A R N E N P U O A R L T A G R I T E R R A A N N U A L R E P O R T 2 0 1 5 2 0 1 5 I S A N A I M Q U O T E D I S A N A I M Q U O T E D P A N - A F R I C A N A G R I C U L T U R A L P A N - A F R I C A N A G R I C U L T U R A L C O M P A N Y , F O C U S S E D O N B U I L D I N G C O M P A N Y , F O C U S S E D O N B U I L D I N G V E R T I C A L L Y I N T E G R A T E D O P E R A T I O N S V E R T I C A L L Y I N T E G R A T E D O P E R A T I O N S A C R O S S I T S M U L T I - D I V I S I O N A L A C R O S S I T S M U L T I - D I V I S I O N A L B U S I N E S S T O P R O V I D E A B A S I S F O R B U S I N E S S T O P R O V I D E A B A S I S F O R S U S T A I N A B L E L O N G - T E R M C A S H S U S T A I N A B L E L O N G - T E R M C A S H G E N E R A T I O N A N D P R O F I T A B I L I T Y G E N E R A T I O N A N D P R O F I T A B I L I T Y S I E R R A - L E O N E S I E R R A - L E O N E F R E E T O W N F R E E T O W N M A P U T O M A P U T O M O Z A M B I Q U E M O Z A M B I Q U E R A N C H E S R A N C H E S R E T A I L U N I T S R E T A I L U N I T S F E E D L O T F E E D L O T M A I Z E M A I Z E A B A T T O I R A B A T T O I R C O C O A C O C O A C O N T E N T S B U S I N E S S R E V I E W C H A I R M A N ’ S S T A T E M E N T O P E R A T I O N S R E V I E W G O V E R N A N C E D I R E C T O R ’ S R E P O R T C O R P O R A T E G O V E R N A N C E S T A T E M E N T O F D I R E C T O R S ’ R E S P O N S I B I L I T I E S I N D E P E N D E N T A U D I T O R ’ S R E P O R T T O T H E M E M B E R S O F A G R I T E R R A L I M I T E D F I N A N C I A L S T A T E M E N T S C O N S O L I D A T E D I N C O M E S T A T E M E N T C O N S O L I D A T E D S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E C O N S O L I D A T E D S T A T E M E N T O F F I N A N C I A L P O S I T I O N C O N S O L I D A T E D S T A T E M E N T O F C H A N G E S I N E Q U I T Y C O N S O L I D A T E D C A S H F L O W S T A T E M E N T N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S C O M P A N Y S T A T E M E N T O F F I N A N C I A L P O S I T I O N C O M P A N Y S T A T E M E N T O F C H A N G E S I N E Q U I T Y C O M P A N Y C A S H F L O W S T A T E M E N T N O T E S T O T H E C O M P A N Y F I N A N C I A L S T A T E M E N T S C O M P A N Y I N F O R M A T I O N & A D V I S E R S 2 – 7 8 – 1 5 1 8 – 2 1 2 2 – 2 5 2 6 – 2 7 2 8 - 2 9 3 2 3 3 3 4 3 5 3 6 – 3 7 3 8 – 7 1 7 2 7 3 7 4 7 5 – 7 8 7 9 T h e Af r i c a n a g r i c u lt u r e m a r ke t i s a n a r e a o f T h e Af r i c a n a g r i c u lt u r e m a r ke t i s a n a r e a o f e xc e p t i o n a l g r o w t h p o t e n t i a l . W i t h a p o r tfo l i o e xc e p t i o n a l g r o w t h p o t e n t i a l . W i t h a p o r tfo l i o fo c u s s e d o n b e e f a n d m a i ze i n M oz a m b i q u e a n d fo c u s s e d o n b e e f a n d m a i ze i n M oz a m b i q u e a n d c o c o a i n S i e r r a L e o n e , Ag r i t e r r a h a s i n v e s t e d c o c o a i n S i e r r a L e o n e , Ag r i t e r r a h a s i n v e s t e d s i g n i fi c a n t ly s i g n i fi c a n t ly i n b u i l d i n g a b a s e t h a t h a s t h e i n b u i l d i n g a b a s e t h a t h a s t h e p o t e n t i a l p o t e n t i a l t o t o i n c r e a s e i n c r e a s e r e v e n u e r e v e n u e g e n e r a t i o n g e n e r a t i o n c a p a b i l i ty a n d p r o fi t a b i l i ty m o v i n g fo r w a rd . c a p a b i l i ty a n d p r o fi t a b i l i ty m o v i n g fo r w a rd . 2 C H A I R M A N ’ S C H A I R M A N ’ S S T A T E M E N T S T A T E M E N T C H A I R M A N ’ S C H A I R M A N ’ S S T A T E M E N T S T A T E M E N T A g ri t erra c ont inues to centre o n s ust a inable a gr icu lt ur a l buildi ng a busi n es s wi th i ts por tfolio f ocussed o n bee f and m ai ze in Moza mbique a nd coc o a in S i erra Le one. As r eflect ed i n the re su lts, th e pe riod h as been mixe d i n term s o f s ucc e ss. Th e beef division h as emerge d as a so lid r evenue gener a to r and a sta ble bas e fr om w hich t o p u r sue the Gr oup ’s ex pa nsi on objectives in th e short to m e di um te r m, wh ile t he im p ac t of e xte rnal fa ctor s bey ond o ur cont r o l in Si e rr a Le on e, in p ar ticular the Ebo l a outb re ak, c ause d the cur tailment o f inve st ment i n o ur oper ations, wi th o ur flee t and ware housing being used by Inte rnati o na l Red Cr oss, Wo r ld the Heal th Org anis a tio n a nd Wor ld Fo o d Program me. tha t Large s c al e agri c ul tur e pr ojects r equ i r e heav y i nv e s tm e nt in or der t o esta bli s h an ef fe ct iv e o p er at ing pla t for m th at can de li ve r l ong-t erm a nd susta ina ble growt h. We ha ve invest ed signific a ntl y in b ui ldi ng a ba se t h e B o a r d believes has the potential to increa se our re ve nue ge ne r ation ca pability a nd profi ta bili ty mo ving f or wa rd. We co nti nu e to lo o k at o pti mi sing o ur business a nd see k t o m ax imi s e eff iciencies ac r o ss our d iv i si ons, t o c ap ita lise on rev enue gene rati o n, opera t i ng exp e ndi tur e and t o im pro ve ma rgi ns s o as t o d ri ve s hare hold er value. reduce to inv e st e d i nfr ast ruct ure, With re ga rd s to o ur beef o pera t i o ns, we h ave in a nd bui lt a valua b le pla tfo rm o f ra nches, feedl o t , an a b atto ir, log i st i c s and re ta il uni ts. T his division cont i nu es to s h o w it s p o te nt ial to gro w a s a solid rev e nue g ener at or, wit h a 31% incre as e to $5,366, 000 from $ 4,08 1 ,00 0 in t he 2014 fina nc i a l yea r, in s pi te o f a 6. 5% f all i n t h e avera ge M eti ca l t o U S$ ex ch an ge r a t e r eve nues i n T H E B E E F D I V I S I O N H A S E M E R G E D A S A S O L I D R E V E N U E G E N E R ATO R A N D A S TA B L E B A S E F R O M W H I C H TO P U R S U E T H E C O M PA N Y ’ S E X PA N S I O N O BJ E C T I V E S I N T H E S H O R T TO M E D I U M T E R M ( in Meti cal terms, revenues increased by over 40%). This notable growth in revenue reflects the increasing volu mes being moved through our feedlot and in pa rticular the expansion of our retail uni ts, w hi ch are the final link in Agriterra ’s beef va lue chain, from field to fork. O f pa rtic ular note during the year has been th e establishment of our butcher y in Namp ula, a nd d i st ribution centre Moz am bique’s third largest city and the cent ra l commercial hub for Nort hern Moz am bique. We opened our doors to the public in April 2015 and, by (retai l O cto ber 2015, monthly sales a nd wh olesale) have already achieved in ex cess of $15 0,000 a month. We exp ect that this growth will continue, by op ti mi si ng per formance and utilising the f ull d i st r ibution capacity of our Nampu la pr oper ty as a staging post for the other nor t hern retail sites, as we push on with ou r expa nsion strategy into t he north of the coun tr y. in our increasing demand Th e success at Nampula has reinforced the Bo ard ’s belief retail exp ansi on strategy, t o further leverage the for qu al ity the apparent beef pr oducts and incr ease in activity from the LNG sector, not w ithstanding the macro oil & gas envir onm ent. We now have six ou tlets a nd f or the 2016 calendar year, we a re t ar geting new sites in the north of the coun tr y in Pemba and Nacala as w ell a s opportunities the capital, Ma put o. We expect that the addit ional volum es supplied from these sites, al ong w it h gro wth in revenues from our existing in sites, will provide a material contribution to revenue growth in FY2016. The Vanduzi feedlot continues to grow in terms of capacity and is processing cattle sourced from our own ranches as well as locally purchased an imals. Overall, we feel that the beef division has now established itself suffic ientl y to enable expansion both in terms of wholesale and retail sales in countr y, as well as by exploring t he potent ial in the export market. the year, Elsewhere, our maize and cocoa divisions have been impacted by external factors beyond our control. In Mozambique, political instability leading up to the presidential elections in Oct ober 2014 made transport of maize meal to the South and North of the countr y difficult. Further, heavy rains affected both Mozambique and Malawi in the second temporarily cutting half of off the road links between the Group’s produ ction and processing facil ities in central Mozambique, and the Norther n markets. These factors, in addition to a bumper maize har vest saturating the market and reducing the demand for our processed products in lower revenues of $5,517,000 (2014: $9,716,000 ) for the year. Whilst this is disappointing, we are confident that this coming year will present a muc h more favourable market opportun ity for the Group. In particular the current maize crop appears to have returned to more typical levels, with consequent higher sales prices of maize meal and higher absolute margins achievable per tonne of maize meal sold. Furthermore, and as a result of current exchan ge rates between the US$ and Metical, the price of rice - which is often seen as a substitute to maize meal - has increased significantly, further driving the demand of maize meal. With a more favourable this sales and pricing environment resulted year, we expe c t to achieve a sig ni f i c a nt impr ov e me nt in t h is d iv isio n in FY2016. t h e t he in s e ri o us a nd pr olon ged i n We st Afr ica s uff e re d Ebo la The cris i s h e a vi l y impa c ted o ur Si erra Le one ope r at i o ns, which i n ad di ti o n to our cocoa di vi si on includ e s 45 ,000 hect ar es o f br ow nf i el d agri c ult ural l an d in an a re a sui ta bl e f o r palm oi l pro duct ion i n t he so uth o f t h e cou ntr y. Due t o a com bin at io n o f f ac tor s res trict io ns of mo vem en t includ ing impo s e d tog et he r w i t h t he co un t r y, the i mp erati ve t o pro te ct our emp l oy e es and th e re duc e d int ern at io na l inve stm ent f u r th e r w e hav e pla ced appe t it e, dev el o p me nt o f o ur Cocoa pla nt at i o n on h o ld fo r t he prese nt ti me. Dur i ng th i s peri o d of “care a nd mai nt ena nc e” , o u r plant at io n a sse ts in countr y a r e bei n g main tai ne d a nd o pera ti ons ar e rea d y to reco mm ence whe n and if f ea sible. I n or d e r to s up po rt th e count r y i n it s f ig ht a g ai ns t, and re c ov e r y fro m, Ebola, w e ha ve lea se d p a r t o f our v e hic l e f leet a nd som e o f o u r war eh o u si ng inf ra s truct ur e t o int ern a ti o na l aid o rga nis ati o ns. I n a ddi t io n w e h a ve effec te d foo d di stri but io n for t h e Wo r ld Foo d Pro gramme in o ur a rea o f ope r a t i o ns arou nd th e Ke ne ma re gio n. S eed ling s f r o m our n urse r y, to ge ther w i th fert ilis er a n d rice, h ave a ls o be en dist r ibuted to lo c al farm er s i n part nersh ip wi th a ma jor c o co a indus t r y player to suppo rt t he r e gi o n’ s reco ve r y. t he co untr y dur ing Des pi te th e sl owd o wn in th e d evelo p m e nt of ou r pl ant ati o n, our curre nt a c ti vi ti e s hav e all owe d us t o ma inta in a pr ese nce t hi s cha lleng i ng in time i n Si e rra Le o ne’ s hist or y and p r o vi de a re ve nue st re a m t o th e Gr oup w h i c h curre ntly o ff set s mo st of t he ca sh c os ts of the c oc o a di vi s io n . that a start fight against Ebola, with Despite the challenges facing our Cocoa operations, we are now encouraged by what appears to be the end of Sierra Leone’s the countr y declared Ebola free by the World in early November Health Organisation 2015. We hope to Sierra Leone’s regeneration will now be possible, which will require innovative solutions to the challenges the countr y faces. As a first step, our Sierra Leone subsidiar y company, Tropical Farms Limited (‘ Tropical Farms ’), has entered into a trading agreement to use its organic certification and buying networks to source and supply up to 500 Mt of Sierra Leonean cocoa beans to a leading global focused on natural, organic company and specialty In exchange, the Offtaker will provide Tropical Farms with pre-financing for the purchase of beans and pay a fee per tonne of beans purchased on behalf of the Offtaker. While relatively modest in scale, we hope that this first step in post Ebola Sierra Leone may lead to future opportunities . ‘ Offtaker ’). foods (the 5 C H A I R M A N ’ S C H A I R M A N ’ S S T A T E M E N T S T A T E M E N T C O R P O R AT E U P D AT E D uri ng t h e per iod, in Apr il 2015, Eua n Ka y and Mich ael Pe lham ste p p ed dow n f rom t he Bo ard a s non -e xecu t i ve dire ct or s in orde r to f ocus on t heir o th er inte re st s. I wo uld li ke to t ha nk bot h Eu a n and M ike fo r the i r suppor t a nd h a rd w o r k for Agri t erra ov er th e yea rs, and w i sh them we l l fo r t he f uture. F I N A N C I A L O V E R V I E W t h e G r o u p ’ s a c o n s e r v a t i v e a p p r o a c h a n d t a ke n t h e p r u d e n t d e c i s i o n t o i m p a i r a l l o f t h e p a l m o i l o p e r a t i o n s a n d s u b s t a n t i a l l y a l l o f t h e c o c o a a s s e t s. T h e r e s u l t i n g i m p a i r m e n t c h a r g e s o f $ 9 , 8 6 0 , 0 0 0 ( 2 0 1 4 : $ n i l ) a r e a s i g n i f i c a n t c o m p o n e n t l o s s o f $ 1 3 , 3 8 7 , 0 0 0 o f ( 2 0 1 4 : $ 8 , 0 1 6 , 0 0 0 ) . D e s p i t e t h e s e o p t i m i s t i c i m p a i r m e n t s, w e a b o u t t h e s e t h e a s s e t s a n d r e m a i n h o p e f u l t h a t f u r t h e r v a l u e m a y b e r e a l i s e d f r o m t h e c o c o a o p e r a t i o n s i n f u t u r e, t h r o u g h i n v e s t m e n t & d e v e l o p m e n t, j o i n t v e n t u r e, s a l e o r a c o m b i n a t i o n o f t h e s e e v e n t s. i n t r i n s i c v a l u e o f r e m a i n In addition to our current operations, the Board has continued to actively pursu e the realisation of value from its legacy oil and gas operations. In light of the c ontinui ng unrest in South Sudan, the Board took the view that it would be prudent to expedite settlement in respect of the claims arising from interests and accordingly, as annou nced on 17 September 2014, a successful settlement was reached in respect of such interests resulting in income of US$5,659,000 to the Group. Following the settlemen t, the Company and Group has no fu rther c urren t economic interest in South Sudan. the Group’s legacy oil t o t he re fl ect W h il e w e c ontinue t o build o ur bus ine s s tow ar ds pr ofita bilit y, ult im a t el y we a re s ti ll i n th e invest ment pha se o f r es ul ts the G ro up ’s dev e lopm ent. O ur sig ni f i c a nt cont inu e inve s tme nt and developm ent in o u r infra s truc ture - in pa rt icular w it hi n o ur bee f bus ine s s th ro ugh th e d evelo p m ent of our farms - as w e expa nd to c r i ti ca l mas s. In t he b ee f d ivisio n our r evenu es now c o ve r al l of the cash op er a ti ng cos ts o f our r eta il, aba ttoir and fee dlo t increa sing sc a l e t he op era ti o ns, wit h of ou r o pe rati o ns contr ibut ing t o th e ongo ing co st s of t he fa rm s. A s w e ex p a nd our h e rd n umbe rs, w e expect t he f a r m s thems e l ves to mov e to prof itabilit y. t he 31 % to incr ea se $5,366,000 in be ef Des p it e rev e nue s ( f r o m $4 ,08 1 ,000 in 2 01 4), th e unf avo ur a ble marke t cond it io ns in the ma ize d i vi si on cont rib u te d to a d ecr ease i n o ve r all rev e nue ( f r o m $1 3,7 9 7,00 0 in 2 014). $11, 787,000 t o A s a r e s u l t o f E b o l a ’ s d e t r i m e n t a l i m p a c t o n S i e r r a Le o n e, t h e B o a r d h a s a d o p t e d T H E P R O G R E S S W E H AV E M A D E TO D AT E H A S C R E AT E D A S T R O N G A N D S U S TA I N A B L E P L AT F O R M . W E A R E N O W B E G I N N I N G TO D E M O N S T R AT E T H E “ P R O O F O F C O N C E P T ” I N O U R B E E F O P E R AT I O N S A N D LO O K F O R WA R D TO A T R A N S I T I O N I N TO P R O F I TA B I L I T Y . fo r wa rd, w e ar e Goi ng f ocu sse d o n imp ro v i ng cost eff ic ie ncy ac ro ss a ll divi si o ns, and ex pan di ng r ev enues, t o bu i ld a pro fi tabl e bus iness. We beli ev e t h a t o ur cas h ba lanc e s o f $ 6,421,00 0 a t 31 Ma y 201 5 , co mbi ned w it h o ur o verd ra f t a n d othe r borrow ing fac ili ties of 179, 000 , 00 0 Meti ca l (appro xim ately $4,850,0 00 a t t he 31 Ma y 20 1 5 Metica l to U S $ ex c h an ge rat e) fo r o ur g ra in oper at i ons a nd a f ur t h er 105 ,0 00,0 0 0 M etic al ($2, 845,0 00 a t t he 31 Ma y 20 1 5 Metica l to U S $ ex c h an ge rat e) t o fund our beef o pera t ion s, ar e suffic i e nt f or t he G ro up t o con t i nue i t s dev e lo pm e nt prog ra mme. In l ig h t o f t he Group’ s f ut ure p ro spe c t s, avai la b le ca sh an d ba nk in g fa c i li t i e s, and a Ne t As s e t Value $2 9,8 42 ,0 00 , the Di re cto rs are of t h at sign i f i c a n tl y the Co mpa ny c ap o f und e r va lued at a ma rke t appro xi mate ly $ 8,250,000 . t he opi ni on is cur rently O U T L O O K T h e Af ri c an ag ri cult ure m ar ket re ma i ns an a rea o f e xc e pti ona l gr ow t h po tenti a l. Whil e we a re st il l in th e d evelo p me nt pha se, th e B oa rd i s con fident th a t t h e t o da te h a s prog res s w e hav e mad e created a strong and sust ai na ble pl a tf o r m. We are now be ginning t o d em o nst r a te th e “ pro of o f c onc ept ” in o ur be ef oper a ti o ns and i nto prof it ab i li ty. tr a nsitio n f or ward t o a l oo k I wou ld li ke t o c onclud e b y t ha nk i ng o u r team w h o have wo rked ti relessly i n a ss i st i ng us in th e de v elop ment o f t he busines s. P H E D M O N D S P H E D M O N D S C H A I R M A N C H A I R M A N 19 No vem ber 2015 7 W i t h a 3 1 % i n c r e a s e i n r e v e n u e s t o $ 5 , 3 6 6 , 0 0 0 fo r F Y 2 01 5 , t h e b e e f d i v i s i o n i s e m e rg i n g a s a s o l i d r e v e n u e g e n e r a t o r a n d a s t a b l e p l a tfo r m f r o m w h i c h t o p u r s u e t h e C o m p a n y ’ s e x p a n s i o n o bj e c t i v e s i n t h e s h o r t t o m e d i u m t e r m , c a p i t a l i s i n g o n t h e i n c r e a s e d d e m a n d fo r q u a l i ty b e e f i n M oz a m b i q u e . 8 O P E R A T I O N S R E V I E W O P E R A T I O N S R E V I E W I n Agr iterra M o zambiqu e, ha s succ es sf ully buil t a ver tica lly inte gra te d, ‘ fiel d t o fo rk ’ bee f ope ra tion, Mo z bi f e Limi t ada (‘ M o zbi fe ’), fr om wh ich it no w looks to ach i eve sca lable gr ow t h. We now h a ve in pla ce t h ree est abli sh ed ranch es (t ot all ing 20,35 0 hect ar es), a feedl ot fa ci li ty ( wi th curre nt ca paci ty f o r up t o 3 ,5 00 ani mal s), an aba tto ir (w i th cap ac i ty f or 4 ,0 00 hea d per mo nth ), and s i x reta il unit s. A maj o r co mpo ne nt in a chi eving g r o w th in o u r be ef o perat i ons is t he ro ll- o u t of our retail units. Each new retail site adds s al es v olumes a nd reve nues, w h i c h in tu rn inc rea se s the t hr ough put at t h e aba tt oi r and the f eed lot. We h a ve alre ady re ach ed net po sit ive ca sh f lo w s from t he s e compo nents o f th e busi ness and a d di ti o nal vo lumes n ow t ra n sla t e to in cre asi ng pro fit at t he bo ttom l i ne. Ident if yi ng app ropr ia te f o r new re t ai l uni ts is the refo re a prior ity f o r the Gr oup and wil l be a key a spe c t i n mak in g th e be ef d ivi sio n ca sh gener a ti ve as a w h o le i n th e sho rt to me dium t er m. lo cat i ons i n natur al Nort her n Mo zambiq ue During th e ro ll- out pla nn in g, Na m p u la, in No rt he rn Mo zambique, w as qui c k ly identi fi e d as a prior it y t ar get fo r r et a i l i s expa nsi o n. dev el o p ing rap idly, a nd is an t icip a ted to c o nti nue to develop, ma inly du e to si g nif ic an t i nt ern at io na l investment, princ i pal ly re so urces a nd is the re for e a key g row th ma rket w i th i n i d e a l Mozambique. N a mpula loc at io n i nto this marke t no t onl y because is it th e cen tra l co mmer c ial h ub fo r Nor t h er n Mozambique, but it also ha s a la r ge dome s ti c p opulat ion (b ei ng t he th i r d large s t ci ty the co unt r y, w i th a pop ul ati on of appro ximat ely 605 , 000 peo p le in 2 014 ), with an e sta blis h ed, and rap idl y g ro wing, ma rke t fo r qu a l i ty t o e xpa nd fr om wh ich i s an in A M A J O R C O M P O N E N T I N A C H I E V I N G G R O W T H I N O U R B E E F O P E R AT I O N S I S T H E R O L L - O U T O F O U R R E TA I L U N I T S . E A C H N E W R E TA I L S I T E A D D S S A L E S V O L U M E S A N D R E V E N U E S , W H I C H I N T U R N I N C R E A S E S T H E T H R O U G H P U T AT T H E A B AT TO I R A N D T H E F E E D LOT butchered beef products. For thes e rea sons, during the period we opened a n ew ~600m2 dist ribution centre and ret a il un it in Nampula, to establis h ou r six th ret ail site, adding to existing retail uni ts in B eira, Chimoio, Tete (two sites) a nd Manica. to these is o ur intention leverage revenues. I t this esta blished northern presence to fu rther bui ld o n Nac ala a nd Pemba, located in the northern pr ovinces of Nampula and Cabo Delegad o have been respectively, identified as strategic locations in which t o op en new retail stores in the fu ture (FY 2016 and FY2017), which woul d be suppli ed from our Nampula distribu tion centr e. I n addition, we have ident ified t wo p ot ential retail units in Maputo, w hich a s the capital and largest city, of f er s significant revenue and growth potential. Furthermore, due to its southern loca ti on, our presence here would reach, supply no ta bly mak ing Mozbife a Mozambique wide suppli er. We also cont inue to assess t he po tent ia l to open smaller satellite retail uni ts i n t he major cities that we already supply, namely Beira and Nampula, w hich w ould utilise the Group ’s existi ng inf r ast ru cture and increase our reach to t he si gnif i cant, but disperse, populations in th ese cities. Export opportunities are being evaluated which, if successful, increase our could scale up our beef business in the medium term. to retail un its keep our In order stocked with the highest quality beef products, and to ensure the full uplift in value is secured within the Grou p’s own operations, all beef sold within Mozbife’s retail units is sourced fr om the Group’s state-of-the-art abattoir at Chimoio. 5,013 animals were processed through the abattoir during the per iod, an the 4,285 an imals processed during FY2014. With a cu rr en t run rate of approximately 700 an imals per month, the abattoir continues to per form well. With a monthly slau ghter capacity of approximately 4,000 head, there remains considerable flexibility to increase slaughter rates as the beef operations expand. increase over In order to achieve the best price for our cattle when slaughtered, our animal s spend feedlot, time at our Vanduzi which has a current carr ying capacity of approximately 3,5 00 head to provide approximately 1,000 head for slau ghter each month to the abattoir. At the period end there were 1,804 animals in the feedlot, sourced from Mozbife’s own ranches or from cattle purchased from the surrounding areas. In addition to feeding pens, the feedlot also has 1,050 hectares of land used for feed production which provides twin benefits of reducing costs and providing certainty of supply. Furthermore, the feedlot works strategically with other companies in the Group, by using bran, the by-product from the grain processing facilities, as a feed supplement for the cattle. By the end of October 2015, and due to the increasing deman d for our products, we have approximately 3,35 0 animals in the feedlot. We are now expanding the feedlot pe ns and expect to add capacity for a fu rther 1,0 00 animals during FY2016. the lo ca t ed In o rd er t o s upply our re ta il o ut le t s and c api ta li se o n po te nt i al ex p or t opp o rt uni ti es wi th high qua lit y b e ef produ c ts, it i s i mpe r at ive t hat we ha v e a str ong sup ply o f beef. Our ra nc h es r anc h, (the 2, 35 0 hec tare Ma vo nde the 2 ,5 00 he ctare r a nc h I nh a zonia and th e 1 5 ,50 0 h e ct ar e Dombe r an c h, all in Ce nt r al Moza mb i qu e) there fo re re mai n cent ra l to t he m edi u m to revenue gener a ti ve capa c it y of the beef d ivisio n, d eliv e r i ng a v e r y hi g h qual it y an ima l, ei t her pur e Beef mas te r, pr emi um qua lit y im por t e d anim al s, o r l oc al bre ed s cr oss-br ed w i t h pedi gree s t o re ar la rg er an ima ls. T he ver y be s t c uts c an be o bt ained f r om these h ig h qual it y ani ma ls wh ich, i n tu r n, comm and t he hi ghe st r et ai l pri ces i n ou r retai l un its. lo ng t e rm Our h e rd s ize a t t he ra nch es at t he end o f May 201 5 sto o d a t 5, 363 he ad (2 01 4: 6 ,40 0 he ad), bri ngi ng Mo zb i f e ’s tota l h e ad to 7 ,1 67 (201 4: 8, 230 he a d ) includ in g th e fe e dlo t a nimals at t ha t d ate. Our focus for the ranches remains centr ed on increasing our herd size in or d er to utilise our land capacity, which impact our operating w ill po si tively ef fi ci enci es and profit margins. To suppo rt this on-going growth in herd siz e, a dd itional pivot irrigation has been completed at Mavonde and Inhazonia, t hereby increasing the irrigated land by 195 hectares to 368 hectares, a nd by 88 hectares to 118 hectares respect ively. Different varieties of grass ha ve no w been planted on these lands t o pr od uce grass which is suit able bot h f or gr a zing and for hay bailing. This d iversif ication will provide important f lex ibi lit y for Mozbife as it continu es i ts exp ansi on strategy t o maximise stocking ra t io s across the ranches. installed irrigation, W ith o ur existing w e f or ha ve a current capacity a ppr oxi mately 10,000 head across our ra nches, with scope for further expansion through expansion of in ca pacity ir ri ga ti on and/or This esta blished infrastructure and capacity land bank. As the pastures potential mean that we are well plac ed fu rther for growth. establish and support an inc reasing herd, increased birth rates and herd sizes will positively impact the number of animals available for slaughter. Our In summar y, we are well advanced in implementing our strategy for the beef division. feedlot, abattoir and retail u nits are generating net positive cash flows and, with the current irrigation at our Mavonde and Inhazonia ran ches (provided we continue to increase our herd size), we expect our farms to start contributing to the bottom line in the short to medium term. Our extensive infrastructure and the capacity to scale up our operations across all asp ects of that we are now poised to capitalise on the ever increasing demand for beef products, both domestically in Mozambique an d overseas. this division means B E E F A V E R T I C A L LY I N T E G R AT E D O P E R AT I O N M AV O N D E R A N C H 2 , 3 5 0 H E C TA R E S I N H A Z O N I A D O M B E R A N C H 2 , 5 0 0 H E C TA R E S R A N C H 1 5 , 5 0 0 H E C TA R E S VA N D U Z I F E E D L O T 3 , 5 0 0 H E A D C A PA C I T Y + 1 , 0 5 0 H E C TA R E S F O R C R O P P I N G B R A N F RO M M A I Z E DIVI S IO N A B AT T O I R 4 , 0 0 0 H E A D M O N T H LY S L A U G H T E R C A PA C I T Y R E TA I L U N I T S T E T E X 2 M A N I C A N A M P U L A C H I M O I O B E I R A A D D I T I O N A L LO C AT I O N S I D E N T I F I E D S U P P LY CO N T R AC T S 11 O P E R A T I O N S O P E R A T I O N S R E V I E W R E V I E W W I T H M I L L I N G C A PA C I T Y I N E XC E S S O F 7 5 , 0 0 0 TO N N E S O F M A I Z E P E R A N N U M , A FAV O U R A B L E S A L E S E N V I R O N M E N T , A N D S T E A D Y S U P P L I E S O F R AW M A I Z E , W E A R E O P T I M I S T I C T H AT F Y 2 0 1 6 W I L L B E A M O R E P R O F I TA B L E , A N D C A S H G E N E R AT I V E Y E A R F O R T H E M A I Z E D I V I S I O N US$496 per tonne of meal during 2014, to US$403 per tonne of meal for 2015. the countr y difficult and Poli tical i nstab ility leading up to the presidential elections in Oct ober 2014 made transport to the South and North of fu rther compounded the disappoint ing sales achieved during the period. Fu rther, heavy rains affected both Mozambiq ue and Malawi in the second half of the year, temporarily cutting off the road links between the Group’s production A g ri t erra ’ s maize o per at io ns a re its 15,000 f acility focus s e d on i ts 3 5 ,000 ton ne sto r a g e capa ci ty f aci lit y in Chi moio in ce ntr a l t o nne Moz ambiq ue, and stora ge c apa ci t y i n north-we st Mo zambique. The esta bl i sh e d maize buyi ng an d pr ocessing busi n ess purc h as e s mai z e f ro m lo ca l out-gro w er s throu g h a netw or k of buy ing st a ti on s, which the n p ro cessed an d st or e d bef or e bei ng s ol d to t he ret ai l m a r ket as m ai ze me al, a key st a ple foo d i n th e reg io n an d c ount r y. i n Tete, i s it is s pe c ifi c buy ing points, The Gro up purcha ses ma ize d irect ly f r o m ov er 2 5 0,0 0 0 loc a l sm allho lder fa r m er s t her eb y at supp orti ng eco nom ic a ctivit y t h e in relev ant r ura l a re as. Ha ving purcha sed the grai n, to purp o s e- built s to ra ge a nd proces si ng fac i li ti es whe re i t is dr ied, f um igat e d, into m ai z e prepa re d a nd pr ocessed mea l. t he seas o n to ta ll e d a ppro xim ately 28, 700 tonnes sea so n: 32 ,000 tonnes). M ai ze purcha ses d uri ng t ra nspor ted ba c k (2 0 13-2 0 1 4 Sale s w ere s lo w d uring the peri od, wi th 18 ,1 00 to nne s of ma ize milled ( 2014: 24 ,5 00 to nne s) a nd 13,600 t onne s o f maize m eal so ld (2 014: 18,700 t onne s) , produc i ng to ta l s a les of $5, 517 , 000 (2014 : $ 9,7 1 6,00 0) . T he Bo ar d beli eve s that th e low sal es vo lumes a re du e to a n um ber of fa ct o rs, tho ugh prim a r i ly refle c t an ex cept iona lly lar ge ha r ves t - es tim ate d a t a ro un d 2.3 millio n t onne s - whi c h sa turate d t h e lo cal m ar ket a nd for pr ocess ed redu ce d produc t s E Lim i t a d a Com erc ia li za çã o Limi t a d a (‘ DECA’) (‘ Com pa gri ’ ). exceptio na ll y larg e h ar v e s t a ls o impa cted th e p r i c e achi e va ble f or th e Gro up’s pro du ct s, with p ri ce s re duc ing fr om an avera g e o f Desenvolvimento A grico la and Com pa gri the de ma nd fr om Thi s M A I Z E I S P U RC H A S E D F RO M A N E S TA B L I S H E D N E T W O R K O F FA R M E R S AT S P E C I FIC B U YI N G S TATIO N S , W H IC H I S T H E N P RO C E S S E D A N D S TO R E D B E F O R E B E I N G S O L D TO T H E R E TA I L M A R K E T A S M A I Z E M E A L , A K E Y S TA P L E F O O D I N M OZ A M B IQ U E A N D T H E WI D E R R E G IO N . fa cili t ies and p ro ces s ing c entr a l Mozam bique, and t he Nor th er n m ar ke ts, with a co nseq ue ntial adv er se ef f ec t o n sales v ol umes. in It is anti ci p at e d th at th e ma ize m a r ket w i ll return to mo re typica l fig ures in th e 2015- 201 6 s ea so n. While t hi s push es buy i ng pric e s u p, i t has i mpa ct ed m o re fa vo ur a bly on th e pric ing e nvir on ment, and d em a nd, for mi ll e d pro duc ts. T h is h as been h el p ed fur th er b y a si gni fican t in cr ea se i n th e p r i c e of co mp et ing im po rte d pr oducts, su ch a s rice, du e to the recen t d epr eci a t i o n of the M e t ical – t he M et ical is now tr a d i ng at ap p ro xi mate ly 4 3 Met ica l pe r U S $, com pa re d to a n aver age of 32. 45 M eti c a l per US $ i n FY 20 15 . With a ppr oxi mat e ly 11,2 00 t onnes o f m a i z e in inv en tor y at 31 May 2 015, pur c h a sed at lo we r pri ces dur in g t he plent ifu l 2013- 201 4 se a so n, w e h a ve a r ela tively c h ea p maiz e su ppl y f or a si gni fica nt prop or t i o n o f our fo rec ast sale s i n FY 2016. W ith m i l li ng cap ac i ty i n exce s s o f 75 ,000 t onnes o f maiz e pe r ann um, a sa les env ir onm ent, and st ea dy supplies o f r a w maiz e, w e a re opt imi stic th a t FY2016 w i ll be a m ore pr ofi tabl e, a nd ca sh g en er a ti ve year fo r t he ma ize di vi sion. f av oura ble 3 5 , 0 0 0 T O N N E S 1 5 , 0 0 0 T O N N E S S T O R A G E C A P A C I T Y F A C I L I T Y I N C H I M O I O , C E N T R A L M O Z A M B I Q U E S T O R A G E C A P A C I T Y F A C I L I T Y I N T E T E , N O R T H - W E S T M O Z A M B I Q U E M O Z A M B I Q U E 2 5 0 , 0 0 0 F A R M E R S N E T W O R K O F O V E R 2 5 0 , 0 0 0 L O C A L S M A L L H O L D E R F A R M E R S 13 O P E R A T I O N S O P E R A T I O N S R E V I E W R E V I E W A g ri t erra ’ s c ocoa di vi sion c onsi sts of a 3 ,2 0 0 he c ta r e co coa plant at i o n, loca te d 40 km f rom Kenem a in so u t h - east S ie rra Le one, w hich is suppor t ed by a 2 .2 h e ct ar e nurs er y. Subject to t h e acq ui s it i on of an a dd itiona l blo c k o f app ro ximat e ly 1,6 00 hecta res o f la nd adj ac ent the exist ing pla nta t i o n, the Gr oup’s i ni ti al plan fo r the co co a plantat io n wa s tot a l o f 4,00 0 he c ta res, wit h the ultima te a i m o f produc i ng a mi ni m um of 8,000 tonne s o f coc o a pe r annum. T he Gro up also o w ns a 2,0 0 0m2 s t at e of t he a rt w ar eho us e in Ke nem a. t o pla nt a to o utbr e ak i ncludi ng Sier ra in S ept ember 2014 As ann ounc ed and as a r e sul t o f the w ell-p ublic i sed a ffecti ng West Ebol a Africa, t h e Leone, Boa rd m ad e t he decision t o susp e nd curre nt dev e lo pme nt act ivi ties a t th e plantat io n. In ad dit io n to t he signif i ca nt res tri c ti ons in co u ntr y in m ovement cau s ing a s hor tage of labour, the B o a r d W I T H A P R OJ E C T E D C O C O A B E A N D E F I C I T O F U P TO O N E M I L L I O N M E T R I C TO N N E S B Y 2 0 2 0 D R I V I N G P R I C E S U P WA R D S , T H E F U N D A M E N TA L S O F T H E C O C O A M A R K E T R E M A I N S T R O N G a ssessed that it was unsafe to pursu e a n expa nsion of the plantation at that sta g e, w hich could increase the risk of Ebola d eveloping on the plantation site a nd place staff at risk. t he hectares planted Accor d ingly, activities at the plantation ha ve been curtailed to a level suf ficient to p rot ect staff while maintaining the Gr oup’ s assets in countr y. In accordance w it h thi s plan, the Group is operating w it h a reduced labour force to ensure tha t to date a re m a intained, as is the plantation inf r astructure including warehousing, a cco mm o dation and equipment. The Gr oup is also rigidly enforcing general hy gi en e protocols to ensure staff and visit or s are not placed at unnecessar y the ri sk. Du e restriction the to in scope of operations in the year and the uncertainty regarding the region, the Board took the decision to write down the cocoa division’s assets and recorded an impairment charge of $6,791,000 (2014: $nil) . the cocoa market the Group, wit h However, in spite of the recent reduction in scale of operations in response to the Ebola outbreak, the Group bel ieves there is potential for the cocoa division. With a projected cocoa bean defic it of up to one million metric tonnes by 2020 driving prices upwards, the fundamentals remain stron g of and its established plantation and supportive infrastructure, is well placed to capitalise on this, whic h will in turn also support the recover y of the countr y. Subject to an improvement in the investment conditions in Sierra Leone, the Directors believe that the Grou p has the opportunity to obtain the necessar y financing to bring the cocoa assets into production in time to capitalise on this supply shortage. In addition to maint aining the Gr oup’ s infrastructure and fleet during the E bola outbreak, the Group has deployed many of its vehicle and warehousing re sources to assist several major NGOs working in the Ebola relief efforts. This support has provided the Group with a significan t role to play during the Ebola outbreak time when many aid agenc ies at a were in-countr y in critical need of support. Through the ut ilisation of its warehousing, which has been used for storage of food and essential sup plies, and vehicles utilised for distribution as well as medical and humanitarian ser vices, the Group has supported the relief effort in Sierra Leone. Further, the income of $904,000 (2014: $nil) from these rentals has contributed to requiremen ts of mitigating this division while the developmen t operations are curtailed. the cash C O C O A 3 , 2 0 0 3 , 2 0 0 H E C T A R E H E C T A R E C O C O A P L A N T A T I O N , 4 0 K M F R O M K E N E M A I N S O U T H - E A S T S I E R R A L E O N E N U R S E R Y 2 . 22 . 2 H E C T A R E H E C T A R E WA R E H O U S E 2 , 0 0 0 MM 22 2 , 0 0 0 S T A T E O F T H E A R T W A R E H O U S E I N K E N E M A ready I n addition to the development of the pla ntation and until early 2014, the Gr oup also operated a small coc oa tra ding business from Kenema where beans were purchased from local out- gr o wers and processed for sa le to the international market. This op eration, whilst an important foothol d in this area of Sierra Leone, was loss - m aking at following a series of poor har vests and the Ebola ou tbreak, the decision was taken to d iscontinue these activities. No cocoa sa les were made during the period and expenditure of US$174,000 (2014: net loss of $986,000) relating to t he tra ding operations is present ed as “d iscontinued ” wit hin the consolidated f inancial statements. time and the 15 T h e T h e d i r e c t o r s d i r e c t o r s r e c o g n i s e r e c o g n i s e t h e t h e v a l u e v a l u e a n d a n d i m p o r t a n c e o f e f fe c t i v e c o r p o r a t e g o v e r n a n c e i m p o r t a n c e o f e f fe c t i v e c o r p o r a t e g o v e r n a n c e a s t h e y c o n t i n u e t o fo c u s o n i m p r o v i n g c o s t a s t h e y c o n t i n u e t o fo c u s o n i m p r o v i n g c o s t e f fi c i e n c y a c r o s s a l l d i v i s i o n s a n d e x p a n d i n g e f fi c i e n c y a c r o s s a l l d i v i s i o n s a n d e x p a n d i n g r e v e n u e s , t o b u i l d a p r o fi t a b l e b u s i n e s s fo r t h e r e v e n u e s , t o b u i l d a p r o fi t a b l e b u s i n e s s fo r t h e b e n e fi t o f a l l s t a ke h o l d e r s . b e n e fi t o f a l l s t a ke h o l d e r s . 17 G O V E R N A N C E G O V E R N A N C E D I R E C T O R S ’ R E P O R T T he d ir ect or s (t he ‘ Dir ec to rs ’ or the ‘ Board ’) of A griterra Limi ted (‘Agrit erra ’ or th e ‘ C o mpan y ’) he reby pr esent thei r annual report t ogether wit h the audit ed fin anc ial s tatement s for th e y ea r end ed 31 M ay 2015 for the Company and it s subsidiaries (co llect ively th e ‘ Gro up’). Except w here o th er w ise n ot ed, a mounts are presented in this Direc tors ’ rep ort in Un ited S ta tes Do lla rs ( ‘$’ or ‘ U S$’ ). 1 . L I S T I N G D E TA I L S A gri ter ra is a Guer nsey r egi ster ed company whos e ordinar y shares (‘ O rdinar y Shares ’) are quo ted on the AI M Mar ket o f th e London St ock Exchange (’AIM ’) u nder symbol AGTA. P R I N C I PA L A C T I V I T I E S , B U S I N E S S R E V I E W 2 . A N D F U T U R E D E V E L O P M E N T S T he pr incipa l acti vi ty of the Gr oup is the i nvestment in, developmen t of an d operat ion o f agr icultur al a nd associ at ed civil engineering project s in Af rica. The Group’s curren t o per a ti ons a re f ocussed on m aize an d beef in M ozambique and c oc oa in Sierra Leone. A review o f t he Gro up’s per fo rm ance by bu siness s egment, key per formanc e in dic ators an d fu ture prospect s a re given in th e Chairman’s Stat ement and Operations Review . A review o f t h e ri sks an d uncer ta int ie s i mpa cting on the Group’s l ong term per f ormanc e is in clu ded i n th e C or por ate G ove rnan ce r eport. 18 3 . R E S U LT S A N D D I V I D E N D S The G ro up re sult s s ho w a loss af ter ta x a t i o n an d d i scontinued operations of $13,387,000 ( 2014: loss $8,016,000), inc luding an i mpa ir me nt charge a ga inst curr ent a nd no n- cu r r ent as set s of $9,860,000 ( 2014: $n il) arisin g again st t he Group ’s c oc oa and pa lm as set s in Si er r a Leone. T h e Di r e c to r s d o not recommend the payment of a f inal dividend (2014: $n il). No interim divid e nds w ere paid in t he y ear (2014: $ni l) . 4 . D I R E C T O R S 4 . 1 D I R E C T O R S I N O F F I C E The Dire ct o rs who h eld of fi ce du rin g th e p er i o d an d until the dat e of t his report were: DIRECTOR PH E DMOND S A S G ROV ES POSITION CHAIRMAN CHIEF EXECUTIVE OFFICER D L C A SSIANO-SILVA FINANCE DIRECTOR DATE OF APPOINTMENT / CESSATION OF OFFICE IN THE PERIOD 1 JUNE 2014 TO THE DATE OF THIS REPORT – – – EA K AY M N PEL HAM NON-EXECUTIVE DIRECTOR RESIGNED 12 APRIL 2015 NON-EXECUTIVE DIRECTOR RESIGNED 12 APRIL 2015 4 . 2 D I R E C T O R S ’ I N T E R E S T S As at the date of this report, the interests of the Directors and their related entities in the Ordinar y Shares of the Company were: PH E DMOND S A S G ROV ES 4 . 3 . D I R E C T O R S ’ E M O L U M E N T S ORDINARY SHARES HELD 15,000,000 15,040,000 Detai ls of the nature and am o unt o f em o l um e nts p ayabl e by the Group for t he ser vic es of its Direc tors durin g t he finan cial year are sho wn i n not e 11 to t he co nso l i d a t ed f i na nc ial stat ement s. 4 . 4 . D I R E C T O R S ’ S H A R E O P T I O N S Detai ls o f t he Direc to r ’s in ter est s in sh ar e o p ti o ns o f the Compan y du ring the fin anc ial year are as follows: DIRECTOR EA K AY D L CA SSIANO-SILVA AT 1 JUNE 2014 2,500,000 2,500,000 2,500,000 7,500,000 2,500,000 LAPSED IN THE YEAR (2,500,000) – – (2,500,000) – AT 31 MAY 2015 EXERCISE PRICE GBP DATE FROM WHICH EXERCISABLE EXPIRY DATE – 2,500,000 2,500,000 5,000,000 2,500,000 3.00 3.50 5.50 1.47 LAPSED (1) (1) (2) LAPSED 28 JULY 2023 11 JANUARY 2020 (3) ( 1) Th ese opt ions w ere granted on 29 J uly 2012 and ves t 20% p er annu m on the f ir st to fi ft h an ni ve rsar y f rom t he date of g r ant. ( 2) Th ese opt ions w ere granted on 15 May 2014 and ves t 20% p er annu m on the f ir st to fi ft h an ni ve rsar y fr om t he date of g r ant. ( 3) Th ese opt ions e xpire five years after the date th ey vest. D I R E C T O R S ’ R E P O R T 19 4 . 5 . D I R E C T O R S ’ I N D E M N I T I E S The C om pan y has m ad e q ualify in g th i r d p a r t y i nd emnity provisions for the benefit of its Directors which remain in force at the dat e of thi s re por t. 5 . S U B S TA N T I A L S H A R E H O L D I N G S To th e be s t of the k now ledge of the Di r e ct o r s a nd executive officers of the Company, except as set ou t in the tabl e below, there ar e no pe rs o ns w h o, a s of 18 N o vem be r 2015 , are the direct or indirect beneficial owners of, or exerci se control or direc ti o n o ve r 3 % or mor e o f t he O r di nar y S h a r es i n iss ue of the Company. B E YOND AFR ICA FUND LIMITED G LOBAL RESOURCES FUND M R. WI LLI AM PHILI P SEYMOUR RICHARDS L IBR A FUND LP OPPE NH EIMER FUNDS, INC. WOR LD PR ECIOUS MINERALS FU ND NUMBER OF ORDINARY SHARES 106,776,005 67,888,600 54 ,000,000 52,729,574 40,000,000 38,476,200 % HOLDING 10.06% 6.39% 5.09% 4.97% 3.77% 3.62% 6 . E M P L O Y E E I N V O LV E M E N T P O L I C I E S The G roup plac es co nsi dera ble va lu e o n th e aw a r eness and involvement of it s employees in t he Group’s per forman ce. Within boun ds o f c omme rcial co nf id ential i ty, i nf o r m a ti o n i s disseminated to all levels of st aff about mat t ers that affec t t he prog ress of t he Gro up an d t ha t ar e o f in t er es t a nd c o nc er n to them as employees. 7 . S U P P L I E R PAY M E N T P O L I C Y A N D P R A C T I C E The Gr oup’ s po li cy is t o en sure t h a t, i n th e abs enc e of disput e, all suppliers are dealt wit h in ac cordan ce wit h its stan dard payme nt pol ic y whi ch is t o abide by th e te r m s o f payment agreed wit h supp liers for eac h t ransac tion. Sup pliers are made awa re o f th e te rms of pa yme nt. T he num ber o f da ys of average daily purc hases inc luded i n t rade p ayables at 31 M ay 2015 was 8 days ( 2 01 4: 2 da y s). 8 . P O L I T I C A L A N D C H A R I TA B L E D O N AT I O N S During th e y ear n o po lit ical a nd cha r i ta bl e do na ti ons were made ( 2014: $nil) . 9 . S O C I A L A N D C O M M U N I T Y I S S U E S The Gro u p re co gnises th e va lue of em p l o ym e nt and training to the con t inued ec on omic growt h in the count ries in which it ope rate s. The Gro up is develop ing p o l i ci es t o ens ure i ts expertise an d sp ecialist skills and fac ilities are made available to the bro a de r co mmun it y. I N D E P E N D E N T A U D I T O R A N D S TAT E M E N T O F P R O V I S I O N O F I N F O R M AT I O N T O T H E 1 0 . I N D E P E N D E N T A U D I T O R RSM UK A udi t LLP ( fo rmer ly B aker Ti ll y UK A u di t L L P) have expressed t heir willin gness to c on tin ue in offic e as in dep endent audi to r o f th e C ompa ny and a r eso lu ti o n to r e- ap p oint t hem will be propos ed at t he f ort hc omin g A nn ual Gen eral Meeting. The Di re ctor s who h eld o ff ice a t th e d a t e o f a p p r oval of this D irectors ’ rep ort conf irm that, so far as they are each aware, there i s no re lev a nt a udi t in fo rm at io n o f wh i ch th e C ompany ’s auditor is n ot aware; and eac h Direc tor has taken all t he step s that he o ught t o h ave ta ken a s a Di r ec to r to m a ke himself aware of any rel evant audit inf ormati on and to est ablish that the Comp an y ’s a udi t or is a w a re o f th a t i nf o r m a ti o n. 20 1 1 . A D D I T I O N A L I N F O R M AT I O N A N D E L E C T R O N I C C O M M U N I C AT I O N S Add it io n al inf o rmatio n on the Com p a ny c an b e f o u nd on the Compan y ’s websit e at www. agrit erra-lt d.c om. The ma int enanc e and int egri ty of th e C o m p any ’s website is the responsibilit y of t he D irect ors; t he work c arried out by the audi to r do e s no t involve co nsi der a t i o n o f the se matters and acc ordin gly, t he audit or acc ept s n o resp on sibility for an y cha nge s t hat may h ave o ccur r ed to t h e f i na nc i al sta tements sinc e they were init ially p resen t ed on the website. The Co mpany ’s we bsit e is m ai nt a ine d i n c o m p li a nc e wit h AIM Rule 26. By o rde r of the Bo ar d PH Ed m ond s Chai rm an 19 N ov em ber 2015 D I R E C T O R S ’ R E P O R T 21 C O R P O R A T E G O V E R N A N C E T he Bo ar d is a cco unt a ble to the Company ’s shareholders for good corporate g over na nce. The C ompa ny i s quoted on A IM and is therefore not required to comp ly wi t h t he pr ovision s of t he U K Co rporate Governan ce Code (t he ‘ Code’) on corporat e g over na nce a s publi shed by t he U K Lis ting Aut hority. Nevertheless, t he Direct ors rec ogn ise th e va lue a nd im por t ance o f effect ive corporate governance and obser ve p rovision s of g ood go vern ance t o th e ex t en t t hat t hey consider them to be appropriat e for a g roup of th is si ze a nd sta ge o f dev elopm ent. Set out below is a su mmar y of how, at 31 M ay 2015, th e Gr oup w as de aling wi t h co rpo rate governance issu es. T H E B O A R D O F D I R E C T O R S A N D T H E 1 . E X E C U T I V E C O M M I T T E E T he Gr oup is led a nd controlled by a B oard comprising the Chairman, t he C hief Execu tive an d th e Fina nce Di rect or. T he B oa r d ha s ent ruste d t he da y-to-day res ponsibility for t he di rec ti on, super vision and mana gem en t of t he busin ess o f th e Group to the Grou p Executive C ommit tee (t he ‘ ExC om’). T he ExC om i s curr en t ly compr ise d of all Board members. Cer t ai n m at t er s a re specif ica lly r eser ved t o the Board for it s dec ision in cludin g, int er ali a, t he cr ea tion or issue of new shares and share opt ions, acquisit ion s, in vest men t s and di spo sa ls a nd ma te rial con tra ct ua l arrangements ou tside the ordinar y course of busin ess. Due t o t he curre nt size o f t he Bo ard and the Company, there is n o sep arat e Nomin at ion Com mit t ee a nd an y new Dir ec to rs are app oi nted by the whole Board. T here i s no agr eed form a l pr ocedure for t he Direc tors to take independen t profession al advi ce at the Gr oup’s expense. T he Company ’s Directors submit themselves f or re-elec tion at the A nnua l G ener al Meet i ng at regular int er vals in accordance with the C ompan y ’s A rt icles o f I nco rpo ra ti on. 22 The G roup has ad op te d a sha re d ea li n g c o de f or Directors ’ dealing s whic h is app ropriat e for an A IM q uot ed comp an y. The Di re ctor s co mply w ith Rule 21 o f th e A I M Rul es relating to direct ors ’ dealing s an d t ake all reason able step s t o en sure com pl ia nce by th e Gro up’s e mploy ee s. The co m pany has Remun er at i on an d A u di t C om m i ttees as more f ully described below. 2 . D I R E C T O R S ’ R E M U N E R AT I O N The re m une ra ti on com mitt ee r eviews th e p er f o r m a nce of the D irec tors and makes rec ommen dat ion s to t he Board on matters rela ti ng to the Di re ct or s ’ remun er at i o n and o t h er te r ms of empl oymen t. The c ommitt ee makes recommen dations to t he Board on the gr anti ng of share opt i ons a nd o th er eq ui t y i nc e ntives and will admini ster any equit y in cen tive sc hemes. The remun eration com mi tte e is cons titute d a nn ually a nd co m p r i s es o f at least two members, one of which is t he C hairman of the Comp any, who acts a s c hai rman o f t he co mmi ttee. Detai ls o f t he re m unera t io n o f ea ch Di r ec t o r a r e s et ou t i n note 11 to the fin anc ial st atement s. 3 . A C C O U N TA B I L I T Y A N D A U D I T The au di t co mmit t ee is responsible f o r ensu r i ng that the Group’s fin an cial p er forman ce an d posit ion is p roperly monitored, con tro l led an d repor t ed. T he com m i t te e m ee ts at least twice a year an d has unrest rict ed acc ess t o t he auditor. In addition to m e et ing wi th th e aud it or a nd r evi e wi n g t h e r e port f rom the auditor relat in g to the ac count s and int ernal c on trol, the com mi tte e i s also re sp onsi ble for r evi ew i ng th e s co pe and resul ts of t he audit, its cost effec tiveness and the in dep en denc e and o b jec ti v it y o f t he aud it or. A f o r m al s ta t em en t of in dep enden ce has been received f rom t he ext ernal auditor for the year. T h e aud it c ommi ttee is con sti tu ted a nnu a l ly a nd comprises of at least t wo members, on e of whic h is t he chairman of the Comp an y, who ac ts a s cha irm a n o f th e c o m m i t te e. 4 . R E L AT I O N S W I T H S H A R E H O L D E R S The Ch ie f Exe cuti ve is t he Co mpa ny ’ s p r i nc i p a l s p okesp erson wi th invest ors, fun d man agers, the p ress an d ot her in terested parti es. A t t he Annua l Genera l Me eti ng, i nvest o r s a re given the opp ort uni ty t o quest ion the Board. 5 . I N T E R N A L A U D I T The B oa rd ac kno wl ed ges it s respon si bi l i ty f o r es ta blishing and monit orin g the Grou p’s systems of in t ern al cont rol. Althoug h no s yst e m of i nte rnal control ca n pr o vi d e ab so lu te assu rance against mat erial misst atement or loss, t he Group ’s systems are des i gne d to pro vide th e Direct ors w i t h r e aso na bl e assu ran ce that problems are iden t ified on a t imely bas is an d dealt with appr opr iate ly. The Boa rd re vi e ws t he effe ct iveness o f th e sys te m s of intern al control and c on siders the major bu siness risks an d the control env ir onm ent. No s ignifi ca nt co nt r o l de f i c i enc i e s h ave come to light durin g t he year and n o weakness in int ernal finan cial con tro l ha s r esul te d i n mat eri al loss es, c o nt i nge nc i es or uncertainti es which would require disc losure as recommen ded by the guidanc e fo r di rec to rs on repor t ing o n i nte r na l f i na ncial control. In lig h t of th is co nt r ol env ir on ment t h e B o a r d c o nsiders t hat there is n o curren t requiremen t for a separat e int ern al audit func ti on. 6 . C O M P L I A N C E W I T H R E L E VA N T L E G I S L AT I O N All Dir ect ors are kept info rm ed o f c h ang e s i n r el evant legislation and changing commercial risk s wit h the assi stanc e of the Co mpany ’s le ga l ad viser s an d a ud i to r s wh e r e appropriate. The Di rectors have taken appropriate l egal advic e an d impl eme nt ed i nter na l tr ainin g and r ep o r t i ng p r o c ed ures to ensure compliance with t he U K Briber y Act 2010 (the ‘ Briber y Act ’) and th e Pre ven tio n o f Cor rupt ion ( B a i li w i c k o f G uer n sey) Law, 2003 which contains broadl y si milar restrict ions. Not wi thstan ding the f ac t th at t he Co m pany is n ot UK –r esi de nt, th e Direct ors have formed a view that it is appropriate for the Comp any to main tai n co mpli ance w it h th e Br iber y A c t. 23 C O R P O R A T E G O V E R N A N C E 7 . G O I N G C O N C E R N The Bo ar d ha s de t ailed its co nsi der a ti o ns r ela t i ng to Going Concern in note 5.1 t o the financial statement s. 8 . R I S K S A N D U N C E R TA I N T I E S The re are a numbe r of r isks and unc er t a i nti es f a c i ng the Group, principall y the following: 8 . 1 . F O R E I G N E X C H A N G E The G roup c ond uc ts its oper at io ns i n m u lti p le ju r i sdictions with differing currencies and therefore is subject t o flu ct uations in exch ang e ra tes. S ome o f the cou ntr i es i n w hi ch t h e Grou p operates maintain st rict controls on access t o foreign currenc y and th e re pat ri atio n o f fun ds. 8 . 2 . R E G U L AT O R Y R I S K Whi l e th e Group believes t ha t its op e r a ti o ns a r e c urrentl y in s ubstantial compliance with al l relevant material environ men tal and h e al th and sa fety law s a nd r eg u la ti o ns, th e r e can be no assurance that new laws and regulations, or amendments to, or string e nt e nfo rc e ment of, ex isting la ws a nd r e gu la ti ons wi ll not be int roduced, which could have a mat erial adverse imp act on th e Gr oup. 8 . 3 . G E N E R A L R I S K S A S S O C I AT E D W I T H O P E R AT I N G I N A F R I C A Cha ng es in gov e rnm en t, mo neta r y p ol i c i es, t a x a ti o n, exchange control and other laws can have a significant impact on the Grou p’ s ass e ts a nd o per a tio ns. S ever a l c o unt r i es i n Africa have experi enced periods of political inst abilit y, and there can be no g uarant e e s as t o th e level o f f u tu r e p o li ti c al stability. Changes t o government poli ci es and applicable laws c ould adv e rse l y af f ect t he oper atio ns and / o r f i nanc i a l c ondition of the Grou p. The jurisdictions in which the Group might op erate in th e fut ure may h ave less develop e d le ga l sy st ems than more established economies, which could result in ris ks su ch as (i) e ff ec tiv e l eg a l r ed r ess in the c o ur t s bei ng mo r e diff icult to obtain; (ii) a hi gher degree of discretion on the part of gove rn me nt al a ut ho rities; ( iii) th e lac k o f j ud i c i a l o r administrative guidance on interpret ing applicable rul es and regulati ons. In c ert ai n juri sdi c tion s, t he comm it m ent o f l o ca l b usi ness peopl e, government officials and agencies and the judicial system to a bi de by leg al requir em ents and ne go ti a te d ag r eements may be more u ncertain, creat ing part icular concern s with r espec t to t he Gr oup’s l ice nses a nd a greem ent s f o r bu si ne ss. These may be suscept ible to revision or cancell at ion and legal redress may be unce rtai n o r de laye d. 8 . 4 . L A N D O W N E R S H I P I N M O Z A M B I Q U E Unde r th e la ws of Mo zam biq ue, pr o p r i et a r y r i g h t s i n land are excl usive t o the st at e. The Mozambique constit ution prescribes the s t ate ’s r ight s o f o wner sh ip a nd th e p o w er a nd ability to determine the conditi ons for the u se and development of lan d by in di vi dual o r c or por at e per sons. T h e la nd c a nnot be sold, mortgaged or en cu mbered in any way or by any means. The state grant s t he r ight t o use a nd d eve lo p t h e la nd which i s evidenced by a Use and Development of Land License (‘ DUAT ’) which all ows fo r t he tit le ho lder to bui ld a nd r eg i st er any infrastructure under it s name on such l an d. D ECA, Compagri an d Moz b ife ’s ope rat ions ar e d epend ent o n m ai nta i ni ng the relevant D UATs and, whilst there is currently no indicat ion that the relev ant DUATs a re in va lid, t her e can be no gu ar a ntees that this will not change in futu re. 8 . 5 . M A I Z E G R O W I N G S E A S O N The Gro up ant ic ipa tes a six mo nth b uy i ng / gr o w i ng seas on for maize. H owever matters ou tside the control of the Group, suc h as a dv e rs e we at he r cond itions, co u ld i m p a ct u p o n the amount of production achieved by local farmers in any year, which coul d c on se que nt l y h ave ad ver se ef f ec t s o n th e Gr oup’s bus iness and profit margins. 24 8 . 6 . C O C O A F A R M I N G The Group, i n co nsulta tion wi t h i ts a gr o no m i ca l advisors, has developed plan tin g t ec hn iques and prog rammes for the dev el o p me nt o f i ts coc oa plantatio n i n S i er r a Leo ne. Based on the expec ted in put s ( e.g. f ertiliser, in sect icide, p lant selection), the Gro up an ti cip at es ach ie ving p r o du ct i o n o f at least two tonnes of cocoa beans per planted hect are once t he coc oa tree s a re ma ture. T h e est ablishment o f c o co a p l a nta ti ons in West ern Africa is at an early st age of development and there can be no g uarante e th at th e p redict ed o u t p ut o f c o coa beans wil l be achieved for t he predict ed cost. Further, matt ers outside the c ont rol o f t he Gr oup, such a s a d ver se w e a th er conditions, c ould impact upon the amount of production achieved, or the cost o f t hat pr oduction. 8 . 7 . C AT T L E R A N C H I N G The Gr oup has si g nifi can t cat t le ra nch i ng a nd f eedlot assets i n M ozambique, wit h ap proximat ely 7,200 head as at 31 May 201 5. Whi le all ne ce ssa r y measur es a r e ta ken t o e nsure the c at tle remain disease and inf ec t ion free, there is a risk that the anim als ma y be a ffected by unfo re see n i ll nes ses which cou ld imp ac t on t he f ut ure profit abil ity of the ranc hin g operation s. Mozam bique i s al so subject to sig ni f i c a nt tem p e r a ture and prec ipitat ion chang es during and between years. In some years, parti cu la rl y ‘ El Ni no’ y ea rs, t he co u ntr y m a y be subject to drought condit ion s which may impact on t he availabil ity of graz ing f e ed f or t he cat t le an d requ i r e a d d i ti o nal supplement ar y feedin g t o maint ain t he an imals ’ con dit ion. An y un expected supp le men ta r y fe e d in g pr ogr am m e m a y i m p a c t on t he prof itabil ity of t he ran ching op erat ion s. 8 . 8 . E B O L A A N D O T H E R H E A LT H R I S K S The Group operates in countr ies th a t a r e, o r m a y b e, subject to sign ific ant health risks. D ue t o t he previousl y un fores een E bol a epide mi c in Si e rra Leon e, th e Gr oup h a s sus p end ed the development of its Cocoa plant at ion. In the e ve nt o f o th er unf or eseen epi d em i cs i n th e f u ture, there is a risk that the Group’s operat ions may be further temporaril y dis rup ted, or re q uire a ddi t io nal p r e ca ut i o na r y m easu res. Accordingly, in su ch circumstances, t he Group may be u n able to dev el o p i ts pr oje c t s in t he ti mefr am e a nd bu d ge t i ni t ially p roject ed, which may i mpact on the cash requirements or profitabilit y of t he s e p roj ec t s. C O R P O R A T E G O V E R N A N C E 25 S T A T E M E N T O F D I R E C T O R S ’ R E S P O N S I B I L I T I E S T he Co mp anies ( Gue rnsey ) Law 2008, as amended (the ‘2008 Law ’) requires t he Dir ecto rs t o ensur e t hat th e fin ancial statements are prepared properly an d in acc ordan ce wi t h a ny releva nt en actm ent fo r t he time being i n forc e. The D irec t ors are required t o pr epar e f ina nci al sta tement s f or each f inancial p eriod which give a tru e and fair view of th e sta te of af f ai rs o f th e C ompa ny and Group and of the profit and loss for that period. T he Dir ect or s a re re qui red by t he A IM Rules of the London St oc k Exc han ge t o p rep are g roup f ina ncia l st at em en ts i n accordanc e wit h International Fin an cial Report in g S tan dards (‘ I FRS ’) a s ad opt ed by t he Eur opean Union (‘ EU ’) and have elected un der Guern sey Com pa ny Law t o prepar e t he Company f inanc ial statements in accordanc e wit h I FRS as ado pted by th e EU. T he f ina ncial sta t em ent s ar e required by IFRS as adopted by t he EU t o present fairly th e f ina ncial position of th e G roup and Company and the fi nancial per formance of t he Gr oup. A pplicable law pr ovid es in relat ion to such financial stat emen t s t hat ref eren ces to fi na ncia l st at em en ts giving a tru e and fair view are ref erences t o t heir achievi ng a fair pr esenta t ion. 26 The Dire ct ors must no t a ppr ove th e f i na nc i al s ta tement s unl ess they are s at isf ied t hat t hey g ive a true an d fair view of the state o f aff ai rs of the G roup an d C o m p a ny and of the profit or loss of the Grou p for t hat period. In prep ar ing t he Group and Co mp any f i na nc i al sta tements, the Direct ors are required t o: • se le c t sui ta ble accoun ting polici e s and th e n ap p ly them c onsistent ly; • make j udge me nts and a cco unt ing e st i m ates t h a t are reasonable an d prudent ; • st at e whe t he r t h ey hav e bee n pr ep a r ed i n ac c o r danc e with IFR Ss as adopt ed by the EU; an d • pre p are t he fi nancia l st at em ents on th e g o i ng c o nc ern bas is unless it is in appropriat e t o presume that the Group and the C o mpa ny wi ll co nt inue in business. The Di re ctor s ar e respo nsible fo r kee p i ng a d eq ua te ac count ing rec ords that are suff icien t to show and exp lain the Group and Co mpany tra nsacti ons a nd d i sc lo s e w i t h r ea sonable accuracy at an y t ime the fin anc ial posit ion of t he Group an d Comp an y an d enable th em to ensu r e t h a t th e f i nan cial statements comply wit h app licable law. They are also res pon sible for safeg uar di n g the assets o f t he Gr ou p a nd C o m p a ny and hence for t akin g reason able st eps for t he preven t ion an d detection of f ra ud and ot her irr eg ula ri t ie s. The Di rec to rs a re respo nsib le for t h e m ai ntena nc e and integrit y of t he corporat e and fin anc ial information in cluded on the Gro up ’s w eb si te. Legisla tion in Guer nsey go ver n i ng the preparat ion and disseminat ion of finan cial st at emen ts may differ from leg is l ati o n in ot he r juri sd ic tion s. The Directors confirm t hey ha ve disc h a r g e d t h ei r r esponsibilit ies as n ot ed above. D I R E C T O R S ’ R E S P O N S I B I L I T I E S 27 I N D E P E N D E N T A U D I T O R ’ S R E P O R T T O T H E M E M B E R S O F A G R I T E R R A L I M I T E D W e ha ve aud it ed t he Group financial stat ement s of Agriterra L imit ed for t he yea r end ed 31 Ma y 201 5 o n pages 30 to 7 1 . The f inancial reporting framework t hat has been applied i n t he ir prepar at io n is appl icabl e law and Int ernational Financial Reporting S ta nda r ds (‘ IF RSs ’) as a d opt ed by t he European Union. T his repor t is m ad e so lely t o t he Company ’s members, as a body, in accordance with s ectio n 262 of t he Com pa ni es ( Guerns ey) Law 2008. Ou r audit work has been undert aken s o t ha t w e mi ght sta t e to th e C om pany ’s members those matters we are requ ired t o state to th em i n an aud it or ’s repor t a nd f or no other purpose. To the ful les t extent permitted by law, we d o not a ccept o r a ssum e responsibility to anyone other than t he Company and th e C om pan y ’s mem ber s a s a bo dy, f or our au dit work, for this report, or for the opinions we ha ve f orm ed. R E S P E C T I V E R E S P O N S I B I L I T I E S O F D I R E C T O R S A N D A U D I T O R S A s m or e fully ex plained in t he St a tement of Direct ors ’ responsibilit ies set out on pages 26 an d 27 , the Di recto rs a re responsible for the preparation of the f inanc ial st at emen ts and fo r being sa t isfi ed t ha t th ey gi ve a true and fair vi ew. Ou r res pon sibility is t o audit and e xp ress an opini on on t he fina ncial s tatements in acc ordanc e with ap plic able law and Inter nat i onal S ta nda rd s on A uditing (UK and I rel and). Those standards require us t o c om ply w ith t he Aud it i ng Pr ac tices Board ’s (A PB’s) Ethical St andards for Audit ors. 28 We re a d ot he r i nf o rmat io n con ta ined i n th e a nnu a l r eport and consider t he implic at ions f or our report if we bec ome aware of any ap p are nt mis st at em ents w it hin th em. S C O P E O F T H E A U D I T A de s cri pti o n of t h e sco pe of a n au d i t o f f i na nci al statement s arisin g from t he req uiremen ts of I nt ernat ional St andards on Aud i ti ng (UK a nd Irela nd ) i s pr ovid ed o n t h e Fi na ncial Reporting Coun cil ’s webs ite at www.f rc. org.u k/audit sc opeukp rivate. O P I N I O N O N T H E F I N A N C I A L S TAT E M E N T S In ou r o pi nio n th e fi na nci al st a tem ent s: • gi ve a true and fair vie w o f the st a te o f t h e G r o u p’s af fairs as at 31 M ay 2015 and of t he Grou p’s loss for the year then en de d; • the Group f inan ci al sta t eme nt s h a ve be en p r o p er l y prepared in acc ordanc e with IFR S as adopt ed by t he European Un ion ; and • th e Group fi nan cia l sta t eme nt s ha ve be en p r ep a r ed in accordance wit h t he requirement s of the C ompani es (Guern sey) Law 20 08 . M AT T E R S O N W H I C H W E A R E R E Q U I R E D T O R E P O R T B Y E X C E P T I O N We ha v e n oth i ng to repo rt in r esp ec t o f th e f o ll o wi ng mat ters where t he C ompan ies (Guern sey) Law 2008 requires us to report to yo u if, i n o ur o pin io n: • pro pe r ac co unting reco rd s have no t b een ke p t b y the Company; or • th e Co mp any ’s acco unt s ar e not i n a gr e em e nt w i th the ac count ing records; or • we h ave no t r ec e ived all t he inf or m ati o n a nd e x p lanations we requ ire for our audit. RSM UK Au dit LLP (former ly Baker Til l y UK A udit LLP) , Auditor Char te r ed Accou ntants and Reg iste re d A udito rs 25 Far r ing don Str e et Lon don EC4 A 4AB 19 N ov em ber 2015 I N D E P E N D E N T A U D I T O R ’ S R E P O R T 29 W h i l e w e c o n t i n u e t o b u i l d o u r b u s i n e s s t o w a rd s W h i l e w e c o n t i n u e t o b u i l d o u r b u s i n e s s t o w a rd s profitability, ultimately we are still in the investment profitability, ultimately we are still in the investment p h a s e o f t h e C o m p a n y ’ s d e v e l o p m e n t a n d o u r p h a s e o f t h e C o m p a n y ’ s d e v e l o p m e n t a n d o u r r e s u lt s c o n t i n u e r e s u lt s c o n t i n u e t o t o r e f l e c t r e f l e c t t h e t h e s i g n i fi c a n t s i g n i fi c a n t investment and development in our i nfras tru cture . investment and development in our i nfras tru cture . • • N e t A s s e t Va l u e o f $ 2 9 , 8 42 , 0 0 0 - N e t A s s e t Va l u e o f $ 2 9 , 8 42 , 0 0 0 - a s i g n i fi c a n t p r e m i u m t o o u r a s i g n i fi c a n t p r e m i u m t o c u r r e n t m a r ke t o u r c u r r e n t m a r ke t c a p o f a p p r ox i m a t e ly $ 8 , 2 5 0 , 0 0 0 c a p o f a p p r ox i m a t e ly $ 8 , 2 5 0 , 0 0 0 * • • C a s h b a l a n c e s o f $ 6 , 42 1 , 0 0 0 * ** * C a s h b a l a n c e s o f $ 6 , 42 1 , 0 0 0 ( 2 014 : $ 6 , 9 9 4 , 0 0 0 ) ( 2 014 : $ 6 , 9 9 4 , 0 0 0 ) • • Lo s s fo r F Y 2 01 5 o f $ 1 3 , 3 8 7 , 0 0 0 ( 2 014 : l o s s Lo s s fo r F Y 2 01 5 o f $ 1 3 , 3 8 7 , 0 0 0 ( 2 014 : l o s s o f $ 8 , 016 , 0 0 0 ) o f $ 8 , 016 , 0 0 0 ) * A s a t 17 N o v e m b e r 2 01 5 * A s a t 17 N o v e m b e r 2 01 5 * A s a t 3 1 M a y 2 01 5 * * A s a t 3 1 M a y 2 01 5 30 F I N A N C I A L F I N A N C I A L S T A T E M E N T S S T A T E M E N T S C O N S O L I D A T E D I N C O M E S T A T E M E N T F O R T H E Y E A R E N D E D 3 1 M A Y 2 0 1 5 C ONTI NUING OP E RATIONS RE VENUE CO ST O F SALES G ROSS PROFIT IN CR EA SE IN VALUE OF BIOLOGICAL A SSETS OPE RATI NG EXPENSES IM PAI RMENT OF CURRENT AND NON-CURRENT A SSETS OTHER INCOME PRO FI T ON D ISPOSAL OF PROPERTY, PLANT AND EQUI PMENT O PE RAT ING LOSS IN VE STMENT REVENU ES OTHE R G AINS AND LOSSES F INAN CE C OSTS LOSS BEFOR E TAXATION TA XATI ON LOSS FO R THE YEAR FROM CONTINUING OPERATIONS D ISC ONTIN UED OPERATIONS PRO FI T/ (LOSS) FOR THE YEAR FRO M DISCONTINUED OPERATIONS LOSS FO R THE YEAR ATTR IBUTABLE TO OWNERS OF THE C OM PANY LOSS PER SHARE B A SI C AND D ILUTED LOSS PER SHARE FROM CONTINUI NG OPERATIONS BA SI C AND D ILUTED LOSS PER SHARE FROM CONTINUING AND D ISCO NTINUED OPERATIONS 32 NOTE 6 23 12.1 8 13 14 15 16 17 18 18 2015 US$000 2014 US$000 11,787 (10,662 ) 1,125 1,910 (10,643 ) (6,791) 33 76 13,797 (12,475) 1,322 290 (8,338) – 77 149 (14,290) (6,500) 19 (849) (683) (15,803) (81) (15,884) 146 936 (209) (5,627) (25) (5,652) 2,497 (13,387) (2,364) (8,016) US CENTS US CENTS (1.50) (1.26) (0.53) (0.76) C O N S O L I D A T E D S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E F O R T H E Y E A R E N D E D 3 1 M A Y 2 0 1 5 LOSS F OR THE YEAR IT E MS THAT MAY BE RECLA SSIFIED SUBSEQUENTLY TO PROFI T OR LOSS: F OR EIG N EXCH ANGE TRANSLATION DIFFERENCES OTHE R C OMPREHENSIVE INCOME FOR THE YEAR TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATT RIB UTABLE TO OWNERS OF THE CO MPANY 2015 US$000 (13,387) (4,435) (4,435) 2014 US$000 (8,016) (1,612) (1,612) (17,822) (9,628) F I N A N C I A L S T A T E M E N T S 33 C O N S O L I D A T E D S T A T E M E N T O F F I N A N C I A L P O S I T I O N A S A T 3 1 M A Y 2 0 1 5 N ON-CU RRENT A SSETS G OO DW ILL PRO PER TY, PLANT AND EQUIPMENT IN TERESTS I N A SSOCIATES IN VE STMENTS I N QUOTED COMPANIES B IOLOG I CAL A SSET S C U R RE NT A SSE TS B IOLOG I CAL A SSET S IN VE NTOR IES T RAD E AND OTHER RECEIVABLES CA SH AN D CA SH EQUIVALENTS TOTAL A SSETS C U R RE NT LIABILITIES B O RROWIN GS T RAD E AND OTHER PAYABLES N ET CUR R ENT A SSETS N ET A SSE TS S HAR E CAPITAL S HAR E PREMIUM S HAR ES TO BE I SSUED S HAR E BA SED PAY MENT RESERVE T RAN SL ATI ON R ESERVE AC CUMULATED LOSSES EQUIT Y ATTR IBUTABLE TO EQUITY HOLDERS OF THE PARE NT NOTE 2015 US$000 2014 US$000 19 20 21 22 23 23 24 25 26 27 28 30 31.1 31.2 – 19,746 4 376 2,246 22,372 1,019 2,892 1,594 6,421 11,926 34,298 3,079 1,377 4,456 7,470 576 36,268 4 1,225 3,071 41,144 1,201 4,900 1,148 6,994 14,243 55,387 2,668 2,170 4,838 9,405 29,842 50,549 1,960 148,622 – 1,914 (8,243) 1,960 148,622 2,940 1,859 (3,808) (114,411) (101,024) 29,842 50,549 The fi na nci al s t a tem ents o f A gr ite r r a L i m i ted we r e approved and authorised for iss ue by the Board of D irectors on 19 N ov e mbe r 20 15. Signed o n beh a lf o f t he B o a r d of Di rectors by: PH EDMO NDS Cha i rm an 19 N ov e mbe r 2 0 15 34 C O N S O L I D A T E D S T A T E M E N T O F C H A N G E S I N E Q U I T Y F O R T H E Y E A R E N D E D 3 1 M A Y 2 0 1 5 SHARE CAPITAL US$000 SHARE PREMIUM US$000 SHARES TO BE ISSUED US$000 NOTE SHARE BASED PAYMENT RESERVE US$000 TRANSLATION RESERVE US$000 ACCUMULATED LOSSES US$000 TOTAL EQUITY US$000 BAL AN CE AT 1 J UNE 2013 1,960 148,622 2,940 1,710 (2,196) (93,008) 60,028 LOSS F OR THE YEAR OTHE R C OMPREHENSIVE INCOME: E XC HA NGE TRA NSLATION LOSS ON F OREI GN OPERATIONS TOTAL COMPREHENSIVE INCOME FOR THE YEAR S HAR E- BA SED PAY MENTS 32 – – – – – – – – – – – – BAL AN CE AT 3 1 MAY 2014 1,960 148,622 2,940 – – – – (8,016) (8,016) (1,612) – (1,612) (1,612) (8,016) (9,628) 149 1,859 – – 149 (3,808) (101,024) 50,549 LOSS F OR THE YEAR OTHE R C OMPREHENSIVE INCOME: E XC HA NGE TRA NSLATION LOSS ON F OREI GN OPERATIONS TOTAL COMPREHENSIVE INCOME FOR THE YEAR S HAR E- BA SED PAY MENTS RE LEA SED TO PROFIT AND LOSS 32 12.2 – – – – – – – – – – – – – – (2,940) – – – 55 – – (13,387) (13,387) (4,435) – (4,435) (4,435) (13,387) (17,822) – – – – 55 (2,940) BAL AN CE AT 3 1 MAY 2015 1, 960 148,622 – 1,914 (8,243) (114,411) 29,842 F I N A N C I A L S T A T E M E N T S 35 C O N S O L I D A T E D C A S H F L O W S T A T E M E N T F O R T H E Y E A R E N D E D 3 1 M A Y 2 0 1 5 C A S H F LOWS FR OM OPERATING ACTIVITIES LOSS B EFORE TAX FROM CONTINU ING OPERATIONS AD JUSTMENTS FOR: D EPR ECIATION PR OFI T ON DI SPOSAL OF PROPERTY, PLANT AND EQUIPME NT SH ARE BA SED PAYMENT EXPENSE FOREIGN EXCHANGE LOSS/(GAIN) I NC REA SE I N VALU E OF BIOLOGICAL A SSETS F IN ANC E COSTS I NVE STMEN T R EVENUES D EC REA SE/(I NC REA SE) IN FAIR VALUE OF QUOTED INVEST MENT S I MPAI RMEN T OF CURRENT AND N ON-CURRENT A SSET S O PE RAT ING CA S H FLOWS BEFORE MOVEMENTS IN WORKING C APITAL D E CR EA SE IN IN VENTORIES ( INC REA SE)/D ECR EA SE IN TRADE AND OTHER RECEIVABL ES D E CR EA SE IN TR ADE AND OTHER PAYABLES CO RPO RATION TAX PAID F INAN CE C OSTS IN TEREST R ECEIV ED N ET CA SH USE D IN OPERATING ACTIVITIES BY CONTINU ING O PERATIONS N ET CA SH PROV IDED BY/(USED IN) OPERATING AC TI VITIES B Y D ISC ONTIN UED OPERATIONS N ET CA SH USE D IN OPERATING ACTIVITIES C A S H F LOWS FR OM INVESTING A CTIVITIES PRO CE EDS FROM D ISPOSAL OF PROPERTY, PLANT AND EQUIPME NT AC QUI SITI ON OF PROPERTY, PLANT AND EQUIPMENT PURC HA SE OF I NVESTMENT IN QUOTED COMPANIES N ET CA SH USE D IN INVESTING ACTIVITIES BY CONTI NUING OPE RATIONS N ET CA SH FR OM INVESTING ACTIVITIES BY DISCONTINU ED OPE RATIONS NET DECREA SE/(INCREA SE) IN BIOLOGICAL A SSETS HELD FOR SLAUGHTER PURPOSES 23 C A S H U SED IN OPER ATING ACTIVITIES BY CONTIN UING OPE RATIONS NOTE 2015 US$000 2014 (RE -PRESENTED – NOTE 4) US$000 (15,803) (5,627) 20 2,211 1,766 23 15 13 22 12.1 (76) 55 177 (1,910) 683 (19) 849 6,791 (7,042) 1,158 (848) (719) 2,281 (5,170) (9) (683) 19 (5,843) 5,627 (149) 149 (52) (290) 209 (146) (936) – (5,076) 197 971 (173) (219) (4,300) (25) (209) 146 (4,388) (879) 20 22 (216) (5,267) 291 (1,555) – (1,264) – 202 (5,935) (285) (6,018) – N ET CA SH USE D IN INVESTING ACTIVITIES (1,264) (6,018) 36 C A S H F LOWS FR OM FINANCING ACTIVITIES NE T D RAW D OWN OF OVERDRAFT RE PAYMENT OF LOANS N ET CA SH FR OM/(USED IN) FINANCING ACTIVITIES FROM C ONTINUING O PE RAT IONS N ET CA SH USE D IN FINANCING ACTIVITIES BY DISCO NTI NUED OPERATIONS N ET CA SH FROM/(USED IN) FINANCING ACTIVITIES N ET DEC REA S E IN CA SH AND CA SH EQUIVALENTS EF FEC T OF EXC HA NGE RATES ON CA SH AND CA SH EQUIVAL ENT S CA SH AN D CA SH EQUIVALENTS AT BEGINNING OF THE YEAR C A S H A ND CA SH EQUIVALENTS AT END OF THE YE AR NOTE 27 2014 (RE -PRESENTED – NOTE 4) US$000 2015 US$000 1,376 (200) 1,176 – 1,176 (304) (269) 6,994 6,421 1,129 (1,500) (371) – (371) (11,656) (98) 18,748 6,994 F I N A N C I A L S T A T E M E N T S 37 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 . G E N E R A L I N F O R M AT I O N Agri t erra is inc orpor at ed a nd d om i c i l ed i n G ue r nsey, the Channel I slands, wi th regist ered n umber 42643. Further details, includ ing the address o f th e re gist er ed o f f i c e, a r e given on p age 79 . The n atu re of t he Group’s operat ion s and it s prin cip al acti v i ti es a re s et o ut in th e Direct o r s ’ r ep o r t. A l i st of the s ignificant investment s in subsidiaries and assoc iate comp anies held dire ct ly and ind irec tly by the Co m pa ny d ur i ng th e p eriod and at the period en d, inc ludin g t he name, coun tr y of inc orporation, ope rati o n a nd o w ne rsh ip inte rest i s gi ve n i n no t e 39. The r ep orti n g curren cy f or th e Com p a ny a nd G r o up is the US D ollar ( ‘$’ or ‘ US$’) as it most ap prop riately reflect s the Group’s bus i nes s act iv it ie s in th e a gr icultura l sec to r i n A f r i ca and therefore t he Group’s fin an cial posit ion an d fin anc ial per f ormanc e. The fi nanci al stat e ments h ave been p r e p ar e d i n a ccordance with IFRSs as adopted by the EU. 2 . A D O P T I O N O F N E W A N D R E V I S E D S TA N D A R D S A N D I N T E R P R E TAT I O N S 2 . 1 . N E W S TA N D A R D S A N D I N T E R P R E TAT I O N S A D O P T E D W I T H N O S I G N I F I C A N T E F F E C T O N T H E F I N A N C I A L S TAT E M E N T S The f o ll ow ing ne w and r evised St and a r d s a n d I nt er p r etations have been adopt ed in these fin anc ial st atement s. Their adoption has no t had a ny sign if icant i mpa ct o n th e a m o u nts r eported in these fin anci al s tat emen ts, bu t may impact the acc oun tin g for futu re t ransac ti ons and ar ra ng ement s. IF RS 1 0 Con soli da te d Finan cia l S t at em e nts ( e ff ective for annual periods beginning on or after 1 Januar y 2014) IF RS 1 1 J oint Ar ra ngement s ( effe c ti ve f o r a nnu al periods beginning on or after 1 Jan uar y 2014) IF RS 1 2 Dis closur e o f Interest s in O th e r En ti ti es (eff ect ive for annu al periods beginning on or aft er 1 Janu ar y 2 014) IA S 27 Se par at e Fina nci al S ta tem en ts ( as amended 2011) (effective for annu al periods beginni ng on or after 1 J an ua r y 2014) IA S 28 I nve st ment s in Asso ciates a nd J o i nt Ventu res (as amended 2011) (effective for annu al periods beginning on or af te r 1 Ja nuar y 201 4) IA S 32 Fi nancial I nst r ument s: Pre sent a ti o n– A mendment; O ff setting Financial Asset s and Financial Liabilit ies (effective fo r annu al perio d s be gin ni ng on or a fter 1 Januar y 2014) IF RI C 21 Le v ie s ( effe ct ive fo r a nnua l p e r i o d s b eginning on or after 1 Janu ar y 2014) 38 2 . 2 . N E W S TA N D A R D S A N D I N T E R P R E TAT I O N S I N I S S U E B U T N O T Y E T E F F E C T I V E At t h e d at e o f aut ho risat io n o f th ese f i na nc i al sta t ements, the f ollowing St andards an d I nt erpret at ions are in issue but n ot ye t effec ti v e (a nd i n s om e cases had no t y et b een a d op ted by the EU): IF RS 9 Fi nancia l In strum ent s: C la ssi f i c at i o n ( ef fective for annual periods begin ni ng on or af ter 1 J anuar y 2018) IF RS 1 4 Reg ulat or y deferr al a cc o un ts ( e f f e c ti ve for annu al periods begin nin g on or af ter 1 J anuar y 2016) IF RS 1 5 Rev e nue fr om con tra cts wi t h c usto m er s (eff ecti ve for an nual periods begin nin g on or aft er 1 Jan uar y 2017) IA S 16 A me ndm ents br in ging bea r er p l a nts i nto t he sc ope of IA S 16 (ef fect ive f or an nual p eriods begin nin g on or after 1 J an uar y 2016) IA S 41 A me ndm ents br in ging bea r er p l a nts i nto t he sc ope of IA S 16 (ef fect ive f or an nual p eriods begin nin g on or after 1 J an uar y 2016) S ep te mb e r 2 014 A nn ual I m proveme nts to I F RS s Ef fective for annual periods begin nin g on or aft er 1 Jan uar y 2016 The D ire c to rs do no t antici pat e tha t th e a d o p ti o n of these Standards and Int erpretations wil l have a material impact on the Gro up ’s fin anc ial st at em ents in t he p er i o d of i ni t i a l appl ication. 3 . S I G N I F I C A N T A C C O U N T I N G P O L I C I E S The f ina nc ial state ment s ha ve been p r e p ar e d o n a historical cost basis, excep t for cert ai n fin anc ial in st rumen t s an d share base d p ayme nt s. Hist or ica l cost is ge ner a lly b a se d on the fair value of t he c on siderat ion given in exc han ge f or t he assets acqu ir ed. Th e p ri ncipa l a ccoun ting p o li ci e s ad o p t ed are s et out below in t his note. 3 . 1 . G O I N G C O N C E R N The Di re cto rs ha ve, a t t he t i me of a p p r o vi ng the financial stat ement s, a reason abl e expec tat ion that t he Company an d Gro up h ave ade quate r eso urces to c o nt i nu e i n o p e rational exist ence for t he foreseeable f utu re. Thus they cont inue t o adopt the go i ng c onc e rn ba sis of acco unti ng i n p r e p a r i ng the f inanc ial st at ement s. Furt her det ail is p rovided in note 5. 1 to the con so li da te d fi nancia l st at ements. 3 . 2 . B A S I S O F C O N S O L I D AT I O N The co nso li da te d fina ncial st at em ent s i nc o r p o r a te the financial st at emen t s of t he C ompan y an d ent ities c on trolled by the Comp an y ( it s sub sidi ar ies) m a de up to 31 M ay. C o ntrol is achieved when t he Company has the power t o g overn t he fin anc ial and o p erat ing p ol icies of an i nvest ee enti ty so a s to obt ain benef its f rom it s act ivities. Asso c i ate s are t ho se en tit ies in w h i c h th e G r o up h a s signifi cant inf luenc e, but not cont rol, over t he fin anc ial an d operating pol ic i e s. The co nsoli dat ed fin ancia l s ta tem ents i nclude t he Group ’s share of t he t ot al recogn ised inc ome and expen ses of asso ci ate s on an e quit y accounted ba si s, f r o m the date that signif ican t in fluen ce c ommen ces un t il the date t hat sign ific ant influ e nc e ce ase s. Wh en th e Gr oup ’ s s h a r e o f l o sses exceeds it s in terest in an as soc iat e, t he Group ’s carr yin g amoun t is reduc e d t o n il an d r ec ognit ion o f f u r th er lo s ses i s d isc ontinu ed exc ept t o the ext ent t hat t he Group has a bindin g obligation to m ake paymen ts on beh alf of a n a sso c i a te. Intra-g ro up transaction s, bala nces and unr e a l i sed gains on t ransaction s between group comp anies are el imin at ed. Un realised los s es a re eli min at ed in t he sam e w a y a s u nr ea li s ed gains, bu t on ly to t he ext ent t hat t here is n o evidenc e of impairmen t. 3 . 3 . F O R E I G N C U R R E N C Y The i ndi vi dua l fi nancial sta tement s o f ea c h c o m p any in the Group are p rep ared in the c urrenc y of t he primar y econ omic env ir onm ent in wh ic h it opera te s ( its ‘ f u nc ti o nal c ur r ency ’). The con solidat ed fin anc ial st atement s are present ed in US D ollars which is a ls o t he fun ct io na l cur renc y o f th e C o m p any. 39 F I N A N C I A L S T A T E M E N T S N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) In pre p aring the f inancia l st a te ment s o f the i ndi vi d u al c ompanies, tran sact ion s in c urrenc ies ot her t han t he en ti ty ’s fun ction a l curre nc y (fore ig n cu rrencies) ar e r ec o g ni se d at t h e rates of exchange prevail ing on t he date of t he t ransact ion. At eac h balanc e she et dat e, mon et ar y asse ts a nd li a bi l i ti es that are denominated in foreign currencies are ret rans lated at the rat e s p reva il ing at t hat dat e. Non- m o neta r y i tem s that are measured in t erms of hist orical cost in a forei gn currency are not retrans l ate d. For th e purpo s e o f presen t in g conso l i da t ed f i na ncial statements, the assets and liabil ities of t he Group’s operations are tra ns lat e d at e xcha nge r at es prevai li ng a t th e ba la nc e sheet date. Income and expense items are transl at ed at the aver age exch ang e ra tes fo r eac h mo nt h, unle ss ex c h a nge r a t es flu ctu ate significantl y during t he mont h, in which cas e exchange r ates at the dat e of t rans action s ar e used. Ex c ha ng e d i f f e r ences arising f rom the translati on of the net investmen t in foreign operation s and o v e rs eas branche s a re r ec ogni se d i n o th e r c o mprehensive income and accu mulat ed in equit y in t he transl at ion reser ve. Suc h t ra ns la ti on differ ence s ar e r eco g ni sed a s i nc o me or expense in t he year in which the operation or branch is disp osed of. The fo llo win g are t h e m at er ia l exch ang e r a te s a p p lied by the Group: M OZAMBI C AN METICAIS: US$ S IE RRA LEONE LEONES: US$ 3 . 4 . O P E R AT I N G S E G M E N T S AVERAGE RATE CLOSING RATE 2015 2014 2015 2014 32.45 4,301 30.23 4,284 36.90 4,295 31.00 4,290 The Ch ie f Op er ati ng Decision Ma ker i s the G r o up Executive Commit t ee ( the ‘ E xCom’) , c omprisin g the C hairman, t he C hief Execu ti ve a nd th e Fi na nce Dir ecto r. T h e Ex C o m r eviews t he Group ’s int ernal reportin g in order to assess per f ormanc e of the bus i nes s. M an ag emen t has de term i ned th e o p er a t i ng segments based on t he report s reviewed by the ExCom which c on sider the ac ti vi ti e s by nat ure o f busin ess. 3 . 5 . R E V E N U E R E C O G N I T I O N Rev enu e is me as ure d at t he fa ir va lu e o f t h e co ns i deration rec eived or receivable f or g oods and ser vic es provided in the normal c ourse of bu sin ess, net o f d i sc o unts, va lue added t axes and other sales relat ed taxes. Sales o f goo ds are r ec ognised w h en go o d s a r e delivered and t itle has passed. D eliver y occ urs when t he products have arriv e d at the sp ecif ied lo cat i on, a nd th e r i sks a nd rewards of ownership have been tran sferred t o t he c ust omer. 3 . 6 . O P E R AT I N G L O S S Opera ti ng lo s s i s s tated bef or e in vest m e nt r eve nues, other gai ns and losses, f inan ce cost s and t axat ion. 40 3 . 7 . B O R R O W I N G C O S T S Borrow ing co st s directly at t r ib uta ble t o t h e a c qu i si t ion, construction or product ion of qualifyin g asset s, whic h are assets that nec e ss ari ly t ake a s ubst an t ia l perio d o f ti m e to g et r eady for their int en ded use or s al e, are added t o t he cost of t hose asset s, unti l su ch ti me a s t h e asset s a r e substant i a lly r ea d y f or t heir int ended u se or sale. The Group did not incur any borrowing c os ts in re s pe ct o f qua lify ing a sset s in th e p er i o d. All ot h er b o rrow ing cost s ar e recog ni sed i n p r o f i t o r loss in t he period in which t hey are incurred. 3 . 8 . S H A R E B A S E D PAY M E N T S The Co mpany is sues equit y-set t led sh a r e- ba sed p a yments to certain emp loyees of t he Group. These p aymen ts are meas ured at f ai r v alue (e xcl ud in g t he e ffect of n on m a r ket b ased vesting conditions ) at t he dat e of gran t an d t he value is expensed on a s tra ight-li ne ba si s o ver th e ves ti n g p er i o d, based on the Group’s est imat e of t he shares t hat will even tuall y vest an d adju st ed fo r non mar ket based vesti ng c o ndi ti o ns. Fair v al ue is me asur ed by use of th e B la c k S ch o l es model. The expect ed life used in t he model is adjus ted, based on man ag em ent ’ s bes t estima te, for the ef f ec t s o f no n-transf erabi lity, exercise rest ric tions an d behavioural con siderations. 3 . 9 . E M P L O Y E E B E N E F I T S 3 . 9 . 1 . S H O R T T E R M E M P L O Y E E B E N E F I T S Short-te rm e mplo ye e be ne fit s includ e sa la r i es a nd w ages, s hort-term c ompen sat ed absen ces and bon us p aymen ts. The Group reco g nis e s a l iab ility a nd co rrespond i ng e x p ense f or short-term emp loyee ben efit s when an employee has ren dered ser vic es that e nti tle hi m/ he r t o th e benef it. 3 . 9 . 2 . P O S T - E M P L O Y M E N T B E N E F I T S The Group do es not co nt r ib ute t o a ny def i ne d r etirement plan f or its employees, either def ined cont ribut ion or defin ed ben e fi t. S o c ial s ecur it y pay m en ts to st a te sc he m es a re charged t o profit and loss as t he empl oyee’s ser vic es are ren dered. 3 . 1 0 . L E A S E S Lea s e s t ha t trans fe r subst a nt ia lly a ll th e r i s ks a nd r eward of own ership are c lassified as f inan ce leases. A ll ot her leases are class if ie d as o pe rat in g leases. As a t 31 Ma y 2014 and 31 May 2015 the Grou p does not have any finance leases. Durin g the pe rio ds pr e sented in these fina nc i a l st at e m ents, the Group was counterparty to certain operating lease contracts. Ren tal s payabl e unde r oper at i ng leases ar e c h a r ge d t o i ncome on a straight-l ine basi s over t he term of the relevant lease. 3 . 1 1 . TA X AT I O N The Co mpa ny i s res id ent f or ta xa ti on p ur p o ses i n G uernsey and its in come is subject to inc ome t ax, present ly at a rat e of zero per c e nt pe r a nnum. The inco m e of o ver se as s ubs i di aries is subjec t t o tax at t he p revailin g rat e in eac h ju risdict ion. The in co me t ax e xpe nse for t he p er i o d c o m p r i s es c urrent and def erred t ax. I nc ome tax is rec ogn ised in t he in come statemen t except to the extent t hat it relat es to i t em s r ec o gnised i n other comprehensive inc ome or direct ly in equit y, when tax is reco g nis e d i n oth e r compr eh ensi ve i nco m e o r d i r e ctl y i n equity as appropriat e. Taxable profit differs f rom acc oun tin g p rofit as re p o rte d i n t he income st at em ent b ec a u se i t ex clu des items of income or expen se t hat are taxable or deduc tible in other years and it furthe r e xcludes it ems t h a t a r e never ta xabl e or deduc tible. Current tax expense is the expected tax payable on the taxable income for the year. It is calculated on the basis of the tax la ws and rates enacted or substantively enacted at the balance sheet date, and includes any adjustment to tax payable in respect of previous years. Deferred tax is calculated using the balance sheet liability method, providing for temporar y differences between the carr ying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the asset can be utilised. This requires judgements to be made in respect of the availability of future taxable income. 41 F I N A N C I A L S T A T E M E N T S N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) The G roup’s de f erre d ta x a ssets an d li a bi li ti e s ar e calcu lated u si ng t ax rat es t hat are exp ec ted t o ap ply in t he p eriod when the l i abi li ty is s et tl ed o r t he asset r ea li s ed b ase d on tax rates t hat have been en act ed or subst ant ively en act ed by the repo rti ng da te. Defe rred inc ome tax a ssets an d liab i li ti es a r e o f f set only when t here is a l eg ally enf orc eable rig ht to of fset curren t t ax asse ts agai ns t cur re nt t ax lia bili t ies a nd w h en t h e d ef er r e d income tax assets and liabilit ies relate to income t axes levied by the same t axa ti on a ut h or ity o n either th e sam e ta x a b le e nti ty or dif ferent taxabl e ent ities where there is an intention to settle the balanc e s o n a n et ba si s. No de fe rre d t ax as set o r lia bi lit y is r e co g ni se d i n r e spec t of temporar y differences associat ed wit h invest ments in s ubsidiar ies, branc h es and joi nt vent ur es wh er e th e G r o up i s a ble to cont rol the timing of reversal of the temporar y differences an d it is proba ble t hat t he tem por ar y d if fer enc es w i ll no t r everse in the f oreseeable futu re. 3 . 1 2 . B U S I N E S S C O M B I N AT I O N S The acquisition of subsidiaries is accounted for using the acquisition method. The cost of acquisition is measured at the aggre gate of the fair values, at the date of acquisition, of assets given, liabilities incurred or assumed and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition related costs are recognised in profit and loss as incurred. The as s ets, l iab i li ti es and cont ingent li a bi l i ti es o f th e acqui ree are measured at t heir fair valu e at t he dat e of acquisition. Any exce s s o f th e f ai r va lue of th e cons i de r a t i o n p a i d o ver the fair val ue of the i den ti fiable n et asset s ac quired is rec og nised as good wi ll. If the fair va lue of t he co nsi d er a ti o n i s l ess than the f ai r val ue of the ident ifi able net assets acquired, the difference is rec o gnis e d dir ec tly i n pro fi t an d l o ss. 3 . 1 3 . G O O D W I L L Goodw il l ari si ng o n t he a cquisit io n o f sub si d i a r i e s i s recognised as an asset. Goodw il l is r evi ew e d fo r impa irm ent a t lea st a nnu al ly. Any impairment is recognised immediat ely in profit or loss and is n ot subs e qu entl y re v e rs ed. For the p urp o se o f i m p a i r m ent testing, goodwill is allocated to cash generating unit s of t he ac quirer which re pres e nt t he sm allest id ent ifi a bl e gr o u p o f a ssets that generates cash inflows t hat are largely independent of the c ash inflo ws from oth er a sset s or gro ups o f as sets. On d i sposal of a s ubsidiar y, as soci at e or joint ventu re, the at tributable amount of g o od wi ll is inc luded in t he deter m i nat i o n o f th e profit or los s on disposal. 3 . 1 4 . P R O P E R T Y , P L A N T A N D E Q U I P M E N T All i t em s of pro pert y, plant and equ i p m ent a r e st ated at hi storical c ost less acc umulat ed deprec iation ( see bel ow) an d impa ir ment. H is toric a l cost includes e x p end i tu r e t h a t i s direc tly attribut able t o t he acq uisit ion. Subsequen t c ost s are in cluded in the as se t ’s c ar r y ing v alue w hen i t i s c o nsi d er ed probabl e that f utu re ec on omic ben ef its as soci at ed wit h t he it em will flow to t he Gro up an d the cost of t he ite m ca n be m e asured reliabl y. Asse ts i n t he co urs e o f const ructi on f o r p r o d uc ti o n, rental or administ rative purp oses are carried at cost, l ess an y identified impa ir ment lo ss. Co st in clude s pr of es si o na l f e es a nd assoc iat ed expenses. 42 Depr ec ia ti on i s ch ar ged o n a st rai g h t-l i ne ba si s o ve r the es timat ed useful lives of eac h it em, as f ollows: LAND AND BUILDINGS L A ND B UI L DI NGS AND L EA SEHOLD IMPROVEMENTS PL ANT AND MACH INERY M OTOR VEHIC LES AVIAT ION OTHE R A SSETS A SSE TS UNDER C ONSTRUCTION NIL 2 %–33 % 7%–25% 20%–25% 20% 10%–33% NIL The as s ets ’ r esi dua l va lues an d usef ul li ves a r e r e vi ewed, an d adjust ed if app ropriat e, at eac h balanc e sheet dat e. Gain s and lo s se s on d is posals a re d et er m i ne d by c om p a r i ng proceeds rec eived wit h t he c arr yin g amoun t of the as set immediately prio r t o d is pos al and ar e in cluded i n p r o f i t a nd l o ss. I M PA I R M E N T O F P R O P E R T Y , P L A N T A N D E Q U I P M E N T A N D I N TA N G I B L E A S S E T S 3 . 1 5 . E X C L U D I N G G O O D W I L L At e ac h b al anc e sh ee t dat e, t he G r o up r evi e ws t h e carr ying amounts of it s tan gible and in tan gible asset s (ot her t han goodwill which i s a sse s se d in a cco rd ance w i th th e p o li cy described above) t o det ermine whether t here is any in dicat ion t hat those asset s h av e suff ere d an i mpai rm ent l o ss. I f an y suc h i ndicati on exist s, t he recoverable amou nt of the asset is est imat ed in ord er to d et e rm ine th e e xt en t of t he im pa i r m ent lo ss ( i f a ny). W here the asset does not generat e cash flows that are indepen den t from o th er ass e ts, the Gro up est ima tes t h e r ec o ver a ble amount of the cash-generating u nit to which t he asset bel ongs. Rec o ve rabl e amo unt is th e high er o f f a i r va l ue le ss cost s of disposal and valu e in use. In ass essi ng value in u se, the estimate d futu re cas h fl ows a re d isco unt ed t o th ei r p r e sen t va lue us ing a pre-tax discount rate t hat reflect s cu rrent market as ses smen ts of the ti me value of mon ey a nd t he ris ks s p ec i f i c to th e asset f or which the est imates of fut ure cash flows have not been a djusted. If th e reco ver abl e amo unt of a n a sse t ( o r c as h -generating unit) is es timat ed to be less t han it s carr ying amoun t, the carr yi ng am ount o f the a sset ( o r ca sh - g ener a t i ng u nit) is reduced to it s recoverable amount. An impairment loss is recogn ised imme di at ely in profit and lo ss beca u se t h e G r o up d oes not record any assets at a reval ued amount. Whe re an i mpa irme nt loss subse quently r eve r ses, t h e carr ying amou nt of t he asset (or cash-generat ing unit ) is increased to the revi s ed es t imat e of it s r ecovera ble a m o unt, bu t so t hat the increased carr ying amount does not exceed the carr ying amoun t that w o uld h av e b een determ in ed h a d no i m p a i r m ent loss been recognised for t he as set (or cash-generati ng unit) in p rior years. A rev e rsa l of a n impa ir ment lo ss i s r ec o g ni sed immediately in profit and los s. 3 . 1 6 . B I O L O G I C A L A S S E T S Cons um er biol ogic al assets, b eing th e bee f c a ttle herd, are measured in acc ordanc e wit h I A S 41, ‘A gric ult ure’ at fair value les s co s ts to s e ll, wit h g a in s and l o sses i n t h e m e as urement to fair valu e recorded in profit an d loss. The herd comp rises breed ing an d no n-b reed ing ca tt le. T h e b r eed i ng c attle comprise bul ls, cows and heifers. As t hes e are expec ted t o be hel d for mo re th an o ne y ea r, br eed ing c a t tl e a r e c l a ssified as non- curren t asset s. The non breedin g c att le c omprise animals (pri ncipally steers) tha t w ill be gro wn a nd s o ld f o r slaughter and are c lassified as c urrent asset s. Cattl e are r eco rde d a s asset s a t t h e y ea r end a nd the fair val ue is det ermined by the size of t he herd an d market pric es at the re p orti ng da te. The co s t of f orage is cha rge d to th e i nco m e s ta t em ent over the period it is consumed. 3 . 1 7 . I N V E N T O R I E S Inve nto rie s ar e st ated a t t h e low er o f c o st a nd ne t real isable val ue. N et realisable value is t he est imated s ell ing pric e in th e ordi na r y co urse o f busi ne ss, less th e es ti m a t ed c o sts of completion and selling expenses. The cost of invent ories i s based on th e we igh te d av er age pr inciple a nd i nc lu d e s e x penditure incu rred in acquiring the inventories an d bringing t hem to their existi n g l oc ati on an d cond it i on. 43 F I N A N C I A L S T A T E M E N T S F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) 3 . 1 8 . F I N A N C I A L I N S T R U M E N T S Financ i al as se ts a nd fina nc ia l liabili ti e s a r e r e co g ni sed in the Group ’s balan ce sheet when t he Group becomes a party to the con trac t ual pro vi s ion s of t he inst ru m ent. 3 . 1 8 . 1 . F I N A N C I A L A S S E T S All fi nan ci al a sse ts a re re cog nised a nd d er ec o g ni se d on a trade date where t he p urchase or sale of a fin anc ial asset is under a c o ntra ct who se t erm s requi re d eli ver y o f t h e f i na ncial asset wit hin the t imef rame established by t he market con cern ed, an d are ini ti al ly me asu red a t f air va lue, p lus t r ans ac t i o n costs, except f or t hose f inan cial asset s c lassified as at f air value thr ough prof it a nd l os s (‘ FVTPL’ ), w hich a r e i ni t i al ly m ea sur e d at fair value. Financ i al a sse t s a re cla ssif ied i nt o t h e f o llo w i ng sp e cified categories: fi nancial assets at ‘ FVTP L’, ‘ held-t o-matu rity ’ investmen ts, ‘av a i labl e -fo r-s ale ’ fi na ncial a ssets a nd ‘ lo a ns a nd r eceivables ’. The cl as sificat ion depends on the nat ure and pu rpose of the fina nc ia l as s et and is d et er mi ned a t th e t i m e o f i ni t i al recogni tion. The Company and Group cu rrent ly have financial assets in the c ate go r y o f ‘ lo a ns a nd r eceiva ble s ’ a nd F V T PL. 3 . 1 8 . 1 . 1 . L O A N S A N D R E C E I VA B L E S Trade re ce i vable s, lo ans recei va bl e, ba nk ba la nces, c ash in hand an d ot her receivables t hat have fixed or det erminable payme nt s t hat are no t q uot ed in a n ac ti ve m a r ket are classif ied as ‘ loans an d rec eivables ’. Loan s an d rec eivables are meas ur ed a t amort ised cost using t h e e f f ec ti ve i nt er est method, less an y impairmen t. In terest inc ome is rec og nised by ap plyin g the e ffe c ti v e i nte re st ra t e, ex cept f o r sh o r t-ter m r e ceivabl es when t he rec og nit ion of in terest wou ld be immat erial. The e f fec t iv e i n te re st m et hod is a m eth o d o f c a lc ul a ting the amortised c ost of a f inan cial in stru men t and of allocat ing interes t income o v er the re leva nt per io d. T h e ef f ec ti ve i nt erest rate is the rate t hat exact ly discount s estimated future cash receip ts (inc l udi ng all fe e s paid or received th a t f or m an integral part of the effect ive interest rat e, transaction cost s and other premi u ms or di sco un ts) t hro ugh t h e e x p ec t ed l i f e o f the i nstrument, or, where appropriate, a shorter period, to t he net c arr ying amo unt on i ni ti al recog ni tion. 3 . 1 8 . 1 . 2 . F I N A N C I A L A S S E T S AT F V T P L Financ i al a sse t s are classif ied as a t F VT P L w he n th e fin ancial asset is either held for t radin g or is design at ed as at FV TP L upo n i nit ia l rec o gnit i on. T he Gro up h o ld s c er ta i n i nvestments in qu ot ed comp anies whic h are design ated as hel d for trading. Financ i al a s se t s at FVT PL ar e st a ted at f ai r va lu e, w ith any gains and losses arisin g on re- measurement recogni sed in p rofit or los s. T h e ne t gai n or loss in co rpo ra tes a ny d i vi d e nds, interest earned, or foreign exchange gains and losses on t he financ ial asset and is inc luded w ith in o ther g a i ns a nd lo s ses i n t he income statement. Fair value is determined in t he manner desc ribed in no t e 22 . 3 . 1 8 . 1 . 3 . I M PA I R M E N T O F F I N A N C I A L A S S E T S Financ i al a sse t s, other tha n t hose a t F V T PL, a r e a ssessed f or indicat ors of impairmen t at eac h balan ce sheet dat e. Finan cial asset s a re i mpai red w h er e t he re i s o bje cti ve e vi d enc e t hat, as a result of one or more even ts t hat occ urred af ter t he initial reco g nit io n of t he finan ci al a sset, t h e es ti m a ted f uture c ash flows of t he invest men t have been affec ted. 44 For lo a ns and re ce iv ables c ar ried a t a m o r ti s ed c ost, the amou nt of t he impairment is t he differen ces bet ween t he ass et ’s carr yi ng amount a nd th e pre sent va l ue o f est i m a te d fu ture cash f lows, disc oun t ed at t he f inan cial asset ’s origin al effec tive inte re st rat e. The ca rr yi ng am ount of t he fina nci a l a s set i s r ed u ced t hrough the u se of an al lowanc e accoun t. When a f inan cial asset is con si de red unco ll e ct able, it i s w ritte n o f f a g ai ns t th e allowance ac count. Su bsequ en t rec overies of amount s previous ly written off are c red it e d aga inst t he a llo w a nce a c co u nt. C hanges in the carr ying amount of t he all owance account are rec ogn ised in p ro fi t o r l os s. If in a su bs e que nt per io d, t he amo u nt o f th e i m p a i r ment loss decreases and the decrease can be relat ed objectively to an ev ent o ccur ri ng aft er t h e imp airm ent w a s r e co g ni se d, t he previousl y recognised impairment loss is reversed t hrou gh profit an d los s to the e x te nt th a t t he ca rr y ing am o u nt o f th e i nvestment at the date t he impairment i s reversed does not exceed what the amo rt is e d c os t wo ul d h a ve be en h a d th e i m p a i r m ent not been recognised. 3 . 1 8 . 1 . 4 . D E R E C O G N I T I O N O F F I N A N C I A L A S S E T S The Gro up de rec ogn ises a f in ancia l a sset o nly w h en the contrac tual rig ht s t o t he cash flows f rom t he asset expire, or when it tra ns fer s th e f inancial asset and subs ta nti a l ly a ll th e risks and rewards of own ership of t he asset t o another en tit y. I f the G rou p neith er trans fer s no r r et a ins substant i a ll y a ll th e r i sks and rewards of ownership and contin ues to control the transferred as s et, the Gro up r eco gnises its r et a ined i nte r es t i n th e a sset and an ass ociat ed liability for amou nts it may have to pay. If the Gr oup reta ins s ubs tant ia ll y a ll t he ri sks a nd r ew a r d s o f o w nership of a trans ferred financial asset, t he Grou p cont inues t o recog nise the f ina nci al ass et an d a lso r ec ogni ses a co l la te r alised borrowing for the proceeds recei ved. 3 . 1 8 . 2 . F I N A N C I A L L I A B I L I T I E S A N D E Q U I T Y Debt a nd eq uit y i nstrum ents a re class i f i e d a s ei th er finan cial liabiliti es or as equit y in acc ordan ce wit h t he substan ce of the con trac t ual arrangeme nt. 3 . 1 8 . 2 . 1 . E Q U I T Y I N S T R U M E N T S An e qui ty in st rume nt is an y co nt r ac t t h a t evi d enc es a residual interest in the asset s of t he Compan y af ter deduct ing all of its liab il it ie s. Eq uit y ins tr ume nt s i ssued b y t h e G r o up a r e recognised at the proceeds received, net of direct issue cost s. 3 . 1 8 . 2 . 2 . F I N A N C I A L L I A B I L I T I E S Financ i al l ia bi li ti es ar e cla ssi fied as e i the r f i na nc i al li abil ities ‘at F VTPL’ or ‘ot her f inan cial l iabilit ies ’. The Group onl y has fina nc ia l l ia bil it ie s in t he ca tegor y of o th e r f i na nc i a l l iabilities. 3 . 1 8 . 2 . 2 . 1 . O T H E R F I N A N C I A L L I A B I L I T I E S Oth er f inanci al liabiliti es a re i ni ti a lly m ea su r ed a t f air value, net of t ransact ion c ost s. Oth er f ina nci al li abilities a re sub seq ue ntl y m e a s ur ed at amortised c ost usin g t he ef fect ive int erest met hod, wit h in terest expe ns e re co g nise d o n a n ef fect ive yi e ld bas i s. 3 . 1 8 . 2 . 2 . 2 . D E R E C O G N I T I O N O F F I N A N C I A L L I A B I L I T I E S The Gro up de re c o gn ise s fina ncial l i a b i li t i es w h en, and only when, t he Group’s obligat ions are disc harg ed, can celled or they e xpir e. F I N A N C I A L S T A T E M E N T S 45 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) 4 . R E P R E S E N TAT I O N S T O T H E C A S H F L O W S TAT E M E N T In th e fi nan ci al ye ar end ed 31 Ma y 2014, a nd c o nsistent with precedin g fi nanc ial periods, the Group p res en t ed all c ash flow s fo r th e purch ase, sale, sla ugh t er o r d i s p o sa l by other mean s of it s cat t le wit hin a sin gle line in the Consolidated cash flow st at eme nt en tit led ‘ In cr ea se in bi ol o gi ca l a sse ts ’, a component of ‘ Cash f lows from in vest in g act ivities ’. This ref lected the fact th at, hi stor ic al ly, a signif icant p o r ti o n o f th e G roup’s cash fl ows f or t he purc hase of an imal s relat ed to the p urchase of the bre ed ing he rd. In t h e cur re nt an d pre ced in g fi nan c i al ye a r, th e G roup did not purchase cat tle to increase it s breeding herd – all c attl e purc ha se s we r e f or sla ugh ter her d a ni m a l s, g ene r al ly being animals taken direct ly i nto the feedlot. Cash flows of this nature a re more a ppr opr iate ly ref lect ed w it hin c as h f l o ws f r om operating ac tivities. A ccordingly, the Group has alt ered its prese ntation for t h e pur chas e of slaugh te r herd an i m al s, wh i ch a r e now included within t he line it em of t he Cons olidat ed cash flow statement entit le d ‘ Ne t d ecre ase/ (increa se) i n bi ol o gi ca l a ssets held for slaughter pu rchases ’, within ‘ Net cash u sed in operatin g acti v i ti es ’. The compar a ti ve o f $219, 000 o ut f l o w h a s been reclassified from cash flows from invest ing act ivities resulti ng in a n incr ea se in ‘ Ne t c ash used i n op er at i ng a ct i vi ti es by continuing operat ions ’ and ‘ Net cash used in operating activities ’ by $21 9, 00 0 and a co rre spo nd in g de c r eas e i n ‘ Ne t cas h us ed in investi ng activities by continu ing operat ions ’ and ‘ Net cash used i n i nve s ti ng acti vi ties ’. Th e r ep r es ent a ti o n h a s no ef fect on net cash flows for the year ended 31 May 2014, nor any effec t on t he Co nsolida te d incom e sta te m ent o r on t he Consolidated s tatement of fin ancial posit ion. C R I T I C A L A C C O U N T I N G J U D G M E N T S A N D K E Y S O U R C E S O F E S T I M AT I O N 5 . U N C E R TA I N T Y In th e ap pli ca ti on of t he Gr oup’s a c c o unti ng p o li cies which are described in note 3, t he Direct ors are req uired to make judg em e nts, e sti mat es a nd a ssum p t i o ns a bo u t th e c arr ying amount s of assets and liabilit ies t hat are n ot readily apparent from o th e r so ur ce s. Th e est i mat es a nd a sso c i a te d a ssumptions are bas ed on hist oric al exp erien ce and ot her fac tors that are con si de red to b e re leva nt. Act ual r es ul ts m a y d i f f er from t hes e es timates. The es t im at e s a nd un derly in g a ssum p ti o ns a r e r evi e we d on an on-going basis. Revision s to ac count in g estimat es are recogn ised in the per io d i n wh ich t he est im at e i s r evi se d i f th e r evision aff ect s on ly t hat period or in t he period of t he revi sion an d future peri o ds i f t he re vis ion a ff ects both cu r r ent a nd f u tu r e periods. The effect on the financial statement s of changes in e stimates in fu tu re pe rio ds c ould be m a ter ial. 5 . 1 . G O I N G C O N C E R N The Gro up ha s pre par ed f or ecasts f o r th e Gr o u p ’ s ongoing bu s inesses c overing t he period of at l east 12 mont hs from the date o f app rov al of t hese f inanci a l st a tem e nts. T h ese forecast s are based on assumpt ions in clu din g, int er alia, t hat there are no si gnif ic ant di srup ti ons t o t h e s up p l y o f m a i z e or cattl e to meet it s projec ted sales volumes an d take in to ac count the inves tme nt i n t he be ef herd, wo rk ing c a p i ta l a nd a d ditional prop ert y pl an t an d equ ipmen t t hat are expec ted t o be required. The Di re c to rs be lie ve th a t wit h e xisti ng r e so ur c e s, i nclu di ng available un drawn borrowing f ac ilit ies, t he Group and C ompan y is able to mana ge i ts b usiness ri sks a nd su c ce ssf ul ly gr ow its operating busi nesses. The Direc tors have a reasonable expectation that t h e Gro up and C om pan y h a ve ad eq ua t e r eso u rces t o cont inue in op erat ional exist en ce f or t he fores eeable fut ure. Thus they c o nti nue to adopt th e go ing c o nc er n ba si s o f accou nting in prep arin g these fin anci al stat emen t s. 46 5 . 2 . I M PA I R M E N T S Impai rmen t re v ie ws fo r no n- cur r ent ass ets a r e ca r r i e d out at each balan ce sheet dat e in acc ordan ce wit h IA S 36, I mp airmen t of As s ets. Whe re t h er e ar e indi ca to r s o f i m p a i r m e nt, the net book value of the asset or cash generat ing unit is comp ared with its fair va lu e. The i mp air ment revi ew is se nsi ti ve t o var i o us assu mptions, inc luding t he expect ed sales forec asts, cost assu mp tions, cap it al req ui re me nts, and di scount r ates am o ng o t h ers. Details of impairmen ts recorded in the period are inclu ded in note 12. 5 . 3 . B I O L O G I C A L A S S E T S Cattl e a re ac co unt ed f or a s bio log i c a l a sse ts a nd measured at their fair value at eac h balan ce s heet date. Fair valu e is base d on th e es tima t ed m a rket valu e f o r c a tt l e i n M ozambique of a similar age and breed, less the est imated cost s to bri ng them to marke t, c onver t ed to U S$ at t h e ex c h a nge r at e prevailing at t he p eriod en d. Changes in any es timat es could l ead to the r ec o gnit io n of sig ni fica nt fa ir val ue c h a nge s i n the consol idated in come stat emen t, or sign ifican t chang es in t he foreign curre nc y tr ans lat io n reser ve for cha ng es i n t h e M et i cal to US$ exchang e rate. A t 31 May 2015 t he value of the breedin g herd dis c lo se d as a no n-curr ent a sset wa s $2, 246, 000 ( 2014: $3,071,000) . The value of t he herd held for slaug ht er disclosed as a cu rr ent a sse t was $1,019,000 (2014: $1, 201, 000). 5 . 4 . R E C O V E R A B I L I T Y O F I N P U T VA L U E A D D E D TA X Mozam bique Valu e A dd ed Ta x (‘ IVA’ ) o p er a tes i n a similar manner t o UK Value Added Tax ( ‘ VAT ’) . The Grou p is exemp t from IVA on it s sal e s o f Maize und er th e ter m s of Mo z a m bi q ue tax law. The Group is able t o recover inp ut sales t ax on subst antially all of th e pur chas e s o f th e Gr ain divisi o n. T he G r o u p i s al ways t heref ore in a n et recover y posit ion of IVA in respec t of its Grain operations. To date the Gro up h as no t s uc c eed ed i n recovering IVA from t he M ozambique Governmen t. Du e t o the signific ant unce rta int y ov e r th e recover abi lity o f th e se I VA ba lances, t he Group has provided in fu ll against the ass et s as at 31 May 201 4 a nd 3 1 Ma y 2015. A s at 31 M a y 2015, t h e g ross and net IVA recoverable asset s are respect ively $1,319,000 (2014: $1,3 45 ,0 00) and $ni l (2 014: $nil) a t th e US $ t o M etical exchange rate of 36.90 (2014: 31.00) at that dat e. 6 . R E V E N U E An a nal ysi s o f t he Gr oup’s reve nu e i s a s f ol lo w s: C ONTI NUING OP E RATIONS S AL E OF GOODS H IRE OF EQUI PMENT AND MACHINERY IN VE STMENT REVENU ES (NOTE 13) D ISC ONTIN UED OPERATIONS S AL ES O F GOODS (NOTE 17.2) 2015 US$000 2014 US$000 10,839 948 11,787 19 11,806 – 11,806 13,797 – 13,797 146 13,943 1,907 15,850 F I N A N C I A L S T A T E M E N T S 47 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) 7 . S E G M E N T R E P O R T I N G The ExC om con sid e r th at t he Gro up ’ s o p er a t i ng a c tivit ies comprise the seg men t s of Grain, Beef an d Cocoa, all un dertaken in Af ri c a. In addi tio n, t he G roup ha s c er ta i n o the r u nallocated expen diture, assets and l iabilit ies, eit her loc ated in Afric a or held as s uppor t fo r t he A fri ca opera ti o ns. 7 . 1 . S E G M E N T R E V E N U E A N D R E S U LT S The fo llo win g i s an a na ly sis o f th e G r o up ’ s r evenu e and results by operatin g s eg men t : GRAIN US$000 BEEF US$000 COCOA(3) US$000 UNALLOCATED US$000 DISCONTINUED(4) US$000 ELIMINATIONS US$000 TOTAL US$000 5,517 524 6,041 5,366 – 5,366 904 – 904 – – – – – – – 11,787 (524) (524) – 11,787 YEAR ENDING 31 MAY 2015 RE VENUE EXTERN AL SALES (2 ) INTE R– SEGMENT SALES ( 1) S EG MEN T RESULTS – O PERATIN G LOSS – I NTER EST (EXPENSE)/ I NCO ME – OTH ER GAI NS AND LOSSES (2,128) (2,317) (7,853) (2,166) 174 (680) – 2 – – – 14 (849) – – LOSS B EFORE TAX (2,808) (2,315) (7,853) (3,001) 174 IN COME TAX (78) (3) – – – LOSS F OR THE PERIOD FROM CO NTI NUI NG OP ERATIONS (2,886) (2,318) (7,853) (3,001) 174 48 – – – – – – (14,290) (664) (849) (15,803) (81) (15,884) YEAR ENDING 31 MAY 2014 RE VENUE EXTERN AL SALES (2 ) INTE R-SEGMEN T SALES ( 1) S EG MEN T RESULTS - O PERATIN G LOSS - INTER EST (EXPENSE)/ INC OME - OT HER GAI NS AND LOSSES LOSS B EFORE TAX IN COME TAX LOSS F OR THE PERIOD FROM CO NTI NUI NG OP ERATIONS GRAIN US$000 BEEF US$000 COCOA US$000 UNALLOCATED US$000 DISCONTINUED (4) US$000 ELIMINATIONS US$000 TOTAL US$000 9,716 412 10,128 4,081 – 4,081 1,907 – 1,907 – – – (1,907) – (1,907) – (412) (412) 13,797 – 13,797 (421) (3,436) (1,028) (2,456) (193) – (614) (16) 2 – (1) – 128 936 (3,434) (1,029) (1,392) (9) – – 841 1 – 842 – (630) (3,443) (1,029) (1,392) 842 – – – – – – (6,500) (63) 936 (5,627) (25) (5,652) ( 1) Int er- segment sal es are ch arged at prevai li ng market pri c es. ( 2) Rev enue r epresent s s ales to external cus tomers and i s reco rde d i n t he coun tr y of dom ic il e of the g roup c omp any mak i ng t he s ale. S ales from the G ra in and Be ef divisio ns are principally f or supp ly to th e Mozambican market. Sale s from the C ocoa div is io n ar e s upp li e d wi thi n Si e rra Le one during the yea r (201 4: suppl ied t o the w orld market). ( 3) Reve nue repor ted in the Co co a s eg men t f or th e 12 mon th s ended 31 May 2015 ari ses on the rental of ce rtai n of the Cocoa divisi on’s assets i n a id of t he re lief ef f ort against the Ebola c ri si s in Si erra Leone. ( 4) Am ount s re classified to dis conti nue d o perati on s in bot h periods pre se nt ed re late to the Cocoa se gm ent – refe r to not e 17.2. The se g me nt i tem s included in th e c o nso l i da t ed i ncome statement for t he year are as follows: YEAR ENDING 31 MAY 2015 D E PREC I ATI ON IM PAI RMENT OF A SSETS ( N OTE 12.1) GRAIN US$000 386 BEEF US$000 1,122 628 136 COCOA US$000 UNALLOCATED US$000 DISCONTINUED(1) US$000 ELIMINATIONS US$000 TOTAL US$000 (61) – – – 2,211 6,791 – – 6,791 – YEAR ENDING 31 MAY 2014 D E PREC I ATI ON GRAIN US$000 504 BEEF US$000 1,124 COCOA US$000 UNALLOCATED US$000 DISCONTINUED(1) US$000 ELIMINATIONS US$000 TOTAL US$000 133 138 (133) – 1,766 ( 1) A mo unts reclassified to discon tin ued operati ons i n both periods pre se nte d re late to the Co coa se gm e nt – re fe r to not e 17.2 . 7 . 2 . S E G M E N T A S S E T S , L I A B I L I T I E S A N D C A P I TA L E X P E N D I T U R E Segment assets consist primarily of property, plant and equipment, biologi cal assets, inventories and trade and other receivab les and cash and cash equivalents. Segment liabilities comprise operating liabilities, including overdraft financing facilities in the Grain segment. Capi ta l e xp end it ure com prises ad d i t i o ns to p r o p erty, plant and equi pment and i ntangibl e asset s, inclu din g capitalised depreciati on and a mo rtisat ion w h er e ap p li c a b le. The se g me nt as se t s a nd lia bilities a t 31 M ay 2015 and capital expenditu re for the year then ended are as follows: A SSETS L IAB IL ITI ES CAPITAL EXP END ITURE GRAIN US$000 9,603 (3,297) 49 BEEF US$000 16,057 (228) 1,168 COCOA US$000 UNALLOCATED US$000 1,656 (146) 484 6,982 (785) – TOTAL US$000 34,298 (4,456) 1,701 49 F I N A N C I A L S T A T E M E N T S N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) Segme nt as se ts and lia bilit ie s ar e r ec o nc i le d t o G r oup assets and liabil ities as foll ows: S EG MEN T A SSETS AND LIABILITIES UNA LLO CATED: P ROPE RTY, P LANT AND EQUIPMENT INV ESTMEN TS OTH ER R ECEIVABLES CA SH TRADE PAYABLES A CC RUA LS AN D DEFERRED INCOME TOTA L ASSETS US$000 27,316 78 380 495 6,029 – – 34,298 The se gme nt as se ts a nd lia bili ties a t 31 M ay 2014 and capital expendit ure for t he year t hen ended are as f ollows: A SSE TS L IAB IL ITI ES CAPITAL EXP END ITURE GRAIN US$000 13,440 (2,775) 409 BEEF US$000 19,269 (442) 1,203 Segm en t a sse t s and lia bilities ar e r ec o nc i le d to G r oup assets and liabil ities as foll ows: S EG MEN T A SSETS AND LIABILITIES UNA LLO CATED: P ROPE RTY, P LANT AND EQUIPMENT INV ESTMEN TS OTH ER R ECEIVABLES CA SH T RADE PAYAB LES A CC RUA LS AN D DEFERRED INCOME TOTA L COCOA US$000 UNALLOCATED US$000 8,728 (334) 4,048 13,950 (1,287) 746 ASSETS US$000 41,437 6,716 1,229 161 5,844 – – 55,387 LIABILITIES US$000 3,671 – – – – 627 158 4,456 TOTAL US$000 55,387 (4,838) 6,406 LIABILITIES US$000 3,551 – – – – 540 747 4,838 Unal lo c at e d prop er t y, pla nt and e qu i p m e nt i nc lu des $nil (2014: $5,880,000) in respect of t he lease over 45,000 hec tares of bro wnfi el d la nd suita ble f or Pa lm o i l p r o d uc t i o n and $76,000 (2014: $837,000) of Aviat ion as set s. The Group’s interest in the afo re me nt ione d lea se w as imp ai r e d i n th e p er i od as more fu lly described i n note 12.2 . 50 7 . 3 . S I G N I F I C A N T C U S T O M E R S In the ye ar end e d 31 Ma y 2 015 o ne o f th e B eef d i vision’s customers gen erat ed $1,515,000 of revenu e being 13% of Group reve nu e. I n the ye ar end ed 31 Ma y 2014 o ne o f t he Cocoa division ’s cust omers g en erated $1,884,000 of revenue being 14% o f Group r eve nue. 8 . O P E R AT I N G L O S S Opera ti ng lo s s has b een a rri ved a t a f te r c h a r gi n g/ (crediting): D E PREC I ATI ON OF PROPERTY, PLANT AND EQUIPMEN T ( PROF IT) /LOSS O N DISPOSAL OF PROPERTY, PLANT AND E QUIPMENT NE T F OREI GN EXC HANGE LOSS/(GAIN) IM PAI RMENT OF A SSETS (SEE NOTE 12.1) S TAFF C OSTS ( SE E NOTE 10) 2015 US$000 2, 211 (76) 177 6,791 4,921 2014 US$000 1,766 ( 149) ( 52) - 4,581 9 . A U D I T O R S R E M U N E R AT I O N Amo u nts payabl e to RS M U K Audi t L L P ( f o r m er l y B a ker Tilly UK Audit L LP ) and their associat es in resp ec t of audit ser vices are as fo llo ws : FEES PAYAB LE TO TH E COMPANY ’S AUDITOR FOR THE AUD IT OF TH E CO MPA NY ’ S A CC OUNT S FEES PAYAB LE TO THE COMPANY ’S AUDITOR AND THEI R A SSOC IATES FOR OTHER SERVICES TO THE GR OUP: T HE A UDI T OF THE COMPANY ’S SUBSIDIARIES TOTAL A UDIT FE ES 2015 US$000 153 52 205 2014 US$000 132 58 190 Oth er t ha n as disc lo sed abo ve, th e C o m p a ny ’ s a uditor and their associat es have n ot provided additi on al ser vices to the Gro up. 1 0 . S TA F F C O S T S The a ve rage mo nth l y num ber o f em p lo y ees ( i ncl ud i ng executive Direct ors) employed by t he Group for t he year was as follows: OFF ICE A ND MAN AGEMENT OPE RATI ONAL OF WH ICH RELATI NG TO: CONT INUI NG OPERATIONS DISC ONTINUED OPERATIONS 2015 NUMBER 2014 NUMBER 48 814 862 849 13 862 61 910 971 900 71 971 F I N A N C I A L S T A T E M E N T S 51 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) Thei r ag g re ga te re munera ti on co m p r i se d: WAG ES A ND SALAR IES S OC IAL SECURI TY COSTS S HAR E BA SED PAY MENT CHARGE L ESS: C APITALISED AND INCLU DED IN A SSETS UNDER C ONSTRUCT ION AMOUNT CHARGED TO PROFIT AND LOSS OF WHICH RELATING TO: CO NTI NUI NG OP ERATIONS DISC ONTINUED OPERATIONS 1 1 . R E M U N E R AT I O N O F D I R E C T O R S YEAR ENDED 31 MAY 2015 P H ED MONDS A S G ROV ES D L C A SSIANO-SILVA EA K AY M N PEL HAM YEAR ENDED 31 MAY 2014 P H ED MONDS A S G ROV ES D L C A SSIANO-SILVA EA K AY M N PEL HAM 2015 US$000 5,008 104 55 5,167 (169) 4,998 4,921 77 4,998 SALARY US$000 BONUS US$000 SHARE BASED PAYMENT US$000 159 159 215 47 50 630 – – – – – – – – 11 15 – 26 SALARY US$000 BONUS US$000 SHARE BASED PAYMENT US$000 165 162 134 154 – 615 – – 42 – – 42 – – – 24 – 24 2014 US$000 5,429 94 149 5,672 (685) 4,987 4,581 406 4,987 TOTAL US$000 159 159 226 62 50 656 TOTAL US$000 165 162 176 178 – 681 52 1 2 . I M PA I R M E N T O F C U R R E N T A N D N O N - C U R R E N T A S S E T S In a c co rda nce wi th IA S 36, I mpair m ent o f a sse ts, the Group conduc ted an imp airmen t review of it s tan gible an d i ntang ibl e asset s a s at 3 1 M ay 2015, resulti ng i n an i m p a i r m ent agai nst its c oc oa divis ion asset s an d palm lease asset s, all held in Sierra Leo ne, a s fo llo ws: COC OA D IV ISI ON IMPAIRMEN T AGAINST CONTINUING OPERATIONS PA LM A CTI VITI ES IMPAIRMEN T AGAINST DISCONTINUED OPERATIONS Furt he r de t ai ls are pr ovide d belo w. 2015 US$000 6,791 6,791 3,069 3,069 9,860 1 2 . 1 . I M PA I R M E N T O F C O C O A D I V I S I O N C U R R E N T A N D N O N - C U R R E N T A S S E T S As a nno un ced in S ept em ber 20 14 a nd as a r e sul t of the well- publicis ed Ebola out break affec tin g Western Af rica, in cludin g Sierra Le o ne, t he Bo ar d ma d e th e d ec i si on to sus p end development act ivities at t he cocoa plan tat ion in Sierra Leon e, havin g alre ady ce a sed i ts co co a t r ad ing a c ti vi t i e s by t h en. In addit ion t o the sig nif icant rest ric tions in movement in c oun tr y causin g a s ho rt ag e of l abo u r, t he B oar d a sse ssed th a t i t w as unsafe t o pursue an expansion of t he plantation at that st age, whic h cou ld inc re as e th e r isk o f Ebo la d eve lo p i ng o n th e plantation site and place staff at risk. The Bo ard c onti nued to m o ni to r th e s i t ua ti o n r eg arding Ebola in Sierra Leone and acknowledges t hat import ant strides hav e be e n mad e t o contro l th e vir u s a nd r es to r e c onfidence in invest ing in the cou ntr y. H owever, the i nvestment l andsc ape in Si e rra Le on e has n ot ret urned to th e f avo u r abl e environment that was present pre-Ebola, and, in the Board ’s op inion, signi fi c ant furth e r re gen er at io n an d i nte r nati o na l d evel opment s upport is needed in t he short to medium t erm t o facil itate fur th er s igni fi ca nt privat e secto r inve st m ent. In lig ht o f t he se de v elopm ents, a nd f o llo w i ng a r evi ew by the Board of its Group investmen t st rat egy and priorities, the Board has m ai ntai ned th e suspension in d eve lo p m ent f un d ing for its Cocoa operations in Sierra Leone; acti vities at the plantation con ti nu e to be maint a ined at t he level su f f i c i ent to prot ect staf f while maintaining the Grou p’s as set s i n count r y. The Gr oup’s prim ar y fo cus is no w on the d evelop m e nt o f th e B e ef business in Mozambique. As re qui re d by I FRS, t he Gr oup cond uc ted an i m p a irment review of all of t he Group’s cocoa divi sion assets in Sierra Leone, which pr inc ipall y c om pri se go o dw i ll, p r o p er ty, p l a nt and eq uipment, l ong term prepayments, and inventor y. The impair men t revi e w res ulte d in a n im pa ir me nt a g a i n st th e c o c oa di vi sion’s assets in Sierra Leone of $6,791,000 (2014: $nil), ana ly sed as follo ws : IM PA IRMENT OF GOODWILL IMPAI RMENT OF PROPERTY, PLANT AND EQUIPMENT IM PAI RMENT OF NON-CURRENT RECEIVABLES IM PAI RMENT OF IN VENTORY 2015 US$000 575 5,998 159 59 6,791 Whe re ass e ts are ca pable o f gene r at i ng c ash f lo w s that are largely in dependent from t hose g enerat ed by ot her assets, the impa ir ment re v ie w co mpa red th e c ar r yi ng va lu e o f individual as set s t o t heir recoverable amoun t. Examples of such assets are w are ho uses, v ehicles, nurser ies e tc. W h er e th e ass et does not g enerat e c ash f lows t hat are indepen den t from other asset s, t he Grou p est i mat ed t he r ec o ver a ble a m o unt of the c ash- generat ing unit t o which the asset belong s. E xamp les of such a s s ets are t he pla nt at io n d e ve lo p m e nt a ss ets, including the land it self, cl earin g c ost s, pl an t ing, main t enan ce and othe r e xp e ndit ure rela ted to t he g r o wi ng o f c o co a plants at t he pl an tat ion. Due t o t he suspen sion of f undin g f or t he cocoa ope rati o ns, re c ov era ble a mo unt w a s ge ner a ll y de te rmined f or as sets or cash gen eratin g un its based on fair value less costs of dis po s al, whe re fair v alue w as ba sed o n t h e Di r ec tors bes t estimates of t he likely realisable value for individual assets withi n Sierra Leo ne . Where, given t he curre nt i n ve st m ent l a ndscape in Sierra Leone there was no basis for mak ing a reliable es timate 53 F I N A N C I A L S T A T E M E N T S N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) of f a ir v alue l ess cost s of di sposa l – su ch a s f o r t h e plantat ion development asset s– recoverable amoun t was measured by refe renc e to value i n use alon e. Th i s w as esti m a t ed a t $ni l because the relevant asset s, at their present st age of develop men t, are no t c apa ble o f ge ne ra ting po si ti ve ca sh r e tu r ns wit hou t furt her development fu nding. The impairment review resu lted in a wri te d ow n o f th e co coa di vi sio ns g o o d wi l l a nd non- current receivables (which represented long t erm land lease rental payme nt s) t o $ ni l, a nd its pro perty, p la nt a nd e qu i pment t o $1,180,000. In th e me di um t o l on g t erm, t h e Bo a r d r em a i ns p o si t i ve about the futu re development pot ent ial in Sierra Leone for the coc oa plant at io n, as we ll a s th e palm (r ef e r be lo w ) . W i th a projec ted cocoa bean deficit of up t o one million metri c ton nes by 202 0/ 20 2 1 driv i ng pr ices upw a rd s, t h e f und a me ntal s of the cocoa market remain strong. The Board remains hopeful that fur th er v alue ma y be r ea lised f rom i ts C o c o a o p er a tions in fu ture periods, t hrough developmen t or s al e, and accordin gly the ope rati o ns co ntinue t o be p resented as c o nti nui ng operations. 1 2 . 2 . I M PA I R M E N T O F PA L M A C T I V I T I E S ’ N O N - C U R R E N T A S S E T S The G ro up co ntro l s a lea se of app r o x i m a t el y 45, 000 hectares of brow nf ield agric ult ural land suit able for p alm oi l p roduction in the Pu je hun Dis trict i n th e S o uther n Pr o vi nc e i n S i erra Leone. The lease was acq uired in 2012 an d t he Board has c on tin ued to ev alu at e th is propert y a nd it s p o tenti a l f o r co m mercial isation. Due t o t he f act ors desc ribed above which result ed in an impa ir ment a gai nst the Group’ s coc o a d i vi si o n a ss et s, the Grou p has dec ided t o sus pend any act ivity on t his lease. The assets hav e ac co rd ingl y been im pa ired t o $ni l an d p r es ented wit hin discont in ued op erat ion s. The c arr yi ng v al ue of th ese a ssets, i nc lu d ed w i th i n Property, plant and equipmen t was $6,009,000, whic h in cludes t he in itial purc ha se pri ce o f t he lea se, d ef er r ed c o nsi d er a ti o n (refer to note 31.1) an d expendit ure inc urred on main t ainin g t he lease (suc h as a nnual l e ase re nt al pa ym e nts) . T h e d ef er r ed consideration was t o be set tl ed in O rdinar y Shares in the Company, follo wi ng t he ini tial development o f 1, 000 h ec ta r es of the leas ehold lan d. Du e t o t he impairment, t he Group n o l on ger intends to c om pl ete thi s init i al d evelo pment a nd ac c o r di ngly the rel ated obligat ion t o is sue shares ( inc luded within t he ‘ Shares to be i s su e d res e r ve’ , a com po ne nt o f th e G r o up a nd Company equit y, wit h a carr ying value of $2,940,000) has been released to prof it and l os s, r ed ucin g t he im p a i r m e nt a r i si ng on the palm act iviti es t o $3,069,000, whic h is in cluded in the res ults of dis c ont inue d o pe rati ons (r ef er t o no t e 17. 3) . 1 3 . I N V E S T M E N T R E V E N U E S INTE REST REV ENUES: BAN K DEP OSIT S OTH ER LOANS AND RECEIVABLES TOTA L IN TEREST R EVENUES 2015 US$000 2014 US$000 19 – 19 58 88 146 All in ve st ment re ve nu es a re ear ned o n f i nanc i a l a sse ts clas sifi ed as loan s an d rec eivables ( inc ludin g cash and ban k balan ces) . 54 1 4 . O T H E R G A I N S A N D L O S S E S (D E CR EA SE)/ I NC REA SE IN FAIR VALUE OF QUOTED INVESTMENTS (NOTE 22) 1 5 . F I N A N C E C O S T S INTE REST EXPENSE: BA NK B ORR OWINGS LOAN NOTES TOTA L FIN ANC E EXPENSE 1 6 . TA X AT I O N LO SS BEFOR E TAX FROM CONTINUING ACTIVITIES 2015 US$000 (849) 2014 US$000 936 2015 US$000 2014 US$000 683 – 683 197 12 209 2015 US$000 (15,803) 2014 US$000 (5,627) TA X CR EDI T AT THE MOZAMBICAN CORPORATION TAX RATE OF 32% (2014:32%) (5,057) (1,801) TA X EFF EC T OF EXPENSES THAT ARE NOT DEDUCTIBLE IN DE TERMI NING TAXABLE PROFIT TA X EFF EC T OF LOSSES NOT ALLO WABLE TA X EFF EC T OF LOSSES NOT RECO GNISED IN OVERSEA S SUBSI DIARIES (NET OF EFFECT OF D IFF EREN T R ATES) S TATUTORY TAXATION PAYMENTS IRRESPECTIVE OF INC OME AD JUSTMENT I N RESPECT OF PRIO R YEARS TA X EXPEN SE 67 1,556 73 432 3,434 1,296 9 72 81 25 – 25 The t ax reco nci li at ion h as been pr ep a r e d us i ng a 32% tax rate, t he corporate in come t ax rat e in M ozambiq ue, as t his is where the Gro up’s pri nci pal a sset s of i ts c o nti n ui ng o p er a tions are located. The Gro up has r ecogn ise d a t ax ch a r g e o f $ni l ( 2014: charge of $1,000,000) in respec t of the disp osal of its Et hi opian oil and g as i nte re sts, repor t ed w ith in d i sc o nti nue d o p erations. The Gro up has o per at io ns in a num be r o f o ver se a s jurisdictions where it has in cu rred t axable losses which may be available for o ffs e t ag ai nst fut ur e ta xa ble pr o f i t s a m o unt i ng to approximately $17,500,000 (31 M ay 2014: $14,570,000). I n addition, the Gro up ha s furt h er d educti ble ti m i ng d i f f e r enc es amounting to ap proximat ely $34,680,000 (31 M ay 2014: $21,047,000 ). No de fe rre d ta x a sset has been rec o g ni se d f o r th e se tax losses and ot her deduc ti ble timin g differen ces as t he requ iremen ts of IA S 12 , ‘ Inco me t ax es ’ , h ave no t be en m et. The Co mpany is re sid ent fo r t ax at i o n p u r p o ses i n Gu ernsey and its inc ome is s ubjec t to Guern sey inc ome t ax, presen tly at a ra te o f z ero percent. per a nnum ( 2014: z er o p e r cent. per annum). No tax is payable f or t he year due t o losses i ncu rred. Defe rred ta x h as not been pr ovide d f o r, a s br o u g ht for ward tax losses are n ot rec overable un der t he In come Tax (Zero 10) (Gu e rns e y) La w, 2 007 (as a men ded ) . F I N A N C I A L S T A T E M E N T S 55 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) 1 7 . D I S C O N T I N U E D O P E R AT I O N S The pro fi t/ (l os s) aft er ta x ar isi ng on di sc o nti n ued o perations du ring the period is an alysed by business operat ion as follows: OIL AN D GA S AC TIVITIES CO CO A TR ADI NG ACTIVITIES PA LM A CTI VITI ES NE T PR OFIT/ (LOSS) AFTER TAX ATTRIBUTABLE TO DISC ONTI NUED OPERATIONS (ATTRIBUTABLE TO OWNERS OF TH E COMPANY) 1 7 . 1 . O I L A N D G A S 2015 US$000 5,740 (174) (3,069) 2014 US$000 (1,378) (986) - 2,497 (2,364) On 6 J an uar y 20 09, t he Sh a rehold e r s a p p r o ved th e adopt ion of t he in vest in g st rat eg y t o ac quire or in vest in businesses or proj ec t s o pe rati n g in th e a gricultur a l a nd a s so c i ated civil engineering indust ries in Sou thern A fric a. A t the same t ime the Gro up suspe nded a ll ex plora tion acti vi ties a nd r ed uc ed e xpenditure to the minimum requ ired in order to ret ain exploration licen ses and e xtr ac t po te nt ia l va lue f or Sh a r e h o ld er s. C o nsequent ly the oil and gas act ivit ies were reclassified as a discontinu ed ope rati o n. In the f ina nc ia l year end ed 31 May 2013, o n 17 J a nuar y 2013, t he Group completed the disposal of it s oil and gas in terests in Et hi o pia, re a li sing a ga in befo re t a x o f $40, 380,000. A fter deduct ion of tax du e on this gain of $12,000,000 net of an expe ct e d tax re bat e of $1,000,000, th e a f ter ta x profit realised was $29,380,000. This gain was written back against the impa ir ment pro vi s ion m a de i n prio r ye ar s. D ur i ng th e year ended 31 M ay 2014 and due t o uncertainties on the tim ing an d amo unt of the tax rebat e to be r ec o ve r ed, t h e G r o up provided against the $1,000,000 expect ed tax rebat e. During t he ye ar e nd ed 31 Ma y 2014 th e G r o u p incu rred expendit ure on formal arbit ration proceedings to recover the com pe ns at io n asse ssed by th e N a t i o na l Pe tr o l eu m Commission as bein g du e to t he Company for works undert aken by the Comp an y i n th e Re public o f Sout h S u da n and a c k nowl edged as being due by the Minist r y of Pet rol eu m and Minin g of the Rep ubli c of So uth Suda n in Apr il 2012. Ex p end i tu r e of $378,000 was incurred in this mat ter du ring t he year ended 31 May 201 4. T his matt er wa s reso lved in th e cu r r ent f i na nc ial year through the payment to t he Company of £3,412,000 (b eing $5,659,000) i n cash w hi ch ha s bee n r ec o gni sed i n the c urrent financial peri od within discont inued operations. A further net cred it o f $ 81,0 00 ha s been r ec ord ed wi th r es p ec t to the re-imbursement of expenditu re incurred in pursui ng this claim. 56 1 7 . 2 . C O C O A T R A D I N G Due to the se r io us a nd w ell-public i sed Ebo l a ou t br eak and the associat ed precaut ionar y rest rict ion s on travelling in Sierra Leo ne, ac c ompani ed by th e o ngoi ng lo ss es su f f er ed by the Cocoa tradin g operat ion s, the Group ceased its Cocoa trading ope rati o ns in Sie rra Leo ne in t h e f inanc i a l y ea r e nded 31 M ay 2014. The C ocoa t radin g operat ion s rep resent ed a sign ific ant com po nent o f a busin ess segment o f t h e Gr o u p a nd acc ordingl y, as req uired by I FRS 5, ‘ Non-c urrent Asset s H eld for Sale and Disco nti nue d Ope ra tion s ’, t he r esu l ts o f t h e C o co a t radi ng operations are p resen t ed as di scon t inued operat ion s within the con so li da te d in co me sta t eme nt. C ash f lo w s p er t a i ning to t he Coc oa tradin g operat ion s are p resen t ed in t he c on solidated cas h flo w s tat e men t alon g w i th a ll ca sh f l o w s r elat ing to discont inued operat ion s. The amoun t s recorded in t he c urrent fina nc ia l y ear re late t o t he win ding d o w n o f t h e C o c oa Trading operations between Jun e an d Au gust 2014. From 1 September 201 4, al l ex pe nd it ure in th e Co co a d i vi si o n h a s been inc luded within cont in uing operat ion s, relatin g eit her t o t he cocoa plant at io n ac ti vi t ie s, or t he logi stic s a c ti vi ti e s un d ert aken to provide assist anc e in the Ebola relief efforts. The re su lts of the discon tin ued Coc o a tr a d i n g o p e r ations, whic h have been inc luded in the Consolidated in come statemen t, were a s fo ll ows: LOSS IN THE YEA R FROM THE COCOA TRADING OPE RATIONS: R EV ENUE EX PENSES F INAN CE EX PEN SE LOSS BEFORE TAXATION TA XATI ON LOSS A FTER TAX FROM DISCONTINUED COCOA TRADING OPE RATI ONS IN THE PERIOD LOSS ON CES SATION OF THE COCOA TRADING OPE RATIONS: LOSS O N I MPAI RME NT OF GOODWILL N ET LOSS ATTR IBU TABLE TO DISCONTINUED COCOA TRAD ING OPERATIONS (ATT RI BUTABL E TO OW NERS OF THE COMPANY) 1 7 . 3 . PA L M A C T I V I T I E S 2015 US$000 2014 US$000 – (174) – (174) – (174) – (174) 1,907 (2,748) (1) (842) – (842) (144) (986) The a mo unt r eport ed w ithin d isco nt i nue d o p er a ti o ns for palm acti vit ies represen ts t he impairmen t ag ain st t he carr yin g valu e of the Gr oup ’s 45 ,000 h ect a re le ase i n t h e Puj eh u n D i stric t of Sierra Leone, n et of t he release of amoun ts deferred c on sideration no lo ng e r e xp ect ed t o be d ue, as m o r e f u ll y d esc r i bed in note 12. 2. 1 8 . ( L O S S )/ E A R N I N G S P E R S H A R E The ca lc ula ti on of t he basi c a nd d i lu te d ( l o ss) / ea r nings per share is based on the followin g dat a: LO SS FOR THE PUR POSES OF BA SIC AND DILUTED EARNINGS PER SHARE FROM CONTINUING ACTI VI TIES PRO FI T/ (LOSS) FOR THE PURPOSES OF BA SIC AND DILUT ED EA RNINGS PER SHARE FROM D ISCO NTINUED A CTIVITIES LOSS F OR THE PURPOSES OF BA SIC AND DILUTED EARNINGS PER SHARE (LOSS FOR THE YEAR AT TRI BUTABLE TO EQU ITY HOLDERS OF THE PARENT) 2015 US$000 2014 US$000 (15,884) (5,652) 2,497 (2,364) (13,387) (8,016) WEI GH TED AVERAGE NU MBER OF ORDINARY SHARES F OR T HE PURPOSES OF BA SIC AND DILUTED ( LO SS) /EAR NI NGS PER SHARE 1,061,818,478 1,061,818,478 B A SI C AND D ILUTED LOSS PER SHARE B A SI C AND D ILUTED LOSS PER SHARE FROM CONTINUING ACT IVITI ES BA SI C AND D ILUTED EARNINGS/(LOSS) PER SHARE FROM DISCONT INUED ACTIVITIES (1.26) (1.50) 0.24 (0.76) (0.53) (0.22) 57 F I N A N C I A L S T A T E M E N T S N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) 1 9 . G O O D W I L L BOOK VALUE AT 1 JUN E 2013 EL IMIN ATED IN THE PERIOD EXC HAN GE R ATE ADJUSTMENT AT 31 MAY 2014 EL IMIN ATED IN THE PERIOD EXC HAN GE R ATE ADJUSTMENT AT 3 1 MAY 2 015 US$000 697 (144) 23 576 (575) (1) – The Gro up’s g o o dwi ll b alan ce a ro se o n th e ac q ui si t i on of the Cocoa op erat ion s, c omprisin g t he coc oa p lant ation an d cocoa tra di ng b us i nes s i n Sierr a Leo ne. Due to th e c es sati o n of the Cocoa t radin g op erations in the year ended 31 M ay 2014 ( refer to n o te 17 .2), th e pro po rti on of the g o o d w i l l a t tr i b ut ed to that busin ess was eliminat ed an d is inc luded in t he computation of the n et l os s fro m discon tinued ope r a ti o ns f o r th e y ear ended 31 May 2014. The remainin g balan ce of $576,000 attributed to t he c oc oa p la nt at io n h a s bee n r evi ew ed f o r i m p airment i n accordan ce wit h the Group ’s acc oun tin g pol icy an d written off in fu ll in t he curren t per io d a s mo re f u ll y d esc r i be d i n not e 12.1. 58 2 0 . P R O P E R T Y , P L A N T A N D E Q U I P M E N T LAND AND BUILDINGS US$000 PLANT AND MACHINERY US$000 MOTOR VEHICLES US$000 AVIATION US$000 OTHER ASSETS US$000 ASSETS UNDER CONSTRUC- TION US$000 COST AT 1 JUN E 2013 AD DI TIO NS D ISPOSALS T RAN SF ERS EXC HAN GE R ATE AD JUSTMENT AT 31 MAY 2014 AD DI TIO NS D ISPOSALS T RAN SF ERS EXC HAN GE R ATE AD JUSTMENT AT 3 1 MAY 2 015 AC CU MU LATE D D E PR EC IATION A ND IMPAIRMEN T AT 1 J UNE 2013 CHAR GE FOR TH E Y EAR D ISPOSALS EXC HAN GE R ATE AD JUSTMENT AT 31 MAY 2014 CHAR GE FOR TH E Y EAR D ISPOSALS IM PAI RMENT LOSS ( N OTE 12) EXC HAN GE R ATE AD JUSTMENT AT 3 1 MAY 2 015 N ET BOOK VALUE 31 MAY 2 015 31 MAY 2014 22,747 1,880 – 307 (557) 24,377 1,039 (1) 2,195 (2,425) 25,185 5 312 – 547 864 421 – 11,117 1,039 (20) (409) (1,158) 10,569 529 (291) 200 (1,483) 9,524 3,391 1,067 (8) (1,383) 3,067 1,101 (112) 5,211 285 (195) 93 476 5,870 38 (241) – (735) 4,932 3,108 775 (160) 464 4,187 645 (219) 11,766 175 32 (160) 12,891 12,294 23,513 (456) 3,775 5,749 7,502 (620) 4,025 907 1,683 573 739 (62) – (72) 1,178 10 – – (202) 986 256 142 (37) (20) 341 174 – – (72) 443 543 837 546 68 (4) 9 (24) 595 85 (18) – (87) 575 193 74 (1) (9) 257 77 (5) 34 (41) 322 253 338 – 2,395 – – – 2,395 – – (2,395) – – – – – – – – – – – – – 2,395 TOTAL US$000 40,194 6,406 (281) – (1,335) 44,984 1,701 (551) – (4,932) 41,202 6,953 2,370 (206) (401) 8,716 2,418 (336) 12,007 (1,349) 21,456 19,746 36,268 Addi ti o ns t o l and a nd buildings i nclu de $399, 000 (2014: $1,897,000) of acquisit ion and devel opment cost s of the Group’s coc o a pl anta ti on in Sier ra Leo ne, i n cu r r ed bet w een 1 June and 30 Sept ember 2014. Included in t his sum i s $146,000 ( 2014: $4 71,000) of depreciat ion in r es p ec t o f p la nt a nd equipment and $169,000 (2014: $558,808) of wages and salaries. Sub se qu ent to 30 S eptem ber 2014, a ll ex p endi tu r e i ncurred in connect ion with the cocoa plant at ion has been expen sed to profi t a nd los s and in clud ed w ithi n c o nt i nu i ng o p e r ations. A d ep rec i at ion ch ar ge of $2,211, 000 ( 2014: $1, 766,000) has been inclu ded in t he consol idat ed income stateme nt within op e ra ti ng e xpens e s a nd $61,000 ( 2014: $133, 000) has been included with dis cont inued operati on s. Land and bui ld ings with a ca r r ying a m o unt o f $2,173,000 (2014: $2,694,000) have been pledged to secure t he Group’s bank o ver dr aft ( note 27). T he Gro up i s no t a l lo w ed to pl edge these as set s as securit y for ot her borrowings or s ell them to ano th e r en ti ty. De t ails of a dd itiona l a sse ts p led g ed as security for new bank borrowings su bsequ en t to the period end are provi de d i n not e 3 5. 1. At 3 1 Ma y 20 1 5 , th e Gro up ha d no c o ntr a c tu al c ommitments for the acquis ition of property, plant and equ ipment (2014: commi t me nt s of $4 9,000). 59 F I N A N C I A L S T A T E M E N T S N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) 2 1 . I N T E R E S T S I N A S S O C I AT E S The Co mpa ny a nd Group’ s in ter est i n a ss o ci ates r epresent s a 40% equit y invest men t in A fric an Man agemen t Ser vic es Limited (‘AMS ’ ). Th e Grou p’s sha re o f th e res ult o f A M S f o r al l periods presented was $nil. The share of the cumulat ive result s and n et asset s of AM S i s $ 4, 000 ( 2014: $4, 000) . T h e C o m p any ’s investment in AMS was $nil. 2 2 . I N V E S T M E N T S I N Q U O T E D C O M PA N I E S ‘ Inve s tme nt s in q uo t ed com pan ies ’ h e ld b y th e C o mpany and Group comp rise fin anc ial asset s at FV TP L. C han ges in market valu e a re rec o rded in pr of it a nd lo ss w i th i n o the r g a ins and loss es. As at 31 May 2015, t hese in ves tment s comp rise 8,337,682 (31 M ay 2 014 : 8 ,33 7,682) or di na r y s h ar es i n A tla s Development & Sup port S er vic es Limit ed (‘AD S ’) (f ormerly A fric an Oilfield Logi s ti cs Li mi te d), an A IM q uot ed co m p a ny f o c us sed on the logistic s sup port in dust r y in respect of oil and gas exp loration and o t he r d e vel o pmen t pr ojects in sub -S a h ar a n A f r ic a. Movement s in the valu e of the invest men t in A DS were as follows: AT 1 JUN E 2013 PURC HA SE OF I NVESTMENTS AT COST IN CR EA SE IN FAI R VALU E (NOTE 14) AT 31 MAY 2014 D E CR EA SE IN FAI R VALUE (NOTE 1 4) AT 3 1 MAY 2 015 US$000 4 285 936 1,225 (849) 376 The f ai r val ue ha s been d et er mi ned b ase d o n q uo t ed market pric es i n an ac tive market an d comp rises a level 1 fair value in the IFR S 13 f ai r v alue hi er ar chy. 60 2 3 . B I O L O G I C A L A S S E T S FAIR VA LUE AT 1 JUN E 2013 PURC HA SE OF BI OLOGICAL A SSETS S AL E, SLAUGHTER OR OTHER DISPO SAL OF BIOLOGICA L A SSE TS CHAN GE I N FAIR VALUE F OR EIG N EXCH ANGE ADJUSTMENT AT 31 MAY 2014 PURC HA SE OF BI OLOGICAL A SSETS S AL E, SLAUGHTER OR OTHER DISPO SAL OF BIOLOGICA L A SSE TS CHAN GE I N FAIR VALUE F OR EIG N EXCH ANGE ADJUSTMENT AT 3 1 MAY 2 015 US$000 4,007 2,195 (1,976) 290 (244) 4,272 1,666 (3,947) 1,910 (636) 3,265 Biolo gi c al as set s co m prise ca tt le i n M o za m bi q ue held for breeding purposes ( the ‘ Breedin g herd ’) or for slaug hter ( the ‘ Sla ug h te r he rd ’). The S la ug ht er h er d h as be en c la ssified as a current asset. The Breedin g herd is classif ied as a non-c urrent asset. Bi o lo g ic al assets a re a cco r d i ngl y c l a ss i f i e d as cu rrent or non-c urrent asset s as follows: N ON-C UR REN T A SSET CUR RENT A SSET 2015 HEAD 4,395 2,772 7,167 2014 HEAD 5,481 2,749 8,230 2015 US$000 2,246 1,019 3,265 2014 US$000 3,071 1,201 4,272 For v alu at io n purp oses, ca ttle ar e gr o u p ed i nto c l asses of animal ( e.g. bu lls, c ows, steers et c) . A st andard an imal weig ht p er breed a nd c las s i s th en m ulti plied by t h e nu m ber o f animals in each c lass t o det ermin e the est imated tot al li ve weight of al l anim als in the h erd. T h e h erd is the n va lu ed by r ef eren ce to market p rices f or meat in M ozambique, less est imated c osts to sell. T h e v alua ti on is a cco rd ingly a le ve l 2 va l ua ti on in t he I FRS 13 hierarchy whereby in put s ot her t han qu ot ed pric es that are o b se r v abl e f or t he asset a re u s ed. 2 4 . I N V E N T O R I E S CONSUMABLES AND SPARES RAW MATERIALS WOR K IN PROGRESS F INI SHED GOODS 2015 US$000 120 2,452 27 293 2,892 2014 US$000 127 4,438 34 301 4,900 During the year inven t ories a m ounti ng to $8, 191, 0 00 (2014: $8,084,000) were inc luded in c ost of sales an d $n il ( 2014: $2,1 79 ,0 00) we re includ ed wit hin d i s co nt i nu ed o p e rations. Inve nto rie s wi th a car r y ing a mount of $2, 140, 000 (2014: $4,237,000) have been pledged t o s ec ure t he Group’s bank ove rdra ft (n o te 2 7) . 2 5 . T R A D E A N D O T H E R R E C E I VA B L E S T R ADE REC EI VABLES OTHE R REC EI VABLES PRE PAY MENTS 61 2015 US$000 1,018 492 84 1,594 2014 US$000 459 393 296 1,148 F I N A N C I A L S T A T E M E N T S N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) ‘ Tr ade rec e iv ables ’ a nd ‘ Other re ce i va b les ’ di sc l osed above are classif ied as loans and rec eivables and measu red at amo rt is e d c os t. Inclu de d in ‘ Oth er recei va bles ’ ar e r ec e i va bl es w h ich have been provided again st. M ovemen t s in t he allowanc e acc oun t agai ns t ‘ Ot he r r ec eiva bles ’, w hich p r i nc i p al ly r e la te to input IVA rec overable in Mozambique (refer t o note 5.4) are as follows : AT 1 JUN E 2013 CHAR GED TO PROFIT AND LOSS F OR EIG N EXCH ANGE GAIN AT 31 MAY 2014 CHAR GED TO PROFIT AND LOSS F OR EIG N EXCH ANGE GAIN AT 3 1 MAY 2 015 US$000 1,310 118 (83) 1,345 224 (250) 1,319 The i n cre as e i n t he a llow ance accou nt d u r i ng bo t h periods presented ref lect s t he inc rease in the u nderlying inp ut IVA balanc e reco rd ed by t he Gro up a nd th e ef f e ct o f t h e d e va l uation of the Mozambiq ue Met ical ag ainst t he U nit ed St ates D ollar. Oth er rec e iv a ble s includ e $35 0,000 ( 2014: $122, 000) due f rom related p art ies ( see note 33). The Di re c tors co nside r t ha t t he ca r r yi n g a m o u nt o f f inancial asset s app roximates t heir fair value. There are n o sign ifican t amo unt s pas t due w hich h a ve not be en p r o vi d ed against (2014: $n il). Furt her details on t he Group ’s f inan cial assets are prov id e d i n note 2 9. 2 6 . C A S H A N D C A S H E Q U I VA L E N T S Inclu de d wi thi n t he C ompa ny and G r o u p ’s c as h a n d cash equ ivalent s is $n il (2014: $107,000) of rest rict ed cash held on dep os i t a s se c uri ty fo r cert a in supp li er gu ar a nt ee s. 62 2 7 . B O R R O W I N G S BANK OVER DR AFT OTHE R 2015 US$000 2014 US$000 3,079 – 3,079 2,468 200 2,668 The Gr oup has an over dr af t fa cili ty o f 179, 000, 000 Metical (approximat ely $4,850,000 at t he 31 May 2015 M etical to US $ e xch ange rate ) (2014: 1 79,000, 000 Me ti c a l ( approximately $6,000,000)) t o provide fun ding for it s Grain operation s in Mozam bique. It i s s ecured ag a in st c er t a i n o f the G r o up’s property, plant and equip men t ( n ot e 20) an d al l maize inventor y an d finis h ed mai ze pro duct s ( not e 24). I nter es t i s c h ar g ed at t he counterp arty ban k ’s p rime l en ding rat e less 3%, bein g a c urrent rat e of 13% (2 0 14 : 1 3%) . Un less it i s c a nc ell ed b y either party, the f ac ilit y renews an nually on 31 M ay . Oth er bo rrowi ngs a t 31 May 2014 r ep r e sented cu stomer pre- finan cin g for t he Grou p’s C oc oa tradin g op erat ions, was unse c ured, b o re no int erest and w a s r ep a i d d ur i n g the year. 2 8 . T R A D E A N D O T H E R PAYA B L E S T R ADE PAYABLES OTHE R PAYAB LES AC CRUE D LI ABI LITIES CO RPO RATION TAX 2015 US$000 314 623 440 – 1,377 2014 US$000 77 666 1,413 14 2,170 ‘ Tr ade p aya ble s ’, ‘ Ot her pa ya bles ’ and ‘A cc r u ed li a bi lities ’ principally comp rise amoun ts out st andin g for trade p urchases and ong oi ng co sts. No int er est is c har g ed o n a ny ba la nces. The Dire ct o rs co nsi der th a t t he ca r r y i ng a m o u nt o f f inancial l iabiliti es ap proximat es their fair value. 2 9 . F I N A N C I A L I N S T R U M E N T S 2 9 . 1 . C A P I TA L R I S K M A N A G E M E N T The Gr oup and C om pan y m ana ges i ts c a p i t al to ensure that entit ies in t he Group will be able to c on tin ue as goin g conc erns while maxi mi si ng th e re turn to sh areh o ld er s. T h e c a p i tal struc ture of the Group comp rises its n et debt (t he borrowin gs disc lose d in no te 27 af te r de ducting ca sh and ba nk b a l a nc e s) and equity of the Grou p as shown in t he balance sheet. The Compan y and Gro u p ar e no t subjec t t o a ny e x te r na l ly i m p o sed capital requ irements. The ExCo m r evi ews th e ca pit al st r uc t ur e o n a r e gu lar basis and seeks t o match new capital requ irements of subsidiar y com pa nie s to ne w sour ces of exter n a l d e bt f u nd i ng denominated in the currency of operations of the relevant sub sidiar y. Whe re such a dd itio nal fund ing i s no t ava i la bl e, t he Group funds the s ubs idi ar y company by way of l oans from t he Comp any. The Gro up a nd Co mpan y pla ce f und s w h i c h a r e no t required i n the short term on deposit at the bes t int erest rat es it is abl e to s ec ur e from i ts ban ker s. In ac co r d a nc e w i th th i s polic y, the Gr oup has main tained it s overdraft facility in M ozambique to fina nc e i ts Gr ai n o pe ra tion s of 179, 000, 000 Mo z a mbique M etical (note 27). Furt her and subsequent t o the period en d, the Gro up h as s e cured a ddi tion al bor ro w i ng f ac i l i ti es i n Mozambique for its Beef operations (refer to note 35.1). 63 F I N A N C I A L S T A T E M E N T S N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) 2 9 . 2 . C AT E G O R I E S O F F I N A N C I A L I N S T R U M E N T S The fo llo win g are t he Gr oup and C o m p a ny f i nanc i a l inst ruments as at 31 M ay: FIN ANC IA L A SSE TS CA SH AND BAN K BALANCES FAIR VALUE THROUGH PROFIT AND LOSS: H ELD FOR TR ADING LOA NS AN D REC EIVABLES FINAN CIAL LIA BILITIES AMORT ISED C OST GROUP COMPANY 2015 US$000 2014 US$000 2015 US$000 2014 US$000 6,421 6,994 6,027 5,747 376 1,510 8,307 4,456 4,456 3,851 1,225 852 9,071 4,824 4,824 4,247 376 22,052 28,455 785 785 27,670 1,225 41,752 48,724 1,040 1,040 47,684 2 9 . 3 . F I N A N C I A L R I S K M A N A G E M E N T O B J E C T I V E S The Gro up manag e s th e risks a ri sing f r o m i ts o p e r a t ions, and f inancial inst rument s at ExC om and Board level. The Board has ove ral l re s pon si b il ity for t he e sta b li sh m e nt a nd o ve rsight of the Group’s ris k management f ramework an d t o en sure that the Gro up h as a de q uate po lici es, p roce d u r es a nd c o ntrols to manage suc cessful ly the fin anc ial risks t hat t he Group faces. Whil e th e Gr oup does no t ha ve a w r i tte n p o l i c y r e lating to ris k managemen t of t he risks aris ing from any fin anc ial in strumen ts held, t h e clo se i nv olv em ent o f t he Ex C o m i n th e d ay to day operat ion s of t he Group ensu res t hat risks are mon itored an d con tro l led i n an a ppr opr ia te m ann er f o r t h e si ze a nd compl exit y of t he Group. Fin anc ial in stru men ts are not t raded, nor are spe c ula tiv e pos i t io ns ta ken. T he Gr o u p a nd C o m p a ny have not ent ered in t o an y derivat ive or other hedg ing inst ruments. The Gro up’s ke y fina ncia l ma rke t r i sk s a r i se f r o m ch anges in foreign exc hang e rat es ( ‘currenc y risk ’). To a lesser extent the Gro up i s ex pos ed t o int erest r at e r i sk a nd o t h er p r i ce risk (i n respect of it s in vest men t s in quoted companies) . The Group is also e xpo sed t o cred it risk a nd liq ui d i ty r i sk. T h e p r incipal ri sks that the Group fac es as at 31 M ay 2015 wit h an impact on fina nc ia l i nstrume nts ar e summa ri sed be lo w. 64 2 9 . 4 . M A R K E T R I S K The G roup and Co mpan y ar e ex pos ed to cu r r enc y r i sk, interest risk an d other pric e risk (in respec t of it s invest men ts in quoted com pa nie s ). The s e a re d iscussed f u r th e r bel ow. 2 9 . 4 . 1 . C U R R E N C Y R I S K Certai n of t he Gro up co mpan ie s ha ve f u ncti o na l c urrencies other t han US$ and t he Grou p is t herefore su bjec t t o f luctuation s in ex ch an ge rate s in tr a nslat io n of th ei r r e sul ts and financ ial posit ion in to US$ f or t he purposes of presen tin g consolidated acc o unt s. Th e Group d oes n ot hed ge a ga i nst th i s translation risk. The Group ’s fin anc ial asset s an d liabilit ies by fu nc tional curre nc y o f t he rel e van t Gr oup com p an y a r e as f o ll ows: U NITE D STATES D OLLAR (‘ US$’) (1 ) M OZAMBI QUE METI CAL (‘ MZN ’) S IE RRA LEONE LEONES (‘ SLL’) OTHE R ASSETS LIABILITIES 2015 US$000 2014 US$000 2015 US$000 2014 US$000 6,880 1,143 284 – 8,307 7,202 1,588 169 112 9,071 786 3,524 146 – 4,456 1,510 3,209 95 10 4,824 ( 1) T he Company ’s f unctional currenc y i s US$ and ac c ordi ngly, a ll amou nt s for the Com pany are i nclu ded wi thi n thi s cat eg or y. The Gro up a nd Co mpa ny t r ansact w i th s up p l i er s a nd/or customers in cu rren cies other than the fun ct ion al cu rren cy of the rele van t group c o mpa ny ( fo reign cu r r enc i es ) , a nd h old investment s in q uot ed c ompan ies which are t raded in c urrenc ies other than US $. The Gro u p d o es not hed g e a g ai ns t th i s t ransactional risk. A s at 31 May 2014 an d 31 M ay 2015, t he Grou p an d Comp an y ’s out st and in g f or ei gn cu r r e ncy d eno m i na ted monetar y items were prin cipally expos ed t o chan ges in t he U S$/GBP and U S$ /MZN e xc h an ge r at e. T he f o llo w i ng ta bl e details t he Group an d Comp any ’s exposure t o a 5 per cent inc rease and dec rea se i n t he US $ a g ainst GBP a nd se p a r a tely agai nst MZN. The sen siti vit y analysis in cludes on ly out st andin g foreign curre nc y deno mi nat ed i tems a nd ex cl ud es th e t r ans lation of foreign subsidiaries and operat ion s in to t he Group’s presentation curre nc y. The s e nsi tivit y a lso i nclud es i ntr a -g r o up l oans where the loan is in a cu rren cy ot her t han t he fun ct ion al c urrenc y of the le nd er o r bo rrow er. A neg a tive num be r i nd i c a tes a decrease in profit and ot her equity when the US$ s trengthens ag ainst the re l e vant curre ncy by 5 per cent. Fo r a 5 p e r weakening of the US$ agai nst the relevant cu rrency, there woul d b e a com pa ra ble im pac t o n th e pr of it a nd o t h er e qu i t y, and the balances would be positi ve. GROUP P ROF IT OR LOSS ( 1) OTHE R E QUI TY (2 ) COMPANY P ROF IT OR LOSS ( 1) OTHE R E QUI TY GBP IMPACT MZN IMPACT 2015 US$000 (10) – 2014 US$000 (61) 12 2015 US$000 – 2014 US$000 – (2,910) (2,755) GBP IMPACT MZN IMPACT 2015 US$000 (10) – 2014 US$000 (61) 3 2015 US$000 2014 US$000 – – – – ( 1) T his is mainly due to the exposure ari si ng f rom i nvestments in quoted com panies where the relat ed company ’s equit y secu ri ties are quoted in GBP. ( 2) T hi s is ma inl y du e t o the exposure aris ing on the trans lati on of US$ denomi nat ed int ra-grou p loans provided t o MZN fu nct ional cu rrency entiti es which ar e include d as pa rt o f the Company and G roup ’s net investm ent in the r elate d ent iti es. F I N A N C I A L S T A T E M E N T S 65 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) 2 9 . 4 . 2 . I N T E R E S T R AT E R I S K The Gro up and C omp any a re ex po se d t o i nter e st r ate ris k because ent ities in t he Group hold cash balances and borrow funds at f lo ati ng int ere st ra tes T he C om pa ny i s f ur th er e x posed to interest rat e risk on loans provided t o subsidiar y companies at float ing i nter e st r at es. As a t 31 Ma y 2015, th e G r o up and Company have no interest bearing fixed rate inst rument s. The Gro up and Co mpa ny ma inta in c ash d ep o s i ts at variable rates of int erest for a variety of short term periods, depending on cash re quire me nts. Th e Gra in oper a ti o ns i n M o z am bi qu e are al so f inanced throu gh t he overdraft facility. The rates obtain ed on ca sh de po s it s a re review ed reg ul ar l y a nd th e best rate obtained in t he context of t he Grou p’s and Company ’s needs. The weigh te d a v erag e int erest r at e on d ep o s i ts w a s 0. 59% (2014: 1.05%). The weight ed average int erest on drawings under the ov e rd raf t fa ci li ty w as 14% (2014: 16%) , o n th e c u stomer advances was nil% (2014: nil%) and on t he short t erm loan note was nil% (20 1 4: 1 0%) . Th e Gr oup do es n ot h ed g e i nt er est rate risk. The fo llo win g tabl e d etails th e Gr o up a nd C o m p any ’ s exposure to interest rate changes, all of which affect profit and loss on ly with a c o rr e spo nding ef f ect on a ccum u la ted lo ss es. The sensit ivity has been prepared assu ming t he l iabilit y outst an ding at the balanc e sh ee t date w a s out sta nd ing f o r th e w h ol e year. In al l cases presented, a positive number in profit and loss re pr esents an i nc rea se i n i nt er est i nco me/dec r ea se i n f i na nc e expense. The sensit ivity is presented assuming int erest rates incr ease by eith er 20bp or 5 0bp. A 20bp o r 50bp de cr e a se i n interest rates wou ld have t he opposite effect. + 20 BP IN CREA SE IN INTEREST RATES + 5 0 B P INC REA SE IN INTEREST RATES 2 9 . 4 . 3 . O T H E R P R I C E R I S K GROUP COMPANY 2015 US$000 (7) (17) 2014 US$000 (9) (23) 2015 US$000 115 289 2014 US$000 110 276 The Gro up and Com pan y i s expo se d to eq u i ty p r i c e risk on it s invest ment s in quoted securit ies which are measu red at fair valu e (ref e r t o no te 22 ). In ve stm en ts i n qu o ted c o mpani es comprise in vestment s in one comp any, AD S. If A DS ’s share pric e incr ea se d/ (d ecr eased) by 1 0% a nd th e US $/ G B P exchange rate remain ed unc han ged, t he Group an d Comp any n et profit woul d i nc re a se/ (de cre ase) by $38 ,000. 2 9 . 5 . C R E D I T R I S K Cre di t ri s k ari s es from ca sh a nd ca sh e q ui va l ent s, and deposits wi th bank s an d finan cial in sti tut ions, as well as out stan ding rece iv a ble s. The Group’ s and Com p a ny ’ s p r i nc i p a l deposit s are held wit h various bank s wit h a hig h c redit ratin g t o diversify from a c onc entr atio n of cr ed it ri sk. Rec ei va bl es a r e regul arl y mon itored and assessed for recoverabilit y. The maxi mum e xpos ur e t o cr ed it r isk i s th e c a r r y i ng val ue of the Grou p an d C ompany fin anc ial asset s disclosed in n ote 29.2. Detai ls o f pr ovi si o ns aga inst finan ci a l as set s a r e p r ovided in note 25. 66 2 9 . 6 . L I Q U I D I T Y R I S K The Gro up a nd Compa ny ’ s po licy t hr o u g ho u t th e y ear has been to ensure that it has adequat e liqu idity by carefu l manag emen t of it s wor ki ng cap it al. T h e E xCo m c on ti nu a lly m o ni tors the Grou p and C ompan y ’s act ual an d f orec ast c as h flows and cash pos i ti o ns. The Ex Com pay s pa rt icu la r at t ent i o n to ongoing expenditu re, both for operat ing requiremen ts an d developmen t acti v i ti es, an d ma tching of t he m a tu r i t y p r o f i le o f the Grou p’s overdraf t to t he processin g and sale of t he Group ’s maize prod uc ts. At 3 1 M ay 201 5 the G ro up h eld ca sh d ep o s i ts o f $6,421,000 (2014: $6,994,000). A t 31 M ay 2015 t he C ompan y held cas h de po si ts o f $6 ,027,000 (2014: $5, 747, 000) . At 31 May 2015 the Grou p had an overdraft f acilit y of ap proximately $4,8 50 ,0 00 (20 14 : appr ox im a tely $6,000, 000) o f whic h $3,079,000 ( 2014: $2,468,000) was drawn. The Group had other borro win gs /sh ort te rm lo an no te ou ts ta ndi ng o f $ni l (2014: $200,000) (see n ot e 27). As at t he dat e of this rep ort t he Grou p has ad equa te liq uidity t o m ee t its o bl i ga ti o ns a s th e y fall du e. The f ol lo wi ng t abl e d et a ils t he G r ou p a nd C o m p any ’s remaining con trac tual mat urit y of it s fin anc ial liabilit ies. The table is d rawn up uti li sing undi scoun ted c as h f l o ws and based on the earliest date on which the Group and Company c ould be requi red to se t tl e its o bliga tion s. Th e ta b le i nc lu de s both interest an d princ ipal c ash f lows. To t he ext en t that int erest c ash flow s a re f loat ing rat e, t he undi scou nt ed am o u nt i s derived us ing the current interes t rate, which is not expect ed t o chan ge signi fi c antl y d uri ng th e per io d t o m a t ur i ty. 1 MON TH 2 TO 3 MON THS 12 MONTHS 2 9 . 7 . F A I R VA L U E S GROUP COMPANY 2015 US$000 1,410 67 3,379 4,856 2014 US$000 2,389 65 2,764 5,218 2015 US$000 785 – – 2014 US$000 1,040 – – 785 1,040 The Di re cto rs hav e re vi ew ed th e f i na nc i al st at em e nts and have conc luded t hat t here is n o sign ifican t differen ce between the c ar r y ing v al ue s and th e fa ir va lu es o f th e f i na ncial asset s and liabiliti es of the Group and of t he C ompan y as at 31 May 201 5 and 31 M ay 2014. 3 0 . S H A R E C A P I TA L GROUP AND COMPANY AT 3 1 MAY 2014 AND 31 MAY 2015: ORDI NARY SHAR ES OF 0.1P EACH D E FER RED SHARES OF 0.1P EACH TOTA L SH ARE C APITAL AUTHORISED NUMBER ALLOTTED AND FULLY PAID NUMBER 2,345,000,000 1,061,818,478 155,000,000 155,000,000 2,500,000,000 1,216,818,478 US$000 1,722 238 1,960 The Co mpany h as one class of o rd i na r y sh a r e wh i c h carries no right to fixed in come. The d e ferre d s hare s ca rr y no righ t to a ny d i vi d end; no right to receive not ice, att end, sp eak or vote at any gen eral meetin g of the Co mpany; and on a r et ur n of ca p i t al o n l i qu i d a t i on or other wise, the holders of t he deferred shares are ent itled to rec eive the no mi nal am ount pai d up a ft er t h e r e p ay m en t o f £1,000,000 per ordinar y share. The deferred shares may be con ver ted into o rdi nar y s hare s by resolut io n o f t he B o a r d. 3 1 . R E S E R V E S Move me nt s i n t he Group an d Co m p a ny r e ser ves a r e inclu ded in t he Consolidated stat emen t of chang es in equit y and the Comp an y s tat ement o f ch a nge s in eq ui ty r esp e c ti vely. A des cription of eac h reser ve is p rovided below. 67 F I N A N C I A L S T A T E M E N T S N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) 3 1 . 1 . S H A R E S T O B E I S S U E D R E S E R V E In the fi nanci al y ea r end ed 31 Ma y 2012 t he Gr o u p acqui red Red Bunch Vent ures (SL) Limit ed (‘ Red Bunch’) which hol ds a leas e ov e r appro xi ma tely 45,000 he cta r es o f a gr i cultural land suitable for palm oil product ion in Sierra Leone. Followin g the deve l op me nt of 1 ,0 00 hecta res of t h e l ea seh o ld l a nd, def erred considerat ion of 37,800,000 Ordinar y Shares would become paya ble und e r t he p urcha se ag reem ent. T h e ‘ S h a r es to be iss ued ’ reser ve recorded the Grou p’s potential obli gat ion to issue such Ordi nar y Sha res. T he Gro up h a s i m p a i r ed th i s l easehold land asset du ring the year as more fu lly described in note 12.2 and ac co rdi ngly t h e ba lance in clud ed w i th i n t h i s r eser ve has been released t o profit and loss wit hin discontinu ed operation s. 3 1 . 2 . T R A N S L AT I O N R E S E R V E For t h e p urpos e o f pr esent in g c onso li d a te d f i na nc i al st atements, the assets and liabilit ies of t he Group ’s foreign operations are tran slate d a t e xchan ge r at es p r eva i li ng o n t h e balance sheet dat e. In come an d expen se i tems are t ranslat ed at the ave rag e e xch ange ra tes fo r th e p er i o d, un les s ex c hange rat es f luct uat e sign ifican t ly du ring t hat period, in which case the exch ang e rat e s at t he d at e of t rans ac ti o ns a r e u sed. Exchange diff erenc es arisin g, if any, are t aken t o the t ransl at ion reser ve. 3 2 . S H A R E B A S E D PAY M E N T S 3 2 . 1 . C H A R G E I N T H E P E R I O D The Gro up r eco rded a char ge w ith i n o th e r o p er a t ing expenses for share based payment s of $55,000 (2014: $149,000). The Co mpa ny re c o rd ed a char ge o f $11, 000 (2014: $55,000) and rec orded an in crease in it s invest men ts in subsidiar y und e rt a ki n gs o f $ 44,0 00 (2014: $94, 000) . 3 2 . 2 . E Q U I T Y – S E T T L E D S H A R E O P T I O N P L A N The Gro up, throug h t he Com pany, h as tw o u nap p roved share op tion sc hemes whic h were est ablished t o provide equity incent iv e s to th e Dir ecto rs of, emp lo y ees o f and consult ants to t he Group. The schemes ’ rules provide t hat the Board shall dete rmi ne t he e xe rcise pr ice for ea ch gr a nt w h i c h s hall be at least t he averag e mid-market closin g price for t he three days imme di at ely pri or to t he gra nt o f the o p ti o ns. T h e m i nimum vesting period is g enerally one year. I f opt ion s remain un exerc ised afte r a pe ri o d o f 4 o r 5 yea rs f ro m th e d a te of gr ant, or vesting, the opt ion s exp ire. Op tions are for feit ed if t he emp loyee leaves the Group be fo re t he opt io ns ves t. 68 The fo llo win g ta bl e pro vid es a r ec o nc i li a t i o n o f sh are options ou tstan ding during t he period: AT 1 JUN E G RANTED I N THE YEAR L A PSED I N THE YEAR AT 31 MAY EX ERC ISABLE AT YEAR END WEIGHTED AVERAGE EXERCISE PRICE 2015 OPTIONS NUMBER WEIGHTED AVERAGE EXERCISE PRICE 2014 OPTIONS NUMBER 42,249,998 4.6P 44,750,000 – (5,750,000) 36,499,998 27,500,004 – 3.0P 3.4 P 3.3P 2,500,000 (5,000,002) 42,249,998 2 7,750,00 2 3.7P 1.5P 5.5P 4.6P 3.0P The fa ir va lue of th e opt io ns g ra nt ed d u r i ng th e y ear ended 31 M ay 2014 was det ermined usin g t he Blac k-S choles option pric in g mo de l usi ng t he f ollow ing a ssu m p ti o ns: – S h are pri ce a t t he d at e o f gr a nt w a s th e a verage mid-market closing price for the t hree days immediat el y p rior to g ra nt, be in g 1. 47p. – T h e ri sk f re e r at e r ang ed fro m 0. 53% t o 1. 87% bas ed on t he gilt yield over t he expect ed life of the options at the date o f g rant. – T h e a nnual d ivid en d y ield wa s ex p ec t ed t o be nil based on t he Board ’s immediat e in tention to reinvest operat in g c as h fl o ws. – T h e annua l vola tility r ang ed fro m 60% to 89% and was derived from t he hist oric daily share prices of the Compa ny over pe ri o ds m at ch ing t he expect ed life o f t h e o pti ons at the date of gran t. – T h e o pti ons w ere gra nt ed o n 15 Ma y 2014 and vest at 20% per annum from the date of gran t. The options can be e xerc i se d wi th in a five y ear pe riod f r o m th e d ate t hey vest. – T h e opt ions ha ve a f ai r va lue r an gi ng betw een 0.4p and 1.0p with the tot al fair value of options grant ed du rin g the ye ar ende d 31 Ma y 201 4 calculated at $30,000. On 12 Ja nua r y 2010, o pt io ns ove r 50, 000, 000 o rdinar y s hares with an exercise price of 5.5p were issued to Ely P lace Nomi n ee s Li mit e d (‘ E PN ’ ) t o be held o n tr us t to be i ssued at the discretion of the Board as incen tives t o D irect ors, emp loyees or c ons ul tant s (t he ‘ I nce nt i ve Opt i o ns ’ ) . B e t we en Januar y 2010 and 15 May 2014, 14,999,999 Incentive Option s wer e allo c at ed. On 1 5 Ma y 2 014 a nd in li g h t o f th e sh a r e price at that date, t he D irectors conclu ded that these Incentive Option s woul d no t pro vi d e a n a ppro pri at e m e ch a ni sm f o r i ncent ivising Direct ors, employees and consult ant s. As su ch, and with the agree m ent of EPN, EPN wa ived t he i r r i g h ts to th e I ncent ive Options, w hich were cancelled and replaced by 35,000,001 n ew incent iv e opti ons gra nt ed a t t he p r e vai l i ng p r i c e on 15 May 2014 (rou nded up t o the nearest half penny) of 1.5p, other wis e to be h el d o n th e s am e t erm s as t h e I nce nti ve O p ti ons. 3 2 . 3 . S H A R E O P T I O N S At 31 M ay 2 015 , t he f ollow ing opt i o ns o ve r o r d i na r y shares of 0.1p each have been g rant ed and remain unexercis ed: DATE OF GRANT TOTAL OPTIONS EXERCISABLE OPTIONS EXERCISE PRICE EXERCISE PERIOD 13 J ULY 2011 5,000,000 5,000,000 1 DEC EMBER 2011 10,000,000 10,000,000 29 J ULY 2012 29 J ULY 2012 01 MAY 2013 01 MAY 2013 15 MAY 2014 7,499,999 3,000,002 7,499,999 7,000,002 2,000,000 2,000,000 2,000,000 2,500,000 - 3.0P 2.0P 3.5P 5.5P 2.8P 5.5P 13 JULY 2012 TO 13 JULY 2017 1 DECEMBER 2011 TO 1 DECEMBER 2016 29 JULY 2013 TO 29 JULY 2023 29 JULY 2013 TO 11 JANUARY 2020 01 MAY 2014 TO 30 APRIL 2019 01 MAY 2014 TO 11 JANUARY 2020 500,000 1.47P 15 MAY 2015 TO 15 MAY 2024 36,499,998 27,500,004 3 2 . 4 . W A R R A N T S Sub se qu ent to th e per iod end a nd a s m o r e f ull y d es cribed in note 35. 2, the Company and Group i ssued 22,500,000 new war ra nt s to subs c ri be f or o rd ina r y sh a r es i n t h e C o mpany at 0.65p per new ordinar y share. 69 F I N A N C I A L S T A T E M E N T S N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) 3 3 . R E L AT E D PA R T Y D I S C L O S U R E S PH Ed mo nds an d A S Gr oves, d irec t o r s o f th e C o m p any, are also direct ors of Sable M ining Africa Limited (‘ Sable’), L iberian Coco a Co rpo ra tio n (‘ LC C ’) a nd A f r i c a n Ma na ge m ent Ser vices Limited (‘A MS ’). In addition and during t he period, A S Groves is, o r wa s, a Di re c t or o f Afr ican Po ta sh L i m i te d ( ‘A f r i can Potash’), Atlas Development and Support Ser vices Limit ed (‘A DS ’), E ast Afric a Pac kagi ng Lim it ed (‘ EA PC ’) a nd A f r i c a n Pr op erty Corporation (‘APC ’) . The Company and Group have t rans ac ted with thes e c ompani es d urin g th e y ear. Rela t ed p ar t y tr a nsactions are entered in to on an arm’s length basis. No provisions have been made i n re s pect of a m ounts o we d by o r to r elated parties. During th e ye ar A MS p rovid ed ac co u nt i ng, t r e a su r y and admi nistrat ive ser vices to the Grou p for a management fee of $38 8, 00 0 (20 1 4: $ 587,000) . T he G r o up a l so i nc ur r ed cert ain expendit ures on behalf of AM S, which was refunded in full during the ye ar. As at 3 1 M ay 2015 th e Gr o u p a nd C o m p any was owed $107,000 (2014: owed $33,000 by A MS). At 31 M ay 2 015 th e Gr oup a nd C o m p a ny w a s du e $89,000 from LCC (2014: $89,000). During th e ye ar t he Gro up an d Co m p a n y a nd S a ble incurred certain expenses on each other ’s behal f, which was refun ded in full dur ing the ye ar. At 31 Ma y 2015, th e am o u nt d ue to Sable was $nil (2014: $nil ). During th e yea r t h e Gr oup a nd Co m p a ny i nc ur r e d c ertain expenses on behalf of African Potash, which was refunded in ful l duri ng t he yea r. At 31 May 20 15, t h e a m o unt d u e to African Potash was $nil (2014: $nil). During th e yea r th e Gr oup a nd C o m p a ny ad va nc ed $nil (2014: $500,000) to A rdan Risk and Su pport Ser vices Limited (‘Ard an’ ), a co mpa ny co nt r olled by MN Pel h am. During th e y ear t he Gr oup a nd Com p a ny i nve sted $nil (2014: $285,000) in t he purchase of ordinar y shares of AD S. During the ye ar th e Gro up a nd Co m p a ny i nc u r r ed certain expenses on behalf of, or advanced loan funding t o, EAPC. At 31 May 2 015 , the am ount due fro m EA PC w a s $151, 000 (2014: $nil). During the ye ar th e Gr oup a nd Com p a ny i nc u r r ed certain expens es on behal f of, or advanced loan funding to, A PC. At 31 May 2 015 , the am ount due fro m A PC w as $3, 000 ( 2014: $nil). The re m une ra ti on o f t he Dir ecto rs, wh o a r e t he key management personnel of the Group, i s set ou t i n note 11. 70 3 4 . O P E R AT I N G L E A S E S At 31 M ay the Gro up h a d co mmitm en ts f o r f ut ur e m inimum l eas e p ayment s un der non-c anc ellabl e operat ing leases for lan d and b u il di ngs, wh ich fa ll d ue a s f o llo w s: WITH IN ONE YEAR IN TH E SEC OND TO FIFTH YEARS INCLUSIVE OPE RATI NG LEA SE RENTALS RECOGNISED A S AN EXPENSE IN THE CONSOLIDATED INCOME S TATE MENT WERE A S FOLLOWS: L A ND AN D BUILD INGS 2015 US$000 2014 US$000 138 95 233 79 - 79 20 9 125 3 5 . E V E N T S S U B S E Q U E N T T O T H E B A L A N C E S H E E T D AT E 3 5 . 1 . P R O V I S I O N O F N E W L E N D I N G F A C I L I T I E S T O T H E B E E F D I V I S I O N On 24 J un e 2 015 , t he Gr oup agr eed new le nd i ng f acil ities t otalling 105,000,000 Met ical ($2,845,000 at t he 31 May 2015 exch ang e rat e) to f in ance it s Beef d i vi si o n i n M o zambiqu e. The f acilit ies comprise 75,000,000 Met ical of t erm loan s for the purchase o f cat t le, irr iga t io n eq ui p m e nt, b ut c h er y equip men t, refrig erated vehic les and g eneral c apit al purposes, an d a 3 0 ,000 ,000 M et ical o ver dr af t. T h e te r m l o ans c an be drawn unt il 24 December 2015, carr y int erest at t he bank ’s p rime lendi n g rat e plus 0. 25% ( curre nt ly 13. 75%) , a nd h ave a five year term f rom draw down wi th a morat orium on capit al rep aymen ts of 15 mo nths. The ov er dr af t r enew s a nn ua lly a nd carries interest at t he bank ’s prime l en ding rate ( curren tly 13.50%) . The lendi n g fac il it ie s are secured a gai nst th e Gr o u p ’ s abattoi r in Chimoio an d all cat t le and meat invent ori es. 3 5 . 2 . A L L O C AT I O N O F W A R R A N T S On 1 J u ne 2 015 th e Gro up cr ea ted a w ar r a nt i nstrument (the ‘ Inst rument ’) to provide s uitable inc ent ives t o t he Group’s emp lo yee s, co nsul ta nt s a nd agen ts, an d i n p ar ti c ular those based, or t hos e spendin g considerable t ime, on s ite at the Gro up ’s o pe ra ti ons. Up to 100,000, 000 w ar r a nts ( the ‘ Warrants ’) t o su bsc ribe f or new Ordin ar y Shares in the C ompan y ( the ‘ Wa rrant S hare s ’) may be issue d pur s ua nt to th e I nstrument. The exercise p rice of each Warrant is 0.65p ( the share pric e of the C om pan y b e i ng appr ox im at ely 0. 6p w h en th e I ns trument was c reat ed) and the subscri pti on period durin g which time the Warran ts m ay be e xercised an d Wa r r a nt s S h a r es i ssu ed is t he 5-year period f rom 1 Jun e 2016 t o 1 Ju ne 2021. S ubjec t to vari ou s ac c ele ratio n pr ovisions, a h o ld er o f Wa r r a nts is not enti tled t o sell more t han 100,000 Warrant S hares in any day nor more th a n 1m Warran t Sha res ( in a gg r eg a te ) i n any c al endar month, wit hout board consen t. 22,500,000 Warrant s have been is sue d su bse que nt t o t he peri od end to e mp lo y ees. 3 5 . 3 . C O C O A T R A D I N G A G R E E M E N T On 1 2 N o ve mbe r 2015 t he Gro up, th r o ug h i ts S i erra Leone su bsidiar y c ompany, Trop ical Farms Limited (‘ Tropical Farms ’) , entere d int o a trading agr eement w i th a lea d i ng g lobal company focused on n at ural, org anic and s pecialt y foods. Und er th e t e rm s o f the t ra di ng a gre em ent, Tr o p i c a l Farms will use its organ ic cert ific at ion and buyin g net works t o sourc e and supp ly u p t o 5 0 0 Mt of Sier ra Leonea n c o co a bea ns to the Of ft aker during t he 2015/2016 buying season; the O fftaker will prov id e Tropi ca l Farm s wit h pre -f ina nci ng f o r t h e p u rchase of bean s. The trad ing agre e ment will levera ge Tr o p i c a l Fa r ms ’ ext ensive in frast ruc ture in Sierra Leone, inc luding a st at e-of-the-art war eh o u se i n Ke nema. In ad d it i on to Tr o p i c a l Far m s s ourc ing and sup plying cocoa, t he Of ft aker has exp ressed its interest in addi ti o nal produc e a nd bo th pa r ti es h a ve c o m m i t ted to explore opportu nit ies for org anic coffee and ot her org anic food crops. 71 F I N A N C I A L S T A T E M E N T S C O M P A N Y S T A T E M E N T O F F I N A N C I A L P O S I T I O N A S A T 3 1 M A Y 2 0 1 5 N ON-CU RRENT A SSETS PRO PER TY, PLANT AND EQU IPMEN T IN VE STMENTS I N SUBSIDIARIES IN TERESTS I N A SSOCIATES IN VE STMENTS I N QUOTED COMPANIES C U R RE NT A SSE TS TRADE AND OTHER RECEIVABLES CA SH AN D CA SH EQUIVALENTS TOTAL A SSETS C U R RE NT LIABILITIES T RAD E AND OTHER PAYABLES N ET CUR R ENT A SSETS N ET A SSE TS S HAR E CAPITAL S HAR E PREMIUM S HAR ES TO BE I SSUED S HAR E BA SED PAY MENT RESERVE T RAN SL ATI ON R ESERVE AC CUMULATED LOSSES TOTAL EQUITY NOTE 2015 US$000 2014 US$000 38 39 21 22 40 41 30 31.1 31.2 – 1 21,714 47,591 – 376 22,090 495 6,027 6,522 – 1,225 48,817 166 5,747 5,913 28,612 54,730 785 785 5,737 27,827 1,960 1,040 1,040 4,873 53,690 1,960 148,622 148,622 – 1,914 2,621 2,940 1,859 2,621 (127, 290) (10 4,312) 27,827 53,690 The f ina nc ial st a tem ent s of A gr ite r r a L i m i t ed we r e approved and aut horised for issue by t he Board of Directors on 19 N o ve mbe r 20 15. Signed o n be h al f o f t h e B o a r d of Direct ors by: P H E DMONDS Chai rma n 19 N o ve mbe r 20 15 72 C O M P A N Y S T A T E M E N T O F C H A N G E S I N E Q U I T Y F O R T H E Y E A R E N D E D 3 1 M A Y 2 0 1 5 SHARE CAPITAL US$000 SHARE PREMIUM US$000 SHARES TO BE ISSUED US$000 NOTE SHARE BASED PAYMENT RESERVE US$000 TRANSLATION RESERVE US$000 ACCUMULATED LOSSES US$000 TOTAL EQUITY US$000 BAL AN CE AT 1 J UNE 2013 1,960 148,622 2,940 1,710 2,621 (101,599) 56,254 LOSS A ND TOTAL COMPREHENSIVE IN COME FOR THE YEAR S HAR E–B A SED PAYMENTS 32 – – – – – – BAL AN CE AT 3 1 MAY 2014 1,960 148,622 2,940 LOSS A ND TOTAL COMPREHENSIVE INCOME FOR THE YEAR S HAR E–B A SED PAYMENTS RE LEA SED TO PROFIT AND LOSS 32 12.2 – – – – – – – – (2,940) – 149 1,859 – 55 – – – (2,713) (2,713) – 149 2,621 (104,312) 53,690 – – – (22,978) (22,978) – – 55 (2,940) BAL AN CE AT 3 1 MAY 2015 1,960 148,622 – 1,914 2,621 (127,290) 27,827 F I N A N C I A L S T A T E M E N T S 73 C O M P A N Y C A S H F L O W S T A T E M E N T F O R T H E Y E A R E N D E D 3 1 M A Y 2 0 1 5 C A S H F LOWS FR OM OPERATING ACTIVITIES LOSS B EFORE TAX FROM CONTINU ING OPERATIONS AD JUSTMENTS FOR: D EPR ECIATION PR OFI T ON DI SPOSAL OF PROPERTY, PLANT AND EQUIPMENT SH ARE BA SED PAYMENT EXPENSE I MPAI RMEN T OF LOANS TO SU BSIDIARY UNDERTAKINGS F ORE IGN EXC HANGE LOSS F IN ANC E COSTS I NVE STMEN T R EVENUES D EC REA SE/(I NC REA SE) IN FAIR VALUE OF QUOTED INVEST MENT S O PE RAT ING CA S H FLOWS BEFORE MOVEMENTS IN WORKING C APITAL ( INC REA SE)/D ECR EA SE IN TRADE AND OTHER RECEIVABL ES D E CR EA SE IN TR ADE AND OTHER PAYABLES N ET CA SH USE D IN OPERATING ACTIVITIES BY CONTINU ING O PERATIONS F INAN CE C OSTS IN TEREST R ECEIV ED NOTE 2015 US$000 2014 US$000 38 32 39 14 (25,777) (1,336) 1 – 11 – (8) 55 23,680 1,038 177 – (1,100) 849 (2,159) (330) (255) (2,744) – 14 37 12 (1,186) (936) (2,324) 1,026 (252) (1,550) (12) 140 N ET CA SH USE D IN OPERATING ACTIVITIES BY CONTINUI NG OP ERATIONS (2,730) (1,422) N ET CA SH PROV IDED BY/(USED IN) OPERATING AC TI VITIES B Y D ISCONTINU ED O PE RAT IONS N ET CA SH PROV IDED BY/(USED IN) OPERATING AC TI VITIES C A S H F LOWS FR OM INVESTING A CTIVITIES PRO CE EDS FROM D ISPOSAL OF PROPERTY, PLANT AND EQUIPME NT PURC HA SE OF I NVESTMENTS IN QUOTED COMPANIES LOA NS TO SUBSIDIARY UNDERTAKINGS N ET CA SH USE D IN INVESTING ACTIVITIES BY CONTI NUING OPE RATIONS N ET CA SH FR OM INVESTING ACTIVITIES IN DISCONTINUE D OP ERATIONS 22 39 N ET CA SH USE D IN INVESTING ACTIVITIES C A S H F LOW F ROM FINANCING A CTIVITIES RE PAYMENT OF BORROWINGS N ET CA SH OUTF LOW FROM FINANCING ACTIVITIES FRO M C ONTINU ING OPERATIONS N ET INCR EA SE /(DECREA SE) IN CA SH AND CA SH EQU IVALE NTS EF FEC T OF EXC HA NGE RATES ON CA SH AND CA SH EQUIVAL ENT S CA SH AN D CA SH EQUIVALENTS AT BEGINNING OF PERIOD C A S H A ND CA SH EQUIVALENTS AT END OF PERIOD 5,740 3,010 – – (2,569) (2,569) – (378) (1,800) 42 (285) (8,449) (8,692) – (2,569) (8,692) – – 441 (161) 5,747 6,027 (1,500) (1,500) (11,992) (31) 17,770 5,747 74 N O T E S T O T H E C O M P A N Y F I N A N C I A L S T A T E M E N T S 3 6 . C O M PA N Y A C C O U N T I N G P O L I C I E S The fi nanci al stat e ment s ha ve been p r e p a r e d i n a c cordance with I FR S as adop ted by t he E U. The fin anc i al st ate m en ts h a ve been p r ep a r ed o n the historical cost basis except for t he measurement of c ertain fin anc ial instrume nt s, a nd sh ar e ba sed pa y m e nts. Th e p r i nci p al ac count ing policies adop ted are t he same as those set ou t in n ote 3 to t he c ons ol id ate d f in an cia l st at em ent s, o th e r th a n as noted below. 3 6 . 1 . I N V E S T M E N T S I N S U B S I D I A R Y U N D E R TA K I N G S Investments are reco rd ed at cost, le ss p r o vi si o n f o r impairment. The Comp any in cludes wit hin t he carr yin g value of investmen ts in su b si di ar y underta kin gs th e f a ir va lue o f t h e co nsiderat ion paid for the subsidiar y. Addit ion al i nvestment in t he subsidiar y und e rt a ki n gs, i n th e for m o f capita l s ubs cr i p ti o ns, capital c ontribut ions or share based payment obligat ions assumed on beha lf o f t he s ubs idia r y i s ad d ed to t h e c o st o f th e i nvest ment in the period in which it arises. 3 7 . R E S U LT F O R T H E Y E A R As pe rmi tt ed by Gue rnsey la w, t he C o m p a ny h a s e lected not to p resen t it s own in come s tat emen t. The Comp any reported a los s fo r the ye ar o f $22 ,978,000 ( 2014: l o ss o f $2, 713,000). 3 8 . P R O P E R T Y , P L A N T A N D E Q U I P M E N T C OST AT 1 J UNE 2013 D ISPOSALS AT 31 MAY 2014 D ISPOSALS AT 3 1 MAY 2 015 AC CU MU LATE D DEPR ECIATION AT 1 J UNE 2013 EL IMIN ATED ON DISPOSALS AT 31 MAY 2014 CHAR GE FOR TH E Y EAR EL IMIN ATED ON DISPOSALS AT 3 1 MAY 2 015 N ET BOOK VALUE 31 MAY 2 015 31 MAY 2014 MOTOR VEHICLES US$000 OTHER ASSETS US$000 TOTAL US$000 42 (42) – – – 8 (8) – – – – – – 16 – 16 (16) – 15 – 15 1 (16) – – 1 58 (42) 16 (16) – 23 (8) 15 1 (16) – – 1 F I N A N C I A L S T A T E M E N T S 75 N O T E S T O T H E C O M P A N Y F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) 3 9 . I N V E S T M E N T I N S U B S I D I A R I E S C OST AT 1 J UNE 2013 LOA NS AD VANC ED IN THE YEAR IN TEREST AC C RUED CAPITAL CONTRI BU TION F OR EIG N EXCH ANGE GAIN AT 31 MAY 2014 LOA NS AD VANC ED IN THE YEAR IN TEREST AC C RUED CAPITAL CONTRI BU TION F OR EIG N EXCH ANGE LOSS AT 3 1 MAY 2 015 P RO VI SION F OR IRRECOVERABLE AMOUNTS AT 1 J UNE 2013 CHAR GE FOR TH E Y EAR F OR EIG N EXCH ANGE LOSS AT 31 MAY 2014 CHAR GE FOR TH E Y EAR AT 3 1 MAY 2 015 N ET BOOK VALUE 31 MAY 2 015 31 MAY 2014 INVESTMENT US$000 LOANS US$000 TOTAL US$000 9,680 - - 94 - 9,774 - - 44 - 58,161 8,449 1,046 - 1,312 68,968 2,569 1,086 - (16) 67,841 8,449 1,046 94 1,312 78,742 2,569 1,086 44 (16) 9,818 72,607 82,425 3,801 - - 3,801 5,880 9,681 137 5,973 25,000 1,038 1,312 27,350 23,680 51,030 28,801 1,038 1,312 31,151 29,560 60,711 21,577 41,618 21,714 47,591 Capital contributio ns repr esent i nc r ea ses o r de cr eas es in i nves tment arising from the grant, lapse or t ermination of share op ti o ns or Ordi n ar y S har es t o em pl o ye es o f s ubs i d i ar y undertakings. Loan s to subs id ia ries fa ll d ue a fter m o r e t h a n o ne year. The provision against loans to subsidiaries in the year reflects the impa irme nt of th e Gro up’s coco a p la nta t i o n o p er ati ons du ring the period and reduct ions in the valu e of t he underlying bus ine s s es as a re sult of m ovem ent s i n ex c h ang es rates (2014: ces sation of t he Group’s cocoa trading activi ties and red uct i ons in t he va lue o f the unde r ly i ng b usi ness es as a resul t of movements in exchanges rates). As s e t o ut i n not e 17. 1, t he Co mp any and G r o up have suspended further expendit ure on all oil and gas exploration an d ev al uat i on pro j ec t s. Accor dingly t h e C o m p a ny ’ s i nvestment and loans provi ded t o subsidiar y u ndertak ings conducting suc h op era ti o ns we re f ul ly pr ovided a ga i nst i n p r i o r p er i ods. As a t 31 May 20 1 5, t he Com pan y h eld eq ui ty i nte r ests in the fol lowing principal undertakings: 76 D I R E C T I N V E S T M E N T S SUBSIDIARY UNDERTAKINGS PROPORTION HELD COUNTRY OF INCORPORATION NATURE OF BUSINESS AG RIT ERRA ( MOZAMBIQUE) LIMITED P A ENER GY AFRI CA LIMITED AG RIT ERRA AVI ATIO N (PTY) LIMITED AG RIT ERRA EA ST AF RICA LIMITED AG RIT ERRA GUIN EA SA WEST AFR ICA C OCOA SERVICES LIMITED S HAWFO RD I NVESTMENTS INC B R ANC A TI DE LIMITED 100% 100% 100% 100% 100% 100% 100% 100% GUERNSEY HOLDING COMPANY BRITISH VIRGIN ISLANDS INACTIVE SOUTH AFRICA MAURITIUS GUINEA BRITISH VIRGIN ISLANDS BRITISH VIRGIN ISLANDS BRITISH VIRGIN ISLANDS AVIATION SERVICES TRADING INFRASTRUCTURE HOLDING COMPANY HOLDING COMPANY HOLDING COMPANY I N D I R E C T I N V E S T M E N T S O F A G R I T E R R A M O Z A M B I Q U E L I M I T E D SUBSIDIARY UNDERTAKINGS PROPORTION HELD COUNTRY OF INCORPORATION NATURE OF BUSINESS D E SEN VOLV IMENTO E COMERCIALIZAÇÃO AG RIC OL A LIMI TADA CO MPAG RI LIMI TA DA M OZB IFE LI MITADA CARNE S D E MANICA LIMITADA AVIA ÇÃO AGRITERRA LIMITADA 100% 100% 100% 100% 100% MOZAMBIQUE MOZAMBIQUE MOZAMBIQUE MOZAMBIQUE MOZAMBIQUE GRAIN GRAIN BEEF BEEF AVIATION SERVICES I N D I R E C T I N V E S T M E N T S O F W E S T A F R I C A C O C O A S E R V I C E S L I M I T E D SUBSIDIARY UNDERTAKINGS PROPORTION HELD COUNTRY OF INCORPORATION NATURE OF BUSINESS T ROP IC AL FAR MS (SL) LIMITED 100% SIERRA LEONE COCOA & COFFEE I N D I R E C T I N V E S T M E N T S O F B R A N C A T I D E L I M I T E D SUBSIDIARY UNDERTAKINGS PROPORTION HELD COUNTRY OF INCORPORATION NATURE OF BUSINESS T ROP IC AL FARMS PLANTATION (SL) LIMITED 100% SIERRA LEONE COCOA PLANTATION I N D I R E C T I N V E S T M E N T S O F S H A W F O R D I N V E S T M E N T S I N C . SUBSIDIARY UNDERTAKINGS PROPORTION HELD COUNTRY OF INCORPORATION NATURE OF BUSINESS RE D BUN CH VENTURES (SL) LIMITED 100% SIERRA LEONE PALM OIL 4 0 . T R A D E A N D O T H E R R E C E I VA B L E S OTHE R REC EI VABLES PRE PAY MENTS 2015 US$000 475 20 495 2014 US$000 134 32 166 ‘Oth e r re c ei vable s ’ disclo sed abo ve ar e c la ssi f i e d as loans and receivables and measu red at amort ised cost. The Direc tors con si de r t hat t he ca rr ying a m ount o f th e se f i nanc i al assets app roximat es t hei r f air value. There are n o sign ific ant amounts pas t d ue whi ch ha v e n ot been p ro vi d e d ag ai nst ( 2014: $nil). Further det ails on t he Company ’s fin anc ial assets are provided in no t e 29 . Oth er rec e iv a ble s includ e $35 0,000 ( 2014: $122, 000) du e from relat ed part ies (see n ot e 33) . 77 F I N A N C I A L S T A T E M E N T S N O T E S T O T H E C O M P A N Y F I N A N C I A L S T A T E M E N T S ( C O N T I N U E D ) 4 1 . T R A D E A N D O T H E R PAYA B L E S Tra de p ayab le s Ot h er p aya ble s Acc ru ed l ia bi li ti es 2015 US$000 101 527 157 785 2014 US$000 78 573 389 1,040 The Di re ctor s c ons ider t ha t the ca r r yi ng a m o u nt o f financial liabil ities approximates their fair valu e. Furt her details on the Com pa ny ’s fi nan c ial liabilit ies a re p r o vi d ed i n no te 29. 4 2 . R E L AT E D PA R T I E S Tran sac t ions a nd balan ces d ue a t t h e p er i o d end with related parties, other than wi th su bsidiar y undertakings, are disclosed in n o te 3 3 . Relat ed pa rt y tr a nsa ctio ns a re ente r ed i nto o n a n arm’s length basis. No provisions have been made in respect of amou nts owed b y or to re la t ed par ties ex ce p t w h er e d i sc lo s ed. Subs i di ar y co mpa nies a re f ina nced b y m ea ns o f p arent company loans which bare market rat es of interest. D et ails on the Com pa ny ’s re c ei v ables fr om subsid i a r y und er tak i ng s, incl uding advances in t he period, interest receivabl e and provisions for irrec ov e ra ble amount s ar e pr ovid ed i n no te 39. 4 3 . U LT I M AT E C O N T R O L L I N G PA R T Y The Di rec t or s a re o f th e o pinio n th at th e r e i s no c o ntrol ling party of the Company. 4 4 . E V E N T S S U B S E Q U E N T T O T H E B A L A N C E S H E E T D AT E Det ai ls of e vent s s ubsequent t o the ba la nc e sh ee t date which relate t o the Company, are included in note 35. 2 . 78 C O M P A N Y I N F O R M A T I O N A N D A D V I S E R S C O U N T R Y O F I N C O R P O R AT I O N Gu ernsey, Channel Islands R E G I S T E R E D A D D R E S S D I R E C T O R S Richmond House St Julians Avenue St Peter Port Gu ernsey GY1 1GZ Mr Philippe Edmonds MA (Cantab) (Chairman) Mr Andrew Groves (Chief Executive) Mr Daniel Cassiano-Silva (Finance D irec tor) C O M PA N Y S E C R E TA R Y Mr Philip Enoch MA (Oxon) A U D I T O R RSM UK Audit LLP (formerly Baker Til ly UK Audit LLP) S O L I C I T O R S N O M I N AT E D A D V I S E R A N D J O I N T B R O K E R J O I N T B R O K E R Chartered Accountants 25 Farringdon Street London EC4A 4AB Carey Olsen 8-10 Throgmorton Avenue London, EC2N 2DL Cantor Fitzgerald Europe One Churchill Place London, E14 5RB M C Peat & Co 11-12 St. James ’s Square London, SW1Y 4LB R E G I S T R A R S Capita Registrars (Guernsey) Limited Longue House Longue House Lane St Sampsons Gu ernsey, GY2 4JN 79 C O M P A N Y I N F O R M A T I O N 80 d e s i g n e d b y s t b r i d e s p a r t n e r s A G R I T E R R A A N N U A L R E P O R T 2 0 1 5 A G - R L I T T D E . R C R O A M
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