TIDMAGTA
RNS Number : 8757J
Agriterra Ltd
24 December 2020
Information communicated within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
24 December 2020
Agriterra Limited ('Agriterra' or the 'Company')
Agriterra Ltd / Ticker: AGTA / Index: AIM / Sector:
Agriculture
Audited Annual Results for Year Ended 31 March 2020
Agriterra Limited, the AIM-quoted African agricultural company,
announces its audited annual results for the year ended 31 March
2020 (the "2020 Annual Accounts").
The 2020 Annual Accounts are now available on the Company's
website and an extract of selected information from the 2020 Annual
Accounts is set out below. The 2020 Annual Accounts will be posted
to Shareholders with the Notice of Annual General Meeting to
approve the 2020 Annual Accounts by 5 January 2021.
In line with the guidance issued by AIM Regulation in an Inside
AIM notification dated 9 June 2020, and the ongoing COVID-19
related disruption to processes, the Company is availing of the
one-month extension to the date by which it is required under AIM
Rule 18 to publish its interim accounts for the six months ended 30
September 2020. Accordingly, the Company is required to publish its
2021 interim accounts by 31 January 2021.
**S **
For further information please visit www.agriterra-ltd.com or
contact:
Agriterra Limited Strand Hanson Limited
(Nominated & Financial Adviser and
Broker)
---------------------------- ------------------------------------
Caroline Havers James Spinney / Ritchie Balmer/ Rob
Patrick
caroline@agriterra-ltd.com +44 (0) 207 409 3494
Chair's statement and strategic review
I am pleased to present the annual report of the Company for the
year ending 31 March 2020. During the year, the Company focused on
stabilising the operations in the aftermath of Cyclones Idai and
Kenneth which significantly affected Mozambique.
The Company continues to observe the principles of the QCA
Corporate Governance Code (the "Code") to the extent that they
consider them to be applicable and appropriate for a Company of
Agriterra's size and stage of development, through the maintenance
of efficient and effective management frameworks accompanied by
good communication. Further details are available at:
http://www.agriterra-ltd.com/corporategovernance.aspx .
Strategy and Business Model
The Company's strategy is to operate efficient, profitable
businesses in Mozambique so as to create value for its shareholders
and other stakeholders by supplying beef and milled maize products
to the local market.
The Company currently has two operational agricultural
divisions:
-- Beef, which sources cattle from local farmers and then
processes them through its own feedlot, abattoir operations and
retail units through Mozbife Limitada ('Mozbife')
-- Grain, which operates maize purchasing and processing
businesses through Desenvolvimento e Comercializa c a o Agri cola
Limitada ('DECA') and Compagri Limitada ('Compagri').
These two divisions have built strong brands in Mozambique.
During the period the Company secured new investment of c.US$1m to
set up a maize snack processing business on the site in Chimoio
under the brand name of DECA Snax, to complement and add value to
the maize meal operation, while expanding the range of products
offered to the consumer. It was intended that this factory would
become operational in this financial year, but COVID-19 related
issues in China resulted in a delay in the supply of the necessary
equipment and commencement of operations have been delayed until Q4
of 2020. The production line has now been commissioned and initial
sales were made in December 2020.
The Company is aware of its environmental, social and
governmental responsibilities and the need to maintain effective
working relationships across a range of stakeholder companies. The
major shareholder is represented on the Board ensuring their views
are incorporated into the Board's decision-making process. In
addition to the Company's staff and shareholders, the local
community in Mozambique is a primary stakeholder. In purchasing
maize and cattle directly from the local community, the Company
plays an important role in local economic development, supporting
small scale farmers and the developing commercial sector.
Mozambique overview
On 14 March 2019, Cyclone Idai made landfall at the port of
Beira, Mozambique, before moving across the region. Millions of
people in Malawi, Mozambique, and Zimbabwe were affected by what
UNICEF declared, was the worst natural disaster to hit southern
Africa in at least two decades. Six weeks later, Cyclone Kenneth
made landfall in northern Mozambique - the first time in recorded
history two strong tropical cyclones have hit the country in the
same season. The UN estimate that due to the devastation caused by
the cyclones 715,000ha of crop production was decimated, 160,000
homes destroyed and a total of 2.5 million people in Mozambique
required humanitarian assistance.
The Company's operations are located in the affected areas, and
although the buildings and assets were not damaged, there was an
impact on our business; 50 members of staff lost their homes, and
many of the small farmers who would normally supply maize and
cattle were left without products to sell during the harvest season
(April to August)
During this same period the Metical depreciated against the US$
going from 61 MZN in January 2019 to 63MZN after Cyclone Idai and
ending at 65MZN to the US$ in March 2020. The Metical did remain
steady against the Rand (4.30MZ), which helped reduce the
annualised inflation in Mozambique from c.3.9% in 2018 to c.2.8% in
2019. As a result Standard Bank's prime Metical lending rate has
reduced to 18% (19.5% at 31 March 2018).
Operations review
Grain division
Due to the disruptions caused by the cyclones, there was a major
shortage of food in the central region of the country. As a result,
DECA was contracted to process 3,000 tons of maize into meal for
the World Food Programme ("WFP") for immediate aid into the region
which lasted into the month of May.
Total maize purchased for the year (excluding WFP) was 24,498
tons and processed into 19,926 tons meal. Maize prices late season
were driven up by a shortage in production caused by the cyclones
where an estimated 700,000ha of crops was destroyed thus impacting
on the ability to purchase affordable maize late season.
Beef division
The cyclones impacted on the ability to access the communities
where the Company has traditionally sourced animals. The livestock
sector was impacted in that a large number of animals died as a
result of the cyclone (+5,000) and the animals that survived were
affected by the lack or low quality of pasture and feed, and
poor-quality drinking water, (+ 130,000). This increased prices and
access became a constraint for the buying teams.
Total animals bought for the year was 6,045 head resulting in
1,200 tons of beef being produced for sale into the local
market.
Mozbife was awarded a grant to build 9 Cattle Service Centres by
the World Bank in 2 provinces, and these were completed in June
2020.
Key Performance Indicators
The Board monitors the Company's performance in delivery of
strategy by measuring progress against Key Performance Indicators
(KPIs). These KPIs comprise a number of operational, financial and
non-financial metrics.
2020 2019 2018
Grain division
------------ ------------ ------------
- Average milling yield 77% 76.2% 72.6%
------------ ------------ ------------
- Meal sold (tonnes) 19,926 16,791 16,472
------------ ------------ ------------
- EBITDA (note 5) (2019: as restated) 86,000 (509,000) (597,000)
------------ ------------ ------------
- Net debt (4,001,000) (3,670,000) (3,625,000)
------------ ------------ ------------
- Available headroom under banking facilities 746,000 537,000 1,709,000
------------ ------------ ------------
Beef division
------------ ------------ ------------
- Slaughter herd size - number of head 2,100 2,468 3,956
------------ ------------ ------------
- Average daily weight gain in feedlot (% of body mass) 0.34 0.32 0.25
------------ ------------ ------------
- Meat sold (tonnes) 1,094 1,260 1,453
------------ ------------ ------------
- EBITDA (note 5) (2019: as restated) (905,000) (520,000) (1,252,000)
------------ ------------ ------------
- Net debt (665,000) (663,000) (180,000)
------------ ------------ ------------
- Available headroom under banking facilities 99,000 195,000 309,000
------------ ------------ ------------
Group
------------ ------------ ------------
- EPS (2019: as restated) (14.1) (15.5) (31.1)
------------ ------------ ------------
- Liquidity - cash plus available headroom under facilities 1,162,000 2,702,000 4,769,000
------------ ------------ ------------
These indicators have been budgeted for the first time for FY-20
and are used to monitor progress on a monthly basis. Further
strategic KPIs will be introduced once the immediate key goal of
moving the existing businesses into profitability has been
achieved.
Financial Review
In FY-20 Group revenue increased 22% to US$12.9m (FY19:
US$10.6m). The effects of the cyclones meant that the first half of
the year accounted for less than 30% of the total revenue earned.
Our management team had to work hard to push the sales up in the
second part of the year, to end the year with a Gross Margin of
US$1.8m (FY19: US$1.2m) and EBITDA loss of US$(1.4m) (FY19:
US$(1.7m). Finance costs were US$1.0m (FY19: US$1.0m) and
depreciation charges were US$0.6m (FY19:US$0.6m) bringing the Loss
attributable to shareholders to US$3.0m (FY19: US$3.3m) The grain
division accounted for 69% of the revenue and 31% of the overall
loss, while the beef generated 31% of the revenue and 51% of the
overall loss. The management team are focussed on improving the
overall performance of both businesses and to take the necessary
actions that will get the beef operation to a point where it
becomes a contributor towards the overall success of the
Company.
During the year, a new fixed asset register was prepared. Asset
values were brought in line with tax depreciation in Mozambique
giving rise to an uplift in the net book value of assets. The
uplift has been accounted for as a prior year adjustment (note 13)
and the increase in the net book value at 1 April 2018 was
$793,000. There was a consequential increase in the depreciation
charge for the year ending 2019 of $136,000 and a write down in the
value of intangible assets of $59,000.
Net Debt at 31 March 2020 was US$ 4.3m (FY19: US$2.4m). Since
the year-end, additional working capital facilities have been
agreed, to enable the Grain division to secure sufficient grain to
meet its operational targets in the 2021 season.
Risk management
The Company is subject to various risks and the future outlook
for the Company, and growth in shareholder value should be viewed
with an understanding of these risks. According to the risk, the
Board may decide to tolerate it, seek to mitigate it through
controls and operating procedures, or transfer it to third parties.
The following table shows the principal risks facing the Company
and the actions taken to mitigate these:
Key risk factor Detail How it is managed Change in the period
Foreign Exchange The Company's operations The Company's borrowing No change. The Metical has
are impacted by facilities are denominated been relatively stable over
fluctuations in exchange in Metical. the last couple of years as
rates and the volatility inflation
of the Metical. falls and interest rates
come down.
---------------------------- ---------------------------- ----------------------------
Political instability Changes to government Contingency plans to Reduced following the
policy and applicable laws protect assets and staff election results in
could adversely affect should political or December 2019, while
operations or the military tensions escalate. military tension has
financial condition of the increased
Company. in Northern Mozambique.
---------------------------- ---------------------------- ----------------------------
Land ownership in Property rights and land Observance of any No change.
Mozambique are exclusive to the state. conditions attaching to a
The state grants rights to DUAT.
use and develop
land "DUATs". The
operations are dependent
upon maintaining the
relevant DUATs.
---------------------------- ---------------------------- ----------------------------
Maize growing season Adverse weather conditions, Diversify sources of supply Reduced - Cyclone Idai
national or regional could and sign supply agreements. destroyed a large part of
impact on the availability the crop in 2019, but
and pricing fortunately this appears
of grain. to have recovered in the
2020 season.
---------------------------- ---------------------------- ----------------------------
Cattle and cattle feed Cattle are subject to Stringent Bio-security Reduced - Improved farming
diseases and infections. measures are in place at and silage storage
The availability and price the Farms and Feedlot. The facilities. Some Foot and
of feed impacts division is now Mouth restrictions
profitability. self-sufficient in roughage have been lifted.
crops and acquires most of
its feed from the Grain
division.
---------------------------- ---------------------------- ----------------------------
Access to working capital The Company is reliant on During the year, the Increased - the exposure to
local banking facilities in Company secured additional reliance on the renewal of
Mozambique. overdraft facilities. short-term facilities has
increased.
---------------------------- ---------------------------- ----------------------------
Compliance There is a risk of a breach The Board reinforces an No change.
of the Company's business ethical corporate culture.
or ethical conduct Anti-bribery policies are
standards and breach in place, with
of anti-corruptions laws, regular training throughout
resulting in the organization.
investigations, fines and
loss of reputation.
---------------------------- ---------------------------- ----------------------------
COVID-19 COVID-19 has had a Plans are in place to The outbreak of COVID-19
significant negative impact protect our staff and occurred post period end.
globally, both economically production capabilities. The outbreak has not yet
and socially. There The Company remains alert spread significantly
is a risk that there will to the fast-changing to Mozambique with only
be a significant outbreak environment and is prepared limited cases reported to
of the COVID-19 virus in to put in place mitigating date.
Mozambique which actions as events
could potentially impact develop. Our products, meal
the population through and beef, are key staples
contraction of COVID-19 and in the domestic Mozambican
Government enforced market and
measures, and in turn demand is not expected to
impact the Company's be significantly affected
operations. should the pandemic take
hold. The impact
on future liquidity has
been discussed further in
the Going Concern section
below.
---------------------------- ---------------------------- ----------------------------
The Board is also responsible for establishing and monitoring
the Company's systems of internal controls. Although no system of
internal control can provide absolute assurance against material
misstatement or loss, the Company's systems are designed to provide
the directors with reasonable assurance that problems are
identified on a timely basis and dealt with appropriately. The
Board reviews the effectiveness of the systems of internal control
and considers the major business risks and the control environment
on a regular basis. In light of this control environment the Board
considers that there is no current requirement for a permanent
separate internal audit function.
Going concern
The Mozambican Government implemented a policy to minimise the
spread of COVID-19 on the 1st April 2020 and has maintained this
policy into December, with the likelihood that it will continue
into 2021. The closure of the borders, industries and the logistics
sectors have had a negative impact on the overall economy in
Mozambique. The grain and beef sales have been encouraging, but
growth is being restricted by the removal of the informal retail
sector, which accounted for the bulk of our clientele.
Grain
The absence of reliable inter-province transportation and cash
(due to movement restrictions) has resulted in a delay in the maize
harvesting and buying season by over 3 months. This resulted in
high raw material costs, more intense efforts to secure the maize
and an adjustment of the initial forecast from 42,000 tons of maize
to 35,000 tons. To date we have purchased at total of 27,000 tons
(more than in FY2020) and we are confident that we will
successfully secure the balance of 8,000 tons in the coming 3
months. Over the last 12 months, the Grain division has made
significant progress in meeting the operating challenges to
increase volumes and margins in order to move into profitability.
More importantly this has been achieved whilst having to live
within its means. New products and improved quality have been a
significant factor in this performance and underpin the continued
improvement in volumes in the FY21 forecast, together with the
start-up phase of the DECA Snax project.
Beef
The beef operation has had a negative impact due to the
lockdown. We have encountered difficulties in accessing the cattle
production areas and the market has shrunk significantly, since the
oil and gas projects have slowed down due to a global contraction
related to COVID-19. Our largest clients (accounting for 60% of
monthly sales) were those supplying these companies in Northern
Mozambique. The result is revenue 22% below budget and there is an
expectation that this will not improve significantly in remainder
of FY21. However, the overall operating performance is ahead of
budget as a result of improved operating efficiencies and an
increased unit value per tonne of meat.
These forecasts show that the Company needs to achieve its
operating targets and renew its existing overdraft facilities to
meet its commitments as they fall due. These conditions and events
indicate the existence of material uncertainties that may cast
significant doubt upon the Company's ability to continue as a going
concern and the Company may therefore be unable to realise their
assets and discharge their liabilities in the ordinary course of
business. These financial statements do not include the adjustments
that would result if the Company were unable to continue as a going
concern.
Outlook
The Company had a difficult start to FY-21 as the COVID-19
lockdown was implemented in April 2020 and is expected to remain in
force until early 2021. This has resulted in a challenging first
quarter for both the grain and the beef operations.
Grain: In order to improve margins, the division secured an
additional working capital facility early in the season, enabling
it to purchase maize in the period when the market is saturated,
and prices are lowest. In addition, some of the larger clients were
encouraged to pre-pay for their meal, so as to secure the maize
needed at the same time. There has also been renewed focus on the
commercial strategy to align our pricing with the market; introduce
a rebranding program to drive the sales of the 1kg packs (offering
better margins); and finally , to encourage clients to buy more and
pay quickly.
Beef: With demand under pressure from lockdown, the focus has
been on realigning the cost base with lower projected volumes and
refocusing the retail strategy. Non-performing retail outlets have
been closed, a depot opened in Maputo to receive and sell carcasses
and meat to the city market and rebranding of the product to focus
on the retail consumer. On the supply side, the focus has been on
strengthening supply chain links with commercial farmers, who are
able to supply higher grade animals.
While the business environment is negatively affected by
COVID-19, the outbreak of COVID-19 has not yet spread significantly
in Mozambique with a relatively low volume of cases reported. Plans
have been put in place to protect our staff and production
capabilities. Our products, meal and beef, are key staples in the
domestic Mozambican market and although demand is not expected to
be significantly affected as the pandemic increases, there are
potential short term risks associated with the availability of cash
in the market, as companies in the tourism, services, logistics and
extractives sectors are forced to reduce the staffing, until things
normalise.
Board and senior management changes
On 30 April 2020 Ms. Thorburn stepped down as a non-executive
director in order to focus on her other business interests in the
region. Mr. Clayton took on the role of Head of the Audit Committee
following Ms. Thorburn's resignation. I would like to thank Amanda
for her contributions and wish her well in her new ventures.
Also, on 30 April 2020 Mr. Zandamela joined the Board as a
non-executive director. Mr. Zandamela is a Mozambican national with
over 20 years' experience in agriculture and business with a degree
in Agronomy - Rural Engineering from the Eduardo Mondlane
University and subsequently an MBA from the Montford University
Southern Africa - Sandton Business School. From 2016 to 2019 Mr.
Zandamela was responsible for all Mozambique commercial activities
of Tongaat Hulett (agriculture and agri-processing business,
focusing on the complementary feedstocks of sugarcane and
maize).
Mr. Zandamela is currently Chairman of the Board of Directors of
the Association of Sugar Producers of Moçambique and acted as
Chairman of the National Sugar Distributors of Moçambique. I
welcome Sergio to the Board, his experience in the agri-sector in
Mozambique will give the Board valuable insight into
Mozambique.
CSO Havers,
Executive Chair
24 December 2020
Corporate Governance
The Company is quoted on AIM and is required to comply with the
provisions of a recognised corporate governance code. The board
elected to adopt the Quoted Company Alliance Corporate Governance
Code (the "QCA code"). Further details are available at
http://www.agriterra-ltd.com/corporategovernance.aspx .
The Board is committed to applying a standard of corporate
governance commensurate with its size and stage of growth and the
nature of its activities.
The Board
The board structure continues to be organised to ensure it has
the appropriate balance of skills and independence. The Board
currently comprises the Executive Chair, two non-independent
Non-Executive Directors and two independent Non-Executive Directors
who were appointed during the year. The Board is looking to further
enhance its composition, skills and balance as the Company
develops. The Board currently comprises:
Caroline Havers, Executive Chair (AC; IC chair)
Ms. Havers is a highly experienced litigation/dispute resolution
lawyer having spent over 30 years within international law firms
working with clients operating in a variety of African
jurisdictions and industry sectors. During her legal career, Ms.
Havers has been both a partner and managing director of different
law firms. She provides advice on compliance and governance and is
a long qualified CEDR Mediator.
Whilst the Company consolidates its operations in Mozambique,
the Board appointed Ms. Havers as Executive Chair. It is intending
to appoint a Chief Executive Officer, based in Mozambique in due
course.
Hamish Rudland, Non-Executive Director (IC)
Mr. Rudland has extensive experience across logistics,
agriculture, agro-processing, distribution and property. After
graduating from Massey University, New Zealand, he returned to
Zimbabwe in 1997 to start a passenger transport business that he
soon diversified into fuel tank haulage in the early 2000s.
Thereafter Mr. Rudland structured acquisitions of foreign-owned
asset rich companies to list on the Zimbabwe Stock Exchange. Mr.
Rudland has substantial investments in Zimbabwe Stock Exchange
listed companies which focus on his core competencies but also
synergise where advantages can be made.
As a result of Mr. Rudland's relationship to Magister
Investments Limited, he is not considered to be an "independent"
director for the purposes of the QCA Corporate Governance Code.
Gary Smith, Non-Executive Director (AC; RC)
Mr. Smith is an experienced finance professional and is
currently a non-executive director of several companies in Zimbabwe
and Mauritius. Mr. Smith worked in the UK for several years where
he was employed at Deutsche Bank, University of Surrey and Foxhills
Club & Resort. Upon returning to Africa he worked for a large
transport and logistics company in Mozambique for four years before
returning home to Zimbabwe and the above positions.
Mr. Smith is a Chartered Accountant and a resident and citizen
of Zimbabwe. As a result of Mr. Smith's relationship with Magister
Investments Limited, he is not considered to be an "independent"
director for the purposes of the QCA Corporate Governance Code.
Neil Clayton, Non-Executive Director (AC Chair; RC Chair)
Mr. Clayton is a Chartered Accountant and has over 30 years of
experience in a variety of listed and un-listed companies.
Specifically, Mr. Clayton brings significant experience and
expertise as regards listed companies operating in Africa as well
as particular knowledge of the Company's business and requirements,
having held an interim finance role at the Company during 2018.
Despite his recent work with the Company the Board considers Mr.
Clayton to be an "independent" director for the purposes of the QCA
Corporate Governance Code.
Sergio Zandamela, Non-Executive Director (appointed 30 April
2020) (IC)
Mr. Zandamela is a Mozambican national with over 20 years'
experience in agriculture and business with a degree in Agronomy -
Rural Engineering from the Eduardo Mondlane University and
subsequently an MBA from the Montford University Southern Africa -
Sandton Business School. From 2016 to 2019 Mr. Zandamela was
responsible from for all Mozambique commercial activities of
Tongaat Hulett (agriculture and agri-processing business, focusing
on the complementary feedstocks of sugarcane and maize. Mr.
Zandamela is currently Chairman of the Board of Directors of the
Association of Sugar Producers of Moçambique and acted as Chairman
of the National Sugar Distributors of Moçambique.
The Board considers Mr. Zandamela to be an "independent"
director for the purposes of the QCA Corporate Governance Code.
The Executive Chair is expected to commit a minimum of 2 weeks
per month and the non-executive directors are expected to commit 2
days a month. In addition, all directors are expected to devote any
additional time that might be required in order to discharge their
duties.
Until March 2020, Board meetings were held quarterly in
Mozambique. The attendance record of directors who held office for
the year is as follows:
Meetings held Meetings attended
Caroline Havers 4 4
-------------- ------------------
Neil Clayton 4 4
-------------- ------------------
Hamish Rudland 4 4
-------------- ------------------
Gary Smith 4 4
-------------- ------------------
Amanda Thorburn 4 3
-------------- ------------------
The Board has entrusted the day-to-day responsibility for the
direction, supervision and management of the business to the Senior
Management Committee (the 'SMT'). For the financial year ended 31
March 2020 the SMT was comprised of the Executive Chair, the
Operations Director and Chief Financial Officer in Mozambique.
Certain matters are specifically reserved to the Board for its
decision including, inter alia, the creation or issue of new shares
and share options, acquisitions, investments and disposals,
material contractual arrangements outside the ordinary course of
business and the approval of all transactions with related
parties.
There is no agreed formal procedure for the directors to take
independent professional advice at the Company's expense. The
Company's directors submit themselves for re-election at the Annual
General Meeting at regular intervals in accordance with the
Company's Articles of Incorporation.
The Company has adopted a share dealing code for directors'
dealings which is appropriate for an AIM quoted company. The
directors and the Company comply with the relevant provisions of
the AIM Rules and the Market Abuse Regulation (EU) No. 596/2014
relating to share dealings and take all reasonable steps to ensure
compliance by the Company's employees.
Board committees
Due to the current size of the Board and the Company, there is
no separate Nominations Committee and any new directors are
appointed by the whole Board.
At the Board meeting held in March 2019 the new Audit ("AC"),
Investment ("IC") and Remuneration Committees ("RC") were
established. The Audit Committee and the Investment Committees have
met in the last financial year.
The Audit Committee was chaired by Amanda Thorburn until her
resignation on 30th April 2020, when Neil Clayton took over as
Chair. The Audit Committee has been actively engaged in the
planning and conduct of the Audit of these financial statements.
The Committee has met formally since the year end and the Chair has
had independent conversations with the Audit partners both in
Mozambique and London where executive management have not been
present.
Terms and conditions for Directors
The Executive Chair and Non-Executive Directors do not have
service contracts but appointment letters setting out their terms
of appointment. The appointments may be terminated on three months'
notice by either party. The Non-Executive Directors receive an
annual base fee reflecting their respective time commitments and do
not receive any benefits in addition to their fees, nor are they
eligible to participate in any pension, bonus or share-based
incentive arrangements.
Directors' remuneration
Remuneration details are set out in note 9 to the financial
statements.
Evaluation of Board performance
Given the Company's size, and the reconstitution of the Board
since the end of 2017, no formal review of the effectiveness of its
performance as a unit, as well as that of its committees and the
individual directors has been taken. Performance reviews are to be
carried out internally from time to time. Reviews will endeavour to
identify skills development or mentoring needs of directors and the
wider senior management team.
The Board recognises that the current procedures remain to be
formally implemented and therefore do not accord with the QCA
Guidelines. However it is anticipated that these procedures will be
augmented to a standard appropriate for the size and stage of
development of the Company.
Communication with shareholders
The Company aims to ensure all communications concerning the
Company's activities are clear, fair and accurate. The Board is
however keen to improve its dialogue with shareholders. The
Company's website is regularly updated, and announcements are
posted onto the Company's website.
The results of voting on all resolutions in future general
meetings will be posted to the Company's website, including any
actions to be taken as a result of resolutions for which votes
against have been received from at least 20 percent of independent
shareholders.
Directors' report
The directors the Company hereby present their annual report
together with the audited financial statements for the year ended
31 March 2020 for the Company.
Except where otherwise noted, amounts are presented in this
Directors' report in United States Dollars ('$' or 'US$').
1. Listing details
Agriterra is a non-cellular Guernsey registered company limited
by shares, whose ordinary shares ('Ordinary Shares') are quoted on
the AIM Market of the London Stock Exchange ('AIM') under symbol
AGTA.
2. PRINCIPAL ACTIVITIES, BUSINESS REVIEW AND FUTURE DEVELOPMENTS
The principal activity of the Company is the investment in,
development of and operation of agricultural projects in Africa.
The Company's current operations are focussed on maize and beef in
Mozambique. A review of the Company's performance by business
segment and future prospects are given in the Chair's statement and
strategic review, together with a review of the risks and
uncertainties impacting on the Company's long-term performance.
3. Results and Dividends
The Company results for the year ending 31 March 2020 show a
loss after taxation of US$ 2,993,000 (2019: loss as restated of $
3,290,000). The Directors do not recommend the payment of a final
dividend (2019: US$ nil). No interim dividends were paid in the
year (2018: US$ nil).
Further details on the Company's performance in the year are
included in the Chair's statement and strategic review.
4. DIRECTORS
4.1. Directors in office
The Directors who held office during the year and until the date
of this report were:
Director Position
---------------------------------------- -----------------------
CSO Havers Executive Chair
NWH Clayton Non-Executive Director
HBW Rudland Non-Executive Director
GR Smith Non-Executive Director
A Thorburn (resigned 30 April 2020) Non-Executive Director
SML Zandamela (appointed 30 April 2020) Non-Executive Director
---------------------------------------- -----------------------
4.2. Directors' interests
As at the date of this report, the interests of the Directors
and their related entities in the Ordinary Shares of the Company
were:
Ordinary Shares held
-------------- ---------------------
HBW Rudland* 10,622,433
Mr. Rudland's interest is held through Magister Investments
Limited ('Magister'). Magister is a private limited company
incorporated in the Republic of Mauritius, wholly owned by
Mauritius International Trust Company Limited, as trustee of the
Casa Trust (a Mauritius registered trust). Mr. Hamish Rudland is
the Settlor of the Casa Trust and the beneficiaries of the Casa
Trust are Mr. Rudland, his wife, Mrs. Bridgette Rudland and their
three children (all of whom are under 18 years old).
4.3. Directors' emoluments
Details of the nature and amount of emoluments payable by the
Company for the services of its Directors during the financial year
are shown in note 9 to the financial statements.
4.4. Directors' indemnities
The Company has made qualifying third-party indemnity provisions
for the benefit of its Directors which remain in force at the date
of this report.
5. Substantial Shareholdings
To the best of the knowledge of the Directors, except as set out
in the table below, there are no persons who, as of 20 December
2020, are the direct or indirect beneficial owners of, or exercise
control or direction over 3% or more of the Ordinary Shares in
issue of the Company.
Number of Ordinary Shares % Holding
------------------------------------- -------------------------- ----------
Magister Investments Limited 10,622,433 50.01%
Gersec Trust Reg. 2,779,656 13. 90 %
Mr. William Philip Seymour Richards 982,500 4.63%
Global Resources Fund 678,886 3.20%
Peter Gyllenhammar AB 647,500 3.05%
6. EMPLOYEE INVOLVEMENT POLICIES
The Company places considerable value on the awareness and
involvement of its employees in the Company's performance. Within
bounds of commercial confidentiality, information is disseminated
to all levels of staff about matters that affect the progress of
the Company and that are of interest and concern to them as
employees.
7. SUPPLIER PAYMENT POLICY AND PRACTICE
The Company's policy is to ensure that, in the absence of
dispute, all suppliers are dealt with in accordance with its
standard payment policy which is to abide by the terms of payment
agreed with suppliers for each transaction. Suppliers are made
aware of the terms of payment. The number of days of average daily
purchases included in trade payables at 31 March 2020 was 39 days
(2019: 20 days).
8. POLITICAL AND CHARITABLE DONATIONS
During the year no political and charitable donations were made
in cash. However the Company did assist in the following form just
after cyclone Idai where 15 tons of maize meal was donated to the
Provincial Government Department of Disaster Management of Manica
who was dealing with 1000's of displaced communities in the
districts who had been affected by localised flooding. This
donation was received and immediately distributed to the districts
where communities were most affected. (2019: $nil).
1000kgs of meal and 200 kgs of meat were also donated to the
local hospital at the time of the cyclone which had suddenly been
inundated with patients injured and sick after the event.
Management and employees also embarked on their own fundraising
campaign where blankets, clothing and dried goods were collected
and donated through the local Red Cross agency.
The Company also supported the plight of the 30 employees who
were isolated and trapped for 4 weeks on Dombe farm after the
cyclone where access was completely cut off. We managed to deliver
dry goods and medication the employees and their families by boat
during that period. The company also assisted employees financially
whose houses were destroyed in the cyclone.
9. SOCIAL AND COMMUNITY ISSUES
The mission of the Company in Mozambique is to work with and
support the local producers only by creating an efficient route to
market of a top quality national product. We strongly believe in
the "field to fork" process and will continue to develop this
concept as the Company grows. We have recently created a slogan
called "Do campo para mesa" meaning "From the field to the table"
which simply cements our beliefs in the business. We respect that
it is part of our wider responsibility to promote the development
of the countries in which we operate. Central to this development
and continued economic growth is employment and training. Wherever
possible, the Company continues to ensure that its expertise and
specialist skills and facilities are made available to the broader
community.
Particular activities undertaken during the year have focused on
(1) practical, 'on the ground' training for students from various
universities in Mozambique studying, inter alia, production
practices in beef and cattle, milling practices (including mill
engineering), veterinary sciences and animal sciences; (2)
dissemination of agricultural management knowledge and practices;
and (3) provision of health and medical assistance.
Milling
With respect to educational activities, this year DECA hosted
another two 6 month post-graduation internship for post graduate
students in HR. One student has remained and IT technology in HR
assisting the HR Manager in the day to day functions of the
Administration department. Then we recruited 2 post graduate
students in Finance who are currently under an internship and if
successful will be taken on permanently in the finance department
as cost accountants. We have also hosted one position for 3 months
in the Technical department in the milling section in food
technology, production and plant maintenance. Our Manager in Tete
has recently graduated in business and economics and continues to
run our facility in Tete as the senior Manager in charge
post-graduation the previous year.
Beef
The Mozbife Vanduzi feedlot hosted 38 animal and veterinary
science students on practical excursions and 17 students in the
abattoir throughout the year as our facility offers a live and real
time platform for students to view and learn many aspects in
veterinary practices and applications. We have hosted 4 students on
a 6 months placement from the Instituto Superior Politecnico de
Gaza and 1 student from the Instituto Agrario de Chimoio throughout
the year. In the abattoir we have had 2 female and 3 male students
on attachment for practical aspects of their university courses
from Gaza. We have recently employed a post graduate food
technologist in the abattoir to support the quality control system
who has since become permanent. We recently trained 60 employees in
the abattoir and butcheries on meat processing and quality control
practices to ensure our product is always of a high standard.
Mozbife is currently working to become HACCP (international food
standards accreditation) accredited from the farm to the feedlot in
ensuring traceability and quality standard of products at all
times.
With respect to the promotion of health and medical assistance,
DECA recently donated its ambulance to Dr Abrantes' clinic in
Chimoio which is the first port of call for the operations in case
of any emergency. He also coordinates and monitors progress on mid
to long term treatments ensuring employees are supported through
whatever treatments are required. We have undertaken further work
on the clinic in the district of Dombe to provide a service base
for this very rural community.
Community relations initiatives have recently received a major
boost this year. Mozbife has managed a US$ 823,000 project with the
Catalytic fund to construct 9 community buying points in the
various areas we operate in. The cattle service centres were
finally completed in June 2020 after numerous challenges and delays
initially caused by the cyclone and then by the time access was
secured into these areas the rainy season had started. These cattle
buying centres (or known as CBCs) will formalize the buying process
by having state of the art equipment and infrastructure in place to
support the activities. This investment has also brought about the
creation of 9 associations who have all been registered and have
received training in functioning as an association. The CBCs will
certainly go a long way in cementing our support within these
communities. We envisage bolting on other activities like maize
buying and the selling of other produce which the association will
supply.
Once again at Vanduzi, manure from the feedlot is given to
surrounding small scale farming associations, being out growers for
Companhia de Vanduzi and Westfalia who commercially export fruit
and vegetables to the European market. Both DECA and Mozbife
sponsored the annual Christmas party for three orphanages with over
200 children in Msika district, and meal was distributed to certain
communities during the planting season to ensure local seed stocks
were planted.
10. INDEPENT AUDITOR AND STATEMENT OF PROVISION OF INFORMATION
TO THE INDEPENT AUDITOR
PKFLittlejohn LLP have expressed their willingness to continue
in office as independent auditor of the Company and a resolution to
re-appoint them will be proposed at the forthcoming Annual General
Meeting.
The Directors who held office at the date of approval of this
Directors' report confirm that, so far as they are each aware,
there is no relevant audit information of which the Company's
auditor is not aware and each Director has taken all the steps that
he ought to have taken as a Director to make himself aware of any
relevant audit information and to establish that the Company's
auditor is aware of that information.
11. ADDITIONAL INFORMATION AND ELECTRONIC COMMUNICATIONS
Additional information on the Company can be found on the
Company's website at www.agriterra-ltd.com .
The maintenance and integrity of the Company's website is the
responsibility of the Directors; the work carried out by the
auditor does not involve consideration of these matters and
accordingly, the auditor accepts 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.
By Order of the Board.
CSO Havers
Executive Chair
24 December 2020
Statement of Directors' responsibilities
The Directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations.
The Companies (Guernsey) Law, 2008, as amended (the '2008 Law')
requires the Directors to prepare Company financial statements for
each financial year in accordance with generally accepted
accounting principles.
The Directors are required by the AIM Rules of the London Stock
Exchange to prepare Company financial statements in accordance with
International Financial Reporting Standards ('IFRS') as adopted by
the European Union ('EU').
The financial statements of the Company are required by law to
give a true and fair view and are required by IFRS as adopted by
the EU to present fairly the financial position and financial
performance of the Company.
In preparing the Company financial statements, the Directors are
required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- state whether they have been prepared in accordance with IFRSs as adopted by the EU; and
- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company and
Company transactions and disclose with reasonable accuracy at any
time the financial position of the Company and enable them to
ensure that the financial statements are properly prepared in
accordance with the Companies (Guernsey) Law, 2008. They are also
responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in Guernsey governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
The Directors confirm they have discharged their
responsibilities as noted above.
Independent auditor's report to the members of Agriterra
Limited
Opinion
We have audited the group financial statements of Agriterra
Limited (the 'group') for the year ended 31 March 2020 which
comprise the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cash
Flows and notes to the financial statements, including a summary of
significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
In our opinion, the group financial statements:
-- give a true and fair view of the state of the group's affairs
as at 31 March 2020 and of its loss for the year then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the European Union; and
-- have been prepared in accordance with the requirements of the
Companies (Guernsey) Law, 2008
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty relating to going concern
We draw attention to Note 3 in the financial statements, which
indicates that the group is reliant upon the sales volume, prices
and renewal of its bank facility in order for the group to meet
committed expenditure requirements and working capital needs. There
is currently uncertainty regarding the renewal of the facility. As
stated in Note 3, these events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the
company's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. At the planning stage, materiality is used to
determine the financial statement areas that are included within
the scope of our audit and the extent of sample sizes during the
audit. No significant changes have come to light through the audit
fieldwork which has required a revision our materiality figure.
We used 1.25% of the average of the 3 years turnover as a basis
for determining Group materiality as the Group's key driver is
revenue and there is a volatility with regards to revenue. We have
determined our overall financial statement materiality to be
US$148,000. Materiality for the significant components of the Group
ranged from $29,000 to $120,000 based on 1.25% of the average of
turnover for each component.
Group performance materiality was set at $89,000
We agreed to report to those charged with governance all
corrected and uncorrected misstatements we identified through our
audit with a value in excess of $7,400. We also agreed to report
any other audit misstatements below that threshold that we believe
warranted reporting on qualitative grounds.
An overview of the scope of our audit
In designing our audit, we determined materiality and assessed
the risks of material misstatement in the financial statements. In
particular we looked at areas involving significant accounting
estimates and judgements by the Directors and considered future
events that are inherently uncertain. These included, but were not
limited to the valuation of the biological assets and the
impairment iof the underlying assets of the beef and grain
divisions. We also addressed the risk of management override of
internal controls, including among other matters consideration of
whether there was evidence of bias that represented a risk of
material misstatement due to fraud.
Our Group audit scope focused on the principal area of
operation, being Mozambique, where the subsidiaries of the Parent
Company trade. Each component was assessed as to whether they were
significant or not significant to the group by either their size or
risk. The parent Company and the three operating subsidiaries were
considered to be significant due to identified risk and size. We
have performed the audit of the Parent Company that is registered
on Guernsey. However, the three remaining components located in
Mozambique have been subject to full scope audits by a component
auditor (a PKF network firm). As group auditors we maintained
oversight and regular contact with the component auditor throughout
all stages of the audit and we were responsible for the scope and
direction of their work.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key Audit Matter How the scope of our audit responded
to the key audit matter
========================================= ==========================================================================
Valuation of Biological Assets
(see note 15)
==========================================================================
The Group has a material biological Our work in this area included
asset in respect livestock within reviewing the work performed by
the beef division. Under IAS41, the component auditor in relation
this is held at fair value and to the following:
there are significant estimates * documents prepared by the board detailing the basis
and assumptions required to determine of valuation of the biological assets, including the
the fair value. As such, there key assumptions and estimation factors therein;
is a risk that the biological asset
is overstated in the financial
statements and the fair value valuation * the discounted cashflow valuation workings prepared
is not appropriate. by management and verifying their mathematical
accuracy;
* the key assumptions and judgements used in the
estimation by management;
* the reasonableness of the underlying inputs of the
fair value calculation;
* a sensitivity analysis to ensure any major
fluctuations in the subjective elements of the FV
calculation of the biological assets would not result
in material misstatement and if they do, that they
are appropriately disclosed; and
* Consideration of whether there were any other
indicators of impairment
==========================================================================
Impairment of the underlying assets
of the Beef and Grain Division
(see Note 4)
==========================================================================
The Group's principal assets relate Our work in this area included
property, plant and equipment held the following:
within the Beef and Grain Divisions * Reviewed the work performed by the component auditor
and the continuing losses incurred in relation to their work on the following:
by the Group may indicate that
there is a risk these assets are
impaired. * indications of impairment (e.g. adverse business
changes, decrease in value, change in use, physical
Management must assess whether damage, operating losses, planned disposal, etc.);
there is any objective evidence and
of impairment of the Group's assets
at the reporting date.
* Review and challenge pf the management's budgets,
cash flow forecasts and projections of the beef and
grain division to ensure that the assets are
recoverable
==========================================================================
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information. Our opinion on the financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon. In connection with our audit of the
financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required
to determine whether there is a material misstatement in the
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the
directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies (Guernsey) Law, 2008 requires us to
report to you if, in our opinion:
-- proper accounting records have not been kept by the parent company; or
-- the financial statements are not in agreement with the accounting records; or
-- we have failed to obtain all the information and explanations
which, to the best of our knowledge and belief, are necessary for
the purposes of our audit
Responsibilities of directors
As explained more fully in the Statement of director's
responsibilities, the directors are responsible for the preparation
of the group financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the group financial statements, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with our engagement letter date 19 May 2020. 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.
Joseph Archer (Engagement Partner) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
24 December 2020
Consolidated income statement
For the year ended 31 March 2020
Year Year
ended ended
31 March 31 March 2019
2020
Note US$000 US$000
--------- --------------
Continuing operations As restated
Revenue 5 12,910 10,629
Cost of sales (10,643) (9,891)
(Decrease) / increase in fair value of biological assets (489) 478
--------- --------------
Gross profit 1,778 1,216
Operating expenses (4,700) (4,055)
Other income 6 842 225
Profit on disposal of property, plant and equipment 80 340
Operating loss 6 (2,000) (2,274)
Finance costs 10 (964 ) (1,016)
Loss before taxation (2,964) (3,290)
Taxation 11 (29) -
--------- --------------
Loss for the year attributable to owners of the Company (2,993) (3,290)
US cents US cents
--------- --------------
Earnings per share
Basic and diluted earnings per share 12 (14.1) (15.5)
--------- --------------
Consolidated statement of comprehensive income
For the year ended 31 March 2020
Year Year
ended ended
31 March 31 March
2020 2019
US$000 US$000
--------- ------------
As restated
Loss for the year (2,993) (3,290)
--------- ------------
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation differences (1,517) (119)
--------- ------------
Other comprehensive loss for the year (1,517) (119)
--------- ------------
Total comprehensive loss for the year attributable to owners of the Company (4,510) (3,409)
--------- ------------
Consolidated statement of financial position
As at 31 March 2020
31 March 31 March 1 April
2020 2019 2018
Note US$000 US$000 US$000
---------- ------------ ------------
As restated As restated
Non-current assets
Property, plant and equipment 13 6 ,049 6,963 7,108
Intangible assets 14 92 107 -
------------
6 ,141 7,070 7,108
---------- ------------ ------------
Current assets
Biological assets 15 665 830 1,137
Inventories 16 825 675 938
Trade and other receivables 17 1,249 698 1,096
Assets classified as held for sale - - 19
Cash and cash equivalents 1,034 2,197 3,541
---------- ------------ ------------
3,773 4,400 6,731
---------- ------------ ------------
Total assets 9,914 11,470 13,839
---------- ------------ ------------
Current liabilities
Borrowings 18 3,339 1,708 4,235
Trade and other payables 19 3,315 1,186 469
------------
6,654 2,894 4,704
---------- ------------ ------------
Net current (liabilities) / assets (2,881) 1,506 2,027
---------- ------------ ------------
Non-current liabilities
Borrowings 18 2,044 2,850 -
---------- ------------
2,044 2,850 -
---------- ------------ ------------
Total liabilities 8,698 5,744 4,704
---------- ------------ ------------
Net assets 1,216 5,726 9,135
---------- ------------ ------------
Share capital 21 3,373 3,373 3,373
Share premium 151,442 151,442 151,442
Share based payment reserve 87 172 1,988
Translation reserve (18,373) (16,856) (16,737)
Accumulated losses (135,313) (132,405) (130,931)
------------
Equity attributable to equity holders of the parent 1,216 5,726 9,135
---------- ------------ ------------
The financial statements on pages 18 to 41 were approved and
authorised for issue by the Board of Directors on 23 December
2020.
Signed on behalf of the Board of Directors by:
CSO Havers
Chair
24 December 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended
31 March 2020
Share based
Share payment Translation Accumulated Total
capital Share premium reserve reserve losses Equity
Note US$000 US$000 US$000 US$000 US$000 US$000
--------- -------------- ------------- -------------- ------------ --------
Balance at 1
April 2018 3,373 151,442 1,988 (16,737) (131,724) 8,342
Prior year
adjustment 13 - - - - 793 793
--------- -------------- ------------- -------------- ------------ --------
Balance at 1 April 2018
restated 3,373 151,442 1,988 (16,737) (130,931) 9,135
Loss for the year
restated - - - - (3,290) (3,290)
Other
comprehensive
income:
Exchange translation
loss on foreign
operations restated - - - (119) - (119)
--------- -------------- ------------- -------------- ------------ --------
Total comprehensive
loss for the year - - - (119) (3,290) (3,409)
Transactions
with owners
Share based
payments - - (1,816) - 1,816 -
Total transactions with
owners for the year - - (1,816) - 1,816 -
Balance at 31
March 2019
restated 3,373 151,442 172 (16,856) (132,405) 5,726
Loss for the
year - - - - (2,993) (2,993)
Other
comprehensive
income:
Exchange translation
loss on foreign
operations - - - (1,517) - (1,517)
Total comprehensive
loss for the year - - - (1,517) (2,993) (4,510)
Transactions
with owners
Share based
payments - - (85) - 85 -
--------- -------------- ------------- -------------- ------------ --------
Total transactions with
owners for the year - - (85) - 85 -
Balance at 31
March 2020 3,373 151,442 87 (18,373) (135,313) 1,216
--------- -------------- ------------- -------------- ------------ --------
Consolidated cash flow statement
For the year ended 31 March 2020
Year ended Year ended
31 March 2020 31 March 2019
Note US$000 US$000
-------------- --------------
As restated
Cash flows from operating activities
Loss before tax from continuing operations (2,964) (3,290)
Adjustments for:
Amortisation and depreciation 13/14 619 756
Profit on disposal of property, plant and equipment (80) (281)
Foreign exchange (gain) / loss (1,383) 80
Net (increase) / decrease in biological assets 15 (366) 754
Decrease / (increase) in value of biological assets 15 489 (478)
Net finance costs 10 964 1,016
Operating cash flows before movements in working capital (2,721) (1,443)
(Increase) / decrease in inventories (192) 238
(Increase) / decrease in trade and other receivables (579) 392
Increase in trade and other payables 2,207 744
Cash used in operating activities (1,285) (69)
Corporation tax paid (14) -
Interest received 14 -
Net cash used in operating activities (1,285) (69)
-------------- --------------
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment net of expenses
incurred 80 346
Acquisition of property, plant and equipment 13 (46) (920)
Acquisition of intangible assets 14 (15) (193)
Net cash generated from / (used in) investing activities 19 (767)
-------------- --------------
Cash flows from financing activities
Net drawdown / (repayment) of overdrafts 18 1,732 (3,258)
Net (repayment) / draw down of loans 18 (732) 3,773
Net draw down of leases 108 -
Finance costs (978) (1,016)
Net cash generated from / (used in) financing activities 130 (501)
-------------- --------------
Net decrease in cash and cash equivalents (1,136) (1,337)
Effect of exchange rates on cash and cash equivalents (27) (7)
-------------- --------------
Cash and cash equivalents at beginning of the year 2,197 3,541
-------------- --------------
Cash and cash equivalents at end of the year 1,034 2,197
-------------- --------------
Notes to the consolidated financial statements
1. GeNERAL INFORMATION
Agriterra is incorporated and domiciled in Guernsey, the Channel
Islands, with registered number 42643. Further details, including
the address of the registered office, are given on page 41. The
nature of the Company's operations and its principal activities are
set out in the Directors' report. A list of the investments in
subsidiaries and associate companies held directly and indirectly
by the Company during the year and at the year-end, including the
name, country of incorporation, operation and ownership interest is
given in note 3.
The reporting currency for the Company is the US Dollar ('$' or
'US$') as it most appropriately reflects the Company's business
activities in the agricultural sector in Africa and therefore the
Company's financial position and financial performance.
The financial statements have been prepared in accordance with
IFRSs.
2. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS
New and amended IFRS Standards that are effective for the
current year
Impact of initial application of IFRS 16 Leases
In the current period, the Group has applied IFRS 16 Leases (as
issued by the IASB in January 2016) that is effective for annual
periods that begin on or after 1 January 2019.
IFRS 16 introduces new or amended requirements with respect to
lease accounting. It introduces significant changes to lessee
accounting by removing the distinction between operating and
finance lease and requiring the recognition of a right-of-use asset
and a lease liability at commencement for all leases, except for
short-term leases and leases of low value assets when such
recognition exemptions are adopted. In contrast to lessee
accounting, the requirements for lessor accounting have remained
largely unchanged. Details of these new requirements are described
in Note 3. The impact of the adoption of IFRS 16 on the Group's
consolidated financial statements is described below.
The date of initial application of IFRS 16 for the Group is 1
April 2019.
The Group has applied IFRS 16 using the cumulative catch-up
approach which:
-- Requires the Group to recognise the cumulative effect of
initially applying IFRS 16 as an adjustment to the opening balance
of retained earnings at the date of initial application (date of
acquisition).
-- Does not permit restatement of comparatives, which continue
to be presented under IAS 17 and IFRIC 4.
(a) Impact of the new definition of a lease
The Group has made use of the practical expedient available on
transition to IFRS 16 not to reassess whether a contract is or
contains a lease. Accordingly, the definition of a lease in
accordance with IAS 17 and IFRIC 4 continues to be applied to those
leases entered or changed before 1 April 2019.
The change in definition of a lease mainly relates to the
concept of control. IFRS 16 determines whether a contract contains
a lease on the basis of whether the customer has the right to
control the use of an identified asset for a period of time in
exchange for consideration. This is in contrast to the focus on
'risks and rewards' in IAS 17 and IFRIC 4.
The Group applies the definition of a lease and related guidance
set out in IFRS 16 to all lease contracts entered into or changed
on or after 1 April 2019 (whether it is a lessor or a lessee in the
lease contract). In preparation for the first-time application of
IFRS 16, the Group has carried out an implementation project. The
project has shown that the new definition in IFRS 16 will not
significantly change the scope of contracts that meet the
definition of a lease for the Group.
b) Impact on Lessee Accounting
(i) Former operating leases
IFRS 16 changes how the Group accounts for leases previously
classified as operating leases under IAS 17, which were off balance
sheet.
Applying IFRS 16, for all leases (except as noted below), the
Group:
-- Recognises right-of-use assets and lease liabilities in the
consolidated statement of financial position, initially measured at
the present value of the future lease payments, with the
right-of-use asset adjusted by the amount of any prepaid or accrued
lease payments in accordance with IFRS 16:C8(b)(ii).
-- Recognises depreciation of right-of-use assets and interest
on lease liabilities in the consolidated statement of profit or
loss;
-- Separates the total amount of cash paid into a principal
portion (presented within financing activities) and interest
(presented within financing activities) in the consolidated
statement of cash flows.
Lease incentives (e.g. rent-free period) are recognised as part
of the measurement of the right-of-use assets and lease liabilities
whereas under IAS 17 they resulted in the recognition of a lease
incentive, amortised as a reduction of rental expenses on a
straight line basis.
Under IFRS 16, right-of-use assets are tested for impairment in
accordance with IAS 36.
For short-term leases (lease term of 12 months or less) and
leases of low-value assets (which includes tablets and personal
computers, small items of office furniture and telephones), the
Group has opted to recognise a lease expense on a straight-line
basis as permitted by IFRS 16. This expense is presented within
'other expenses' in profit or loss.
The Group has used the following practical expedients when
applying the cumulative catch-up approach to leases previously
classified as operating leases applying IAS 17.
-- The Group has applied a single discount rate to a portfolio
of leases with reasonably similar characteristics.
-- The Group has elected not to recognise right-of-use assets
and lease liabilities to leases for which the lease term ends
within 12 months of the date of initial application.
-- The Group has excluded initial direct costs from the
measurement of the right-of-use asset at the date of initial
application.
-- The Group has used hindsight when determining the lease term
when the contract contains options to extend or terminate the
lease.
(ii) Former finance leases
For leases that were classified as finance leases applying IAS
17, the carrying amount of the leased assets and obligations under
finance leases measured applying IAS 17 immediately before the date
of initial application is reclassified to right-of-use assets and
lease liabilities respectively without any adjustments, except in
cases where the Group has elected to apply the low-value lease
recognition exemption.
The right-of-use asset and the lease liability are accounted for
applying IFRS 16 from 1 January 2019.
(c) Impact on Lessor Accounting
The Group is not a Lessor
(d) Financial impact of initial application of IFRS 16
Other than short term leases, the Company does not have any
operating leases. The weighted average incremental borrowing rate
applied to lease liabilities previously categorised as finance
leases is 18.5%.
In the current year, the Group has applied a number of
amendments to IFRS Standards and Interpretations issued by the IASB
that are effective for an annual period that begins on or after 1
January 2019. Their adoption has not had any material impact on the
disclosures or on the amounts reported in these financial
statements.
Amendments to IFRS 9 Prepayment Features with Negative Compensation
Amendments to IAS 28 Long-term Interests in Associates and Joint
Ventures
-----------------------------------------------
Annual Improvements to IFRS 3 Business Combinations
IFRS Standards 2015-2017 IFRS 11 Joint Arrangements
Cycle Amendments to: IAS 12 Income Taxes
IAS 23 Borrowing Costs
-----------------------------------------------
Amendments to IAS 19 Employee Benefits Plan Amendment, Curtailment
or Settlement
-----------------------------------------------
IFRIC 23 Uncertainty over Income Tax Treatments
-----------------------------------------------
New and revised IFRS Standards in issue but not yet
effective
At the date of authorisation of these financial statements, the
Group has not applied the following new and revised IFRS Standards
that have been issued but are not yet effective [and [in some
cases] have not yet been adopted by the EU]:
IFRS 17 Insurance Contracts
IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture
(amendments)
----------------------------------------------------
Amendments to IFRS 3 Definition of a business
----------------------------------------------------
Amendments to IAS 1 and Definition of material
IAS 8
----------------------------------------------------
Conceptual Framework Amendments to References to the Conceptual Framework
in IFRS Standards
----------------------------------------------------
The directors do not expect that the adoption of the Standards
listed above will have a material impact on the financial
statements of the Group in future periods
3. SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared on a historical cost
basis, except for certain financial instruments, biological assets
and share based payments. Historical cost is generally based on the
fair value of the consideration given in exchange for the assets
acquired. The principal accounting policies adopted are set out
below in this note.
Going concern
The Company has prepared forecasts for the Company's ongoing
businesses covering the period of 12 months from the date of
approval of these financial statements. These forecasts are based
on assumptions including, inter alia, that there are no significant
disruptions to the supply of maize or cattle to meet its projected
sales volumes and that key inputs are achieved, such as forecast
selling prices and volume, budgeted cost reductions, and projected
weight gains of cattle in the feedlot. They further take into
account working capital requirements and currently available
borrowing facilities.
These forecasts show that with active management of working
capital and the timing of capital expenditure, there is sufficient
headroom under the banking facilities currently available to the
Company. Certain short-term overdraft facilities fall due for
renewal in May 2021. Whilst there are no contractual obligations,
the Company will continue to rely on the bank guarantee currently
provided by its majority shareholder.
The Company's focus remains on continuing to improve operational
performance of the Grain and Beef divisions with emphasis on volume
and pricing growth to increase gross margins.
Over the last 12 months, the Grain division has made significant
progress in meeting the operating challenges to increase volumes
and margins in order to move into profitability. More importantly
this has been achieved whilst having to live within its means. New
products and improved quality have been a significant factor in
this performance and underpin the continued improvement in volumes
in the FY21 forecast, together with the start-up phase of the DECA
Snax project.
The Beef division is starting to show a recovery in
profitability as a result of the actions taken by management over
the last 12 months and is expected to generate positive operational
cash flows over the next 18 months.
COVID-19: As set out in the strategic report, the actions taken
by the Government of Mozambique to limit the spread of COVID-19,
has impacted the availability of local maize and demand for Beef
form the Oil and Gas sector. The Key focus of the Company has been
to maintain the health of its workforce with stringent hygiene
measures implemented at all our operations. To date there has been
no site closures or cessation of operations. However, the future
evolution of COVID-19 is not currently known and therefore a
sensitised version of the Company's forecasts has been
prepared.
Corporate overheads are forecast to be consistent with the
current run rate.
The divisional forecasts for FY-21 show a significant
improvement in operating performance as compared to that reported
for the year ended 31 March 2020. However, there can be no
certainty that the turnaround plans will be successful, and the
forecasts are sensitive to small adverse changes in the operations
of the divisions. As set out in notes 18 and 20 the Company is
funded by a combination of short and long-term borrowing
facilities. $2.7m of overdraft facilities are due for renewal
within the next 12 months and the Company is required to make $0.7m
of repayments in respect of the bank loan instalments amount
together with principal on finance leases of $167,000. The
forecasts show that the Company will require the renewal of its
overdraft facilities in the review period.
The Company has also received correspondence from the banks
providing overdraft facilities indicating that they do not
presently see any reason why the current overdraft facilities would
not be extended at their respective renewal dates. Consequently,
the forecasts include all contractual interest and capital
repayments and assume that both the term loan and overdraft
facilities will continue to be available and will be renewed for a
further year when they are reviewed in 2021.
Based on the above, whilst there are no contractual guarantees,
the directors are confident that the existing financing will remain
available to the Company. The directors, with the operating
initiatives already in place and funding options available are
confident that the Company will achieve its cash flow forecasts.
Therefore, the directors have prepared the financial statements on
a going concern basis.
The forecasts show that the Company needs to achieve its
operating targets and renew its existing overdraft facilities to
meet its commitments as they fall due. These conditions and events
indicate the existence of material uncertainties that may cast
significant doubt upon the Company's ability to continue as a going
concern and the Company may therefore be unable to realise their
assets and discharge their liabilities in the ordinary course of
business. The auditors make reference to going concern in their
audit report by way of a material uncertainty. These financial
statements do not include the adjustments that would result if the
Company were unable to continue as a going concern.
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 March 2020. The company controls
an investee if all three of the following elements are present:
power over the investee, exposure to variable returns from the
investee, and the ability of the investor to use its power to
affect those variable returns. Control is reassessed whenever facts
and circumstances indicate that there may be a change in any of
these elements of control.
Intra-Group transactions, balances and unrealised gains on
transactions between Group companies are eliminated. Unrealised
losses are eliminated in the same way as unrealised gains, but only
to the extent that there is no evidence of impairment.
As at 31 March 2020, the Company held equity interests in the
following undertakings:
Direct investments
Proportion held of equity Country of incorporation and
instruments place of business Nature of business
Subsidiary undertakings
Agriterra (Mozambique) Limited 100% Guernsey Holding company
Indirect investments of Agriterra (Mozambique) Limited
Proportion held of equity Country of incorporation and
instruments place of business Nature of business
Subsidiary undertakings
DECA - Desenvolvimento E
Comercialização
Agrícola Limitada 100% Mozambique Grain
Compagri Limitada 100% Mozambique Grain
Mozbife Limitada 100% Mozambique Beef
Carnes de Manica Limitada 100% Mozambique Beef
Aviação Agriterra
Limitada 100% Mozambique Dormant
Foreign currency
The individual financial statements of each company in the Group
are prepared in Mozambican Metical the currency of the primary
economic environment in which it operates (its 'functional
currency'). The consolidated financial statements are presented in
US Dollars.
In preparing the financial statements of the individual
companies, transactions in currencies other than the entity's
functional currency (foreign currencies) are recognised at the
rates of exchange prevailing on the date of the transaction. At
each balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non-monetary items that are measured in
terms of historical cost in a foreign currency are not
retranslated.
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Company's operations are
translated at exchange rates prevailing at the balance sheet date.
Income and expense items are translated at the average exchange
rates for each month, unless exchange rates fluctuate significantly
during the month, in which case exchange rates at the date of
transactions are used. Exchange differences arising from the
translation of the net investment in foreign operations and
overseas branches are recognised in other comprehensive income and
accumulated in equity in the translation reserve. Such translation
differences are recognised as income or expense in the year in
which the operation or branch is disposed of.
The following are the material exchange rates applied by the
Company:
Average Rate Closing Rate
2020 2019 2020 2019
------- ------ ------- ------
Mozambican Metical: US$ 65.59 60.82 67.45 63.73
------- ------ ------- ------
Operating segments
The Chief Operating Decision Maker is the Board. The Board
reviews the Company's internal reporting in order to assess
performance of the business. Management has determined the
operating segments based on the reports reviewed by the Board which
consider the activities by nature of business.
Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable for goods and services provided in the
normal course of business, net of discounts, value added taxes and
other sales related taxes.
Performance obligations and timing of revenue recognition:
All of the Company's revenue is derived from selling goods with
revenue recognised at a point in time when control of the goods has
transferred to the customer. This is generally when the goods are
collected or delivered to the customer. There is limited judgment
needed in identifying the point control passes: once physical
delivery of the products to the agreed location has occurred, the
Company no longer has physical possession, usually it will have a
present right to payment. Consideration is received in accordance
with agreed terms of sale.
Determining the contract price:
All of the Company's revenue is derived from fixed price lists
and therefore the amount of revenue to be earned from each
transaction is determined by reference to those fixed prices.
Allocating amounts to performance obligations:
For most sales, there is a fixed unit price for each product
sold. Therefore, there is no judgment involved in allocating the
price to each unit ordered.
There are no long-term contracts in place. Sales commissions are
expensed as incurred. No practical expedients are used.
Operating loss
Operating loss is stated before investment revenues, other gains
and losses, finance costs and taxation.
Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets
that necessarily take a substantial year of time to get ready for
their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their
intended use or sale. The Company did not incur any borrowing costs
in respect of qualifying assets in any year presented.
All other borrowing costs are recognised in profit or loss in
the year in which they are incurred.
Share based payments
The Company issues equity-settled share-based payments to
certain employees of the Company. These payments are measured at
fair value (excluding the effect of non-market based vesting
conditions) at the date of grant and the value is expensed on a
straight-line basis over the vesting year, based on the Company's
estimate of the shares that will eventually vest and adjusted for
non-market based vesting conditions.
Fair value is measured by use of the Black Scholes model. The
expected life used in the model is adjusted, based on management's
best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations.
Employee benefits
Short-term employee benefits
Short-term employee benefits include salaries and wages,
short-term compensated absences and bonus payments. The Company
recognises a liability and corresponding expense for short-term
employee benefits when an employee has rendered services that
entitle him/her to the benefit.
Post-employment benefits
The Company does not contribute to any retirement plan for its
employees. Social security payments to state schemes are charged to
profit and loss as the employee's services are rendered.
Leases
The Group has applied IFRS 16 using the cumulative catch-up
approach and therefore comparative information has not been
restated and is presented under IAS 17. The details of accounting
policies under both IAS 17 and IFRS 16 are presented separately
below.
The Group as a lessee
The Group assesses whether a contract is or contains a lease, at
inception of the contract. The Group recognises a right-of-use
asset and a corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for short-term
leases (defined as leases with a lease term of 12 months or less)
and leases of low value assets (such as tablets and personal
computers, small items of office furniture and telephones). For
these leases, the Group recognises the lease payments as an
operating expense on a straight-line basis over the term of the
lease unless another systematic basis is more representative of the
time pattern in which economic benefits from the leased assets are
consumed.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate
cannot be readily determined, the lessee uses its incremental
borrowing rate.
Lease payments included in the measurement of the lease
liability comprise:
-- Fixed lease payments (including in-substance fixed payments),
less any lease incentives receivable;
-- Variable lease payments that depend on an index or rate,
initially measured using the index or rate at the commencement
date;
-- The amount expected to be payable by the lessee under residual value guarantees;
-- The exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and
-- Payments of penalties for terminating the lease, if the lease
term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the
consolidated statement of financial position.
The lease liability is subsequently measured by increasing the
carrying amount to reflect interest on the lease liability (using
the effective interest method) and by reducing the carrying amount
to reflect the lease payments made.
The Group re-measures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever :
-- The lease term has changed or there is a significant event or
change in circumstances resulting in a change in the assessment of
exercise of a purchase option, in which case the lease liability is
re-measured by discounting the revised lease payments using a
revised discount rate.
-- The lease payments change due to changes in an index or rate
or a change in expected payment under a guaranteed residual value,
in which cases the lease liability is re-measured by discounting
the revised lease payments using an unchanged discount rate (unless
the lease payments change is due to a change in a floating interest
rate, in which case a revised discount rate is used).
-- A lease contract is modified and the lease modification is
not accounted for as a separate lease, in which case the lease
liability is re-measured based on the lease term of the modified
lease by discounting the revised lease payments using a revised
discount rate at the effective date of the modification.
The Group did not make any such adjustments during the periods
presented.
The right-of-use assets comprise the initial measurement of the
corresponding lease liability, lease payments made at or before the
commencement day, less any lease incentives received and any
initial direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle
and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the
terms and conditions of the lease, a provision is recognised and
measured under IAS 37. To the extent that the costs relate to a
right-of-use asset, the costs are included in the related
right-of-use asset, unless those costs are incurred to produce
inventories.
Right-of-use assets are depreciated over the shorter period of
lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over
the useful life of the underlying asset. The depreciation starts at
the commencement date of the lease.
The right-of-use assets are presented as a separate line in the
consolidated statement of financial position.
The Group applies IAS 36 to determine whether a right-of-use
asset is impaired and accounts for any identified impairment loss
as described in the 'Property, Plant and Equipment' policy.
Variable rents that do not depend on an index or rate are not
included in the measurement of the lease liability and the
right-of-use asset. The related payments are recognised as an
expense in the period in which the event or condition that triggers
those payments occurs and are included in operating expenses in
profit or loss.
Taxation
The Company is resident for taxation purposes in Guernsey and
its income is subject to income tax, presently at a rate of zero
per cent per annum. The income of overseas subsidiaries is subject
to tax at the prevailing rate in each jurisdiction.
The income tax expense for the year comprises current and
deferred tax. Income tax is recognised in the income statement
except to the extent that it relates to items recognised in other
comprehensive income or directly in equity, when tax is recognised
in other comprehensive income or directly in equity as appropriate.
Taxable profit differs from accounting 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.
Current tax expense is the expected tax payable on the taxable
income for the year. It is calculated on the basis of the tax laws
and rates enacted or substantively enacted at the balance sheet
date and includes any adjustment to tax payable in respect of
previous years. Deferred tax is calculated using the balance sheet
liability method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax
assets are recognised to the extent that it is probable that
taxable profit will be available against which the asset can be
utilised. This requires judgements to be made in respect of the
availability of future taxable income.
The Company's deferred tax assets and liabilities are calculated
using tax rates that are expected to apply in the year when the
liability is settled or the asset realised based on tax rates that
have been enacted or substantively enacted by the reporting
date.
Deferred income tax assets and liabilities are offset only when
there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income tax
assets and liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different
taxable entities where there is an intention to settle the balances
on a net basis.
No deferred tax asset or liability is recognised in respect of
temporary differences associated with investments in subsidiaries,
branches and joint ventures where the Company is able to control
the timing of reversal of the temporary differences and it is
probable that the temporary differences will not reverse in the
foreseeable future.
Property, plant and equipment
All items of property, plant and equipment are stated at
historical cost less accumulated depreciation (see below) and
impairment. Historical cost includes expenditure that is directly
attributable to the acquisition. Subsequent costs are included in
the asset's carrying value when it is considered probable that
future economic benefits associated with the item will flow to the
Company and the cost of the item can be measured reliably.
Depreciation is charged on a straight-line basis over the
estimated useful lives of each item, as follows:
Land and buildings:
Land Nil
Buildings and leasehold improvements 2% - 33%
Plant and machinery 5% - 25%
Motor vehicles 20% - 25%
Other assets 10% - 33%
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance sheet date. Gains and
losses on disposals are determined by comparing proceeds received
with the carrying amount of the asset immediately prior to disposal
and are included in profit and loss.
Intangible assets
Intangible assets comprise investment in management information
and financial software. This is amortised at 10% straight line.
Impairment of property, plant and equipment and intangible
assets
At each balance sheet date, the Company reviews the carrying
amounts of its tangible 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 Company estimates the
recoverable amount of the cash-generating unit to which the asset
belongs.
Recoverable amount is the higher of fair value less costs of
disposal 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 not 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 (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in
profit and loss because the Company does not record any assets at a
revalued amount.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or 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 (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognised immediately in profit and
loss.
Biological assets
Consumer biological assets, being the beef cattle herd, are
measured in accordance with IAS 41, 'Agriculture' at fair value
less costs to sell, with gains and losses in the measurement to
fair value recorded in profit and loss. Breeding cattle, comprising
bulls, cows and heifers are expected to be held for more than one
year, and are classified as non-current assets. The non-breeding
cattle comprise animals that will be grown and sold for slaughter
and are classified as current assets.
Cattle are recorded as assets at the year-end and the fair value
is determined by the size of the herd and market prices at the
reporting date.
Cattle ceases to be a biological asset from the point it is
slaughtered, after which it is accounted for in accordance with the
accounting policy below for inventories.
Forage crops are valued in accordance with IAS 41, 'Agriculture'
at fair value less costs to harvest. As there is no ready local
market for forage crops, fair value is calculated by reference to
the production costs of previous crops. The cost of forage is
charged to profit or loss over the year it is consumed.
Inventories
Inventories are stated at the lower of cost and net realisable
value. Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of completion
and selling expenses. The cost of inventories is based on the
weighted average principle and includes expenditure incurred in
acquiring the inventories and bringing them to their existing
location and condition.
Financial assets and financial liabilities are recognised in the
Company's balance sheet when the Company becomes a party to the
contractual provisions of the instrument.
Financial assets
Financial assets are classified as either financial assets at
amortised cost, at fair value through other comprehensive income
("FVTOCI") or at fair value through profit or loss ("FVPL")
depending upon the business model for managing the financial assets
and the nature of the contractual cash flow characteristics of the
financial asset.
A loss allowance for expected credit losses is determined for
all financial assets, other than those at FVPL, at the end of each
reporting period. The Company applies a simplified approach to
measure the credit loss allowance for trade receivables using the
lifetime expected credit loss provision. The lifetime expected
credit loss is evaluated for each trade receivable taking into
account payment history, payments made subsequent to year-end and
prior to reporting, past default experience and the impact of any
other relevant and current observable data. The Company applies a
general approach on all other receivables classified as financial
assets. The general approach recognises lifetime expected credit
losses when there has been a significant increase in credit risk
since initial recognition.
The Company derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and
rewards of ownership of the asset to another party. The Company
derecognises financial liabilities when the Company's obligations
are discharged, cancelled or have expired.
Trade and other receivables
Trade receivables are accounted for at amortised cost. Trade
receivables do not carry any interest and are stated at their
nominal value as reduced by appropriate expected credit loss
allowances for estimated recoverable amounts as the interest that
would be recognised from discounting future cash payments over the
short payment period is not considered to be material. Other
receivables are accounted for at amortised cost and are stated at
their nominal value as reduced by appropriate expected credit loss
allowances.
Financial liabilities
The classification of financial liabilities at initial
recognition depends on the purpose for which the financial
liability was issued and its characteristics.
All purchases of financial liabilities are recorded on trade
date, being the date on which the Company becomes party to the
contractual requirements of the financial liability. Unless
otherwise indicated the carrying amounts of the Company's financial
liabilities approximate to their fair values.
The Company's financial liabilities consist of financial
liabilities measured at amortised cost and financial liabilities at
fair value through profit or loss.
A financial liability (in whole or in part) is derecognised when
the Company has extinguished its contractual obligations, it
expires or is cancelled. Any gain or loss on de-recognition is
taken to the statement of comprehensive income.
Borrowings
Borrowings are included as financial liabilities on the Company
balance sheet at the amounts drawn on the particular facilities net
of the unamortised cost of financing. Interest payable on those
facilities is expensed as finance cost in the period to which it
relates.
Trade and other payables
Trade and other payables are initially recorded at fair value
and subsequently carried at amortised cost.
Fair value measurement
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place
either in the principal market for the asset or liability or, in
the absence of a principal market, in the most advantageous market
for the asset or liability. The principal or the most advantageous
market must be accessible to the Company.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their
economic best interest.
For all other financial instruments not traded in an active
market, the fair value is determined by using valuation techniques
deemed to be appropriate in the circumstances. Valuation techniques
include the market approach (i.e. using recent arm's length market
transactions adjusted as necessary and reference to the current
market value of another instrument that is substantially the same)
and the income approach (i.e. discounted cash flow analysis and
option pricing models making as much use of available and
supportable market data as possible).
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a
whole:
Level 1 - Quoted (unadjusted) market prices in active markets
for identical assets or liabilities.
Level 2 - Valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or
indirectly observable.
Level 3 - Valuation techniques for which the lowest level input
that is significant to the fair value measurement is
unobservable.
For assets and liabilities that are recognised in the financial
statements on a recurring basis, the Company determines whether
transfers have occurred between levels in the hierarchy by
re-assessing the categorisation (based on the lowest level input
that is significant to the fair value measurement as a whole) at
the end of each reporting year.
4. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Company's accounting policies which
are described in note 3, the directors are required to make
judgments, estimates and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on
historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the year in which the estimate is revised if the revision affects
only that year or in the year of the revision and future years if
the revision affects both current and future years. The effect on
the financial statements of changes in estimates in future years
could be material.
Impairment
Impairment reviews for non-current assets are carried out at
each balance sheet date in accordance with IAS 36, Impairment of
Assets. Reported losses in the Beef and Grain divisions were
considered to be indications of impairment and a formal impairment
review was undertaken.
The impairment reviews are sensitive to various assumptions,
including the expected sales forecasts, cost assumptions, capital
requirements, and discount rates among others. The forecasts of
future cash flows were derived from the operational plans in place
to address the requirement to increase both volumes and margins
across the two divisions. Real commodity prices were assumed to
remain constant at current levels.
Discount rate: Current central bank prime MIMO benchmark rate is
10.25% and with inflation at around 3.2%, the benchmark real
interest rate is around 7.05%. The real rate assumed in these
forecasts is 12.5%, consistent with prior years. Current nominal
bank borrowing rates are 15.9%, but these are expected to fall
further as the economy recovers from the COVID-19 Pandemic and
inflation remains stable. Neither division is sensitive to an
increase in the discount rate to 25%
Grain division: The forecasts for the Grain division show a
return towards the 10 year moving average with meal sales
increasing to 31,000 tonnes in FY-21 (Year ending 31 March 2020:
19,926). A shortfall in the projected volumes of 18% or a reduction
in the gross margin of more than 16% would lead to an indication of
impairment.
Beef division : The forecasts for the Beef division show volumes
of all meat products improving to 1,193 tonnes in FY-21 (Year
ending 31 March 2020: 1,094 tonnes) and to 1,797 tonnes in FY-22. A
fall in forecasted sales volumes of 4% or a reduction in budgeted
gross margin of 2% would be required to indicate possible further
impairment. The assets of the Beef division were impaired by $ 3.1m
in the year ended 31 May 2016 following the decision to destock the
ranches. The Board continues to evaluate the development of these
assets, however it is too early to consider whether or not the
previous impairment charge should be reversed.
No impairments were recorded in the year ended 31 March 2020 or
the year ended 31 March 2019.
Non-current assets
During the year, the Company implemented the new asset module in
the Mozambique operations. The project included the compilation of
a new register of assets from a review of all existing assets. In
addition, it was decided to bring the accounting values for these
assets into line with the written down values in accordance with
tax legislation in Mozambique. As a result, there was an overall
uplift in the value of fixed assets of $793,000 at 1 April 2018.
This has been accounted for as a prior year adjustment. There was a
fall in the value of intangible assets of $59,000 at 1 April 2019.
Further details are given in notes 13 and 14.
Biological assets
Cattle are accounted for as biological assets and measured at
their fair value at each balance sheet date. Fair value is based on
the estimated market value for cattle in Mozambique of a similar
age and breed, less the estimated costs to bring them to market,
converted to US$ at the exchange rate prevailing at the year end.
Changes in any estimates could lead to the recognition of
significant fair value changes in the consolidated income
statement, or significant changes in the foreign currency
translation reserve for changes in the Metical to US$ exchange
rate.
The herd may be categorised as either the breeding herd or
slaughter herd, depending on whether it was principally held for
reproduction or slaughter. At 31 March 2020 the value of the
breeding herd disclosed as a non-current asset was $nil (31 March
2019: $nil). The value of the herd held for slaughter disclosed as
a current asset was $ 0.7m (31 March 2019: $ 0.8m).
Recoverability of input Value Added Tax
Mozambique Value Added Tax ('IVA') operates in a similar manner
to UK Value Added Tax ('VAT'). The Company is exempt from IVA on
its sales of maize products under the terms of Mozambique tax law.
The Company is able to recover input sales tax on substantially all
of the purchases of the Grain division. The Company is always
therefore in a net recovery position of IVA in respect of its Grain
operations. To date the Company has succeeded in recovering a
portion of the IVA balance from prior years from the Mozambique
Government amounting to $0.8m, while the remaining historical IVA
balance has been fully provided for. As at 31 March 2020, the gross
and net IVA recoverable assets are respectively $ 0.1 million (31
March 2019: $1,046,000) and $nil (31 March 2019: $nil) at the US$
to Metical exchange rate of 67.45 (31 March 2019: 63.73) at that
date.
5. Segment reporting
The Board considers that the Company's operating activities
comprise the segments of Grain and Beef and which are undertaken in
Africa. In addition, the Company has certain other unallocated
expenditure, assets and liabilities, either located in Africa or
held as support for the Africa operations.
Segment revenue and results
The following is an analysis of the Company's revenue and
results by operating segment:
Year ending 31 March 2020 Grain Beef Unallo-cated Elimina-tions Total
US$000 US$000 US$000 US$000 US$000
------- -------- ------------- -------------- --------
Revenue
External sales(2) 8,955 3,955 - - 12,910
Inter-segment sales(1) 453 - - (453) -
------- -------- ------------- -------------- --------
9,408 3,955 - (453) 12,910
------- -------- ------------- -------------- --------
Segment results
- Operating loss (964) (1,452) (562) - (2,978)
- Interest expense (805) (155) (4) - (964)
- Other gains and losses 883 95 - - 978
------- -------- ------------- -------------- --------
Loss before tax (886) (1,512) (566) - (2,964)
------- -------- ------------- -------------- --------
Income tax (29) - - - (29)
------- -------- ------------- -------------- --------
Loss after tax (915) (1,512) (566) - (2,993)
------- -------- ------------- -------------- --------
Year ending 31 March 2019 as restated Grain Beef Unallo-cated Elimina-tions Total
US$000 US$000 US$000 US$000 US$000
-------- -------- ------------- -------------- --------
Revenue
External sales(2) 5,586 5,043 - - 10,629
Inter-segment sales(1) 873 - - (873) -
-------- -------- ------------- -------------- --------
6,459 5,043 - (873) 10,629
-------- -------- ------------- -------------- --------
Segment results
- Operating loss (956) (1,380) (503) - (2,839)
- Interest expense (916) (100) - - (1,016)
- Other gains and losses 309 252 4 - 565
-------- -------- ------------- -------------- --------
Loss before tax (1,563) (1,228) (499) - (3,290)
-------- -------- ------------- -------------- --------
Income tax - - - - -
-------- -------- ------------- -------------- --------
Loss after tax (1,563) (1,228) (499) - (3,290)
-------- -------- ------------- -------------- --------
(1) Inter-segment sales are charged at prevailing market prices.
(2) Revenue represents sales to external customers and is recorded in the country of domicile
of the Company making the sale. Sales from the Grain and Beef divisions are principally for
supply to the Mozambique market.
The segment items included in the consolidated income statement
for the year are as follows:
Year ending 31 March 2020 Grain Beef Unallo-cated Elimina-tions Total
US$000 US$000 US$000 US$000 US$000
------- ------- ------------- -------------- -------
Depreciation and amortisation 167 452 - - 619
------- ------- ------------- -------------- -------
Year ending 31 March 2019 as restated Grain Beef Unallo-cated Elimina-tions Total
US$000 US$000 US$000 US$000 US$000
Depreciation and amortisation 138 608 10 - 756
------- ------- ------------- -------------- -------
Segment assets, liabilities and capital expenditure
Segment assets consist primarily of property, plant and
equipment, biological assets, inventories, trade and other
receivables and cash and cash equivalents. Segment liabilities
comprise operating liabilities, including an overdraft financing
facility in the Grain segment, and bank loans and overdraft
financing facilities in the Beef segment.
Capital expenditure comprises additions to property, plant and
equipment.
The segment assets and liabilities at 31 March 2020 and capital
expenditure for the year then ended are as follows:
Grain Beef Unallocated Total
US$000 US$000 US$000 US$000
-------- -------- ------------ --------
Assets 5,223 4,332 359 9,914
Liabilities (7,249) (1,300) (149) (8,698)
Capital expenditure 16 45 - 61
-------- -------- ------------ --------
Segment assets and liabilities are reconciled to Group assets
and liabilities as follows:
Assets Liabilities
US$000 US$000
------- ------------
Segment assets and liabilities 9,555 (8,549)
Unallocated:
Intangible asset 27 -
Other receivables 16 -
Cash and cash equivalents 316 -
Accrued liabilities - (149)
9,914 (8,698)
------- ------------
The segment assets and liabilities at 31 March 2019 and capital
expenditure for the year then ended are as follows:
Grain Beef Unallocated Total
US$000 US$000 US$000 US$000
-------- ------- ------------ --------
Assets 4,636 4,825 2,009 11,470
Liabilities (4,742) (861) (141) (5,744)
Capital expenditure 355 727 31 1,113
-------- ------- ------------ --------
Segment assets and liabilities are reconciled to Company assets
and liabilities as follows:
Assets Liabilities
US$000 US$000
------- ------------
Segment assets and liabilities 9,461 (5,603)
Unallocated:
Intangible asset 21 -
Other receivables 16 -
Cash and cash equivalents 1,972 -
Accrued liabilities - (141)
11,470 (5,744)
------- ------------
Key performance Indicator
The Board considers that earnings before interest, tax,
depreciation and amortisation ("EBITDA") is a key performance
indicator in measuring operational performance. It is calculated as
follows:
Year ending 31 March 2020 Grain Beef Unallocated Total
US$000 US$000 US$000 US$000
------- -------- ------------ --------
Loss before tax (886) (1,512) (566) (2,964)
- Interest expense 805 155 4 964
- Depreciation and amortisation charge 167 452 - 619
------- -------- ------------ --------
EBITDA 86 (905) (562) (1,381)
------- -------- ------------ --------
Year ending 31 March 2019 as restated Grain Beef Unallocated Total
US$000 US$000 US$000 US$000
-------- -------- ------------ --------
Loss before tax (1,563) (1,228) (499) (3,290)
- Interest expense 916 100 - 1,016
- Depreciation and amortisation charge 138 608 10 756
-------- -------- ------------ --------
EBITDA (509) (520) (489) (1,654)
-------- -------- ------------ --------
Significant customers
In the year ended 31 March 2020, two customers of the Grain
segment generated revenue of $3.5m amounting to 18.7% of Company
revenue for one customer and 8.5% for the other. Two customers of
the Beef segment generated revenue of $1.5m amounting to 7.1% of
Company revenue for one customer and 4.7% for the other (Year ended
31 March 2019: two customers of the Grain division generated
revenue of $ 2.3m amounting to 22.0% of Company revenue and one
customer of the Beef division generated revenue of $1.3m amounting
to 12.5% of Company revenue).
6. Operating loss
Operating loss has been arrived at after charging /
(crediting):
Year Year
ended ended
31 March 2020 31 March 2019
US$000 US$000
-------------- --------------
Other income: recovery of historic VAT claim (804) -
Depreciation of property, plant and equipment (see note 13) 595 736
Amortisation of intangible asset (see note 14) 24 20
Profit on disposal of property, plant and equipment (80) (810)
Net foreign exchange gain 56 (11)
Staff costs (see note 8) 1,915 1,971
-------------- --------------
7. Auditors Remuneration
Amounts payable to the auditors and their associates in respect
of audit services are as follows:
Year Year
Ended Ended
31 March 2020 31 March 2019
US$000 US$000
------------- -------------
Fees payable to the Company's previous auditor and their associates
For the audit of the Company's accounts - 130
For the forensic audit of the Company's subsidiaries - 55
For the audit of the Company's subsidiaries - 79
Overruns in respect of prior years 68 -
------------- -------------
68 264
Fees payable to the Company's auditor and their associates
For the audit of the Company's accounts 58 -
For the audit of the Company's subsidiaries 37 -
------------- -------------
Total audit fees 163 264
------------- -------------
Prior to their appointment as the Company's auditor for the year
ended 31 March 2020, PKF Littlejohn LLP were engaged to perform an
independent forensic audit of the Company's subsidiaries for the
previous year end. The fee was $122,000.
Other than as disclosed above, the Company's auditor and their
associates have not provided additional services to the
Company.
8. Staff costs
The average monthly number of employees (including executive
Directors) employed by the Company for the year was as follows:
Year Year
ended ended
31 March 2020 31 March 2019
Number Number
-------------- --------------
Office and Management 31 60
Operational 488 497
-------------- --------------
519 557
-------------- --------------
Their aggregate remuneration comprised:
Year Year
ended ended
31 March 2020 31 March 2019
US$000 US$000
-------------- --------------
Wages and salaries 1,808 1,904
Social security costs 60 67
Correction of prior period social security costs 47 -
1,915 1,971
-------------- --------------
9. REMUNERATION OF DIRECTORS
Year Year
ended ended
31 March 2020 31 March 2019
CS Havers 31 41
NWH Clayton 10 2
HWB Rudland 12 10
GR Smith 12 10
A Thorburn 11 1
76 64
--------------- ---------------
In addition N Clayton received $55,000 (2019: $5,000) and A
Thorburn received $27,000 (2019: $nil) in respect of consultancy
services to the Company. All remuneration relates to short term
benefits.
10. Finance costs
Year Year
Ended Ended
31 March 2020 31 March 2019
US$000 US$000
-------------- --------------
Interest receivable on bank deposits 14 -
Interest expense on bank borrowings and overdrafts (890) (1,009)
Interest expense on leases (88) (7)
-------------- --------------
Net finance costs (964) (1,016)
-------------- --------------
11. Taxation
Year Year
Ended Ended
31 March 2020 31 March 2019
US$000 US$000
-------------- --------------
As restated
-------------- --------------
Loss before tax from continuing activities (2,964) (3,290)
-------------- --------------
Tax credit at the Mozambican corporation tax rate of 32% (2019: 32%) (949) (1,053)
Tax effect of expenses that are not deductible in determining taxable profit 66 107
Tax effect of (income not taxable) or losses not allowable 264 125
Tax effect of net losses not recognised in overseas subsidiaries (net of effect of
different
rates) 619 821
Statutory taxation payments irrespective of income 29 -
Tax expense 29 -
-------------- --------------
The tax reconciliation has been prepared using a 32% tax rate,
the corporate income tax rate in Mozambique, as this is where the
Company's principal assets of its continuing operations are
located.
The Company has not recognised any tax credits for the year
ended 31 March 2020 (2019: $nil). The Company has operations in
overseas jurisdictions where it has incurred taxable losses which
may be available for offset against future taxable profits
amounting to approximately $ 9,049,000 (2019: $ 11,386,000). No
deferred tax asset has been recognised for these tax losses and
other deductible timing differences as the requirements of IAS 12,
'Income taxes', have not been met.
The Company is resident for taxation purposes in Guernsey and
its income is subject to Guernsey income tax, presently at a rate
of zero percent per annum (2019: zero percent per annum). No tax is
payable for the year. Deferred tax has not been provided for, as
brought forward tax losses are not recoverable under the Income Tax
(Zero 10) (Guernsey) Law, 2007 (as amended).
12. earnings per share
The calculation of the basic and diluted earnings per share is based on the Year ended Year ended
following data:
31 March 2020 31 March 2019
US$000 US$000
-------------- --------------
As restated
Loss for the year for the purposes of basic and diluted earnings per share
attributable to
equity holders of the Company (2,993) (3,290)
-------------- --------------
Weighted average number of Ordinary Shares for the purposes of basic and diluted
earnings
per share 21,240,618 21,240,618
-------------- --------------
Basic and diluted earnings per share - US cents (14.1) (15.5)
-------------- --------------
Basic and diluted earnings per share from continuing activities - US cents (14.1) (15.5)
-------------- --------------
The Company has issued options over ordinary shares which could
potentially dilute basic loss per share in the future. There is no
difference between basic loss per share and diluted loss per share
as the potential ordinary shares are anti-dilutive. Details of
options are set out in note 22.
13. Property, plant and equipment
Other
Land and buildings Plant and machinery Motor vehicles Assets Total
US$000 US$000 US$000 US$000 US$000
Cost
At 1 April 2018 7,659 4,362 1,856 325 14,202
Prior year adjustment 1,226 848 (801) (297) 976
------------------- -------------------- --------------- -------- -------
At 1 April 2018 as restated 8,886 5,210 1,055 28 15,178
Additions 53 545 598 41 1,237
Disposals - (100) (212) - (312)
Exchange rate adjustment (329) (226) (56) (3) (613)
------------------- -------------------- --------------- -------- -------
At 31 March 2019 as restated 8,610 5,429 1,385 66 15,490
Additions - 42 - 4 46
Disposals - (17) (7) - (24)
Exchange rate adjustment (475) (301) (76) (4) (856)
At 31 March 2020 8,135 5,153 1,302 66 14,656
------------------- -------------------- --------------- -------- -------
Accumulated depreciation and
impairment
At 1 April 2018 3,327 2,521 1,823 217 7,887
Prior year adjustment (771) 1,635 (501) (181) 183
------------------- -------------------- --------------- -------- -------
At 1 April 2018 as restated 2,556 4,156 1,322 36 8,070
Charge for the year 216 814 47 6 1,083
Disposals - (88) (202) - (290)
Exchange rate adjustment (105) (185) (44) (2) (336)
------------------- -------------------- --------------- -------- -------
At 31 March 2019 as restated 2,667 4,697 1,123 40 8,527
Charge for the year 291 204 90 10 595
Disposals - (17) (7) - (24)
Exchange rate adjustment (157) (267) (64) (3) (491)
At 31 March 2020 as restated 2,801 4,617 1,142 47 8,607
------------------- -------------------- --------------- -------- -------
Net book value
31 March 2020 5,334 536 160 19 6,049
------------------- -------------------- --------------- -------- -------
31 March 2019 5,943 732 262 26 6,963
------------------- -------------------- --------------- -------- -------
During the year, a new fixed asset register was prepared. Asset
values were brought in line with tax depreciation in Mozambique
giving rise to an uplift in the net book value of assets. The
uplift has been accounted for as a prior year adjustment and the
increase in the net book value at 1 April 2018 was $673,000. There
was a consequential increase in the depreciation charge for the
year ending 2019 of $136,000.
For the year ended 31 March 2020, a depreciation charge of
$595,000 (2019: $ 736,000) has been included in the consolidated
income statement within operating expenses.
Property, plant and equipment with a carrying amount of
$4,366,000 (2019: $ 4,719,000) have been pledged to secure the
Company's bank overdrafts and loans (note 18). The Company is not
allowed to pledge these assets as security for other borrowings or
sell them to another entity.
The Company adopted IFRS 16 on 1 April 2019. At 31 March 2020
the net book value of plant and equipment and motor vehicles
classified as right of use assets amounted to $328,000 (2019:
$421,000) and $142,000 (2019: $nil) respectively.
At 31 March 2020 and 31 March 2019, the Company had no
contractual commitments for the acquisition of property, plant and
equipment.
14. Intangible assets
US$000
Cost
At 1 April 2018 Nil
Additions 193
Exchange rate adjustment (7)
At 31 March 2019 186
Prior year adjustment (69)
-------
At 1 April 2019 as restated 117
Additions 15
Exchange rate adjustment (6)
At 31 March 2020 126
-------
Accumulated amortisation
At 1 April 2018 Nil
Charge for the year 20
Exchange rate adjustment -
At 31 March 2019 20
Prior year adjustment (10)
-------
At 1 April 2019 as restated 10
Charge for the year 24
Exchange rate adjustment -
At 31 March 2020 34
-------
Net book value
31 March 2020 92
-------
31 March 2019 as restated 107
-------
Intangible assets comprise investment in management information
and financial software. As part of the review of the Group's
non-current assets, software with a net book value of $59,000 that
had been capitalised in the prior year was written off as an
operating expense in the prior year and included in prior year
adjustments.
15. Biological assets
US$000
--------
Fair value
At 31 March 2018 1,137
Purchase of biological assets 1,608
Sale, slaughter or other disposal of biological assets (2,362)
Change in fair value of the herd 478
Foreign exchange adjustment (31)
At 31 March 2019 830
Purchase of biological assets 2,395
Sale, slaughter or other disposal of biological assets (2,029)
Change in fair value of the herd (489)
Foreign exchange adjustment (42)
--------
At 31 March 2020 665
--------
At 31 March 2020 and 2019, all cattle are held for slaughter.
The slaughter herd has been classified as a current asset. Forage
crops included in current assets are US$ 5,978 (2019: US$
5,000).
At 31 March 2020 the slaughter herd comprised 2,100 head (2019:
2,468), with an average weight of 250kgs (2019: 270 kgs) and
average value of US$ 314 (2019: US$ 335).
For valuation purposes, cattle that are not in the feedlot are
grouped into classes of animal (e.g. bulls, cows, steers etc.) and
a standard animal weight per breed and class was then multiplied by
the number of animals in each class to determine the estimated
total live weight of all animals in the herd. This methodology is
supported by the induction weights recorded when the cattle are
subsequently moved to the feedlot. For animals in the feedlot,
their weight has been estimated based on their individual weigh in
data at the closest weigh in date to the year end. Cattle are
generally kept for periods less than 3 months before slaughter.
The Company's slaughter herd have been pledged in full to secure
the Beef division's bank overdraft and loans (see note 18).
16. Inventories
31 March 31 March
2020 2019
US$000 US$000
--------- ---------
Consumables and spares 157 297
Raw materials 189 48
Finished goods 479 330
825 675
--------- ---------
During the year inventories amounting to US$9,174,000 (2019:
US$7,690,000) were included in cost of sales.
Inventories with a carrying amount of $442,000 (2019: $331,000)
have been pledged to secure the Grain division's bank overdraft and
inventories with a carrying value of $179,000 (2019: $168,000)
having been pledged to secure the Beef division's bank overdraft
and loans (see note 18).
17. Trade and other receivables
31 March 31 March
2020 2019
US$000 US$000
--------- ---------
Trade receivables 522 542
Other receivables 712 138
Prepayments 15 18
1,249 698
--------- ---------
Trade receivables
31 March 31 March
2020 2019
US$000 US$000
--------- ---------
Trade receivables - gross 872 865
Loss allowance (350) (323)
--------- ---------
522 542
--------- ---------
Trade receivables are amounts due from customers for goods sold
in the ordinary course of business. They are generally due for
settlement within 30 days and therefore are all classified as
current. Trade receivables are recognised initially at the amount
of consideration that is unconditional. The Company holds the trade
receivables with the objective to collect the contractual cash
flows and therefore measures them subsequently at amortised cost
using the effective interest method.
The Company applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss
allowance for all trade receivables. To measure the expected credit
losses, trade receivables have been grouped based on the days past
due.
At 31 March 2020 Current More than 30 days More than 60 Days More than 90 days Total
US$000 US$000 US$000 US$000 US$000
-------- ------------------ ------------------ ------------------ -------
Expected loss rate 0% 0% 0% 91% 40%
-------- ------------------ ------------------ ------------------ -------
Gross trade receivables 209 184 93 386 872
-------- ------------------ ------------------ ------------------ -------
Loss allowance - - - 350 350
-------- ------------------ ------------------ ------------------ -------
At 31 March 2019 Current More than 30 days More than 60 Days More than 90 days Total
US$000 US$000 US$000 US$000 US$000
-------- ------------------ ------------------ ------------------ -------
Expected loss rate 0% 0% 0% 97% 37%
-------- ------------------ ------------------ ------------------ -------
Gross trade receivables 384 124 25 332 865
-------- ------------------ ------------------ ------------------ -------
Loss allowance - - - 323 323
-------- ------------------ ------------------ ------------------ -------
The closing loss allowances for trade receivables as at 31 March
2020 reconcile to the opening loss allowances as follows:
31 March 31 March
2020 2019
US$000 US$000
--------- ---------
Loss allowances at 1 April previously calculated under IAS 39 323 39
Increase in loan loss allowance recognised in profit or loss during the year 32 297
Receivables written off during the year as uncollectible - -
Exchange rate adjustment (5) (13)
Loss allowances at 31 March 350 323
--------- ---------
Trade receivables are provided for when there is no reasonable
expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure of a
debtor to engage in a repayment plan with the Company, and a
failure to make contractual payments for a period of greater than
120 days past due. This is used as the basis of the ECL provision
disclosed above. The Company determines the percentage based on
historic trends. Impairment losses on trade receivables are
presented as net impairment losses within operating profit.
Subsequent recoveries of amounts previously written off are
credited against the same line item.
Trade receivables with a carrying amount of $98,000 (2019:
$134,000) have been pledged to secure the Grain division's bank
overdraft and trade receivables with a carrying value of $229,000
(2019: $324,000) have been pledged to secure the Beef division's
bank overdraft and loans (see note 18).
Further details on the Company's financial assets are provided
in note 20.
18. Borrowings
31 March 2020 31 March 2019
US$000 US$000
-------------- --------------
Non-current liabilities
Bank loans 1,661 2,510
Leases 383 340
-------------- --------------
2,044 2,850
-------------- --------------
Current liabilities
Bank loans 711 753
Leases 87 48
Overdraft 2,541 907
-------------- --------------
3,339 1,708
-------------- --------------
5,383 4,558
-------------- --------------
Bank Borrowings
Beef division
The Beef division has an overdraft facility of 30 million
Metical ($ 0.44m). The amount drawn down at 31 March 2020 was $
0.41m (2019: $ 0.32m). The facility carries an interest rate at the
Bank's prime lending rate (15.2%) at 31 March 2020 (2019: 19.5%).
The facility was repaid in October 2020 and is no longer
available.
The facilities are secured as follows: 31 March 2020 31 March
2019
US$000 US$000
-------------- ---------
Fixed Charge
Property, plant and equipment 2,676 2,913
Floating Charge
Cattle 659 825
Meat Inventories 179 168
Trade receivables 229 324
-------------- ---------
3,743 4,230
-------------- ---------
Grain division
In May 2018 the division's overdraft facility was restructured
into a 240 million Metical ($ 3.77m) 5 year term loan with an
interest rate of the Bank's prime lending rate +0.25% and a 12
month 60 million Metical ($ 0.94m) overdraft facility at the Bank's
prime lending rate less 1.75%. At 31 March 2020, the principal
outstanding on the term loan was 160 million Metical ($ 2.37m) and
the amount drawn on the overdraft facility was 53.8 million Metical
($ 0.80m). On 30 September 2020, the overdraft facility was
restructured into a 60 million Metical ($0.9m) 33 month term loan
at the Bank's prime lending rate less 1.75%
The facilities are secured as follows:
31 March 2020 31 March
2019
US$000 US$000
-------------- ---------
Fixed Charge
Property, plant and equipment 1,690 1,806
Floating Charge
Maize and maize product inventories 442 331
Trade receivables 98 134
-------------- ---------
2,230 2,271
-------------- ---------
As further security to the bank loans and overdrafts, Agriterra
Limited has issued a Corporate guarantee in favour of the bank.
Under the terms of the guarantee, it may only be called upon once
the bank has exhausted all possible means of recovering the debt in
Mozambique.
Reconciliation to cash flow statement
At 31 March 2019 Cash flow Foreign Exchange At 31 March 2020
US$000 US$000 US$000 US$000
Non-current bank loan 2,510 (732) (117) 1,661
Non-current leases 340 64 (21) 383
Current bank loan 753 - (42) 711
Current leases 48 44 (5) 87
Overdrafts 907 1,732 (98) 2,541
----------------- ---------- ----------------- -----------------
4,558 1,108 (283) 5,383
----------------- ---------- ----------------- -----------------
At 31 March 2018 Cash flow Foreign Exchange At 31 March 2019
US$000 US$000 US$000 US$000
Non-current bank loan - 2,631 (121) 2,510
Non current leases - 356 (16) 340
Current bank loan 50 736 (33) 753
Current leases - 50 (2) 48
Overdrafts 4,185 (3,258) (20) 907
----------------- ---------- ----------------- -----------------
4,235 515 (192) 4,558
----------------- ---------- ----------------- -----------------
Leases
The Company applied IFRS 16 on 1 April 2019 and used the
cumulative catch up approach on transition. Accordingly, the
comparatives have not been restated.
31 March 31 March
Amounts recognised in profit and loss 2020 2019
$'000 $'000
Depreciation expense on right-of-use assets 132 12
Interest expense on lease liabilities 88 6
Expense relating to short-term leases and low value assets 50 50
270 68
-------- ---------
At 31 March 2020, the Group is committed to $13,000 (2019
$50,000) for short-term leases. The total cash outflow for leases
(principal and interest) amounts to $174,000 (2019: $55,000).
31 March 31 March
Maturity Analysis 2019 2019
$'000 $'000
Year 1 - -
Year 2 - -
Year 3 - -
Year 4 470 -
Year 5 - 388
--------
470 388
-------- ---------
Analysed as:
Current 87 48
Non-current 383 340
-------- ---------
470 388
-------- ---------
The Group does not face a significant liquidity risk with regard
to its lease liabilities.
19. Trade and other payables
31 March 2020 31 March
2019
US$000 US$000
-------------- ---------
Trade payables 1,386 622
Other payables 1,775 294
Accrued liabilities 154 270
3,315 1,186
-------------- ---------
'Trade payables', 'Other payables' and 'Accrued liabilities'
principally comprise amounts outstanding for trade purchases and
ongoing costs. No interest is charged on any balances.
The Directors consider that the carrying amount of financial
liabilities approximates their fair value.
20. FINANCIAL INSTRUMENTS
20.1. Capital risk management
The Company manages its capital to ensure that entities in the
Company will be able to continue as going concerns while maximising
the return to shareholders. The capital structure of the Company
comprises its net debt (the borrowings disclosed in note 18 after
deducting cash and bank balances) and equity of the Company as
shown in the statement of financial position. The Company is not
subject to any externally imposed capital requirements.
The Board reviews the capital structure on a regular basis and
seeks to match new capital requirements of subsidiary companies to
new sources of external debt funding denominated in the currency of
operations of the relevant subsidiary. Where such additional
funding is not available, the Company funds the subsidiary company
by way of loans from the Company. The Company places funds which
are not required in the short term on deposit at the best interest
rates it is able to secure from its bankers.
Current interest rates on borrowings in Mozambique are very
high, with the prime lending rate at 18.0% at 31 March 2020 (2019:
19.5%). In light of this, the Company has been rationalising its
operations, with particular focus on disposing of surplus assets to
reduce external debt levels. The Company has restructured its loan
facilities in Mozambique to finance its Grain operations (note
18).
20.2. Categories of financial instruments
The following are the Company financial instruments as at the
year-end held at amortised cost:
31 March 2020 31 March 2019
US$000 US$000
-------------- --------------
Financial assets
Cash and bank balances 1,034 2,197
Other loans and receivables 827 681
-------------- --------------
1,861 2,878
-------------- --------------
Financial liabilities
Trade and other payables 3,315 1,186
Borrowings - current 3,339 1,708
Borrowings - non-current 2,044 2,850
-------------- --------------
8,698 5,744
(6,837) (2,866)
-------------- --------------
20.3. Financial risk management objectives
The Company manages the risks arising from its operations, and
financial instruments at Executive operating and Board level. The
Board has overall responsibility for the establishment and
oversight of the Company's risk management framework and to ensure
that the Company has adequate policies, procedures and controls to
manage successfully the financial risks that the Company faces.
While the Company does not have a written policy relating to
risk management of the risks arising from any financial instruments
held, the close involvement of the senior executives in the day to
day operations of the Company ensures that risks are monitored and
controlled in an appropriate manner for the size and complexity of
the Company. Financial instruments are not traded, nor are
speculative positions taken. The Company has not entered into any
derivative or other hedging instruments.
The Company's key financial market risks arise from changes in
foreign exchange rates ('currency risk') and changes in interest
rates ('interest risk'). The Company is also exposed to credit risk
and liquidity risk. The principal risks that the Company faces as
at 31 March 2020 with an impact on financial instruments are
summarised below.
20.4. Market Risk
The Company is exposed to currency risk and interest risk. These
are discussed further below.
20.5. Currency risk
Certain of the Company companies have functional currencies
other than US$ and the Company is therefore subject to fluctuations
in exchange rates in translation of their results and financial
position into US$ for the purposes of presenting consolidated
accounts. The Company does not hedge against this translation risk.
The Company's financial assets and liabilities by functional
currency of the relevant company are as follows:
Assets Liabilities
31 March 31 March 31 March 31 March
2020 2019 2020 2019
US$000 US$000 US$000 US$000
--------- --------- --------- ---------
United States Dollar ('US$') 321 1,972 - 141
Great British Pound ('GBP') 10 - 149 -
Mozambique Metical ('MZN') 1,530 906 8,538 5,603
1,861 2,878 8,687 5,744
--------- --------- --------- ---------
The Company transacts with suppliers and/or customers in
currencies other than the functional currency of the relevant
Company (foreign currencies). The Company does not hedge against
this transactional risk. As at 31 March 2020 and 31 March 2019, the
Company's outstanding foreign currency denominated monetary items
were principally exposed to changes in the US$ / GBP and US$ / MZN
exchange rate.
The following tables detail the Company's exposure to a 5, 10
and 15 per cent depreciation in the US$ against GBP and separately
to a 10, 20 and 30 per cent depreciation of the US$ against the
Metical. For a strengthening of the US$ against the relevant
currency, there would be a comparable impact on the profit and
other equity, and the balances would be of opposite sign. The
sensitivity analysis includes only outstanding foreign currency
denominated items and excludes the translation of foreign
subsidiaries and operations into the Company's presentation
currency. The sensitivity also includes intra-Company loans where
the loan is in a currency other than the functional currency of the
lender or borrower. A negative number indicates a decrease in
profit and other equity.
31 March 31 March
2020 2019
US$000 US$000
--------- ---------
GBP Impact
Profit or loss
5% Increase in US$ (7) (7)
10% Increase in US$ (14) (14)
15% Increase in US$ (21) (21)
Other equity
5% Increase in US$ (7) (7)
10% Increase in US$ (14) (14)
15% Increase in US$ (21) (21)
MZN Impact
Profit or loss
10% Increase in US$ - -
20% Increase in US$ - -
30% Increase in US$ - -
Other equity(1)
10% Increase in US$ (2,242) (6,407)
20% Increase in US$ (4,484) (12,815)
30% Increase in US$ (6,726) (19,222)
--------- ---------
(1) This is mainly due to the exposure arising on the translation of US$ denominated intra-Company
loans provided to Metical functional currency entities which are included as part of the Company's
net investment in the related entities.
20.6. Interest rate risk
The Company is exposed to interest rate risk because entities in
the Company hold cash balances and borrow funds at floating
interest rates. As at 31 March 2020 and 31 March 2019, the Company
has no interest-bearing fixed rate instruments.
The Company maintains cash deposits at variable rates of
interest for a variety of short-term periods, depending on cash
requirements. The Grain and Beef operations in Mozambique are also
financed through bank facilities. The rates obtained on cash
deposits are reviewed regularly and the best rate obtained in the
context of the Company's needs. The weighted average interest rate
on deposits was nil % (2019: nil). The weighted average interest on
drawings under the overdraft facilities and bank loans was 18.68%
(2019: 20.14%). The Company does not hedge interest rate risk.
The following table details the Company's exposure to interest
rate changes, all of which affect profit and loss only with a
corresponding effect on accumulated losses. The sensitivity has
been prepared assuming the liability outstanding at the balance
sheet date was outstanding for the whole year. In all cases
presented, a negative number in profit and loss represents an
increase in finance expense/decrease in interest income. The
sensitivity as at 31 March 2020 and 31 March 2019 is presented
assuming interest rates on cash balances remain constant, with
increases of between 20bp and 1000bp on outstanding overdraft and
bank loans. This sensitivity to interest rate rises is deemed
appropriate because the Company interest bearing liabilities are
Metical based. Although the macroeconomic scenario in Mozambique is
now improving and interest rates are falling, they remain high with
prime rates of 18% at 31 March 2020 (2019: 19.5%). Any further
depreciation in the Metical could see this trend reverse.
31 March 31 March
2020(1) 2019 (1)
US$000 US$000
--------- ----------
+ 20 bp increase in interest rates (9) (5)
+ 50 bp increase in interest rates (22) (12)
+100 bp increase in interest rates (43) (24)
+200 bp increase in interest rates (87) (47)
+500 bp increase in interest rates (217) (118)
+800 bp increase in interest rates (348) (189)
+1000 bp increase in interest rates (435) (236)
--------- ----------
The table above is prepared on the basis of an increase in rates. A
(1) decrease in rates would have the opposite effect.
20.7. Credit risk
Credit risk arises from cash and cash equivalents, and deposits
with banks and financial institutions, as well as outstanding
receivables. The Company's principal deposits are held with various
banks with a high credit rating to diversify from a concentration
of credit risk. Receivables are regularly monitored and assessed
for recoverability. The impact of COVID-19 on the credit risk of
the Company has been considered in the Going Concern disclosures in
note 3.
The maximum exposure to credit risk is the carrying value of the
Company financial assets disclosed in note 20.2. Details of
provisions against financial assets are provided in note 17.
20.8. Liquidity risk
The Company policy throughout the year has been to ensure that
it has adequate liquidity by careful management of its working
capital. The operating executives continually monitor the Company's
actual and forecast cash flows and cash positions. They pay
particular attention to ongoing expenditure, both for operating
requirements and development activities, and matching of the
maturity profile of the Company's overdrafts to the processing and
sale of the Company's maize and beef products. The impact of
COVID-19 on the liquidity risk of the Company has been considered
in the Going Concern disclosures in note 3.
At 31 March 2020 the Company held cash deposits of $1,034,000
(2019: $2,197,000). At 31 March 2020 the Company had overdraft and
bank loans facilities of approximately $6,805,041 (2019:
$5,063,000) of which $5,383,107 (2019: $ 4,558,000) were drawn. As
at the date of this report the Company has adequate liquidity to
meet its obligations as they fall due.
The following table details the Company's remaining contractual
maturity of its financial liabilities. The table is drawn up
utilising undiscounted cash flows and based on the earliest date on
which the Company could be required to settle its obligations and
assuming business conditions at 31 March 2020. The table includes
both interest and principal cash flows.
31 March 31 March
2020 2019
US$000 US$000
--------- ---------
1 month 2,650 2,159
2 to 3 months 218 134
4 to 12 months 982 601
1 to 2 years 2,619 1,634
3 to 5 years 437 1,216
--------- ---------
6,906 5,744
--------- ---------
21. Share capital
Authorised Allotted and fully paid
Number Number US$000
------------ ------------------------ -------
At 31 March 2018 and 31 March 2019 and 31 March 2020 23,450,000 21,240,618 3,135
At 31 March 2018 and 31 March 2019 and 31 March 2020
Deferred shares of 0.1p each 155,000,000 155,000,000 238
Total share capital 178,450,000 176,240,618 3,373
------------ ------------------------ -------
The Company has one class of ordinary share which carries no
right to fixed income.
The deferred shares carry no right to any dividend; no right to
receive notice, attend, speak or vote at any general meeting of the
Company; and on a return of capital on liquidation or otherwise,
the holders of the deferred shares are entitled to receive the
nominal amount paid up after the repayment of GBP1,000,000 per
ordinary share. The deferred shares may be converted into ordinary
shares by resolution of the Board.
22. Share based payments
22.1. Charge in the year
The Company recorded a charge within Operating expenses for
share based payments of $ nil (2019: $ nil) in respect of options
issued in previous years vesting during the year. No options were
issued during the year (2019: $nil).
22.2. Outstanding options and warrants
The Group, through the Company, has two unapproved share option
schemes which were established to provide equity incentives to the
Directors of, employees of and consultants to the Company. The
schemes' rules provide that the Board shall determine the exercise
price for each grant which shall be at least the average mid-market
closing price for the three days immediately prior to the grant of
the options. The minimum vesting year is generally one year. If
options remain unexercised after a year of 4 or 5 years from the
date of grant, or vesting, the options expire. Options are
forfeited if the employee leaves the Company before the options
vest.
In addition to share options issued under the unapproved share
option schemes, on 1 June 2015, the Company created a warrant
instrument (the 'Instrument') to provide suitable incentives to the
Company's employees, consultants and agents, and in particular
those based, or those spending considerable time, on site at the
Company's operations. Up to 1,000,000 warrants (the 'Warrants') to
subscribe for new Ordinary Shares in the Company (the 'Warrant
Shares') may be issued pursuant to the Instrument. The exercise
price of each Warrant is GBP0.65 (the share price of the Company
being approximately 0.6p when the Instrument was created) and the
subscription year during which time the Warrants may be exercised
and Warrants Shares issued is the 5-year year from 1 June 2016 to 1
June 2021. Subject to various acceleration provisions, a holder of
Warrants is not entitled to sell more than 1,000 Warrant Shares in
any day nor more than 10,000 Warrant Shares (in aggregate) in any
calendar month, without Board consent. 50,000 Warrants are in
issue.
The following table provides a reconciliation of share options
and warrants outstanding during the year. The number of shares or
warrants and their respective exercise prices have been adjusted to
reflect the share consolidation (see note 21):
Year
ended Year ended
31 March 2020 Weighted average 31 March 2019 Weighted average
Number exercise price (p) Number exercise price (p)
At beginning of year 151,160 263 335,850 160
Granted in the year - - - -
Terminated in the year - - - -
Lapsed in the year (58,080) 455 (184,690) 83
At end of year 93,080 142 151,160 263
--------------- --------------------- --------------------- ---------------------
Exercisable at year end 93,080 142 151,160 263
--------------- --------------------- --------------------- ---------------------
A transfer of $84,681 was made from the share-based payments
reserve to the accumulated losses reserve in respect of the options
that lapsed during the year.
At 31 March 2020, the following options and warrants over
ordinary shares of 10p each have been granted and remain
unexercised:
Date of grant Total Exercisable Exercise price
options Options P Expiry date
--------------- --------- ------------ --------------- --------------
29 July 2012 18,080 18,080 350p 29 July 2023
15 March 2014 25,000 25,000 150p 15 March 2024
1 June 2015 50,000 50,000 65p 1 June 2021
--------- ------------
93,080 93,080
--------- ------------
23. Related party disclosures
Magister Investments Limited ("Magister"), holds 50.01% of the
ordinary share capital of the Company and is the ultimate
controlling party.
The remuneration of the Directors, who are the key management
personnel of the Company, is set out in note 9.
24. Events subsequent to the balance sheet date
The impact of COVID-19 is a non-adjusting event after the
reporting period. The impact of COVID-19 on the estimates and
judgments of the financial statements has been considered by the
Company and although there are inherent risks and uncertainties as
disclosed on page 3 in the Chair's statement, as at the date of
signing, COVID-19 has not had a material impact on the financial
statements. Further details in relation to Going Concern are
disclosed in note 3.
On 26 May 2020, the Company announced that the Grain division
has entered into a new one-year revolving overdraft facility of
306m Metical with an interest rate of 85% of the Prime lending
rate. This facility has been secured by a guarantee from Magister
Investments Limited, the Company's majority shareholder.
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END
FR BXBDDCGDDGGS
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December 24, 2020 08:15 ET (13:15 GMT)
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