TIDMDKL
RNS Number : 8620P
Dekel Agri-Vision PLC
23 June 2022
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food
Producers
Dekel Agri-Vision Plc ('Dekel' or the 'Company')
2021 Final Results
Dekel Agri-Vision Plc (AIM: DKL) , the West African agribusiness
company focused on building a portfolio of sustainable and
diversified projects, is pleased to announce its audited results
for the year ended 31 December 2021 (the 'Accounts'). The Company
also gives notice that its Annual General Meeting ('AGM') will be
held at Hill Dickinson LLP, The Broadgate Tower, 20 Primrose
Street, London EC2A 2EW on 26 July 2022 at 10am BST. The Notice of
AGM will be sent to shareholders and the Notice of AGM and Accounts
will be made available to download later today from the Company's
website www.dekelagrivision.com.
Financial Highlights
-- Record Revenue and EBITDA delivered from the Ayenouan palm
oil plant in Côte d'Ivoire ('Palm Oil Operation') primarily driven
by record Crude Palm Oil ('CPO') production and record CPO
pricing:
o 66.2% increase in revenues to EUR37.4m (2020: EUR22.5m) -
includes sale of CPO, Palm Kernel Oil ('PKO'), Palm Kernel Cake
('PKC') and Nursery Plants
o Gross margin increased by 70.6% to 17.4% (2020: 10.2%), with
post period end margins further improving towards historical
levels
o 333.3% increase in EBITDA to EUR5.2m (2020: EUR1.2m)
o Net profit after tax of EUR1.0m (2020: EUR2.2m net loss)
-- The Company's cashew processing plant at Tiebissou in Côte
d'Ivoire (the 'Cashew Operation') recorded a Net Loss of EUR0.4m in
2021 during its construction phase and entered the commissioning
phase in December 2021 with pilot production and sales commencing
in early January after 2021 year-end.
Year ended 31 December 2021 2020 % change
Palm Oil Operation
---------- ---------- ---------
Revenue EUR37.4m EUR22.5m 66.2%
---------- ---------- ---------
Gross Margin EUR6.5m EUR2.3m 182.6%
---------- ---------- ---------
Gross Margin % 17.4% 10.2% 70.6%
---------- ---------- ---------
G&A (EUR3.5m) (EUR2.8m) (25.0%)
---------- ---------- ---------
EBITDA EUR5.2m EUR1.2m 333.3%
---------- ---------- ---------
Net profit / (loss)
after tax EUR1.0m (EUR2.2m) n/a
---------- ---------- ---------
Cashew Operation
---------- ---------- ---------
Net Loss* (EUR0.4m) Nil n/a
---------- ---------- ---------
Dekel Group Net profit
/ (loss) after tax EUR0.6m (EUR2.2m) n/a
---------- ---------- ---------
*Cashew pilot production commenced in early January post-2021
year-end
Operational Highlights - Palm Oil Operation
-- 17.5% increase in FY2021 CPO production compared to FY2020,
resulting in record annual production of 39,953 tonnes
-- 21.0% extraction rate achieved in FY 2021 (FY2020: 22.1%)
-- 14.9% increase in FY2021 CPO sales compared to FY2020,
resulting in record annual sales of 39,092 tonnes
-- 44.2% increase in average CPO prices to EUR868 per tonne in
FY2021 (FY2020: EUR602). This represents an annual Company record
sales price
-- 22.7% increase in FY2021 PKO sales compared to FY2020
-- 42.5% increase in average PKO prices to EUR851 in FY2021 (FY2020: EUR597)
Operational Highlights - Cashew Operation
-- Cashew Operation capital works progressed significantly in
FY2021 from a project at an early land preparation and construction
phase to a largely commissioned plant with pilot production having
commenced in early January 2022
-- Delays in final key equipment items have stalled the ramp-up
of production in H1 2022; however, with the arrival of the colour
sorter on 12 June 2022, we expect to see a material increase in
operating capacity shortly
-- Cashew Operation expected to become net operating cash flow positive in Q4 2022
Lincoln Moore, Dekel 's Executive Director , said: "It was a
significant year for Dekel with our Palm Oil Operation delivering
record breaking operating and financial results and our Cashew
Operation moving materially towards first production, albeit with
unprecedented macro conditions impacting the timing of delivery of
full capacity. Whilst macro conditions are challenging, CPO prices
continue to remain strong, underpinning the profitability of the
Palm Oil Operation despite a period of weaker fresh fruit bunches
('FFB') volumes in H1 2022 and, together with the imminent ramp-up
phase of the Cashew Operation, Dekel is well positioned to deliver
a period of transformational operating and financial growth."
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
**S **
For further information please visit the Company's website
www.dekelagrivision.com or contact:
Dekel Agri-Vision Plc
Youval Rasin
Shai Kol
Lincoln Moore +44 (0) 207 236 1177
WH Ireland Ltd (Nomad and Joint Broker)
James Joyce
Ben Good +44 (0) 20 7220 1666
Optiva Securities Limited (Joint Broker)
Christian Dennis
Daniel Ingram +44 (0) 203 137 1903
Notes:
Dekel Agri-Vision Plc is a multi-project, multi-commodity
agriculture company focused on West Africa. It has a portfolio of
projects in Côte d'Ivoire at various stages of development: a fully
operational palm oil project in Ayenouan where fruit produced by
local smallholders is processed at the Company's 60,000tpa capacity
crude palm oil mill and a cashew processing project in Tiebissou,
which commenced production in early January 2021.
CHAIRMAN'S STATEMENT
2021 has seen a year of record breaking results in our Palm Oil
Operation and considerable progress towards commencement of
production from our Cashew Operation, our second commodity to enter
production and a key part of our short and medium term strategies
to increase both the scale and diversity of Dekel.
The excellent performance of our Palm Oil Operation has been
reflected in our full year financial results. Both revenue of
EUR37.4 million (2020: EUR22.5 million) and EBITDA of EUR5.2
million (2020: EUR1.2m) were records for our Palm Oil Operation.
2021 also saw a return to net profitability of the Palm Oil
Operation which delivered a net profit after tax of EUR1.0m, having
reported a loss of EUR2.2 million in 2020. While supportive palm
oil prices have played a major role in these results, it is also
due to Dekel's ability to navigate and withstand the various
operational challenges resulting from Covid-19 and maintain
stability within the Palm 0il Operation.
In terms of delivering the Cashew Operation to production,
significant progress was achieved in 2021, albeit slower than we
envisaged. At the time of writing this statement, we will now
shortly commence the process of increasing production to over 50%
of capacity with final commissioning and 100% capacity to follow.
We believe the delivery of this project will be transformational in
terms of increasing the scale, diversity and most importantly the
future profit potential of Dekel.
Palm Oil Operation
2021 Palm Oil production can be summarised in two halves: a
solid high season during H1 where production increased 11% compared
to H1 2020 and an exceptionally high low season during H2 where
production increased 33% compared to H2 2020. Combined, the FY2021
CPO production of 39,959 tn was an annual record. Tempering this
result to a small degree was a lower CPO extraction rate of 21.0%
in FY2021 compared to FY2020 of 22.1%.
The high levels of CPO production continued into January 2022;
however, over the past few months we have seen unusually weak
quantities of FFB during the high season which typically takes
place from February to May. The weak FFB levels have been
experienced throughout the east of Cote d'Ivoire and into the west
of Ghana. Our agronomists and other technical experts have had
difficulty pin-pointing the exact reason for this unusual seasonal
trend. However, we have historically seen that periods of
exceptionally high production, as we experienced in H2 2021, are
often followed by a weaker period of production. Critically, during
H1 2022, we have seen a dramatic improvement in the CPO extraction
rate to well over 22%, which is in part offsetting the weaker FFB
volumes. Again, this is consistent with historical trends where FFB
production volumes and extraction rates have had an indirect
relationship.
CPO prices achieved by the Company commenced 2021 at EUR796 per
tonne and ended the year significantly higher at EUR968 per tonne.
During 2021 we saw CPO demand rise as economies reopened after
Covid-19 lockdowns and supply remained constricted following a
number of years of low global new planting levels, coupled with
labour, logistics and shipping challenges associated with the
reopening of economies.
Currently, we are experiencing a 'super peak' in CPO prices as
the impact of the war in Ukraine, which produces approximately 50%
of the world's sunflower oil (a substitute for CPO) has created
further supply constraints and has led to numerous vegetable oil
producing countries (including soya producers, the main substitute
to CPO) to restrict exports in order to meet local demands. This
has resulted in global CPO prices rising to as high as EUR1,800 per
tonne in March 2022. Whilst the current global uncertainty means
predictions are difficult, we expect to see some softening in
prices during 2022 from these unprecedented levels. However, we
maintain our view that CPO prices should remain well above the
long-term average of EUR700 per tonne for the foreseeable future
which would be very supportive for our Palm Oil Operation. We also
remain bullish on medium to long term price dynamics.
The CPO and PKO prices achieved by Dekel locally in Côte
d'Ivoire in FY2021 rose by 44.2% and 42.5% respectively compared to
FY2020. Despite these significant increases, local prices have now
traded at a material discount to the international market due to
local market price caps being set at approximately EUR900 per tonne
to protect local consumers. Whilst we continue to sell the majority
of our products locally, we have also commenced the export of a
portion of our products in 2021. This commenced with our PKO which
we are currently selling for over EUR400 per tonne more than in
2021. In addition we are now exporting a portion of our CPO
production where our prices achieved have increased over EUR200 per
tonne in recent months. We aim to continue to export a portion of
our products to gain access to the higher international prices
while balancing our obligations to local stakeholders.
Final Roundtable on Sustainable Palm Oil ('RSPO') audit and
certification of our Palm Oil Mill has been stalled firstly as a
result of the inability of consultants and auditors to travel in H1
2021 due to Covid-19 and a current resultant backlog of companies
seeking RSPO audits and RSPO renewal audits post Covid-19 travel
restrictions. During this waiting period we have been consulting
with RSPO in relation to the audit of our Company estates. As our
estates consist of over 100 small plots rather than one large plot
the audit process, in our view, needed clarification and a bespoke
approach. RSPO has now provided a clear pathway to completing the
Company estates audit and we are now preparing the works required
with the objective of completing the audits of the Palm Oil Mill
and Company estates at the same time. We will continue to update
the market with our progress on this process.
Cashew Operation
The Cashew Operation site commenced 2021 as an early-stage
construction site and finished the year with all site and
infrastructure works completed. The equipment, with the exception
of the sorting and shelling machinery was also largely
commissioned, with pilot cashew production commencing in early
January after year-end. Whilst progress has been considerable, we
have encountered a host of supplier equipment delays due to our
suppliers experiencing raw material shortages, logistics and
shipping issues and additional Covid-19 lockdowns. This has meant a
number of key components, most notably the sorting and shelling
machines, have been severely delayed and stalled our intended
timeline to ramp-up the Cashew Operation towards full production.
We believe we are finally seeing the light at the end of the tunnel
including the arrival of the colour sorting equipment from China on
12 June 2022 which, once installed, will allow production to
increase to above 50% of capacity shortly. In addition, shipment of
the shelling machines are being prepared for shipment imminently.
These machines when working together with substitute shelling
machines already on site will enable 100% capacity to finally be
delivered. As announced on 15 June 2021, we acquired approximately
2,000tn of raw cashew nut feedstock during 2021 and we are
continuing to acquire feedstock with the current objective of
transitioning to full scale production as quickly as possible.
Whilst the delays have been very frustrating, we remain excited
about the potential of the Cashew Operation which is being
developed in such a way that capacity can be increased
significantly once the initial raw material capacity of 10,000
tonnes per annum is reached. With a nameplate capacity of 15,000
tonnes per annum ('tpa'), production at the plant can be ramped up
by 50% at no extra cost by increasing the number of shifts from two
to three when operations have reached an appropriate sustained
period of stabilisation. From 15,000tpa and at a cost of EUR5-6
million, the mill's capacity can be doubled to 30,000tpa, which we
estimate could generate revenues in the region of approximately
EUR35-40 million per annum based on today's cashew prices.
Other projects
We continue to assess and undertake low-cost feasibility studies
on additional projects, including a third commodity for which we
believe we can leverage our existing infrastructure, logistics
network and technical expertise. In addition, we have medium term
plans to create a clean energy operation from waste material from
both our Palm Oil Operation and Cashew Operation, which would
underpin a biomass operation. Both projects are proceeding
cautiously with current work being low cost and will remain so, at
least until the Cashew Operation is up and running. We will provide
further updates as appropriate.
Financial
A summary of the financial performance for FY2021, in addition
to the comparatives for the previous 5 years, is outlined in the
table below.
FY2021 FY 2020 FY 2019 FY 2018 FY 2017 FY 2016
FFB collected (tonnes) 190,020 154,151 176,019 146,036 171,696 171,301
--------- ---------- ---------- ---------- --------- ---------
CPO production (tonnes) 39,953 34,002 37,649 33,077 38,736 39,111
--------- ---------- ---------- ---------- --------- ---------
CPO sales (tonnes) 39,092 34,008 37,713 32,692 38,373 39,498
--------- ---------- ---------- ---------- --------- ---------
Average CPO price
per tonne EUR868 EUR602 EUR491 EUR542 EUR680 EUR575
--------- ---------- ---------- ---------- --------- ---------
Total Revenue (all
products) EUR37.4m EUR22.5m EUR20.9m EUR20.9m EUR30.2m EUR26.6m
--------- ---------- ---------- ---------- --------- ---------
Gross Margin EUR6.5m EUR2.3m EUR1.7m EUR1.7m EUR6.9m EUR6.6m
--------- ---------- ---------- ---------- --------- ---------
Gross Margin % 17.4% 10.2% 8.1% 8.3% 22.8% 24.8%
--------- ---------- ---------- ---------- --------- ---------
Overheads EUR3.8m EUR2.8m EUR3.2m EUR3.2m EUR3.6m EUR3.2m
--------- ---------- ---------- ---------- --------- ---------
EBITDA EUR4.8m EUR1.2m EUR0.2m (EUR0.2m) EUR4.5m EUR4.1m
--------- ---------- ---------- ---------- --------- ---------
EBITDA % 12.8% 5.3% 1.0% - 14.9% 15.4%
--------- ---------- ---------- ---------- --------- ---------
Net Profit / (Loss)
After Tax EUR0.6m (EUR2.2m) (EUR3.3m) (EUR3.3m) EUR1.6m EUR1.3m
--------- ---------- ---------- ---------- --------- ---------
Net Profit / (Loss)
After Tax % 1.6% - - - 5.3% 4.9%
--------- ---------- ---------- ---------- --------- ---------
FY2021 Revenue was a record for the Company and 66.2% higher
than FY2020. This was driven by both record production in addition
to record CPO and PKO pricing. The Gross Margin improved by 7.2
percentage points compared to FY2020, largely due to increased
efficiencies associated with processing higher volumes, as well as
premium sales prices. However, the Gross Margin % fell short of
previous strong years in FY2016 and FY2017 due to a relatively low
CPO extraction rate of 21.0% compared to historical levels above
22%. The CPO extraction rate is primarily driven by variation in
the FFB oil content and, pleasingly, we have seen the extraction
rate increase to historical levels above 22% in early 2022.
FY2021 Overheads rose by EUR1m to EUR3.8m compared to FY2020.
This was mainly attributable to the first-time consolidation of the
Cashew Operation overhead (EUR0.4m), increases in salaries post
Covid-19 (EUR0.4m) and one-off expenses related to the equity and
debt raises completed in FY2021 (EUR0.2m).
Dekel achieved record FY2021 EBITDA of EUR4.8m, in addition to a
return to profitability with a Net Profit After Tax of EUR0.6m. We
believe this was a strong outcome, particularly in a year of
significant pre-production investment, operating and financial
costs of the Cashew Operation. We expect to see the financial
benefits of this significant investment start to pay dividends in
Q4 2022 and beyond.
Outlook
We believe we have entered a period of supportive macro
conditions in terms of selling prices of CPO and PKO. Whilst FY2022
high season FFB volume levels have been weak, the financial results
remain relatively robust due to a combination of further increases
in the selling prices of CPO and PKO compared to FY2021 and a
material improvement in our extraction rate which, together, are
driving an improvement in current gross profit margins. We continue
to operate as efficiently as possible during what has been a weak
high season and remain focused on controlling overheads in a high
inflationary macro environment. The Cashew Operation is now finally
reaching the point where production volumes can be ramped up and we
believe we will see net contributions to Dekel from this operation
commence in Q4 and importantly we expect it to be a catalyst for a
material uplift in financial performance of Dekel over the next 12
months.
I would like to thank the Board, management, our employees and
advisers for their support and hard work over the course of the
year. I believe shareholders can look forward to an exciting year
ahead.
Andrew Tillery
Non-Executive Chairman Date: 22 June 2022
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
------------------------
2021 2020
------ ----------------
Note Euros in thousands
---- ------------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 1,595 202
Trade receivables 1,487 -
Inventory 4 3,240 1,283
Deposits in banks 10 595 -
Accounts and other receivables 5 365 292
------ ----------------
Total current assets 7,282 1,777
------ ----------------
NON-CURRENT ASSETS:
Deposits in banks 10 501 282
Property and equipment , net 7 43,892 41,249
Total non-current assets 44,393 41,531
------ ----------------
Total assets 51,675 43,308
====== ================
The accompanying notes are an integral part of the consolidated
financial statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
--------------------
2021 2020
--------- ---------
Note Euros in thousands
---- --------------------
EQUITY AND LIABILITIES
CURRENT LIABILITIES:
Short-term loans and current maturities
of long-term loans 10 5,431 5,676
Trade payables 1,374 893
Advance payments from customers 108 1,971
Loan from non-controlling interest 6 915 -
Other accounts payable and accrued expenses 8 2,646 1,824
--------- ---------
Total current liabilities 10, 4 74 10,364
--------- ---------
NON-CURRENT LIABILITIES:
Long-term lease liabilities 9 169 192
Accrued severance pay, net 135 238
Long-term loans 10 24,562 20,052
Total non-current liabilities 24,866 20,482
--------- ---------
Total liabilities 35,340 30,846
--------- ---------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF
THE COMPANY 11
Share capital 170 142
Additional paid-in capital 39,98 5 35,569
Accumulated deficit (17,971) (18,728)
Capital reserve 2,532 2,532
Capital reserve from transactions with
non-controlling interests (8,710) (7,754)
--------- ---------
16,006 11,762
Non-controlling interests 329 700
--------- ---------
Total equity 16,335 12,462
Total liabilities and equity 51,675 43,308
========= =========
The accompanying notes are an integral part of the consolidated
financial statements.
June 22, 2022.
-------------------- ------------------ ------------------ ------------------
Date of approval Youval Rasin Yehoshua Shai Kol Lincoln John Moore
of the
financial statements Director and Chief Director and Chief Executive Director
Executive Officer Finance Officer
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended
31 December
------------------ -------
2021 2020
------------------ -------
Euros in thousands
(Except per share
Note amounts)
------------------
Revenues 12 37,391 22,546
Cost of revenues 15 a 30,880 20,207
------------------ -------
Gross profit 6,511 2,339
General and administrative 15 b 3,869 2,761
------------------ -------
Operating profit (loss) 2,642 (422)
Finance cost 15 c (1,726) 1,582
Share of loss of associate - 167
Profit (loss) before taxes on income 916 (2,171)
Taxes on income 14 2 75 55
------------------ -------
Net income (loss) and total comprehensive
income (loss) 641 (2,226)
================== =======
Attributable to:
Equity holders of the Company 757 (2,226)
Non-controlling interests (116) -
------------------ -------
Net income (loss) and total comprehensive
income (loss) 641 (2,226)
Net earnings (loss) per share attributable
to equity holders of the Company -
Basic and diluted net earnings (loss)
per share 16 0.00 (0.01)
================== =======
The accompanying notes are an integral part of the consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
------------------------------------------------------------------------ ------------------------
Capital
reserve
from
transactions
Additional with
Share paid-in Accumulated Capital non-controlling Non-controlling Total
capital capital deficit reserve interests Total interests Equity
------- ---------- ----------- -------- --------------- ----------- --------------- -------
Euros in thousands
--------------------------------------------------------------------------------------------------
Balance as of 1
January, 2020 141 34,368 (16,502) 2,532 (7,754) 12,785 - 12,785
Loss and total
comprehensive
loss - - (2,226) - - (2,226) - (2,226)
Issuance of
shares (Note
10) 1 907 - - - 908 - 90 8
Non-controlling
interests
arising
from initially
consolidated
subsidiary - - - - - - 700 700
Share-based
compensation - 295 - - - 295 - 295
------- ---------- ----------- -------- --------------- ----------- --------------- -------
Balance as of 31
December 2020 142 35,570 (18,728) 2,532 (7,754) 11,762 700 12,462
------- ---------- ----------- -------- --------------- ----------- --------------- -------
Net income
(loss)and total
comprehensive
income (loss) 757 757 (116) 641
Issuance of
shares (Note
11) 26 3,720 - 3,745 3,745
Acquisition of
non-controlling
interests
(Note 6) 2 401 - ( 956 ) (553) (255) ( 808 )
Share-based
compensation - 295 - 295 295
------- ---------- ----------- -------- --------------- ----------- --------------- -------
Balance as of 31
December 2021 170 39,985 (17,971) 2,532 (8,710) 16,006 329 16,335
======= ========== =========== ======== =============== =========== =============== =======
The accompanying notes are an integral part of the consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended
31 December
--------------------
2021 2020
----------- -------
Euros in thousands
--------------------
Cash flows from operating activities:
Net income (loss) 641 (2,226)
----------- -------
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating
activities:
Adjustments to the profit or loss items:
Depreciation 1,888 1,369
Share-based compensation 295 295
Accrued interest on long-term loans and non-current liabilities 1 ,188 1,141
Change in employee benefit liabilities, net (103) 205
Share of loss of associate - 167
Changes in asset and liability items:
Decrease (increase) in inventories (1,957) (366)
Decrease (increase) in accounts and other receivables (1,296) (39)
Decrease (increase) in bank deposits - (18)
Increase in trade payables 498 83
Increase (decrease) in advance from customers (1,863) 802
Increase in accrued expenses and other accounts payable 859 325
----------- -------
(491) 3,964
----------- -------
Cash paid during the year for:
Income taxes (264) (9)
Interest ( 1 ,188) (1,296)
----------- -------
(1,452) (1,305)
----------- -------
Net cash provided by (used in) operating activities (1,302) 433
=========== =======
The accompanying notes are an integral part of the consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended
31 December
--------------------
2021 2020
--------- ---------
Euros in thousands
--------------------
Cash flows from investing activities:
Increase in cash upon initial consolidation
of subsidiary (a) - 89
Loan to associate - (378)
Increase in deposits (814)
Purchase of property and equipment (4,568) (118)
--------- ---------
Net cash used in investing activities (5,382) (407)
--------- ---------
Cash flows from financing activities:
Issuance of shares (offering net of expenses) 3,726 -
Cash paid on acquisition of non-controlling
interests (806) -
Long-term lease, net (23) (12)
Loan to subsidiary by non-controlling interests 915 -
Receipt of short-term loans, net 605 945
Receipt of long-term loans 5,997 1,220
Repayment of long-term loans (2,338) (2,250)
--------- ---------
Net cash provided by financing activities 8,077 (97)
--------- ---------
Increase (decrease) in cash and cash equivalents 1,393 (71)
Cash and cash equivalents at beginning of year 202 273
--------- ---------
Cash and cash equivalents at end of year 1,595 202
========= =========
Supplemental disclosure of non-cash activities:
Issuance of shares in consideration for investment
in Pearlside 403 884
(a) Acquisition of initially consolidated subsidiary:
The subsidiaries' assets and liabilities at
date of acquisition:
Deficiency in working capital (excluding cash
and cash equivalents) - 462
Deposits - (264)
Property, plant and equipment - (12,191)
Right of use asset - 114
Long-term debt - 8,174
Non-controlling interests - 700
Issuance of shares for acquisition - 884
Investment in company accounted for at equity - 2,210
--------- ---------
- 89
========= =========
The accompanying notes are an integral part of the consolidated
financial information.
NOTE 1:- GENERAL
a. Dekel Agri-Vision PLC ("the Company") is a public limited
company incorporated in Cyprus on 24 October 2007. The Company's
Ordinary shares are admitted for trading on the AIM, a market
operated by the London Stock Exchange. The Company is engaged
through its subsidiaries in developing and cultivating palm oil
plantations in Cote d'Ivoire for the purpose of producing and
marketing Crude Palm Oil ("CPO"), as well as constructing a Raw
Cashew Nut ("RCN") processing plant, which is currently in the
initial production phase. The Company's registered office is in
Limassol, Cyprus.
b. CS DekelOil Siva Ltd. ("DekelOil Siva") a company
incorporated in Cyprus, is a wholly-owned subsidiary of the
Company. DekelOil CI SA, a subsidiary in Cote d'Ivoire currently
held 99.85% by DekelOil Siva, is engaged in developing and
cultivating palm oil plantations for the purpose of producing and
marketing CPO. DekelOil CI SA constructed and is currently
operating its first palm oil mill.
c. Pearlside Holdings Ltd. ("Pearlside") a company incorporated
in Cyprus, is a subsidiary of the Company since December 2020. The
assets and liabilities of Pearlside are included for the first time
by the Company in the consolidated statement of financial position
at 31 December 2020. The Company holds 70.7% interest since
February 2021 (previously 54%). Pearlside has a wholly owned
subsidiary in Cote d'Ivoire, Capro CI SA ("Capro"). Capro is
currently engaged in the initial production phase of its RCN
processing plant in Cote d'Ivoire near the village of Tiabisu (see
also Note 6).
d. DekelOil Consulting Ltd. a company located in Israel and a
wholly owned subsidiary of DekelOil Siva, is engaged in providing
services to the Company and its subsidiaries.
e. Cash flow from operations and working capital deficiency
In FY2021 the Company recognised record revenue, record Palm Oil
operating profit and returned to Group profitability. This resulted
in the Group working capital deficiency materially decreasing from
EUR8.6 million as at 31 December 2020 to EUR3.3 million. Although
in 2021 there was a negative cash flow from Group operations of
EUR1.4 million, this was due to the activities of the RCN
operation. The positive cash flow from the Palm Oil operations in
2021was approximately EUR 2.2 million. In 2022, CPO prices have
continued to materially increase during the first few months, and
through the date of approval of these financial statements. Despite
softer CPO volumes, the Palm Oil operations are continuing to
generate positive operating cash flow. In addition, expenditures
for the completion of the RCN processing plant of Pearlside have
been almost entirely paid and have now entered the production phase
with operational capacity in the process of increasing materially
over the coming months. As a result, the RCN operation is expected
to produce additional operating cash flow for the Group in the
latter half of 2022 and beyond. The Group has prepared detailed
forecasted cash flows through the end of 2023, which indicate that
the Group should have positive cash flows from its operations.
However, the operations of the Group are subject to various market
conditions, including quantity and quality of fruit harvests and
market prices, that are not under the Group's control that could
have an adverse effect on the Group's future cash flows.
Based on the above, Company management believes it will have
sufficient funds necessary to continue its operations and to meet
its obligations as they become due for at least a period of twelve
months from the date of approval of the financial statements.
f. The recent outbreak of COVID-19 had a significant effect on
the global economic conditions and CPO prices, but it had no
significant impact on the Company's operations during 2021. The
outbreak of COVID-19 may resume its negative effect on economic
conditions regionally as well as globally, disrupt operations
situated in countries particularly exposed to the contagion, affect
the Company's customers and suppliers or business practices
previously applied by those entities, or otherwise impact the
Company's activities. Governments in affected countries have
imposed travel bans, quarantines and other emergency public safety
measures. Those measures, though apparently temporary in nature,
may continue and increase depending on developments in the COVID-19
pandemic. The ultimate severity of the COVID-19 outbreak is
uncertain at this time and therefore the Company cannot reasonably
estimate the impact it may have on its end markets and its future
revenues, profitability, liquidity and financial position.
g. Definitions:
The Group - DEKEL AGRI-VISION PLC and its subsidiaries.
The Company - DEKEL AGRI-VISION PLC.
Subsidiaries - Companies that are controlled by the Company-
CS DekelOil Siva Ltd, DekelOil CI SA, DekelOil
Consulting Ltd, and commencing from December
2020 - Pearlside Holdings, Capro CI SA.
Associate - Company in which the Group has significant
influence over the financial and operating
policies without having control - Pearlside
Holdings Ltd (until December 2020).
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been applied consistently
in the financial statements for all periods presented, unless
otherwise stated.
a. Basis of presentation of the financial statements:
These financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union ("IFRS").
The financial statements have been prepared on a cost basis.
The Company has elected to present profit or loss items using
the function of expense method.
b. Consolidated financial statements:
The consolidated financial statements comprise the financial
statements of companies that are controlled by the Company
(subsidiaries). Control is achieved when the Company is exposed, or
has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its
power over the investee. Potential voting rights are considered
when assessing whether an entity has control. The consolidation of
the financial statements commences on the date on which control is
obtained and ends when such control ceases.
The financial statements of the Company and of the subsidiaries
are prepared as of the same dates and periods. The consolidated
financial statements are prepared using uniform accounting policies
by all companies in the Group. Significant intragroup balances and
transactions and gains or losses resulting from intragroup
transactions are eliminated in full in the consolidated financial
statements.
Non-controlling interests in subsidiaries represent the equity
in subsidiaries not attributable, directly or indirectly, to a
parent. Non-controlling interests are presented in equity
separately from the equity attributable to the equity holders of
the Company. Profit or loss and components of other comprehensive
income are attributed to the Company and to non-controlling
interests. Losses are attributed to non-controlling interests even
if they result in a negative balance of non-controlling interests
in the consolidated statement of financial position.
A change in the ownership interest of a subsidiary, without a
change of control, is accounted for as a change in equity by
adjusting the carrying amount of the non-controlling interests with
a corresponding adjustment of the equity attributable to equity
holders of the Company less / plus the consideration paid or
received.
c. Business combinations and goodwill:
Business combinations are accounted for by applying the
acquisition method. The cost of the acquisition is measured at the
fair value of the consideration transferred on the acquisition date
with the addition of non-controlling interests in the acquiree. In
each business combination, the Company chooses whether to measure
the non-controlling interests in the acquiree based on their fair
value on the acquisition date or at their proportionate share in
the fair value of the acquiree's net identifiable assets.
Direct acquisition costs are carried to the statement of profit
or loss as incurred.
In a business combination achieved in stages, equity interests
in the acquiree that had been held by the acquirer prior to
obtaining control are measured at the acquisition date fair value
while recognizing a gain or loss resulting from the revaluation of
the prior investment on the date of achieving control.
Contingent consideration is recognized at fair value on the
acquisition date and classified as a financial asset or liability
in accordance with IAS 39. Subsequent changes in the fair value of
the contingent consideration are recognized in profit or loss. If
the contingent consideration is classified as an equity instrument,
it is measured at fair value on the acquisition date without
subsequent remeasurement.
d. Investment in an associate:
Associates are companies in which the Group has significant
influence over the financial and operating policies without having
control. The investment in an associate is accounted for using the
equity method.
e. Functional currency, presentation currency and foreign currency:
1. Functional currency and presentation currency:
The local currency used in Cote d'Ivoire is the West African CFA
Franc ("FCFA"), which has a fixed exchange rate with the Euro (Euro
1 = FCFA 655.957). A substantial portion of the Group's revenues
and expenses is incurred in or linked to the Euro. The Group
obtains debt financing mostly in FCFA linked to Euros and the funds
of the Group are held in FCFA. Therefore, the Company's management
has determined that the Euro is the currency of the primary
economic environment of the Company and its subsidiaries, and thus
its functional currency. The presentation currency is Euro.
2. Transactions, assets and liabilities in foreign currency:
Transactions denominated in foreign currency are recorded upon
initial recognition at the exchange rate at the date of the
transaction. After initial recognition, monetary assets and
liabilities denominated in foreign currency are translated at each
reporting date into the functional currency at the exchange rate at
that date. Exchange rate differences, other than those capitalized
to qualifying assets or accounted for as hedging transactions in
equity, are recognized in profit or loss. Non-monetary assets and
liabilities denominated in foreign currency and measured at cost
are translated at the exchange rate at the date of the transaction.
Non-monetary assets and liabilities denominated in foreign currency
and measured at fair value are translated into the functional
currency using the exchange rate prevailing at the date when the
fair value was determined.
f. Cash equivalents:
Cash equivalents are considered as highly liquid investments,
including unrestricted short-term bank deposits with an original
maturity of three months or less from the date of acquisition.
g. Financial instruments:
1. Financial assets:
Financial assets are measured upon initial recognition at fair
value plus transaction costs that are directly attributable to the
acquisition of the financial assets, except for financial assets
measured at fair value through profit or loss in respect of which
transaction costs are recorded in profit or loss.
The Company classifies and measures debt instruments in the
financial statements based on the following criteria:
- The Company's business model for managing financial assets; and
- The contractual cash flow terms of the financial asset.
a) Debt instruments are measured at amortized cost when:
The Company's business model is to hold the financial assets in
order to collect their contractual cash flows, and the contractual
terms of the financial assets give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding. After initial recognition, the
instruments in this category are measured according to their terms
at amortized cost using the effective interest rate method, less
any provision for impairment.
On the date of initial recognition, the Company may irrevocably
designate a debt instrument as measured at fair value through
profit or loss if doing so eliminates or significantly reduces a
measurement or recognition inconsistency, such as when a related
financial liability is also measured at fair value through profit
or loss.
b) Equity instruments and other financial assets held for trading:
Investments in equity instruments do not meet the above criteria
and accordingly are measured at fair value through profit or
loss.
Other financial assets held for trading, including derivatives,
are measured at fair value through profit or loss unless they are
designated as effective hedging instruments.
Dividends from investments in equity instruments are recognized
in profit or loss when the right to receive the dividends is
established.
2. Impairment of financial assets:
The Company evaluates at the end of each reporting period the
loss allowance for financial debt instruments which are not
measured at fair value through profit or loss.
The Company has short-term financial assets such as trade
receivables in respect of which the Company applies a simplified
approach and measures the loss allowance in an amount equal to the
lifetime expected credit losses. An impairment loss on debt
instruments measured at amortized cost is recognized in profit or
loss with a corresponding loss allowance that is offset from the
carrying amount of the financial asset.
As of 31 December 2021, there were no past-due trade
receivables.
3. Financial liabilities:
a) Financial liabilities measured at amortized cost:
Financial liabilities are initially recognized at fair value
less transaction costs that are directly attributable to the issue
of the financial liability.
After initial recognition, the Company measures all financial
liabilities at amortized cost using the effective interest rate
method.
4. Derecognition of financial instruments:
a) Financial assets:
A financial asset is derecognized when the contractual rights to
the cash flows from the financial asset expire.
b) Financial liabilities:
A financial liability is derecognized when it is extinguished,
that is when the obligation is discharged or cancelled or
expires.
h. Borrowing costs:
The Group capitalizes borrowing costs that are attributable to
the acquisition, construction, or production of qualifying assets
which necessarily take a substantial period of time to get ready
for their intended use or sale.
The capitalization of borrowing costs commences when
expenditures for the asset are incurred, the activities to prepare
the asset are in progress and borrowing costs are incurred and
ceases when substantially all the activities to prepare the
qualifying asset for its intended use or sale are complete. The
amount of borrowing costs capitalized in a reporting period
includes specific borrowing costs and general borrowing costs based
on a weighted capitalization rate.
i. Leases:
The Company accounts for a contract as a lease when the contract
terms convey the right to control the use of an identified asset
for a period of time in exchange for consideration.
The Group as a lessee:
For leases in which the Company is the lessee, the Company
recognizes on the commencement date of the lease a right-of-use
asset and a lease liability, excluding leases whose term is up to
12 months and leases for which the underlying asset is of low
value. For these excluded leases, the Company has elected to
recognize the lease payments as an expense in profit or loss on a
straight-line basis over the lease term. In measuring the lease
liability, the Company has elected to apply the practical expedient
in the Standard and does not separate the lease components from the
non-lease components (such as management and maintenance services,
etc.) included in a single contract.
On the commencement date, the lease liability includes all
unpaid lease payments discounted at the interest rate implicit in
the lease, if that rate can be readily determined, or otherwise
using the Group's incremental borrowing rate. After the
commencement date, the Group measures the lease liability using the
effective interest rate method.
On the commencement date, the right-of-use asset is recognized
in an amount equal to the lease liability plus lease payments
already made on or before the commencement date and initial direct
costs incurred. The right-of-use asset is measured applying the
cost model and depreciated over the shorter of its useful life or
the lease term.
Following are the periods of depreciation of the right-of-use
assets by class of underlying asset:
Years
-----
Land 99
Motor vehicles 5
The Group tests for impairment of the right-of-use asset
whenever there are indications of impairment pursuant to the
provisions of IAS 36.
j. Biological assets:
Biological assets of the Company are fresh fruit bunches (FFB)
that grow on palm oil trees. The period of biological
transformation of FFB from blossom to harvest and then conversion
to inventory and sale is relatively short (about 2 months).
Accordingly, any changes in fair value at each reporting date are
generally immaterial.
k. Property and equipment:
Property and equipment are stated at cost, net of accumulated
depreciation. Palm oil trees before maturity are measured at
accumulated cost, and depreciation commences upon reaching
maturity.
Depreciation is calculated by the straight-line method over the
estimated useful lives of the assets at the following annual
rates:
%
-------
Extraction mill 2.5
Palm oil plantations 3.33
Computers and peripheral equipment 33
Equipment and furniture 15 - 20
Motor vehicles 25
Agriculture equipment 15
The useful life, depreciation method and residual value of an
asset are reviewed at least each year-end and any changes are
accounted for prospectively as a change in accounting estimate.
Depreciation of an asset ceases at the earlier of the date that the
asset is classified as held for sale and the date that the asset is
derecognized.
l. Impairment of non-financial assets:
The Company evaluates the need to record an impairment of
non-financial assets whenever events or changes in circumstances
indicate that the carrying amount is not recoverable.
If the carrying amount of non-financial assets exceeds their
recoverable amount, the assets are reduced to their recoverable
amount. The recoverable amount is the higher of fair value less
costs of sale and value in use. In measuring value in use, the
expected future cash flows are discounted using a pre-tax discount
rate that reflects the risks specific to the asset. The recoverable
amount of an asset that does not generate independent cash flows is
determined for the cash-generating unit to which the asset belongs.
Impairment losses are recognized in profit or loss.
An impairment loss of an asset, other than goodwill, is reversed
only if there have been changes in the estimates used to determine
the asset's recoverable amount since the last impairment loss was
recognized. Reversal of an impairment loss, as above, shall not be
increased above the lower of the carrying amount that would have
been determined (net of depreciation or amortization) had no
impairment loss been recognized for the asset in prior years and
its recoverable amount. The reversal of impairment loss of an asset
presented at cost is recognized in profit or loss.
m. Revenue recognition:
Revenue from contracts with customers is recognized when the
control over the services is transferred to the customer. The
transaction price is the amount of the consideration that is
expected to be received based on the contract terms.
In determining the amount of revenue from contracts with
customers, the Company evaluates whether it is a principal or an
agent in the arrangement. The Company is a principal when the
Company controls the promised goods or services before transferring
them to the customer. In these circumstances, the Company
recognizes revenue for the gross amount of the consideration. When
the Company is an agent, it recognizes revenue for the net amount
of the consideration, after deducting the amount due to the
principal.
Revenue from the sale of goods:
Revenue from sale of goods is recognized in profit or loss at
the point in time when the control of the goods is transferred to
the customer, generally upon delivery of the goods to the
customer.
Contract balances:
Amounts received from customers in advance of performance by the
Company are recorded as contract liabilities/advance payments from
customers and recognized as revenue in profit or loss when the work
is performed. For all years presented in these financial
statements, such advances were recognized as revenues in the year
subsequent to their receipt.
n. Inventories:
Inventories are measured at the lower of cost and net realizable
value. The cost of inventories comprises costs of purchase and
costs incurred in bringing the inventories to their present
location and condition. Net realizable value is the estimated
selling price in the ordinary course of business less estimated
costs of completion and estimated costs necessary to make the sale.
The Company periodically evaluates the condition and age of
inventories and makes provisions for slow moving inventories
accordingly.
Cost of finished goods inventories is determined on the basis of
average costs including materials, labor and other direct and
indirect manufacturing costs based on normal capacity.
o. Earnings (loss) per share:
Earnings (loss) per share are calculated by dividing the net
income attributable to equity holders of the Company by the
weighted number of Ordinary shares outstanding during the
period.
Potential Ordinary shares are included in the computation of
diluted earnings per share when their conversion decreases earnings
per share from continuing operations. Potential Ordinary shares
that are converted during the period are included in diluted
earnings per share only until the conversion date and from that
date in basic earnings per share. The Company's share of earnings
of investees is included based on its share of earnings per share
of the investees multiplied by the number of shares held by the
Company.
p. Provisions:
A provision in accordance with IAS 37 is recognized when the
Group has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. When the Group expects part or all of the expense to be
reimbursed, for example under an insurance contract, the
reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain. The expense is recognized in
profit or loss net of any reimbursement.
q. Fair value measurement:
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
Fair value measurement is based on the assumption that the
transaction will take place in the asset's or the liability's
principal market, or in the absence of a principal market, in the
most advantageous market.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their
economic best interest.
Fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset
in its highest and best use.
The Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
All assets and liabilities measured at fair value or for which
fair value is disclosed are categorized into levels within the fair
value hierarchy based on the lowest level input that is significant
to the entire fair value measurement:
Level 1 - quoted prices (unadjusted) in active markets
for identical assets or liabilities.
Level 2 - inputs other than quoted prices included within
Level 1 that are observable either directly
or indirectly.
Level 3 - inputs that are not based on observable market
data (valuation techniques which use inputs
that are not based on observable market data).
r. Share-based payment transactions:
The Company's employees / other service providers are entitled
to remuneration in the form of equity-settled share-based payment
transactions and certain employees / other service providers are
entitled to remuneration in the form of cash-settled share-based
payment transactions that are measured based on the increase in the
Company's share price.
Equity-settled transactions:
The cost of equity-settled transactions with employees is
measured by reference to the fair value of the equity instruments
at the date on which they are granted. The fair value is determined
using an acceptable option model.
The cost of equity-settled transactions is recognized, together
with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled, ending on
the date on which the relevant employees become fully entitled to
the award ("the vesting date"). The cumulative expense recognized
for equity-settled transactions at each reporting date until the
vesting date reflects the extent to which the vesting period has
expired and the Company's best estimate of the number of equity
instruments that will ultimately vest.
s. Taxes on income:
Current or deferred taxes are recognized in profit or loss,
except to the extent that they relate to items which are recognized
in other comprehensive income or equity.
1. Current taxes:
The current tax liability is measured using the tax rates and
tax laws that have been enacted or substantively enacted by the end
of reporting period as well as adjustments required in connection
with the tax liability in respect of previous years.
2. Deferred taxes:
Deferred taxes are computed in respect of temporary differences
between the carrying amounts in the financial statements and the
amounts attributed for tax purposes.
Deferred taxes are measured at the tax rate that is expected to
apply when the asset is realized or the liability is settled, based
on tax laws that have been enacted or substantively enacted by the
reporting date.
Deferred tax assets are reviewed at each reporting date and
reduced to the extent that it is not probable that they will be
utilized. Temporary differences for which deferred tax assets had
not been recognized are reviewed at each reporting date and a
respective deferred tax asset is recognized to the extent that
their utilization is probable.
Taxes that would apply in the event of the disposal of
investments in investees have not been taken into account in
computing deferred taxes, as long as the disposal of the
investments in investees is not probable in the foreseeable
future.
Also, deferred taxes that would apply in the event of
distribution of earnings by investees as dividends have not been
taken into account in computing deferred taxes, since the
distribution of dividends does not involve an additional tax
liability or since it is the Company's policy not to initiate
distribution of dividends from a subsidiary that would trigger an
additional tax liability.
t. Significant accounting estimates and assumptions used in the
preparation of the financial statements:
The preparation of the financial statements requires management
to make estimates and assumptions that have an effect on the
application of the accounting policies and on the reported amounts
of assets, liabilities, revenues and expenses. Changes in
accounting estimates are reported in the period of the change in
estimate.
u. Changes in accounting policies - initial application of new
financial reporting and accounting standards and amendments to
existing financial reporting and accounting standards:
1. Amendments to IFRS 9, IFRS 7, IFRS 16, IFRS 4 and IAS 39 regarding the IBOR reform:
In August 2020, the IASB issued amendments to IFRS 9, "Financial
Instruments", IFRS 7, "Financial Instruments: Disclosures", IAS 39,
"Financial Instruments: Recognition and Measurement", IFRS 4,
"Insurance Contracts", and IFRS 16, "Leases" ("the
Amendments").
The Amendments provide practical expedients when accounting for
the effects of the replacement of benchmark InterBank Offered Rates
(IBORs) by alternative Risk Free Interest Rates (RFRs).
Pursuant to one of the practical expedients, an entity will
treat contractual changes or changes to cash flows that are
directly required by the reform as changes to a floating interest
rate. That is, an entity recognizes the changes in interest rates
as an adjustment of the effective interest rate without adjusting
the carrying amount of the financial instrument. The use of this
practical expedient is subject to the condition that the transition
from IBOR to RFR takes place on an economically equivalent
basis.
In addition, the Amendments permit changes required by the IBOR
reform to be made to hedge designations and hedge documentation
without the hedging relationship being discontinued, provided
certain conditions are met. The Amendments also provide temporary
relief from having to meet the "separately identifiable"
requirement according to which a risk component must also be
separately identifiable to be eligible for hedge accounting.
The Amendments include new disclosure requirements in connection
with the expected effect of the reform on an entity's financial
statements, such as how the entity is managing the process to
transition to the interest rate reform, the risks to which it is
exposed due to the reform and quantitative information about
IBOR-referenced financial instruments that are expected to
change.
The Amendments are effective for annual periods beginning on or
after January 1, 2021. The Amendments are to be applied
retrospectively. However, restatement of comparative periods is not
required.
The application of the Amendments did not have a material impact
on the Company's financial statements.
NOTE 3:- DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION
a. Amendment to IAS 16, "Property, Plant and Equipment":
In May 2020, the IASB issued an amendment to IAS 16, "Property,
Plant and Equipment" ("the Amendment"). The Amendment prohibits a
company from deducting from the cost of property, plant and
equipment ("PP&E") consideration received from the sales of
items produced while the company is preparing the asset for its
intended use. Instead, the company should recognize such
consideration and related costs in profit or loss.
The Amendment is effective for annual reporting periods
beginning on or after January 1, 2022, with earlier application
permitted. The Amendment is to be applied retrospectively, but only
to items of PP&E made available for use on or after the
beginning of the earliest period presented in the financial
statements in which the company first applies the Amendment. The
company should recognize the cumulative effect of initially
applying the Amendment as an adjustment to the opening balance of
retained earnings at the beginning of the earliest period
presented.
The Company estimates that the application of the Amendment is
not expected to have a material impact on the financial
statements.
d. Amendment to IAS 1, "Presentation of Financial Statements":
In January 2020, the IASB issued an amendment to IAS 1,
"Presentation of Financial Statements" ("the Amendment") regarding
the criteria for determining the classification of liabilities as
current or non-current.
The Amendment includes the following clarifications:
What is meant by a right to defer settlement;
That a right to defer must exist at the end of the reporting
period;
That classification is unaffected by the likelihood that an
entity will exercise its deferral right;
That only if an embedded derivative in a convertible liability
is itself an equity instrument would the terms of a liability not
impact its classification.
The Amendment is effective for annual periods beginning on or
after January 1, 2023 and must be applied retrospectively.
The Company is evaluating the possible impact of the Amendment
on its current loan agreements.
f. Amendment to IAS 8, "Accounting Policies, Changes to Accounting Estimates and Errors":
In February 2021, the IASB issued an amendment to IAS 8,
"Accounting Policies, Changes to Accounting Estimates and Errors"
("the Amendment"), in which it introduces a new definition of
"accounting estimates".
Accounting estimates are defined as "monetary amounts in
financial statements that are subject to measurement uncertainty".
The Amendment clarifies the distinction between changes in
accounting estimates and changes in accounting policies and the
correction of errors.
The Amendment is to be applied prospectively for annual
reporting periods beginning on or after January 1, 2023 and is
applicable to changes in accounting policies and changes in
accounting estimates that occur on or after the start of that
period. Early application is permitted.
The Company is evaluating the effects of the Amendment on its
financial statements.
NOTE 4:- INVENTORY
31 December
---------------------
2021 2020
--------- ---------
Euros in thousands
---------------------
Palm oil mill final products 902 212
Plants 186 172
Raw cashew nuts 1,381
Spare parts, tools & materials 771 899
--------- ---------
3,240 1,283
========= =========
NOTE 5:- ACCOUNTS AND OTHER RECEIVABLES
31 December
---------------------
2021 2020
--------- ---------
Euros in thousands
---------------------
Government authorities (VAT) 10 3
Prepaid expenses and other receivables 7 12
Loans to employees 29 41
Advance payment to contractor 319 236
--------- ---------
365 292
========= =========
NOTE 6:- INVESTMENT IN PEARLSIDE HOLDINGS LTD
On 20 December 2018 the Company entered into an agreement to
purchase a 43.8% interest in Pearlside Holdings Ltd ("Pearlside")
by way of issuing 52,612,613 Ordinary shares of the Company.
Pearlside, through its wholly-owned subsidiary, was in the advanced
stages of development and construction of a Raw Cashew Nut (RCN)
processing plant in Cote d'Ivoire, The closing of this purchase
transaction occurred on 7 January 2019 (See also Note 11
Equity).
Based on the market price of the Company's shares on the date of
the purchase, the cost of the investment in Pearlside amounted to
approximately EUR1.9 million.
On 30 October 2020 the Company entered into an agreement to
increase its holding in Pearlside to 52% by way of issuing
28,552,800 Ordinary shares of the Company. Based on the market
price of the Company's shares on the date of the purchase, the cost
of this additional investment in Pearlside is EUR740 thousand. The
shares were issued, and the transaction was completed on 25
November 2020.
Following this transaction, the Company gained control over
Pearlside. The assets and liabilities of Pearlside are included for
the first time in the consolidated statement of financial position
as of 31 December 2020. As Pearlside was in the process of
construction of its RCN plant, the results of operations of
Pearlside from the date of acquisition to 31 December 2020 were
immaterial.
On 8 December 2020 the Company entered into an agreement to
purchase an additional 2% and to increase its holding to 54% by way
of issuing 3,922,789 Ordinary shares of the Company. Based on the
market price of the Company's shares on the date of the purchase,
the cost of this additional investment in Pearlside is EUR144
thousand.
As of the date of obtaining control, the RCN plant under
construction represented substantially all of the gross assets of
Pearlside. All of the activity of Pearlside related to the
construction of the plant. There were a few employees that were
involved in the supervision of the construction which was being
performed by external contractors. Accordingly, the purchase
transaction was accounted for as an acquisition of assets.
Pursuant to IFRS 3, the Company records the cash and other
financial assets and liabilities at their fair value on date of
acquisition (which approximated their carrying amounts, including
loans which were recently obtained at market terms). The excess of
(i) the cost of the investment plus (ii) the non-controlling
interest recognized over (iii) the carrying amount of the net
assets acquired (equity of Pearlside) was allocated to the RCN
plant. The non-controlling interest in the amount of EUR 700 was
measured at its proportionate share of the net assets (equity) of
Pearlside.
Following are the assets and liabilities acquired at the date of
acquisition (Euros in thousands):
Deficiency in working capital (373)
Non- current deposits 264
Property, plant and equipment 12,191
Lease liability (114)
Long-term debt (8,174)
On 8 February 2021, the Company signed an agreement to purchase
an additional 16.7% of Pearlside for a total consideration of
GBP1.062 million (EUR1.2 million), of which GBP354,000 (EUR403
thousand) was settled via the issue of 7,080,000 new Ordinary
shares at 5 pence per share (see Note 11), and the remaining
GBP708,000 (EUR806 thousand) of the consideration was settled in
cash. Following this acquisition, the Company holds 70.7% of
Pearlside. The difference between the total consideration and the
carrying amount of the non-controlling interests, in the amount of
EUR 956 thousand, was recorded as a charge to "capital reserve from
transactions with non-controlling interests" in equity.
During 2021 the shareholders of Pearlside invested additional
funds as a loan to Pearlside, in order to finance the construction
and activity of Pearlside. The portion of the loan provided by the
non-controlling interests amounted to EUR 915 thousand. The loan
bears no interest and is to be repaid only from available funds of
Pearlside. The loan is presented as a current liability in the
consolidated statement of financial position as of 31 December
2021.
NOTE 7:- PROPERTY AND EQUIPMENT, NET
Composition and movement:
Cashew
Computers processing
and Equipment Extraction mill under
peripheral and Motor Agriculture mill Palm oil construction
equipment furniture vehicles equipment and land plantations and land Total
----------- ------------ ----------- ----------- ----------- ----------- -------
Cost:
Balance as of
1 January,
2020 290 110 1,495 464 26,281 7,620 - 36,260
----------- ------------ ----------- ----------- ----------- ----------- ------------ -------
Acquisitions
during the
year 4 - 103 - - 12 - 119
Disposals
during the
year (15) (7) (72) - - - - (94)
Initial
consolidation
of subsidiary 3 3 26 26 - - 12,133 12 ,191
-------------- ----------- ------------ ----------- ----------- ----------- ----------- ------------ -------
Balance as of
31 December,
2020 28 2 10 6 1 , 5 52 490 26,281 7,632 12,133 48, 476
Acquisitions
during the
year 87 453 723 - 247 - 3,079 4,589
Disposals
during the
year - - (149) - - - - (149)
Balance as of
31 December,
2021 369 559 2,126 490 26,528 7,632 15,212 52,916
=========== ============ =========== =========== =========== =========== ============ =======
Accumulated
depreciation:
Balance as of
1 January
2020 163 98 825 394 3,693 779 - 5,952
----------- ------------ ----------- ----------- ----------- ----------- ------------ -------
Depreciation
during the
year 29 8 205 15 876 236 - 1,369
Disposals
during the
year (15) (7) (72) - - - - (94)
Balance as of
31 December
2020 177 99 958 409 4,569 1,015 - 7,227
Depreciation
during the
year 31 15 220 26 861 789 - 1 ,942
Disposals
during the
year - - (145) - - - - (145)
----------- ------------ ----------- ----------- ----------- ----------- ------------ -------
Balance as of
31 December
2021 208 114 1,033 435 5,430 1,1,804 - 9,024
=========== ============ =========== =========== =========== =========== ============ =======
Depreciated
cost as of 31
December 2021 161 445 1,093 55 21,098 5,828 15,212 43,892
=========== ============ =========== =========== =========== =========== ============ =======
Depreciated
cost as of 31
December 2020 105 7 594 81 21,712 6,617 12,133 41,249
=========== ============ =========== =========== =========== =========== ============ =======
NOTE 8:- OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES
31 December
--------------------
2021 2020
--------- ---------
Euros in thousands
--------------------
Employees and payroll accruals 917 993
VAT payable 405 100
Other accounts payable & accrued expenses 1,325 731
--------- ---------
2,647 1,824
========= =========
NOTE 9:- RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
On 24 June 2008, DekelOil CI SA signed a lease agreement for 42
hectares near the village of Ayenouan, Cote d'Ivoire. The agreement
is with the village of Adao and the people occupying the land in
Ayenouan. The lease is for 90 years and the payment for the lease
is FCFA 3,000,000 (app. EUR 4,573) per annum.
In January 2018 a subsidiary of the Company signed a lease
agreement for a vehicle. The lease is for 5 years and the payment
is EUR1,080 per month.
A subsidiary consolidated for the first time at 31 December 2020
signed a lease agreement with the government authorities for 6
hectares near the village of Tiabissuo, Cote d'Ivoire. The
agreement is for a lease of 99 years with an annual lease payment
of 6 million FCFA (app. EUR 9,146)
The right-of-use assets in respect of the above leases are
included in Property and Equipment (Note 7). The balance of the
lease liabilities at 31 December 2021 amounted to EUR 161 (2020 -
EUR169).
NOTE 10:- LOANS
a. Long-term loans:
Interest
rate as of
31 December 31 December
--------------------
Currency 2021 2021 2020
---------- ------------ --------- ---------
Euros in thousands
--------------------
SGBCI In FCFA 6.2%-7.3% - 1
SOGEBOURSE (c.1) In FCFA 8.4% 4,568 6,387
SIB (c.2) In FCFA 6.85% 256 377
AgDevCo (c.3) In Euro 8.2% 7,200 7,200
BGFI (c.4) In FCFA 7.5% 941 1,153
BIDC (c.5) In FCFA 7.25% 4,053 4,053
NSIA (c.6) In FCFA 8.5% 2,287 1,834
NSIA (c.7) In FCFA 7.75% 133 762
BGFI (c.8) In FCFA 7.75% 1,524 1,524
HUDSON (c.9) In FCFA 7.5% 5,991 -
Total loans 26,953 23,291
Less - current
maturities (2,391) (3,239)
--------- ---------
24,562 20,052
--------- ---------
b. Short-term loans and current maturities:
31 December
--------------------
20 21 2020
--------- ---------
Euros in thousands
--------------------
Bank Credit line 1,888 2,437
Short-term loan from bank 1,152
Current maturities - per a. above 2,391 3,239
--------- ---------
5,431 5,676
--------- ---------
c. 1. In September 2016 DekelOil CI SA signed a long-term
financing facility agreement with a consortium of institutional
investors arranged by SOGEBOURSE for a long-term loan of up to FCFA
10 billion (approximately EUR15.2 million). Of this amount, FCFA
5.5 billion (approximately EUR8.4 million) was utilized to
refinance the West Africa Development Bank ("BOAD") loan The loan
is repayable over 7 years in fourteen semi annual payments. and
bears interest at a rate of 6.85% per annum.
On 22 October 2016 SOGEBOURSE transferred the funds and the BOAD
loan was repaid in full .
On 1 February 2018 the DekelOil CI SA drew down a second tranche
of FCFA 2.8 billion (EUR4.34 million) from its FCFA 10 billion
(EUR15.2 million) long-term Syndicated Loan Facility with
Sogebourse CI. on the same terms as the first tranche. Part of the
funds were used to repay a short-term loan in the amount of
EUR1,524 thousand and a long-term loan in the amount of EUR497
thousand.
2. In October 2018 DekelOil CI SA signed a loan agreement with
Societe Ivorienne de Banque ("SIB") for FCFA 400 million
(approximately EUR610 thousand). The loan is for 5 years and bears
interest at a rate of 8.2% per annum. One of the boilers in the CPO
extraction mill serves as a security for the loan.
3. In July 2019 DekelOil CI SA signed an agreement with AgDevCo
Limited ("AgDevCo"), a leading African agriculture sector impact
investor for a EUR7.2 million loan for a term of 10 years, 4 years
of principal grace and 6 years of repayment, with a gross interest
rate of 7.5% per annum, variable and based on 12-month Euro Short
Term Rate published by the European Central Bank (which replaced
the Euro Libor used previously) plus a pre-defined spread, and
collared with a minimum rate of 6% per annum and a maximum rate of
9% per annum. The funds from the loan were used as follows: (i)
EUR6.2 million to replace existing NSIA Bank loan and (ii) EUR1.0
million for Environmental, Social and Governance ("ESG") activities
and general working capital purposes. The fixed assets of DekelOil
CI SA serves as a security for this loan.
The loan agreement contains the following financial covenants to
be tested on a quarterly basis: (1) Current Ratio of at least 0.5;
(2) Debt Service Coverage Ratio of at least 1. The Company met
these financial covenants on 31 December 2021 and is expected to
meet these financial covenants during 2022.
4. On 7 July 2020 DekelOil CI SA signed a loan agreement with
Banque Gabonaise Francaise International ("BGFI") for FCFA 800
million (approximately EUR1,220 thousand). The loan is for 5 years
and bears interest at a rate of 7.25% per annum.
5. On 16 March 2016 Capro CI SA signed a loan agreement with the
Bank of Investment and Development of CEDEAO ("EBID") according to
which EBID agreed to grant Capro CI SA a facility of 3,000 million
FCFA (EUR 4,573 thousand).
The EBID loan shall bear interest at a rate of 8.5% per annum.
The loan has a tenure of seven years and shall be repaid in 20
quarterly installments over five years, commencing after a grace
period on principal payments of two years. Principal payments start
in January 2022. . According to the loan agreement as a security
for this loan there is a lien over the equipment of Capro CI SA and
an amount of EUR97 thousand has been deposited in a bank by Capro
CI SA (non-current bank deposits).
6. In 2018 Capro CI SA signed a loan agreement with NSIA bank,
Togo ("NSIA Togo") according to which NSIA Togo agreed to grant
Capro CI SA a facility of 1,500 million FCFA (EUR 2,278
thousand).
NSIA Togo loan shall bear interest at a rate of 7.25%% per
annum. The loan has a tenure of seven years and shall be repaid in
20 quarterly installments over five years, commencing after a grace
period on principal payments of two years from the first withdrawal
made on 20 February 2020.
7. On 30 March 2020 Capro CI SA signed a loan agreement with
NSIA bank Cote d'Ivoire ("NSIA") according to which NSIA agreed to
grant Capro CI SA a facility of 500 million FCFA (EUR 762
thousand).
NSIA loan shall bear interest at a rate of 7.25% per annum. The
loan is for two years with one year grace period on principal
payments.
8. On 3 February 2020 Capro CI SA signed a loan agreement with
Banque Gabonaise Francaise International ("BGFI") for FCFA 1,000
million (approximately EUR1,542 thousand). The loan shall bear
interest at a rate of 7.5% per annum. The loan has a tenure of
seven years and shall be repaid in monthly installments over five
years, commencing after a grace period on principal payments of two
years from the first withdrawal made in September 2020. According
to the loan agreement as a security for this loan an amount of
EUR114 thousand has been deposited in a bank by Capro CI SA
(non-current bank deposits).
9. On 25 January 2021 DekelOil CI SA signed an agreement with
Hudson for issuance of a long-term bond of up to EUR15.2 million
(10,000 million FCFA). The first tranche of EUR6 million (3,930
million FCFA) was received on 27 January 2021. The bond is for 7
years with a 3-year grace for principal repayments. The bond bears
annual interest of 7.75%. According to the agreement DekelOil CI SA
accumulates the funds for each payment prior to each payment by a
monthly payment to be made for that purpose to a designated deposit
account. In addition, a fixed amount has been deposited in a
separate bank account. As of 31 December 2021, the deposits amount
to EUR283 thousand and EUR239 thousand (current and non-current
deposits), respectively.
NOTE 11:- EQUITY
a. Composition of share capital:
31 December 31 December
---------------------------- ------------------------------
2021 2020 2021 2020
------------- ------------- ----------------- -----------
Authorized Issued and outstanding
---------------------------- ------------------------------
Number of shares
Ordinary shares
of EUR 0.0003367
par value each 1,000,000,000 1,000,000,000 535,863,569 457,126,075
============= ============= ================= ===========
Each Ordinary share confers upon its holder voting rights, the
right to receive cash and share dividends, and the right to share
in excess assets upon liquidation of the Company.
Commencing from December 2019, pursuant to his remuneration
contract, the General Manager of the company's subsidiary, shall be
issued 400,000 Ordinary Shares per year at par value over the next
3 years, vesting on a monthly basis. The fair value of the Ordinary
shares to be issued at the date of grant amounts to EUR 34
thousand. As of 31 December 2021, 800,000 Ordinary shares are fully
vested. These shares were issued to the General Manager in
2022.
On 25 November 2020 the Company issued 28,552,800 Ordinary
Shares according to an agreement to increase its holding of
Pearlside to 52% by way of a share swap. Based on the market price
of the Company's shares on the date of the purchase, the cost of
this additional investment in Pearlside is EUR740 thousand.
On 10 December 2020 the Company completed a purchase of an
additional 2% of Pearlside Holding Ltd, reaching a total holding of
54% of Pearlside, by way of issuing 3,922,789 Ordinary shares of
the Company. Based on the market price of the Company's shares on
the date of the purchase, the cost of this additional investment in
Pearlside is EUR144 thousand.
In 2020 the Company issued 1,587,043 ordinary shares to certain
brokers in consideration for services provided. The fair value of
the shares issued amounting to EUR 24 thousand was recorded in
general and administrative expenses
On 29 January 2021 the Company raised equity totaling to GBP3.3
million (EUR3.7 million, (net of GBP0.23 million (EUR0.26 million)
fund raising costs) through the placing of 70,000,000 new Ordinary
Shares at an issue price of 5 pence per share.
On 8 February 2021, the Company signed an agreement to purchase
an additional 16.7% of Pearlside for a total consideration of
GBP1.062 million (EUR1.2 million), of which GBP354,000 (EUR403
thousand) was settled via the issue of 7,080,000 new Ordinary
shares at 5 pence per share -see Note 6.
In 2021 (January & September) the Company issued 1,656,029
ordinary shares to certain brokers in consideration for services
provided. The fair value of the shares issued amounting to EUR 64
thousand was recorded in general and administrative expenses
b. Share option plan:
On 15 January 2015 the Company granted directors and senior
employee's options to purchase 8,100,000 Ordinary shares. Of that
amount, 1,800,000 options vested immediately, and the remainder
will vest ratably over 3 years. Half of the options have an
exercise price of 12.5 pence per share while the remainder is
exercisable at a price of 20 pence per share. The fair value of the
options granted calculated
On 19 October 2015 the Company granted directors and senior
employee's options to purchase 1,800,000 Ordinary shares. The
options will vest ratably over 3 years. Half of the options have an
exercise price of 12.5 pence per share while the remainder is
exercisable at a price of 20 pence per share. The fair value of the
options granted calculated based on Black-Scholes option pricing
model was approximately EUR139 thousand.
On 30 June 2017 the Company granted directors and senior
employee's options to purchase 10,750,000 Ordinary shares. The
options will vest ratably over 5 years. The exercise price of the
options is EUR0.1359 per share. The fair value of the options
granted calculated based on Black-Scholes option pricing model was
approximately EUR612 thousand.
On 1 January 2017 a subsidiary appointed a new CEO, and as part
of his employment compensation he was granted 1,200,000 options to
purchase Ordinary shares of the Company at a nominal exercise
price. The options vest linearly over three years. The fair value
of the options at the date of grant was calculated based on the
share price at that date and was approximately EUR151 thousand.
On 2 December 2019 the Company granted directors and advisers
options to purchase 17,600,000 Ordinary shares. The 2019 Options
expire 10 years from the date of grant and have an exercise price
of 2.45 pence per Ordinary Share. One third of the 2019 Options
vest immediately. The balance of the 2019 Options are subject to
vesting conditions as follows:
(i) One third of the options may only be exercised if at any
point following the date of grant, the 30-day Volume Weighted
Average Price (VWAP) of the Ordinary Shares achieves a price per
share equal to or exceeding 4.0 pence, this condition was met
during 2020. These options vest over 12 months following the date
of grant.
(ii) A further one third of the options may only be exercised if
at any point following the date of grant, the 30-day VWAP of the
Ordinary Shares achieves a price per share equal to or exceeding
6.0 pence. These options vest over 12 months from the first
anniversary of the date of grant.
The fair value of the options granted calculated based on
Black-Scholes option pricing model was approximately EUR289
thousand for the 14,100,000 options granted to directors and
approximately EUR72 thousand for the 3,500,000 options granted to
advisors.
In addition, in December 2019 the Company amended the terms of
7,200,000 of the options granted in January 2015 (see above) and of
the terms of 9,100,000 option granted on 30 June 2017 (see above),
to reflect the same terms, vesting terms and duration of the
options granted on 2 December 2019.
The incremental fair value of the amended options totaling
approximately EUR212 thousand was calculated based on the
difference between the fair value of the options immediately before
the amendment and their fair value immediately after the amendment.
The calculation was based on Black-Scholes option pricing model.
This incremental fair value will be recorded as an expense over the
amended vesting period in addition to the expense recorded in
respect of the original grant of these options.
A summary of the activity in options for the years 2021 and 2020
is as follows:
Year ended
31 December
-------------------------------------------------
2021 2020
------------------------ -----------------------
Weighted Weighted
average average
Number exercise Number of exercise
of options price-Euro options price-Euro
----------- ----------- ---------- -----------
Outstanding at beginning
of year 35,522,314 0.0332 35,522,314 0.0332
Exercised - - - -
Granted - - - -
Expired - - - -
Forfeited - - - -
Outstanding at end
of year 35,522,314 0.0332 35,522,314 0.0332
===========
Exercisable options 29,655,647 0.0352 24,222,314 0.0352
=========== =========== ========== ===========
c. Capital reserve
The capital reserve comprises the contribution to equity of the
Company by the controlling shareholders.
NOTE 12:- REVENUES
a. All of the revenues are derived from the sales of Palm Oil,
Palm Kernel Oil and Palm Kernel Cake in Cote d'Ivoire see also Note
19.
b. Major customers:
Year ended 31 December
------------------------
2021 2020
----------- -----------
Euros in thousands
------------------------
Revenues from major customers which
each account for 10% or more of total
revenues reported in the financial
statements:
Customer A - 23,925 18,531
Customer B - 5,241 -
NOTE 13:- FAIR VALUE MEASUREMENT
The fair value of accounts and other receivables, loans, and
trade and other payables approximates their carrying amount due to
their short-term maturities. The fair value of long-term loans with
a carrying amount of EUR26,953 thousands and EUR23,291 thousands
(including current maturities) approximates their fair value as of
31 December 2021 and 2020, respectively (level 3 of the fair value
hierarchy).
NOTE 14:- INCOME TAXES
a. Tax rates applicable to the income of the Company and its subsidiaries:
The Company and its subsidiaries, CS DekelOil Siva Ltd and
Pearlside Holdings Ltd, were incorporated in Cyprus and are taxed
according to Cyprus tax laws. The statutory tax rate is 12.5%.
The carryforward losses of the Company are approximately EUR31
thousand of CS DekelOil Siva Ltd are approximately EUR20 thousand,
and of Pearlside are approximately EUR12 thousand.
The subsidiary, DekelOil CI SA, was incorporated in Cote
d'Ivoire and is taxed according to Cote d'Ivoire tax laws. Based on
its investment plan, DekelOil CI SA received a full tax exemption
from local income tax, "Tax on Industrial and Commercial profits,"
for the thirteen years starting 1 January 2014, 50% tax exemption
for the fourteenth year and 25% tax exemption for the fifteenth
year.
The tax exemptions were conditional upon meeting the terms of
the investment plan, which the Group has met.
The subsidiary, Capro CI SA, was incorporated in Cote d'Ivoire
and is taxed according to Cote d'Ivoire tax laws. Based on its
investment plan, Capro CI SA received a full tax exemption from
local income tax, "Tax on Industrial and Commercial profits," for
the thirteen years starting from commencement of production, 50%
tax exemption for the fourteenth year and 25% tax exemption for the
fifteenth year.
The tax exemptions were conditional upon meeting the terms of
the investment plan, which the Group is expecting to meet.
The subsidiary DekelOil Consulting Ltd was incorporated in
Israel and is taxed according to Israeli tax laws.
b. Tax assessments:
The Company's subsidiary, DekelOil CI SA, received a final tax
assessment through 2020.
As of 31 December 2020, the Company and all its other
subsidiaries had not yet received final tax assessments
c. The tax expense during the year ended 31 December, 2021
relate to tax of the Company's subsidiaries DekelOil CI SA and
DekelOil Consulting Ltd.
NOTE 15:- SUPPLEMENTARY INFORMATION TO THE STATEMENT OF
COMPREHENSIVE INCOME
Year ended
31 December
--------------------
2021 2020
--------- ---------
Euros in thousands
--------------------
a. Cost of revenues:
Cost of fruits 23,064 14,233
Salaries and related benefits 1,937 1,680
Cultivation & Nursery costs 588 578
Vehicles 356 372
Maintenance and other operating costs 3,251 2,111
Depreciation 1,684 1,233
--------- ---------
30,880 20,207
========= =========
b. General and administrative expenses:
Salaries and related benefits 1,610 1,131
Subcontractors 452 310
Rents & related office expenses 160 108
Travel expenses 84 99
Legal & accounting and professional
fees 378 283
Vehicle maintenance 118 86
Insurance 168 86
Brokerage & nominated advisor fees 99 82
Depreciation 204 138
Share-based compensation 271 271
Other 325 167
--------- ---------
3,869 2,761
========= =========
c. Finance cost:
Interest on loans (*) 1,438 1,144
Bank fees 400 429
Exchange rate differences (112) 9
--------- ---------
1,726 1,582
========= =========
* Net of interest capitalized of EUR
827 thousands
NOTE 16:- INCOME (LOSS) PER SHARE
The following reflects the income (loss) and share data used in
the basic and diluted earnings per share computations:
Year ended 31 December
------------------------------
2021 2020
-------------- -----------
Euros in thousands
------------------------------
Net income(loss) attributable to equity
holders
of the Company 757 (2,226)
============== ===========
Weighted average number of Ordinary shares
used for computation of:
Basic earnings (loss) per share 528,368,244 428,930,844
Diluted net earnings (loss) per share
(after effect of options) 529,217,521 428,930,844
============== ==============
In 2020, share options are excluded from the calculation of
diluted loss per share as their effect is antidilutive.
NOTE 17:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Year ended
31 December
--------------------
2021 2020
--------- ---------
Euros in thousands
--------------------
a.1 Balances:
Other accounts payable and accrued
expenses 452 191
a.2 Transactions:
Services and expense reimbursements - 33
b. Compensation of key management personnel
of the Company:
Short-term employee benefits 801 625
Share-based compensation 224 224
c. Significant agreements with related parties:
1. In February 2008, DekelOil Consulting Limited ("Consulting")
signed an employment agreement with a shareholder, who is a
director of the Company, the CEO of the Company and the chairman of
the Board of Directors of DekelOil CI SA.
Under the employment agreement, the CEO is entitled to a monthly
salary of EUR 20,000 per month. The agreement is terminable by the
Company with 24 months' notice. The total annual salary, social
benefits, bonuses and management fee paid to the CEO during 2021
and 2020 was approximately EUR239 thousand and EUR217 thousand,
respectively.
2. In March 2008, DekelOil Consulting Limited signed an
employment agreement with a shareholder, who is a director of the
Company, its Deputy CEO and Chief Financial Officer. The agreement
was amended on 11 July 2014 by the board of the subsidiary to
reflect the same salary terms as those of the CEO described in c
(1) above. The total annual salary and social benefits paid to the
employee during 2021 and 2020 was approximately EUR239 thousand and
EUR217 thousand, respectively.
NOTE 18:- FINANCIAL INSTRUMENTS
a. Classification of financial liabilities:
The financial liabilities in the statement of financial position
are classified by groups of financial instruments pursuant to IFRS
9:
31 December
--------------------
2021 2020
----------- -------
Euros in thousands
--------------------
Financial liabilities measured at
amortized cost:
Trade and other payables 4,022 2,717
Short-term loans 3,040 2,437
Long-term lease liabilities 169 192
Long-term loans (including current
maturities) 26,947 23,291
Total 34,178 28,637
=========== =========
b. Financial risks factors:
The Group's activities expose it to market risk (foreign
exchange risk). Certain of the Group's long-term obligations at the
reporting date also bear variable interest rates which are linked
to the inter banking interest rate in Cote d'Ivoire and in the UK,
and therefore the Group is exposed to cash flow risks due to
changes in that base interest rate. The effect on profit or loss is
approximately EUR80 thousand for each 1% change in the base
interest rate.
Foreign exchange risk:
The Company is exposed to foreign exchange risk resulting from
the exposure to different currencies, mainly, NIS and GBP. Since
the FCFA is fixed to the Euro, the Group is not exposed to foreign
exchange risk in respect of the FCFA. As of 31 December 2021, the
foreign exchange risk is immaterial.
Liquidity risk:
The table below summarizes the maturity profile of the Group's
financial liabilities based on contractual undiscounted payments
(including interest payments):
31 December 2021
Less 2 to
than 1 to 3 3 to 4 to > 5
one year 2 years years 4 years 5 years years Total
--------- -------- ------ -------- -------- ------ -------
Euros in thousands
----------------------------------------------------------------
Long-term loans
(1) 4,117 3,269 4,563 4,447 4,225 10,937 31,558
Loan from non-controlling
interest 915 915
Short-term loan 3,040 3,040
Trade payables
and other accounts
payable 4,022 4,022
Long-term lease
liabilities 30 15 15 15 15 1,365 1,455
--------- -------- ------ -------- -------- ------ -------
12,124 3,284 4,578 4,462 4,240 12,302 40,990
========= ======== ====== ======== ======== ====== =======
31 December 2020
Less 2 to
than 1 to 3 3 to 4 to > 5
one year 2 years years 4 years 5 years years Total
--------- -------- ------ -------- -------- ------ ------
Euros in thousands
---------------------------------------------------------------
Long-term loans
(1) 4,254 4,784 3,935 4,504 3751 11,758 32,986
Short-term loan 2,437 - - - - - 2,437
Trade payables
and other accounts
payable 2,717 - - - - - 2,717
Long-term lease
liabilities 20 20 6 6 6 328 386
--------- -------- ------ -------- -------- ------ ------
9,428 4,804 3,941 4,510 3,757 12,086 36,091
========= ======== ====== ======== ======== ====== ======
Movement in financial liabilities:
Long Loan
Short term loans Lease from non-controlling
term loans (1) liabilities interest Total
----------- ----------- ------------- -------
Balance as of 1 January
2020 1,490 16,302 90 - 17,882
Receipt of short-term
loan 2,437 - - - 2,437
Repayment of long-term
lease - - (12) - (12)
New lease upon consolidation
of subsidiary. - - 114 - 114
Repayment of loans (1,490) (3,584) - - (5,038)
Receipt of long-term
loans - 2,363 - - 2,363
Initial consolidation
of subsidiary - 8,174 - - 8,174
---------------------
Balance as of 31 December
2020 2,437 23,291 192 - 23,557
Receipt of short-term
loan 3,040 915 3,955
Repayment of long-term
lease (23) (23)
Repayment of loans (2,437) (2,339) (4,776)
Receipt of long-term
loans 5,991 5,991
----------- ----------- ------------- --------------------- -------
Balance as of 31 December
2021 3,040 26,943 169 915 28,704
----------- ----------- ------------- --------------------- -------
1) Including current maturities and accrued interest.
NOTE 19:- OPERATING SEGMENTS
a. General:
The operating segments are identified on the basis of
information that is reviewed by the Companies management to make
decisions about resources to be allocated and assess its
performance. Accordingly, for management purposes, the Group is
organized into two operating segments based on the two business
units the Group has. The two business units are incorporated under
two separate subsidiaries of the Company, the CPO production unit
is incorporated under CS DekelOil Siva Ltd and its subsidiary and
the RCN processing plant under construction is incorporated under
Pearlside Holdings Ltd and its subsidiary (see Note 1)
The RCN processing activity was consolidated for the first time
on 31 December 2020, and 2021 is the first year that the results of
RCN operations are consolidated (see Note 6).
Segment performance (segment income (loss)) and the segment
assets and liabilities are derived from the financial statements of
each separate group of entities as described above. Unallocated
items are mainly the Group's headquarter costs, finance expenses
and taxes on income.
b. Reporting operating segments:
Crude Palm Raw Cashew
Oil Nut Total
---------- ---------- -------
Euros in thousands
-------------------------------
Year ended 31 December
2021:
Revenues-External
customers 37,391 - 37,391
========== ========== =======
Segment profit (loss) 3,830 (391) 3,439
========== ========== =======
Unallocated corporate
expenses (797)
Finance cost (1,809)
---------- ---------- -------
Profit before taxes
on income 833
Depreciation and
amortization (1,888) - (1,888)
Year ended 31 December
2020:
Revenues-External
customers 22,546 - 22,546
========== ========== =======
Segment profit (loss) 137 - 137
Unallocated corporate
expenses (559)
Finance cost (1,582)
Share of loss of
associate (167)
Profit before taxes
on income (2,171)
Depreciation and
amortization (1,369) - (1,369)
========== ========== =======
Crude Palm Raw Cashew
Oil Nut Total
---------- ---------- ------
Euros in thousands
------------------------------
As of 31 December
2021:
Segment assets 33,393 18 ,199 51,592
========== ========== ======
Segment liabilities 24,180 10,943 35,123
========== ========== ======
As of 31 December
2020:
Segment assets 30,580 12,728 43,308
========== ========== ======
Segment liabilities 21,912 8,934 30,846
========== ========== ======
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END
FR BUGDLIUDDGDD
(END) Dow Jones Newswires
June 23, 2022 02:00 ET (06:00 GMT)
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