TIDMDKL
RNS Number : 9189C
Dekel Agri-Vision PLC
24 June 2021
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food
Producers
Dekel Agri-Vision Plc ('Dekel' or the 'Company')
2020 Final Results
Dekel Agri-Vision Plc, the West African focused agriculture
company, is pleased to announce its audited results for the year
ended 31 December 2020 ('Accounts').
Financial Overview - across the board uplift in key financial
metrics driven by 22.6% rise in crude palm oil ('CPO') prices and
higher extraction rates more than offsetting lower CPO
production
Full year revenues up 7.7% to EUR22.5 million; EBITDA up 500% to
EUR1.2million; net loss decreased to EUR2.3m (2019: EUR3.3m), as
detailed in the table below:
2020 2019 % change
Revenue EUR22.5m EUR20.9m 7.7%
---------- ---------- ---------
Gross Margin EUR2.3m EUR1.7m 35.3%
---------- ---------- ---------
Gross Margin % 10.2% 8.1% 25.9%
---------- ---------- ---------
G&A (EUR2.8m) (EUR3.2m) 12.5%
---------- ---------- ---------
EBITDA EUR1.2m EUR0.2m 500%
---------- ---------- ---------
Net profit / (loss) after tax (EUR2.2m) (EUR3.3m) 33.3%
---------- ---------- ---------
Production - palm oil project, Ayenouan Côte d'Ivoire
-- 22.6% increase in average realised global CPO prices to
EUR602 per tonne of CPO (2019: EUR491) more than offset lower CPO
volumes produced and sold
o After retracing from US$850 per tonne in January 2020 due to
COVID-19, CPO prices rallied strongly in H2 2020 ending the year at
around the US$1,000 per tonne level
-- 34,002 tonnes of CPO produced (2019: 37,649 tonnes) follows
12.4% decrease in Fresh Fruit Bunches ('FFB') delivered to 154,151
tonnes (2019: 176,019 tonnes) - in line with wider sector
o Smaller decrease in CPO produced compared to FFB volumes due
to significantly higher extraction rate of 22.1% (2019: 21.4%) as a
result of higher oil content of FFB delivered
-- 34,016 tonnes of CPO sold in 2020 (2019: 37,713 tonnes)
-- ESG initiatives:
- Roll-out of fruit traceability programme across the region
- Maintaining 300 plus staffing levels at Ayenouan despite COVID-19
Development - cashew processing project at Tiebissou in Côte
d'Ivoire
-- Acquisition of controlling stake in cashew project which is
on course to become Dekel's second producing asset when first
production commences in the coming weeks
-- Interest in project increased to 70.7% post period end
-- Tiebissou is expected to make meaningful contribution to 2021
group financials and ramp up further in 2022, the first year of
full production
New Ventures - growing pipeline of new opportunities
-- Third commodity project in Côte d'Ivoire - under active
consideration following positive results of internal feasibility
study
-- Hybrid power project in Côte d'Ivoire - feasibility study
being undertaken by JV partner Green Enesys on the development of a
30MW solar PV plant and a 5-6MW biomass plant using feedstock from
Ayenouan - discussions ongoing with government
Dekel Executive Director Lincoln Moore said, "12 months ago, in
the face of the pandemic, we said that the year ahead would
demonstrate that Dekel Agri-Vision is both a resilient and a
growing business. 12 months on, and while the pandemic remains
ongoing, we are reporting full year results which show a strong
improvement in Dekel's financial performance compared to the prior
year. This set of results, in our view, clearly demonstrates the
resilience of the Company that we had predicted. 12 months on, and
with a strong performance from our palm oil operations in H1 2021,
coupled with the imminent commissioning phase of the Tiebissou
cashew processing project approaching, we believe we are on the
cusp of a material step up in financial performance.
"Importantly, Tiebissou offers not one but a series of step-ups
in revenue generation and profitability. We expect to increase
capacity at the plant by 50% to 15,000tpa within 12-24 months at no
cost and from there to double production to 30,000tpa. Together
with Ayenouan we have a defined path in place to treble group
revenues to c. EUR60million within the next two to three years.
Arguably, this is a conservative estimate as it does not take into
account our plans to add a third commodity to our portfolio and
also the joint venture agreement we have with Green Enesys
regarding the potential development of a 30MW solar PV plant and a
5-6MW biomass plant using feedstock from Ayenouan. The possible
biomass plant would also add to our already strong ESG credentials,
which are expected to be independently validated later this year
following the completion of the RSPO certification process, which
could in turn open up export markets for our palm oil.
"We are delivering on our objective to build a multi-project,
multi-commodity agriculture business, which benefits not just
investors but all stakeholders, including the local community in
which we operate. With this in mind, I look forward to providing
further updates on our progress in the year ahead."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
*S*
For further information please visit the Company's website at
www.dekelagrivision.com or contact:
Dekel Agri-Vision Plc
Youval Rasin
Shai Kol
Lincoln Moore +44 (0) 207 236 1177
Arden Partners Plc (Nomad and Joint Broker)
Paul Shackleton / Ruari McGirr /
Akhil Shah (Corporate Finance)
Simon Johnson (Corporate Broking) +44 (0) 207 614 5900
Optiva Securities Limited (Joint Broker)
Christian Dennis
Jeremy King +44 (0) 203 137 1903
CHAIRMAN'S STATEMENT
2020 was very much a year of two halves for Dekel Agri-Vision,
its established palm oil operations and its soon to be producing
cashew processing plant in Cote d'Ivoire:
-- Highly challenging first half due to the global pandemic and associated lockdowns
-- Strong second half pick-up in activity which partially made
up for the ground lost in the first half and which has since
gathered further momentum in 2021
Specifically, H1 2020 saw our Ayenouan crude palm oil ('CPO')
operations contend with a near halving in global prices from US$850
per tonne in January to US$500-550 per tonne in April and May 2020,
a price trajectory that was in line with other commodities
following the onset of the pandemic. At the same time, construction
activity at our Tiebissou cashew plant was held back due to delays
in the manufacture and shipping of milling and infrastructure
equipment in Italy and China, two countries that were severely
impacted by the pandemic in the first half.
H2 2020 witnessed a sharp rebound. Global CPO prices soared to
the US$1,000 per tonne level they currently trade at today
following a strong recovery in CPO demand, which has enabled us to
report an improvement across all of Ayenouan's key financial
metrics for the full year compared to 2019. In addition, thanks to
the progress made on the ground in the second half, the
commissioning of the 10,000tpa mill at Tiebissou is expected in the
coming weeks.
Importantly, the strong finish to the year has laid the
foundations for what promises to be a transformative 2021 for the
Company. Once operations commence at Tiebissou, Dekel will have two
projects producing two commodities and generating two independent
revenue streams. Not only will this lead to the scaling up of our
revenues and earnings, but also to the diversification of our end
markets. The directors have sought to increase shareholder value by
reducing risk through a combination of sustainably higher earnings
and multiple end markets.
With the commissioning of the cashew processing plant at
Tiebissou within sight, we believe recent corporate transactions
indicate that we are already starting to see a lowering in the
Company's risk profile:
-- Execution of transactions during the year and post period
end, which resulted in the Company securing a controlling stake in
the Tiebissou cashew project in exchange for Dekel shares that were
issued at premia to the then market price
-- Completion of a GBP3.2m equity raise post period end that was oversubscribed
-- c.EUR15.2 million bond facility secured post period end which
extends the maturity of Dekel's debt profile and significantly
strengthens the balance sheet - EUR5.9m was drawn down in January
2021
Taken together, it is clear that Dekel is entering a new phase
in its history in which a highly cash generative platform and a
strong balance sheet promise to accelerate the implementation of
our growth strategy. This remains focused on building a
multi-project, multi-commodity agriculture company for the benefit
of both shareholders and the local communities in which we
operate.
Ayenouan Palm Oil
Being a producer of crude palm oil, key performance drivers for
our Ayenouan operations are global CPO prices, fresh fruit bunch
('FFB') deliveries / production levels, and extraction rates. The
year under review saw significant improvements in two of these
metrics: global CPO prices and extraction rates. The 22.6% increase
in CPO prices to EUR602 per tonne and the jump in the extraction
rate to 22.1% from 21.4% the previous year were more than enough to
offset a 12.5% drop in FFB delivered to the mill and a 9.6% fall in
volumes of CPO produced during the year. In turn, this has driven a
material improvement in our full year financial performance at the
revenue, EBITDA and net profit / loss levels compared to 2019, as
detailed in the table below.
The average realised price of EUR602 per tonne of CPO achieved
during the year does not tell the whole story. Global CPO prices
began and ended the year under review at over US$800 per tonne, a
level rarely seen in the eight years since our 60,000tpa mill was
commissioned in 2013. Had prices traded at or around this level
throughout the year then, despite lower volumes of CPO produced at
Ayenouan in 2020, it is likely we would be reporting results closer
to those of 2017, a record year in terms of revenue generation and
profitability with EUR30.2m revenues, EUR4.5m EBITDA and EUR1.6m
net profits posted. During 2020 CPO prices were anything but
stable, dropping below EUR500 per tonne as the pandemic took hold
and societies around the world went into lockdown, before
rebounding equally dramatically in the second half of the year, as
major importers in Asia replenished inventories.
The above paragraph has not been included to illustrate a 'what
could have been' scenario - rather a case of 'what might be'. We
are almost halfway through the current year and we have reported
average realised prices of EUR794 per tonne for Q1 2021, EUR803 for
April and EUR774 for May. Together with a material improvement in
the peak harvest season, resulting in volumes of CPO produced
increasing to 23,877 tonnes during the five months to 31 May 2021,
compared to 21,539 tonnes in the equivalent five-month period in
2020, we believe we are on course to report another year of
material revenue and profits growth at Ayenouan, one that could
potentially challenge 2017's record outcome. By way of
illustration, in Q1 2017 16,398 tonnes of CPO were produced and
average realised prices of EUR731 were achieved. The relevant
figures for Q1 2021 are 15,327 tonnes of CPO produced and average
realised prices of EUR794 per tonne. Much can happen between now
and the end of the year but, as things stand, at the very least we
are confident of another year of progress at Ayenouan.
FY 2020 FY 2019 FY 2018 FY 2017 FY 2016
FFB collected (tonnes) 154,151 176,019 146,036 171,696 171,301
---------- ---------- ---------- --------------------- ---------
CPO production (tonnes) 34,002 37,649 33,077 38,736 39,111
---------- ---------- ---------- --------------------- ---------
CPO Sales (tonnes) 34,008 37,713 32,692 38,373 39,498
---------- ---------- ---------- --------------------- ---------
Average CPO price tonne EUR602 EUR491 EUR542 EUR680 EUR575
---------- ---------- ---------- --------------------- ---------
Revenue (All products) EUR22.5m EUR20.9m EUR20.9m EUR30.2m EUR26.6m
---------- ---------- ---------- --------------------- ---------
Gross Margin EUR2.3m EUR1.7m EUR1.7m EUR6.9m EUR6.6m
---------- ---------- ---------- --------------------- ---------
Gross Margin % 10.2% 8.1% 8.3% 22.8% 24.8%
---------- ---------- ---------- --------------------- ---------
EBITDA EUR1.2m EUR0.2m (EUR0.2m) EUR4.5m EUR4.1m
---------- ---------- ---------- --------------------- ---------
EBITDA % 5.3% 1% - 14.9% 15.4%
---------- ---------- ---------- --------------------- ---------
NPAT (EUR2.2m) (EUR3.3m) (EUR3.3m) EUR1.6m EUR1.3m
---------- ---------- ---------- --------------------- ---------
NPAT % - - - 5.3% 4.9%
---------- ---------- ---------- --------------------- ---------
ESG
Progress at Ayenouan this year will not be confined to
operations and financials. Following major advances made in 2020
preparing for the Round Table for Sustainable Palm Oil ('RSPO')
certification process, we believe we are on course to attain RSPO
certification later this year. A pre-audit of the Company's
programmes and management systems by Oxford-based environmental
consultancy Proforest, as well as an assessment of the processes
and procedures to manage environmental and social risks and impacts
at Ayenouan, has now been completed. We are currently reviewing the
final recommendations of the report ahead of commencing the formal
RSPO audit process later this year.
Certification would see Ayenouan become one of the few
operations in the region with the RSPO stamp of approval. It would
also be a validation of our collaborative model which places local
smallholders and communities at the centre of our operations: over
90% of the CPO we produce at Ayenouan originates from fruit
harvested by local smallholders; while our state-of-the-art nursery
supplies farmers with hundreds of thousands of young trees each
year. We have always believed that strong ESG credentials and
corporate profitability can go hand in hand, and we believe RSPO
certification can demonstrate this. By providing third-party
endorsement, RSPO certification will differentiate Dekel from
non-ESG focused peers. This has the potential to increase
deliveries of fruit grown in the region by local smallholders to
Ayenouan for processing, which in turn could help increase CPO
production at the project towards the mill's nameplate 60,000tpa
capacity. Furthermore, having RSPO certification has the potential
to open up export markets for our CPO.
Tiebissou cashew project
Up until now, the financial results of Ayenouan and those of the
group as a whole have mirrored each other, at least at the revenue
and gross profit levels, as our palm oil operation has been the
only one in our portfolio that has been in production. All this is
set to change with the imminent commissioning of the 10,000tpa mill
at our cashew processing project. Thanks to the progress made
during the second half of 2020, we are set to commence production
in the coming weeks and are also currently purchasing sufficient
volumes of nuts from local co-operatives for processing in the
second half. Tiebissou is therefore on track to contribute to
Dekel's financial performance in the current year before
transforming Dekel's financial profile in 2022, the first full year
of production.
We are confident that sufficient volumes of RCN will be secured
to fully utilise the plant's capacity because, unlike palm oil,
Cote d'Ivoire is not only one of the world's largest RCN producers
but there is a major shortfall in cashew processing capacity in the
country - just 15-20% of the c. 750,000MT of RCN grown each year is
processed domestically. Even after taking into account additional
processing capacity that is due to come on stream in the years
ahead, we believe RCN supply will continue to outstrip demand from
local processing plants for some time to come. This demand / supply
imbalance also has positive implications for the project's margins
which are expected to be higher than those of our palm oil
operations at Ayenouan.
With such favourable RCN demand / supply dynamics and higher
margins on offer, we are keen to expand capacity at Tiebissou at
the earliest opportunity and we have a roadmap in place to achieve
this. The plant we are installing has a nameplate capacity of
15,000tpa, which provides us with the opportunity to ramp up
production by 50% at no extra cost by increasing the number of
shifts from two to three. We will look to do this within 12-24
months of the commissioning of the plant. From this point onwards
we aim to increase the plant's capacity to 30,000tpa which, based
on today's prices, could generate annual revenues of around EUR40
million. The imminent commissioning of the plant is therefore just
the first of a series of growth steps at Tiebissou.
That Tiebissou is on track to commence operations in the coming
weeks is testament to the hard work of our team on the ground and
those of our equipment suppliers in Italy and China in the face of
severe disruption caused by the pandemic. The progress made in the
second half of the year gave us the confidence to execute the
series of transactions, both during the year under review and post
period end, that has seen Dekel's interest in the project increase
to 70.7%.
Other projects
The development of our pipeline of projects was put on hold
during the year in response to COVID-19. As the global situation
improves, and once Tiebissou is up and running, we will look to
advance these projects, one of which is centred around building a
state-of-the-art processing plant for a third commodity. We also
have a joint venture with established renewable energy company
Green Enesys Holdings to develop a hybrid power project ('HCTPP')
in Côte d'Ivoire. This project is at the feasibility study stage
and is evaluating the construction of a HCTPP comprising a 30MW
solar PV plant and a 5-6MW biomass plant using empty fruit bunches
from Dekel's mill at Ayenouan as feedstock. Discussions with the
government in Cote d'Ivoire are ongoing.
Financial
During the period under review, total revenues at Ayenouan were
EUR22.5 million, a 7.7% increase on the previous year. The higher
revenues were driven by a 22.6% increase in CPO prices achieved and
a higher extraction rate which together more than offset lower year
on year CPO production at the mill during the period (2020: 34,002
tonnes / 2019: 37,649 tonnes). The higher full year revenues
generated a 500% increase in EBITDA to EUR1.2 million (excluding
share based compensation).
In response to the pandemic, management implemented a cost
saving programme at both project and corporate levels, resulting in
a 12.5% reduction in general administration expenses compared to
2019.
In June 2020, Bloomfield Investment Corporation, the credit
rating agent for West Africa, renewed the Company's credit rating
as investment grade unchanged: long term BBB- and short term
A3.
Outlook
Dekel has emerged from what was a highly challenging year in a
strengthened position, both operationally and financially. In spite
of the disruption caused by the pandemic, we have reported an
improved set of full year financial results for our palm oil
operations, we have advanced our large-scale cashew processing
project, and we have secured a controlling interest in the same
project ahead of the commencement of first production.
The momentum behind the business continues to build in the
current year: our palm oil operations are on course to post another
improved set of financial results for the first half; the cashew
purchasing programme has commenced in anticipation of the plant at
Tiebissou commencing processing in the coming weeks; the post
period end long term debt refinancing has extended the maturity of
our debt profile and strengthened our balance sheet; and the
planned completion of the RSPO certification process for our palm
oil operations later this year will potentially highlight the
attractiveness of our project and open up export routes. Takeaways
from each of the above neatly sum up what we at Dekel Agri-Vision
are focused on building: a highly cash generative agriculture
group; a diversified portfolio of growing revenues streams; a
strong balance sheet to support future growth; and a business with
best-in-class ESG credentials among its peers.
Finally, I would like to thank the Board, management, our
employees and advisers for their support and hard work over the
course of the year. It is because of their efforts that Dekel is in
the strong position it is today and that shareholders can look
forward to an exciting year ahead.
Andrew Tillery
Non-Executive Chairman Date: 23 June 2021
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
--------------------
2020 2019
--------- ---------
Note Euros in thousands
---- --------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 202 273
Inventory 1,283 917
Accounts and other receivables 4 292 69
--------- ---------
Total current assets 1,777 1,259
--------- ---------
NON-CURRENT ASSETS:
Deposits in banks 282 -
Property and equipment, net 6 41,249 30,308
Investment in an associate 5 - 1,998
Total non-current assets 41,531 32,306
--------- ---------
Total assets 43,308 33,565
--------- ---------
The accompanying notes are an integral part of the consolidated
financial statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
--------------------
2020 2019
--------- ---------
Note Euros in thousands
---- --------------------
EQUITY AND LIABILITIES
CURRENT LIABILITIES:
Short-term loans and current maturities
of long-term loans 9 5,676 3,829
Trade payables 893 680
Advance payments from customers 1,971 1,169
Other accounts payable and accrued expenses 7 1,824 1,016
--------- ---------
Total current liabilities 10,364 6,694
--------- ---------
NON-CURRENT LIABILITIES:
Long-term lease liabilities 8 192 90
Accrued severance pay, net 238 33
Long-term loans 9 20,052 13,963
Total non-current liabilities 20,482 14,086
--------- ---------
Total liabilities 30,846 20,780
--------- ---------
EQUITY ATRIBUTED TO EQUITY HOLDERS OF THE
COMPANY 10
Share capital 142 141
Additional paid-in capital 35,569 34,368
Accumulated deficit (18,728) (16,502)
Capital reserve 2,532 2,532
Capital reserve from transactions with
non-controlling interests (7,754) (7,754)
--------- ---------
11,762 12,785
Non-controlling interests 700 -
--------- ---------
Total equity 12,462 12,785
Total liabilities and equity 43,194 33,565
--------- ---------
The accompanying notes are an integral part of the consolidated
financial statements.
, 2021
-------------------- ------------------ ------------------ ------------------
Date of approval Youval Rasin Yehoshua Shai Kol Lincoln John Moore
of the
financial statements Director and Chief Director and Chief Executive Director
Executive Officer Finance Officer
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended
31 December
---------------------- -----------
2020 2019
---------------------- -----------
Euros in thousands
(except share and per
Note share amounts)
----------------------
Revenues 11 22,546 20,947
Cost of revenues 14a 20,207 19,252
---------------------- -----------
Gross profit 2,339 1,695
General and administrative 14b 2,761 3,158
---------------------- -----------
Operating loss (422) (1,463)
Finance cost 14c 1,582 1,829
Share of loss of associate 167 -
Loss before taxes on income (2,171) (3,292)
Taxes on income 13 55 47
---------------------- -----------
Loss and total comprehensive loss (2,226) (3,339)
---------------------- -----------
Attributable to:
Equity holders of the Company 2,226 3,339
Non-controlling interests - -
---------------------- -----------
Loss and total comprehensive loss 2,226 3,339
Loss per share attributable to equity holders
of the Company - -
Basic and diluted loss per share (0.01) (0.01)
---------------------- -----------
Weighted average number of shares used in
computing basic and diluted loss per share 428,930,844 379,838,186
---------------------- -----------
The accompanying notes are an integral part of the consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
------------------------------------------------------------------------------------------------------
Capital Non-controlling Total Equity
reserve interests
from
transactions
Additional with
Share paid-in Accumulated Capital non-controlling
capital capital deficit reserve interests Total
------- ---------- ----------- ------- --------------- ----------- --------------- ------------
Euros in thousands
Balance as of 1
January,
2019 99 29,862 (13,163) 2,532 (7,754) 11,576 - -
Loss and total
comprehensive
loss - - (3,339) - - (3,339) - -
Issuance of
shares
(Note 10) 42 4,186 - - - 4,228 - -
Exercise of *) -
options
(Note 10) - - - *) - -
Share-based
compensation - 320 - - - 320 - -
------- ---------- ----------- ------- --------------- ----------- --------------- ------------
Balance as of 31
December
2019 141 34,368 (16,502) 2,532 (7,754) 12,785 - 12,785
Loss and total
comprehensive
loss - - (2,226) - - (2,226) - (2,226)
Issuance of
shares
(Note 10) 1 907 - - - 908 - 908
Non-controlling
interests
arising from
initially
consolidated
subsidiary - - - - - - 700 700
Share-based
compensation - 295 - - - 295 - 295
------- ---------- ----------- ------- --------------- ----------- --------------- ------------
Balance as of 31
December
2020 142 35,570 (18,728) 2,532 (7,754) (11,762) 700 (12,462)
------- ---------- ----------- ------- --------------- ----------- --------------- ------------
*) Represents an amount lower than EUR1.
The accompanying notes are an integral part of the consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended
31 December
--------------------
2020 2019
--------- ---------
Euros in thousands
--------------------
Cash flows from operating activities:
Loss (2,226) (3,339)
--------- ---------
Adjustments to reconcile loss to net cash used
in operating activities:
Adjustments to the profit or loss items:
Depreciation 1,369 1,357
Share-based compensation 295 320
Accrued interest on long-term loans and non-current
liabilities 1,141 1,306
Change in employee benefit liabilities, net 205 1
Share of loss of associate 167 -
Changes in asset and liability items:
Decrease (increase) in inventories (366) 626
Decrease (increase) in accounts and other receivables (39) 351
Decrease in short-term deposits (18) -
Increase in trade payables 83 16
Increase (decrease) in advance from customers 802 (1,302)
Increase in accrued expenses and other accounts
payable 325 420
3,964 3,095
--------- ---------
Cash paid during the year for:
Income taxes (9) -
Interest (1,296) (1,053)
--------- ---------
(1,305) (1,053)
--------- ---------
Net cash provided by (used in) operating activities 433 (1,297)
--------- ---------
The accompanying notes are an integral part of the consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended
31 December
--------------------
2020 2019
---------- --------
Euros in thousands
--------------------
Cash flows from investing activities:
Increase in cash upon initial consolidation
of subsidiary (a) 89 -
Loan to associate (378) -
Purchase of property and equipment (118) (435)
---------- --------
Net cash used in investing activities (407) (435)
---------- --------
Cash flows from financing activities:
Issue of shares (offering net proceeds) - 2,231
Long-term lease, net (12) (4)
Receipt of short-term loans, net 945 682
Receipt of long-term loans 1,220 7,200
Repayment of long-term loans (2,250) (8,366)
---------- --------
Net cash provided by financing activities (97) 1,743
---------- --------
Increase (decrease) in cash and cash equivalents (71) 11
Cash and cash equivalents at beginning of year 273 262
---------- --------
Cash and cash equivalents at end of year 202 273
---------- --------
Supplemental disclosure of non-cash activities:
Issuance of shares in consideration for investment
in Pearlside 884 1,998
(a) Acquisition of initially consolidated subsidiary:
The subsidiaries' assets and liabilities at
date of acquisition:
Deficiency in working capital (excluding cash
and cash equivalents) 462 -
Deposits (264) -
Property, plant and equipment (12,191) -
Right of use asset 114 -
Long-term debt 8,174 -
Non-controlling interests 700 -
Issuance of shares for acquisition 884 -
Investment in company accounted for at equity 2,210 -
----------
89 -
The accompanying notes are an integral part of the consolidated
financial information.
NOTE 1:- GENERAL
a. Dekel Agri-Vision PLC ("the Company") is a public limited
company incorporated in Cyprus on 24 October 2007. The Company's
Ordinary shares are admitted for trading on the AIM, a market
operated by the London Stock Exchange. The Company is engaged
through its subsidiaries in developing and cultivating palm oil
plantations in Cote d'Ivoire for the purpose of producing and
marketing Crude Palm Oil ("CPO"). The Company's registered office
is in Limassol, Cyprus.
b. CS DekelOil Siva Ltd. ("DekelOil Siva") a company
incorporated in Cyprus, is a wholly-owned subsidiary of the
Company. DekelOil CI SA, a subsidiary in Cote d'Ivoire currently
held 99.85% by DekelOil Siva, is engaged in developing and
cultivating palm oil plantations for the purpose of producing and
marketing CPO. DekelOil CI SA constructed and is currently
operating its first palm oil mill.
c. Pearlside Holdings Ltd. ("Pearlside") a company incorporated
in Cyprus, is a 54%-owned subsidiary of the Company since December
2020 (formerly a 43.8% owned associate). The assets and liabilities
of Pearlside are included for the first time by the Company in the
consolidated statement of financial position at 31 December 2020.
Pearlside has a wholly-owned subsidiary in Cote d'Ivoire, Capro CI
SA ("Capro"). Capro is currently constructing a Raw Cashew Nut
(RCN) processing plant in Cote d'Ivoire near the village of Tiabisu
(see also Note 5 and Note 18)..
d. DekelOil Consulting Ltd. a company located in Israel and a
wholly-owned subsidiary of DekelOil Siva, is engaged in providing
services to the Company and its subsidiaries.
e. Cash flow from operations and working capital deficiency
During the last three year the Company has operated in
challenging economic conditions. In 2018 due to unusually low fruit
yields across Cote d'Ivoire and a decrease in the market price of
palm oil, the Group's cash flows generated from operations were
nil. In 2019 the fruit yields recovered to normal levels but the
market price of palm oil continued to be at cyclical low levels
resulting in a negative cash flow from operations of approximately
EUR1.3 million. There was a recovery in market prices at the
beginning of 2020 which was reversed with the outbreak of the COVID
-19 pandemic, and the subsequent sharp decrease of commodity
prices. Despite this, the Group generated positive cash flow from
operations of approximately EUR0.4 million in 2020. CPO prices have
continued to increase during the first few months of 2021, and
through the date of approval of these financial statements, the
Group is continuing to generate positive cash flow from operations.
The Group has prepared detailed forecasted cash flows through the
end of 2022 based on estimates of commodity prices expected to be
in effect during that period, which forecasts indicate that the
Group should continue to have positive cash flows from its
operations. However, the operations of the Group are subject to
various market conditions, including quantity and quality of fruit
harvests and market prices, that are not under the Group's control
that could have an adverse effect on the Group's future cash
flows.
As of 31 December 2020, the Group has a deficiency in working
capital of approximately EUR 8.6 million. In December 2020, the
Company was in advanced stages of debt refinancing and an equity
raise that were completed in early 2021 (see Note 18 "Subsequent
events"). These transactions resulted in immediate additional funds
of approximately EUR 9.7 million, with an additional EUR 9.2
million available to draw down in the future. As of the date of
approval of the financial statements, expenditures for the
completion of the RCN processing plant of Pearlside have been
substantially paid. Additional funding for the initial operation of
the plant in the second half of 2021 are in place and are expected
to be sufficient until the plant reaches the production level
necessary to provide a positive cash flow from its operations.
Based on the above, Company management believes it will have
sufficient funds necessary to continue its operations and meets its
obligations as they become due for at least a period of twelve
months from the date of approval of the financial statements.
f. The recent outbreak of Coronavirus, a virus causing
potentially deadly respiratory tract infections originating in
China and spreading in various jurisdictions, had a significant
effect on the global economic conditions and CPO prices but it had
no significant effect on the Company's operations during the
reported year. The outbreak of Coronavirus may resume its negative
affect on economic conditions regionally as well as globally,
disrupt operations situated in countries particularly exposed to
the contagion, affect the Company's customers and suppliers or
business practices previously applied by those entities, or
otherwise impact the Company's activities. Governments in affected
countries are imposing travel bans, quarantines and other emergency
public safety measures. Those measures, though apparently temporary
in nature, may continue and increase depending on developments in
the virus' outbreak. The ultimate severity of the Coronavirus
outbreak is uncertain at this time and therefore the Company cannot
reasonably estimate the impact it may have on its end markets and
its future revenues, profitability, liquidity and financial
position.
NOTE 1:- GENERAL (Cont.)
g. Definitions:
The Group - DEKEL AGRI-VISION PLC and its subsidiaries.
The Company - DEKEL AGRI-VISION PLC.
Subsidiaries - Companies that are controlled by the Company-
CS DekelOil Siva Ltd, DekelOil CI SA, DekelOil
Consulting Ltd, and commencing from December
2020 - Pearlside Holdings, Capro CI SA.
Associate - Company in which the Group has significant
influence over the financial and operating
policies without having control - Pearlside
Holdings Ltd (until December 2020).
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been applied consistently
in the financial statements for all periods presented, unless
otherwise stated.
a. Basis of presentation of the financial statements:
These financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union ("IFRS").
The financial statements have been prepared on a cost basis.
The Company has elected to present profit or loss items using
the function of expense method.
b. Consolidated financial statements:
The consolidated financial statements comprise the financial
statements of companies that are controlled by the Company
(subsidiaries). Control is achieved when the Company is exposed, or
has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its
power over the investee. Potential voting rights
are considered when assessing whether an entity has control. The
consolidation of the financial statements commences on the date on
which control is obtained and ends when such control ceases.
The financial statements of the Company and of the subsidiaries
are prepared as of the same dates and periods. The consolidated
financial statements are prepared using uniform accounting policies
by all companies in the Group. Significant intragroup balances and
transactions and gains or losses resulting from intragroup
transactions are eliminated in full in the consolidated financial
statements.
Non-controlling interests in subsidiaries represent the equity
in subsidiaries not attributable, directly or indirectly, to a
parent. Non-controlling interests are presented in equity
separately from the equity attributable to the equity holders of
the Company. Profit or loss and components of other comprehensive
income are attributed to the Company and to non-controlling
interests. Losses are attributed to non-controlling interests even
if they result in a negative balance of non-controlling interests
in the consolidated statement of financial position.
A change in the ownership interest of a subsidiary, without a
change of control, is accounted for as a change in equity by
adjusting the carrying amount of the non-controlling interests with
a corresponding adjustment of the equity attributable to equity
holders of the Company less / plus the consideration paid or
received.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
c. Investment in an associate:
The Group's investment in an associate is accounted for using
the equity method.
Under the equity method, the investment in the associate is
presented at cost with the addition of post-acquisition changes in
the Group's share of net assets, including other comprehensive
income of the associate. Gains and losses resulting from
transactions between the Group and the associate are eliminated to
the extent of the interest in the associate.
Goodwill relating to the acquisition of an associate is
presented as part of the investment in the associate, measured at
cost and not systematically amortized. Goodwill is evaluated for
impairment as part of the investment in the associate as a
whole.
The financial statements of the Company and of the associate are
prepared as of the same dates and periods. The accounting policies
applied in the financial statements of the associate are uniform
and consistent with the policies applied in the consolidated
financial statements of the Group.
Losses of an associate in amounts which exceed its equity are
recognized by the Company to the extent of its investment in the
associate plus any losses that the Company may incur as a result of
a guarantee or other financial support provided in respect of the
associate. For this purpose, the investment includes long-term
receivables (such as loans granted) for which settlement is neither
planned nor likely to occur in the foreseeable future.
d. Functional currency, presentation currency and foreign currency:
1. Functional currency and presentation currency:
The local currency used in Cote d'Ivoire is the West African CFA
Franc ("FCFA"), which has a fixed exchange rate with the Euro (Euro
1 = FCFA 655.957). A substantial portion of the Group's revenues
and expenses is incurred in or linked to the Euro. The Group
obtains debt financing mostly in FCFA linked to Euros and the funds
of the Group are held in FCFA. Therefore, the Company's management
has determined that the Euro is the currency of the primary
economic environment of the Company and its subsidiaries, and thus
its functional currency. The presentation currency is Euro.
2. Transactions, assets and liabilities in foreign currency:
Transactions denominated in foreign currency are recorded upon
initial recognition at the exchange rate at the date of the
transaction. After initial recognition, monetary assets and
liabilities denominated in foreign currency are translated at each
reporting date into the functional currency at the exchange rate at
that date. Exchange rate differences, other than those capitalized
to qualifying assets or accounted for as hedging transactions in
equity, are recognized in profit or loss. Non-monetary assets and
liabilities denominated in foreign currency and measured at cost
are translated at the exchange rate at the date of the transaction.
Non-monetary assets and liabilities denominated in foreign currency
and measured at fair value are translated into the functional
currency using the exchange rate prevailing at the date when the
fair value was determined.
e. Cash equivalents:
Cash equivalents are considered as highly liquid investments,
including unrestricted short-term bank deposits with an original
maturity of three months or less from the date of acquisition.
f. Financial instruments:
1) Financial assets:
Financial assets are measured upon initial recognition at fair
value plus transaction costs that are directly attributable to the
acquisition of the financial assets, except for financial assets
measured at fair value through profit or loss in respect of which
transaction costs are recorded in profit or loss.
The Company classifies and measures debt instruments in the
financial statements based on the following criteria:
-- The Company's business model for managing financial assets; and
-- The contractual cash flow terms of the financial asset.
a) Debt instruments are measured at amortized cost when:
The Company's business model is to hold the financial assets in
order to collect their contractual cash flows, and the contractual
terms of the financial assets give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding. After initial recognition, the
instruments in this category are measured according to their terms
at amortized cost using the effective interest rate method, less
any provision for impairment.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
b) Equity instruments and other financial assets held for trading:
Investments in equity instruments do not meet the above criteria
and accordingly are measured at fair value through profit or
loss.
Other financial assets held for trading such as derivatives,
including embedded derivatives separated from the host contract,
are measured at fair value through profit or loss unless they are
designated as effective hedging instruments.
Dividends from investments in equity instruments are recognized
in profit or loss when the right to receive the dividends is
established.
2) Impairment of financial assets:
The Company evaluates at the end of each reporting period the
loss allowance for financial debt instruments which are not
measured at fair value through profit or loss.
The Company has short-term financial assets such as trade
receivables in respect of which the Company applies a simplified
approach and measures the
loss allowance in an amount equal to the lifetime expected
credit losses. An impairment loss on debt instruments measured at
amortized cost is recognized in profit or loss with a corresponding
loss allowance that is offset from the carrying amount of the
financial asset.
3) Financial liabilities:
a) Financial liabilities measured at amortized cost:
Financial liabilities are initially recognized at fair value
less transaction costs that are directly attributable to the issue
of the financial liability.
After initial recognition, the Company measures all financial
liabilities at amortized cost using the effective interest rate
method.
4) Derecognition of financial instruments:
a) Financial assets:
A financial asset is derecognized when the contractual rights to
the cash flows from the financial asset expire.
b) Financial liabilities:
A financial liability is derecognized when it is extinguished,
that is when the obligation is discharged or cancelled or
expires.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
g. Borrowing costs:
The Group capitalizes borrowing costs that are attributable to
the acquisition, construction, or production of qualifying assets
which necessarily take a substantial period of time to get ready
for their intended use or sale.
The capitalization of borrowing costs commences when
expenditures for the asset are incurred, the activities to prepare
the asset are in progress and borrowing costs are incurred and
ceases when substantially all the activities to prepare the
qualifying asset for its intended use or sale are complete. The
amount of borrowing costs capitalized in a reporting period
includes specific borrowing costs and general borrowing costs based
on a weighted capitalization rate.
h. Leases:
On January 1, 2019, the Company first applied IFRS 16, "Leases"
("the Standard"). The Company elected to apply the provisions of
the Standard using the modified retrospective method (without
restatement of comparative data).
The Company accounts for a contract as a lease when the contract
terms convey the right to control the use of an identified asset
for a period of time in exchange for consideration.
The Group as a lessee:
For leases in which the Company is the lessee, the Company
recognizes on the commencement date of the lease a right-of-use
asset and a lease liability, excluding leases whose term is up to
12 months and leases for which the underlying asset is of low
value. For these excluded leases, the Company has elected to
recognize the lease payments as an expense in profit or loss on a
straight-line basis over the lease term. In measuring the lease
liability, the Company has elected to apply the practical expedient
in the Standard and does not separate the lease components from the
non-lease components (such as management and maintenance services,
etc.) included in a single contract.
On the commencement date, the lease liability includes all
unpaid lease payments discounted at the interest rate implicit in
the lease, if that rate can be readily determined, or otherwise
using the Group's incremental borrowing rate. After the
commencement date, the Group measures the lease liability using the
effective interest rate method.
On the commencement date, the right-of-use asset is recognized
in an amount equal to the lease liability plus lease payments
already made on or before the commencement date and initial direct
costs incurred. The right-of-use asset is measured applying the
cost model and depreciated over the shorter of its useful life or
the lease term. The Group tests for impairment of the right-of-use
asset whenever there are indications of impairment pursuant to the
provisions of IAS 36.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
h. Biological assets:
Biological assets of the Company are fresh fruit bunches (FFB)
that grow on palm oil trees. The period of biological
transformation of FFB from blossom to harvest and then conversion
to inventory and sale is relatively short (about 2 months).
Accordingly, any changes in fair value at each reporting date are
generally immaterial.
i. Property and equipment:
Property and equipment are stated at cost, net of accumulated
depreciation. Palm oil trees before maturity are measured at
accumulated cost, and depreciation commences upon reaching
maturity. Depreciation is calculated by the straight-line method
over the estimated useful lives of the assets at the following
annual rates:
%
----
Extraction mill 2.5
Palm oil plantations 3.33
Computers and peripheral
equipment 33
15 -
Equipment and furniture 20
Motor vehicles 25
Agriculture equipment 15
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
The useful life, depreciation method and residual value of an
asset are reviewed at least each year-end and any changes are
accounted for prospectively as a change in accounting estimate.
Depreciation of an asset ceases at the earlier of the date that the
asset is classified as held for sale and the date that the asset is
derecognized.
j. Impairment of non-financial assets:
The Company evaluates the need to record an impairment of
non-financial assets whenever events or changes in circumstances
indicate that the carrying amount is not recoverable.
If the carrying amount of non-financial assets exceeds their
recoverable amount, the assets are reduced to their recoverable
amount. The recoverable amount is the higher of fair value less
costs of sale and value in use. In measuring value in use, the
expected future cash flows are discounted using a pre-tax discount
rate that reflects the risks specific to the asset. The recoverable
amount of an asset that does not generate independent cash flows is
determined for the cash-generating unit to which the asset belongs.
Impairment losses are recognized in profit or loss.
An impairment loss of an asset, other than goodwill, is reversed
only if there have been changes in the estimates used to determine
the asset's recoverable amount since the last impairment loss was
recognized. Reversal of an impairment loss, as above, shall not be
increased above the lower of the carrying amount that would have
been determined (net of depreciation or amortization) had no
impairment loss been recognized for the asset in prior years and
its recoverable amount. The reversal of impairment loss of an asset
presented at cost is recognized in profit or loss.
The following criteria are applied in assessing impairment of
these specific assets:
Investment in associate:
After application of the equity method, the Company determines
whether it is necessary to recognize any additional impairment loss
with respect to the investment in associates. The Company
determines at each reporting date whether there is objective
evidence that the carrying amount of the investment in the
associate is impaired. The test of impairment is carried out with
reference to the entire investment, including the goodwill
attributed to the associate.
k. Revenue recognition:
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Revenue from contracts with customers is recognized when the
control over the services is transferred to the customer. The
transaction price is the amount of the consideration that is
expected to be received based on the contract terms.
Revenue from the sale of goods:
Revenue from sale of goods is recognized in profit or loss at
the point in time when the control of the goods is transferred to
the customer, generally upon delivery of the goods to the
customer.
Contract balances:
Amounts received from customers in advance of performance by the
Company are recorded as contract liabilities/advance payments from
customers and recognized as revenue in profit or loss when the work
is performed. For all years presented in these financial
statements, such advances were recognized as revenues in the year
subsequent to their receipt.
l. Inventories:
Inventories are measured at the lower of cost and net realizable
value. The cost of inventories comprises costs of purchase and
costs incurred in bringing the inventories to their present
location and condition. Net realizable value is the estimated
selling price in the ordinary course of business less estimated
costs of completion and estimated costs necessary to make the sale.
The Company periodically evaluates the condition and age of
inventories and makes provisions for slow moving inventories
accordingly.
Cost of finished goods inventories is determined on the basis of
average costs including materials, labor and other direct and
indirect manufacturing costs based on normal capacity.
m. Earnings (loss) per share:
Earnings (loss) per share are calculated by dividing the net
income attributable to equity holders of the Company by the
weighted number of Ordinary shares outstanding during the
period.
Basic earnings (loss) per share only include shares that were
actually outstanding during the period. Potential Ordinary shares
are only included in the computation of diluted earnings (loss) per
share when their conversion
decreases earnings per share or increases loss per share from continuing operations.
Further, potential Ordinary shares that are converted during the
period are included in diluted earnings (loss) per share only until
the conversion date and from that date in basic earnings (loss) per
share. The Company's share of earnings of investees is included
based on the earnings (loss) per share of the investees multiplied
by the number of shares held by the Company.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Basic and diluted earnings per share are adjusted
retrospectively due to changes in shares outstanding resulting from
bonus issues, share splits and share consolidations, including
those that occur after the reporting period and through the date
the financial statements are approved for issuance.
n. Provisions:
A provision in accordance with IAS 37 is recognized when the
Group has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. When the Group expects part or all of the expense to be
reimbursed, for example under an insurance contract, the
reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain. The expense is recognized in
profit or loss net of any reimbursement.
o. 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.
Fair value measurement is based on the assumption that the
transaction will take place in the asset's or the liability's
principal market, or in the absence of a principal market, in the
most advantageous market.
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.
Fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset
in its highest and best use.
The Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
All assets and liabilities measured at fair value or for which
fair value is disclosed are categorized into levels within the fair
value hierarchy based on the lowest level input that is significant
to the entire fair value measurement:
Level - quoted prices (unadjusted) in active markets
1 for identical assets or liabilities.
Level - inputs other than quoted prices included within
2 Level 1 that are observable either directly
or indirectly.
Level - inputs that are not based on observable market
3 data (valuation techniques which use inputs
that are not based on observable market data).
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
p. Share-based payment transactions:
The Company applies the provisions of IFRS 2, "Share-Based
Payment". IFRS 2 requires an expense to be recognized where the
Company buys goods or services in exchange for shares or rights
over shares ("equity-settled transactions"), or in exchange for
other assets equivalent in value to a given number of shares of
rights over shares ("cash-settled transactions"). The main impact
of IFRS 2 on the Company is the expensing of employees' and
directors' share options (equity-settled transactions).
The cost of equity-settled transactions with employees is
measured by reference to the fair value of the equity instruments
at the date on which they are granted. The fair value is determined
using an acceptable option model.
The cost of equity-settled transactions is recognized, together
with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled, ending on
the date on which the relevant employees become fully entitled to
the award ("the vesting date"). The cumulative expense recognized
for equity-settled transactions at each reporting date until the
vesting date reflects the extent to which the vesting period has
expired and the Company's best estimate of the number of equity
instruments that will ultimately vest.
q. Taxes on income:
Current or deferred taxes are recognized in profit or loss,
except to the extent that they relate to items which are recognized
in other comprehensive income or equity.
1. Current taxes:
The current tax liability is measured using the tax rates and
tax laws that have been enacted or substantively enacted by the end
of reporting period as well as adjustments required in connection
with the tax liability in respect of previous years.
2. Deferred taxes:
Deferred taxes are computed in respect of temporary differences
between the carrying amounts in the financial statements and the
amounts attributed for tax purposes.
Deferred taxes are measured at the tax rate that is expected to
apply when the asset is realized or the liability is settled, based
on tax laws that have been enacted or substantively enacted by the
reporting date.
Deferred tax assets are reviewed at each reporting date and
reduced to the extent that it is not probable that they will be
utilized. Temporary differences for which deferred tax assets had
not been recognized are reviewed at each reporting date and a
respective deferred tax asset is recognized to the extent that
their utilization is probable.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Taxes that would apply in the event of the disposal of
investments in investees have not been taken into account in
computing deferred taxes, as long as the disposal of the
investments in investees is not probable in the foreseeable
future.
Also, deferred taxes that would apply in the event of
distribution of earnings by investees as dividends have not been
taken into account in computing deferred taxes, since the
distribution of dividends does not involve an additional tax
liability or since it is the Company's policy not to initiate
distribution of dividends from a subsidiary that would trigger an
additional tax liability.
r. Significant accounting estimates and assumptions used in the
preparation of the financial statements:
The preparation of the financial statements requires management
to make estimates and assumptions that have an effect on the
application of the accounting policies and on the reported amounts
of assets, liabilities, revenues and expenses. Changes in
accounting estimates are reported in the period of the change in
estimate.
s. Changes in accounting policies - initial application of new
financial reporting and accounting standards and amendments to
existing financial reporting and accounting standards:
Amendment to IFRS 3, "Business Combinations"
In October 2018, the IASB issued an amendment to the definition
of a "business" in IFRS 3, "Business Combinations" ("the
Amendment").
The Amendment clarifies that in order to meet the definition of
a "business", an acquired set of activities and assets must
include, at a minimum, an input and a substantive process that
together significantly contribute to the ability to create output.
The Amendment also clarifies that a business can exist without
including all of the inputs and processes necessary to create
outputs. The Amendment includes an optional concentration test that
permits a simplified assessment of whether an acquired set of
activities and assets is not a business, with no need for other
assessments.
The Amendment is to be applied to business combinations and
asset acquisitions for which the acquisition date is on or after
January 1, 2020.
The Company has applied the Amendment to the acquisition of the
controlling interest in Pearlside in 2020.
NOTE 3:- DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION
a. Amendment to IAS 16, "Property, Plant and Equipment":
In May 2020, the IASB issued an amendment to IAS 16, "Property,
Plant and Equipment" ("the Amendment"). The Amendment prohibits a
company from deducting from the cost of property, plant and
equipment ("PP&E") consideration received from the sales of
items produced while the company is preparing the asset for its
intended use. Instead, the company should recognize such
consideration and related costs in profit or loss.
The Amendment is effective for annual reporting periods
beginning on or after January 1, 2022, with earlier application
permitted. The Amendment is to be applied retrospectively, but only
to items of PP&E made available for use on or after the
beginning of the earliest period presented in the financial
statements in which the company first applies the Amendment. The
company should recognize the cumulative effect of initially
applying the Amendment as an adjustment to the opening balance of
retained earnings at the beginning of the earliest period
presented.
The Company estimates that the application of the Amendment is
not expected to have a material impact on the financial
statements.
b. Amendment to IAS 1, "Presentation of Financial Statements":
In January 2020, the IASB issued an amendment to IAS 1,
"Presentation of Financial Statements" ("the Amendment") regarding
the criteria for determining the classification of liabilities as
current or non-current.
The Amendment includes the following clarifications:
-- What is meant by a right to defer settlement;
-- That a right to defer must exist at the end of the reporting period;
-- That classification is unaffected by the likelihood that an entity will exercise its deferral right;
-- That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of
a liability not impact its classification.
The Amendment is effective for annual periods beginning on or
after January 1, 2023 and must be applied retrospectively.
The Company is evaluating the possible impact of the Amendment
on its current loan agreements.
c. Amendments to IFRS 9, IFRS 7, IFRS 16, IFRS 4 and IAS 39 regarding the IBOR reform:
In August 2020, the IASB issued amendments to IFRS 9, "Financial
Instruments", IFRS 7, "Financial Instruments: Disclosures", IAS 39,
"Financial Instruments: Recognition and Measurement", IFRS 4,
"Insurance Contracts", and IFRS 16, "Leases" ("the
Amendments").
The Amendments provide practical expedients when accounting for
the effects of the replacement of benchmark InterBank Offered Rates
(IBORs) by alternative Risk Free Interest Rates (RFRs).
Pursuant to one of the practical expedients, an entity will
treat contractual changes or changes to cash flows that are
directly required by the reform as changes to a floating interest
rate. That is, an entity recognizes the changes in interest rates
as an adjustment of the effective interest rate without adjusting
the carrying amount of the financial instrument. The use of this
practical expedient is subject to the condition that the transition
from IBOR to RFR takes place on an economically equivalent
basis.
The Amendments include new disclosure requirements in connection
with the expected effect of the reform on an entity's financial
statements, such as how the entity is managing the process to
transition to the interest rate reform, the risks to which it is
exposed due to the reform and quantitative information about
IBOR-referenced financial instruments that are expected to
change.
The Amendments are effective for annual periods beginning on or
after January 1, 2021. The Amendments are to be applied
retrospectively. However, restatement of comparative periods is not
required. Early application is permitted.
The Company is presently assessing the accounting implications,
if any, of the transition from IBORs to RFRs on the financial
instrument contracts that are expected to be in effect on the
transition date, including the effects of the application of the
above Amendments.
NOTE 4:- ACCOUNTS AND OTHER RECEIVABLES
31 December
---------------------
2020 2019
--------- ---------
Euros in thousands
---------------------
Government authorities (VAT) 3 3
Prepaid expenses and other receivables 12 62
Loans to employees 41 4
Advance payment to contractor 236 -
--------- ---------
292 69
--------- ---------
NOTE 5:- INVESTMENT IN PEARLSIDE HOLDINGS LTD
On 20 December 2018 the Company entered into an agreement to
purchase a 43.8% interest in Pearlside Holdings Ltd ("Pearlside")
by way of issuing 52,612,613 Ordinary shares of the Company.
Pearlside, through its wholly-owned subsidiary, is in the final
stages of development and construction of a Raw Cashew Nut (RCN)
processing plant in Cote d'Ivoire, which is expected to be
completed and operational in the second half of 2021. The closing
of this purchase transaction occurred on 7 January 2019 (See also
Note 10 Equity).
Based on the market price of the Company's shares on the date of
the purchase, the cost of the investment in Pearlside amounted to
approximately EUR1.9 million.
On 30 October 2020 the Company entered into an agreement to
increase its holding in Pearlside to 52% by way of issuing
28,552,800 Ordinary shares of the Company. Based on the market
price of the Company's shares on the date of the purchase, the cost
of this additional investment in Pearlside is EUR740 thousand. The
shares were issued, and the transaction was completed on 25
November 2020.
Following this transaction, the Company gained control over
Pearlside. The assets and liabilities of Pearlside are included for
the first time in the consolidated statement of financial position
as of 31 December 2020. As Pearlside is in the process of
construction of its RCN plant, the results of operations of
Pearlside from the date of acquisition to 31 December 2020 are
immaterial.
On 8 December 2020 the Company entered into an agreement to
purchase an additional 2% and to increase its holding to 54% by way
of issuing 3,922,789 Ordinary shares of the Company. Based on the
market price of the Company's shares on the date of the purchase,
the cost of this additional investment in Pearlside is EUR144
thousand.
As of the date of obtaining control, the RCN plant under
construction represented substantially all of the gross assets of
Pearlside. All of the activity of Pearlside relates to the
construction of the plant. There are a few employees that are
involved in the supervision of the construction which is being
performed by external contractors. Accordingly, the purchase
transaction is accounted for as an acquisition of assets.
Pursuant to IFRS 3, the Company records the cash and other
financial assets and liabilities at their fair value on date of
acquisition (which approximates their carrying amounts, including
loans which were recently obtained at market terms). The excess of
(i) the cost of the investment plus (ii) the non-controlling
interest recognized over (iii) the carrying amount of the net
assets acquired (equity of Pearlside) is allocated to the RCN
plant. The non-controlling interest in the amount of EUR 700 is
measured at its proportionate share of the net assets (equity) of
Pearlside.
Following are the assets and liabilities acquired at the date of
acquisition (Euros in thousands):
Deficiency in working capital (373)
Non- current deposits 264
Property, plant and equipment 12,191
Lease liability (114)
Long-term debt (8,174)
NOTE 6:- PROPERTY AND EQUIPMENT, NET
Composition and movement:
Cashew
processing
Computers Equipment Extraction mill under
and peripheral and Motor Agriculture mill Palm oil construction
equipment furniture vehicles equipment and land plantations and land Total
--------------- ---------- --------- ----------- ---------- ------------ -------
Cost:
Balance as
of 1 January,
2019 338 109 1,397 460 26,003 7,543 - 35,850
--------------- ---------- --------- ----------- ---------- ------------ ------------- -------
Acquisitions
during the
year 5 1 128 4 278 77 - 493
Disposals
during
the year (53) - (30) - - - - (83)
Balance as
of 31
December,
2019 290 110 1,495 464 26,281 7,620 - 36,260
Acquisitions
during the
year 4 - 103 - - 12 - 119
Disposals
during
the year (15) (7) (72) - - - - (94)
-------------
Initial
consolidation
of subsidiary 3 3 26 26 - - 12,133 12 ,191
--------------- ---------- --------- ----------- ---------- ------------ ------------- -------
Balance as
of 31
December, 1 , 5
2020 28 2 10 6 52 490 26,281 7,632 12,133 48, 476
--------------- ---------- --------- ----------- ---------- ------------ ------------- -------
Accumulated
depreciation:
Balance as
of 1 January
2019 181 81 582 380 2,845 609 - 4,678
--------------- ---------- --------- ----------- ---------- ------------ ------------- -------
Depreciation
during the
year 35 17 273 14 848 170 - 1,357
Disposals
during
the year (53) - (30) - - - - (83)
--------------- ---------- --------- ----------- ---------- ------------ ------------- -------
Balance as
of 31 December
2019 163 98 825 394 3,693 779 - 5,952
Depreciation
during the
year 29 8 205 15 876 236 - 1,369
Disposals
during
the year (15) (7) (72) - - - - (94)
--------------- ---------- --------- ----------- ---------- ------------ ------------- -------
Balance as
of 31 December
2020 182 101 1,005 409 4,569 1,015 - 7,281
--------------- ---------- --------- ----------- ---------- ------------ ------------- -------
Depreciated
cost as of
31 December
2020 105 7 594 81 21,712 6,617 12,133 41,249
--------------- ---------- --------- ----------- ---------- ------------ ------------- -------
Depreciated
cost as of
31 December
2019 127 12 669 70 22,589 6,841 - 30,308
NOTE 7:- OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES
31 December
--------------------
2020 2019
--------- ---------
Euros in thousands
--------------------
Employees and payroll accruals 993 272
VAT payable 100 164
Other accounts payable 731 580
--------- ---------
1,824 1,016
--------- ---------
NOTE 8:- RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
On 24 June 2008, DekelOil CI SA signed a lease agreement for 42
hectares near the village of Ayenouan, Cote d'Ivoire. The agreement
is with the village of Adao and the people occupying the land in
Ayenouan. The lease is for 90 years and the payment for the lease
is FCFA 3,000,000 (app. EUR 4,573) per annum.
In July 2015 a subsidiary of the Company signed a lease
agreement for a vehicle. The lease is for 4 years and the payment
is EUR1,062 per month.
In January 2018 a subsidiary of the Company signed a lease
agreement for a vehicle. The lease is for 5 years and the payment
is EUR1,080 per month.
A subsidiary consolidated for the first time at 31 December 2020
signed a lease agreement with the government authorities for 6
hectares near the village of Tiabissuo, Cote d'Ivoire. The
agreement is for a lease of 99 years with an annual lease payment
of 6 million FCFA (app. EUR 9,146)
The right-of-use assets in respect of the above leases are
included in Property and Equipment (Note 6). The balance of the
lease liabilities at 31 December 2020 amounted to EUR 192 (2019 -
EUR90).
NOTE 9:- LOANS
a. Long-term loans:
Interest rate
as of 31 December 31 December
--------------------
Currency 2020 2020 2019
--------- ------------------ --------- ---------
Euros in thousands
--------------------
SGBCI In FCFA 6.2%-7.3% 1 26
NSIA In FCFA 8.4% - 207
SOGEBOURSE (c.1) In FCFA 6.85% 6,387 8,380
SIB (c.2) In FCFA 8.2% 377 490
AgDevCo (c.3) In Euro 7.5% 7,200 7,200
BGFI (c.4) In FCFA 7.25% 1,153 -
BIDC (c.5) In FCFA 8.5% 4,053 -
NSIA (c.6) In FCFA 7.75% 1,834 -
NSIA (c.7) In FCFA 7.75% 762 -
BGFI (c.8) In FCFA 7.5% 1,524 -
Total loans 23,291 16,303
Less - current
maturities (3,239) (2,339)
--------- ---------
20,052 13,963
--------- ---------
b. Short-term loans and current maturities:
31 December
--------------------
20 20 2019
--------- ---------
Euros in thousands
--------------------
Short-term loan from bank 2,437 1,490
Current maturities - per
a. above 3,239 2,339
--------- ---------
5,676 3,829
--------- ---------
c. 1. In September 2016 DekelOil CI SA signed a long-term
financing facility agreement with a consortium of institutional
investors arranged by SOGEBOURSE for a long-term loan of up to FCFA
10 billion (approximately EUR 15.2 million). Of this amount, FCFA
5.5 billion (approximately EUR 8.4 million) was utilized to
refinance the West Africa Development Bank ("BOAD") loan The loan
is repayable over 7 years in fourteen semi annual payments. and
bears interest at a rate of 6.85% per annum.
On 22 October 2016 SOGEBOURSE transferred the funds and the BOAD
loan was repaid in full.
On 1 February 2018 the DekelOil CI SA drew down a second tranche
of FCFA 2.8 billion (EUR4.34 million) from its FCFA 10 billion
(EUR15.2 million) long-term Syndicated Loan Facility with
Sogebourse CI. on the same terms as the first tranche. Part of the
funds were used to repay a short-term loan in the amount of
EUR1,524 thousand and a long-term loan in the amount of EUR497
thousand.
2. In October 2018 DekelOil CI SA signed a loan agreement with
Societe Ivorienne de Banque ("SIB") for FCFA 400 million
(approximately EUR610 thousand). The loan is for 5 years and bears
interest at a rate of 8.2% per annum. One of the boilers in the CPO
extraction mill serves as a security for the loan.
3. In July 2019 DekelOil CI SA signed an agreement with AgDevCo
Limited ("AgDevCo"), a leading African agriculture sector impact
investor for a EUR7.2 million loan for a term of 10 years, 4 years
of principal grace and 6 years of repayment, with a gross interest
rate of 7.5% per annum, variable and based on 12-month EURO Libor
plus a pre-defined spread, and collared with a minimum rate of 6%
per annum and a maximum rate of 9% per annum. The funds from the
loan are to be used as follows: (i) EUR6.2 million to replace
existing NSIA Bank loan (see also 3 above) and (ii) EUR1.0 million
for Environmental, Social and Governance ("ESG") activities and
general working capital purposes.
The loan agreement contains the following financial covenants to
be tested on a quarterly basis: (1) Current Ratio of at least 0.5;
(2) Debt Service Coverage Ratio of at least 1. In December 2019 a
waiver was received for the testing of the above financial
covenants till 30 June 2020. AgDevCo then issued an extension to
the waiver covering 30 June 2020 and 31 December 2020. The Company
is expected to meet these financial covenants during 2021 (see Note
18 Subsequent Events).
4. On 7 July 2020 DekelOil CI SA signed a loan agreement with
Banque Gabonaise Francaise International ("BGFI") for FCFA 800
million (approximately EUR1,220 thousand). The loan is for 5 years
and bears interest at a rate of 7.25% per annum.
5. On 16 March 2016 Capro CI SA signed a loan agreement with the
Bank of Investment and Development of CEDEAO ("EBID") according to
which EBID agreed to grant Capro CI SA a facility of 3,000 million
FCFA (EUR 4,573 thousand).
The EBID loan shall bear interest at a rate of 8.5% per annum.
The loan has a tenure of seven years, and shall be repaid in 20
quarterly installments over five years, commencing after a grace
period on principal payments of two years. Principal payments start
in January 2022.
6. in 2018 Capro CI SA signed a loan agreement with NSIA bank,
Togo ("NSIA Togo") according to which NSIA Togo agreed to grant
Capro CI SA a facility of 1,500 million FCFA (EUR 2,278
thousand).
NSIA Togo loan shall bear interest at a rate of 7.25%% per
annum. The loan has a tenure of seven years and shall be repaid in
20 quarterly installments over five years, commencing after a grace
period on principal payments of two years from the first withdrawal
made on 20 February 2020.
7. On 30 March 2020 Capro CI SA signed a loan agreement with
NSIA bank Cote d'Ivoire ("NSIA") according to which NSIA agreed to
grant Capro CI SA a facility of 500 million FCFA (EUR 762
thousand).
NSIA loan shall bear interest at a rate of 7.25% per annum. The
loan is for two years with one year grace period on principal
payments.
8. On 3 February 2020 Capro CI SA signed a loan agreement with
Banque Gabonaise Francaise International ("BGFI") for FCFA 1,000
million (approximately EUR1,542 thousand). The loan shall bear
interest at a rate of 7.5% per annum. The loan has a tenure of
seven years and shall be repaid in monthly installments over five
years, commencing after a grace period on principal payments of two
years from the first withdrawal made in September 2020.
NOTE 10:- EQUITY
a. Composition of share capital:
31 December 31 December
---------------------------- ------------------------
2020 2019 2020 2019
------------- ------------- ----------- -----------
Authorized Issued and outstanding
---------------------------- ------------------------
Number of shares
------------------------------------------------------
Ordinary shares
of EUR 0.0003367
par value each 1,000,000,000 1,000,000,000 457,126,075 423,064,443
------------- ------------- ----------- -----------
Each Ordinary share confers upon its holder voting rights, the
right to receive cash and share dividends, and the right to share
in excess assets upon liquidation of the Company.
In 2019 the Company issued 467,659 ordinary shares to certain
brokers in consideration for services provided. The fair value of
the shares issued amounting to EUR 17 thousand was recorded in
general and administrative expenses
On 7 January 2019 the Company completed a purchase of 43.8%
interest in Pearlside Holding Ltd by way of issuing 52,612,613
Ordinary shares of the Company. Based on the market price of the
Company's shares on the date of the purchase, the cost of the
investment in Pearlside amounted to approximately EUR1.9 million.
Of the total Ordinary shares issued, 36,156,157 Ordinary shares
were issued to related parties of the Company.
On 9 April 2019 the CEO of the Company's subsidiary exercised
600,000 options to acquire Ordinary shares granted to him as part
of his employment agreement.
On 8 August 2019 the Company raised a total amount of
approximately EUR2.23 million (net of EUR88 thousands fund raising
costs) through the issuance of 69,723,361 Ordinary shares (of which
EUR1.5 million was invested by AgDevCo Limited (see also note 9
c.6).
Commencing from December 2019, pursuant to his remuneration
contract, the General Manager of the company's subsidiary, shall be
issued 400,000 Ordinary Shares per year at par value over the next
3 years, vesting on a monthly basis. The fair value of the Ordinary
shares to be issued at the date of grant amounts to EUR 34
thousand. As of 31 December 2020, 400,000 Ordinary shares which are
fully vested have not yet been issued to the General Manager.
On 25 November 2020 the Company issued 28,552,800 Ordinary
Shares according to an agreement to increase its holding of
Pearlside to 52% by way of a share swap. Based on the market price
of the Company's shares on the date of the purchase, the cost of
this additional investment in Pearlside is EUR740 thousand.
On 10 December 2020 the Company completed a purchase of an
additional 2% of Pearlside Holding Ltd, reaching a total holding of
54% of Pearlside, by way of issuing 3,922,789 Ordinary shares of
the Company. Based on the market price of the Company's shares on
the date of the purchase, the cost of this additional investment in
Pearlside is EUR144 thousand.
In 2020 the Company issued 1,587,043 ordinary shares to certain
brokers in consideration for services provided. The fair value of
the shares issued amounting to EUR 24 thousand was recorded in
general and administrative expenses
b. Share option plan:
On 15 January 2015 the Company granted directors and senior
employee's options to purchase 8,100,000 Ordinary shares. Of that
amount, 1,800,000 options vested immediately, and the remainder
will vest ratably over 3 years. Half of the options have an
exercise price of 12.5 pence per share while the remainder is
exercisable at a price of 20 pence per share. The fair value of the
options granted calculated based on Black-Scholes option pricing
model was approximately EUR820 thousand.
On 19 October 2015 the Company granted directors and senior
employee's options to purchase 1,800,000 Ordinary shares. The
options will vest ratably over 3 years. Half of the options have an
exercise price of 12.5 pence per share while the remainder is
exercisable at a price of 20 pence per share. The fair value of the
options granted calculated based on Black-Scholes option pricing
model was approximately EUR139 thousand.
On 30 June 2017 the Company granted directors and senior
employee's options to purchase 10,750,000 Ordinary shares. The
options will vest ratably over 5 years. The exercise price of the
options is EUR0.1359 per share. The fair value of the options
granted calculated based on Black-Scholes option pricing model was
approximately EUR612 thousand.
On 1 January 2017 a subsidiary appointed a new CEO, and as part
of his employment compensation he was granted 1,200,000 options to
purchase Ordinary shares of the Company at a nominal exercise
price. The options vest linearly over three years. The fair value
of the options at the date of grant was calculated based on the
share price at that date and was approximately EUR151 thousand.
On 2 December 2019 the Company granted directors and advisers
options to purchase 17,600,000 Ordinary shares. The 2019 Options
expire 10 years from the date of grant and have an exercise price
of 2.45 pence per Ordinary Share. One third of the 2019 Options
vest immediately. The balance of the 2019 Options are subject to
vesting conditions as follows:
(i) One third of the options may only be exercised if at any
point following the date of grant, the 30-day Volume Weighted
Average Price (VWAP) of the Ordinary Shares achieves a price per
share equal to or exceeding 4.0 pence, this condition was met
during 2020. These options vest over 12 months following the date
of grant.
(ii) A further one third of the options may only be exercised if
at any point following the date of grant, the 30-day VWAP of the
Ordinary Shares achieves a price per share equal to or exceeding
6.0 pence. These options vest over 12 months from the first
anniversary of the date of grant.
The fair value of the options granted calculated based on
Black-Scholes option pricing model was approximately EUR289
thousand for the 14,100,000 options granted to directors and
approximately EUR72 thousand for the 3,500,000 options granted to
advisors.
NOTE 10:- EQUITY (Cont.)
In addition, in December 2019 the Company amended the terms of
7,200,000 of the options granted in January 2015 (see above) and of
the terms of 9,100,000 option granted on 30 June 2017 (see above),
to reflect the same terms, vesting terms and duration of the
options granted on 2 December 2019.
The incremental fair value of the amended options totaling
approximately EUR212 thousand was calculated based on the
difference between the fair value of the options immediately before
the amendment and their fair value immediately after the amendment.
The calculation was based on Black-Scholes option pricing model.
This incremental fair value will be recorded as an expense over the
amended vesting period in addition to the expense recorded in
respect of the original grant of these options.
The following table lists the inputs used in the measurement of
the fair value of options, in accordance with the Black and Scholes
option pricing model, with respect to the above plans:
2019
----
Risk-free interest
rate (%) 0.6%
Dividend yield (%) 0%
Expected volatility
(%) 70%
Expected term (in years) 10
A summary of the activity in options for the years 2020 and 2019
is as follows:
Year ended
31 December
-------------------------------------------------
2020 2019
------------------------ -----------------------
Weighted Weighted
average average
Number exercise Number of exercise
of options price-Euro options price-Euro
----------- ----------- ---------- -----------
Outstanding at beginning
of year 35,522,314 0.0332 18,722,314 0.1734
Exercised - - (600,000) nil
Granted - - 17,600,000 0.0288
Expired - - - -
Forfeited - - (200,000) nil
Outstanding at end
of year 35,522,314 0.0332 35,522,314 0.0332
-----------
Exercisable options 24,222,314 0.0352 12,922,314 0.0408
----------- ----------- ---------- -----------
c. Capital reserve
The capital reserve comprises the contribution to equity of the
Company by the controlling shareholders.
NOTE 11:- REVENUES
a. The Company has one operating segment - production and sale
of Palm Oil, Palm Kernel and Palm Kernel Oil. Substantially all of
the revenues are derived from the sales of Palm Oil, Palm Kernel
Oil and Palm Kernel Cake in Cote d'Ivoire.
b. Major customers:
Year ended
31 December
--------------------
2020 2019
--------- ---------
Euros in thousands
--------------------
Revenues from major customers which
each account for 10% or more of total
revenues reported in the financial
statements:
Customer A - 18,531 13,583
Customer B - - 3,720
NOTE 12:- FAIR VALUE MEASUREMENT
The fair value of accounts and other receivables, loans, and
trade and other payables approximates their carrying amount due to
their short-term maturities. The fair value of long-term loans with
a carrying amount of EUR23,291 thousands and EUR 16,303 thousands
(including current maturities) approximates their fair value as of
31 December 2020 and 2019, respectively (level 3 of the fair value
hierarchy).
NOTE 13:- INCOME TAXES
a. Tax rates applicable to the income of the Company and its subsidiaries:
The Company and its subsidiaries, CS DekelOil Siva Ltd and
Pearlside Holdings Ltd, were incorporated in Cyprus and are taxed
according to Cyprus tax laws. The statutory federal tax rate is
10%.
The carryforward losses of the Company are approximately EUR26
thousand, of CS DekelOil Siva Ltd are approximately EUR17 thousand,
and of Pearlside are approximately EUR9 thousand.
The subsidiary, DekelOil CI SA, was incorporated in Cote
d'Ivoire and is taxed according to Cote d'Ivoire tax laws. Based on
its investment plan, DekelOil CI SA received a full tax exemption
from local income tax, "Tax on Industrial and Commercial profits,"
for the thirteen years starting 1 January 2014, 50% tax exemption
for the fourteenth year and 25% tax exemption for the fifteenth
year.
The tax exemptions were conditional upon meeting the terms of
the investment plan, which the Group has met.
The subsidiary, Capro CI SA, was incorporated in Cote d'Ivoire
and is taxed according to Cote d'Ivoire tax laws. Based on its
investment plan, Capro CI SA received a full tax exemption from
local income tax, "Tax on Industrial and Commercial profits," for
the thirteen years starting from commencement of production, 50%
tax exemption for the fourteenth year and 25% tax exemption for the
fifteenth year.
The tax exemptions were conditional upon meeting the terms of
the investment plan, which the Group is expecting to meet.
The subsidiary DekelOil Consulting Ltd was incorporated in
Israel and is taxed according to Israeli tax laws.
NOTE 13:- INCOME TAXES (Cont.)
b. Tax assessments:
The Company's subsidiary, DekelOil CI SA, received a final tax
assessment through 2017.
As of 31 December 2020 the Company and all its other
subsidiaries had not yet received final tax assessments
c. The tax expense during the year ended 31 December, 2020
relate to tax of the Company's subsidiaries DekelOil CI SA and
DekelOil Consulting Ltd.
NOTE 14:- SUPPLEMENTARY INFORMATION TO THE STATEMENT OF COMPREHENSIVE INCOME
Year ended
31 December
--------------------
2020 2019
--------- ---------
Euros in thousands
--------------------
a. Cost of revenues:
Cost of fruits 14,233 14,243
Salaries and related benefits 1,680 1,587
Cultivation & Nursery costs 578 379
Vehicles 372 364
Maintenance and other operating costs 2,111 1,550
Depreciation 1,233 1,129
20,207 19,252
--------- ---------
b. General and administrative expenses:
Salaries and related benefits 1,131 1,189
Subcontractors 310 364
Rents & related office expenses 108 111
Travel expenses 99 98
Legal & accounting and professional
fees 283 293
Vehicle maintenance 86 106
Insurance 86 98
Brokerage & nominated advisor fees 82 134
Depreciation 138 228
Share-based compensation 271 296
Other 167 241
--------- ---------
2,761 3,158
--------- ---------
c. Finance cost:
Interest on loans 1,144 1,304
Bank fees 429 463
Exchange rate differences 9 62
--------- ---------
1,582 1,829
--------- ---------
NOTE 15:- INCOME (LOSS) PER SHARE
The following reflects the income (loss) and share data used in
the basic and diluted earnings per share computations:
Year ended
31 December
---------------------------
2020 2019
----------- -----------
Euros in thousands
---------------------------
Net income(loss) (2,226) (3,389)
----------- -----------
Weighted average number of Ordinary shares
for computing basic and diluted earnings
(loss) per share 428,930,844 352,290,622
----------- --------------
In 2020 and 2019, share options are excluded from the
calculation of diluted earnings per share as their effect is
antidilutive.
NOTE 16:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Year ended
31 December
--------------------
2020 2019
--------- ---------
Euros in thousands
--------------------
a.1 Balances:
Other accounts payable and accrued expenses 191 31
a.2 Transactions:
Services and expense reimbursements 33 92
b. Compensation of key management personnel
of the Company:
Short-term employee benefits 379 564
Share-based compensation 224 224
c. Significant agreements with related parties:
1. In February 2008, DekelOil Consulting Limited ("Consulting")
signed an employment agreement with a shareholder, who is a
director of the Company, the CEO of the Company and the chairman of
the Board of Directors of DekelOil CI SA.
NOTE 16:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Cont.)
Under the employment agreement, the CEO is entitled to a monthly
salary of EUR 20,000 per month. The agreement is terminable by the
Company with 24 months' notice. The total annual salary, social
benefits, bonuses and management fee paid to the CEO during 2020
and 2019 was approximately EUR162 thousand and EUR 252 thousand,
respectively.
2. In March 2008, DekelOil Consulting Limited signed an
employment agreement with a shareholder, who is a director of the
Company, its Deputy CEO and Chief Financial Officer. The agreement
was amended on 11 July 2014 by the board of the subsidiary to
reflect the same salary terms as those of the CEO described in c
(1) above. The total annual salary and social benefits paid to the
employee during 2020 and 2019 was approximately EUR146 thousand and
EUR 194 thousand, respectively.
NOTE 17:- FINANCIAL INSTRUMENTS
a. Classification of financial liabilities:
The financial liabilities in the statement of financial position
are classified by groups of financial instruments pursuant to IFRS
9:
31 December
--------------------
2020 2019
----------- -------
Euros in thousands
--------------------
Financial liabilities measured at
amortized cost:
Trade and other payables 2,717 1,687
Short-term loans 2,437 1,490
Long-term lease liabilities 192 90
Long-term loans (including current
maturities) 23,291 16,303
Total 28,637 19,570
----------- ---------
b. Financial risks factors:
The Group's activities expose it to market risk (foreign
exchange risk). Certain of the Group's long-term obligations at the
reporting date also bear variable interest rates which are linked
to the inter banking interest rate in Cote d'Ivoire and in the UK,
and therefore the Group is exposed to cash flow risks due to
changes in that base interest rate. The effect on profit or loss is
approximately EUR80 thousand for each 1% change in the base
interest rate.
NOTE 17:- FINANCIAL INSTRUMENTS (Cont.)
Foreign exchange risk:
The Company is exposed to foreign exchange risk resulting from
the exposure to different currencies, mainly, NIS and GBP. Since
the FCFA is fixed to the Euro, the Group is not exposed to foreign
exchange risk in respect of the FCFA. As of 31 December 2019, the
foreign exchange risk is immaterial.
Liquidity risk:
The table below summarizes the maturity profile of the Group's
financial liabilities based on contractual undiscounted payments
(including interest payments):
31 December 2020
Less 2 to
than 1 to 3 3 to 4 to
one year 2 years years 4 years 5 years > 5 years Total
--------- -------- ------ -------- -------- --------- ------
Euros in thousands
------------------------------------------------------------------
Long-term loans
(1) 4,254 4,784 3,935 4,504 3751 11,758 32,986
Short-term loan 2,437 - - - - - 2,437
Trade payables
and other accounts
payable 2,717 - - - - - 2,717
Long-term lease
liabilities 20 20 6 6 6 328 386
--------- -------- ------ -------- -------- --------- ------
9,428 4,804 3,941 4,510 3,757 12,086 36,091
--------- -------- ------ -------- -------- --------- ------
31 December 2019
Less 2 to
than 1 to 3 3 to 4 to
one year 2 years years 4 years 5 years > 5 years Total
--------- -------- ------ -------- -------- --------- ------
Euros in thousands
------------------------------------------------------------------
Long-term loans
(1) 3,147 2,863 2,739 1,852 2,421 7,368 20,390
Short-term loan 1,490 - - - - - 1,490
Trade payables
and other accounts
payable 1,687 - - - - - 1,687
Long-term lease
liabilities 23 20 20 6 6 334 409
6,347 2,883 2,759 1,858 2,427 7,702 23,976
--------- -------- ------ -------- -------- --------- ------
(1) Including current maturities.
Movement in financial liabilities:
Short term Long term
loans loans (1) Lease liabilities Total
---------- ---------- ------------------ -------
Balance as of 1
January 2019 670 17,293 94 18,057
Receipt of short-term
loan
Receipt of long-term
lease 1,490 - 14 1,504
Repayment of long-term
lease - - (18) (18)
Repayment of loans (670) (8,191) - (8,861)
Receipt of long-term
loans - 7,200 - 7,200
Balance as of 31
December 2019 1,490 16,302 90 17,882
Receipt of short-term
loan 2,437 - - 2,437
Repayment of long-term
lease - - (12) (12)
New lease upon consolidation
of subsidiary. - - 114 114
Repayment of loans (1,490) (3,584) - (5,038)
Receipt of long-term
loans - 2,363 - 2,363
---------- ---------- ------------------ -------
Initial consolidation
of subsidiary - 8,174 - 8,174
---------- ---------- ------------------ -------
Balance as of 31
December 2020 2,437 23,291 192 23,557
---------- ---------- ------------------ -------
1) Including current maturities and accrued interest.
NOTE 18:- SUBSEQUENT EVENTS
On 25 January 2021 DekelOil CI SA signed an agreement for a
long-term bond of up to EUR15.2 million (10,000 million FCFA). The
first tranch of EUR6 million (3,930 million FCFA) was received on
27 January 2021. The bond is for 7 years with a 3 year grace for
principal repayments. The bond bears annual interest of 7.75%.
On 29 January 2021 the Company raised equity totaling to GBP3.27
million (EUR3.69 million) [net of GBP0.23 million (EUR0.26 million)
fund raising costs] through the placing of 70,000,000 new Ordinary
Shares at an issue price of 5 pence per share.
On 8 February 2021, the Company signed an agreement to purchase
an additional 16.7% of Pearlside for a total consideration of
GBP1.062 million (EUR1.2 million), of which GBP708,000 (EUR806
thousand) of the consideration is to be settled in cash with the
remaining GBP354,000 (EUR403 thousand) to be settled via the issue
of 7,080,000 new Ordinary shares at 5 pence per share. Following
this acquisition, the Company holds 70.7% of Pearlside (see also
Note 6)
, the news service of the London Stock Exchange. RNS is approved by
the Financial Conduct Authority to act as a Primary Information
Provider in the United Kingdom. Terms and conditions relating to
the use and distribution of this information may apply. For further
information, please contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR BXLLLFQLFBBD
(END) Dow Jones Newswires
June 24, 2021 02:00 ET (06:00 GMT)
Dekel Agri-vision (LSE:DKL)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
Dekel Agri-vision (LSE:DKL)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024