TIDMTREE
RNS Number : 1395A
Cambium Global Timberland Limited
25 September 2020
Cambium Global Timberland Limited
("Cambium" or the "Company")
Annual Results for the year ended 30 April 2020
Cambium (AIM: TREE) announces its audited results for the year
ended 30 April 2020. A copy of the annual report and accounts will
be sent to shareholders and will be available to view on the
Company's website shortly, at http://www.cambium.je/ .
For further enquiries, please contact:
Cambium Global Timberland Limited
Tony Gardner-Hillman (Chairman Tel: +44 (0)1534 486 980
WH Ireland Limited (Nomad and Broker)
James Joyce Tel: +44 (0)207 220 1666
Praxis Fund Services (Jersey) Limited (Administrator and Company
Secretary)
Josh Farrow Tel: +44 (0)1534 835835
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). Upon the
publication of this announcement via Regulatory Information Service
this inside information is now considered to be in the public
domain.
The below has been extracted from the full financial
statements.
Chairman's Statement
I am pleased to report significant progress, despite the current
challenges the World is dealing with on top of the expected
complexities in exiting from asset-ownership in Brazil. The
progress is summarised below, and detailed in the Operations
Manager's Report and elsewhere in these financial statements.
Assets and values
The Company's Net Asset Value per share ("NAVPS") as of 30 April
2020 is 10.4p, compared with 18.8p as at 30 April 2019, a decrease
of 44.8%.
The decrease in NAVPS is accounted for by: exchange rate effects
(54.2% of the difference), loss on disposal of assets held for sale
(0.3%), the Board's view on land values (26.5%), the accretive
effect of share buy-backs (-0.4%) and net expenditure on forestry
and other costs (19.4%).
The Group started the period owning plantation assets in Brazil
only, and cash balances at bank. The Brazil assets comprised one
plantation, 3R, in Tocantins State, and three, Agua Santa, Ribeirao
do Gado and Forquilha, in Minas Gerais State. Fortunately, the
demand for wood has not been materially impacted by the pandemic so
progress has been possible, although of course Cambium has faced
hold-ups with third parties along the way due to the effect
lockdowns have had on getting things done.
In August 2019 the Board announced the conditional agreement to
sell Agua Santa. In March 2020 we announced, first, that the Agua
Santa agreement had become unconditional and, secondly, the
signature of a conditional agreement to sell Ribeirao do Gado.
Conditions in the latter agreement have been substantially met
since then, with the only outstanding matter now being the awaited
receipt of a third-party report on environmental licensing aspects,
still awaiting processing at the reporting agency, which we are
told is a direct result of backlog due to the Brazilian
lockdown.
The Board's view on land values results in an aggregate decrease
of GBP1.64 million. The value of the Group's plantations has seen a
small reduction in aggregate value due to wood sales, partially
offset by further growth of wood which remains in the ownership of
the Group, including coppice re-growth at 3R.
Cash and costs
The Board continually monitors the Group's cash position, and
the level of recurring costs. As at the period-end the Company and
its subsidiaries had cash reserves of GBP0.63 million. Costs
related to Brazil (for example, plantation care and maintenance,
and insurance costs) will continue to fall along with asset
disposals. The Board continues to seek ways to reduce further the
Group's central costs, primarily the costs of continuing to be
listed, a complex issue at this stage of Cambium's lifespan.
Events after the year end
Following the year end, the Group completed a contract to sell
the land at Ribeirao do Gado, agreed terms subject to contract to
sell the land at 3R, and contracted to sell the standing wood at
Forquilha (see note 27).
Conclusion
It has proved to be a long haul since shareholders voted in 2013
for an orderly realisation of assets. The haul is ongoing but I can
now say, albeit cautiously, that the light at the end of the tunnel
is becoming visible.
I look forward to reporting further progress in the course of
the current financial year.
Antony Gardner-Hillman
Chairman
22 September 2020
Operations Manager's Report
For the year ended 30 April 2020
Total returns for the year were a loss of GBP6.2 million
compared to a loss of GBP1.7 million in the previous year. The
increase is principally due to the fall in the value of the
Brazilian Real from R$5.11:GBP1.00 at 30 April 2019 to
R$6.91:GBP1.00 at 30 April 2020, impacting the sterling value of
the land and plantations while values in local currency were
largely unchanged. Operating costs declined as disposals
continued.
Below is a summary of the results by geographic area.
Brazil
The Brazilian portfolio now represents 100% of the physical
assets and 94% of total assets. Brazil has been badly hit by
COVID-19, but rural and industrial activity appears to be
continuing much as before. This is being manifested by relatively
unchanged wood prices and some activity from local industry players
in land acquisitions. Interest from offshore and onshore financial
investors in the forestry sector remains nominal.
At 3R the 1,600 hectares of coppice are re-growing more rapidly
than expected in response to continued maintenance. Discussions had
been held with a large local forestry, charcoal and iron smelting
business to lease the property to them, but since the year end date
these discussions have developed into an agreement in principle to
sell the whole property to the same counterparty, which is
currently in lawyers' hands.
In Minas Gerais, where contracts had been underway to sell the
wood from Agua Santa and Ribeirao do Gado, as already announced,
agreement has now been reached to sell the land to the buyers of
the wood. Payments were received for the wood sales as expected and
consideration from the agreements to sell the entirety of both
properties is now being received on schedule. Negotiations to sell
the wood at Forquilha have resulted, after the year end, in an
agreement which has now been completed. Discussions are also
underway to sell the land, but as yet no firm offers have been
received.
Security, fire protection and insurance costs are no longer
required at Agua Santa and Ribeirao do Gado, but will continue to
be required to protect the Company's other properties until sale
agreements can be closed.
United States - Hawaii
Since Cambium sold its Hawaii leasehold interests, funds have
been withheld in an escrow account as security to the landlords
that the buyer will meet its rent payment obligations. Cambium
records the balance of the escrow as an asset, and that now
represents only 1% of total assets. The assignees of the plantation
leases continue to pay the rent to the landlords, so allowing the
release of escrow funds to Cambium as scheduled. The final payment
should be received in December 2020.
Conclusion
Good progress has been made in realising the Brazilian assets
and reducing ongoing operational expenditure. The absence of cash
rich investment purchasers has necessitated sales to buyers which,
while relatively creditworthy, require extended payment terms to
finance acquisitions. Legal documentation protects Cambium's
position, but these transactions will result in the proceeds of
sale being received over two to three years. There are current
prospects for disposals of the remaining assets on similar
terms.
Robert Rickman
Operations Manager
22 September 2020
Board of Directors
Antony R Gardner-Hillman, Independent Non-executive Chairman
Tony Gardner-Hillman is a solicitor of the Senior Courts of
England and Wales and has a first-class honours degree in
Jurisprudence from Oxford University. He co-founded the Jersey
Trust Company group in 1987 and was a director and shareholder for
21 years until he resigned as non-executive group chairman and
disposed of his remaining shareholding in the group holding company
in 2008. He was a partner of Crills, a Jersey law firm, from 1987
to 2002, and a Jersey resident non-executive partner of the
international law firm Holman, Fenwick & Willan (Jersey
partnership) from 1987 to 2003. Since 2008 he has worked full-time
on a varied portfolio of directorship appointments (including with
AIM listed companies).
Svante Adde, Independent Non-executive Director
Svante Adde studied at the Stockholm School of Economics to take
his BA degree in 1979. He joined Citibank in Stockholm that year as
an account officer and moved with Citicorp to London in 1983 to
work in M&A and corporate finance. Svante joined Lazard
Brothers in London in 1989 to head up their Nordic business which
he led until 2003 as a managing director/partner. During this
period Lazard acquired its Stockholm office for which Svante was
the managing director until 2003. Since 2003 he has worked as CFO
of Ahlstrom in Helsinki, managing director of Compass Advisers, and
from 2007 until 2013 was managing director and a senior adviser of
Pöyry Capital.
Mark Rawlins, Independent Non-executive Director
Mark Rawlins is a solicitor of the Senior Courts of England and
Wales and has an honours degree in Natural Sciences (Theoretical
Physics) from Cambridge University. He joined Linklaters in London
in 1993 and then moved to Arups (London) in 1997, before
transitioning to the practice of off-shore law in 1998 with Maples
and Calder, first in London and then in the Caribbean, where he
became a group partner in 2005. His legal practice is focused on
investment funds. He relocated to Jersey in 2011 and headed the
Jersey investment fund practice of Collas Crill from 2011 to 2017.
He currently practices as a lawyer with Hatstone Lawyers and acts
as a non-executive director in a personal capacity.
Directors' Report
For the year ended 30 April 2020
The Directors present their annual report and the audited
consolidated financial statements for the year ended 30 April 2020
(the "financial statements") of Cambium Global Timberland Limited
(the "Company") and entities under its control (together the
"Group").
Business of the Company
The Company was incorporated as a closed-ended Jersey-registered
investment company with limited liability on 19 January 2007. The
shares were successfully admitted to the Alternative Investment
Market ("AIM"), a market of the London Stock Exchange, with a dual
listing on the Channel Islands Securities Exchange ("CISX"). On 20
October 2014, the Company cancelled its listing on the CISX. The
Company has received a certificate from, and is regulated by, the
Jersey Financial Services Commission under the Collective
Investment Funds (Jersey) Law 1988, as amended.
The Company's initial strategy was: to generate superior total
returns to investors by effectively managing an optimised portfolio
of timberland properties and timberland-related investments
diversified by location, age class and species; to manage each of
the assets on an environmentally and socially sustainable basis;
and to manage assets for timber production with exposure to
emerging environmental markets. Subsequent to the strategic review,
completed in November 2012, the Company's strategy is to implement
an orderly realisation of the Group's investments in a manner which
maximises value for shareholders and returns surplus cash to
shareholders over time through ad hoc returns of capital.
A review of business during the year and future developments is
contained in the Chairman's Statement and Operations Manager's
Report.
Going concern
On 30 November 2012, the Independent Directors announced the
outcome of the strategic review initiated in June 2012. The
Directors proposed and recommended a change of investment policy
with a view to implementing an orderly realisation of the Group's
investments in a manner which maximises value for shareholders and
returns surplus cash to shareholders over time through ad hoc
returns of capital. This proposal was approved by shareholders at
an Extraordinary General Meeting ("EGM") on 22 February 2013. There
is no set period for the realisation of the portfolio.
The Board will continue to consider appropriate offers for all
the Company's assets, but adopted the view that shareholders'
interests are no longer best served by aiming to dispose of assets
within any specific time-frame, or by actively seeking purchasers
and incurring all the costs that involves. The Board therefore
moved forward with plans for harvesting and selling wood while it
continues to operate within the policy of an orderly realisation of
its real estate assets. During the year, the Group completed the
sale of the Agua Santa property in Minas Gerais (see note 13) and
agreed a deal for the sale of the Ribeirao do Gado property, also
in Minas Gerais, which was completed in May 2020. Subsequent to the
year end, the Group is in discussions with buyers to complete deals
for the sale of the plantations at the Forquilha property and the
entire 3R property.
As at the date of approval of these financial statements, the
Directors have no intention to instigate a winding-up of the
Company, a course of action that would require the approval of
shareholders. As a result, as at 30 April 2020 the assets and
liabilities of the Company pertaining to the Jersey operations have
not been classified as held for sale and its operations continue to
be treated as continuing.
The spread of the worldwide Coronavirus outbreak which commenced
before the reporting date was declared by the WHO as a Public
Health Emergency of International Concern on 30 January 2020 and as
a worldwide pandemic on 11 March 2020. The COVID-19 pandemic has
resulted in adverse impact to the global commercial market and
contributed to the volatility of many businesses and communities
throughout the world. The impact of the global spread of COVID-19
continues to evolve and will require continued assessment as the
pandemic follows its course. The extent of the impact on the
Group's investments and ultimately to the Group will depend on
future developments, including the duration of the outbreak and the
extent of the impact of the pandemic on the Brazilian economy, in
particular on the counterparties to the Group's agreements for the
sale of the Agua Santa and Ribeirao do Gado properties, but also on
other potential purchasers of the Group's remaining properties. The
virus is widespread in Brazil, and is likely to continue to be so
for some time, however there is evidence that Brazilian rural
activities continue largely unaffected, as demonstrated by the
recent agreements in negotiation to sell the 3R property and the
plantations at Forquilha. These new agreements, and the confidence
that existing ones will be fulfilled, are underpinned by the
competitive Brazilian exchange rate and continued demand for wood,
paper and agricultural products on a worldwide basis, despite an
economic slow-down in other sectors. The Group continues to monitor
the ability of service providers to continue to function with
employees working from home. In the opinion of the Board, as
COVID-19 continues to spread, the potential impacts are
increasingly difficult to assess, however there are, for the time
being, no signs that contracts entered into will not run their
course. The Board will nevertheless continue to monitor the
situation and take appropriate mitigating actions as necessary.
The Directors have reviewed the Group's cash flow forecasts to
31 December 2024 and consider that the Group has sufficient
resources available to pay its liabilities as they fall due. As a
result, the Directors believe it is appropriate to prepare the
financial statements on a going concern basis.
Results and dividends
The results of the Group are stated on page 17. The Directors do
not propose a dividend in respect of the financial year ended 30
April 2020 (2019: GBPNil).
The Board
The Board currently consists of three Directors. The Board
considers that the Directors are independent of the Operations
Manager.
It is required that Directors shall retire by rotation and stand
for re-election at regular intervals of no more than three years,
or in the case of a non-independent Director, every year. At each
AGM the number of Independent Directors required to retire (other
than any Director who wishes to retire without offering himself for
re-election) shall not exceed one third of the total number of
Directors. If two or more Directors have been in office for the
same period of time then the Director(s) to retire shall be
determined by agreement or by lot. Each Director is appointed for a
three-year term subject to the performance evaluation carried out
by the Remuneration Committee each year. The Board will agree
whether it is appropriate for a Director to seek an additional
term. There is no set notice period and no provision for
compensation upon early termination of appointment.
Directors
The Directors of the Company who held office during the year and
to the date of signing of these financial statements are detailed
below:
Appointed
31 July 2015 (re-appointed
Antony Gardner-Hillman 20 September 2018)
23 July 2013 (re-appointed 19 September 2019,
Roger Lewis resigned 1 May 2020)
Svante Adde 23 July 2013 (re-appointed 19 September 2019)
Mark Rawlins 1 May 2020
Directors' interests
Svante Adde had an interest in 160,840 shares of the Company at
30 April 2020, representing 0.22% of the Company's issued share
capital.
Substantial shareholdings
As at 30 April 2020 the Company has received notifications of
the following Shareholder interests in 5% or more of the issued
shares of the Company:
Number of
-------
Name of investors shares % held
------------------------ ------------ -------
Peter Gyllenhammar AB 23,667,097 32.10
Rath Dhu Limited 17,550,000 23.80
British Steel Pensions 7,263,495 9.85
Corporate governance
As a Jersey incorporated company and under the AIM Rules for
companies, it is not a requirement for the Company to comply with
the UK Corporate Governance Code published by the Financial
Reporting Council (the "FRC Code").
On 1 June 2019, pursuant to the Collective Investment Funds
(Jersey) Law 1988, the Jersey Financial Services Commission issued
its updated Codes of Practice for Certified Funds (the "CF Codes").
The CF Codes have been prepared and issued for the purpose of
establishing sound principles and providing practical guidance in
respect of any Jersey certified fund. The Company has considered
the eight fundamental principles of the CF Codes and has adopted
certain policies in order to comply with the CF Codes.
The Board considers that it is appropriate to report against the
principles of the CF Codes. The Directors believe that the Company
has complied throughout the accounting period, except where noted
below. The Board will continue to consider the Company's corporate
governance practices, periodically at Board meetings, so as to
remain satisfied with the degree of compliance with the principles
as set out in the CF Codes. The following describes how the
relevant principles of governance are applied to the Company.
Board meetings
The Board meets at least four times a year and between these
formal meetings there is regular contact between the Board and the
Operations Manager as well as other advisers. The Directors are
kept fully informed of investment and financial controls and other
matters that are relevant to the business of the Company. The
Directors have access, where necessary in the furtherance of their
duties, to independent professional advice at the expense of the
Company.
Any matters that should be brought to the Directors' attention
are provided in an agenda and all items are considered by the Board
and its advisers at the Company's quarterly meetings. Sufficient
notice is provided to all the Board members and the Operations
Manager prior to any formal meeting. Focus is given to a review of
the Company's investment performance, approval of financial
statements, approval of borrowings by the Company and its Group, as
well as associated matters such as investor relations, industry and
market conditions and the overall strategy of the Company. A set of
papers containing quarterly reporting is circulated to the Board in
advance of the meeting and the Directors may request to be added
any agenda items that they consider appropriate for Board
discussion. All Directors are able to request relevant financial
and regulatory information from the Company's engaged parties and
should expect to receive such items within a timely manner.
Additionally, each Director is required to inform the Board of any
potential or actual conflict of interest prior to Board
discussion.
Contractual agreements are not entered into without full and
proper consideration by the Board and Directors' contracts are
reviewed on an annual basis by the Company's Remuneration
Committee, as discussed below.
Committees of the Board
Audit Committee
The Board operates an Audit Committee, which comprises all of
the Directors. Roger Lewis acted as Chairman until his retirement
on 1 May 2020, when Antony Gardner-Hillman took over the role of
Chairman. The Audit Committee operates within defined terms of
reference as agreed by the Board which are available from the
Company Secretary upon request. The Audit Committee's function is
to ensure the Company's financial performance is properly reported
on and monitored and to advise the Board on whether the annual
report and financial statements, taken as a whole, are fair,
balanced and understandable, and provide the information necessary
for shareholders to assess the Company's performance, business
model and strategy. Where non-audit services are to be provided to
the Group by the Auditor, full consideration of the financial and
other implications on the independence of the Auditor arising from
any such engagement will be considered before engaging. The Audit
Committee meets at least twice a year and considers the items
below, however the list is not exhaustive:
-- the annual and interim financial statements;
-- internal control systems and procedures;
-- accounting policies of the Group;
-- the Auditor's effectiveness and independence;
-- announcements; and
-- the Auditor's remuneration and engagement, as well as any non-audit
services provided by them.
When required the Audit Committee meetings are also attended by
the Administrator and the Company's external Auditor.
Remuneration Committee
The Board operates a Remuneration Committee which comprises all
of the Directors. Svante Adde acts as Chairman of the Committee.
The Remuneration Committee operates within defined terms of
reference agreed by the Board which are available from the Company
Secretary upon request. Under its terms of reference, the Committee
expects to meet at least once a year. The main duties of the
Committee are outlined below, but the list is not exhaustive.
-- reviewing the performance and remuneration of the Board and of the
Chairman;
-- reviewing the performance and remuneration of the Operations Manager;
and
-- reviewing the performance and engagement terms of third party service
providers including the Company Secretary and Administrator.
As part of the evaluation process the Committee will evaluate
the composition and balance of the Board. The experience, skills
and effectiveness of each Director are also considered before
recommendation of their individual re-election. The remuneration of
each appointment is carefully considered in line with the quality
and experience of the provider and measured against the work they
undertake for the Company.
Details of the skills and experience of the Directors are
disclosed in the biography section on page 4.
The Chairman leads the performance evaluation of the Board and
the Directors lead the evaluation of the Chairman. The Board, as a
whole, evaluates its own performance and that of its committees and
third party advisers. This evaluation ensures that the Chairman
continues to remain independent from the Operations Manager and his
integrity and judgement does not conflict with his own interests
and those of the shareholders.
Meeting attendance
All members of the Board are expected to attend each Board
meeting and to arrange their schedules accordingly, although
non-attendance is unavoidable in certain circumstances.
The table below shows the number of meetings held during the
year ended 30 April 2020 and the number of Board and committee
meetings attended by each Director:
Audit Remuneration
Committee meetings
------------------------ ------ ---------------------- ------
Board meetings Committee meetings Other meetings
------------------------ ----------------- -------- ------------ --------------------- -----------------
Held Attended Held Attended Held Attended Held Attended
------------------------ ------ --------- -------- ------------ ------- ------------ ------ ---------
Antony Gardner-Hillman 4 4 3 3 1 1 2 2
Svante Adde 4 4 3 3 1 1 2 2
Roger Lewis 4 4 3 3 1 1 2 2
------------------------ ------ --------- -------- ------------ ------- ------------ ------ ---------
Board responsibilities
The Directors meet at least four times a year to consider, as
appropriate, such matters as:
-- the overall objectives for the Company;
-- risk assessment and management, including reporting, monitoring, governance
and control;
-- any shifts in strategy that may be appropriate in light of changes
in market conditions;
-- the appointment and ongoing monitoring, through regular reports and
meetings, of the Operations Manager, Administrator and other service
providers;
-- the Company's investment performance and investment realisations;
-- share price performance;
-- statutory obligations and public disclosure;
-- the shareholder profile of the Company; and
-- transactional and other general matters affecting the Company.
The Board has been continually engaged in a review of the
Company's strategy with the Operations Manager and Broker to ensure
the employment of appropriate strategies under prevailing market,
political and economic conditions at any particular time, within
the overall investment restrictions of the Company.
To support the review of the strategy, the Board has focused at
Board meetings on a review of individual investments and returns,
country exposure, the overall portfolio performance and any
associated matters. Additionally, a strong focus of attention is
given to marketing, investor relations, risk management and
compliance, peer group information and industry issues.
These matters are discussed by the Board to clearly demonstrate
the seriousness with which the Directors take their fiduciary
responsibilities and as an ongoing means of measuring and
monitoring the effectiveness of their actions.
The Board has engaged external providers to undertake the
administrative activities of the Company and the production of the
annual report and financial statements, which are independently
audited. Clearly documented contractual arrangements are in place
with these parties that define the areas where the Board has
delegated responsibility to them. Whilst the Board delegates
responsibility, it retains accountability for the functions it
delegates and is responsible for the systems of internal
control.
Relations with shareholders
The Board monitors the trading activity and shareholder profile
on a regular basis and places importance on effective communication
with shareholders. The Board and the Broker endeavour to maintain
dialogue with major shareholders. In addition, the Company reports
formally to shareholders twice a year, by way of the annual report
and interim report. All shareholders have the opportunity to attend
the AGM of the Company where a Director is present to answer any
questions.
Current information is provided to shareholders on an ongoing
basis through the Company's website: www.cambium.je.
Internal controls
The Board is ultimately responsible for the Company's system of
internal control and for reviewing its effectiveness. The Board
confirms that there is an ongoing process for identifying,
evaluating and managing the significant risks faced by the Company.
This process has been in place for the year under review and up to
the date of approval of this annual report and financial
statements. In line with general market practice for investment
companies, the Directors do not conduct a formal annual review of
the internal controls. However, the Board does conduct an annual
review of the financial reporting procedures and corporate
governance controls and feels that the procedures employed by the
service providers adequately mitigate the risks to which the
Company is exposed.
The key procedures which have been established to provide
effective internal controls are as follows:
-- Praxis Fund Services (Jersey) Limited ("Praxis Jersey"), under an Administration
Agreement dated 15 April 2016, is responsible for the administration
and company secretarial duties of the Company;
-- Praxis Fund Services Limited, under an outsourcing agreement with Praxis
Jersey dated 15 April 2016, is responsible for the sub-administration
and delegated company secretarial duties of the Company;
-- the Directors of the Company clearly define the duties and responsibilities
of their agents and advisers in the terms of their contracts;
-- Robert Rickman, the Operations Manager, is responsible for the oversight
of forest management and the realisation process for the timber assets
owned by the Company's subsidiaries;
-- the Board reviews financial information produced by the Operations
Manager on a regular basis;
-- the Company does not have an internal audit department. All of the
Company's management functions are delegated to independent third parties
and it is therefore felt that there is no need for the Company to have
an internal audit facility; and
-- on an ongoing basis, independently prepared compliance reports are
provided at each Board meeting.
The internal control systems are designed to meet the Company's
particular needs and the risks to which it is exposed. Accordingly,
the internal control systems are designed to manage rather than
eliminate the risk of failure to achieve business objectives and by
their nature can only provide reasonable and not absolute assurance
against misstatement and loss.
Bribery Act
The Bribery Act came into force in the UK on 1 July 2011. Whilst
the Act is UK legislation and is not directly applicable to Jersey,
its far-reaching provisions mean that it does impact on Jersey
companies. It is therefore important that the Company is aware of
the impact of the Act, the offences under the Act and how to
protect itself. The Company acknowledges its responsibility to
maintain adequate procedures to prevent acts of bribery and has
considered the risks and aspects of the Company's business that
might be improved to mitigate such risks. The Board has a zero
tolerance policy towards bribery and is committed to carrying out
business fairly, honestly and openly.
Foreign Account Tax Compliance Act ("FATCA")/Intergovernmental
Agreement ("IGA")
The Company's return for 2019 under the Jersey/US IGA (US FATCA)
was completed on time in June 2020.
The Company complied on time with on-boarding procedures, the
due diligence process to identify all pre-existing accounts, and
annual reports to date under the Jersey/UK IGA (UK FATCA). UK FATCA
has subsequently been superseded by the Common Reporting Standard
(see below).
Some accounts are exempted from reporting and this includes
accounts for certain types of listed shares.
Common Reporting Standard ("CRS")
The Jersey regulations that give effect to the CRS in Jersey
came into effect from 1 January 2016. All new account holders were
required to complete self-certification forms and any high value
pre-existing individual account holders needed to be identified by
31 December 2016. The first report under CRS, in respect of
calendar year 2016, was due and submitted to the Jersey Taxes
Office by 30 June 2017. The Company's CRS return for 2019 was
completed on time in June 2020.
Directors' responsibilities with regards to financial
reporting
The Directors are responsible for preparing the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law they have
elected to prepare the financial statements in accordance with
International Financial Reporting Standards and applicable law.
Under the Companies (Jersey) Law 1991, the Directors must not
approve the financial statements for any period unless they are
satisfied that the financial statements give a true and fair view
of the state of affairs of the Group and of the profit or loss of
the Group for that period. In preparing these financial statements,
the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements; and
-- assess the Company's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern; and
-- use the going concern basis of accounting unless they either intend
to liquidate the Company or to cease operations, or have no realistic
alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's
transactions and disclose with reasonable accuracy at any time the
financial position of the Group and enable them to ensure that the
financial statements comply with Companies (Jersey) Law 1991. They
are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error,
and have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in Jersey governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
In the opinion of the Directors, the annual report and audited
consolidated financial statements taken as a whole, are fair,
balanced and understandable and provide the information necessary
to assess the Company's performance, business model and
strategy.
Auditor
The auditor of the Company, KPMG Channel Islands Limited, has
expressed its willingness to continue in office and a resolution
giving authority to reappoint KPMG Channel Islands Limited will be
proposed at the forthcoming AGM.
Directors' remuneration report
An ordinary resolution for approval of the Remuneration
Committee's report will be put to shareholders at the forthcoming
AGM.
Company performance
The Board is responsible for the Company's investment strategy
and performance, although the management oversight of the Company's
investment portfolio is delegated to the Operations Manager.
On behalf of the Board
Antony Gardner-Hillman Mark Rawlins
22 September 2020 22 September 2020
Audit Committee Report
For the year ended 30 April 2020
The Company has established an Audit Committee with formally
delegated duties and responsibilities which are documented in
written terms of reference, copies of which are available from the
Company Secretary.
Chairman and Membership
During the year, the Audit Committee was chaired by Roger Lewis,
until his resignation as a Director on 1 May 2020, from which date
Antony Gardner-Hillman took over as chair of the Committee. Its
members are all three members of the Board of Directors, each of
whom is an independent, non-executive Director. The Audit Committee
meets not less than twice a year and meets with the external
Auditor at least once a year. The performance, membership and terms
of reference of the Audit Committee are kept under review.
Duties
The principal duties of the Audit Committee in discharging its
responsibilities include reviewing the Annual Report and audited
consolidated financial statements, the Interim Report and unaudited
consolidated financial statements, the system of internal control
and the terms of engagement and remuneration of the external
Auditor. The Audit Committee considers, discusses and agrees the
nature and scope of the audit and reviews the effectiveness of the
audit and the independence and objectivity of the external Auditor.
The Audit Committee is responsible for monitoring the financial
reporting process, including the appropriateness of the Group's
accounting policies, and the effectiveness of the Company's
internal control policies and procedures for the identification,
assessment and reporting of risks and the prevention and detection
of fraud. The Audit Committee is also responsible for overseeing
the Company's relationship with the external Auditor, including
making recommendations to the Board in relation to the appointment,
re-appointment or removal of the Company's external Auditor.
Financial Reporting and Audit
The Audit Committee reviews, considers and, if thought
appropriate, recommends to the Board the approval of the contents
of the Interim Report and unaudited consolidated financial
statements and the Annual Report and audited consolidated financial
statements, together with the report of the external Auditor. The
Audit Committee focuses particularly on any changes in accounting
policies and practices, major areas of judgement, including the
fair value of investments, significant adjustments arising from the
audit, the going concern assessment, compliance with accounting
standards, and compliance with legal, regulatory and corporate
governance requirements.
The Audit Committee provides a formal forum through which the
external Auditor may discuss any problems or reservations which
arise from the audit or otherwise and the external Auditor is
invited to attend meetings at which the annual consolidated
financial statements are considered.
After discussion with the Operations Manager, the Audit
Committee is in agreement with the key sources of estimation
uncertainty, as described in note 4 to the consolidated financial
statements.
Note 5 to the consolidated financial statements highlights that
the total carrying values of the Group's assets and liabilities
were GBP9.49 million and GBP1.79 million respectively. The Group's
assets and liabilities are valued based on the accounting policies
described in detail in note 3 to the consolidated financial
statements. Valuation methodologies have been discussed with the
Operations Manager. Valuations are obtained from external
independent valuers on an annual basis, which are reviewed by the
Audit Committee. The external valuations, latest offers received
for the Group's assets and other factors that may influence
potential purchasers are taken into consideration when estimating
the fair values of GBP5.61 million for the Group's assets held for
sale and of GBP3.18 million for the contractual receivable relating
to the Agua Santa sale in these consolidated financial
statements.
After due consideration the Audit Committee recommends to the
Board that the Annual Report and consolidated financial statements,
taken as a whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess the Group's
performance, business model and strategy.
External Auditor
The Audit Committee keeps under review the relationship with the
external Auditor, including (but not limited to) the independence
and objectivity of the external Auditor and the consideration of
fees paid to the external Auditor together with any other fees
payable in respect of non-audit services, and discusses with the
external Auditor issues such as compliance with accounting
standards. All non-audit services are pre-approved by the Audit
Committee after they are satisfied that relevant safeguards are in
place to protect the Auditor's objectivity and independence.
This is the thirteenth year of KPMG Channel Islands Limited's
appointment as the Company's external Auditor. The Audit Committee
will continue to monitor the suitability of the external Auditor
and whether the length of tenure warrants a formal tender of the
Group's audit.
Internal Controls
The Operations Manager, Administrator and Sub-Administrator
together maintain a system of internal control which they report to
the Audit Committee. The Audit Committee has reviewed the need for
an internal audit function and has decided that the systems and
procedures employed by the Operations Manager, Administrator and
Sub-Administrator provide sufficient assurance that a sound system
of risk management and internal control is maintained to safeguard
shareholders' investment and the assets of the Group. An internal
audit function specific to the Group has subsequently been
considered unnecessary.
The Audit Committee has considered non-financial areas of risk
such as disaster recovery and staffing levels of service
providers.
On behalf of the Audit Committee
Antony Gardner-Hillman
Audit Committee Chairman
22 September 2020
Remuneration Committee Report
For the year ended 30 April 2020
Introduction
An ordinary resolution to receive and adopt this report will be
put to shareholders at the forthcoming AGM.
Policy on Directors' fees
The Remuneration Committee was appointed on 26 January 2010. It
comprises all three members of the Board of Directors and is
chaired by Svante Adde.
The Board's policy is that the remuneration of the Directors
should reflect the experience of each Board Member and the Board as
a whole. It is ensured that the remuneration of each Director
reflect their duties, responsibilities and time spent so as to be
fair and comparable with similarly sized companies, with similar
regulation and structure. The level of remuneration should be
sufficient to retain the Directors to oversee the Company properly
and to reflect its specific circumstances. It is intended that this
policy will continue for the year ending 30 April 2021 and
subsequent years.
Furthermore, the fees for the Directors are determined within
limits set out in the Company's Articles of Association. The
present limit is an aggregate of GBP200,000 per annum. The
Directors are not eligible for bonuses or incentive schemes.
Details of the Directors' remuneration during the year are
disclosed below.
During the year the Directors received the following contractual
Directors' fees from the Company:
30 April 30 April
2020 2019
Total Total
GBP GBP
----------------------------------- --------- ---------
Antony Gardner-Hillman (Chairman) 48,000 46,667
Svante Adde 25,000 25,000
Roger Lewis 25,000 25,000
98,000 96,667
----------------------------------- --------- ---------
The Directors are also entitled to be repaid all reasonable out
of pocket expenses properly incurred by them in connection with the
performance of their duties or in attending meetings of the Board
or of committees or general meetings.
The Board has a breadth of experience relevant to the Company
and has access to independent professional advice at the Company's
expense where they deem it necessary to discharge their
responsibility as Directors. The Board, with assistance of its
Committees, can identify the need for any new appointments and
consideration will be given as to whether a formal induction
process is appropriate and if any relevant training needs to be
offered for the role. Directors believe that any changes to the
Board's composition can be managed without undue disruption.
Other than the above, there were no other fees paid to the
Board. The Company did not engage the services of an external
remuneration consultant during the year.
On behalf of the Remuneration Committee
Svante Adde
Remuneration Committee Chairman
22 September 2020
Independent Auditor's Report to the Members of Cambium Global
Timberland Limited
Our opinion is unmodified
We have audited the consolidated financial statements of Cambium
Global Timberland Limited (the "Company") and its subsidiaries
(together, the "Group"), which comprise the consolidated statement
of financial position as at 30 April 2020, the consolidated
statements of comprehensive income, changes in equity and cash
flows for the year then ended, and notes, comprising significant
accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial
statements:
-- give a true and fair view of the financial position of the
Group as at 30 April 2020, and of the Group's financial performance
and cash flows for the year then ended;
-- are prepared in accordance with International Financial Reporting Standards; and
have been properly prepared in accordance with the Companies
(Jersey) Law, 1991.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities are described below. We have fulfilled our ethical
responsibilities under, and are independent of the Company and
Group in accordance with, UK ethical requirements including FRC
Ethical Standards, as applied to listed entities. We believe that
the audit evidence we have obtained is a sufficient and appropriate
basis for our opinion.
Emphasis of matter - material uncertainty relating to valuation
of investment property
We draw attention to note 13 ii) c of the consolidated financial
statements, which describes the unique characteristics of the
Forquilha Investment Property and the inherent uncertainties in
arriving at the carrying valuation and, furthermore, that the fair
value may differ materially from the actual value that would be
realised if the property is sold.
Our opinion is not modified in this respect.
We have identified the valuation of the investment property as a
key audit matter in pages 13 and 14 of this report.
Key audit matters: our assessment of the risks of material
misstatement
Key audit matters are those matters that, in our professional
judgment, were of most significance in the audit of the
consolidated financial statements and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) identified by us, including those which had the greatest
effect on: the overall audit strategy; the allocation of resources
in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters. In arriving at our audit opinion above, the key audit
matter was as follows:
Valuation of investment property and Basis: Our audit procedures included:
plantations (included in Assets Held The Group's holding of investment Internal Controls:
for Sale) property and plantations represents Assessed the design and
GBP5,544,007; (2019: GBP14,189,142) 72% (2019: 103%) of implementation of the control over
Refer to accounting policy in note 3 its net assets, and 99% (2018: 99%) the valuation of investment property
and notes 13 and 14 of the of Assets Held for Sale. and plantations.
disclosures. Evaluating experts engaged by
management:
Assessed the scope, independence,
competence, and objectivity of the
third party valuer engaged
by the management.
As described in Note 3, the Group
accounts for investment property and Challenging managements' assumptions
plantations at fair and inputs:
value. In the absence of quoted Inspected the third party valuation
market prices or comparable reports for the investment property
observable market transactions, and plantations to
the Directors are required to identify underlying key inputs such
estimate the fair value of investment as acreage, plantable area, wood
property and plantations prices and establishment
using a valuation methodology. This costs. Agreed the key inputs to
requires the application of judgment relevant sources such as real estate
and the use of assumptions records, inventory reports
such as those described in note 13. and industry benchmarks and tested
For investment property and reasonableness of discounts applied
plantations where no sale to appraised values
agreements or offers were in place, with reference to wood and land price
the Directors engaged a third party movements.
valuer to assist in Reviewed third party valuation
the valuation process and applied a reports to obtain an understanding of
discount to the third party valuation their valuation process
to estimate the and key judgements and assumptions
fair value of investment property and used in determining the value of the
plantations. properties. Compared
Risk: the valuation adopted by the
The judgments and assumptions made in Directors to the value derived by the
estimating the fair value of third party valuer. This
investment property and included challenging the assumptions
plantations may not reflect actual of the Directors in determining the
outcome which this may result in the valuation such as
fair value being materially wood prices, discount rates, sales
different from the amount that may costs, offers received and other
ultimately be realized from sale of factors that potential
these assets. purchasers would consider. We
Specifically for Forquilha investment obtained support for those
property, as outlined in note 13 ii) assumptions such as land and wood
c, given its unique sale contracts and real estate and
realty characteristics, there is environmental aspect confirmation.
increased inherent uncertainties in Compared the valuations in the
arriving at the carrying financial statements to the latest
valuation. sales offers received by
the Group and inspected
correspondence and agreements with
prospective buyers of the properties
and plantations to determine the
progress of negotiations.
Inspected board minutes and assessed
whether key issues in relation to
regulations / environmental
laws that would impact the valuation
were appropriately discussed and
evidenced as being taken
into consideration by the Directors.
Assessing Disclosures:
Considered the appropriateness and
sufficiency of disclosures in the
financial statements
including compliance with the
requirements of IFRS 5 and 13.
-------------------------------------- -------------------------------------- --------------------------------------
Our application of materiality and an overview of the scope of
our audit
Materiality for the consolidated financial statements as a whole
was set at GBP157,000, determined with reference to a benchmark of
Group net assets of GBP7,703,686, of which it represents
approximately 2.0% (2019: 5%).
We reported to the Audit Committee any corrected or uncorrected
identified misstatements exceeding GBP7,900 in addition to other
identified misstatements that warranted reporting on qualitative
grounds.
Our audit of the Group was undertaken to the materiality level
specified above, which has informed our identification of
significant risks of material misstatement and the associated audit
procedures performed in those areas as detailed above.
The group team performed the audit of the Group as if it was a
single aggregated set of financial information. The audit was
performed using the materiality level set out above and covered
100% of total group revenue, total group profit before tax, and
total group assets and liabilities.
We have nothing to report on going concern
The directors have prepared the consolidated financial
statements on the going concern basis as they do not intend to
liquidate the Group or to cease its operations, and as they have
concluded that the Group's financial position means that this is
realistic. They have also concluded that there are no material
uncertainties that could have cast significant doubt over its
ability to continue as a going concern for at least a year from the
date of approval of the financial statements ("the going concern
period").
In our evaluation of the directors' conclusions, we considered
the inherent risks to the Group's activities including where
relevant the impact of the COVID-19 pandemic and the requirements
of the applicable financial reporting framework. We analysed how
those risks might affect the Group's financial resources or ability
to continue operations over the going concern period, including
challenging the underlying data and key assumptions used to make
the assessment, and evaluated the directors' plans for future
actions in relation to their going concern assessment.
Based on this work, we are required to report to you if we have
concluded that the use of the going concern basis of accounting is
inappropriate or there is an undisclosed material uncertainty that
may cast significant doubt over the use of that basis for a period
of at least a year from the date of approval of the consolidated
financial statements. We have nothing to report in these
respects.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the Annual
Report and Audited Consolidated Financial Statements but does not
include the consolidated financial statements and our auditor's
report thereon. Our opinion on the consolidated financial
statements does not cover the other information and we do not
express an audit opinion or any form of assurance conclusion
thereon.
In connection with our audit of the consolidated financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements
or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing
to report in this regard.
We have nothing to report on other matters on which we are
required to report by exception
We have nothing to report in respect of the following matters
where the Companies (Jersey) Law 1991 requires us to report to you
if, in our opinion:
-- adequate accounting records have not been kept by the Company; or
the Company's consolidated financial statements are not in
agreement with the accounting records; or
we have not received all the information and explanations we
require for our audit.
Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on page 9,
the directors are responsible for: the preparation of the
consolidated financial statements including being satisfied that
they give a true and fair view; such internal control as they
determine is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement,
whether due to fraud or error; assessing the Group and Company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern; and using the going concern basis
of accounting unless they either intend to liquidate the Group or
the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue
our opinion in an auditor's report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the consolidated financial
statements.
A fuller description of our responsibilities is provided on the
FRC's website at www.frc.org.uk/auditorsresponsibilities .
The purpose of this report and restrictions on its use by
persons other than the Company's members, as a body
This report is made solely to the Company's members, as a body,
in accordance with Article 113A of the Companies (Jersey) Law 1991.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members, as a body,
for our audit work, for this report, or for the opinions we have
formed.
Benjamin Honeywood
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognized Auditors
Jersey
23 September 2020
Consolidated Statement of Comprehensive Income
For the year ended 30 April 2020
30 April 2020 30 April 2019
Continuing operations Notes GBP GBP
--------------------------------------------- ---------- ------------- --------------
Finance costs 9 (115,996) (97,510)
Net foreign exchange loss (1,282) (2,501)
------------------------------------------------- ------ ------------- --------------
Net finance costs (117,278) (100,011)
------------------------------------------------- ------ ------------- --------------
Administrative expenses 6 (472,596) (574,990)
Loss for the year from continuing operations (589,874) (675,001)
------------------------------------------------- ------ ------------- --------------
Discontinued operations
Loss on disposal of assets held for
sale 14 (20,696) (72,556)
(Decrease)/increase in fair value of
assets and disposal group held for sale 5,14 (1,637,347) 587,773
(1,658,043) 515,217
------------------------------------------------------------------------ --------------
Administrative expenses 6 (145,171) (74,077)
Forestry management expenses 7 (5,351) (6,349)
Other operating forestry expenses 8 (434,761) (615,322)
(585,283) (695,748)
------------------------------------------------------------------------ --------------
Operating loss from discontinued operations (2,243,326) (180,531)
------------------------------------------------- --------------------- --------------
Finance costs 9 (24,326) (3,350)
Net foreign exchange loss (101,298) -
------------------------------------------------- --------------------- --------------
Net finance costs (125,624) (3,350)
------------------------------------------------- --------------------- --------------
Loss before taxation from discontinued
operations (2,368,950) (183,881)
Taxation charge 10 - -
------------------------------------------------- ------ ------------- --------------
Loss for the year from discontinued
operations (2,368,950) (183,881)
------------------------------------------------- --------------------- --------------
Loss for the year (2,958,824) (858,882)
------------------------------------------------- --------------------- --------------
Other comprehensive loss
Items that are or may be reclassified
to profit or loss, net of tax
Foreign exchange loss on translation
of discontinued foreign operations 16 (3,239,954) (816,903)
Other comprehensive loss for
the year (3,239,954) (816,903)
----------------------------------------------- ------ ------------- --------------
Total comprehensive loss for the year (6,198,778) (1,675,785)
------------------------------------------------- --------------------- --------------
Basic and diluted loss per share 11 (4.01) pence (1.07) pence
------------------------------------------------- ------ ------------- --------------
Basic and diluted loss per share from 11 (0.80) pence (0.84) pence
continuing operations
------------------------------------------------- ------ ------------- --------------
Basic and diluted loss per share from 11 (3.21) pence (0.23) pence
discontinued operations
------------------------------------------------- ------ ------------- --------------
All gains and losses from continuing and discontinued operations
are attributable to the equity holders of the parent Company. There
are no minority interests.
The notes on pages 21 to 46 form an integral part of these
consolidated financial statements.
Consolidated Statement of Financial Position
At 30 April 2020
30 April 2020 30 April 2019
Notes GBP GBP
Non-current assets
Trade and other receivables 15 1,441,991 -
----------- --------------
Current assets
Assets held for sale 14 5,608,306 14,292,311
Trade and other receivables 15 1,816,048 208,641
Cash and cash equivalents 625,612 1,137,281
----------- --------------
Total current assets 8,049,966 15,638,233
----------- --------------
Total assets 9,491,957 15,638,233
------------------------------- ---------------- --------------
Current liabilities
Liabilities held for sale 14 46,269 74,072
Loan payable to related party 17 1,652,347 1,539,237
Trade and other payables 18 89,655 77,529
Total liabilities 1,788,271 1,690,838
------------------------------- ---------------- --------------
Net assets 12 7,703,686 13,947,395
------------------------------- --- ----------- --------------
Equity
Stated capital 21 2,000,000 2,000,000
Distributable reserve 22 82,603,312 82,648,243
Translation reserve 22 (437,729) 2,802,225
Retained loss (76,461,897) (73,503,073)
------------------------------- ---------------- --------------
Total equity 7,703,686 13,947,395
------------------------------- --- ----------- --------------
Net asset value per share 12 10.4 pence 18.8 pence
------------------------------- --- ----------- --------------
These consolidated financial statements were approved and
authorised for issue on 22 September 2020 by the Board of
Directors.
Antony Gardner-Hillman Mark Rawlins
The notes on pages 21 to 46 form an integral part of these
consolidated financial statements.
Consolidated Statement of Changes in Equity
For the year ended 30 April 2020
Stated Distributable Translation Retained
capital reserve reserve loss Total
GBP GBP GBP GBP GBP
---------------------------------------- ---------- -------------- ------------ ------------- ------------
At 30 April 2019 2,000,000 82,648,243 2,802,225 (73,503,073) 13,947,395
Total comprehensive loss for
the year
Loss for the year - - - (2,958,824) (2,958,824)
Other comprehensive loss
Foreign exchange losses on translation
of discontinued foreign operations
(note 16) - - (3,239,954) - (3,239,954)
---------------------------------------- ---------- -------------- ------------ ------------- ------------
Total comprehensive loss - - (3,239,954) (2,958,824) (6,198,778)
---------------------------------------- ---------- -------------- ------------ ------------- ------------
Transactions with owners
Share buy-backs (note 21) - (44,931) - - (44,931)
---------------------------------------- ---------- -------------- ------------ ------------- ------------
Total transactions with owners - (44,931) - - (44,931)
---------------------------------------- ---------- -------------- ------------ ------------- ------------
At 30 April 2020 2,000,000 82,603,312 (437,729) (76,461,897) 7,703,686
---------------------------------------- ---------- -------------- ------------ ------------- ------------
Stated Distributable Translation Retained
capital reserve reserve loss Total
GBP GBP GBP GBP GBP
---------------------------------------------------- -------------- ------------ ------------- ------------
At 30 April 2018 2,000,000 83,589,060 3,619,128 (72,644,191) 16,563,997
Total comprehensive income for
the year
Profit for the year - - - (858,882) (858,882)
Other comprehensive loss
Foreign exchange losses on translation
of discontinued foreign operations
(note 16) - - (816,903) - (816,903)
---------------------------------------- ---------- -------------- ------------ ------------- ------------
Total comprehensive income - - (816,903) (858,882) (1,675,785)
---------------------------------------- ---------- -------------- ------------ ------------- ------------
Transactions with owners
Share buy-backs (note 21) - (940,817) - - (940,817)
---------------------------------------- ---------- -------------- ------------ ------------- ------------
Total transactions with owners - (940,817) - - (940,817)
---------------------------------------- ---------- -------------- ------------ ------------- ------------
At 30 April 2019 2,000,000 82,648,243 2,802,225 (73,503,073) 13,947,395
---------------------------------------- ---------- -------------- ------------ ------------- ------------
The notes on pages 21 to 46 form an integral part of these
consolidated financial statements.
Consolidated Statement of Cash Flows
For the year ended 30 April 2020
30 April 2020 30 April 2019
Note GBP GBP
------------------------------------------------------- ---------- --------------
Cash flows from operating activities
Loss for the year (2,958,824) (858,882)
Adjustments for:
Decrease/(Increase) in fair value
of assets and disposal group held
for sale 14 1,637,347 (587,773)
Loss on disposal of assets held for
sale 14 20,696 72,556
Net finance costs, excluding foreign
exchange movements - continuing operations 9 115,996 97,510
Net finance costs, excluding foreign
exchange movements - discontinued
operations 9 24,326 3,350
Decrease in trade and other receivables
(excluding receivables reclassified
from assets held for sale) 165,779 161,274
Decrease in trade and other payables (15,677) (78,053)
(1,010,357) (1,190,018)
Tax paid - -
-------------------------------------------------- --------------- --------------
Net cash used in operating activities (1,010,357) (1,190,018)
-------------------------------------------------- --------------- --------------
Cash flows from investing activities - discontinued operations
Net proceeds received from sale of assets
held for sale 727,790 353,801
Cost capitalised to land and plantations 14 (105,317) (151,776)
Net cash from investing activities 622,473 202,025
-------------------------------------------------- --- ---------- --------------
Cash flows from financing activities
Share buy-backs 21 (44,931) (940,817)
Net finance costs, excluding foreign
exchange movements (27,212) (5,895)
Net cash used in financing activities (72,143) (946,712)
-------------------------------------------------- --------------- --------------
Net decrease in cash and cash equivalents (460,027) (1,934,705)
-------------------------------------------------- --------------- --------------
Foreign exchange movements (51,642) 123
Balance at the beginning of the year 1,137,281 3,071,863
-------------------------------------------------- --------------- --------------
Balance at the end of the year 625,612 1,137,281
-------------------------------------------------- --- ---------- --------------
The notes on pages 21 to 46 form an integral part of these
consolidated financial statements.
Notes to the Consolidated Financial Statements
For the year ended 30 April 2020
1. General information
The Company and its subsidiaries (together the "Group") is
nearing the end of a process of realising a portfolio of forestry
based properties managed on an environmentally and socially
sustainable basis. Assets are managed for timber production, with
exposure to emerging environmental markets. As at the year end date
the Group's remaining forestry assets are all located in
Brazil.
The Company is a closed-ended company with limited liability,
incorporated in Jersey, Channel Islands on 19 January 2007. The
address of its registered office is Charter Place, 23/27 Seaton
Place, St Helier, Jersey JE1 1JY.
These consolidated financial statements (the "financial
statements") were approved and authorised for issue on 22 September
2020 and signed by Mark Rawlins and Antony Gardner-Hillman on
behalf of the Board.
The Company is listed on AIM, a market of the London Stock
Exchange.
2. Basis of preparation
The consolidated financial information included in the financial
statements for the year ended 30 April 2020 has been prepared in
accordance with International Financial Reporting Standards
("IFRS") issued and adopted by the International Accounting
Standards Board ("IASB"). They give a true and fair view and are in
compliance with applicable legal and regulatory requirements of the
Companies (Jersey) Law 1991.
The financial statements have been prepared in Sterling, which
is the presentation currency and functional currency of the
Company, and under the historical cost convention, except for
investment property, plantations, buildings, assets and liabilities
held for sale and certain financial instruments, which are carried
either at fair value less cost to sell.
The preparation of the financial statements in accordance with
IFRS requires Directors to make estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and
liabilities, and the disclosure of contingent liabilities at the
date of the financial statements. It also requires management to
exercise its judgement in the process of applying accounting
policies. The main area of the financial statements where
significant estimates are made by the Directors is in determining
the valuation and fair value of the assets held for sale and
contractual receivables for the sale of land and plantations as
disclosed in notes 4 and 13. The areas involving high degrees of
judgement or complexity, or areas where the assumptions and
estimates are significant to financial statements are disclosed in
note 4.
Going concern and assets and liabilities held for sale
On 30 November 2012, the Directors announced the outcome of the
strategic review initiated in June 2012. The Directors proposed and
recommended a change of investment policy with a view to
implementing an orderly realisation of the Group's investments in a
manner which maximises value for shareholders, and to returning
surplus cash to shareholders over time through ad hoc returns of
capital. This proposal was approved by shareholders at an
Extraordinary General Meeting ("EGM") on 22 February 2013. There is
no set period for the realisation of the portfolio.
Since the EGM, the portfolio has been reviewed by the Directors
with a view to an orderly sale of the assets in such a manner as to
enable their inherent value to be realised. As part of this
process, the Directors plan to sell the remaining assets when
acceptable offers are received. As a result, as at 30 April 2020,
the portfolio of assets is classified as held for sale (and its
transactions for the year as discontinued operations) under IFRS 5
'Non-current Assets Held for Sale and Discontinued Operations', as
disclosed in note 14.
As at the date of approval of these financial statements, the
Directors have no intention to instigate a winding-up of the
Company, a course of action that would require the approval of
shareholders. As a result, as at 30 April 2020 the assets and
liabilities of the Company pertaining to the Jersey operations have
not been classified as held for sale and its operations continue to
be treated as continuing.
The COVID-19 pandemic, commenced before the reporting date, has
resulted in adverse impact on the global commercial market and
contributed to the volatility of businesses and communities
throughout the world. The impact is still evolving and will require
continued assessment whilst the pandemic continues. The extent of
the impact on the Group's investments and ultimately on the Group
will depend on future developments, including the duration of the
outbreak and the effect on the Brazilian economy, in particular on
the counterparties to the Group's agreements for the sale of the
Agua Santa and Ribeirao do Gado properties, but also on other
potential purchasers of the Group's remaining properties. The virus
is widespread in Brazil, and is likely to continue to be so for
some time, however there is evidence that Brazilian rural
activities continue largely unaffected, as demonstrated by the
recent agreements in negotiation to sell the 3R property and the
plantations at Forquilha. These new agreements, and the confidence
that existing ones will be fulfilled, are underpinned by the
competitive Brazilian exchange rate and continued demand for wood,
paper and agricultural products on a worldwide basis, despite an
economic slow-down in other sectors. The Group continues to monitor
the ability of service providers to continue to function with
employees working from home. In the opinion of the Board, as
COVID-19 continues to spread, the potential impacts are
increasingly difficult to assess, however the Board will continue
to monitor the situation and take available mitigating actions as
appropriate.
The Directors have reviewed the Group's cash flow forecasts,
which cover the period to 31 December 2024 and consider that the
Group has sufficient resources available to pay its liabilities as
they fall due. On the basis of the above, the Directors believe it
is appropriate to prepare the financial statements on a going
concern basis.
2. Basis of preparation (continued)
New, revised and amended standards
At the date of authorisation of these financial statements, the
following relevant amended standards, which have not been applied
in these financial statements, were in issue but not yet
effective:
-- IAS 1 (amended), "Presentation of Financial Statements" (amendments
regarding the classification of liabilities, effective for periods
commencing on or after 1 January 2022; and
-- IAS 37 (amended), "Provisions, Contingent Liabilities and Contingent
Assets" (amendments regarding the costs to include when assessing
whether a contract is onerous, effective for accounting periods commencing
on or after 1 January 2022).
In addition, the IASB has issued the following publications:
-- 'Amendments to References to the Conceptual Framework in IFRS Standards',
published in March 2018, which updated certain Standards and Interpretations
with regard to references to and quotes from the framework or to indicate
where they refer to a different version of the Conceptual Framework,
effective for accounting periods commencing on or after 1 January
2020;
-- 'Definition of Material (Amendments to IAS 1 and IAS 8)', published
in October 2018, which has amended IAS 1 and IAS 8 to clarify the
definition of 'material' and to align the definition used in the Conceptual
Framework and the standards, effective for accounting periods commencing
on or after 1 January 2020;
-- 'Amendments regarding pre-replacement issues in the context of the
IBOR reform', published in September 2019, which has amended IFRS
7, IFRS 9 and IAS 39, effective for accounting periods commencing
on or after 1 January 2020; and
-- 'Annual Improvements to IFRS Standards 2018-2020', published in May
2020, which has amended certain existing standards, effective for
accounting periods commencing on or after 1 January 2022.
The Directors do not anticipate that the adoption of these
standards in future periods will have a material impact on the
financial statements of the Group.
New accounting standards and interpretations effective and
adopted
The following amended standard has been applied for the first
time in these financial statements.
-- IFRS 9 (amended), "Financial Instruments" (amendments regarding prepayment
features with negative compensation and modifications of financial
liabilities, effective for periods commencing on or after 1 January
2019).
-- IFRIC 23, "Uncertainty over Income Tax Treatments" (clarifies the
accounting for uncertainties over income tax treatments under IAS
12, effective for periods commencing on or after 1 January 2019).
In addition, the IASB completed its Annual Improvements
2015-2017 Cycle project in December 2017. This project has amended
certain existing standards and interpretations, effective for
accounting periods commencing on or after 1 January 2019.
The adoption of these standards and amendments has had no
material impact on the financial statements of the Group.
3. Significant accounting policies
A summary of the principal accounting policies, all of which
have been applied consistently throughout the year, is set out
below.
Basis of consolidation
The financial statements incorporate the financial statements of
the Company and its subsidiaries, including special purpose
entities ("SPEs") controlled by the Company, made up to 30 April
2020. Control is achieved when the Company is exposed, or has
rights, to variable returns from its involvement with an investee
and has the ability to affect those returns through its power over
the investee.
a) Subsidiaries
Subsidiaries are entities controlled by the Group. The financial
statements of subsidiaries are included in the financial statements
from the date that control commences until the date that control
ceases. The accounting policies of subsidiaries have been changed
when necessary to align them with the policies adopted by the
Group.
b) Transactions eliminated on consolidation
When necessary, adjustments are made to the financial statements
of subsidiaries to bring the accounting policies used in line with
those used by the Group. All intra-group transactions, balances,
income and expenses are eliminated on consolidation.
c) Discontinued operations
A discontinued operation is a component of the Group's business,
the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which:
-- represents a separate major line of business or geographical area of operations;
-- is part of a single co-ordinated plan to dispose of a
separate major line of business or geographical area of
operations;
-- is a subsidiary acquired exclusively with a view to re-sale.
Classification as a discontinued operation occurs at the
earliest of disposal or when the operation meets the criteria to be
classified as held-for-sale.
When an operation is classified as a discontinued operation, the
comparative statement of comprehensive income and statement of cash
flows are re-presented as if the operation had been discontinued
from the start of the comparative year.
Revenue and other income
Revenue is recognised when it is probable that the economic
benefits associated with the transaction will flow to the Group and
the amount of revenue can be measured reliably. Revenues are
accounted for on an accruals basis.
3. Significant accounting policies (continued)
Basis of consolidation (continued)
Finance income and finance costs
Finance income comprises interest income on funds invested.
Interest income and expense are accrued on a time basis by
reference to the principal outstanding and the effective interest
rate applicable.
Finance costs comprise bank charges and interest payable on the
loan from a related party.
Foreign currency gains and losses are reported on a net
basis.
Foreign currencies
a) Functional and presentation currency
Items included in the financial statements of each of the Group
entities are measured in the currency of the primary economic
environment in which the entity operates (the "functional
currency"). The Group has selected Sterling as its presentation
currency, as it is the currency in which capital has been raised
and dividends paid, and is the functional currency of the
Company.
b) Transactions and balances
Transactions in currencies other than Sterling are recorded at
the rates of exchange prevailing on the dates of transactions. At
each period end date, monetary assets and liabilities that are
denominated in foreign currencies are translated at the rates
prevailing on the period end date. Non-monetary assets and
liabilities that are carried at fair value and denominated in
foreign currencies are translated at the rates prevailing at the
date when the fair value was determined. Gains and losses arising
on translation are included in net profit or loss for the period,
except for exchange differences arising on non-monetary assets and
liabilities where the changes in fair value are recognised in other
comprehensive income.
c) Group companies
The results and financial position of all the Group entities
that have a functional currency different from the presentation
currency of the Company are translated into the presentation
currency of the Company as follows:
(i) assets and liabilities in each Statement of Financial Position presented
are translated at the closing rate at the reporting date;
(ii) income and expenses in the Statement of Comprehensive Income are translated
at the average exchange rate prevailing in the period; and
(iii) all resulting exchange differences are recognised in other comprehensive
income and are taken to the translation reserve.
The following exchange rates have been applied in these
financial statements to convert foreign currency balances to
Sterling:
30 April 30 April 30 April 30 April
2020 2020 2019 2019
closing rate average closing average
rate rate rate
---------------------- ------------- --------- --------- ---------
Brazilian Real 6.9081 5.3580 5.1067 4.9910
United States Dollar 1.2594 1.2666 1.3032 1.3045
---------------------- ------------- --------- --------- ---------
On consolidation, the exchange differences arising from the
translation of the net investment in foreign entities are
recognised in other comprehensive income and are taken to the
translation reserve.
Expenses
All expenses are accounted for on an accruals basis. Expenses
which are incidental to the acquisition of an investment property
or plantation are included within the cost of that property and
plantation; for example this will include legal fees, due diligence
fees and other expenses associated with acquisitions that are
capitalised. Expenses incurred in relation to the disposal of an
investment property or plantation are included in profit or loss on
disposal of that asset.
Provisions
Provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to
the liability. Discounting provisions against receivables arising
from the disposal of an asset are set against the profit or loss on
the disposal of the asset in the Statement of Comprehensive
Income.
Impairment
The carrying amounts of the Group's non-financial assets, other
than investment property and plantations, buildings and
improvements are reviewed at each reporting date to determine
whether there is any indication of impairment. If such indication
exists the asset's recoverable amount is estimated. Any impairment
loss is recognised in profit or loss of the Statement of
Comprehensive Income whenever the carrying amount of an asset
exceeds its recoverable amount. For the purposes of assessing
impairment, assets are grouped together at the lowest levels for
which there are separately identifiable cash flows.
An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset's carrying
amount, after the reversal, does not exceed the amount that has
been determined, net of applicable depreciation, if no impairment
loss had been recognised.
Taxation
The Company is subject to Jersey income tax at a rate of 0%. No
charge to Jersey taxation arises on capital gains. The Group is
liable to foreign tax arising on activities in the overseas
subsidiaries. During the year, the Group has owned subsidiaries
incorporated in Brazil and the British Virgin Islands.
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit or net loss as
reported in the Statement of Comprehensive Income because it
excludes items of income and expense that are taxable or deductible
in other years or that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that have
been enacted by the reporting date.
Deferred tax is the tax arising on differences between the
carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation
of taxable profit and is accounted for using the liability method.
Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and
liabilities in a transaction that affects neither the tax profit
nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries, except where
the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will
reverse in the near future.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset
realised. Deferred tax is charged or credited in the Statement of
Comprehensive Income, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Investment property and plantations
a) Investment property
Land is classified as investment property as it is held for
capital appreciation. Investment property is recognised as an asset
when it is probable that the future economic benefits that are
associated with the property will flow to the enterprise and the
cost of the property can be reliably measured. Investment property
is initially measured at cost, including transaction costs.
Investment property is remeasured at fair value, which is the
price at which an orderly transaction to sell the investment
property would take place between market participants at the
measurement date under current market conditions. The fair values
are determined by the Directors, with reference to the latest
offers received, current wood pricing and independent professional
valuations. Gains or losses arising from changes in the fair value
of or from disposal of investment property are recognised in profit
or loss of the Statement of Comprehensive Income.
b) Plantations
Plantations are recognised as biological assets when the Group
controls the asset as a result of past events, it is probable that
future economic benefits will flow to the Group and the fair value
or cost of the asset can be measured reliably. Plantations are
measured on initial recognition and at each reporting date at fair
value less cost to sell. The fair values are determined by the
Directors, with reference to the latest offers received and
independent professional valuations. Gains or losses arising from
changes in the fair value of or from disposal of plantations are
recognised in profit or loss in the Statement of Comprehensive
Income. The Group's plantations are classified as consumable and
mature biological assets. Agricultural produce harvested from
plantations is classified as harvested timber. Gains or losses
arising from changes in the fair value of or from disposal of
plantations are recognised in profit or loss in the Statement of
Comprehensive Income.
Assets held for sale
Assets are classified as held-for-sale if it is highly probable
that they will be recovered primarily through sale rather than
through continuing use. Such assets are generally measured at the
lower of their carrying amount and fair value less costs to sell.
On subsequent remeasurement of a disposal group, the carrying
amounts of assets and liabilities included in the disposal group
classified as held for sale, shall be remeasured in accordance with
applicable IFRSs as set out above before the fair value less costs
to sell of the disposal group is remeasured. Impairment losses on
initial classification as held-for-sale and subsequent gains and
losses on remeasurement are recognised in profit or loss.
Financial instruments
Financial assets and financial liabilities are recognised in the
Group's Statement of Financial Position when the Group becomes a
party to the contractual provisions of the instrument. The Group
offsets financial assets and financial liabilities if the Group has
a legally enforceable right to set off the recognised amounts and
interests and intends to settle on a net basis.
Financial assets
The Group's financial assets fall into the categories below,
with the allocation depending to an extent on the purpose for which
the asset was acquired. The Group has not classified any of its
financial assets as held to maturity.
Unless otherwise indicated, the carrying amounts of the Group's
financial assets are a reasonable approximation of their fair
values.
a) Financial assets at amortised cost
Financial assets at amortised cost are non-derivative financial
assets with fixed or determinable payments that are not quoted in
an active market. They arise through deposits on new acquisitions
and also incorporate other types of contractual monetary assets.
They are included in current assets, except for maturities greater
than twelve months after the reporting date which are classified as
non-current assets. The Group's financial assets at amortised cost
comprise trade and other receivables and cash and cash
equivalents.
Trade and other receivables are measured at initial recognition
at fair value and are subsequently measured at amortised cost using
the effective interest rate method.
Impairment provisions are recognised when there is objective
evidence (such as significant financial difficulties on the part of
the counterparty or default or significant delay in payment) that
the Group will be unable to collect all of the amounts due under
the terms receivable, the amount of such a provision being the
difference between the net carrying amount and the present value of
the future expected cash flows associated with the impaired
receivable. For trade and other receivables, such impairments
directly reduce the carrying amount of the impaired asset and are
recognised against the relevant income category in profit or loss
of the Statement of Comprehensive Income.
Cash and cash equivalents are carried at cost and comprise cash
in hand and demand deposits, and other short-term highly liquid
investments that are readily convertible to a known amount of cash
and are subject to an insignificant risk of changes in value.
b) De-recognition of financial assets
A financial asset (in whole or in part) is de-recognised either
when the Group has transferred substantially all the risks and
rewards of ownership; or when it no longer has control over the
asset or a portion of the asset; or when the contractual right to
receive cash flows from the asset has expired.
Financial liabilities
a) Financial liabilities at amortised cost
Trade payables and other short-term monetary liabilities are
initially recognised at fair value and subsequently carried at
amortised cost using the effective interest rate method. The effect
of discounting on these financial instruments is not considered to
be material.
Borrowings are recognised initially at fair value. Subsequent to
initial recognition, interest-bearing borrowings are stated at
amortised cost with any difference between cost and redemption
value being recognised in profit or loss of the Statement of
Comprehensive Income over the period of the borrowings on an
effective interest basis.
b) De-recognition of financial liabilities
A financial liability is de-recognised when the obligation
specified in the contract is discharged, cancelled or expired.
c) Stated capital
Financial instruments issued by the Company are treated as
equity only to the extent that they do not meet the definition of a
financial liability. The Company's shares are classified as equity
instruments. For the purposes of the disclosures given in notes 20
and 21 the Group considers all its stated capital and all other
reserves as equity. The Company is not subject to any externally
imposed capital requirements.
d) Effective interest method
The effective interest rate method is a method of calculating
the amortised cost of a financial asset or liability and of
allocating interest income and expense over relevant periods. The
effective interest rate is the rate that exactly discounts
estimated future cash receipts or payments (including all fees on
points paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or discounts)
through the expected life of the financial asset or liability or
where appropriate, a shorter period.
Dividends
A dividend is recognised as a liability in the financial
statements in the period in which it becomes an obligation of the
Company.
Determination and presentation of operating segments
The Group determines and presents operating segments based on
the information that is provided internally to the Board of
Directors by the Operations Manager.
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to
transactions with any of the Group's other components. An operating
segment's operating results are reviewed regularly by the Board of
Directors to make decisions about resources to be allocated to the
segment and assess its performance, and for which discrete
financial information is available.
The Board of Directors is the Chief Operating Decision Maker
("CODM"). Segment results that are reported to the CODM include
items directly attributable to a segment as well as those that can
be allocated on a reasonable basis. The Jersey segment comprises
mainly corporate assets and corporate expenses to administer and
register the ultimate holding company.
Segment capital expenditure is the total cost incurred during
the year to acquire and/or maintain property, buildings, plant and
equipment and intangible assets.
4. Significant accounting judgements and key sources of
estimation uncertainty
The Directors make estimates and assumptions concerning the
Group's future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates
and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
Valuation of assets and disposal group held for sale
The Directors determine the fair value of the Group's assets and
disposal group held for sale, taking into consideration the
valuations performed by its independent professional valuers; the
latest offers received for the Group's assets; and using their
judgement to determine the highest and best use of the properties
and the principal market in which an orderly transaction would take
place for the properties. Some of the inputs used in the valuation
are based on assumptions. The Directors also make reference to
market evidence of transaction prices for similar transactions,
where available and appropriate (for details of significant inputs
used in the calculation of the valuations see note 13). As well as
making reference to the valuations performed by independent
valuers, the Directors make their own judgement on the valuations
of the Group's assets and disposal groups held for sale and on the
estimated costs to sell those assets, with reference to the views
of the Operations Manager and other advisors as to the likely
realisable values of the
assets in the current market. The Directors have also exercised
their judgement in determining the recoverability of the remaining
contractual receivables arising at the reporting date from the sale
of the Agua Santa property, and have estimated the present value of
the receivables on a discounted cash flow basis, using an
appropriate effective discount rate.
Going concern
The Directors have determined that it is appropriate for the
Group to prepare its financial statements on a going concern basis.
Details of the Directors' judgements in making this assessment are
contained in note 2.
Classification of assets and disposal group held for sale
The Directors intend to realise value from the sale of the
Group's investments in an orderly manner but not within any
specific time frame. In previous years, the Directors had
undertaken a marketing process and implemented a disposal plan to
locate buyers for the remaining assets in Brazil. During the two
prior years, the Group disposed of its tree crop in the 3R
Tocantins property. During the prior year the Group also agreed
contracts for the sale of the entire tree crop at its Ribeirao do
Gado and Agua Santa properties in Minas Gerais, at both of which
harvesting commenced in the latter part of the prior year. During
the year, the latter contract was superseded by a signed contract
for the sale of the entire Agua Santa property and a contract was
agreed for the sale of the entire Ribeirao do Gado property. This
contract was signed subsequent to the year end. Subsequent to the
year end, the Group has completed a deal for the sale of the tree
crop at Forquilha. At the date of signing these financial
statements, the Group is also in discussions with a buyer for the
entire 3R property. The assets remaining in Brazil, with the
exception of the receivable for the sale of the Agua Santa
property, are classified as part of a disposal group held for sale
in these financial statements, and the Brazil segment is classified
as a discontinued operation.
Income and deferred taxes
The Group is subject to income and capital gains taxes in
numerous jurisdictions. Significant judgement is required in
determining the total provision for income and deferred taxes.
There are many transactions and calculations for which the ultimate
tax determination and timing of payment are uncertain. The Group
recognises liabilities for current and deferred tax based on
estimates of whether taxes will be due and at what rates those
taxes will be calculated, and based on judgements made in assessing
what income may be taxable and what items may be deductible for tax
purposes. The Directors have determined that deferred tax assets
should not be recognised in these financial statements due to the
unpredictability of future taxable profits against which such
assets could be used. Where the final tax outcome of these matters
is different from the amounts that were initially recorded such
differences will impact the income and deferred tax provisions in
the period in which the determination is made.
5. Operating segments
The Board of Directors is charged with setting the Company's
investment strategy in accordance with the Prospectus. The Board of
Directors, as the Chief Operating Decision Maker ("CODM"), had,
until 16 October 2014, delegated the day to day implementation of
this strategy to its Investment Manager and, with effect from 16
October 2014, to its Operations Manager, but retains responsibility
to ensure that adequate resources of the Company are directed in
accordance with its decisions. The investment decisions of the
Operations Manager have been and are reviewed on a regular basis to
ensure compliance with the policies and legal responsibilities of
the Board.
Whilst the Operations Manager may manage operations on a day to
day basis, any changes to the investment strategy, major allocation
decisions or any asset dispositions or material timber contracts
have to be approved by the Board, even though they may be proposed
by the Operations Manager. The Board therefore retains full
responsibility as to the major allocation decisions made on an
ongoing basis.
As at 30 April 2020, the Group operates in two geographical
locations, which the CODM has identified as one non-operating
segment, Jersey, and one operating segment, Brazil. Timberlands are
located in Brazil. The Brazil segment is classified as a
discontinued operation (see note 14).
The accounting policies of each segment are the same as the
accounting policies of the Group, therefore no reconciliation has
been performed.
Jersey Hawaii Brazil Total
30 April GBP GBP GBP GBP
2020
----------------------------------------- ---- ---------- ------- ---------- ----------
Assets and disposal group held for sale
(note 14) - - 5,608,306 5,608,306
Other assets 514,650 52,316 3,316,685 3,883,651
------------------------------------------ --- ---------- ------- ---------- ----------
Total assets 514,650 52,316 8,924,991 9,491,957
------------------------------------------ --- ---------- ------- ---------- ----------
Total liabilities 1,742,002 - 46,269 1,788,271
------------------------------------------ --- ---------- ------- ---------- ----------
Jersey Hawaii Brazil Total
30 April 2019 GBP GBP GBP GBP
----------------------------------------- ---- ---------- -------- ----------- -----------
Assets and disposal group held for sale
(note 14) - - 14,292,311 14,292,311
Other assets 1,008,862 193,838 143,222 1,345,922
------------------------------------------ --- ---------- -------- ----------- -----------
Total assets 1,008,862 193,838 14,435,533 15,638,233
------------------------------------------ --- ---------- -------- ----------- -----------
Total liabilities 1,616,766 - 74,072 1,690,838
------------------------------------------ --- ---------- -------- ----------- -----------
Jersey Hawaii Brazil Total
For the year ended 30 April 2020 GBP GBP GBP GBP
------------------------------------------- -------- -------- ------------ ------------
Segment revenue - - - -
------------------------------------------ -------- -------- ------------ ------------
Segment gross profit - - - -
------------------------------------------- -------- -------- ------------ ------------
Decrease in fair value of assets and
disposal group held for sale - - (1,637,347) (1,637,347)
------------------------------------------- -------- -------- ------------ ------------
Loss on disposal of assets held for sale - - (20,696) (20,696)
------------------------------------------- -------- -------- ------------ ------------
Forestry management expenses - - 5,351 5,351
------------------------------------------- -------- -------- ------------ ------------
Other operating forestry expenses - - 434,761 434,761
------------------------------------------- -------- -------- ------------ ------------
Jersey Hawaii Brazil Total
For the year ended 30 April 2019 GBP GBP GBP GBP
------------------------------------------- -------- -------- --------- ---------
Segment revenue - - - -
------------------------------------------ -------- -------- --------- ---------
Segment gross profit - - - -
------------------------------------------- -------- -------- --------- ---------
Increase in fair value of assets and
disposal group held for sale - - 587,773 587,773
------------------------------------------- -------- -------- --------- ---------
Loss on disposal of assets held for sale - - (72,556) (72,556)
------------------------------------------- -------- -------- --------- ---------
Forestry management expenses - - 6,349 6,349
------------------------------------------- -------- -------- --------- ---------
Other operating forestry expenses - - 615,322 615,322
------------------------------------------- -------- -------- --------- ---------
As at 30 April 2020 the Group owned three (30 April 2019: four)
distinct parcels of land in one main geographical area, Brazil.
There was no revenue in the years ended 30 April 2020 or 30
April 2019. Sales of wood at the Agua Santa and Ribeirao do Gado
properties during the year have been classified as asset disposals
rather than revenue (see note 13).
The Group's investments will be realised in an orderly manner
(that is, with a view to achieving a balance between returning cash
to shareholders and maximising value). In light of the realisation
strategy, there will be no specific investment restrictions
applicable to the Group's portfolio going forward.
This policy will involve a continuing evaluation of the
portfolio in order to assess the most appropriate realisation
strategy to be pursued in relation to each investment.
The strategy for realising individual investments will be
flexible and may need to be altered to reflect changes in the
circumstances of a particular investment or in the prevailing
market conditions. The Group will, in relation to each investment,
seek to create competition amongst a range of interested
parties.
The net cash proceeds from realisations of assets will be
applied to the payments of tax or other liabilities as the Board
thinks fit prior to making payments to shareholders.
6. Administrative expenses
For the
For the year year
ended ended
30 April 30 April
2020 2019
GBP GBP
--------------------------------------------------------- ----------
Recurring expenses
Continuing operations
Operations Manager's fees (see note 26) 106,000 104,333
Directors' fees (see note 26) 98,000 96,667
Auditor's fees 41,300 42,990
Professional & other fees 227,296 256,000
-------- ----------
472,596 499,990
Discontinued operations
Professional & other fees 105,392 35,608
Administration of subsidiaries 39,779 38,469
-------- ----------
145,171 74,077
Total recurring expenses 617,767 574,067
Non-recurring expenses
Continuing operations
Nomad fees incurred to enable share buy-backs - 75,000
Total administration expenses 617,767 649,067
----------------------------------------------- -------- ----------
Professional and other fees include the Company's own
secretarial, administration and statutory fees, listing and
registrar fees, insurance costs, broker's fees (including costs
associated with share buy-backs), legal fees and consultancy fees
relating to the disposal of the Company's assets.
Administration of subsidiaries includes statutory fees,
accounting fees and administrative expenses in regard to the asset
holding subsidiaries.
7. Forestry management expenses
For the
For the year year
ended ended
30 April 30 April
2020 2019
GBP GBP
----------------------- ----------
Appraisal fees 5,351 6,349
5,351 6,349
----------------------- ----------
8. Other operating forestry expenses
For the
For the year year
ended ended
30 April 30 April
2020 2019
GBP GBP
------------------------------------------------ ----------
Recurring expenses
Property management fees and expenses 193,705 213,336
Property taxes 26,647 -
Fencing maintenance 376 29,514
Other repairs and maintenance - 10,192
Pest control 9,060 32,830
Forest protection and insurance 150,164 261,140
Consulting fees 46,735 62,007
Other 8,074 287
-------- ----------
434,761 609,306
-------- ----------
Non-recurring expenses
Inventory fees - 6,016
- 6,016
-------- ----------
434,761 615,322
------------------------------------------------ ----------
9. Finance costs
For the
For the year year
ended ended
30 April 30 April
2020 2019
GBP GBP
----------------------------------- ----------
Continuing operations
Loan interest 113,110 94,965
Other finance costs 2,886 2,545
-------- ----------
115,996 97,510
Discontinued operations
Other finance costs 24,326 3,350
Total finance costs 140,322 100,860
------------------------- -------- ----------
10. Taxation
Taxation on loss on ordinary activities
The Group has incurred no tax charges during the year. A
reconciliation of the Group's losses during the year to the zero
tax charge is shown below.
For the
For the year year
ended ended
30 April 30 April
2020 2019
GBP GBP
--------------------------------------------------------------------- ----------
Tax charge reconciliation
Loss for the year from continuing operations before
taxation (589,874) (675,001)
Loss for the year from discontinued operations before
taxation (2,368,950) (183,881)
------------------------------------------------------- ------------ ----------
Total loss for the year before taxation (2,958,824) (858,882)
------------------------------------------------------- ------------ ----------
Tax credit using the average of the tax rates in the
jurisdictions in which the Group operates (771,825) (49,868)
Effects of:
Operating losses for which no deferred tax asset is
recognised 339,316 83,995
Capital losses for which no deferred tax asset is
recognised 432,509 4,510
Brought forward capital losses utilised - (38,637)
Tax charge for the year - -
------------------------------------------------------- ------------ ----------
The average tax credit rate is a blended rate calculated using
the weighted average applicable tax rates of the jurisdictions in
which the Group operates. The average of the tax rates in the
jurisdictions in which the Group operates in the year was 26.09%
(2019: 5.81%). The effective tax rate in the year was 0.00% (2019:
0.00%).
At the year end date the Group has unused operational and
capital losses. No deferred tax asset has been recognised in
respect of these losses due to the unpredictability of future
taxable profits and capital gains available against which they can
be utilised. Tax losses arising in the United States can be carried
forward for up to 20 years; those arising in Brazil can be carried
forward indefinitely.
Operational tax losses for which deferred tax assets have not
been recognised in the consolidated financial statements
For the
For the year year
ended ended
30 April 30 April
2020 2019
GBP GBP
------------------------------------------------------------------- ----------
Balance at beginning of the year 5,883,902 5,368,406
Current year operating losses for which no deferred
tax asset is recognised 649,334 759,533
Exchange rate movements (1,275,349) (244,037)
----------------------------------------------------- ------------ ----------
Balance at the end of the year 5,257,887 5,883,902
----------------------------------------------------- ------------ ----------
Accumulated operating losses at 30 April 2020 and 30 April 2019
in the table above relate entirely to discontinued operations. The
value of deferred tax assets not recognised in regard to
operational losses amounted to GBP1,371,419 (2019: GBP1,620,097),
all of which related to discontinued operations.
Accumulated operating losses relating to continuing operations
at the year end date amounted to GBP28,697,034 (2019:
GBP28,107,160). No deferred tax assets arose in respect of these
losses.
At the year end the Group had accumulated capital losses of
GBP2,860,365 (2019: GBP818,089). The accumulated capital losses at
30 April 2020 and 30 April 2019 related entirely to discontinued
operations. The value of deferred tax assets not recognised in
regard to these capital tax losses amounted to GBP972,524 (2019:
GBP278,150), all of which related to discontinued operations.
Deferred taxation
As at 30 April 2020 and 30 April 2019 the Group had no deferred
tax liabilities or recognised deferred tax assets.
11. Basic and diluted loss per share
The calculation of the basic and diluted loss per share in total
and for continuing operations is based on the following loss
attributable to shareholders and weighted average number of shares
outstanding.
For the
For the year year
ended ended
30 April 30 April
2020 2019
GBP GBP
-------------------------------------------------------------------- ----------
Loss for the purposes of basic and diluted loss per
share being net loss for the year (2,958,824) (858,882)
------------------------------------------------------ ------------ ----------
Loss for the purposes of basic and diluted loss per
share being net loss for the year from continuing
operations (589,874) (675,001)
------------------------------------------------------ ------------ ----------
Loss for the purposes of basic and diluted loss per
share being net loss for the year from discontinued
operations (2,368,950) (183,881)
------------------------------------------------------ ------------ ----------
30 April
30 April 2020 2019
-------------------------------------------------------------------------- -----------
Weighted average number of shares
Issued shares brought forward 74,117,299 82,130,000
Issued shares carried forward 73,728,284 74,117,299
Weighted average number of shares in issue during
the year 73,767,611 80,195,141
------------------------------------------------------------- ----------- -----------
Basic and diluted loss per share (4.01) (1.07)
pence pence
------------------------------------------------------------- ----------- -----------
Basic and diluted loss per share from continuing operations (0.80) (0.84)
pence pence
------------------------------------------------------------- ----------- -----------
Basic and diluted loss per share from discontinued (3.21) (0.23)
operations pence pence
------------------------------------------------------------- ----------- -----------
12. Net asset value
30 April 2020 30 April
2019
GBP GBP
-------------------------------------------------- -----------
Total assets 9,491,957 15,638,233
Total liabilities 1,788,271 1,690,838
------------------------------------- ----------- -----------
Net asset value 7,703,686 13,947,395
------------------------------------- ----------- -----------
Number of shares in issue (note 21) 73,767,611 74,117,299
Net asset value per share 10.4 pence 18.8 pence
------------------------------------- ----------- -----------
13. Investment property and plantations
The Group's investment property and plantations are classified
as disposal group and assets held for sale.
The Group engages external independent professional valuers to
estimate the market values of the investment properties and
plantations in Brazil on an annual basis, with the Operations
Manager providing a desktop update valuation for the purposes of
the Group's Interim Financial Statements.
The investment property and plantations are carried at their
estimated fair values less costs to sell as at 30 April 2020, as
determined by the Directors taking into consideration the external
independent professional valuers' valuations, the latest offers
received for the investment property and plantations, including
draft sale agreements in negotiation subsequent to the year end,
and the Directors' assessment of other factors that may influence
prospective purchasers.
The fair value measurements of investment properties and
plantations have been categorised as Level 3 fair values based on
the unobservable nature of significant inputs to the valuation
techniques used.
Notwithstanding the results of the independent valuations, the
Directors make their own judgement on the valuations of the Group's
investment property and plantations, with reference to the views of
the Operations Manager, other advisors and the latest offers
received.
13. Investment property and plantations (continued)
In forming their conclusions of the fair value of the investment
property and plantations, the Directors have considered the
following factors:
(i) Plantations
Property Fair value Valuation Significant unobservable Inter-relationship
technique inputs between key unobservable
inputs and fair
value measurement
2020 2019
GBPm GBPm
------ ------
a) Minas
Gerais - 2.7 30 April 2020
-Agua Santa N/A N/A N/A
30 April 2019
In accordance * Sale price subject to final agreement The estimated fair
with sale value would increase/(decrease)
agreement if:
completed * Discount rate: 10% * the agreed sale price were higher/(lower)
after
the year end,
discounted to * Estimated costs to sell: 5% * the discount rate were lower/(higher)
adjust for
partially
deferred * estimated costs to sell were lower/(higher)
settlement
------ ------ --------------- ------------------------------------------------------------ ---------------------------------------------------
b) Minas
Gerais 0.4 0.8 30 April 2020
- Ribeirao In accordance * Sale price agreed The estimated fair
do Gado with sale value would increase/(decrease)
agreement if:
completed * Discount rate: 8% * the sale price were higher/(lower)
after
the year end,
discounted to * Estimated costs to sell: 5% * the discount rate were lower/(higher)
adjust for
partially
deferred * estimated costs to sell were lower/(higher)
settlement
30 April 2019
In accordance * Sale price subject to final agreement The estimated fair
with sale value would increase/(decrease)
agreement if:
in discussion * Discount rate: 10% * the sale price were higher/(lower)
after the year
end,
discounted * Estimated costs to sell: 5% * the discount rate were lower/(higher)
to adjust for
partially
deferred * estimated costs to sell were lower/(higher)
settlement
------ ------ --------------- ------------------------------------------------------------ ---------------------------------------------------
c) Minas
Gerais 0.6 0.9 30 April 2020
-Forquilha Market * Estimated log prices per m3, being standing prices The estimated fair
approach, with the buyer absorbing all the costs of harvesting value would increase/(decrease)
using prices and haulage: BRL 36.64 - BRL 41.34 if:
and other * estimated log prices were higher/(lower)
information
generated by * Discount rate: 8%
identical or * the discount rate were lower/(higher)
comparable
market * Estimated costs to sell: 5%
transactions, * estimated costs to sell were lower/(higher)
discounted to
adjust for
deferred
settlement
30 April 2019
Market * Estimated log prices per m3, being standing prices The estimated fair
approach, with the buyer absorbing all the costs of harvesting value would increase/(decrease)
using prices and haulage: BRL 33.00 - BRL 38.00 if:
and other * estimated log prices were higher/(lower)
information
generated by * Estimated costs to sell: 5%
identical or * estimated costs to sell were lower/(higher)
comparable
market
transactions
------ ------ --------------- ------------------------------------------------------------ ---------------------------------------------------
Property Fair value Valuation Significant unobservable Inter-relationship
technique inputs between key unobservable
inputs and fair
value measurement
-------------- --------------- ------------------------------------------------------------ ---------------------------------------------------
2020 2019
--------------- ------------------------------------------------------------ ---------------------------------------------------
GBPm GBPm
------ ------ --------------- ------------------------------------------------------------ ---------------------------------------------------
d) 3R
Tocantins 0.5 0.3 30 April 2020
In accordance * Sale price subject to final agreement The estimated fair
with sale value would increase/(decrease)
agreement if:
in discussion * Discount rate: 8% * the sale price were higher/(lower)
after the
year
end, * Estimated costs to sell: 5% * the discount rate were lower/(higher)
discounted
to adjust for
partially * estimated costs to sell were lower/(higher)
deferred
settlement
The estimated fair
30 April 2019 * Regeneration costs: BRL 1,046.22 per hectare) value would increase/(decrease)
Reproduction if:
cost method * regeneration costs were higher/(lower)
* Estimated costs to sell: 5%
* estimated costs to sell were lower/(higher)
------ ------ --------------- ------------------------------------------------------------ ---------------------------------------------------
Total 1.5 4.7
------ ------ ----------------------------------------------------------------------------------------------------------------------------------
(i) a) Plantations - Agua Santa
In the prior year, the Group agreed a contract to sell the
plantations at the Agua Santa farm. During the year, the Group
completed a contract to sell the entire Agua Santa property to the
same buyer for GBP5.0 million (BRL 30.0 million), with settlement
taking place over the 24 months ending in March 2022. The property
sale contract superseded the previously agreed contract for the
sale of the plantations alone. All amounts received under the terms
of the initial contract have been applied against the BRL 30.0
million receivable under the new contract.
(i) b) Plantations -Ribeirao do Gado
In the prior year, the Group also agreed a contract to sell the
plantations at the Ribeirao do Gado farm, which was completed
during the year. During the year, the Group subsequently agreed a
contract to sell the entire Ribeirao do Gado property to the same
buyer for GBP1.0 million (BRL 7.0 million). This contract
superseded the previously agreed contract for the sale of the
plantations alone, and was completed in May 2020, with settlement
taking place over the 33 months ending in January 2023. All amounts
received under the terms of the initial contract have been applied
against the BRL 7.0 million receivable under the new contract. The
Board has determined that the plantations should be valued on the
basis of this later contract, less GBP0.1 million (BRL 0.6 million)
of plantations sold during the year under the initial contract,
less an appropriate discount for deferred settlement, and
accordingly the Ribeirao do Gado plantations are valued in these
financial statements at GBP0.4 million (BRL 2.7 million) before
estimated selling costs of GBP0.02 million.
(i) c) Plantations - Forquilha
The independent valuer has valued the Forquilha plantations at
GBP0.8 million ((BRL 5.2 million) (2019: GBP0.9 million (BRL 4.7
million)). The Board has determined that the plantations should be
valued based on this appraisal, less an estimated discount for
deferred settlement, and accordingly the Forquilha plantations are
valued in these financial statements at GBP0.7 million (BRL 4.7
million) (2019: GBP0.9 million (BRL 4.7 million)) before estimated
selling costs of GBP0.03 million (2019: GBP0.05 million).
Subsequent to the year end, the Group has completed a deal to sell
the plantations to a buyer for a sum that supports the value
provided by the independent valuer.
(i) d) Plantations - 3R Tocantins
During the year, the Group entered into discussions, which were
progressed further subsequent to the year end, to sell the land and
plantations at the 3R property for GBP2.7 million (BRL 18.5
million), with settlement taking place over 31 months. GBP0.6
million (BRL 3.9 million) is attributable to the plantations, based
on the valuation provided by the independent valuer. The Board has
determined that the plantations should be valued on the basis of
this agreement in negotiation, less an appropriate discount for
deferred settlement, and accordingly the 3R plantations are valued
in these financial statements at GBP0.5 million (BRL 3.4 million)
(2019: GBP0.3 million (BRL1.7 million) before estimated selling
costs of GBP0.03 million (2019: GBP0.02 million).
(ii) Investment property
Property Fair value Valuation Significant unobservable Inter-relationship
technique inputs between key unobservable
inputs and fair
value measurement
2019 2018
GBPm GBPm
------ ------
a) Minas
Gerais - 2.2 30 April 2020
-Agua Santa N/A N/A N/A
30 April 2019
In accordance * Sale price agreed The estimated fair
with value would increase/(decrease)
sale if:
agreement * Discount rate: 10% * the agreed sale price were higher/(lower)
completed
after
the year end, * Estimated costs to sell: 5% * the discount rate were lower/(higher)
discounted
to adjust for
partially * estimated costs to sell were lower/(higher)
deferred
settlement
------ ------ --------------- --------------------------------------------------------------- ---------------------------------------------------
b) Minas
Gerais 0.4 0.6 30 April 2020
- Ribeirao In accordance * Sale price agreed The estimated fair
do Gado with value would increase/(decrease)
sale if:
agreement * Discount rate: 8% * the sale price were higher/(lower)
completed
after
the year end, * Estimated costs to sell: 5% * the discount rate were lower/(higher)
discounted
to adjust for
partially * estimated costs to sell were lower/(higher)
deferred
settlement
30 April 2019 The estimated fair
In accordance * Sale price agreed value would increase/(decrease)
with if:
sale * the agreed sale price were higher/(lower)
agreements * Discount rate: 10%
completed
after * the discount rate were lower/(higher)
the year end,
discounted
to adjust for
partially
deferred
settlement
------ ------ --------------- --------------------------------------------------------------- ---------------------------------------------------
c) Minas
Gerais 1.9 3.3 30 April 2020
-Forquilha and
30 April 2019 * Land value per hectare: BRL 1,108 - BRL 2,406 (2019: The estimated fair
Direct BRL 1,426 - BRL 4,455) value would increase/(decrease)
comparative if:
approach. * land values were higher/(lower)
Considers * Discount rate: 8%
the bare land
price * the discount rate were lower/(higher)
from * Estimated costs to sell: 5%
comparable
transactions, * estimated costs to sell were lower/(higher)
soil
quality, and
topography
of the land,
access
and distance
from
cities and
the
proportion of
the
property
which
could be used
for
cultivation.
------ ------ --------------- --------------------------------------------------------------- ---------------------------------------------------
d) 3R 30 April 2020
Tocantins 1.8 3.4 In accordance * Sale price agreed The estimated fair
with value would increase/(decrease)
sale agreement if:
in discussion * Discount rate: 8% * the sale price were higher/(lower)
after
the year end,
discounted * Estimated costs to sell: 5% * the discount rate were lower/(higher)
to adjust for
partially
deferred * estimated costs to sell were lower/(higher)
settlement
The estimated fair
30 April 2019 * Comparable land sales prices per hectare: BRL 2,335 - value would increase/(decrease)
Direct BRL 3,821 if:
comparative * land values were higher/(lower)
approach.
Considers
the bare land
price
from
comparable
transactions,
soil
quality,
topography
of the land,
access
and distance
from
cities and the
proportion of
the
property which
could be used
for
cultivation.
------ ------ --------------- --------------------------------------------------------------- ---------------------------------------------------
Total 4.1 9.1
------ ------ -------------------------------------------------------------------------------------------------------------------------------------
(ii) a) Investment property - Agua Santa
In the prior year, the Group agreed a contract to sell the
plantations at the Agua Santa farm. During the year, the Group
completed a contract to sell the entire Agua Santa property to the
same buyer for GBP5.0 million (BRL 30.0 million), with settlement
taking place over the 24 months ending in March 2022. The property
sale contract superseded the previously agreed contract for the
sale of the plantations alone. All amounts received under the terms
of the initial contract have been applied against the BRL 30.0
million receivable under the new contract.
(ii) b) Investment property - Ribeirao do Gado
In the prior year, the Group also agreed a contract to sell the
plantations at the Ribeirao do Gado farm, which was completed
during the year. During the year, the Group subsequently agreed a
contract to sell the entire Ribeirao do Gado property to the same
buyer for GBP1.0 million (BRL 7.0 million). The property sale
contract superseded the previously agreed contract for the sale of
the plantations alone, and was completed in May 2020, with
settlement taking place over the 33 months ending in January 2023.
All amounts received under the terms of the initial contract have
been applied against the BRL 7.0 million receivable under the new
contract. The Board has determined that the investment property
should be valued on the basis of this later contract, less an
appropriate discount for deferred settlement, and accordingly the
Ribeirao do Gado land is valued in these financial statements at
GBP0.4 million (BRL 3.0 million) before estimated selling costs of
GBP0.02 million.
(ii) c) Investment property - Forquilha
The independent valuer has valued the investment property held
for sale in Forquilha, the third farm in the Minas Gerais property,
at GBP2.2 million (BRL 15.5 million) (2019: GBP4.0 million (BRL
20.6 million)), which the Directors believe represents a reasonable
estimation of the likely realisation proceeds in the event of a
sale of the land. In arriving at this likely realisation valuation,
the Directors have also considered the high proportion of
unproductive land in the property, the sales prices achieved by the
Company at its other properties in Minas Gerais during the year,
and the current wood prices prevailing in the region as an
indicator of the economic potential of the land. Further, the
Directors are involved in negotiations to sell the property and the
land value implicit in the informal offers received by the Group
materially support the independent valuer's appraisal of the likely
realisation value. However, the Directors note that no binding
offer has been received as at the date of approval of these
Financial Statements.
Further, the Directors consider it appropriate to discount the
realisation valuation, as presented by the independent valuer, for
the expected deferred settlement of any likely realisation proceeds
and for the impact of any related costs to sell. Accordingly, the
Forquilha land has been valued at GBP2.0 million (BRL 13.6 million)
(2019: GBP3.3 million (BRL 16.8 million)) inclusive of discounting
of GBP0.3 million (BRL 1.9 million), before estimated selling costs
of GBP0.1 million (BRL 0.7 million).
The Directors note the continuing inherent uncertainty in
arriving at a fair value of the Forquilha investment property due
to its unique realty characteristics when compared to the other
comparable market transactions and further that there is no legally
binding offer supporting the valuation. Accordingly, the Directors
note that the fair value may differ materially from the actual
value that would be realised if the property is sold.
(ii) d) Investment property - 3R Tocantins
During the year, the Group entered into discussions, which were
progressed further subsequent to the year end, to sell the land and
plantations at the 3R property for GBP2.7 million (BRL 18.5
million), with settlement taking place over 31 months. GBP2.1
million (BRL 14.6 million) of this amount is attributable to the
land, after attributing GBP0.6 million (BRL 3.9 million) to the
plantations, based on the valuation provided by the independent
valuer. The Board has determined that the investment property
should be valued on the basis of this agreement in negotiation,
less an appropriate discount for deferred settlement, and
accordingly the 3R land is valued in these financial statements at
GBP1.9 million (BRL 12.9 million) (2019: GBP3.4 million (BRL17.5
million) before estimated selling costs of GBP0.09 million.
The Group is exposed to a number of risks related to its tree
plantations:
Regulatory and environmental risks
The Group is subject to laws and regulations in various
countries in which it operates. The Group has established
environmental policies and procedures aimed at compliance with
local environmental and other laws. Management performs regular
reviews to identify environmental risks and to ensure that the
systems in place are adequate to manage those risks.
Supply and demand risk
The Group is exposed to risks arising from fluctuations in the
price and sales volume of trees. When possible the Group manages
this risk by aligning its harvest volume to market supply and
demand. Management performs regular industry trend analyses to
ensure that the Group's pricing structure is in line with the
market and to ensure that projected harvest volumes are consistent
with the expected demand.
Climate and other risks
The Group's plantations are exposed to the risk of damage from
climatic changes, diseases, forest fires and other natural forces.
The Group has extensive processes in place aimed at monitoring and
mitigating those risks, including regular forest health inspections
and industry pest and disease surveys.
14. Disposal groups and assets held for sale and discontinued
operations
During the year, the Group continued its disposal plan for the
remaining assets in Brazil.
The assets in Brazil are more likely to be sold through a
disposal of the entities owning the assets. Accordingly, the
Group's Brazil segment is presented as a disposal group held for
sale.
The Brazil disposal group comprises the following assets and
liabilities held for sale:
Assets Liabilities
held for held for 30 April 30 April
sale sale 2020 2019
GBP GBP GBP GBP
----------------------------- ---------- ------------ ---------- -----------
Investment property 4,058,634 - 4,058,634 9,505,966
Plantations 1,485,373 - 1,485,373 4,683,176
Trade and other receivables 64,299 - 64,299 103,169
Trade and other payables - 46,269 (46,269) (74,072)
5,608,306 46,269 5,562,037 14,218,239
----------------------------- ---------- ------------ ---------- -----------
During the year, following the sale of the Agua Santa property,
the receivable of GBP3,176,307 due in respect of the sale was
reclassified from assets held for sale to trade and other
receivables.
A loss of GBP3,242,748 (2019: loss of GBP840,345) related to the
Brazil disposal group, representing foreign exchange translation of
discontinued operations, is included in other comprehensive income
(see note 16).
Movements in total assets held for sale in the statement of
financial position during the year were as follows:
30 April
30 April 2020 2019
GBP GBP
----------------------------------------------------------------- -----------
Balance brought forward 14,292,311 14,774,260
(Increase)/decrease in trade and other receivables (38,870) 21,885
Costs capitalised to land and plantations 105,317 151,776
Disposals of assets held for sale (5,173,865) (353,801)
Loss on disposal of assets held for sale (20,696) (72,556)
(Decrease)/increase in the fair value of disposal
groups and assets held for sale (1,637,347) 587,773
Foreign exchange effect on land and plantations (1,918,544) (817,026)
--------------------------------------------------- ------------ -----------
5,608,306 14,292,311
----------------------------------------------------------------- -----------
The assets held for sale are located entirely in Brazil.
The fair value measurement of GBP5,608,306 has been categorised
as a Level 3 fair value based on the estimated fair values of the
investment property and plantations less costs to sell. These
assets were measured using the methods outlined in note 13. The
fair value of other assets and liabilities within the disposal
group is not significantly different from their carrying
amounts.
Net cash flows attributable to the discontinued operations were
as follows:
30 April
30 April 2020 2019
GBP GBP
-------------------------------------------------------------------------------- ----------
Operating activities
Loss for the year before taxation (2,368,950) (183,881)
Adjustments for:
Loss on disposal of assets held for sale 20,696 72,556
Decrease/(increase) in fair value of disposal groups,
assets held for sale and investment property and plantations 1,637,347 (587,773)
Net finance costs 24,326 3,350
Decrease in trade and other receivables 157,548 138,430
Decrease in trade and other payables (11,708) (91,659)
Taxation paid - -
------------ ----------
Net cash used in operating activities (540,741) (648,977)
Cash from investing activities - sales proceeds of
assets held for sale less costs capitalised to land
and plantations 622,473 202,025
Net cash used in financing activities - net finance
costs (24,326) (3,350)
Foreign exchange movements (50,360) 2,624
Net cash outflow for the year (7,046) (447,678)
------------------------------------------------------------------ ------------ ----------
15. Trade and other receivables
30 April 2020 30 April
2019
GBP GBP
Non-current
Agua Santa sales proceeds receivable 1,441,991 -
-------------------------------------- ---------- ---------
Current
-------------------------------------------------- ---------
Agua Santa sales proceeds receivable 1,734,316 -
Rental escrow accounts receivable 52,316 193,838
Prepaid expenses 29,416 14,803
-------------------------------------- ---------- ---------
1,816,048 208,641
-------------------------------------- ---------- ---------
Total trade and other receivables 3,258,039 208,641
-------------------------------------- ---------- ---------
The Group's exposure to credit and currency risks and impairment
losses related to trade and other receivables is disclosed in note
23.
16. Foreign exchange translation
The translation reserve movement in the year has arisen as
follows:
Exchange rate Exchange Translation
rate
at 30 April at 30 April reserve
30 April 2020 2020 2019 movement
----------------------------------- --------- ------------ ------------
Discontinued operations
Brazilian Real 6.9081 5.1067 (3,242,748)
United States Dollar 1.2594 1.3032 2,794
Foreign exchange translation loss (3,239,954)
------------------------------------ ------------------------------------
Exchange
Exchange rate rate Translation
at 30 April at 30 April reserve
30 April 2019 2019 2018 movement
----------------------------------- --------- ------------ ------------
Discontinued operations
Brazilian Real 5.1067 4.8252 (839,018)
United States Dollar 1.3032 1.3763 22,115
Foreign exchange translation gain (816,903)
------------------------------------ ------------------------------------
17. Loan payable to related party
In December 2017, the Group agreed an unsecured loan funding
facility with Peter Gyllenhammar AB ('PGAB'), the Company's largest
shareholder, for approximately GBP1.4 million, in order to enable
the Group to remove outstanding mortgages over the Group's 3R
Tocantins property (see note 25) without depleting existing cash
balances.
The interest rate on the loan was 6% for the first 12 months and
thereafter 8%. PGAB has agreed not to have recourse against the
existing cash balances. There is no specified repayment date (and
consequently no default interest rate) and the Company is only
required to repay the loan or pay interest out of cash flow from
the land and/or timber assets presently held in Brazil which are
surplus to requirements. The loan agreement contains borrower
covenants requiring lender consent for the Company to return to
shareholders in excess of approximately GBP 2,000,000 of the cash
presently held, to purchase own shares for more than 12p per share,
to declare or pay any dividend, or to make any significant new
investment (not including asset maintenance or repair costs).
During the year, no such consents were sought by the Company, and
no repayments of principal or interest were made.
18. Trade and other payables
30 April 2020 30 April
2019
GBP GBP
-------------------------- ---------
Accrued expenses 89,655 77,529
89,655 77,529
-------------------------- ---------
The Group's exposure to currency and liquidity risk related to
trade and other payables is disclosed in note 23.
19. Investment in Subsidiaries
The financial statements of the Group consolidate the results,
assets and liabilities of the subsidiary companies listed
below:
Direct subsidiaries Country of Incorporation Beneficial Financial
interest year end
-------------------------------------- ------------------------- ----------- ----------
British Virgin
Cambium Pahala Holdings Limited Islands 100% 30 April
British Virgin
Cambium Pinnacle Holdings Limited Islands 100% 30 April
British Virgin
Cambium Minas Gerais Holdings Limited Islands 100% 30 April
British Virgin
Cambium MG Holdings Limited Islands 100% 30 April
-------------------------------------- ------------------------- ----------- ----------
Indirect subsidiaries Country of Incorporation Beneficial Financial
interest year end
-------------------------------------- ------------------------- ----------- ----------
Cambium Brazil MG Investimentos
Florestais Ltda Brazil 100% 30 April
3R Tocantins Investimentos Florestais
Ltda Brazil 100% 30 April
-------------------------------------- ------------------------- ----------- ----------
There are no other significant restrictions, any funding
requirements or risks associated with the Company's interest in the
above subsidiaries other than those already disclosed in these
financial statements.
20. Net asset value reconciliation
For the
year
For the year ended
ended 30 April
30 April 2020 2019
GBP GBP
------------------------------------------------------------------------ ------------
Net asset value brought forward 13,947,395 16,563,997
Foreign exchange translation differences (3,239,954) (816,903)
Loss on disposal of assets held for sale (20,696) (72,556)
(Decrease)/increase in fair value of assets and disposal
group held for sale (1,637,347) 587,773
Share buy-backs (44,931) (940,817)
Net finance costs including foreign exchange movements
- continuing operations (117,278) (100,011)
Net finance costs including foreign exchange movements
- discontinued operations (125,624) (3,350)
Loss before above items (1,057,879) (1,270,738)
Net asset value carried forward 7,703,686 13,947,395
---------------------------------------------------------- ------------ ------------
21. Stated capital
30 April 2020 30 April
2019
GBP GBP
------------------------------------ ----------
Balance as at 30 April 2,000,000 2,000,000
------------------------ ---------- ----------
The total authorised share capital of the Company is 250 million
shares of no par value. On initial placement 104,350,000 shares
were issued at 100 pence each. Shares carry no automatic rights to
fixed income but the Company may declare dividends from time to
time to which shareholders are entitled. Each share is entitled to
one vote at meetings of the Company.
On 22 February 2007 a special resolution was passed by the
Company to reduce the stated capital account from GBP104,350,000 to
GBP2,000,000. Approval was sought from the Royal Court of Jersey
and was granted on 29 June 2007. The balance of GBP102,350,000 was
transferred to a distributable reserve on that date.
The Company was granted authority by shareholders on 15 August
2008 to make market purchases of its own shares, an authority which
was renewed annually, most recently on 20 September 2018. However
no such authority was sought at the Company's 2019 AGM, and on 17
December 2019, the Board resolved that no further share buybacks
would be contemplated until further notice.
During the years ended 30 April 2009 and 30 April 2012, the
Company used this authority to buy-back and cancel 2,220,000
shares.
On 27 January 2015, shareholders approved a resolution to
distribute GBP5,000,000 of cash via a tender offer of 25 pence per
share, resulting in the buy-back and cancellation of 20,000,000
shares.
During the year, the Company made market purchases of 389,015 of
its own shares at a price of 11.55p per share (2019: 8,012,701 at
an average price of 11.74p per share). The total cost of these
share buy-backs was GBP44,931 (2019: GBP940,817), which was charged
to the Company's Distributable reserve (see note 22).
Shares in issue
30 April 2020 30 April
2019
Number Number
---------------------------------------------- ------------
Brought forward 74,117,299 82,130,000
Share buy-backs during the year (389,015) (8,012,701)
--------------------------------- ----------- ------------
In issue at 30 April fully paid 73,728,284 74,117,299
--------------------------------- ----------- ------------
22. Reserves
The movements in the reserves for the Group are shown in the
Statement of Changes in Equity on page 19.
Translation reserve
The translation reserve comprises accumulated exchange
differences arising on consolidation of the Group's foreign
operations (see note 16).
Distributable reserve
In June 2007, the Company reduced its stated capital account and
a balance of GBP102,350,000 was transferred to distributable
reserves. This reserve has been utilised by the Company to purchase
its own shares (as at 30 April 2020: GBP7,237,888; as at 30 April
2019: GBP7,192,957) and for the payment of total cumulative
dividends of GBP12,508,800, leaving a balance at 30 April 2020 of
GBP82,603,312 (30 April 2019: GBP82,648,243).
23. Financial instruments risk exposure and management
In common with other businesses, the Group is exposed to risks
that arise from use of financial instruments. The notes below
describe the Group's objectives, policies and processes for
managing those risks and the methods used to measure them. Further
quantitative information in respect of these risks is presented
throughout these financial statements.
Principal financial instruments
The principal financial instruments used by the Group, from
which financial instrument risk arises, are as follows:
-- Trade and other receivables
-- Cash and cash equivalents
-- Trade and other payables
-- Liabilities held for
sale
-- Loan payable to related
party
The Board of Directors and Operations Manager are responsible
for overseeing the measurement and control of all aspects of risk
management and hold regular meetings in order to do so.
Various risk management models are in place which help to
identify and monitor key risks both at individual investment level
and at a Group level. The risk management policies apply equally to
the Group. Further details regarding these policies are set out
below.
Categories of financial assets and financial liabilities
30 April 2020 30 April 2019
------------------------------------------------------------------ --------------
Financial assets measured at amortised cost
Trade and other receivables 3,228,623 193,838
Cash and cash equivalents 625,612 1,137,281
Assets held for sale (trade and other receivables) 35,922 103,169
Financial liabilities measured at amortised cost
Loan payable to related party 1,652,347 1,539,237
Trade and other payables 89,655 77,529
Liabilities held for sale (trade and other payables) 46,269 74,072
------------------------------------------------------ ---------- --------------
(a) Credit risk
Credit risk is the risk that the counterparty to a financial
instrument will fail to meet obligations, causing a loss to the
Group.
Cash and cash equivalents and trade and other receivables
represent the majority of the Group's financial assets.
The credit risk associated with the holding of cash and cash
equivalents is managed under the Group's cash management policy.
This policy states that the Group must spread cash between the
Group's bankers, each of whom at any given time should hold an
approximate maximum of the lower of either GBP5 million or 10% of
the net asset value. The cash management policy will be reviewed on
an annual basis by the Board of Directors and the Operations
Manager.
The Group monitors receipt of staged payments due under the sale
and purchase agreement from S&D Florestal Agronegocio Fazenda
Agua Santa Ltda, the buyer of the Agua Santa property. Should any
payments be missed, or there be any indication of a decline in the
creditworthiness of the counterparty, the Group will consider
possible impairment of the receivable.
The following table below shows the maximum exposure to risk of
the major counterparties at the year end date.
Credit Carrying
30 April 2020 rating Short-term amount
Counterparty agency rating GBP
---------------------------------------------- -------- ------------ ----------
S&D Florestal Agronegocio Fazenda Agua
Santa Ltda N/A N/A 3,176,307
Investec Bank (Channel Islands) Limited Fitch F2 370,983
Royal Bank of Scotland International Limited Fitch F1 99,999
Broker's share buy-back account N/A N/A 14,252
Banco Bradesco Fitch B 25,331
Citibank Fitch F1 115,047
3,801,919
-------------------------------------------------------------------- ----------
3 months-1
<1 month 1-3 months year >1 year
30 April 2020 GBP GBP GBP GBP
Maturities of these financial assets
------------------------------------------- -------- ----------- ----------- ----------
S&D Florestal Agronegocio Fazenda
Agua Santa Ltda 32,510 309,419 1,392,387 1,441,991
Investec Bank (Channel Islands)
Limited 370,983 - - -
Royal Bank of Scotland International
Limited 99,999 - - -
Broker's share buy-back account 14,252 - - -
Banco Bradesco 25,331 - - -
Citibank 115,047 - - -
658,122 309,419 1,392,387 1,441,991
---- ----------------------------------------------- ----------- ----------- ----------
Credit Carrying
30 April 2019 rating Short-term amount
Counterparty agency rating GBP
------------------------------------------------- ------------ ------------ ----------
Investec Bank (Channel Islands) Limited Fitch F2 434,858
Royal Bank of Scotland International Limited Fitch F1 500,018
Broker's share buy-back account N/A N/A 59,183
Banco Bradesco Fitch B 13,636
Citibank Fitch F1+ 129,586
1,137,281
------------------------------------------------- ------------------------- ----------
3 months-1
<1 month 1-3 months year >1 year
30 April 2019 GBP GBP GBP GBP
Maturities of these cash and cash
equivalents
----------------------------------------------------------------------------- ----------
Investec Bank (Channel Islands)
Limited 434,858 - - -
Royal Bank of Scotland International
Limited 500,018 - - -
Broker's share buy-back account 59,183 - - -
Banco Bradesco 13,636 - - -
Citibank 129,586 - - -
1,137,281 - - -
------------------------------------------------- ------------ ------------ ----------
The Group is subject to counterparty concentration risk in
respect of its holdings of cash with Investec Bank (Channel
Islands) Limited Citibank and Royal Bank of Scotland International
Limited, which together represent 94% (2019: 94%) of the Group's
total cash balance. Bankruptcy or insolvency of either of these
counterparties may cause the Group's rights with respect to these
cash holdings to be delayed or limited. The Group monitors this
risk by monitoring the credit ratings of Investec Bank (Channel
Islands) Limited, Citibank and Royal Bank of Scotland International
Limited, which currently have Fitch short-term credit ratings of
F2, F1 and F1 respectively (2019: F2, F1+ and F1).
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet financial liability obligations as they fall due. The Group's
liquidity risk is managed by the Operations Manager in accordance
with policies and procedures established by the Board. The Board
believes that the Group has sufficient resources to appropriately
manage its liquidity risk.
The tables below analyse the Group's financial liabilities,
which will be settled on a net basis, into relevant maturity
groupings based on the remaining period at the year end to the
contractual maturity date. The amounts disclosed in the table are
the contractual undiscounted cash flows including interest
payments. Balances due within twelve months equal their carrying
balances as the impact of discounting is not significant.
Contractual maturities of financial liabilities
Less than
Carrying Contractual 1 No specified
amount cashflows year maturity*
30 April 2020 GBP GBP GBP GBP
------------------------------- ---------- ------------ ---------- -------------
Loan payable to related party 1,652,347 1,765,457 - 1,765,457
Trade and other payables 89,655 89,655 89,655 -
Liabilities held for sale 46,269 46,269 46,269 -
------------------------------- ---------- ------------ ---------- -------------
Total 1,788,271 1,901,381 135,924 1,765,457
------------------------------- ---------- ------------ ---------- -------------
* Repayment of the loan is dependent on the sale of the
Brazilian properties, which is estimated to be within approximately
1 year.
Less than No specified
Carrying Contractual 1
amount cashflows year maturity*
30 April 2019 GBP GBP GBP GBP
------------------------------- ---------- ------------ ---------- -------------
Loan payable to related party 1,539,237 1,765,457 - 1,765,457
Trade and other payables 77,529 77,529 77,529 -
Liabilities held for sale 74,072 74,072 74,072 -
------------------------------- ---------- ------------ ---------- -------------
Total 1,690,838 1,917,058 151,601 1,765,457
------------------------------- ---------- ------------ ---------- -------------
(c) Market risk
The sensitivity analyses in this note, relating to interest and
exchange rates, are based on a change in an assumption while
holding all other assumptions constant. In practice this is
unlikely to occur and changes in some of the assumptions may be
correlated, for example, change in interest rates and change in
market values.
(d) Foreign exchange currency risk
The Group is exposed to currency risk through investing in
assets held in currencies other than the functional currency. As a
result, the Group is exposed to the risk that the exchange rates of
Sterling relative to other currencies may fluctuate and have an
adverse affect on the Group's performance. The Group operates in
various parts of the world and is exposed to foreign exchange risk
arising from currency exposure to Brazilian Real and United States
Dollar. Foreign exchange risk arises from commercial transactions,
recognised monetary assets and liabilities and net investments in
foreign operations. The Group does not hedge against currency risk
and so bears the risk of currency fluctuation.
The tables below summarise the exposure the Group has to foreign
exchange risk in regards to financial assets and financial
liabilities.
Monetary Monetary Net
assets liabilities exposure
30 April 2020 GBP GBP GBP
--------------------- ---------- ------------ ----------
Brazilian Real 3,352,607 46,269 3,306,338
United States Dollar 52,316 - 52,316
3,404,923 46,269 3,358,654
--------------------------------- ------------ ----------
Monetary Monetary Net
assets liabilities exposure
30 April 2019 GBP GBP GBP
--------------------- -------- ------------ ---------
Brazilian Real 246,391 74,072 172,319
United States Dollar 193,838 - 193,838
440,229 74,072 366,157
------------------------------- ------------ ---------
(d) Foreign exchange currency risk (continued)
The Group's policy is, where possible, to allow Group entities
to settle liabilities denominated in their functional currency with
cash generated from their own operations in that currency.
At the reporting date the Group's exposure to foreign currency
in regards to all foreign operations, including all assets and
liabilities, was as follows (expressed in Sterling):
30 April 2020 30 April
2019
GBP GBP
--------------------------------- -----------
Brazilian Real 8,878,722 14,361,461
United States Dollar 52,316 193,838
8,931,038 14,555,299
--------------------------------- -----------
The Group is subject to concentration risk in relation to its
exposure to US Dollars and Brazilian Real. The Group holds 1%
(2019: 1%) of its net assets in US Dollars and 115% (2019: 92%) of
its net assets in Brazilian Real.
At 30 April 2020, had Sterling strengthened by 20% against the
Brazilian Real and by 5% against the US Dollar (2019: 10% against
all currencies), with all other variables held constant, the net
asset value would have decreased by the amounts shown below:
30 April 2020 30 April
2019
GBP GBP
----------------------------------- ------------
Brazilian Real (1,775,744) (1,436,146)
United States Dollar (2,616) (19,384)
(1,778,360) (1,455,530)
----------------------------------- ------------
A corresponding weakening of Sterling against the above
currencies would have resulted in an equal but opposite effect on
the net asset value, on the basis that all other variables remain
constant. The sensitivity rates of sterling against the Brazilian
Real and US Dollar are regarded as reasonable in relation to the
volatility of Sterling exchange rates against those currencies in
the last year.
(e) Cash flow and fair value interest rate risk
Interest rate risk arises in the Group predominantly from the
holding of cash and cash equivalents. The Board has established a
cash management policy to ensure the best return from the Group's
bankers and to mitigate interest rate risk arising from the holding
of cash. Cash is predominantly held on short-term deposit and the
Board reviews interest rates on a quarterly basis. The Group's
interest rate profile is shown in the following tables.
Interest rate profile Weighted average Amount
interest rate
As at 30 April 2020 % GBP
--------------------------------------------------- ----------------- ----------
Financial assets
Non-interest bearing (trade and other receivables
and receivables held for sale) 0.00 3,264,545
--------------------------------------------------- ----------------- ----------
Cash and cash equivalents
Variable 0.00 625,612
--------------------------------------------------- ----------------- ----------
Financial liabilities
Interest bearing (loan payable to related party) 8.00 1,652,347
Non-interest bearing (trade and other payables
and liabilities held for sale) 0.00 135,924
--------------------------------------------------- ----------------- ----------
Interest rate profile Weighted average Amount
interest rate
As at 30 April 2019 % GBP
---------------------------------------------------- ----------------- ----------
Financial assets
Non-interest bearing (trade and other receivables
and receivables held for sale) 0.00 311,810
---------------------------------------------------- ----------------- ----------
Cash and cash equivalents
Variable 0.00 1,137,281
---------------------------------------------------- ----------------- ----------
Financial liabilities
Interest bearing (loan payable to related party) 8.00 1,539,237
Non-interest bearing (trade and other payables and
liabilities held for sale) 0.00 151,601
---------------------------------------------------- ----------------- ----------
(e) Cash flow and fair value interest rate risk (continued)
For the Group, an increase of 100 basis points in interest rates
as at the year end date would decrease the Group's pre-tax loss by
GBP6,256 (2019: GBP11,373). A decrease of 50 basis points in
interest rates would have no effect on the Group's pre-tax loss
(2019: no effect). The loan payable to related party bears interest
at a fixed rate and is therefore not subject to interest rate
risk.
(f) Fair values
The fair values of the Group's financial assets and liabilities
carried at amortised cost are not significantly different from
their carrying amounts.
30 April 2020
-----------------------
Carrying amount Fair value
GBP GBP
------------------------------------------------------------------- -----------
Financial assets carried at amortised cost
Trade and other receivables and receivables held for
sale 3,264,525 3,264,525
Cash and cash equivalents 625,612 625,612
------------------------------------------------------- ---------- -----------
3,890,137 3,890,137
------------------------------------------------------------------- -----------
Financial liabilities carried at amortised cost
Loan payable to related party 1,652,347 1,652,347
Trade and other payables and liabilities held for sale 135,924 135,924
1,788,271 1,788,271
------------------------------------------------------------------- -----------
30 April 2019
-----------------------
Carrying amount Fair value
GBP GBP
------------------------------------------------------------------- -----------
Financial assets carried at amortised cost
Trade and other receivables and receivables held for
sale 311,810 311,810
Cash and cash equivalents 1,137,281 1,137,281
------------------------------------------------------- ---------- -----------
1,449,091 1,449,091
------------------------------------------------------------------- -----------
Financial liabilities carried at amortised cost
Loan payable to related party 1,539,237 1,539,237
Trade and other payables and liabilities held for sale 151,601 151,601
1,690,838 1,690,838
------------------------------------------------------------------- -----------
(g) Fair value hierarchy
The following table analyses the Group's financial assets and
liabilities. The different levels have been defined as follows:
-- Level 1: quoted prices (unadjusted) in active markets for identical
assets and liabilities;
-- Level 2: inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices);
-- Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
Level 1 Level 2 Level 3 Total
As at 30 April 2020 GBP GBP GBP GBP
----------------------------------- --------- ---------- -------- ----------
Assets not measured at fair value
Trade and other receivables - 3,228,623 - 3,228,623
Cash and cash equivalents - 625,612 - 625,612
Assets held for sale (trade and
other receivables) - 35,922 - 35,922
----------------------------------- --------- ---------- -------- ----------
- 3,890,157 - 3,890,157
--------------------------------------------- ---------- -------- ----------
Liabilities not measured at fair
value
Trade and other payables - 89,655 - 89,655
Loan payable to related party - 1,652,347 - 1,652,347
Liabilities held for sale (trade
and other payables) - 46,269 - 46,269
----------------------------------- --------- ---------- -------- ----------
- 1,788,271 - 1,788,271
--------------------------------------------- ---------- -------- ----------
Level 1 Level 2 Level 3 Total
As at 30 April 2019 GBP GBP GBP GBP
----------------------------------- --------- ---------- -------- ----------
Assets not measured at fair value
Trade and other receivables - 208,641 - 208,641
Cash and cash equivalents - 1,137,281 - 1,137,281
Assets held for sale (trade and
other receivables) - 103,169 - 103,169
----------------------------------- --------- ---------- -------- ----------
- 1,449,091 - 1,449,091
--------------------------------------------- ---------- -------- ----------
Liabilities not measured at fair
value
Trade and other payables - 77,529 - 77,529
Loan payable to related party - 1,539,237 - 1,539,237
Liabilities held for sale (trade
and other payables) - 74,072 - 74,072
----------------------------------- --------- ---------- -------- ----------
- 1,690,838 - 1,690,838
--------------------------------------------- ---------- -------- ----------
The following tables show the reconciliation of the Group's
significant assets held for sale categorised as Level 3 in the fair
value hierarchy.
As at 30 April 2020 GBP
------------------------------------------- ------------
Fair value brought forward 14,292,311
Disposal of disposal groups and assets
held for sale (5,233,431)
Costs capitalised to land and plantations 105,317
Decrease in fair value of disposal groups
and assets held for sale (1,637,347)
Foreign exchange effect (1,918,544)
---------------------------------------------- ------------
Fair value carried forward 5,608,306
---------------------------------------------- ------------
As at 30 April 2019 GBP
------------------------------------------- -----------
Fair value brought forward 14,774,260
Disposal of disposal groups and assets
held for sale (404,472)
Costs capitalised to land and plantations 151,776
Increase in fair value of disposal groups
and assets held for sale 587,773
Foreign exchange effect (817,026)
---------------------------------------------- -----------
Fair value carried forward 14,292,311
---------------------------------------------- -----------
The Group recognises transfers between levels of the fair value
hierarchy as at the end of the reporting period during which the
change has occurred.
24. Capital risk management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and to maintain an optimal capital
structure to reduce the cost of capital. In order to maintain or
adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders,
issue new shares or sell net assets.
There were no changes to the Group's approach to capital
management during the year. Neither the Company nor any of its
subsidiaries were subject to any externally imposed capital
requirements as at 30 April 2020 or 30 April 2019.
25. Contingent asset
Until it was settled by the Group on 21 December 2017, there
existed a security interest on the property owned by 3R Tocantins
Florestais Ltda. ("3R Tocantins") to cover a liability between the
previous owners and Banco da Amazonia (BASA), a financial
institution which lent money to the previous owners who used the
property as collateral. The liability to BASA was settled in the
prior year, however 3R Tocantins retains a security interest on
Lizarda, another property of the previous owners, as cover for this
potential liability. A valuation completed in December 2013 valued
this property at BRL 7.7 million (GBP1.1 million), however the
security on this property may have been limited to BRL 5.0 million
(GBP0.7 million) and may not be enforceable. The Group continues to
explore legal options in relation to the Lizarda security interest,
and in the event that it is successful in enforcing this interest,
the Lizarda property may become an asset of the Group. Should the
discussions relating to the sale of the 3R property be concluded
(see note 13), any rights that the Group may have over the Lizarda
property will be assigned to the buyer as part of the
transaction.
26. Related party transactions
Parties are considered to be related if one party has the
ability to control the other party or exercise significant
influence over the other party in making financial or operational
decisions.
During the year the Directors received the following
remuneration in the form of fees from the Company:
30 April 30 April
2020 2019
Total Total
GBP GBP
----------------------------------- --------- ---------
Antony Gardner-Hillman (Chairman) 48,000 46,667
Svante Adde 25,000 25,000
Roger Lewis 25,000 25,000
98,000 96,667
----------------------------------- --------- ---------
The Chairman's annual fee increased from GBP40,000 per annum to
GBP48,000 per annum with effect from 1 July 2018. There has been no
change in the remuneration of the Directors during the year.
At the year end the Directors had the following interests in the
shares of the Company:
30 April 2020 30 April
2019
Number Number
----------------------- ---------
Svante Adde 160,840 160,840
------------- -------- ---------
Other material contracts
Under an agreement effective from 16 October 2014, Robert
Rickman, a former Director of the Company, was engaged as
Operations Manager to the Company, to be responsible for the
management oversight and realisation of the timber assets of the
Group. Mr Rickman's annual fee increased from GBP96,000 per annum
to GBP106,000 per annum with effect from 1 July 2018. The agreement
for Mr Rickman's services was amended in December 2019 so as to
align his remuneration with shareholders' interests, by a
combination of measures including deferral of part of his monthly
fee until all assets have been contracted to be realised and an
outcome-related adjustment in the event realisations from assets on
a property-by-property basis exceed the published NAV figure for
the relevant property as at 30 April 2019. During the year, Mr
Rickman has received remuneration of GBP96,000 (2019: GBP104,333)
in the form of fees from the Company, with payment of GBP2,000 per
month deferred (pursuant to the amendment agreement) with effect
from December 2019 (GBP10,000 in respect of the year).
27. Events after the year end
On 1 May 2020, Roger Lewis resigned as a Director of the
Company, and Mark Rawlins was appointed in his place.
On 6 May 2020, the Group completed a contract to sell the entire
Ribeirao do Gado property for GBP1.0 million (BRL 7.0 million),
this contract superseding the previously agreed contract for the
sale of the plantations alone, with settlement to take place over
33 months.
Subsequent to the year end, the Group has agreed terms, subject
to contract, to sell the entire 3R property, and has signed a
contract for the sale of the plantations at Forquilha (see note
13).
There were no other significant events after the year end which,
in the opinion of the Directors, require disclosure in these
financial statements.
Other than that mentioned above the Group had no significant
events after the year end that require disclosure in these
financial
This information is provided by RNS, 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 SESSAIESSEEU
(END) Dow Jones Newswires
September 25, 2020 04:27 ET (08:27 GMT)
Cambium Global Timberland (LSE:TREE)
Gráfico Histórico do Ativo
De Ago 2024 até Set 2024
Cambium Global Timberland (LSE:TREE)
Gráfico Histórico do Ativo
De Set 2023 até Set 2024