At the date of authorisation of these financial statements, the
following Standards and Interpretations which have not been applied
in these financial statements, were in issue but not yet effective
for the year presented:
- IFRS 9 in respect of Financial Instruments which will be
effective for the accounting periods beginning on or after 1
January 2018.
- IFRS 15 in respect of Revenue from Contracts with Customers which
will be effective for accounting periods beginning on or after 1
January 2018.
- IFRS 16 in respect of Leases which will be effective for
accounting periods beginning on or after 1 January 2019.
There are no other IFRSs or IFRIC interpretations that are not yet
effective that would be expected to have a material impact on the
Company. |
|
Going
Concern |
|
The Directors noted the losses that the Group has made for
the Year Ended 31 December 2016. The Directors have prepared
cash flow forecasts for the period ending 31 May 2018 which take
account of the current cost and operational structure of the
Group.
The cost structure of the Group and Parent Company comprises a high
proportion of discretionary spend and therefore in the event that
cash flows become constrained, costs can be quickly reduced to
enable the Group and Parent Company to operate within its available
funding.
These forecasts demonstrate that the Group has sufficient cash
funds available to allow it to continue in business for a period of
at least twelve months from the date of approval of these financial
statements. Accordingly, the financial statements have been
prepared on a going concern basis.
It is the prime responsibility of the Board to ensure the Group and
Parent Company remains as going concerns. At 31 December 2016, the
Group had cash and cash equivalents of £240,000 and borrowings of
£nil. The Group and Parent Company has minimal contractual
expenditure commitments and the Board considers the present funds
sufficient to maintain the working capital of the Group and Parent
Company for a period of at least 12 months from the date of signing
the Annual Report and Financial Statements. For these reasons the
Directors adopt the going concern basis in the preparation of the
Financial Statements. |
|
|
|
Basis of
preparation |
|
The
consolidated financial statements have been prepared on the
historical cost basis, except for the measurement to fair value of
assets and financial instruments as described in the accounting
policies below, and on a going concern basis. |
|
The financial report is
presented in Pound Sterling (£) and all values are rounded to the
nearest thousand pounds (£‘000) unless otherwise stated. |
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|
|
|
|
Notes to the financial statements
(continued)
_________________________________________________________________________________________
2 |
Significant accounting policies |
|
|
|
Basis of
Consolidation |
|
|
The Group financial
statements consolidate those of the Company and all of its
subsidiary undertakings drawn up to the balance sheet date.
Subsidiaries are entities over which the Company has the power to
control, directly or indirectly, the financial and operating
policies so as to obtain benefits from their activities. The
Company obtains and exercises control through voting rights.
Subsidiaries are fully consolidated from the date at which control
is transferred to the Company. They are deconsolidated from
the date that control ceases. |
|
|
|
|
|
Unrealised gains on
transactions between the Company and its subsidiaries are
eliminated. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Group. |
|
|
|
|
|
Acquisitions of
subsidiaries are dealt with by the acquisition method. The
acquisition method involves the recognition at fair value of all
identifiable assets and liabilities, including contingent
liabilities of the subsidiary, at the acquisition date, regardless
of whether or not they were recorded in the financial statements of
the subsidiary prior to acquisition. On initial recognition,
the assets and liabilities of the subsidiary are included in the
consolidated balance sheet at their fair values, which are also
used as the bases for subsequent measurement in accordance with the
Group accounting policies. Goodwill is stated after
separating out identifiable intangible assets. Goodwill
represents the excess of acquisition cost over the fair value of
the Group's share of the identifiable net assets of the acquired
subsidiary at the date of acquisition. Acquisition costs are
written off as incurred. |
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|
|
Investments in
associates are initially recognised at cost and subsequently
accounted for using the equity method. Any goodwill or fair value
adjustment attributable to the Group’s share in the associate is
not recognised separately and is included in the amount recognised
as investment in associate. The carrying amount of the investment
in associates is increased or decreased to recognise the Group’s
share of the profit or loss and other comprehensive income of the
associate, adjusted where necessary to ensure consistency with the
accounting policies of the Group. Unrealised gains and losses on
transactions between the Group and its associates are eliminated to
the extent of the Group’s interest in those entities. Where
unrealised losses are eliminated, the underlying asset is also
tested for impairment |
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|
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Revenue
recognition |
|
|
Revenue is measured at
the fair value of the consideration received or receivable and
represents amounts from the sales of goods provided in the normal
course of business, net of value added tax and discounts, and is
recognised when the significant risks and rewards of ownership of
the product have been transferred to a third party. In the
case of sale or return transactions, revenue is only recognised
when, and only to the level that, risks and rewards are
transferred. |
|
|
|
|
|
Revenue is the invoiced
value of goods and services supplied and excludes VAT and other
sales based taxes. |
|
Notes to the financial statements
(continued)
__________________________________________________________________________________________
2 |
Significant
accounting policies (continued) |
|
|
|
Finance costs /
investment revenue |
|
Borrowing
costs are recognised as an expense when incurred. |
|
Investment revenue is
recognised as the Group becomes entitled to such revenue.
Dividends are accounted for on receipt thereof. |
|
|
|
Property, plant and
equipment - General |
|
Plant and
equipment is stated at cost less accumulated depreciation and any
accumulated impairment losses.
Depreciation is provided on all tangible assets to write off the
cost less estimated residual value of each asset over its expected
useful economic life on a straight-line basis at the following
annual rates:
All assets are subject to annual impairment reviews. |
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Inventories |
|
Inventories are stated
at the lower of cost and net realisable value. |
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Financial
instruments |
|
Financial assets and
financial liabilities are recognised on the Group and Company’s
statement of financial position when the Group or Company becomes a
party to the contractual provisions of the instrument. |
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The Company’s
activities give rise to some exposure to the financial risks of
changes in interest rates and foreign currency exchange
rates. The Company has no borrowings and is principally
funded by equity, maintaining all its funds in bank
accounts. |
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Financial
assets |
|
Financial assets are
classified into the following specified categories; financial
assets “at fair value through profit or loss” (FVTPL), “held to
maturity” investments, “available for sale” (AFS) financial assets
and “loans and receivables”. The classification depends on
the nature and purpose of the financial assets and is determined at
the time of initial recognition. |
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Available for sale
financial assets |
|
Available-for-sale
financial assets are non-derivative financial assets that are
either designated to this category or do not qualify for inclusion
in any of the other categories of financial assets. The Group’s
available-for-sale financial assets include listed securities.
These available-for-sale financial assets are measured at fair
value. Realised Gains and losses are recognised in the income
statement and unrealised gains and losses in other comprehensive
income and reported within the available-for-sale reserve within
equity, except for permanent impairment losses and foreign exchange
differences, which are recognised in the income statement. When the
asset is disposed of or is determined to be impaired, the
cumulative gain or loss recognised in other comprehensive income is
reclassified from the equity reserve to the income statement and
presented as a reclassification adjustment within other
comprehensive income. Interest calculated using the effective
interest method and dividends are recognised in the income
statement within investment income. |
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Reversals of impairment
losses are recognised in other comprehensive income. |
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|
Notes to the financial statements
(continued)
__________________________________________________________________________________________
2 |
Significant
accounting policies (continued) |
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Equity |
|
Share capital is
determined using the nominal value of shares that have been
issued. |
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The share premium
account represents premiums received on the initial issuing of the
share capital. Any transaction costs associated with the
issuing of shares are deducted from share premium, net of any
related income tax benefits. |
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The share based payment
reserve represents the cumulative amount which has been expensed in
the income statement in connection with share based payments, less
any amounts transferred to retained earnings on the exercise of
share options. |
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Foreign currency
reserve represents the exchange translation gains/(losses) on
converting overseas subsidiaries. |
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Revaluation reserve
represents the unrealised gain or loss on fair/market value
movement on available for sale investments and other assets which
are valued at their fair value at the balance sheet date. |
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Retained earnings
include all current and prior period results as disclosed in the
income statement. |
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Cash and cash
equivalents |
|
Cash and cash
equivalents includes cash in hand, deposits held at call with
banks, and bank overdrafts. Bank overdrafts are shown within
current liabilities on the balance sheet. |
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Financial
liabilities |
|
Financial
liabilities are obligations to pay cash or other financial assets
and are recognised when the Group becomes a party to the
contractual provisions of the instrument.
All financial liabilities initially recognised at fair value less
transaction costs and thereafter carried at amortised cost using
the effective interest method, with interest-related charges
recognised as an expense in finance cost in the income
statement. A financial liability is derecognised only when
the obligation is extinguished, that is, when the obligation is
discharged or cancelled or expires. |
|
Trade
payables |
|
Trade payables are
non-interest-bearing and are initially measured at fair value and
thereafter at amortised cost using the effective interest
rate. |
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Taxation |
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The tax expense
represents the sum of the tax currently payable and deferred
tax. |
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The tax currently
payable is based on taxable profit for the period. Taxable
profit differs from the net profit as reported in the income
statement because it excludes items of income or expense that are
taxable or deductible in other periods and it further excludes
items that are never taxable or deductible. The Group’s
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet
date. |
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Notes to the financial statements
(continued)
__________________________________________________________________________________________
2 |
Significant
accounting policies (continued) |
|
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Provisions |
|
Provisions are
recognised when the Group has a present obligation as a result of a
past event, it is probable that the Group will be required to
settle that obligation and a reliable estimate can be made of the
amount of the obligation. The amount recognised as a
provision is the best estimate of the consideration required to
settle the present obligation at the balance sheet date, taking
into account the risks and uncertainties surrounding the
obligation |
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Share based
payments |
|
The Company issues
equity-settled share based benefits to employees. All
equity-settled share-based payments are ultimately recognised as an
expense in profit or loss with a corresponding credit to
reserves. |
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Share-based payments
relating to the subsidiary company increase the carrying value of
the investment in the subsidiary and are included in the loss on
disposal of the subsidiary. |
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If vesting periods or
other non-market vesting conditions apply, the expense is allocated
over the vesting period, based on the best available estimate of
the number of share options expected to vest. Estimates are
subsequently revised if there is any indication that the number of
share options expected to vest differs from previous
estimates. Any cumulative adjustment prior to vesting is
recognised in the current period. No adjustment is made to
any expense recognised in prior periods if share options ultimately
exercised are different to that estimated on vesting. |
|
|
|
Upon exercise of share
options the proceeds received net of attributable transaction costs
are credited to share capital, and where appropriate share
premium. |
|
|
3 |
Critical accounting
judgements and key sources of estimation uncertainty |
|
|
|
In the process of
applying the Group’s accounting policies, as described in note 2,
management has made the following judgements that have the most
significant effect on the amounts recognised in the financial
statements. |
|
|
|
Valuation of share
based payments to employees |
|
|
|
The Company estimates
the expected value of share based payments to employees and this is
charged through the income statement over the vesting period.
The fair value is estimated using the Black Scholes valuation model
which requires a number of assumptions to be made such as level of
share vesting, time of exercise, expected length of service and
employee turnover and share price volatility. This method of
estimating the value of share based payments is intended to ensure
that the actual value transferred to employees is provided for by
the time such payments are made. |
|
|
|
|
Notes to the financial statements
(continued)
__________________________________________________________________________________________
4 |
Segmental information |
|
|
|
|
|
An operating segment is a distinguishable component of the
Group that engages in business activities from which it may earn
revenues and incur expenses, whose operating results are regularly
reviewed by the Group’s chief operating decision maker to make
decisions about the allocation of resources and assessment of
performance and about which discrete financial information is
available.
The chief operating decision maker has defined that the Group’s
only reportable operating segments during the period are the
agriculture and logistics sector, and the parent
company/investment.
Subject to further acquisitions the Group expects to further review
its segmental information during the forthcoming financial
year.
The Group has generated revenues from external customers during the
period of £3,035,000 (2015: £1,977,000), and £nil (2015: £nil)
revenue is from management fees to the associate company.
In respect of the total assets of £2,783,000 (2015: £2,288,000),
£85,000 (2015: £245,000) arise in the parent company, and
£2,698,000 (2015: £2,043,000) arise in South Africa. |
|
5 |
Operating
loss |
Year to 31 |
Year to 31 |
|
|
Dec 2016 |
Dec 2015 |
|
|
£’000 |
£’000 |
|
Operating loss is
stated after charging: |
|
|
|
Wages and
salaries |
11 |
29 |
|
Share option
charges |
98 |
- |
|
Currency losses/
(gains) |
73 |
(38) |
|
Audit fees |
11 |
10 |
|
|
|
|
|
Included in
share options is £nil (2015 - £nil) relating to directors. |
|
|
|
In addition
to auditors’ remuneration shown above, the auditors received the
following fees for non-audit services. |
|
|
2016 |
2015 |
|
|
£’000 |
£’000 |
|
Other financial
advisory services |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to the financial statements
(continued)
__________________________________________________________________________________________
6 |
Directors’ emoluments |
2016 |
2015 |
|
|
£’000 |
£’000 |
|
Fees and
benefits |
19 |
108 |
|
|
|
|
|
The Parent
Company has no other directly employed personnel. |
|
|
Fees
and |
Share based |
|
|
|
salaries |
payments |
Total |
|
2016 |
£’000 |
£’000 |
£’000 |
|
|
|
|
|
|
D Lenigas (2) |
3 |
- |
3 |
|
A Samaha (3) |
4 |
- |
4 |
|
D Strang |
6 |
- |
6 |
|
H Harris |
6 |
- |
6 |
|
|
19 |
- |
19 |
|
|
|
|
|
|
2015 |
£’000 |
£’000 |
£’000 |
|
|
|
|
|
|
D Lenigas (1) |
36 |
- |
36 |
|
D Strang |
36 |
- |
36 |
|
H Harris |
36 |
- |
36 |
|
|
108 |
- |
108 |
|
|
|
|
|
|
Directors’
fees totalling £376,000 have been accrued and remain unpaid as at
31 December 2016 (2015: £387,000). |
|
Directors’
interest in share options is set out in the directors’ report. |
|
|
7 |
Investment income |
Year to 31 |
Year to
31 |
|
|
Dec
2016 |
Dec 2015 |
|
|
£’000 |
£’000 |
|
|
|
|
|
Dividends received |
2 |
3 |
|
Interest received |
7 |
5 |
|
Gain on sale of AFS
investments |
76 |
18 |
|
|
|
|
|
Total investment
income |
85 |
26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to the financial statements
(continued)
__________________________________________________________________________________________
8 |
Finance costs |
Year to 31 |
Year to 31 |
|
|
Dec 2016 |
Dec 2015 |
|
|
|
|
|
Interest paid |
5 |
2 |
|
|
|
|
9 |
Taxation |
Year
to 31 |
Year to
31 |
|
|
Dec 2016 |
Dec 2015 |
|
|
£’000 |
£’000 |
|
|
|
|
|
Total current tax |
- |
- |
|
|
|
|
|
The actual tax charges
for the period differs from the standard rate applicable in the UK
of 20% (2015 – 20/21%) for the reasons set out in the following
reconciliation: |
|
|
|
|
|
|
2016 |
2015 |
|
|
£’000 |
£’000 |
|
|
|
|
|
Loss on ordinary activities
before tax |
(9) |
(96) |
|
|
|
|
|
|
|
|
|
Tax thereon @ rates above |
(2) |
(19) |
|
Factors affecting charge for the
period: |
|
|
|
Losses arising in territories where
no tax is charged |
2 |
19 |
|
|
|
|
|
Current tax charge for the
period |
- |
- |
|
|
|
|
10 |
Loss per
share |
|
|
2016 |
2015 |
|
The calculation of loss per share is
based on the loss after taxation divided by the weighted average
number of shares in issue during the period: |
£’000 |
£’000 |
|
Net loss after taxation (£000’s) |
(9) |
(96) |
|
Number of shares |
|
|
|
Weighted average number of ordinary
shares for the purposes of basic loss per share (millions) |
1,381.00 |
1,381.00 |
|
|
|
|
|
Basic and diluted loss per share
(expressed in pence) |
(0.001) |
(0.01) |
|
|
|
As inclusion of the
potential ordinary shares would result in a decrease in the
earnings per share they are considered to be anti-dilutive, as
such, a diluted earnings per share is not included. |
Notes to the financial statements
(continued)
__________________________________________________________________________________________
11 |
Property, plant
& equipment - Group |
|
Total
PPE |
|
|
|
£’000 |
|
Costs |
|
|
|
At 1 January 2015 |
|
- |
|
Additions |
|
2 |
|
At 31 December
2015 |
|
2 |
|
At 1 January 2016 |
|
2 |
|
Additions |
|
3 |
|
At 31 December
2016 |
|
5 |
|
|
|
Depreciation &
impairment |
|
|
|
As at 1 January 2015,
31 December 2015, & 31 December 2016 |
|
- |
|
|
|
|
|
Net Book
Values |
|
At 31 December
2015 |
|
2 |
|
At 31 December
2016 |
|
5 |
|
|
|
Impairment Review
At 31 December 2016, the directors have carried out an impairment
review and have considered that no impairment is required.
The depreciation charge is immaterial currently in respect of
disclosure within the table above, and therefore not
disclosed. |
|
|
12 |
Investments in subsidiaries - Company |
|
|
31 December |
31
December |
|
|
2016 |
2015 |
|
|
£’000 |
£’000 |
|
Cost and
net book value |
|
|
|
At 1
January |
- |
- |
|
Additions |
- |
- |
|
Disposal |
- |
- |
|
|
|
|
|
At 31
December |
- |
- |
|
|
|
The
following were subsidiary undertakings held directly or indirectly
by the Company at the end of the year: |
|
|
|
Name |
Country of
incorporation |
Proportion of voting rights and ordinary share capital held
voting right |
Nature
of business |
|
AfriAg Limited |
England |
100% |
Holding
Company |
|
Afriag International
Limited |
England |
100% |
Dormant
Company |
|
AfriAg Limited |
BVI |
100% |
Dormant
Company |
|
Afriag Holdings (Pty)
Limited |
South Africa |
100% |
Holding
Company |
|
Afriag Marketing (Pty)
Limited |
South Africa |
100% |
Marketing
Company |
|
|
|
|
|
|
|
|
|
|
|
|
Notes to the financial statements
(continued)
__________________________________________________________________________________________
13 |
Investment in associate - Group |
31 December |
31 December |
|
|
2016 |
2015 |
|
|
£’000 |
£’000 |
|
|
|
|
|
At 1
January |
1,476 |
1,333 |
|
Addition at
cost |
- |
- |
|
Share of
associate result |
42 |
143 |
|
|
|
|
|
Carrying
value at 31 December |
1,518 |
1,476 |
|
|
|
|
|
The Group's
share of results of its associate, which is unlisted, and its
aggregated assets and liabilities, is as follows: |
|
Name |
Country of
incorporation |
Assets |
Liabilities |
Revenues |
Profit/(Loss) |
% interest
held |
|
|
|
As at 31 December 2016 |
Year to 31 December 2016 |
|
|
AfriAg (Pty) Ltd |
South Africa |
£4,002,000 |
£3,490,000 |
£11,704,000 |
£104,000 |
40 |
|
|
|
AfriAg
(Pty) Limited's year end is 31 December. |
|
|
|
|
|
|
|
|
|
|
14 |
Available-for-sale
investments – Group & Company |
31 December |
31 December |
|
|
2016 |
2015 |
|
Current Assets -
Listed investments |
£’000 |
£’000 |
|
|
|
|
|
At 1 January – market
value |
177 |
186 |
|
Disposals during the
period |
(168) |
(56) |
|
Gain on disposal of
investments |
76 |
18 |
|
Transfers to income
statement |
(55) |
(7) |
|
Movement in market
value |
5 |
36 |
|
At 31 December –
market value |
35 |
177 |
|
|
|
|
|
Available-for-sale investments comprise investments in
listed securities which are traded on stock markets throughout the
world, and are held by the Group as a mix of strategic and short
term investments.
Income from these investments was £2,000 for dividends received for
the year to 31 December 2016. (2015: £3,000) |
15 |
Inventories -
Group |
31
December |
31
December |
|
|
2016 |
2015 |
|
|
£’000 |
£’000 |
|
|
|
|
|
Goods &
Packaging |
9 |
- |
|
Total |
9 |
- |
|
|
|
|
Notes to the financial statements
(continued)
__________________________________________________________________________________________
16 |
Trade and other
receivables |
31 December 2016 |
31 December 2015 |
|
|
Group
£’000 |
Company
£’000 |
Group
£’000 |
Company
£’000 |
|
Current trade and
other receivables |
|
|
|
|
|
Trade receivables |
345 |
2 |
226 |
- |
|
Other debtors |
627 |
1 |
140 |
10 |
|
Prepayments &
accrued income |
4 |
4 |
19 |
19 |
|
Total |
976 |
7 |
385 |
29 |
|
Non-Current trade and other receivables |
|
|
|
|
|
Loans due from
subsidiaries |
- |
1,836 |
- |
1,836 |
|
Total |
- |
1,836 |
- |
1,836 |
|
Loans outstanding and due from subsidiaries, are interest free and
repayable on demand. |
17 |
Trade and other
payables |
|
|
|
|
31 December 2016 |
31 December 2015 |
|
|
Group
£’000 |
Company
£’000 |
Group
£’000 |
Company
£’000 |
|
Current trade and
other payables |
|
|
|
|
|
Trade creditors |
402 |
22 |
213 |
9 |
|
Other creditors |
194 |
31 |
44 |
- |
|
Accruals |
391 |
391 |
434 |
314 |
|
Total |
987 |
444 |
691 |
323 |
18 |
Share
capital |
31
December |
31
December |
|
|
2016 |
2015 |
|
|
£’000 |
£’000 |
|
|
|
|
|
Allotted, issued and
fully paid |
|
|
|
1,381,001,037 (2015 –
1,381,001,037) ordinary shares of £0.001 each |
1,381 |
1,381 |
|
|
|
|
|
Shares issued during the year ended 31 December
2016:
No shares were issued by the Company during the year to 31 December
2016 (2015: nil). |
|
Warrants
in issue |
|
|
|
As at 31
December 2016, nil warrants (2015: nil) remain outstanding. No
warrants were issued, exercised, or lapsed during the year ended 31
December 2016 (2015: nil). |
|
|
|
Share Options |
|
The Company
has as at 31 December 2016, 129,000,000 (2015: 79,000,000) share
options issued through its share schemes. During the year
60,000,000 options were issued (2015: nil), no options were
exercised (2015: nil), 10,000,000 options were cancelled or lapsed
(2015: nil). |
|
|
Notes to the financial statements
(continued)
_________________________________________________________________________________________
18 |
Share capital
(continued) |
|
|
|
|
|
|
|
Employment Benefit Trust (“EBT”) |
|
The Company established on 3 October 2014 a share incentive
plan ("SIP") and effective as of 3 October 2014. The purpose of the
SIP is to incentivise officers, employees and consultants of the
Company by the award of ordinary shares in the capital of the
Company ("Ordinary Shares") for no cost. Ordinary Shares under this
plan will not exceed 10 per cent of the Company's issued share
capital from time to time without the prior approval of
shareholders of the Company.
The Company also established on 3 October 2014, an employee benefit
trust called the AfriAg Employee Benefit Trust ("EBT") to implement
the use of the SIP. The EBT is a discretionary trust for the
benefit of directors, employees and consultants of the Company and
its subsidiaries.
Accordingly, the trustees of the EBT subscribed for 118,000,000 new
ordinary shares of 0.1p each in the Company, at par value per share
at an aggregate cost to the Company of £118,000, such shares
representing 9% of the so enlarged issued share capital of the
Company. The shares held in the EBT are intended to be used
to satisfy future awards made by the Company's Remuneration
Committee under the SIP. It is intended that any individual awards
under the scheme will be subject to vesting and performance
conditions. There have been no further subscriptions during
the year ended 31 December 2016 (2015 : nil). On 11 August
2016, the Company awarded 100 million of the EBT shares to Mr P de
Robillard, who is responsible for managing the Group’s logisitics
divisions, leaving 18 million shares held by the EBT. |
19 |
Share
based payments |
|
|
|
|
|
|
|
A modified Black-Scholes model has been used to determine
the fair value of the share options on the date of grant. The
fair value is expensed to the income statement on a straight line
basis over the vesting period, which is determined annually.
The model assesses a number of factors in calculating the fair
value. These include the market price on the date of grant,
the exercise price of the share options, the expected share price
volatility of the Company’s share price, the expected life of the
options, the risk free rate of interest and the expected level of
dividends in future periods.
As disclosed in note 5 the share option charge for the period was
£98,000 (2015 - £nil)
The inputs into the model for the 2016 issues were as follows:
|
|
|
July 2016 Options |
August 2016 Options |
|
Number of
options |
50,000,000 |
10,000,000 |
|
Volatility |
79.00% |
79.00% |
|
Market
price |
£0.00255 |
£0.00325 |
|
Interest
rate |
2.30% |
2.30% |
|
Dividend
yield |
Nil |
Nil |
|
Contractual
life |
4.50 years |
3.39 years |
|
The
volatility assumption is based upon historic share price volatility
of the Company. |
|
|
|
Exercise
Price |
Grant
Date |
Expiry
Date |
31 December
2015 |
Granted |
Expired |
31
December
2016 |
Weighted
average
exercise
price |
|
Summary
of options |
|
|
|
|
|
|
|
|
|
|
£0.001 |
07/12/2012 |
31/12/2020 |
69,000,000 |
- |
- |
69,000,000 |
£0.0010 |
|
£0.0045 |
03/10/2014 |
31/12/2016 |
10,000,000 |
- |
(10,000,000) |
- |
£0.0045 |
|
£0.0025 |
01/07/2016 |
31/12/2020 |
- |
50,000,000 |
- |
50,000,000 |
£0.0025 |
|
£0.0030 |
12/08/2016 |
31/12/2019 |
- |
10,000,000 |
- |
10,000,000 |
£0.0030 |
|
|
|
|
79,000,000 |
60,000,000 |
(10,000,000) |
129,000,000 |
£0.0021 |
|
|
|
|
|
|
|
|
|
|
|
Notes to the financial statements
(continued)
__________________________________________________________________________________________
20 |
Financial
instruments |
|
|
|
The Group’s financial instruments comprise cash at bank and
payables which arise in the normal course of business. It is,
and has been throughout the period under review, the Group’s policy
that no speculative trading in financial instruments shall be
undertaken. The Group has been solely equity funded during
the period. As a result, the main risk arising from the
Group’s financial instruments is currency risk.
Details of the significant accounting policies and methods adopted,
including the criteria for recognition, the basis of measurement
and the basis on which income and expenses are recognised, in
respect of each class of financial asset, financial liability and
equity instrument are disclosed in note 2 of the accounts. |
|
|
2016 |
2015 |
|
|
£’000 |
£’000 |
|
Financial assets (current) |
|
|
|
Trade
receivables |
345 |
226 |
|
Cash and
cash equivalents |
240 |
248 |
|
|
|
|
|
Financial liabilities (current) |
|
|
|
Trade
payables |
402 |
213 |
|
|
|
|
|
Interest rate risk and liquidity risk
The Group is funded by equity, maintaining all its funds in bank
accounts. The Group’s policy throughout the period has been
to minimise the risk of placing available funds on short term
deposit. The short-term deposits are placed with banks for
periods up to 1 month according to funding requirements.
The Group had no undrawn committed borrowing facilities at any time
during the period.
Currency risk
The group is directly exposed to currency risk of its subsidiaries,
as they are based in South Africa, and exposed to movement against
the South African Rand as their assets, liabilities, revenue and
expenditure are denominated therein. The parent company is
denominated in pound sterling.
Market risk
The group and company’s current exposure to market risk in relation
to its AFS investments, which are listed on stock markets
throughout the world.
Fair values
Cash and cash equivalents (which are presented as a single class of
assets on the face of the balance sheet) comprise cash held by the
company with an original maturity of three months or less.
The carrying amount of these assets approximates their fair
value.
The directors consider there to be no material difference between
the book value of financial instruments and their values at the
balance sheet date. |
|
|
|
|
|
|
Notes to the financial statements
(continued)
__________________________________________________________________________________________
21 |
Related
party transactions |
|
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note. Transactions between other related parties
are discussed below. |
|
During the
period, there were no related party transactions to disclose. |
|
|
|
Remuneration of Key Management Personnel |
The
remuneration of the Directors and other key management personnel of
the Group are set out below in aggregate for each of the categories
specified in IAS24 Related party Disclosures. |
|
|
2016 |
2015 |
|
|
£’000 |
£’000 |
|
Short-term
employee benefits |
30 |
137 |
|
Share-based
payments |
79 |
- |
|
|
109 |
137 |
|
|
22 |
Capital
Commitments & Contingent Liabilities |
|
There are no non-cancellable capital commitments as at the balance
sheet date. The Group has no contingent liabilities at the balance
sheet date. |
|
|
23 |
Ultimate
control |
|
The Company has no individual controlling party. |
|
|
24 |
Events
after the end of reporting period |
|
There are no events after the end of the reporting period to
disclose. |
|
|
25 |
Profit
and loss account of the parent company |
|
As permitted by s408 of the Companies Act 2006, the profit and loss
account of the parent company has not been separately presented in
these accounts. The parent company loss for the year was £149,000
(2015: £218,000). |
|
|
|
|
|