30 September 2024
Agriterra Limited
('Agriterra' or the 'Company')
Agriterra Limited / Ticker: AGTA / Index: AIM / Sector:
Agriculture
2024 Annual
Results
Agriterra Limited, the AIM-quoted
African agricultural company, is pleased to announce its audited
annual results for the year ended 31 March 2024 (the "2024 Annual
Results"). Copies will be posted to Shareholders where appropriate.
The Company will be posting its notice of Annual General Meeting,
and a further announcement will be made in due course.
The information contained within this announcement is
considered to be inside information prior to its release, as
defined in Article 7 of the Market Abuse Regulation No. 596/2014,
and is disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
For further information please
visit www.agriterra-ltd.com or contact:
|
Agriterra Limited
|
Caroline
Havers
caroline@agriterra-ltd.com
|
|
Strand
Hanson Limited
Nominated &
Financial Adviser
|
Ritchie
Balmer / James Spinney
+44 (0)
207 409 3494
|
|
Peterhouse Capital
Limited
Broker
|
Duncan
Vasey / Eran Zucker
+44 (0)
207 469 0930
|
CHAIR'S STATEMENT AND STRATEGIC REVIEW
I am pleased to present the annual
report of the Group for the year ending 31 March 2024. During the
year, the Group had a strategic review and formulated a 5-year plan
to improve and expand the operational performance across all
divisions to achieve profitability. The initial phase was to align
the workforce with the business volumes and to revise the sales
strategy.
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 group 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/investor-relations/corporate-governance/
Strategy and Business Model
The Group continues to focus on
adding value along the entire maize and beef value chain, by
developing and offering new products to the market. It has three
operating divisions:
· Grain, which operates maize purchasing and processing
businesses through Desenvolvimento e Comercialização Agrìcola
Limitada (DECA) and Compagri Limitada (Compagri).
· Beef, which sources cattle from local farmers and then
processes them through its own feedlot, abattoir and retail units
through Mozbife Limitada (Mozbife)
· Snax, which sources maize grits from DECA, processing them
into flavoured puffs through DECA Snax Limitada, a joint venture
company in which DECA has a majority interest.
· Biscuits, which was planned and developed during the year
2023/2024 and commissioned in June 2024, trading under the brand
name of Doko Doko. Biscuits will remain under the Grain division
until it is more established.
During the year the Company
secured shareholder loans of, in aggregate, c.US$4.6m (2023:
c.US$7.9m) to repay commercial bank debt and to fund working
capital for the Grain and Beef divisions. This has resulted in a
reduction in debt servicing costs.
The Group is aware of its
environmental, social and governmental responsibilities and the
need to maintain effective working relationships across a range of
stakeholders. The major shareholder is represented on the Board,
both at the Executive and Non-Executive level, ensuring their views
are incorporated into the Board's decision-making process. In
addition to the Group's staff and shareholders, the local community
in Mozambique is a primary stakeholder. In purchasing maize and
cattle directly from the local community, the Group plays an
important role in local economic development, supporting small
scale farmers and the developing commercial sector.
Mozambique overview
During the current period the
Metical remained steady against the US$1; MZN63.90 (2023; US$1; MZN
63.88). Annual inflation decreased faster than anticipated to 7.1%,
against 10.3% in the previous year. The Authorities are maintaining
controls to ensure fiscal discipline, during the period the prime
lending rate rose to 23.50% to contain inflation but has since
started reducing (20.6% September 2024) and is expected to decrease
further by the end of 2024. In addition, the Central Bank increased
the Prudential Deposit Ratio from 10.5% to 39%.
The continuing instability and
Islamist attacks in Cabo Delagado have restricted the production of
Liquified Natural Gas (LNG) slowing the anticipated income in our
Beef division from this sector as this sector contributed
significant revenue to the Beef division in the past. However, the
medium-term outlook is positive, with growth expected to accelerate
to 4.6% over 2025 to 2026.
A report from the African
Development Group: "The fiscal deficit improved from 5.1% of GDP in
2022 to about 2.8% in 2023, reflecting cuts in public spending and
higher domestic revenue collection as the economy gradually
recovered. Mozambique is in debt distress, but its debt is assessed
as sustainable on a forward-looking basis."
Operations review
Grain division
The division secured a US$2
million shareholder loan to fund grain working capital in August
2023 and purchased 14,494 tons of maize. In addition, 1,000 tons of
mealie meal was imported from South Africa when the cost of maize
in Mozambique increased to US$315 per ton, and hence it was more
economic to import, in accordance with the sales
strategy.
The Grain division generated
revenue amounting to US$6.2 million (FY23: US$8.6 million) after
selling 10,882 tons (2023: 17,819 tons) of mealie meal, the average
meal selling price increased by 18% to US$570 per ton (2023:
US$482).
The Grain division's bank
borrowings decreased by US$1.1 million due to repayment of bank
borrowings of US$1 million and finance leases were fully repaid
during the year. The Grain division has one outstanding commercial
bank loan amounting to US$0.6 million.
Operating costs increased by
US$0.1m to US$1.2m, EBITDA decreased to negative US$0.02m (2023:
positive EBITDA of US$0.6m) due to low sales volumes and high cost
of maize during the year. Finance costs decreased to US$0.3m (2023:
US$1.0m) and depreciation cost amounted to US$0.5m (2023: US$0.5m)
resulting in a loss before tax of US$0.78m (2023: loss
US$0.86m).
Beef division
The Beef division generated
revenue of US$3.0 million (FY23: US$3.13 million). The main
customers are wholesale customers being the catering companies and
supermarkets. Retail customers are more sensitive to price as
compared to quality and there was increased competition from
cheaper meat from the informal market. Although sales volumes were
9.4% higher than previous year (728 tons vs 666 tons in FY23) the
price of beef per kg deceased by 10.2% to combat competition from
the informal market and the Gross Margin decreased to 14.94% (FY23:
24.06%).
The average daily weight gain of
animals increased from 0.22% to 0.26% of body mass and the average
dress out rate was 47.2% (FY-2023: 49.2%) due to lower quality of
animals which were purchased to service the retail
business.
Beef division strategy shifted
during the year from the more high-end market to a mix of quality
product together with a lower quality product that could be priced
more aggressively and aimed at the mass retail market.
Beef division is targeting areas
much closer to the operational base for cattle buying and is
incentivising farmers to deliver animals directly to the abattoir.
70% of all animals slaughtered in the last 6 months of the year
were delivered directly to the abattoir. This has improved
operational efficiencies by cutting out unnecessary transport
costs.
The Maputo butchery was closed, as
the proximity to South Africa and the fluctuating cheap imports
were affecting sales.
The Beef division still carries
the cost of the 3 farms that remain in care and maintenance whilst
looking for potential buyers.
Loss after tax amounted to
US$1,140,000 (FY23: Loss after tax US$651,000).
Snax division
At the beginning of the year, in
order to be more responsive to changes in the market, the Group
acquired operating control of DECA Snax Limitada through control
over the board by an approved resolution. Consequently the Group is
consolidating the performance of Snax division and recognising the
non-controlling interest in the Group's financial
statements.
Sales revenue decreased by 9% to
US$2.1 million (FY23: US$2.3 million). The Snax division was
affected by the increasing cost of maize during the year, up by
27%. However there was resistance from the market to attempts to
increase the selling price of the Snax to recover the cost of
inputs.
During the year, Snax installed a
large 100-gram packing machine to offer family pack size to
customers. The division has not been able to utilise more than 60%
of its production capacity due to maize cost and availability which
affected the cost of production.
Snax sold 1,066,996 bales during
the year (FY23: 1,111,538 bales). Profit after tax amounted to
US$22,676 (FY23: US$74,976) after payment of management fees to the
Grain division, amounting to US$103,601 (FY23: US$117,289). Low
profitability resulted from high cost of raw materials.
Key Performance Indicators
The Board monitors the Group'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.
|
|
2024
|
2023
|
2022
|
|
Grain division
|
|
|
|
|
- Average milling yield
|
75.1%
|
75.3%
|
78.0%
|
|
- Meal sold (tonnes)
|
10,882
|
17,819
|
17,094
|
|
- Revenue
|
$6,186,000
|
$8,590,000
|
$7,118,000
|
|
- EBITDA (note 5)
|
($21,000)
|
$611,000
|
$535,000
|
|
|
|
|
|
|
|
|
|
|
|
Beef division
|
|
|
|
|
- Slaughter herd - number of head
sold in year
|
5,320
|
4,099
|
4,575
|
|
- Average daily weight gain in
feedlot (% of body mass)
|
0.26
|
0.22
|
0.35
|
|
- Meat sold (tonnes)
|
728
|
666
|
734
|
|
- Revenue
|
$2,967,000
|
$3,129,000
|
$3,159,000
|
|
- EBITDA (note 5)
|
($633,000)
|
($244,000)
|
($66,000)
|
|
|
|
|
|
|
Snax division (note 23)
|
|
|
|
|
- Bales sold (units)
|
1,066,996
|
1,111,538
|
707,385
|
|
- Revenue
|
$2,072,000
|
$2,345,779
|
$1,447,000
|
|
- EBITDA (note 5)
|
$98,000
|
$170,000
|
$247,000
|
|
|
|
|
|
|
Group
|
|
|
|
|
- EPS
|
(4.49)
|
(9.29)
|
(10.7)
|
|
- Liquidity - cash plus available
headroom under facilities
|
$439,000
|
$174,000
|
$107,000
|
Financial Review
In FY24 the Group revenue includes
the revenue from the Snax division (US$2.1m) following the change
of operating control. After taking the Snax revenue into account,
revenue in the Grain and Beef divisions decreased by 28% to US$8.3m
(FY23: US$11.49m) mainly due to:
· The
Grain division secured a pre-buying season facility from a
commercial bank in Mozambique which the bank could not deliver due
to an increase in the prudential deposit ratio with the Central
Bank from 10.5% to 39%. The Company therefore obtained a
shareholder loan in August 2023 as an alternative. This delay led
to DECA purchasing 6,609 tons of maize initially and then rolling
the generated working capital to purchase a total of 14,494 tons of
maize. At an extraction of 75.1%, only 10,882 tons were produced
and sold (FY23: 17,819).
· The
Beef division sales volumes increased to 728 tons (FY23: 666 tons),
however revenue saw a slight decrease to US$3.0 million (FY23:
US$3.1 million) due to a reduction in the average selling price.
The increased sales volumes reflect the strategy to be more
aggressive in the retail market, but the revenue reflects the
reduction in the sales to wholesale customers as a result of
competition from South African beef due to Rand: MZN exchange
rate.
The Group's gross margin decreased
to 17.6% (FY23: 21.2%) due to fair value reduction of biological
assets amounting to US$437,000 (FY23: US$288,000) and cost of
replacement maize. Gross profit was US$1.8 million (FY23: US$2.4
million).
The Group's operating expenses
increased by 18% to US$4 million with an increase in operating
losses to US$1.85 million (FY23: US$0.81 million).
Net Debt as of 31 March 2024 was
US$13.83 million (FY23: US$9.69 million). The shareholder loan
injections of US$4.6 million funded maize purchases, various
equipment to enhance production, the biscuit plant and raw
materials. US$1.1 million was used to repay part of a long
outstanding commercial bank loan. Finance costs were at US$1.49
million (FY23: US$1.46 million), of which US$1.003 million was
accrued to shareholder loans which are at 6% above Secured
Overnight Financing Rate (5.31%) as compared to Mozambique
commercial bank loan rates of more than 22% per annum.
Subsequent to the year end, the
Grain division secured US$4.2 million to fund working capital in
the form of advance payments from a major customer amounting to
US$1.2 million and US$3 million under a commodity trading agreement
with a local Mozambican company (see note 27).
Risk management
The Group is subject to various
risks, and the future outlook for the Group and growth in
shareholder value should be viewed with an understanding of these
risks. The following table shows the principal risks facing the
Group and the actions taken to mitigate these:
|
Key risk factor
|
Detail
|
How it is managed
|
Change in the period
|
|
Foreign Exchange
|
The Group's operations are impacted
by fluctuations in exchange rates and the volatility of the
Metical.
|
The Group adjusts its output volumes
and prices in response to competition from imports.
|
Increased. Although the
Metical has been stable in the past 12 months, the Group's
borrowings are now denominated in USD and there is high risk of
devaluation of the Metical due to shortage of foreign
currency.
|
|
Political instability
|
Presidential elections in October
2024 and changes to government policy and applicable laws could
adversely affect operations or the financial condition of the
Group.
|
Contingency plans to protect assets
and staff should political or military tensions
escalate.
|
No
Change.
|
|
Land ownership in
Mozambique
|
Property rights and land are
exclusive to the state. The state grants rights to use and develop
land "DUATs". The operations are dependent upon maintaining the
relevant DUATs.
|
Observance of any conditions
attaching to a DUAT.
|
No
Change.
|
|
Maize growing season
|
Adverse weather conditions, and
anticipated drought for the next growing season nationally or
regional may impact on the availability and pricing of
grain.
|
Diversify sources of supply and sign
supply agreements. The business has taken the initiative to go
directly to the farmer, rather than depending entirely on
traders.
|
Increased.
|
|
Cattle and cattle feed
|
Cattle are subject to diseases and
infections. The availability and price of feed impacts
profitability.
|
Stringent Bio-security measures are
in place at the Farms and Feedlot. The division is now
self-sufficient in roughage crops and acquires most of its feed
from the Grain division.
|
No
Change.
|
|
Access to working capital
|
The Group is less reliant on local
banking facilities in Mozambique and has the continued support from
the majority shareholder.
|
The Group has secured additional
working capital facilities.
|
No
change.
|
|
Compliance
|
Risk of a breach of the Group's
business or ethical conduct standards and breach of
anti-corruptions laws, resulting in investigations, fines and loss
of reputation.
|
The Board reinforces an ethical
corporate culture. Anti-bribery policies are in place, with regular
training throughout the organization.
|
No
Change.
|
The Board is also responsible for
establishing and monitoring the Group's systems of internal
controls. Although no system of internal control can provide
absolute assurance against material misstatement or loss, the
Group's systems are designed to provide the directors with
reasonable assurance that problems are identified on a timely basis
and dealt with appropriately. The 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
Details of the consideration of
going concern are set out in note 3. The Group has prepared
forecasts for its ongoing operating 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.
The Group reduced commercial debt
during the year by a further US$1.1 million (FY23: US$7.98
million). Post year end, the Grain division has sourced the
equivalent of US$3 million under a commodity trading agreement with
a local Mozambican company and has received an advance payment of
the equivalent of U$1.2 million from one of its major customers.
All the funding was used to purchase maize and will be repaid
within the year ending 31 March 2025.
The Group prepared a 5-year
strategy which defined the key performance indicators, identified
the challenges it is likely to encounter and set direction and
targets for the management teams in their respective divisions.
These operating targets will need to be achieved for the Group to
meet its cashflow requirements.
These conditions indicate the
existence of a material uncertainty that may cast significant doubt
upon the Group's ability to continue as a going concern and the
operating companies may therefore be unable to realise their assets
and discharge their liabilities in the ordinary course of business.
The auditors make reference to going concern in their audit report
by way of a material uncertainty. These financial statements do not
include the adjustments that would result if the Group was unable
to continue as a going concern.
Outlook
The Group plans, having
implemented a retrenchment programme in the prior year, to align
the costs to the business volumes in FY 2025. Operating costs
remain under constant review. The majority shareholder continues to
offer support to the Group in the form of extending existing loan
facilities.
The macro-economic environment is
expected to improve in 2024/25 financial year. The US$: MZN
exchange rate is expected to remain at US$1: MZN 63.90, whilst
inflation is expected to decrease to around 4-5%. The Central Bank
of Mozambique is using interest rates to control inflation, and a
decrease in the inflation rate will enable the Central Bank of
Mozambique to reduce the prime lending rate which is currently at
22.4%.
Grain: The Grain division needs to
secure maize at the right time and at the right price to ensure its
success. Operational efficiency is also key to unlocking profit,
extractions are expected at 75% and therefore regular maintenance
and plant and machinery is required. The region expects grain
shortages due to an El Nino induced drought, and this will drive
maize meal prices up. The pressure on available maize has provided
an opportunity for the Grain division to gain market share and
improve sales revenue. The Grain division has bought 15,549 tons by
31 August 2024 and is actively procuring an additional 6,000 tons
of maize to achieve production of 15,000 tons meal, plus having
1,000 tons to carry into the next season.
The biscuit brand which is
included in the Grain division is anticipated to continue to grow
and achieve a positive EBITDA in 2025.
Beef: The Beef division financial
performance is dependent on successfully penetrating the retail
market to achieve sales of 100 tons per month in addition to the
existing wholesale market for prime product, whilst containing
operational expenses. The Beef division is now securing more than
70% of its animals for slaughter at the abattoir directly from the
farmers and this has reduced transport costs. The Beef division
will look to diversify other protein products to the market,
including chicken and fish.
Snax: The Snax division
profitability was affected by high cost of maize, however the Grain
division has sufficient maize to supply the requirements for the
Snax division and options of importing grits from South Africa are
being explored. The Snax division will be introducing new flavours
during the year to increase customer choices and improve
sales.
Board and senior management changes
There were no changes in the Board
and Senior Management during the year.
CSO Havers,
Non-Executive Chair
30 September 2024
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
|
|
|
|
Year
ended
|
|
Year
ended
|
|
|
|
|
31 March
2024
|
|
31 March
2023
|
|
|
Note
|
|
US$000
|
|
US$000
|
|
|
|
|
|
|
|
|
Revenue
|
5
|
|
10,393
|
|
11,494
|
|
Cost of sales
|
|
|
(8,124)
|
|
(8,758)
|
|
Decrease in fair value of biological
assets
|
|
|
(437)
|
|
(288)
|
|
Gross profit
|
|
|
1,832
|
|
2,448
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(3,988)
|
|
(3,381)
|
|
Other income
|
|
|
273
|
|
122
|
|
Profit on disposal of property,
plant and equipment
|
|
|
30
|
|
-
|
|
Operating loss
|
|
|
(1,853)
|
|
(811)
|
|
|
|
|
|
|
|
|
Finance costs
|
6
|
|
(1,488)
|
|
(1,462)
|
|
Share of profit in equity-accounted
investees, net of tax
|
12
|
|
-
|
|
37
|
|
Loss before taxation
|
|
|
(3,341)
|
|
(2,236)
|
|
|
|
|
|
|
|
|
Taxation
|
|
|
127
|
|
127
|
|
Loss for the year attributable to
owners of the Company
|
|
|
(3,214)
|
|
(2,109)
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME
|
Loss for the year
|
|
|
(3,214)
|
|
(2,109)
|
|
Items that will not be reclassified
to profit or loss
|
|
|
|
|
|
|
Revaluation of
property, plant and equipment
|
|
|
(141)
|
|
-
|
|
Related
tax
|
|
|
45
|
|
-
|
|
|
|
|
(96)
|
|
-
|
|
Items that may be reclassified
subsequently to profit or loss:
|
|
|
|
|
|
|
Foreign exchange translation
differences
|
|
|
5
|
|
(161)
|
|
|
|
|
|
|
|
|
Other comprehensive loss for the
year
|
|
|
(91)
|
|
(161)
|
|
Total comprehensive loss for the
year attributable to owners of the Company
|
|
|
(3,305)
|
|
(2,270)
|
|
|
|
|
|
|
|
|
Profit Attributable to:
|
|
|
|
|
|
|
Owners of the company
|
|
|
(3,225)
|
|
(2,109)
|
|
Non-controlling
interest
|
|
|
11
|
|
-
|
|
|
|
|
(3,214)
|
|
(2,109)
|
|
|
|
|
|
|
|
|
Total comprehensive income attributable to:
|
|
|
|
|
|
|
Owners of the company
|
|
|
(3,316)
|
|
(2,270)
|
|
Non-controlling
interest
|
|
|
11
|
|
-
|
|
|
|
|
(3,305)
|
|
(2,270)
|
|
|
|
|
US cents
|
|
US
cents
|
|
Earnings per Share
|
|
|
|
|
|
|
Basic and diluted earnings per
share
|
7
|
|
(4.49)
|
|
(9.29)
|
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 31 MARCH 2024
|
|
|
|
31 March
|
31
March
|
|
|
|
|
2024
|
2023
|
|
|
Note
|
|
US$000
|
US$000
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Property, plant and
equipment
|
8
|
|
24,968
|
24,267
|
|
Intangible assets
|
|
|
-
|
3
|
|
Equity-accounted
investees
|
12
|
|
-
|
93
|
|
|
|
|
24,968
|
24,363
|
|
Current assets
|
|
|
|
|
|
Biological assets
|
9
|
|
245
|
496
|
|
Inventories
|
|
|
616
|
550
|
|
Trade and other
receivables
|
|
|
1,949
|
1,055
|
|
Cash and cash equivalents
|
|
|
439
|
174
|
|
|
|
|
3,249
|
2,275
|
|
Total assets
|
|
|
28,217
|
26,638
|
|
Current liabilities
|
|
|
|
|
|
Borrowings
|
10
|
|
130
|
1,166
|
|
Trade and other payables
|
|
|
1,217
|
658
|
|
|
|
|
1,347
|
1,824
|
|
Net current assets
|
|
|
1,902
|
451
|
|
Non-current liabilities
|
|
|
|
|
|
Borrowings
|
10
|
|
14,138
|
8,696
|
|
Deferred tax liability
|
|
|
5,937
|
6,111
|
|
|
|
|
20,075
|
14,807
|
|
Total liabilities
|
|
|
21,422
|
16,631
|
|
Net assets
|
|
|
6,795
|
10,007
|
|
|
|
|
|
|
|
Share capital
|
11
|
|
56,694
|
3,993
|
|
Share premium
|
|
|
-
|
151,419
|
|
Share based payment
reserve
|
|
|
67
|
67
|
|
Revaluation reserve
|
|
|
11,714
|
12,061
|
|
Translation reserve
|
|
|
(16,164)
|
(16,169)
|
|
Accumulated loss
|
|
|
(45,620)
|
(141,364)
|
|
Non-controlling interest
|
|
|
104
|
-
|
|
Equity attributable to equity holders of the
parent
|
|
|
6,795
|
10,007
|
The financial statements on pages
18 to 48 were approved and authorised for issue by the Board of
Directors on 30 September 2024.
Signed on behalf of the Board of
Directors by:
CSO Havers
Chair
30 September 2024
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
|
|
|
|
Share
capital
|
|
Share
premium
|
|
Share
based payment reserve
|
|
Translation reserve
|
|
Revaluation reserve
|
|
Accumulated
losses
|
|
Non-Controlling Interest
|
|
Total
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 April 2022
|
|
|
3,373
|
|
151,442
|
|
67
|
|
(16,008)
|
|
12,312
|
|
(139,506)
|
|
-
|
|
11,680
|
|
Loss for the year
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(2,109)
|
|
-
|
|
(2,109)
|
|
Other comprehensive loss
|
-
|
|
-
|
|
-
|
|
(161)
|
|
-
|
|
-
|
|
-
|
|
(161)
|
|
Total comprehensive loss for the
year
|
-
|
|
-
|
|
-
|
|
(161)
|
|
-
|
|
(2,109)
|
|
-
|
|
(2,270)
|
|
Transactions with owners
Share based payments
|
|
|
620
|
|
(23)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
597
|
|
Revaluation surplus
realised
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(251)
|
|
251
|
|
-
|
|
-
|
|
Total transactions with owners for
the year
|
|
|
620
|
|
(23)
|
|
-
|
|
-
|
|
(251)
|
|
251
|
|
-
|
|
597
|
|
Balance at 31 March
2023
|
|
|
3,993
|
|
151,419
|
|
67
|
|
(16,169)
|
|
12,061
|
|
(141,364)
|
|
-
|
|
10,007
|
|
Loss for the year
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(3,225)
|
|
11
|
|
(3,214)
|
|
Other comprehensive income/(loss)
for the year
|
|
-
|
|
-
|
|
-
|
|
5
|
|
(96)
|
|
-
|
|
-
|
|
(91)
|
|
Total comprehensive loss for the
year
|
|
-
|
|
-
|
|
-
|
|
5
|
|
(96)
|
|
(3,225)
|
|
11
|
|
(3,305)
|
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of subsidiary with
NCI
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
93
|
|
93
|
|
Reclassification
|
11
|
|
52,701
|
|
(151,419)
|
|
-
|
|
-
|
|
-
|
|
98,718
|
|
-
|
|
-
|
|
Revaluation surplus
realised
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(251)
|
|
251
|
|
-
|
|
-
|
|
Total transactions with owners for the year
|
52,701
|
|
(151,419)
|
|
-
|
|
-
|
|
(251)
|
|
98,969
|
|
93
|
|
93
|
|
Balance at 31 March 2024
|
|
|
56,694
|
|
-
|
|
67
|
|
(16,164)
|
|
11,714
|
|
(45,620)
|
|
104
|
|
6,795
|
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
|
|
|
|
|
|
|
|
|
|
|
Year ended
|
|
Year
ended
|
|
|
|
|
31 March
2024
|
|
31 March
2023
|
|
|
Note
|
|
US$000
|
|
US$000
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
Loss before tax
|
|
|
(3,341)
|
|
(2,236)
|
|
Adjustments for:
|
|
|
|
|
|
|
Amortisation and
depreciation
|
|
|
871
|
|
870
|
|
Profit on disposal of property,
plant and equipment
|
|
|
(30)
|
|
-
|
|
Impairment of goodwill on
acquisition
|
|
|
12
|
|
|
|
Foreign exchange gain
|
|
|
(48)
|
|
(439)
|
|
Changes in value of biological
assets
|
|
|
437
|
|
288
|
|
Share of profit in
associate
|
|
|
-
|
|
(37)
|
|
Net finance costs
|
|
|
1,488
|
|
1,462
|
|
Operating cash flows before movements in working
capital
|
|
|
(611)
|
|
(92)
|
|
Net increase in biological
assets
|
|
|
(186)
|
|
(33)
|
|
Decrease in inventories
|
|
|
389
|
|
1,626
|
|
Increase in trade and other
receivables
|
|
|
(956)
|
|
(231)
|
|
Decrease in trade and other
payables
|
|
|
(155)
|
|
(302)
|
|
Net cash (used in) / generated from operating
activities
|
|
|
(1,519)
|
|
968
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
Proceeds from disposal of property,
plant and equipment net of expenses incurred
|
|
|
30
|
|
-
|
|
Acquisition of property, plant and
equipment
|
|
|
(1,271)
|
|
(90)
|
|
Acquisition of subsidiary net of
cash acquired
|
|
|
48
|
|
-
|
|
Net cash used in investing activities
|
|
|
(1,193)
|
|
(90)
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
Net repayment of
overdrafts
|
|
|
-
|
|
(6,254)
|
|
Net repayment of loans
|
|
|
(940)
|
|
(1,589)
|
|
Net drawdown of shareholder
loans
|
|
|
4,600
|
|
7,900
|
|
Net repayment of leases
|
|
|
(198)
|
|
(137)
|
|
Issue of shares
|
|
|
-
|
|
283
|
|
Finance costs
|
|
|
(485)
|
|
(1,014)
|
|
Net cash generated from / (used in) financing
activities
|
|
|
2,977
|
|
(811)
|
|
Net increase in cash and cash equivalents
|
|
|
265
|
|
67
|
|
Effect of exchange rates on cash and
cash equivalents
|
|
|
-
|
|
-
|
|
Cash and cash equivalents at
beginning of the year
|
|
|
174
|
|
107
|
|
Cash and cash equivalents at end of the
year
|
|
|
439
|
|
174
|
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 47. The nature of the Group'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
Group is the US Dollar ('$' or 'US$') as it most appropriately
reflects the Group's business activities in the agricultural sector
in Africa and therefore the Group's financial position and
financial performance.
The financial statements have been
prepared in accordance with International Accounting Standards as
adopted by the United Kingdom.
The financial statements have been
prepared on the historical cost basis, except for the following
items, which are measured at on alternative basis on each reporting
date:
|
Items
|
Measurement basis
|
|
Biological assets
|
Fair value
|
|
Property, plant and equipment - Land
and building
|
Subsequent measured at revalued
amount - i.e., fair value at the date of revaluation less
subsequent depreciation and impairment losses.
|
2.
ADOPTION OF NEW AND REVISED STANDARDS AND
INTERPRETATIONS
Adoption of new and revised
Standards
During the current year, the Group
has adopted all of the new and revised standards and
interpretations issued by the IASB and the IFRS-IC that are
relevant to its operations and effective for annual reporting
periods beginning on 1 April 2023. The revised standards and
interpretations have not resulted in material changes to the
Group's accounting policies.
The following new and amended
standards are not expected to have a significant impact on the
Group's financial statements in the future, being FY
2025.
Amendments to IAS 1 Presentation
of Financial Statements: Classification of Liabilities as Current
or Non-current
Amendments to IAS 1 Presentation
of Financial Statements: Non-current Liabilities with
Covenants
Amendments to IFRS 16 Leases:
Lease Liability in a Sale and Leaseback
Amendments to IAS 7 Statement of
Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier
Finance Arrangements
3.
SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been
prepared on a historical cost basis, except for certain financial
instruments, biological assets, property, plant and equipment 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 Group'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 include the impact
of the restructuring exercise and working capital constraints show
that the Group needs to achieve its operating targets to have
sufficient headroom under its existing banking and shareholder loan
facilities. Certain facilities fall due for renewal in June 2025,
and it has been assumed that these will be renewed.
The divisional forecasts for FY-25
show a significant improvement in operating performance as compared
to that reported for the year ended 31 March 2024. However, there
can be no certainty that these restructuring 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 21 the Group is funded by a combination of short and long-term
borrowing facilities. As set out in note 27, since the year end
additional finance has been secured and shareholder loans maturing
in July and August 2024 have been extended by a further
year.
Based on the above, whilst there
are no contractual guarantees, the directors are confident that the
existing financing facilities will continue to be available to the
Group. The directors, with the operating initiatives already in
place and funding options available are confident that the Group
will achieve its cash flow forecasts. Therefore, the directors have
prepared the financial statements on a going concern
basis.
The forecasts show that the Group
needs to achieve its operating targets in order to remain within
its existing bank and shareholder loan facilities and to meet its
commitments as they fall due. These conditions and events indicate
the existence of a material uncertainty that may cast significant
doubt upon the Group's ability to continue as a going concern and
the Group companies 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 Group were unable
to continue as a going concern.
Basis of consolidation
The Group accounts for business
combinations using the acquisition method when the acquired set of
activities and assets meets the definition of a business and
control is transferred to the Group. In determining whether a
particular set of activities and assets is a business, the Group
assesses whether the set of assets and activities acquired
includes, at a minimum, an input and substantive process and
whether the acquired set has the ability to produce
outputs.
The consideration transferred in
the acquisition is generally measured at fair value, as are the
identifiable net assets acquired. Any goodwill that arises is
tested annually for impairment. Any gain on a bargain purchase is
recognised in profit or loss immediately. Transaction costs are
expensed as incurred, except if related to the issue of debt or
equity securities.
Subsidiaries
Subsidiaries are entities
controlled by the Group. The Group 'controls' an entity when it is
exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through
power over the entity. The financial statements of subsidiaries are
included in the consolidated financial statements from the date on
which control commences until the date on which controls
ceases.
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.
Interest in equity accounted
investees
The Group's interest in equity
accounted investees comprise interest in a joint
venture.
A joint venture is an arrangement
in which the Group has joint control, whereby the Group has rights
to the net assets of the arrangement rather than rights to its
assets and obligations for its liabilities.
Interest in Joint Ventures are
accounted for using the equity method. There are initially
recognised at cost, which include transaction cost. Subsequent to
initial recognition, the consolidated financial statements include
the Group's share of the profit or loss and OCI of the equity
accounted investees, until the date on which joint control
ceases.
As at 31 March 2024, the Company
held equity interests in the following undertakings:
Direct investments
|
|
Proportion held of equity
instruments
|
Country of incorporation and 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
instruments
|
Country of incorporation and 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
|
Dormant
|
|
Aviação Agriterra
Limitada
|
100%
|
Mozambique
|
Dormant
|
|
Deca Snax Limitada
|
50%
|
Mozambique
|
Maize based food products
|
|
|
|
|
|
|
|
|
|
|
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 Group'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 the year, unless exchange rates
fluctuate significantly during the year, 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 Group:
|
|
Average
Rate
|
|
Closing
Rate
|
|
|
|
|
|
|
|
2024
|
2023
|
|
2024
|
2023
|
|
|
|
|
|
|
|
|
Mozambican Metical: US$
|
63.89
|
63.86
|
|
63.90
|
63.88
|
Operating segments
The Chief Operating Decision Maker
is the Board. The Board reviews the Group's internal reporting in
order to assess the 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.
These include the Grain, Beef and Snax divisions.
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 Group'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 by or delivered to
the customer. There is limited judgement needed in identifying the
point control passes once physical delivery of the products to the
agreed location has occurred, the Group 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 Group'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 judgement
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
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
Group 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 Group and in
settlement of certain expenditure. 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 period, 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 Group 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 Group 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 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 remeasures 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
remeasured 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 remeasured 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 remeasured 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 Group'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
Group 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
Recognition
Items of property, plant and
equipment are stated at historical purchase cost. Cost includes
expenditure that is directly attributable to the acquisition. The
cost of self-constructed assets includes the cost of materials and
direct labour, any other costs directly attributable to bringing
the assets to a working condition for their intended use, the costs
of dismantling and removing the items and restoring the site on
which they are located and borrowing costs on qualifying
assets.
Subsequent expenditure
Subsequent expenditure is
capitalised only if it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the
item can be measured reliably.
Subsequent measurement
Following initial recognition at
cost, items of land and buildings are subsequently measured using
the revaluation model being the fair value at the date of
revaluation less any subsequent depreciation and subsequent
impairment losses. The revaluation model is only used when fair
value can be reliably measured. Revaluations are made regularly
enough to ensure that at any reporting date the carrying amount
does not differ materially from the fair value. Revaluations are
performed by independent sworn valuators triennially. When an item
of property, plant and equipment is revalued, the entire class of
property, plant, and equipment to which the asset belongs is
revalued. Only land and buildings are subsequently valued using the
revaluation model and all others are valued at cost
model.
Any revaluation surplus is
credited to revaluation reserve as part of other comprehensive
income, except to the extent that it reverses a revaluation
decrease of the same asset previously recognized in the profit or
loss, in which case the increase is recognized in the profit or
loss. A revaluation deficit is recognized in profit or loss, except
to the extent that it offsets an existing surplus on the same
recognized in the asset revaluation reserve. The revaluation
reserve is realized over the period of the useful life of the
property by transferring the realized portion from the revaluation
reserve to retained earnings.
Depreciation
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 and goodwill
Intangible assets comprise
investment in management information and financial software.
This is amortised at 10% straight line. Goodwill arising on the
acquisition of subsidiaries is measured at cost less accumulated
impairment losses.
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 initially against amounts included in
the revaluation reserve in respect of the asset and subsequently in
profit and loss.
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 instruments
Financial assets and financial
liabilities are recognised in the Group's balance sheet when the
Group 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 Group
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 Group 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 Group 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 Group derecognises financial liabilities when the
Group'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.
Cash and cash equivalents
Cash and cash equivalents,
comprise cash on hand, on demand deposits and cash equivalents ,
which are short term highly liquid investments that are readily
convertible into a known amount of cash and which are subject to an
insignificant risk of changes in value.
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
Group becomes party to the contractual requirements of the
financial liability. Unless otherwise indicated the carrying
amounts of the Group's financial liabilities approximate to their
fair values.
The Group'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 Group has extinguished its
contractual obligations, it expires or is cancelled. Any gain or
loss on derecognition is taken to the statement of comprehensive
income.
Borrowings
Borrowings are included as
financial liabilities on the Group 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 Group'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 on property, plant and equipment (note 13), and biological
assets (note 15).
Going concern
Details of the directors'
assessment of Going Concern are set out in note 3. These financial
statements do not include the adjustments that would result if the
Group were unable to continue as a going concern.
Impairment and revaluation of land and
buildings
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 to review whether the
carrying amounts of non-current assets are greater than the
recoverable amount.
The impairment reviews are
sensitive to various assumptions, including the expected sales
forecasts, cost assumptions, rent per square metre, capital
requirements, and discount rates among others depending on how the
recoverable amount is determined. The forecasts of future cash
flows were derived from the operational plans put in place
following the restructuring exercise undertaken since year end 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.
As at 31 March 2024, the Group
engaged an Independent real estate valuer to compute the fair value
of land and buildings which also assisted in determining the
recoverable amount whilst revaluing non-current assets. The
Independent valuer used Royal Institute of Chartered Surveyors
(RICS) and International Financial Reporting Standards to determine
the fair value of land and buildings. Based on the assessment
performed by the independent real estate valuers at 31 March 2024,
and the improved operational outlook reflected in the operational
plan in place, management have concluded that, at 31 March 2024,
non-current assets are not impaired.
No impairments were recorded in
the year ended 31 March 2024 or the year ended 31 March 2023. The
carrying amount of non-current assets is US$25.0 million (2022:
$24.3million).
Biological assets
Cattle are accounted for as
biological assets and measured at their fair value at each balance
sheet date. Fair value is based on the estimated market value for
cattle in Mozambique of a similar age and breed, less the estimated
costs to bring them to market, converted to US$ 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. The value of
the herd held for slaughter disclosed as a current asset was $0.2m
(2023: $0.5m).
5.
SEGMENT REPORTING
The Board considers that the
Group's operating activities comprise the segments of Grain, Beef
and Snax and which are undertaken in Africa. In addition, the Group
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 Group's revenue and results by operating segment:
|
Year ending 31 March 2024
|
Grain
|
|
Beef
|
|
Snax*
|
|
Unallo-cated
|
|
Elimina-tions
|
|
Total
|
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
External sales
(2)
|
5,354
|
|
2,967
|
|
2,072
|
|
-
|
|
-
|
|
10,393
|
|
Inter-segment sales
(1)
|
816
|
|
-
|
|
-
|
|
-
|
|
(816)
|
|
-
|
|
|
6,170
|
|
2,967
|
|
2,072
|
|
-
|
|
(816)
|
|
10,393
|
|
Segment results
|
|
|
|
|
|
|
|
|
|
|
|
|
- Operating (loss)/profit
|
(728)
|
|
(963)
|
|
5
|
|
(440)
|
|
-
|
|
(2,126)
|
|
- Interest expense
|
(292)
|
|
(193)
|
|
-
|
|
(1,003)
|
|
-
|
|
(1,488)
|
|
- Other gains and losses
|
237
|
|
4
|
|
18
|
|
14
|
|
-
|
|
273
|
|
- Share of profit in
equity-accounted investees
|
-
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
(Loss)/Profit before
tax
|
(783)
|
|
(1,152)
|
|
23
|
|
(1,429)
|
|
-
|
|
(3,341)
|
|
Income tax
|
115
|
|
12
|
|
-
|
|
-
|
|
-
|
|
127
|
|
(Loss)/Profit after tax
|
(668)
|
|
(1,140)
|
|
23
|
|
(1,429)
|
|
-
|
|
(3,214)
|
|
Year ending 31 March 2023
|
Grain
|
|
Beef
|
|
Snax*
|
|
Unallo-cated
|
|
Elimina-tions
|
|
Total
|
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
External sales
(2)
|
8,365
|
|
3,129
|
|
-
|
|
-
|
|
-
|
|
11,494
|
|
Inter-segment sales
(1)
|
225
|
|
-
|
|
-
|
|
-
|
|
(225)
|
|
-
|
|
|
8,590
|
|
3,129
|
|
-
|
|
-
|
|
(225)
|
|
11,494
|
|
Segment results
|
|
|
|
|
|
|
|
|
|
|
|
|
- Operating (loss)/profit
|
2
|
|
(659)
|
|
-
|
|
(308)
|
|
-
|
|
(965)
|
|
- Interest expense
|
(958)
|
|
(63)
|
|
-
|
|
(441)
|
|
-
|
|
(1,462)
|
|
- Other gains and losses
|
95
|
|
59
|
|
-
|
|
-
|
|
-
|
|
154
|
|
- Share of profit in
equity-accounted investees
|
-
|
|
-
|
|
37
|
|
-
|
|
-
|
|
37
|
|
(Loss)/Profit before
tax
|
(861)
|
|
(663)
|
|
37
|
|
(749)
|
|
-
|
|
(2,236)
|
|
Income tax
|
115
|
|
12
|
|
-
|
|
-
|
|
-
|
|
127
|
|
(Loss)/Profit after tax
|
(746)
|
|
(651)
|
|
37
|
|
(749)
|
|
-
|
|
(2,109)
|
(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.
* Deca Snax was accounted
as a subsidiary in 2024 due to acquisition of control and was
accounted under equity method as a joint venture.
The segment items included in the
consolidated income statement for the year are as
follows:
|
Year ending 31 March 2024
|
Grain
|
|
Beef
|
|
Snax
|
|
Unallo-cated
|
|
Elimina-tions
|
|
Total
|
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortisation
|
470
|
|
326
|
|
75
|
|
-
|
|
-
|
|
871
|
|
Year ending 31 March 2023
|
Grain
|
|
Beef
|
|
Snax
|
|
Unallo-cated
|
|
Elimina-tions
|
|
Total
|
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortisation
|
514
|
|
356
|
|
-
|
|
-
|
|
-
|
|
870
|
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 2024 and capital expenditure for the year then ended
are as follows:
|
|
Grain
|
|
Beef
|
|
Snax
|
|
Unallocated
|
|
Total
|
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
21,970
|
|
4,515
|
|
1,205
|
|
527
|
|
28,217
|
|
Liabilities
|
(5,417)
|
|
(731)
|
|
(772)
|
|
(14,502)
|
|
(21,422)
|
|
Capital expenditure
|
993
|
|
154
|
|
124
|
|
-
|
|
1,271
|
Segment assets and liabilities are
reconciled to Group assets and liabilities as follows:
|
|
Assets
|
|
Liabilities
|
|
|
US$000
|
|
US$000
|
|
Segment assets and
liabilities
|
27,690
|
|
(6,920)
|
|
Unallocated:
|
|
|
|
|
Other receivables
|
527
|
|
-
|
|
Accrued liabilities
|
-
|
|
(865)
|
|
Borrowings
|
-
|
|
(13,637)
|
|
|
28,217
|
|
(21,422)
|
The segment assets and liabilities
at 31 March 2023 and capital expenditure for the year then ended
are as follows:
|
|
Grain
|
|
Beef
|
|
Snax
|
|
Unallocated
|
|
Total
|
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
21,361
|
|
4,880
|
|
93
|
|
304
|
|
26,638
|
|
Liabilities
|
(7,596)
|
|
(770)
|
|
-
|
|
(8,265)
|
|
(16,631)
|
|
Capital expenditure
|
31
|
|
59
|
|
-
|
|
-
|
|
90
|
Segment assets and liabilities are
reconciled to Group assets and liabilities as follows:
|
|
Assets
|
|
Liabilities
|
|
|
US$000
|
|
US$000
|
|
Segment assets and
liabilities
|
26,334
|
|
(8,366)
|
|
Unallocated:
|
|
|
|
|
Intangible asset
|
304
|
|
-
|
|
Accrued liabilities
|
-
|
|
(232)
|
|
Borrowings
|
-
|
|
(8,033)
|
|
|
26,638
|
|
(16,631)
|
Key performance Indicators
The Board considers that earnings
before interest, tax, depreciation and amortisation ("EBITDA") is a
key performance indicator in measuring operational performance.
EBITDA is a non IFRS measure and alternative performance measure
for the Group which is calculated as follows:
|
Year ending 31 March 2024
|
Grain
|
|
Beef
|
|
Snax
|
|
Unallocated
|
|
Total
|
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
(Loss)/Profit before tax
|
(783)
|
|
(1,152)
|
|
23
|
|
(1,429)
|
|
(3,341)
|
|
- Interest expense
|
292
|
|
193
|
|
-
|
|
1,003
|
|
1,488
|
|
- Depreciation and amortisation
charge
|
470
|
|
326
|
|
75
|
|
-
|
|
871
|
|
- Share of profit in
equity-accounted investees
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
EBITDA
|
(21)
|
|
(633)
|
|
98
|
|
(426)
|
|
(982)
|
|
Year ending 31 March 2023
|
Grain
|
|
Beef
|
|
Snax
|
|
Unallocated
|
|
Total
|
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
(Loss)/Profit before tax
|
(861)
|
|
(663)
|
|
37
|
|
(749)
|
|
(2,236)
|
|
- Interest expense
|
958
|
|
63
|
|
-
|
|
441
|
|
1,462
|
|
- Depreciation and amortisation
charge
|
514
|
|
356
|
|
-
|
|
-
|
|
870
|
|
- Share of profit in
equity-accounted investees
|
-
|
|
-
|
|
(37)
|
|
-
|
|
(37)
|
|
EBITDA
|
611
|
|
(244)
|
|
-
|
|
(308)
|
|
59
|
Significant customers
In the year ended 31 March 2024,
the two largest customers of the Grain segment generated revenue of
$1.8 million (31 March 2023: $2.6m) constituting 29% (31 March
2023: 31%) of the Grain division's revenue. The two largest
customers of the Beef segment generated revenue of $0.7m (31 March
2023: $0.2m) amounting to 25% (31 March 2023: 6%) of the Beef
division's revenue.
6.
FINANCE COSTS
|
|
Year
Ended
|
|
Year
Ended
|
|
|
31 March
2024
|
|
31 March
2023
|
|
|
US$000
|
|
US$000
|
|
|
|
|
|
|
Interest expense on bank borrowings
and overdrafts
|
(444)
|
|
(913)
|
|
Interest expense on shareholder
loans
|
(1,003)
|
|
(448)
|
|
Interest expense on
leases
|
(41)
|
|
(101)
|
|
Net finance costs
|
(1,488)
|
|
(1,462)
|
7.
EARNINGS PER SHARE
|
|
Year ended
|
|
Year
ended
|
|
|
31 March
2024
|
|
31 March
2023
|
|
|
US$000
|
|
US$000
|
|
The calculation of the basic and
diluted earnings per share is based on the following
data:
|
|
|
|
|
|
|
|
|
|
Loss for the year for the purposes
of basic and diluted earnings per share attributable to equity
holders of the Company
|
(3,225)
|
|
(2,109)
|
|
|
|
|
|
|
Weighted average number of Ordinary
Shares for the purposes of basic and diluted earnings per
share
|
71,829,007
|
|
22,705,569
|
|
|
|
|
|
|
Basic and diluted earnings per share
- US cents
|
(4.49)
|
|
(9,29)
|
|
Basic and diluted earnings per share
from continuing activities - US cents
|
(4.49)
|
|
(9,29)
|
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
25.
8.
PROPERTY, PLANT AND EQUIPMENT
|
|
Land and
buildings
|
|
Plant
and machinery
|
|
Motor
vehicles
|
|
Other
Assets
|
|
Total
|
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
At 1
April 2022
|
25,246
|
|
5,409
|
|
1,191
|
|
142
|
|
31,988
|
|
Additions
|
12
|
|
56
|
|
-
|
|
22
|
|
90
|
|
Disposals
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Exchange rate adjustment
|
(20)
|
|
(5)
|
|
-
|
|
-
|
|
(25)
|
|
At 31 March 2023
|
25,238
|
|
5,460
|
|
1,191
|
|
164
|
|
32,053
|
|
Acquisition through business
combination
|
-
|
|
552
|
|
-
|
|
66
|
|
618
|
|
Additions
|
-
|
|
266
|
|
224
|
|
781
|
|
1,271
|
|
Revaluation
|
(2,013)
|
|
-
|
|
-
|
|
-
|
|
(2,013)
|
|
Disposals
|
-
|
|
(15)
|
|
(25)
|
|
(1)
|
|
(41)
|
|
Exchange rate adjustment
|
(8)
|
|
(2)
|
|
(1)
|
|
-
|
|
(11)
|
|
At 31 March 2024
|
23,217
|
|
6,261
|
|
1,389
|
|
1,010
|
|
31,877
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and
impairment
|
|
|
|
|
|
|
|
|
|
|
At 1
April 2022
|
625
|
|
5,049
|
|
1,138
|
|
125
|
|
6,937
|
|
Charge for the year
|
624
|
|
154
|
|
51
|
|
25
|
|
854
|
|
Disposals
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Exchange rate adjustment
|
(1)
|
|
(2)
|
|
(1)
|
|
(1)
|
|
(5)
|
|
At 31 March 2023
|
1,248
|
|
5,201
|
|
1,188
|
|
149
|
|
7,786
|
|
Acquisition through business
combination
|
-
|
|
124
|
|
-
|
|
47
|
|
171
|
|
Charge for the year
|
624
|
|
205
|
|
8
|
|
31
|
|
868
|
|
Revaluation
|
(1,872)
|
|
-
|
|
-
|
|
-
|
|
(1,872)
|
|
Disposals
|
-
|
|
(15)
|
|
(25)
|
|
(1)
|
|
(41)
|
|
Exchange rate adjustment
|
-
|
|
(2)
|
|
(1)
|
|
-
|
|
(3)
|
|
At 31 March 2024
|
-
|
|
5,513
|
|
1,170
|
|
226
|
|
6,909
|
|
Net
book value
|
|
|
|
|
|
|
|
|
|
|
31 March 2024
|
23,217
|
|
748
|
|
219
|
|
784
|
|
24,968
|
|
31 March 2023
|
23,990
|
|
259
|
|
3
|
|
15
|
|
24,267
|
The Group accounting policy for
recognition and subsequent measurement of land and buildings is the
revaluation model. In accordance with the International Financial
Reporting Standards, such revaluation exercises should be performed
regularly. The Group adopted a policy to revalue land and buildings
after every 3 years.
At the triennial valuation of land
and building at 31 March 2024 the Group revalued land and buildings
down by $141,087 (31 March 2021: revalued up by $18,475,127) in
total (DECA revalued down by $274,923, Compagri revalued down by
$124,935 and Mozbife revalued up by $258,771). This valuation
attributed a value of $nil to the farms, which are currently held
for sale. The next revaluation exercise will be performed on 31
March 2027. The carrying value of land and buildings at 31 March
2024 under the cost model would have been $ 4,735,908 (2023:
$4,893,000). The valuation of the land and building was carried out
by a certified valuer. The valuation was based on replacement cost
method wherein the valuer estimated the cost of building a similar
infrastructure taking into account inflation, cost of
constructions, land value and return on investments. These inputs
are Level 3 inputs as per the fair value hierarchy as they are
unobservable inputs. The fair value is sensitive to these inputs
and changes to one or more inputs can significantly impact the fair
value.
Property, plant and equipment with
a carrying amount of $6,085,415 (2023: $20,401,000) have been
pledged to secure the Group's bank overdrafts and loans (note 18).
The Group is not allowed to pledge these assets as security for
other borrowings or sell them to another entity.
For the year ended 31 March 2024,
a depreciation charge of $868,000 (2023: $854,000) has been
included in the consolidated income statement within operating
expenses. Certain motor vehicles and equipment have been purchased
with finance leases. Included in property, plant and equipment are
right-of-use-assets with a carrying value of $Nil (2023: $71,825)
and $ nil (2023: nil) for machinery and motor vehicles respectively
(note 20).
During the year ended 31 March
2024, the Group acquired plant and machinery, with the intention of
constructing a new biscuit factory in Chimoio totalling to $0.8
million. Such plant and machinery were not ready for its intended
use as at 31 March 2024. No depreciation was charged on such asset.
It is included under other assets.
9.
BIOLOGICAL ASSETS
|
|
|
|
US$000
|
|
Fair value
|
|
|
|
|
At 31 March 2022
|
|
|
463
|
|
Purchase of biological
assets
|
|
|
1,812
|
|
Sale, slaughter or other disposal of
biological assets
|
|
|
(1,533)
|
|
Change in fair value of the
herd
|
|
|
(288)
|
|
Foreign exchange
adjustment
|
|
|
42
|
|
At 31 March 2023
|
|
|
496
|
|
Purchase of biological
assets
|
|
|
1,751
|
|
Sale, slaughter or other disposal of
biological assets
|
|
|
(1,565)
|
|
Change in fair value of the
herd
|
|
|
(437)
|
|
Foreign exchange
adjustment
|
|
|
-
|
|
At 31 March 2024
|
|
|
245
|
At 31 March 2024 and 2023, all
cattle are held for slaughter. The slaughter herd has been
classified as a current asset. Forage crops included in current
assets are US$22,543 (2023: US$42,547).
At 31 March 2024 the number of the
slaughter herd sold during the year was 5,320 head (2023: 4,099),
with an average weight of 283kgs (2023: 341kgs) and average value
of US$343.91 (2023: US$369).
For valuation purposes, 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 of less than 3 months
before slaughter.
10.
BORROWINGS
|
|
31 March
2024
|
|
31 March
2023
|
|
|
US$000
|
|
US$000
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Shareholder loans
|
13,637
|
|
8,034
|
|
Bank loans
|
501
|
|
574
|
|
Leases
|
-
|
|
88
|
|
|
14,138
|
|
8,696
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Bank loans
|
130
|
|
1,056
|
|
Leases
|
-
|
|
110
|
|
Overdrafts
|
-
|
|
-
|
|
|
130
|
|
1,166
|
|
|
14,268
|
|
9,862
|
|
|
|
|
| |
Bank and Shareholder Borrowings
Group
During the period, Agriterra
Limited secured shareholder loans amounting to US$4.6 million
(2023; US$7.9 million) from Chepstow Investments Limited at an
interest rate of SOFR+6% to reduce the finance cost which has been
increasing over the years and has been used to repay commercial
borrowing in Mozambique which were charged interest above 18% per
annum. The shareholder loans are made up of:
· US$6.1m convertible loan facility with a 3-year tenure
maturing in July 2025.
· US$1.8m convertible loan facility with a 12-month tenure
maturing in July 2023, which was renewed for the same period in
July 2024 and renewed again for the same period after year end to
July 2025.
· US$
2.0m convertible loan facility with a 12-month tenure maturing in
August 2024 and was renewed for the same period after year end to
August 2025.
· US$
1.7m loan facility with a 12-month tenure maturing in November
2024, with the option to renew for a further 12-month period at
that date.
· US$
0.9m loan facility maturing on 31 March 2026, with the option to
extend for a further 12-month period at that date.
In the event of default or at the
option of the lender, the outstanding principal and interest may be
converted into new ordinary shares at the prevailing market price
of the Company`s shares at such time. The market price is
determined by the 10-day VWAP. The difference between the 10-day
VWAP and the closing market price is a derivative liability the
value of which is not considered to be material. Accordingly, the
principal of the convertible loans has been recorded in full as a
financial liability.
Beef division
Beef division does not have any
finance facilities as at 31 March 2024.
Grain division
At 31 March 2024, the Grain
division has one outstanding commercial bank loan amounting to
US$0.6 million secured by land and buildings valued at US$6.1
million. The loan has an interest rate of 22.5% and matures on 24
November 2026.
In addition, Grain division fully
repaid finance lease for 6 vehicles which matured on 05 December
2023. Grain division was incurring interest of 24.1% on this
facility and during the period US$50,078 of the outstanding balance
was repaid.
The bank facilities are secured as
follows:
|
|
31 March
2024
|
|
31
March
2023
|
|
|
US$000
|
|
US$000
|
|
Fixed Charge
|
|
|
|
|
Property, plant and
equipment
|
6,085
|
|
20,401
|
|
Floating Charge
|
|
|
|
|
Maize and maize product
inventories
|
-
|
|
-
|
|
|
6,085
|
|
20,401
|
Reconciliation to cash flow statement
|
|
At 31 March
2023
|
|
Cash flow
|
|
Interest
accrued
|
|
Loan to equity
conversion
|
|
Foreign
Exchange
|
|
At 31 March
2024
|
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
Shareholder loans
|
8,034
|
|
4,600
|
|
1,003
|
|
-
|
|
-
|
|
13,637
|
|
Non-current bank loans
|
574
|
|
(72)
|
|
|
|
-
|
|
(1)
|
|
501
|
|
Non-current leases
|
88
|
|
(88)
|
|
|
|
-
|
|
-
|
|
-
|
|
Current bank loans
|
1,056
|
|
(868)
|
|
|
|
-
|
|
(58)
|
|
130
|
|
Current leases
|
110
|
|
(110)
|
|
|
|
-
|
|
-
|
|
-
|
|
Overdrafts
|
-
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
|
9,862
|
|
3,462
|
|
1,003
|
|
-
|
|
(59)
|
|
14,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31
March 2022
|
|
Cash
flow
|
|
Interest
accrued
|
|
Loan to
equity conversion
|
|
Foreign
Exchange
|
|
At 31
March 2023
|
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
US$000
|
|
Shareholder loans
|
-
|
|
7,900
|
|
448
|
|
(314)
|
|
-
|
|
8,034
|
|
Non-current bank loans
|
783
|
|
(209)
|
|
|
|
-
|
|
-
|
|
574
|
|
Non-current leases
|
220
|
|
(132)
|
|
|
|
-
|
|
-
|
|
88
|
|
Current bank loans
|
2,438
|
|
(1,380)
|
|
|
|
-
|
|
(2)
|
|
1,056
|
|
Current leases
|
115
|
|
(5)
|
|
|
|
-
|
|
-
|
|
110
|
|
Overdrafts
|
6,256
|
|
(6,254)
|
|
|
|
-
|
|
(2)
|
|
-
|
|
|
9,812
|
|
(80)
|
|
448
|
|
(314)
|
|
(4)
|
|
9,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.
SHARE CAPITAL
|
|
|
Authorised
|
|
Allotted and fully
paid
|
|
|
|
|
|
Number
|
|
Number
|
|
US$000
|
|
At
31 March 2022
|
|
23,450,000
|
|
21,240,618
|
|
3,135
|
|
Issue of shares
|
|
50,588,383
|
|
50,588,389
|
|
620
|
|
At
31 March 2023
|
|
74,038,389
|
|
71,829,007
|
|
3,755
|
|
Transferred from share
premium
|
|
|
|
|
|
52,701
|
|
At
31 March 2024
|
|
|
|
|
|
56,456
|
|
|
|
|
|
|
|
|
|
At
31 March 2023 and 31 March 2024
|
|
|
|
|
|
|
|
Deferred shares of 0.1p
each
|
|
155,000,000
|
|
155,000,000
|
|
238
|
|
|
|
|
|
|
|
|
|
Total share capital
|
|
229,038,389
|
|
226,829,007
|
|
56,694
|
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 £1,000,000 per ordinary share. The deferred shares may be
converted into ordinary shares by resolution of the
Board.
At 31 March 2024 the Company
offset accumulated losses of US$98,718,000 attributable to its
previous oil and gas businesses against share premium account and
the balance of US$52,701,000 remaining on the share premium account
has been combined with the share capital account to comply with
Guernsey company law.
PLACING AND BROKER OPTION
On 20 March 2023, the Company
issued 20,000,000 new ordinary shares for cash at a price of 1p per
share and 20,000,000 new ordinary shares on conversion of a loan
from Chepstow Investments Limited at a conversion price of 1p per
share.
On 22 March 2023, the Company
issued 5,000,000 new ordinary shares for cash at a price of 1p per
share and 5,000,000 new ordinary shares on conversion of a loan
from Chepstow Investments Limited at a conversion price of 1p per
share.
On 23 March 2023, the Company
issued 588,389 new ordinary shares on conversion of a loan from
Chepstow Investments Limited at a conversion price of 1p per share
in order to maintain the Chepstow Investments Limited shareholding
at 50.58%.
WARRANTS
|
|
31 March
2024
|
|
31
March
2023
|
|
|
|
|
|
|
PILOW warrants
|
50,588,389
|
|
50,588,389
|
|
Broker warrants
|
1,250,000
|
|
1,250,000
|
|
|
51,838,389
|
|
51,838,389
|
Participants in the Placing and
Debt Conversion received one Protected In-the-money Loyalty Warrant
("PILOW") for every Placing Share or Conversion Share issued. The
PILOW offers rights to the Company to call the PILOW holder to
exercise their options at a price to be determined by the company
or in the event of a future fundraising or in certain other
circumstances, the Company is mandated to call the PILOW holder to
exercise their options on similar terms to the future placing. The
PILOW expires 24 months from the date of issue. The PILOW has no
fixed price, no guaranteed discount and are held over a variable
number of securities. Given these variables, in the opinion of the
Company it is not possible to calculate the expected value of a
PILOW and that their fair value is nil.
On 22 March 2023, the Company
issued 1,250,000 Broker warrants with a term of 24 months and an
exercise price of 1p. Their value is not material and has not been
accounted for as a cost of the placing.
12.
EQUITY-ACCOUNTED INVESTEES
|
|
31 March
2024
|
|
31
March
2023
|
|
|
US$000
|
|
US$000
|
|
|
|
|
|
|
Interest in joint venture
|
-
|
|
93
|
|
|
-
|
|
93
|
The Group acquired control in DECA
Snax Limitada which was equity accounted investee on 1 April 2023.
Interest in DECA Snax remains unchanged at 50% and is a strategic
customer of grits produced by the Grain division. DECA Snax is
principally engaged in the production of corn snack in Chimoio,
Mozambique and is not listed.
DECA Snax Limitada is structured
as a separate vehicle and the Group has controlling interest in the
net assets of DECA Snax Limitada. Accordingly, the Group has
classified DECA Snax Limitada as a subsidiary. In accordance with
the agreement under which DECA Snax Limitada is established, the
Group and the other investor have agreed to make additional
contributions in proportion of their interest if additional
investment is required in DECA Snax Limitada.
The following table summarises the
financial information of DECA Snax Limitada as included in its own
financial statements. The table also reconciles the summary
information to the carrying amount of the Group's interest in DECA
Snax Limitada.
|
|
31 March
2024
|
|
31
March
2023
|
|
|
US$000
|
|
US$000
|
|
|
|
|
|
|
Percentage ownership interest
|
50%
|
|
50%
|
|
|
|
|
|
|
Non-current assets
|
-
|
|
447
|
|
Current assets (including cash and
cash equivalents - 2024: US$ Nil, 2023: US$48,000)
|
-
|
|
550
|
|
Current liabilities (Trade and other
payables)
|
-
|
|
(75)
|
|
Non-current liabilities
|
-
|
|
(748)
|
|
|
|
|
|
|
Net assets (100%)
|
-
|
|
174
|
|
Net assets (Carrying amount of joint
venture)
|
-
|
|
93
|
|
|
|
|
|
|
Revenue
|
-
|
|
2,346
|
|
Cost of Sales
|
-
|
|
(1,804)
|
|
Depreciation and
amortisation
|
-
|
|
(77)
|
|
Operating expenses
|
-
|
|
(372)
|
|
Interest expense
|
-
|
|
-
|
|
Income tax expense
|
-
|
|
(18)
|
|
Profit and other comprehensive
income (100%)
|
-
|
|
75
|
|
Profit and other comprehensive
income (50%)
|
-
|
|
37
|
13.
CONTROL OVER JOINT VENTURE
The Group acquired 50% of the
shares in DECA Snax Limitada at incorporation and step acquired
majority voting rights on 01 April 2023. The Group acquired control
by gaining the right to make decisions over relevant activities
including financing, disposal and capital expenditure by board
resolution. The step acquisition granted the Group control of DECA
Snax Limited.
Included in the identifiable
assets and liabilities acquired at the date of acquisition of DECA
Snax are inputs (patent technology, inventories and customer
relationships), production processes and an organised workforce.
The Group has determined that together the acquired inputs and
processes significantly contribute to the ability to create
revenue. The Group has concluded that the acquired set is a
business.
Taking control of DECA Snax will
enable the Group to improve its meal sales and diversify revenue
streams by adding value to the meal produced by the Grain division.
The Group also expects to reduce costs through economies of scale.
For the 12 months to 31 March 2024, DECA Snax contributed revenue
of US$2.1 million and a profit of US$23 000.
13.1. Consideration
transferred
The Group acquired control in DECA
Snax Limitada through a step acquisition increasing voting rights
thereby granting control. Consideration paid was the fair value of
the previously held interest in Joint Venture value at US$ 93
000.
13.2. Identifiable
assets acquired and liabilities assumed.
The following table summarises the
recognised amounts of assets acquired, and liabilities assumed at
the date of acquisition.
|
|
|
|
|
|
|
US$000
|
|
|
|
|
|
Plant and equipment
|
|
447
|
|
Inventories
|
|
455
|
|
Trade receivables
|
|
47
|
|
Cash and cash equivalent
|
|
48
|
|
Loans and borrowings
|
|
(748)
|
|
Trade and other payables
|
|
(75)
|
|
Net identifiable assets
|
|
174
|
|
|
|
|
Management performed a desktop
valuation to determine the fair value of the net identifiable
assets and assumed that the carrying amounts do not materially
differ from the fair value of above identifiable assets.
13.3.
Goodwill
Goodwill arising from the
acquisition has been recognised as follows.
|
|
|
|
|
|
|
US$000
|
|
|
|
|
|
Consideration transferred
|
|
-
|
|
NCI based on their proportionate
interest in the recognised amount of assets and
liabilities
|
|
93
|
|
Fair value of pre-existing interest
in DECA Snax
|
|
93
|
|
Fair value of identifiable net
assets
|
|
(174)
|
|
Goodwill
|
|
12
|
The goodwill is attributable
mainly to the skills and technical talent of DECA Snax Limitada
workforce. None of the goodwill is expected to be deductible for
tax purposes.
At the end of the financial
period, the Group tested goodwill for impairment at the end of the
year and due to decrease in performance of Snax division, goodwill
was impaired.
14.
RELATED PARTY DISCLOSURES
Chepstow Investments Limited
("Chepstow"), (formerly Magister Investments Limited), holds 50.58%
of the ordinary share capital of the Company and is the ultimate
controlling party. During the year Chepstow advanced shareholder
loans to repay bank debt, purchase the biscuit plant and other
productive assets and provide working capital (note 18). The
balance outstanding at 31 March 2024 was $13,636,619 (2023:
$8,033,782). During the year, the Group incurred expenses on behalf
of Chepstow. Other receivables include receivable from shareholder
for expenses incurred on behalf of the shareholders US$176,118
(2023: Nil).
The following Director of
Agriterra is also a Director of Chepstow:
· HBW
Rudland
The remuneration of the Directors,
who are the key management personnel of the Company, is set out in
note 9.
15.
EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
In April 2024 the Grain division
entered into a commodity trading agreement with a local Mozambican
company to source MZN 195.5 million for the purchase of maize. In
June 2024 the Grain division also agreed on advance funding by a
major customer amounting to MZN76 million, which was used to
purchase maize to be milled for that customer. In addition,
shareholder loans maturing in July and August 2024 have been
extended by a further year to July and August
2025.