DEKEL AGRI-VISION PLC
(Formerly Dekeloil Public Ltd)
CONSOLIDATED FINANCIAL STATEMENTS
AS OF 31 DECEMBER 2019
EUROS IN THOUSANDS
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INDEX
Chairman's Statement
Company Information
Information on the Board of Directors
Professional Advisers
Directors’ Report
Chairman’s Statement on Corporate Governance
Statement of Directors’ Responsibilities
Independent Auditors' Report
Consolidated Statements of Financial Position
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
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Page
3-8
9
10
11
12-15
16-22
23
24-25
26-28
29
30
31-32
33-69
CHAIRMAN’S STATEMENT
The list of highlights to open this year’s Chairman’s Statement was as long as we had hoped it would be at
the start of 2019.
• The corporate name change to Dekel Agri-Vision (“Dekel”), an identity that better reflects our
objective to build a West African focused multi-commodity, multi-project agriculture company that
places local smallholders and communities at the centre of operations;
• a 14% increase in annual crude palm oil (“CPO”) production to 37,649 tonnes at our 100% owned
project at Ayenouan in Côte d’Ivoire;
• an over 50% increase in global CPO prices to over US$850 per tonne in the last 8 weeks of 2019;
•
the refinancing of long-term debt on improved terms with AgDevCo, a UK government-backed social
impact investor in the African agriculture sector;
the roll-out of various ESG initiatives;
the commencement of the development of our cashew processing project at Tiebissou, Côte d’Ivoire.
•
•
In the event, none of the above secured top billing. Instead, this year’s Chairman Statement opens with a
post period event that is still ongoing, the coronavirus pandemic. The all-encompassing nature of COVID-19
and the measures being taken by governments across the world to suppress it, have disrupted societies,
sectors and businesses all over the world in a way that has not been experienced for generations. The global
palm oil industry has been no exception.
With countries in lockdown, global demand for palm oil and more specifically the everyday food and personal
care products that palm oil is used in has contracted sharply, resulting in CPO prices falling. Rather than
heralding a return to historic averages, the US$850 plus CPO prices have proved to be temporary with global
benchmarks retrenching to the US$500 level they traded at for most of 2018 and 2019. As recently as
January, we were expecting Ayenouan’s 2020 EBITDA and profits after tax to at least challenge 2017’s record
of €4.5m and €1.6m respectively. With prices threatening to retest last year’s cyclical lows on the back of
lower global demand for CPO, 2017’s record profits will remain intact for another year. At the time of
preparing this report we have seen international prices rebound to around US$600 and there are reasons to
be optimistic that prices may improve further as key buying countries, most notably India and China, begin
to restock CPO supplies over the next 6-12 months.
Our priority during the period ahead remains to continue operating our CPO production mill at Ayenouan as
efficiently as possible, while at all times ensuring the safety and wellbeing of our staff on the ground and the
communities in which we operate. With this in mind, we take great pride in Dekel being one of the few
businesses not to have reduced local staffing levels during the crisis. Employing over 300 staff and working
closely with thousands of smallholders, we take our responsibility to our local communities seriously and in
line with this we adhere to the latest COVID-19 guidelines and advice of the government of Côte d’Ivoire.
At the time of writing, Côte d’Ivoire has escaped the worst of the pandemic in terms of lock down impacts
and as a result, operations at both Ayenouan and at Tiebissou where we are constructing a large-scale cashew
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processing project, have been able to continue with minimal disruption with the objective of being
operational Q2 2021. So too has the desktop work we have carried out to evaluate the feasibility of potential
new projects.
Ayenouan Palm Oil Project
At the beginning of the year under review, management was hopeful that fruit yields and global CPO prices
would bounce back strongly from 2018’s lows. Forecasts that the poor peak harvest season in 2018 would
revert to an improved 2019 proved correct with fresh fruit bunches delivered to the mill for processing during
2019 up 21% to 176,019 tonnes, which in turn fed through to a 14% year on year increase in CPO production
to 37,649 tonnes and a 15% increase in CPO sales to 37,713 tonnes.
Global CPO prices took longer to recover and spent much of the year trading at around €500 per tonne,
briefly dipping below this level in the summer months. In the second half, it became clear that concerns over
a supply glut that had weighed heavily on prices were overdone as international stock levels of CPO
decreased. Together with new initiatives in south east Asia to increase biodiesel production, of which CPO
is a key feed stock, prices rose strongly during the latter months, so much so that they finished the year
around the €800 per tonne level. Due to the five weeks it takes for local pricing to reflect moves in global
benchmarks, the strong bounce in prices was too late to have a positive impact on the average CPO price for
the year, which came in at €491 per tonne, a 9% reduction on 2018’s average of €542 per tonne. As a mark
of how challenging trading conditions have been, the average CPO prices for 2018 and 2019 rank as among
the worst in the last 15 years.
Faced with such a challenging pricing environment, our focus at Ayenouan has been on costs and efficiency.
Importantly, this has not come at the expense of Dekel’s ESG credentials. ESG has always been front and
centre of Dekel’s activities. Our collaborative business model is one that is centred on working closely with
local smallholders and communities who grow and deliver fruit to our mill for processing. Our ESG initiatives
do not begin and end with our business model. In terms of the environment, we have been working hard to
secure RSPO (Roundtable for Sustainable Palm Oil) certification for Ayenouan. This process is continuing to
advance. An audit and final confirmation of our operations had been due to take place this year but we
expect some form of delay due to the pandemic. We are confident that once the virus subsides, the well-
advanced certification process can be taken through the final phases of audit resulting in its completion as
soon as possible. RSPO is recognised globally as a certification standard for sustainable palm oil and
becoming a certified producer would therefore be a major milestone for the Company which has been a
RSPO member since 2008.
In terms of social impact initiatives at Ayenouan, the year under review saw Dekel trial with over 250 small
holders a sustainable financing solution focused on enabling farmers to acquire and apply fertiliser during
periods of low as well as high fresh fruit bunch (“FFB”) prices. With the application of fertiliser and best
management practice, we estimate farmers can potentially double their yields. Our financing solution is not
based on grants or long-term loans. Rather, a gradual increase in the fertilisation programme is recovered
on a monthly basis from FFB delivered to the mill which helps to keep funds loaned to farmers to a
manageable level. It also encourages farmers to deliver FFB to our mill to continue to gain access to the
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fertiliser programme. By strengthening our relations with the farmers and gradually increasing yields in our
region, we believe the programme demonstrates that social impact initiatives and commercial activities can
go hand in hand. We are gradually increasing the programme in 2020 and are seeking to scale up even further
in the years to come.
Tiebissou Cashew Project
It has always been our intention to scale up and diversify our revenues by adding additional agriculture
projects to our portfolio. In line with this, 2019 saw work commence on the construction of an initial 10,000
tpa cashew processing project at Tiebissou in Côte d’Ivoire, which once operational will become Dekel’s
second producing asset. Currently, Dekel holds a 43.8% interest, together with an option to acquire an
additional 20% stake. See Note 5 for further details.
Tiebissou will adopt the same collaborative model as Ayenouan, whereby a state-of-the-art plant will be
constructed to process raw cashew nuts (“RCN”) grown by local smallholders and co-operatives. Côte
d’Ivoire is a leading cashew nut producer, but only processes 10-15% of RCNs grown in the country. Much of
the value associated with processing nuts is therefore not retained in the country. Tiebissou is a region
where we believe there is a significant shortfall in processing capacity and our project will help to fill this by
providing smallholders with an outlet for their produce.
Work at the site at Tiebissou has been able to continue with minimal disruption, though COVID-19 has pushed
back the date of the commissioning of the processing mill at Tiebissou by an estimated three months.
Originally targeted to commence in January 2021, first production is now expected in Q2 2021 after the
manufacturing of the milling equipment in Italy was suspended due to the severity of the outbreak in that
country. Post period end in May 2020, we were pleased to announce that manufacturing of the equipment
has resumed, and that infrastructure equipment is currently en route from China to Côte d’Ivoire.
Importantly, the delay in first production is not expected to prevent the project from capitalising on at least
some of the 2021 peak cashew season in Côte d’Ivoire which typically runs from February to May. Unlike
palm fruit which perishes within days, raw cashew nuts can be purchased and stored for months allowing
processing to take place throughout the year. We will therefore look to secure supplies during the 2021 peak
season for processing throughout the year. Benefiting from expected comparatively strong margins, we
anticipate processing cashews at Tiebissou has the potential to deliver higher EBITDA margins once the
operation moves into a position of steady state production which we hope will be achieved in a matter of a
few months post first production.
Other projects
With palm oil production at Ayenouan firmly established and cashew processing at Tiebissou due to
commence in Q2 2021, we have been working hard to put in place a pipeline of potential new projects that
match our investment and ESG criteria to grow the Company further. One such new venture is the
development of a 35-36MW hybrid power project ('HCTPP'), potentially in Ayenouan. In December 2019, we
signed a joint venture agreement with Green Enesys Holdings Ltd. (”GEH”), an established renewable energy
company which has developed over 490MW of solar PV projects all over the world. GEH is currently
undertaking a feasibility study on the construction of an initial HCTPP in Côte d'Ivoire comprising a 30MW
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solar PV plant and a 5-6MW biomass plant using feedstock from Dekel's Ayenouan project, specifically empty
fruit bunches from the mill. Concurrently, discussions with the government regarding the application and
permitting process have progressed well. Government direction has been to present a proposal supporting
an application for a permit initially focused on the 5-6MW biomass project. However, given the macro
uncertainty at present we are proceeding cautiously in order to preserve funding for our existing projects.
Internally, we have also been carrying out feasibility studies on a number of potential new ventures in Côte
d'Ivoire. Early indications are that at least one of these warrants further consideration. It is worth noting
that any new projects will be progressed slowly, particularly during the current global crisis, and that our full
focus remains on optimising the palm oil operations at Ayenouan and progressing the Tiebissou cashew
project to first production.
Financial
During the year under review, total revenues at Ayenouan were €21m (2018: €20.9m) which generated
EBITDA (excluding share based compensation) of €0.2m (2018: EBITDA loss of €0.1m) and a loss after tax of
€3.4m (2018: net loss after tax of €3.3m). The financial performance for the year was largely determined by
a sustained period of low CPO prices which, for the majority of the year, continued to trade at cyclical lows.
As described earlier, the average CPO price achieved during the year was €491 per tonne, a 9% reduction on
2018’s average of €542. 2019’s average has resulted in CPO prices trading well below historic levels of c.
€700 per tonne for the last two years. Such was the discount to historic average prices, that the low prices
more than offset the recovery seen in CPO volumes. During 2019, the mill at Ayenouan produced 37,649
tonnes of CPO, a 14% increase on 2018, while year on year sales increased 15% to 37,713 tonnes.
The low-cost nature of our operations at Ayenouan and the tight management of our cost base at the
corporate level where general administration expenses in 2019 were 2.2% lower than the previous year, have
proved to be essential in the challenging pricing environment which has affected all operators in the region.
In July 2019, we announced a refinancing of long-term debt on much improved terms via a €7.2million 10-
year senior secured loan facility with AgDevCo, a UK government-backed social impact investor in Africa's
agriculture sector. €6.2 million of the AgDevCo loan facility replaced an existing NSIA Bank loan while €1.0
million will support the Company’s ESG activities and general working capital purposes. The ESG activities
include an enhanced traceability programme and finalisation of the RSPO certification process that is
currently underway at the Company's palm oil operations at Ayenouan. Such are the benefits of the
refinancing that we estimate the four-year capital repayment holiday included in the AgDevCo loan will
generate €5.8 million cash savings, after taking into account the interest rate differential and transaction
fees. In addition to the loan facility, AgDevCo subscribed to €1.5 million of new ordinary shares in Dekel. The
Company raised a further £0.77 million (before expenses) via the placing of 25,788,194 new ordinary shares
in August 2019. A total of 69,723,361 new ordinary shares were issued via the AgDevCo equity investment
and placing.
Largely due the the AgDevCo refinancing and equity investment, net assets increased to €12.8m (2018:
€11.6m). Net current liabilities also decreased by €0.3m. To continue Dekel’s ongoing programme to
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strengthen its balance sheet during uncertain times and position the Company to execute on its growth plans,
it is the Board’s intention to refinance a large portion of the current and long term debt into a longer tenure
facility during the second half of 2020. The Company is progressing well with a long term debt provider and
we look forward to updating shareholders as appropriate, in due course.
Outlook
There has been much to cover in this latest Chairman’s Statement for 2019, however the advent of COVID-
19 at the beginning of the current year and the effects of ongoing efforts around the world to curb it have
not only necessitated comment in today’s report but threaten to frame the content of future statements.
We know the sharp reversal seen in CPO prices following the spread of COVID-19 will prevent our Ayenouan
palm oil operation achieving the levels of EBITDA we had expected at the start of the year, however, despite
the macro challenges, we currently remain on track to report a positive half year EBITDA for 2020. In addition,
the advancement of our cashew project and the fertiliser programme at Ayenouan remain intact and so will
provide us with the platform for growth we set out to put in place.
Our immediate focus will be of course to ensure the safety and wellbeing of all our staff and partners and to
continue to operate as efficiently and cost effectively as possible at Ayenouan. At the same time, we have a
defined and deliverable strategy with which to build a large-scale agriculture group with sustainable and
diversified revenue streams. I am confident the next 12 months will see further progress made towards
achieving our corporate objectives.
I would like to thank the Board, management, our employees and advisers for their support and hard work
over the course of the year and wish all those connected with the Company well during this challenging
period.
Andrew Tillery
Non-Executive Chairman
Date: 25 June 2020
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COMPANY INFORMATION
Directors
Andrew James Tillery, Non-Executive Chairman
Youval Rasin, Chief Executive Officer
Yehoshua Shai Kol, Chief Financial Officer
Lincoln John Moore, Executive Director
Aristide Achybrou, Non-Executive Director (appointed 16 March 2020)
Bernard Francois, Non-Executive Director (ceased 16 March 2020)
Secretary
Absolute Trust Nominees Ltd
Registered Office
38 Agias Fylaxeos, Nicolas Court
First Floor, Office 101
P.C. 3025
Company Registration
HE 210981
Country of Incorporation
Cyprus
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INFORMATION ON THE BOARD OF DIRECTORS
Andrew Tillery, Non-Executive Chairman
Mr Tillery is an experienced project manager and investment executive with over 25 years’ operational
management and private equity experience in Africa and other emerging markets. This includes eight years
(1996-2003) as a CEO in Côte d'Ivoire, West Africa where he had responsibility for managing a group of oil
palm operations and also founding a natural rubber business. Mr Tillery has an MA and MSc from Oxford
University, an MBA from the University of Chicago and worked with CDC Group Plc (the UK Government
development finance institution) from 1989 until 2004. Following this he spent several years in emerging
markets investment management, including four years as a Senior Investment Manager with Norfund, the
Norwegian Investment Fund for Developing Countries. He is currently on the board of three African
agribusiness and adviser to several agribusiness investment funds in sub-Saharan Africa.
Youval Rasin, Chief Executive Officer
Mr Rasin is the co-founder of Dekel and has held senior management positions in various companies within
the Rina Group, a family holding company with diverse interests including agriculture, mining and hotels in
Africa and Europe. By profession, Mr Rasin is a qualified lawyer and has been active in Côte d’Ivoire since
2002, with 10 years’ experience in agro-industrial projects including 13 years in the palm oil industry with
Dekel.
Yehoshua Shai Kol, Deputy CEO and Chief Financial Officer
Mr Kol is the co-founder of Dekel. By profession, Mr Kol is a Chartered Accountant, and has an MBA from Tel
Aviv University. Mr Kol worked for 13 years in finance, with significant business & international exposure. Mr
Kol is a former employee of KPMG Corporate Finance and Professional Practice. He was also the Financial
Director for Europe, Middle East and Africa for an international software company, Director of Finance and
Business Development for Yellow Pages Ltd in Israel, during which time he led fund raising and M&A.
Lincoln John Moore, Executive Director
For the past 12 years Mr Moore has been actively involved in establishing and developing oil palm projects
in Liberia, Sierra Leone and Côte d’Ivoire. Mr Moore was the former Chief Financial Officer of Sierra Leone
Agriculture Ltd until September 2011 and a co-founder and former director of Ragnar Capital Ltd. He has
played key roles in raising funding and developing early stage oil palm projects in West Africa. Mr Moore is a
Chartered Accountant and former senior manager in the restructuring division of Deloitte.
Aristide (“Aris”) C. Achy Brou, Non-Executive Director
Over the last 20 years Aristide has held senior positions in the commodity and derivative trading divisions
at Citadel, British Petroleum, JP Morgan and Goldman Sachs. A native of Côte d’Ivoire, Aristide and his
family have been involved in rubber plantations and processing operations in the country for over 40 years.
Aristide grew up in both France and Côte d’Ivoire and after graduating from the leading aerospace
engineering school in France, he moved to the US where he obtained a Master of Science at MIT and
received a PhD in Applied Statistics from Johns Hopkins University. Additionally, he holds an MBA from the
Wharton Business School, with a focus on Finance and Operational Management of Corporations.
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PROFESSIONAL ADVISERS
Nominated Adviser and Lead Broker
Joint Brokers
Auditor
Solicitors
Arden Partners plc
125 Old Broad Street
London
EC2N 1AR
Optiva Securities Limited
49 Berkeley Square, Mayfair
London W1J 5AZ
Kost Forer Gabbay & Kasierer
(a member of Ernst & Young Global)
3 Aminadav St.
Tel-Aviv 67067
Israel
Hill Dickinson LLP
The Broadgate Tower
20 Primrose Street
London EC2A 2EW
United Kingdom
Depositary
Computershare Investor Services PLC
Registrars
The Pavilions
Bridgewater Road
Bristol BS99 6ZZ
United Kingdom
Cymain Registrars Ltd
26 Vyronos Avenue
1096 Nicosia
Cyprus
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DIRECTORS REPORT
The Directors present their annual report and the audited Financial Statements for the year ended
31 December 2019.
Principal Activities
Dekel Public Ltd. is a Cyprus based holding company which owns 100% per cent. of and is the operator of
Dekel Cote d’Ivoire SA, an oil palm production company established in the Republic of Cote d’Ivoire.
Dekel Public Ltd. also holds a 43.8% interest in Pearlside Holdings Ltd who through its 100% owned subsidiary
Capro CI. is currently developing a cashew processing operation in the Republic of Cote d’Ivoire. See Note 5
for further details.
Group Results
The Group results are set out later in this report and are stated in thousands Euros. The Group made
operating net loss after tax of €3.4 million (2018 - €3.3 million). The Directors do not recommend the payment
of a dividend (2018 - nil).
Review of the Business
A review of the business for the year is set out in the Chairman’s Statement.
Key Performance Indicators
The Group implemented the following key performance indicators during 2019:
Key Performance Indicator
Budget
Actual
FFB Received
CPO Extraction Rate
CPO Produced
Future Developments
190,000 tn
176,019 tn
22.5%
42,750 tn
21.4%
37,649 tn
Future Developments are outlined in the Outlook section of the Chairman’s Statement.
Going Concern
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The Directors have prepared cash flow forecasts and budgets that show that, for a period of at least twelve
months from the date of signing these Financial Statements, the Group expects to have sufficient resources
to continue its business. Accordingly, the Directors believe that it is appropriate to prepare the Financial
Statements on a going concern basis. See Note 1 for further details.
Events After the Reporting Period
Events after the Reporting Period are outlined in Note 18 to the Financial Statements.
Directors Remuneration
Details of Directors’ Remuneration are set out in the table below:
Executive Directors
Youval Rasin
-2019
-2018
Shai Kol
-2019
-2018
Lincoln Moore
Salaries and Fees
€'000
Benefits Bonuses
€'000
€'000
Total
€'000
223
29
-
252
224
28
-
252
166
28
194
164
27
-
191
-2019
102
-
-
102
-2018
Non Executive Directors
Andrew Tillery
103
-
-
103
-2019
40
-
-
-2018
Bernard Francois
27
-
-
-
-2019
-2018
27
-
-
20
-
-
40
27
27
20
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Directors Shares and Options
Details of Directors are set out on page 10. Details of Directors’ interests as at 25 June 2020 in share options
and warrants are set out in the table below:
Director
Andrew Tillery
Youval Rasin
Yehoshua Shai Kol
Lincoln John Moore
Aristide Achy Brou*
Bernard Francois**
Number of
Ordinary
Shares
Number
of Vested
Options
Number
of
Unvested
Options
-
600,000 1,200,000
64,875,115 2,833,333 5,666,667
27,581,861 2,833,333 5,666,667
4,949,791 2,833,333 5,666,667
-
-
21,300,000
-
-
-
*Appointed on 16 March 2020
**Ceased on 16 March 2020
Substantial Shareholding
As at 25 June 2020, the Company had been notified of the following substantial shareholdings in the ordinary
share capital:
Directors
Youval Rasin
64,875,115
15.30%
Shai Kol
27,581,861
Aristide Achy Brou
21,300,000
6.51%
5.02%
Lincoln Moore
Over 3%
4,949,791
1.17%
Miton Group plc
50,147,629
11.83%
AgDevCo Ltd
41,188,990
Biopalm Energy Limited
35,455,111
Yossi Inbar
15,825,548
9.72%
8.36%
3.73%
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Corporate Governance
Audit and Remuneration Committees have been established and in each case comprise Andrew Tillery,
Aristide Achybrou and Lincoln Moore.
The role of the Remuneration Committee is to review the performance of the executive Directors and to set
the scale and structure of their remuneration, including bonus arrangements. The Remuneration Committee
also administers and establishes performance targets for the Group’s employee share schemes and executive
incentive schemes for key management. In exercising this role, the terms of reference of the Remuneration
Committee require it to comply with the Code of Best Practice published in the Combined Code.
The Audit Committee is responsible for making recommendations to the Board on the appointment of the
auditors and the audit fee, and receives and reviews reports from management and the Company’s auditors
on the internal control systems in use throughout the Group and its accounting policies.
Suppliers’ Payment Policy
It is the Group's policy to agree appropriate terms and conditions for its transactions with suppliers by means
ranging from standard terms and conditions to individually negotiated contracts and to pay suppliers
according to agreed terms and conditions, provided that the supplier meets those terms and conditions. The
Group does not have a standard or code dealing specifically with the payment of suppliers.
Trade payables at the year end all relate to sundry administrative overheads and disclosure of the number of
days purchases represented by year end payables is therefore not meaningful.
Directors' Indemnities
In accordance with the Companies (Audit Investigations and Community Enterprise) Act 2004, which came
into force on 6 April 2005, the Company has indemnified the Directors against liability to third parties, and
undertaken to pay Directors' legal costs as incurred, provided that they are reimbursed to the Company if
the individual is convicted.
By Order of the Board
Lincoln Moore, Executive Director Date: 25 June 2020
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CHAIRMAN’S STATEMENT ON CORPORATE GOVERNANCE
Introduction
The Board of directors of the Company recognises the importance of sound corporate governance and applies
The Quoted Companies Alliance Corporate Governance Code (2018) (the ‘QCA Code’), which they believe is
the most appropriate recognised governance code for a company with shares admitted to trading on the AIM
market of the London Stock Exchange. The QCA Code provides the Company with the framework to help
ensure that a strong level of governance is maintained, enabling the Company to embed the governance
culture that exists within the organisation as part of building a successful and sustainable business for all its
stakeholders.
The QCA Code has ten principles of corporate governance that the Company has committed to apply within
the
foundations of
the business. Full details can be
found on
the company’s website:
www.dekelagrivision.com.
We have outlined below a short explanation of how the Company applies each of the principles at the time
of preparation of this report. Given this is a newly introduced policy the Company will continually reassess
and strengthen its polices and associated execution of the aforementioned policies.
Principle One
Establish a strategy and business model which promote long-term value for shareholders
Dekel is a large-scale palm oil producer that works in close partnership with the communities and authorities
in its areas of operation. The establishment of such partnerships enables Dekel to pursue its strategy of
building sustainable, inclusive and environmentally sensitive palm oil production centres in the Ivory Coast
and, in time, across West Africa. Full details are provided on the Company’s website.
At the core of our immediate strategy is working to increase our market share of the quantity of FFB from
our small holder suppliers and increase the market size of FFB from small holders in our region. To increase
market share we apply best practise supplier payment systems and assist our small holders with logistics.
This is evident in the five logistic centres we have established to provide ease the transportation burden on
small holders delivering FFB to our Mill. As outlined in our Chairman’s Report we are also working to
implement a sustainable fertiliser programme with our small holder farmers.
We are also working hard to apply best in practise environmental processes in our existing operations. An
example of this is our effluent treatment plant operation which we understand is the only fully compliant
system operating in our country of operations. We are also a fully committed member of the Round Table
for Sustainable Palm Oil and are working towards full certification.
The recent falls in CPO prices which whilst we believe will not continue into the medium term have
highlighted a need to further diversify our operations. We are currently in the process of rectifying this and
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in 2021 we will apply our small holder business model to the cashew industry which includes the current
construction of a cashew processing facility which will provide further diversity to our sales from 2021
onwards.
Dekel will continue to assess opportunities to diversify its commodity base and in time, the countries it
operates to deliver long term sustainable and diversified revenue streams.
Principle Two
Seek to understand and meet shareholder needs and expectations
The Board is committed to maintaining good communication and having constructive dialogue with its
shareholders in order to communicate Dekel’s strategy and progress and to understand the needs and
expectations of shareholders. In 2020 this included increasing our use of social media, regular podcasts to
explain key announcements and at least twice yearly shareholder dial in calls to communicate with our
shareholders. See the Dekel website for further details.
Principle Three
Take into account wider stakeholder and social responsibilities and their implications for long-term
success
The Group’s operations in Côte d’Ivoire to date have created over 300 new jobs and it is expected the
development of the Company (and its subsidiaries) moving forward will create at least an additional 300 new
jobs. It is also expected to improve existing oil palm farm yields, enhance Ayenouan farmers’ income,
revitalise the Co-operatives and accelerate the development of social infrastructure in the local community.
Dekel Côte d’Ivoire’s activity affects the lives of more than 6,000 families directly and indirectly. Dekel Côte
d’Ivoire has completed an Environmental and Social Impact Assessment (“ESIA”) which is in line with the
International Finance Corporation (“IFC”) requirements and Ivorian law. Dekel Côte d’Ivoire is committed to
adopt and operate in accordance with the recommendations provided by the ESIA.
The aim of the ESIA report was to satisfy both legal and institutional obligations under the Ivorian
environmental protection laws (Arrêté no 00972 du 14 Novembre 2007 relatif á l’ application du décret no
96 894 du 8 Novembre 1996), and also comply with the IFC standards on the environment.
Dekel Côte d’Ivoire is a member of the Roundtable of Sustainable Palm Oil (“RSPO”). The RSPO was
established in 2004 to promote the production and use of sustainable palm oil. The RSPO is an association
created by organisations carrying out activities in and around the entire supply chain for palm oil to promote
the growth and use of sustainable palm oil. The Directors are committed to compliance with its code of
conduct where applicable and are working towards full RSPO certification.
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During the current Covid-19 pandemic to adhere to the prevailing advice and guidance of the relevant
government authorities in order to help ensure the wellbeing of all its staff and the local communities in
which Dekel operates in.
Principle Four
Embed effective risk management, considering both opportunities and threats, throughout the
organization
The Board is responsible for ensuring that procedures are in place and being implemented effectively to
identify, evaluate and manage the significant risks faced by the Company. A list of the key operational and
business risks is outlined on the Dekel website.
In terms of internal processes, the Company operates pursuant to internally created processes and
procedures, ensures all key strategy decisions are reviewed and approved by the Board an operates board
committees for both the Audit Committee and Remuneration Committee.
Principle Five
Maintain the Board as a well-functioning, balanced team led by the Chair
All of the Directors are subject to election by shareholders at the first Annual General Meeting after their
appointment to the Board and will continue to seek re-election at least once every three years. To date in
the current financial year the Directors have a 100% record of attendance at meetings. Directors meet
formally and informally both in person and by telephone. The Board is responsible to the shareholders for
the proper management of the Group. The Boards undertakes the following meeting process:
- meets at least twice per year - full attendance was observed
- monthly review of operational and financial results
Andrew Tillery and Aristide Achybrou are considered to be Independent Directors (applying the principles on
independence set out in Section B.1.1. of the UK Corporate Governance Code published by the Financial
Reporting Council).
Principle Six
Ensure that between them, the directors have the necessary up-to-date experience, skills and capabilities
Our multi-disciplinary management team of executives, entrepreneurs and agronomists can call upon more
than 30 years of experience in the international agro-industry. Team members have driven the planning,
implementation and management of large-scale agricultural and agri-industrial projects across several
continents. The Board considers that all of the Directors and Non-executive Directors are of sufficient
- 18 -
competence and calibre to add strength and objectivity to its activities, and bring considerable experience in
scientific, operational and financial development of food products and companies. The Board regularly
reviews the composition of the Board to ensure that it has the necessary breadth and depth of skills to
support the ongoing development of the Company. The Board ensures its knowledge is kept up to date on
key issues and developments pertaining to the Company, its operational environment and to the Directors’
responsibilities as members of the Board. During the course of the year, Directors receive updates from
various external advisers on a number of industry and corporate governance matters.
Audit and Remuneration Committees have been established and in each case comprise Andrew Tillery,
Lincoln Moore and Aristide Achybrou. The audit and remuneration committees comprise a majority of non
executives and that they are chaired by non executives.
The role of the Remuneration Committee is to review the performance of the executive Directors and to set
the scale and structure of their remuneration, including bonus arrangements. The Remuneration Committee
also administers and establishes performance targets for the Group’s employee share schemes and executive
incentive schemes for key management. In exercising this role, the terms of reference of the Remuneration
Committee require it to comply with the Code of Best Practice published in the Combined Code.
The Audit Committee is responsible for making recommendations to the Board on the appointment of the
auditors and the audit fee, and receives and reviews reports from management and the Company’s auditors
on the internal control systems in use throughout the Group and its accounting policies.
The Director biographies and details are set out earlier in this report and further information for director is
summarised in the table below.
Name
Role
Time
Dekel Shareholder
Andrew Tillery
Non Executive Chairman 2 days per month
Youval Rasin
Chief Executive Office
Yehohua Shai Kol Deputy CEO and Chief
Full time
Full time
Financial Officer
Lincoln Moore
Executive Director
Full time
Non Executive Director
2 days per month
Aristide
Achybrou
Principle Seven
No
Yes
Yes
Yes
Yes
Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
Internal evaluation of the Board, the Committees and individual Directors is undertaken on an annual basis
in the form of peer appraisal and discussions to determine the effectiveness and performance against targets
and objectives, as well as the Directors' continued independence. As a part of the appraisal the
appropriateness and opportunity for continuing professional development whether formal or informal is
discussed and assessed.
- 19 -
The Board may ultilise the results of the evaluation process when considering the adequacy of the
composition of the Board and for succession planning. Succession planning is formally considered by the
Board on an annual basis in conjunction with the appraisal process.
Principle Eight
Promote a corporate culture that is based on ethical values and behaviours
The Board recognises that their decisions regarding strategy and risk will impact the corporate culture of the
Company as a whole which in turn will impact Company’s performance. The Directors are very aware that
the tone and culture set by the Board will greatly impact all aspects of the Company as a whole and the way
that consultants or other representatives behave.
The Board seeks to maintain the highest standards of integrity and probity in the conduct of the Group’s
operations. These values are enshrined in the written policies and working practices adopted by all
employees in the Group. An open culture is encouraged within the Group, with regular communications to
staff regarding progress and staff feedback regularly sought. The Executive Committee regularly monitors
the Group’s cultural environment and seeks to address any concerns than may arise, escalating these to
Board level as necessary.
The Group is committed to providing a safe environment for its staff and all other parties for which the Group
has a legal or moral responsibility in this area. The Group’s health and safety policies and procedures
encompass all aspects of the Group’s day-to-day operations.
Issues of bribery and corruption are taken seriously. The Company has a zero-tolerance approach to bribery
and corruption and has an anti-bribery and corruption policy in place to protect the Company, its employees
and those third parties to which the business engages with. The policy is provided to staff upon joining the
business and training is provided to ensure that all employees within the business are aware of the
importance of preventing bribery and corruption. Each employment contract specifies that the employee will
comply with the policies.
There were no issues to note during the 2019 financial year.
Principle Nine
Maintain governance structures and processes that are fit for purpose and support good decision-making
by the Board
Ultimate authority for all aspects of the Company's activities rests with the Board, the respective
responsibilities of the Chairman and Non-Executive Directors arising as a consequence of delegation by the
Board. The Board has adopted appropriate delegations of authority which set out matters which are reserved
for the Board. The Chairman is responsible for the effectiveness of the Board as well as primary contact with
- 20 -
shareholders.
The Board has overall responsibility for promoting the success of the Group. The Executive Directors have
day-to-day responsibility for the operational management of the Group’s activities. The Non-executive
Directors are responsible for bringing independent and objective judgment to Board decisions.
There is a clear separation of the roles of Chief Executive Officer and Non-executive Chairman. The Chairman
is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the
Board’s decision-making and ensuring the Non-executive Directors are properly briefed on matters. The
Chairman has overall responsibility for corporate governance matters in the Group and chairs the
Nominations and Corporate Governance Committee. The Chief Executive Officer has the responsibility for
implementing the strategy of the Board and managing the day-to-day business activities of the Group. The
Company Secretary is responsible for ensuring that Board procedures are followed and applicable rules and
regulations are complied with.
The Board has established an Audit Committee and Remuneration Committee with formally delegated duties
and responsibilities.
Audit Committee
The Audit Committee comprises three Directors, Andrew Tillery, Lincoln Moore and Aristide Achybrou, and
is chaired by Andrew Tillery. The Audit Committee will meet at the time of preparation of the annual and
interim accounts of the Company at such other times as the chairman of the Audit Committee shall deem
necessary. The Audit Committee receives and reviews reports from management of the Company’s auditors
relating to the interim and annual accounts and keeps under review the accounting and internal controls
which the Company has in place.
Remuneration Committee
The Remuneration Committee comprises three Directors, Andrew Tillery, Lincoln Moore and Aristide
Achybrou, and is chaired by Andrew Tillery. The Remuneration Committee will meet at such times as the
chairman of the Remuneration Committee or the Board deem necessary. The Remuneration Committee will
determine and review (in consultation with the Board) the terms and conditions of service of the executive
directors and non-executive directors. The Remuneration Committee will also review the terms and
conditions of any proposed share incentive plans, to be approved by the Board and the Company’s
shareholders.
In setting remuneration packages, the Committee ensured that individual compensation levels, and total
board compensation, were comparable with those of other AIM-listed companies where appropriate.
Further details are set out in the Director’s Report and notes to the accounts.
Principle Ten
- 21 -
Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders
and other relevant stakeholders
The Company places a high priority on regular communications with its various stakeholder groups and aims
to ensure that all communications concerning the Group’s activities are clear, fair and accurate. Full details
of how the Company maintains a dialogue with shareholders and other stakeholders is set out on the
Company’s website.
Andrew Tillery
Non-Executive Chairman
Date: 25 June 2020
- 22 -
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law
the Directors have elected to prepare the Group Financial Statements under IFRS. The Financial Statements
are required by law to give a true and fair view of the state of affairs of the Group and company and of the
profit or loss of the Group for that period.
In preparing these Financial Statements, the Directors are required to:
•
select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
•
state whether applicable accounting standards have been followed, subject to any material
departure disclosed and explained in the Financial Statements; and
• prepare the Financial Statements on the going concern basis, unless it is inappropriate to presume
that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records which disclose with reasonable
accuracy at any time the financial position of the Group and to enable them to ensure that the Financial
Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of
the Group and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
In so far as each of the Directors are aware:
•
•
there is no relevant audit information of which the Group's auditors are unaware; and
the Directors have taken all steps that they ought to have taken to make themselves aware of any
relevant audit information and to establish that the auditors are aware of that information.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the company's website.
Kost Forer Gabbay & Kasierer
Tel: +972-3-6232525
- 23 -
144 Menachem Begin Road, Building A,
Tel-Aviv 6492102, Israel
Fax: +972-3-5622555
ey.com
INDEPENDENT AUDITORS' REPORT
To the Shareholders of
DEKEL AGRI-VISION PLC.
(formerly – DEKELOILPUBLIC LTD.)
We have audited the accompanying consolidated financial statements of DEKEL AGRI-VISION PLC. and its
subsidiaries ("the Group"), which comprise the consolidated statements of financial position as of 31
December 2019 and 2018, and the consolidated statements of comprehensive income, changes in equity
and cash flows for each of the years then ended, and the related notes to the consolidated financial
statements, which, as described in Note 2 to the consolidated financial statements, have been prepared on
the basis of International Financial Reporting Standards as adopted by the European Union.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with International Financial Reporting Standards as adopted by the European
Union; this includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditors' judgment, including
the assessment of the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the
entity's preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements.
- 24 -
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of the Group as of 31 December 2019 and 2018, and the
results of its operations and its cash flows for the each of the years then ended in accordance with
International Financial Reporting Standards as adopted by the European Union.
The Group’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Group will
continue as a going concern. As discussed in Note 1e to the consolidated financial statements, certain
financial covenants in respect of a loan may not be met on 30 June 2020. Should a waiver of the covenants
not be granted by the lender, the entire balance of the loan of approximately € 7.2 million will be subject to
immediate repayment upon the demand of the lender, which raises substantial doubt about the Group’s
ability to continue as a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with
respect to this matter.
Tel-Aviv, Israel
25 June 2020
KOST FORER GABBAY & KASIERER
A Member of Ernst & Young Global
- 25 -
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Inventory
Accounts and other receivables
Total current assets
NON-CURRENT ASSETS:
Property and equipment, net
Investment in an associate
DEKEL AGRI-VISION PLC.
(formerly – DEKELOILPUBLIC LTD.)
31 December
2019
2018
Note
Euros in thousands
273
917
69
262
1,543
420
1,259
2,225
30,308
1,998
31,172
-
4
6
5
Total non-current assets
32,306
31,172
Total assets
33,565
33,397
The accompanying notes are an integral part of the consolidated financial statements.
- 26 -
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
EQUITY AND LIABILITIES
CURRENT LIABILITIES:
Short-term loans and current maturities of long-term loans
Trade payables
Advance payments from customers
Other accounts payable and accrued expenses
Total current liabilities
NON-CURRENT LIABILITIES:
Long-term lease liabilities
Accrued severance pay, net
Long-term loans
DEKEL AGRI-VISION PLC.
(formerly – DEKELOILPUBLIC LTD.)
31 December
2019
2018
Note
Euros in thousands
9
7
8
9
3,829
680
1,169
1,016
4,251
665
2,471
596
6,694
7,983
90
33
94
32
13,963
13,712
Total non-current liabilities
14,086
13,838
Total liabilities
EQUITY
Share capital
Additional paid-in capital
Accumulated deficit
Capital reserve
Capital reserve from transactions with non-controlling interests
- 27 -
10
20,780
21,821
141
99
34,368
29,862
(16,502)
(13,163)
2,532
(7,754)
2,532
(7,754)
DEKEL AGRI-VISION PLC.
(formerly – DEKELOILPUBLIC LTD.)
Total equity
12,785
11,576
Total liabilities and equity
33,565
33,397
The accompanying notes are an integral part of the consolidated financial statements.
25 June 2020
Date of approval of the
Youval Rasin
Yehoshua Shai Kol
Lincoln John Moore
financial statements
Director and Chief
Executive Officer
Director and Chief
Finance Officer
Executive Director
- 28 -
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Revenues
Cost of revenues
Gross profit
DEKEL AGRI-VISION PLC.
(formerly – DEKELOILPUBLIC LTD.)
Year ended
31 December
2019
2018
Euros in thousands
Note
(except share and per share
amounts)
11
14a
20,947
19,252
20,885
19,152
1,695
1,733
General and administrative
14b
3,158
3,235
Operating loss
Finance cost
Loss before taxes on income
Taxes on income
(1,463)
(1,502)
14c
1,829
1,738
(3,292)
(3,240)
13
47
43
Loss and total comprehensive loss
(3,339)
(3,283)
Loss per share
Basic and diluted loss per share
(0.01)
(0.01)
Weighted average number of shares used in computing
basic and diluted income (loss) per share
379,838,186 299,119,461
The accompanying notes are an integral part of the consolidated financial statements.
- 29 -
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
DEKEL AGRI-VISION PLC.
(formerly – DEKELOILPUBLIC LTD.)
Attributable to equity holders of the Company
Share
capital
Additional
paid-in
capital
Accumulated
deficit
Capital
reserve
Euros in thousands
Capital reserve
from
transactions
with non-
controlling
interests
Total
Balance as of 1 January, 2018
99
29,669
(9,880)
2,532
(7,754)
14,666
Loss and total comprehensive
loss
Issuance of shares (Note 10)
Exercise of options (Note 10)
Share-based compensation
-
*)
*)
-
-
(3,283)
33
-
160
-
-
-
-
-
-
-
-
-
-
-
(3,283)
33
*)
160
Balance as of 31 December 2018
99
29,862
(13,163)
2,532
(7,754)
11,576
Loss and total comprehensive
loss
-
-
(3,339)
Issuance of shares (Note 10)
42
4,186
Exercise of options (Note 10)
Share-based compensation
*)
-
-
320
-
-
-
-
-
-
-
-
-
-
-
(3,339)
4,228
*)
320
Balance as of 31 December 2019
141
34,368
(16,502)
2,532
(7,754)
12,785
*)
Represents an amount lower than €1.
The accompanying notes are an integral part of the consolidated financial statements.
- 30 -
CONSOLIDATED STATEMENTS OF CASH FLOWS
DEKEL AGRI-VISION PLC.
(formerly – DEKELOILPUBLIC LTD.)
Cash flows from operating activities:
Loss
Adjustments to reconcile loss to net cash used in operating activities:
Adjustments to the profit or loss items:
Depreciation
Share-based compensation
Accrued interest on long-term loans and non-current liabilities
Change in employee benefit liabilities, net
Changes in asset and liability items:
Decrease (increase) in inventories
Decrease (increase) in accounts and other receivables
Increase in trade payables
Increase (decrease) in advance from customers
Increase (decrease) in accrued expenses and other accounts payable
Cash paid during the year for:
Interest
Year ended
31 December
2019
2018
Euros in thousands
(3,339)
(3,283)
1,357
320
1,306
1
626
351
16
(1,302)
420
1,318
160
1,265
(5)
(174)
(103)
506
1,898
(333)
3,095
4,532
(1,053)
(1,286)
(1,053)
(1,286)
Net cash used in operating activities
(1,297)
(37)
The accompanying notes are an integral part of the consolidated financial statements.
- 31 -
CONSOLIDATED STATEMENTS OF CASH FLOWS
DEKEL AGRI-VISION PLC.
(formerly – DEKELOILPUBLIC LTD.)
Year ended
31 December
2019
2018
Euros in thousands
Cash flows from investing activities:
Purchase of property and equipment
(435)
(1,041)
Net cash used in investing activities
(435)
(1,041)
Cash flows from financing activities:
Issue of shares (offering net proceeds)
Long-term lease, net
Receipt of short-term loans, net
Receipt of long-term loans
Repayment of long-term loans
2,231
(4)
682
7,200
(8,366)
-
48
662
4,976
(5,121)
Net cash provided by financing activities
1,743
565
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental disclosure of non-cash activities:
11
262
273
(513)
775
262
Issuance of shares in consideration for investment in Pearlside
1,998
-
The accompanying notes are an integral part of the consolidated financial information.
- 32 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
NOTE 1:-
GENERAL
a.
b.
Dekel Agri-Vision PLC ("the Company") is a public limited company incorporated in Cyprus
on 24 October 2007. The Company's Ordinary shares are admitted for trading on the AIM,
a market operated by the London Stock Exchange. The Company is engaged through its
subsidiaries in developing and cultivating palm oil plantations in Cote d'Ivoire for the
purpose of producing and marketing Crude Palm Oil ("CPO"). The Company's registered
office is in Limassol, Cyprus. In November 2019 the name of the Company was changed
from DekelOil Public Ltd to its current name.
CS DekelOil Siva Ltd. ("DekelOil Siva") a company incorporated in Cyprus, is a wholly-
owned subsidiary of the Company. DekelOil CI SA, a subsidiary in Cote d'Ivoire currently
held 99.85% by DekelOil Siva, is engaged in developing and cultivating palm oil plantations
for the purpose of producing and marketing CPO. DekelOil CI SA constructed and is
currently operating its first palm oil mill.
c.
DekelOil Consulting Ltd. a company located in Israel and a wholly-owned subsidiary of
DekelOil Siva, is engaged in providing services to the Company and its subsidiaries.
d. Working capital deficiency and cash flow from operations
As of 31 December 2019, the Group has a deficiency in working capital of approximately €
5.4 million. Since commencement of production and sale of palm oil in 2014, the Group
generated positive cash flows from its operations until 2017. In 2018 due to unusually low
fruit yields across Cote d'Ivoire and a decrease in the market price of palm oil, the Group's
cash flows generated from operations were nil. In 2019 the fruit yields recovered to
normal levels but the market price of palm oil continued to be at cyclical low levels
resulting in a negative cash flow from operations of approximately €1.4 million. There has
been a partial recovery in market prices and cash flow from operations has been positive
in 2020 up to the date of approval of the consolidated financial statements. Company
management expects that cash flow from operations for the entire year of 2020 will
revert back to the positive levels achieved in prior years. However, the operations of the
Group are subject to various market conditions, including quantity and quality of fruit
harvests and market prices, that are not under the Group's control that could have an
adverse effect on the Group's cash flows. See also Note 1f. below regarding the
uncertainty of the impact the Coronavirus may have on the Group’s future revenues,
profitability, liquidity and financial position.
In June 2020 the Company has closed on a loan that will provide additional financing for
the Group’s operations of approximately € 1.2 million. Furthermore, the Company is now
in advanced stages of debt refinancing. Based on the above, Company management
believes it will have sufficient funds necessary to satisfy any short-term working capital
deficiency.
33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
e. Effect of non-waiver of loan covenants on Group’s ability to continue as a going concern
The accompanying consolidated financial statements have been prepared assuming that
the Group will continue as a going concern. As further described in Note 9c.6, in
December 2019 the Group received a waiver till 30 June 2020 of certain financial
covenants in respect of a loan. Whilst the Company has continued to meet current
repayment obligations with respect to the loan, the lender is considering extending the
waiver period as the covenants may not be met on 30 June 2020. However, it is uncertain
that an extension of the waiver will be granted by the lender prior to 30 June 2020. Should
the extension of the waiver not be granted, the entire balance of the loan of
approximately € 7.2 million will be subject to immediate repayment upon the demand of
the lender, which raises substantial doubt about the Group’s ability to continue as a
going concern. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
NOTE 1:-
GENERAL (Cont.)
f.
The recent outbreak of Coronavirus, a virus causing potentially deadly respiratory tract
infections originating in China and spreading in various jurisdictions, may negatively affect
economic conditions regionally as well as globally, disrupt operations situated in countries
particularly exposed to the contagion, affect the Company's customers and suppliers or
business practices previously applied by those entities, or otherwise impact the
Company's activities. Governments in affected countries are imposing travel bans,
quarantines and other emergency public safety measures. Those measures, though
apparently temporary in nature, may continue and increase depending on developments
in the virus’ outbreak. The ultimate severity of the Coronavirus outbreak is uncertain at
this time and therefore the Company cannot reasonably estimate the impact it may have
on its end markets and its future revenues, profitability, liquidity and financial position.
f.
Definitions:
The Group
- DEKEL AGRI-VISION PLC and its subsidiaries.
The Company
- DEKEL AGRI-VISION PLC.
Subsidiaries
- Companies that are controlled by the Company- CS DekelOil Siva Ltd,
DekelOil CI SA, DekelOil Consulting Ltd.
Company in which the Group has significant influence over the financial
and operating policies without having control – Pearlside Holdings Ltd.
Associate -
34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES
DEKEL AGRI-VISION PLC.
The following accounting policies have been applied consistently in the financial statements for
all periods presented, unless otherwise stated.
a.
Basis of presentation of the financial statements:
These financial statements have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union ("IFRS").
The financial statements have been prepared on a cost basis.
The Company has elected to present profit or loss items using the function of expense
method.
b. Consolidated financial statements:
The consolidated financial statements comprise the financial statements of companies
that are controlled by the Company (subsidiaries). Control is achieved when the Company
is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee. Potential voting
rights
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
are considered when assessing whether an entity has control. The consolidation of the
financial statements commences on the date on which control is obtained and ends when
such control ceases.
The financial statements of the Company and of the subsidiaries are prepared as of the
same dates and periods. The consolidated financial statements are prepared using
uniform accounting policies by all companies in the Group. Significant intragroup
balances and transactions and gains or losses resulting from intragroup transactions are
eliminated in full in the consolidated financial statements.
Non-controlling interests in subsidiaries represent the equity in subsidiaries not
attributable, directly or indirectly, to a parent. Non-controlling interests are presented in
equity separately from the equity attributable to the equity holders of the Company.
Profit or loss and components of other comprehensive income are attributed to the
Company and to non-controlling interests. Losses are attributed to non-controlling
35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
interests even if they result in a negative balance of non-controlling interests in the
consolidated statement of financial position.
DEKEL AGRI-VISION PLC.
A change in the ownership interest of a subsidiary, without a change of control, is
accounted for as a change in equity.
c.
Investment in an associate:
The Group's investment in an associate is accounted for using the equity method.
Under the equity method, the investment in the associate is presented at cost with the
addition of post-acquisition changes in the Group's share of net assets, including other
comprehensive income of the associate . Gains and losses resulting from transactions
between the Group and the associate are eliminated to the extent of the interest in the
associate .
Goodwill relating to the acquisition of an associate is presented as part of the investment
in the associate , measured at cost and not systematically amortized. Goodwill is
evaluated for impairment as part of the investment in the associate as a whole.
The financial statements of the Company and of the associate are prepared as of the same
dates and periods. The accounting policies applied in the financial statements of the
associate are uniform and consistent with the policies applied in the consolidated financial
statements of the Group.
Losses of an associate in amounts which exceed its equity are recognized by the Company
to the extent of its investment in the associate plus any losses that the Company may
incur as a result of a guarantee or other financial support provided in respect of the
associate. For this purpose, the investment includes long-term receivables (such as loans
granted) for which settlement is neither planned nor likely to occur in the foreseeable
future.
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
d.
Functional currency, presentation currency and foreign currency:
1.
Functional currency and presentation currency:
The local currency used in Cote d'Ivoire is the West African CFA Franc ("FCFA"),
which has a fixed exchange rate with the Euro (Euro 1 = FCFA 655.957). A
substantial portion of the Group's revenues and expenses is incurred in or linked
to the Euro. The Group obtains debt financing mostly in FCFA linked to Euros and
the funds of the Group are held in FCFA. Therefore, the Company's management
36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
has determined that the Euro is the currency of the primary economic
environment of the Company and its subsidiaries, and thus its functional currency.
The presentation currency is Euro.
2.
Transactions, assets and liabilities in foreign currency:
Transactions denominated in foreign currency are recorded upon initial recognition
at the exchange rate at the date of the transaction. After initial recognition,
monetary assets and liabilities denominated in foreign currency are translated at
each reporting date into the functional currency at the exchange rate at that date.
Exchange rate differences, other than those capitalized to qualifying assets or
accounted for as hedging transactions in equity, are recognized in profit or loss.
Non-monetary assets and liabilities denominated in foreign currency and measured
at cost are translated at the exchange rate at the date of the transaction. Non-
monetary assets and liabilities denominated in foreign currency and measured at
fair value are translated into the functional currency using the exchange rate
prevailing at the date when the fair value was determined.
e.
Cash equivalents:
Cash equivalents are considered as highly liquid investments, including unrestricted
short-term bank deposits with an original maturity of three months or less from the date
of acquisition.
f.
Financial instruments:
On 1 January 2018, the Company initially adopted IFRS 9, "Financial Instruments" ("the
Standard"). The Company elected to apply the provisions of the Standard retrospectively
without restatement of comparative data.
37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
DEKEL AGRI-VISION PLC.
The accounting policy for financial instruments applied commencing from 1
January 2018, is as follows:
1)
Financial assets:
Financial assets are measured upon initial recognition at fair value plus
transaction costs that are directly attributable to the acquisition of the
financial assets, except for financial assets measured at fair value through
profit or loss in respect of which transaction costs are recorded in profit or
loss.
The Company classifies and measures debt instruments in the financial
statements based on the following criteria:
-
-
The Company's business model for managing financial assets; and
The contractual cash flow terms of the financial asset.
a)
Debt instruments are measured at amortized cost when:
The Company's business model is to hold the financial assets in order
to collect their contractual cash flows, and the contractual terms of the
financial assets give rise on specified dates to cash flows that are solely
payments of principal and
interest on the principal amount
outstanding. After initial recognition, the instruments in this category
are measured according to their terms at amortized cost using the
effective interest rate method, less any provision for impairment.
b)
Equity instruments and other financial assets held for trading:
Investments in equity instruments do not meet the above criteria and
accordingly are measured at fair value through profit or loss.
Other financial assets held for trading such as derivatives, including
embedded derivatives separated from the host contract, are
measured at fair value through profit or loss unless they are
designated as effective hedging instruments.
38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
Dividends from investments in equity instruments are recognized in
profit or loss when the right to receive the dividends is established.
2)
Impairment of financial assets:
The Company evaluates at the end of each reporting period the loss
allowance for financial debt instruments which are not measured at fair value
through profit or loss.
The Company has short-term financial assets such as trade receivables in
respect of which the Company applies a simplified approach and measures
the
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
loss allowance in an amount equal to the lifetime expected credit losses. An
impairment loss on debt instruments measured at amortized cost is
recognized in profit or loss with a corresponding loss allowance that is offset
from the carrying amount of the financial asset.
3)
Financial liabilities:
a)
Financial liabilities measured at amortized cost:
Financial liabilities are initially recognized at fair value less transaction
costs that are directly attributable to the issue of the financial liability.
After initial recognition, the Company measures all financial liabilities
at amortized cost using the effective interest rate method.
4)
Derecognition of financial instruments:
a)
Financial assets:
A financial asset is derecognized when the contractual rights to the
cash flows from the financial asset expire.
b)
Financial liabilities:
A financial liability is derecognized when it is extinguished, that is when
the obligation is discharged or cancelled or expires.
39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
g.
Borrowing costs:
DEKEL AGRI-VISION PLC.
The Group capitalizes borrowing costs that are attributable to the acquisition,
construction, or production of qualifying assets which necessarily take a substantial
period of time to get ready for their intended use or sale.
The capitalization of borrowing costs commences when expenditures for the asset are
incurred, the activities to prepare the asset are in progress and borrowing costs are
incurred and ceases when substantially all the activities to prepare the qualifying asset for
its intended use or sale are complete. The amount of borrowing costs capitalized in a
reporting period includes specific borrowing costs and general borrowing costs based on
a weighted capitalization rate.
h.
Leases:
As described in Note 2s regarding the initial adoption of IFRS 16, "Leases" ("the
Standard"), the Company elected to apply the provisions of the Standard using the
modified retrospective method (without restatement of comparative data).
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
The accounting policy for leases applied effective from 1 January 2019, is as follows:
The Company accounts for a contract as a lease when the contract terms convey the right
to control the use of an identified asset for a period of time in exchange for consideration.
The Group as a lessee:
For leases in which the Company is the lessee, the Company recognizes on the
commencement date of the lease a right-of-use asset and a lease liability, excluding
leases whose term is up to 12 months and leases for which the underlying asset is of low
value. For these excluded leases, the Company has elected to recognize the lease
payments as an expense in profit or loss on a straight-line basis over the lease term. In
measuring the lease liability, the Company has elected to apply the practical expedient
in the Standard and does not separate the lease components from the non-lease
components (such as management and maintenance services, etc.) included in a single
contract.
On the commencement date, the lease liability includes all unpaid lease payments
discounted at the interest rate implicit in the lease, if that rate can be readily
determined, or otherwise using the Group's incremental borrowing rate. After the
commencement date, the Group measures the lease liability using the effective interest
rate method.
40
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
On the commencement date, the right-of-use asset is recognized in an amount equal to
the lease liability plus lease payments already made on or before the commencement
date and initial direct costs incurred. The right-of-use asset is measured applying the
cost model and depreciated over the shorter of its useful life or the lease term. The
Group tests for impairment of the right-of-use asset whenever there are indications of
impairment pursuant to the provisions of IAS 36.
The accounting policy for leases applied until 31 December 2018 is as follows:
The criteria for classifying leases as finance or operating leases depend on the substance
of the agreements and are made at the inception of the lease in accordance with the
following principles as set forth in IAS 17.
The Group as lessee:
1.
Finance leases:
Finance leases transfer to the Group substantially all the risks and benefits
incidental to ownership of the leased asset. At the commencement of the lease
term, the leased assets are measured at the lower of the fair value of the leased
asset or the present value of the minimum lease payments. The liability for lease
payments is presented at its present value and the lease payments are apportioned
between finance cost and a reduction of the lease liability using the effective
interest method.
The leased asset is amortized over the shorter of its useful life or the lease term.
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
2.
Operating leases:
Lease agreements are classified as an operating lease if they do not transfer
substantially all the risks and benefits incidental to ownership of the leased asset.
Lease payments are recognized as an expense in profit or loss on a straight-line
basis over the lease term.
h.
Biological assets:
Biological assets of the Company are fresh fruit bunches (FFB) that grow on palm oil trees.
The period of biological transformation of FFB from blossom to harvest and then
41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
conversion to inventory and sale is relatively short (about 2 months). Accordingly, any
changes in fair value at each reporting date are generally immaterial.
DEKEL AGRI-VISION PLC.
i.
Property and equipment:
Property and equipment are stated at cost, net of accumulated depreciation. Palm oil
trees before maturity are measured at accumulated cost, and depreciation commences
upon reaching maturity. Depreciation is calculated by the straight-line method over the
estimated useful lives of the assets at the following annual rates:
Extraction mill
Palm oil plantations
Computers and peripheral equipment
Equipment and furniture
Motor vehicles
Agriculture equipment
%
2.5
3.33
33
15 – 20
25
15
The useful life, depreciation method and residual value of an asset are reviewed at least
each year-end and any changes are accounted for prospectively as a change in accounting
estimate. Depreciation of an asset ceases at the earlier of the date that the asset is
classified as held for sale and the date that the asset is derecognized.
j.
Impairment of non-financial assets:
The Company evaluates the need to record an impairment of non-financial assets
whenever events or changes in circumstances indicate that the carrying amount is not
recoverable.
If the carrying amount of non-financial assets exceeds their recoverable amount, the
assets are reduced to their recoverable amount. The recoverable amount is the higher
of fair value less costs of sale and value in use. In measuring value in use, the expected
future cash flows are discounted using a pre-tax discount rate that reflects the risks
specific to the asset. The recoverable amount of an asset that does not generate
independent cash flows is determined for the cash-generating unit to which the asset
belongs. Impairment losses are recognized in profit or loss.
42
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
DEKEL AGRI-VISION PLC.
An impairment loss of an asset, other than goodwill, is reversed only if there have been
changes in the estimates used to determine the asset's recoverable amount since the
last impairment loss was recognized. Reversal of an impairment loss, as above, shall not
be increased above the lower of the carrying amount that would have been determined
(net of depreciation or amortization) had no impairment loss been recognized for the
asset in prior years and its recoverable amount. The reversal of impairment loss of an
asset presented at cost is recognized in profit or loss.
The following criteria are applied in assessing impairment of these specific assets:
Investment in associate:
After application of the equity method, the Company determines whether it is necessary
to recognize any additional impairment loss with respect to the investment in associates.
The Company determines at each reporting date whether there is objective evidence that
the carrying amount of the investment in the associate is impaired. The test of impairment
is carried out with reference to the entire investment, including the goodwill attributed
to the associate.
k.
Revenue recognition:
On 1 January 2018 the Company initially adopted IFRS 15, "Revenue from Contracts
with Customers" ("the new Standard"). The Company elected to apply the provisions of
the new Standard using the modified retrospective approach and without restatement
of comparative data.
The accounting policy for revenue recognition applied commencing from 1 January 2018,
is as follows:
Revenue from contracts with customers is recognized when the control over the services
is transferred to the customer. The transaction price is the amount of the consideration
that is expected to be received based on the contract terms.
Revenue from the sale of goods:
Revenue from sale of goods is recognized in profit or loss at the point in time when the
control of the goods is transferred to the customer, generally upon delivery of the goods
to the customer.
43
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Contract balances:
DEKEL AGRI-VISION PLC.
Amounts received from customers in advance of performance by the Company are
recorded as contract liabilities/advance payments from customers and recognized as
revenue in profit or loss when the work is performed. For all years presented in these
financial statements, such advances were recognized as revenues in the year
subsequent to their receipt.
44
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
l.
Inventories:
DEKEL AGRI-VISION PLC.
Inventories are measured at the lower of cost and net realizable value. The cost of
inventories comprises costs of purchase and costs incurred in bringing the inventories to
their present location and condition. Net realizable value is the estimated selling price in
the ordinary course of business less estimated costs of completion and estimated costs
necessary to make the sale. The Company periodically evaluates the condition and age
of inventories and makes provisions for slow moving inventories accordingly.
Cost of finished goods inventories is determined on the basis of average costs including
materials, labor and other direct and indirect manufacturing costs based on normal
capacity.
m.
Earnings (loss) per share:
Earnings (loss) per share are calculated by dividing the net income attributable to equity
holders of the Company by the weighted number of Ordinary shares outstanding during
the period.
Basic earnings (loss) per share only include shares that were actually outstanding during
the period. Potential Ordinary shares are only included in the computation of diluted
earnings (loss) per share when their conversion decreases earnings per share or
increases loss per share from continuing operations.
Further, potential Ordinary shares that are converted during the period are included in
diluted earnings (loss) per share only until the conversion date and from that date in basic
earnings (loss) per share. The Company's share of earnings of investees is included based
on the earnings (loss) per share of the investees multiplied by the number of shares held
by the Company.
Basic and diluted earnings per share are adjusted retrospectively due to changes in shares
outstanding resulting from bonus issues, share splits and share consolidations, including
those that occur after the reporting period and through the date the financial statements
are approved for issuance.
n.
Provisions:
A provision in accordance with IAS 37 is recognized when the Group has a present
obligation (legal or constructive) as a result of a past event, it is probable that an outflow
of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. When the Group expects
part or all of the expense to be reimbursed, for example under an insurance contract,
the reimbursement is recognized as a separate asset but only when the reimbursement
is virtually certain. The expense is recognized in profit or loss net of any reimbursement.
45
DEKEL AGRI-VISION PLC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
o. Fair value measurement:
Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.
Fair value measurement is based on the assumption that the transaction will take place
in the asset's or the liability's principal market, or in the absence of a principal market, in
the most advantageous market.
The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest.
Fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its highest and
best use or by selling it to another market participant that would use the asset in its
highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities measured at fair value or for which fair value is disclosed are
categorized into levels within the fair value hierarchy based on the lowest level input
that is significant to the entire fair value measurement:
Level 1
- quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2
- inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly.
Level 3
- inputs that are not based on observable market data (valuation
techniques which use inputs that are not based on observable market
data).
46
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
p.
Share-based payment transactions:
DEKEL AGRI-VISION PLC.
The Company applies the provisions of IFRS 2, "Share-Based Payment". IFRS 2 requires an
expense to be recognized where the Company buys goods or services in exchange for
shares or rights over shares ("equity-settled transactions"), or in exchange for other assets
equivalent in value to a given number of shares of rights over shares ("cash-settled
transactions"). The main impact of IFRS 2 on the Company is the expensing of employees'
and directors' share options (equity-settled transactions).
The cost of equity-settled transactions with employees is measured by reference to the
fair value of the equity instruments at the date on which they are granted. The fair value
is determined using an acceptable option model.
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
The cost of equity-settled transactions is recognized, together with a corresponding
increase in equity, over the period in which the performance and/or service conditions
are fulfilled, ending on the date on which the relevant employees become fully entitled
to the award ("the vesting date"). The cumulative expense recognized for equity-settled
transactions at each reporting date until the vesting date reflects the extent to which the
vesting period has expired and the Company's best estimate of the number of equity
instruments that will ultimately vest.
q.
Taxes on income:
Current or deferred taxes are recognized in profit or loss, except to the extent that they
relate to items which are recognized in other comprehensive income or equity.
1.
Current taxes:
The current tax liability is measured using the tax rates and tax laws that have been
enacted or substantively enacted by the end of reporting period as well as
adjustments required in connection with the tax liability in respect of previous
years.
2.
Deferred taxes:
Deferred taxes are computed in respect of temporary differences between the
carrying amounts in the financial statements and the amounts attributed for tax
purposes.
Deferred taxes are measured at the tax rate that is expected to apply when the
asset is realized or the liability is settled, based on tax laws that have been enacted
or substantively enacted by the reporting date.
47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
Deferred tax assets are reviewed at each reporting date and reduced to the extent
that it is not probable that they will be utilized. Temporary differences for which
deferred tax assets had not been recognized are reviewed at each reporting date
and a respective deferred tax asset is recognized to the extent that their utilization
is probable.
Taxes that would apply in the event of the disposal of investments in investees have
not been taken into account in computing deferred taxes, as long as the disposal of
the investments in investees is not probable in the foreseeable future.
Also, deferred taxes that would apply in the event of distribution of earnings by
investees as dividends have not been taken into account in computing deferred
taxes, since the distribution of dividends does not involve an additional tax liability
or since it is the Company's policy not to initiate distribution of dividends from a
subsidiary that would trigger an additional tax liability.
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
r. Changes in accounting policies – initial application of new financial reporting and
accounting standards and amendments to existing financial reporting and accounting
standards:
1.
Initial application of IFRS 16, “Leases”:
In January 2016, the IASB issued IFRS 16, "Leases" ("the Standard"), which
provides guidance on the recognition, measurement, presentation and disclosure
of leases and supersedes IAS 17, "Leases" ("the old Standard"), IFRIC 4,
"Determining Whether an Arrangement Contains a Lease", and SIC-15, "Operating
Leases - Incentives". According to the Standard, a lease is a contract, or part of a
contract, that conveys the right to use an asset for a period of time in exchange
for consideration.
The Standard has been applied for the first time in these financial statements. As
permitted by the Standard, the Company elected to apply the provisions of the
Standard using the modified retrospective method. The initial application of the
Standard did not have a material effect on the consolidated financial statements.
2.
IFRIC 23, "Uncertainty over Income Tax Treatments":
In June 2017, the IASB issued IFRIC 23, "Uncertainty over Income Tax Treatments"
("the Interpretation"). The Interpretation clarifies the rules of recognition and
48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
measurement of assets or liabilities in accordance with the provisions of IAS 12,
"Income Taxes", in situations of uncertainty involving income taxes. The
Interpretation provides guidance on considering whether some tax treatments
should be considered collectively, examination by the tax authorities,
measurement to reflect uncertainty involving income taxes in the financial
statements and accounting for changes in facts and circumstances underlying the
uncertainty.
The Interpretation has been initially applied in these financial statements. The
initial application of the Interpretation did not have a material effect on the
consolidated financial statements.
NOTE 3:-
SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS USED IN THE PREPARATION OF
THE FINANCIAL STATEMENTS
The preparation of the financial statements requires management to make estimates and
assumptions that have an effect on the application of the accounting policies and on the
reported amounts of assets, liabilities, revenues and expenses. Changes in accounting estimates
are reported in the period of the change in estimate.
The key assumptions made in the financial statements concerning uncertainties at the reporting
date and the critical estimates computed by the Group that may result in a material adjustment
to the carrying amounts of assets and liabilities within the next financial year are discussed
below.
Impairment of investment in an associate:
As further described in Note 5, the Group has an investment in an associate
which is engaged in the development and construction of a raw cashew nut
processing plant. The Group reviews its investment for impairment whenever
events or changes in circumstances indicate that carrying amount of the
investment is not recoverable. This requires management to make an estimate of
the projected future cash flows from the expected operations of the plant and
also to choose a suitable discount rate for those cash flows. Furthermore, the
successful operation of the plant is dependent on the associate’s ability to obtain
the funds necessary to complete its construction.
49
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4:-
ACCOUNTS AND OTHER RECEIVABLES
Government authorities (VAT)
Prepaid expenses and other receivables
Loans to employees
DEKEL AGRI-VISION PLC.
31 December
2019
2018
Euros in thousands
3
62
4
69
3
339
78
420
NOTE 5:-
INVESTMENT IN AN ASSOCIATE - PEARLSIDE HOLDINGS LTD
On 20 December 2018 the Company entered into an agreement to purchase a 43.8% interest in
Pearlside Holdings Ltd ("Pearlside") by way of issuing 52,612,613 Ordinary shares of the
Company. Pearlside, through its wholly-owned subsidiary, is in the initial stages of development
and construction of a raw cashew nut processing plant in Cote d'Ivoire. The closing of this
purchase transaction occurred on 7 January 2019 (See also Note 10 Equity).
Based on the market price of the Company's shares on the date of the purchase, the cost of the
investment in Pearlside amounted to approximately €1.9 million.
In addition, the Company has an option to purchase an additional 20.5% of Pearlside which may
be exercised at any time following the date on which Pearlside is due to publish its audited
annual accounts for the year ending 31 December 2020 until the date falling 6 months after
Pearlside issues its audited annual accounts for the year ending 31 December 2021.
NOTE 5:-
INVESTMENT IN AN ASSOCIATE - PEARLSIDE HOLDINGS LTD (Cont.)
The exercise price will be calculated by reference to the higher of (i) 5 times EBITDA of Pearlside
in its last published audited annual accounts prior to exercise of the option and (ii) the valuation
of € 18 million for the entire issued share capital of Pearlside.
If Pearlside has not achieved an EBITDA of € 4 million for the year 2020, the Company may
acquire the shares of Pearlside under option based on an € 18 million valuation of Pearlside, at
any time until the 2021 annual accounts are published at which point the valuation will be reset
at the higher of 4.5 times EBITDA or € 18 million for 100% of Pearlside's equity. If the exercise
price is determined by reference to the EBITDA of Pearlside, and the EBITDA is € 7 million or
more, the EBITDA applied will be capped at € 7 million.
50
DEKEL AGRI-VISION PLC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On 25 May 2019 Pearlside signed an equity investment agreement with an investor pursuant
to which the subscriber invested €1 million in Pearlside in consideration for shares
representing approximately a 15% ownership interest in Pearlside. These subscribed shares
were to be issued to the investor upon the investor’s consummation of the investment
agreement.
The investment agreement included certain provisions regarding appointment of directors and
the management of Pearlside, which provided the Company with the potential rights to
control Pearlside as of the agreement date. Accordingly, the accounts of Pearlside were
consolidated in the interim financial statements of the Company as of 30 June 2019.
The investment agreement failed to be consummated by the investor and was ultimately
canceled by Pearlside in December 2019. No shares were ever issued pursuant to the
investment agreement, the investment amount of €1 million is presented as a liability in the
accounts of Pearlside, and the provisions in the investment agreement regarding the potential
rights of the Company in respect of the control and management of Pearlside were not
implemented. As a result, the Company ceased to consolidate the financial statements of
Pearlside in December 2019. The effects on the consolidated financial statements of the
deconsolidation of Pearlside were immaterial.
The expected completion of the development and construction of Pearlside’s cashew nut
processing plant by the end of the first quarter of 2021 is dependent on Pearlside obtaining
additional financing from external sources. The management of Pearlside is evaluating various
financing alternatives and it believes that the required funds will be available when required.
However, there is no assurance that Pearlside will succeed in obtaining such financing at the
appropriate time. This could result in a significant delay in the commencement of operations
of the plant.
51
DEKEL AGRI-VISION PLC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6:-
PROPERTY AND EQUIPMENT, NET
Composition and movement:
Computers
and
peripheral
equipment
Equipment
and
furniture
Motor
vehicles
Agriculture
equipment
Extraction
mill
and land
Palm oil
plantations
Total
Euros in thousands
Cost:
Balance as of 1 January, 2018
Acquisitions during the year
Disposals during the year
329
100
1,259
460
25,307
9
-
9
-
270
(132)
-
-
696
-
Balance as of 31 December, 2018
338
109
1,397
460
26,003
Acquisitions during the year
Disposals during the year
5
(53)
1
-
128
(30)
4
-
278
-
Balance as of 31 December, 2019
290
110
1,495
464
26,281
Accumulated depreciation:
Balance as of 1 January 2018
Depreciation during the year
Disposals during the year
Balance as of 31 December 2018
Depreciation during the year
Disposals during the year
Balance as of 31 December 2019
148
33
-
181
35
(53)
163
65
16
-
81
17
-
98
482
366
198
(98)
14
-
582
380
273
(30)
14
-
825
394
1,959
886
-
2,845
848
-
3,693
52
7,453
34,908
90
-
1,073
(132)
7,543
35,850
77
-
493
(83)
7,620
36,260
439
3,459
170
-
1,317
(98)
609
4,678
170
-
1,357
(83)
779
5,952
DEKEL AGRI-VISION PLC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Depreciated cost as of 31
December 2019
Depreciated cost as of 31
December 2018
127
157
12
669
70
22,589
6,841
28
815
80
23,158
6,934
30,308
31,172
NOTE 7:- OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Employees and payroll accruals
VAT payable
Other accounts payable
31 December
2019
2018
Euros in thousands
272
164
580
1,016
198
228
170
596
NOTE 8:-
RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
On 24 June 2008, DekelOil CI SA signed a lease agreement for 42 hectares near the village of
Ayenouan, Cote d'Ivoire. The agreement is with the village of Adao and the people occupying
the land in Ayenouan. The lease is for 90 years and the payment for the lease is FCFA 3,000,000
(app. € 4,573) per annum.
In July 2015 a subsidiary of the Company signed a lease agreement for a vehicle. The lease is for
4 years and the payment is €1,062 per month.
In January 2018 a subsidiary of the Company signed a lease agreement for a vehicle. The lease
is for 5 years and the payment is €1,080 per month..
The right-of-use assets in respect of the above leases are included in Property and Equipment
(Note 6). The balance of the lease liabilities at 31 December 2019 amounted to € 90 (2018 - €94).
53
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9:-
LOANS
a.
Long-term loans:
DEKEL AGRI-VISION PLC.
Interest rate as of
31 December
31 December
Currency
2019
2019
2018
SGBCI (c.1)
NSIA (c.2 and c.3)
SOGEBOURSE (c.4)
SIB (c.5)
AgDevCo (c.6)
Total loans
In FCFA
In FCFA
In FCFA
In FCFA
In Euro
6.2%-7.3%
8.4%
6.85%
8.2%
7.5%
Euros in thousands
26
207
8,380
490
7,200
110
6,558
10,023
602
-
16,303
17,293
Less - current maturities
(2,339)
(3,581)
13,963
13,712
b.
Short-term loans and current maturities:
Interest rate
31 December
Short-term loan from bank
7% - 8%
Current maturities - per a. above
2019
2018
Euros in thousands
1,490
2,339
670
3,581
3,829
4,251
c.
1.
On 7 May 2013, DekelOil CI SA signed a line of credit agreement with the
Societe Generale de Banque Cote d'Ivoire ("SGBCI) for financing the purchase of
vehicles,). The loan is for a term of three years from the date of each loan
withdrawal. The effective interest rate of the loan is between 6.2 - 7.3% per annum.
2.
In June 2015 DekelOil CI SA signed a loan agreement with NSIA Banque ("NSIA")
according to which NSIA agreed to grant DekelOil CI SA a loan of FCFA 700 million
(approximately € 1,067 thousand). The loan is for 4 years and bears interest at a
rate of 8.4% per annum. The loan balance as of 31 December 2019 represents the
remaining balance of that loan.
54
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9:-
LOANS (Cont.)
DEKEL AGRI-VISION PLC.
3.
4.
5.
6.
In March 2016 DekelOil CI SA signed a long-term loan agreement with NSIA Bank
for FCFA 6 billion (approximately €9.15 million) in order to refinance the Bank of
Investment and Development of CEDEAO ("EBID") loan. The loan is repayable over
7 years in equal monthly payments and bears annual interest at the basic bank rate
minus 3.7% which is currently equal to 7.1%. According to the agreement, the
financial covenants that DekelOil CI SA should maintain are (1) Net debt to EBITDA
lower or equal to five, and (2) Debt service cover ratio greater than 1.2. The
significant decrease in EBITDA resulted in covenants breach as at 31 December
2018 which was waived by NSIA in December 2018.
On 22 March 2016 NSIA transfered the funds and the EBID loan was repaid in full.
In July 2019 this loan was refinanced in full by a loan from AgDevCo Limited (see 6
below)
In September 2016 DekelOil CI SA signed a long-term financing facility agreement
with a consortium of institutional investors arranged by SOGEBOURSE for a long-
term loan of up to FCFA 10 billion (approximately €15.2 million). Of this amount,
FCFA 5.5 billion (approximately €8.4 million) was utilized to refinance the West
Africa Development Bank ("BOAD") loan The loan is repayable over 7 years in
fourteen semi annual payments. and bears interest at a rate of 6.85% per annum.
On 22 October 2016 SOGEBOURSE transferred the funds and the BOAD loan was
repaid in full.
On 1 February 2018 the DekelOil CI SA drew down a second tranche of FCFA 2.8
billion (€4.34 million) from its FCFA 10 billion (€15.2 million) long-term Syndicated
Loan Facility with Sogebourse CI. on the same terms as the first tranche. Part of
the funds were used to repay a short-term loan in the amount of €1,524 thousand
and a long-term loan in the amount of €497 thousand.
In October 2018 DekelOil CI SA signed a loan agreement with Societe Ivorienne de
Banque ("SIB") for FCFA 400 million (approximately €610 thousand). The loan is for
5 years and bears interest at a rate of 8.2% per annum. One of the boilers in the
CPO extraction mill serves as a security for the loan.
In July 2019 the Company signed an agreement with AgDevCo Limited ("AgDevCo"),
a leading African agriculture sector impact investor for a €7.2 million loan for a term
of 10 years, 4 years of principal grace and 6 years of repayment, with a gross
interest rate of 7.5% per annum, variable and based on 12-month EURO Libor plus
a pre-defined spread, and collared with a minimum rate of 6% per annum and a
maximum rate of 9% per annum. The funds from the loan are to be used as follows:
(i) €6.2 million to replace existing NSIA Bank loan (see also 3 above) and (ii) €1.0
million for Environmental, Social and Governance ("ESG") activities and general
working capital purposes.
The loan agreement contains the following financial covenants to be tested on a
quarterly basis: (1) Current Ratio of at least 0.5; (2) Debt Service Coverage Ratio of
at least 1. In December 2019 a waiver was received for the testing of the above
55
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
financial covenants till 30 June 2020. AgDevCo is considering extending the waiver
period as the covenants may not be met on 30 June 2020. However, it is uncertain
that an extension of the waiver will be granted by AgDevCo prior to 30 June 2020.
Should the extension of the waiver not be granted, the entire balance of the loan
of approximately € 7.2 million will be subject to immediate repayment upon the
demand of AgDevCo.
NOTE 10:- EQUITY
a.
Composition of share capital:
31 December
31 December
2019
2018
2019
2018
Authorized
Issued and outstanding
Number of shares
Ordinary shares of
€ 0.0003367 par value
each
1,000,000,000 400,000,000
423,064,443
299,660,810
Each Ordinary share confers upon its holder voting rights, the right to receive cash and
share dividends, and the right to share in excess assets upon liquidation of the Company.
On 22 January 2018 the CEO of the Company's subsidiary exercised 400,000 options to
acquire Ordinary shares granted to him as part of his employment agreement.
In 2019 the Company issued 467,659 ordinary shares to certain brokers in consideration
for services provided. The fair value of the shares issued amounting to € 17 thousand was
recorded in general and administrative expenses
On 7 January 2019 the Company completed a purchase of 43.8% interest in Pearlside
Holding Ltd by way of issuing 52,612,613 Ordinary shares of the Company. Based on the
market price of the Company's shares on the date of the purchase, the cost of the
investment in Pearlside amounted to approximately €1.9 million. Of the total Ordinary
shares issued, 36,156,157 Ordinary shares were issued to related parties of the Company.
On 9 April 2019 the CEO of the Company's subsidiary exercised 600,000 options to acquire
Ordinary shares granted to him as part of his employment agreement.
On August 8th the Company raised a total amount of approximately €2.23 million (net of
€88 thousands fund raising costs) through the issuance of 69,723,361 Ordinary shares (of
which €1.5 million was invested by AgDevCo Limited (see also note 9 c.6).
Commencing from December 2019, pursuant to his remuneration contract, the General
Manager of the company’s subsidiary, shall be issued 400,000 Ordinary Shares per year
at par value over the next 3 years, vesting on a monthly basis. The fair value of the
56
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Ordinary shares to be issued at the date of grant amounts to € 34 thousand.
DEKEL AGRI-VISION PLC.
b.
Share option plan:
On 15 January 2015 the Company granted directors and senior employees options to
purchase 8,100,000 Ordinary shares. Of that amount, 1,800,000 options vested
immediately, and the remainder will vest ratably over 3 years. Half of the options have an
exercise price of 12.5 pence per share while the remainder is exercisable at a price of 20
pence per share. The fair value of the options granted calculated based on Black-Scholes
option pricing model was approximately €820 thousand.
NOTE 10:- EQUITY (Cont.)
On 19 October 2015 the Company granted directors and senior employee's options to
purchase 1,800,000 Ordinary shares. The options will vest ratably over 3 years. Half of the
options have an exercise price of 12.5 pence per share while the remainder is exercisable
at a price of 20 pence per share. The fair value of the options granted calculated based on
Black-Scholes option pricing model was approximately €139 thousand.
On 30 June 2017 the Company granted directors and senior employee's options to
purchase 10,750,000 Ordinary shares. The options will vest ratably over 5 years. The
exercise price of the options is €0.1359 per share. The fair value of the options granted
calculated based on Black-Scholes option pricing model was approximately €612
thousand.
On 1 January 2017 a subsidiary appointed a new CEO, and as part of his employment
compensation he was granted 1,200,000 options to purchase Ordinary shares of the
Company at a nominal exercise price. The options vest linearly over three years. The fair
value of the options at the date of grant was calculated based on the share price at that
date and was approximately €151 thousand.
On 2 December 2019 the Company granted directors and advisers options to purchase
17,600,000 Ordinary shares. The 2019 Options expire 10 years from the date of grant
and have an exercise price of 2.45 pence per Ordinary Share. One third of the 2019
Options vest immediately. The balance of the 2019 Options are subject to vesting
conditions as follows:
(i) One third of the options may only be exercised if at any point following the date of
grant, the 30-day Volume Weighted Average Price (VWAP) of the Ordinary Shares
achieves a price per share equal to or exceeding 4.0 pence. These options vest over 12
months following the date of grant.
(ii) A further one third of the options may only be exercised if at any point following the
date of grant, the 30-day VWAP of the Ordinary Shares achieves a price per share equal
to or exceeding 6.0 pence. These options vest over 12 months from the first anniversary
of the date of grant.
57
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
The fair value of the options granted calculated based on Black-Scholes option pricing
model was approximately €289 thousand for the 14,100,000 options granted to directors
and approximately €72 thousand for the 3,500,000 options granted to advisors.
In addition, in December 2019 the Company amended the terms of 7,200,000 of the
options granted in January 2015 (see above) and of the terms of 9,100,000 option
granted on 30 June 2017 (see above), to reflect the same terms, vesting terms and
duration of the options granted on 2 December 2019.
The incremental fair value of the amended options totaling approximately €212
thousand was calculated based on the difference between the fair value of the
options immediately before the amendment and their fair value immediately
after the amendment. The calculation was based on Black-Scholes option pricing
model. This incremental fair value will be recorded as an expense over the
NOTE 10:- EQUITY (Cont.)
amended vesting period in addition to the expense recorded in respect of the
original grant of these options.
The following table lists the inputs used in the measurement of the fair value of options,
in accordance with the Black and Scholes option pricing model, with respect to the above
plans:
2019
2017
2015
Risk-free interest rate (%)
Dividend yield (%)
Expected volatility (%)
Expected term (in years)
0.6%
0%
70%
10
1.3%
0%
37%%
10
1.6%
0%
47%
10
A summary of the activity in options for the years 2019 and 2018 is as follows:
Year ended
31 December
2019
2018
Weighted
average
exercise
Number
Number of
Weighted
average
exercise
of options
price-Euro
options
price-Euro
58
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
Outstanding at beginning of year
18,722,314
0.1734
21,850,000
0.1705
Exercised
Granted
Expired
Forfeited
(600,000)
nil
(400,000)
17,600,000
0.0288
-
nil
-
-
(200,000)
-
nil
(2,727,686)
0.1752
-
-
Outstanding at end of year
35,522,314
0.0332
18,722,314
0.1734
Exercisable options
12,922,314
0.0408
12,717,314
0.1887
c.
Capital reserve
The capital reserve comprises the contribution to equity of the Company by the
controlling shareholders.
59
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11:- REVENUES
DEKEL AGRI-VISION PLC.
a.
The Company has one operating segment - production and sale of Palm Oil, Palm Kernel
and Palm Kernel Oil. Substantially all of the revenues are derived from the sales of Palm
Oil, Palm Kernel Oil and Palm Kernel Cake in Cote d'Ivoire.
b. Major customers:
Year ended
31 December
2019
2018
Euros in thousands
Revenues from major customers which each account
for 10% or more of total revenues reported in the
financial statements:
Customer A -
Customer B -
13,583
3,720
13,817
3,938
NOTE 12:- FAIR VALUE MEASUREMENT
The fair value of accounts and other receivables, loans, and trade and other payables
approximates their carrying amount due to their short-term maturities. The fair value of long-
term loans with a carrying amount of €17,293 thousands and € 15,934 thousands (including
current maturities) approximates their fair value as of 31 December 2018 and 2017, respectively
(level 3 of the fair value hierarchy).
NOTE 13:-
INCOME TAXES
a.
Tax rates applicable to the income of the Company and its subsidiaries:
The Company and its subsidiary, CS DekelOil Siva Ltd, were incorporated in Cyprus and
are taxed according to Cyprus tax laws. The statutory federal tax rate is 10%.
The carryforward losses of the Company are approximately €22 thousand, and of CS
DekelOil Siva Ltd are approximately €14 thousand.
The subsidiary, DekelOil CI SA, was incorporated in Cote d'Ivoire and is taxed according to
Cote d'Ivoire tax laws. Based on its investment plan, DekelOil CI SA received a full tax
exemption from local income tax, "Tax on Industrial and Commercial profits," for the
60
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
thirteen years starting 1 January 2014, 50% tax exemption for the fourteenth year and
25% tax exemption for the fifteenth year.
The tax exemptions were conditional upon meeting the terms of the investment plan,
which the Group has met.
The subsidiary DekelOil Consulting Ltd was incorporated in Israel and is taxed according
to Israeli tax laws.
NOTE 13:-
INCOME TAXES (Cont.)
b.
Tax assessments:
The Company's subsidiary, DekelOil CI SA, received a final tax assessment through 2017.
As of 31 December 2019, the Company and all its other subsidiaries had not yet received
final tax assessments
c.
The tax expense during the year ended 31 December, 2019 relate to tax of the Company's
subsidiaries DekelOil CI SA and DekelOil Consulting Ltd.
NOTE 14:- SUPPLEMENTARY INFORMATION TO THE STATEMENT OF COMPREHENSIVE INCOME
Year ended
31 December
2019
2018
Euros in thousands
a.
Cost of revenues:
Cost of fruits
14,243
13,769
Salaries and related benefits
Cultivation & Nursery costs
Vehicles
Maintenance and other operating costs
Depreciation
b.
General and administrative expenses:
1,587
379
364
1,550
1,129
1,520
414
433
1,895
1,121
19,252
19,152
Salaries and related benefits
1,189
1,625
61
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Subcontractors
Rents & related office expenses
Travel expenses
Legal & accounting and professional fees
Vehicle maintenance
Insurance
Brokerage & nominated advisor fees
Depreciation
Share-based compensation
Other
c.
Finance cost:
Interest on loans
Bank fees
Exchange rate differences
DEKEL AGRI-VISION PLC.
364
111
98
293
106
98
134
228
296
241
42
250
122
222
110
73
81
186
160
364
3,158
3,235
1,304
463
62
1,410
268
60
1,829
1,738
62
DEKEL AGRI-VISION PLC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15:-
INCOME (LOSS) PER SHARE
The following reflects the income (loss) and share data used in the basic and diluted earnings
per share computations:
Year ended
31 December
2019
2018
Euros in thousands
Net income(loss)
(3,389)
(3,283)
Weighted average number of Ordinary shares for computing
basic and diluted earnings (loss) per share
352,290,622 299,119,461
In 2019 and 2018, share options are excluded from the calculation of diluted earnings per share
as their effect is antidilutive.
NOTE 16:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Year ended
31 December
2019
2018
Euros in thousands
a.1
Balances:
Other accounts payable and accrued expenses
31
32
a.2
Transactions:(c1)
Services and expense reimbursements
92
289
b.
Compensation of key management personnel of the
Company:
Short-term employee benefits
Share-based compensation
564
224
539
74
63
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) See also Note 10a regarding issuance of shares to related parties in connection with
the acquisition of an investment in Pearlside.
DEKEL AGRI-VISION PLC.
c.
Significant agreements with related parties:
1.
In February 2008, DekelOil Consulting Limited ("Consulting") signed an employment
agreement with a shareholder, who is a director of the Company, the CEO of the
Company and the chairman of the Board of Directors of DekelOil CI SA.
64
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
NOTE 16:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Cont.)
Under the employment agreement, the CEO is entitled to a monthly salary of
€ 20,000 per month (included in b) and management fee of € 5,000 per month
(included in a.2). The agreement is terminable by the Company with 24 months'
notice. The total annual salary, social benefits, bonuses and management fee paid
to the CEO during 2019 and 2018 was approximately €252 thousand and € 252
thousand, respectively.
2.
3.
In March 2008, DekelOil Consulting Limited signed an employment agreement with
a shareholder, who is a director of the Company, its Deputy CEO and Chief Financial
Officer. The agreement was amended on 11 July 2014 by the board of the subsidiary
to reflect the same salary terms as those of the CEO described in c (1) above. The
total annual salary and social benefits paid to the employee during 2019 and 2018
was approximately €194 thousand and € 191 thousand, respectively.
In March 2014 a subsidiary of the Company entered into an agreement with a
related party for renting tractors for its mill and logistic centers operation. The
engagement ended on October 2018. During 2018 the subsidiary paid to the related
company for these services approximately €179 thousand.
NOTE 17:- FINANCIAL INSTRUMENTS
a.
Classification of financial liabilities:
The financial liabilities in the statement of financial position are classified by groups of
financial instruments pursuant to IFRS 9:
31 December
2019
2018
Euros in thousands
Financial liabilities measured at amortized cost:
Trade and other payables
1,687
1,261
Short-term loans
1,490
670
Long-term lease liabilities
90
94
Long-term loans (including current maturities)
16,303
17,293
Total
19,570
19,818
b.
Financial risks factors:
65
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
The Group's activities expose it to market risk (foreign exchange risk). Certain of the
Group's long-term obligations at the reporting date also bear variable interest rates which
are linked to the inter banking interest rate in Cote d'Ivoire and in the UK, and therefore
the Group is exposed to cash flow risks due to changes in that base interest rate. The
effect on profit or loss is approximately €80 thousand for each 1% change in the base
interest rate.
66
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17:- FINANCIAL INSTRUMENTS (Cont.)
DEKEL AGRI-VISION PLC.
Foreign exchange risk:
The Company is exposed to foreign exchange risk resulting from the exposure to different
currencies, mainly, NIS and GBP. Since the FCFA is fixed to the Euro, the Group is not
exposed to foreign exchange risk in respect of the FCFA. As of 31 December 2019, the
foreign exchange risk is immaterial.
Liquidity risk:
The table below summarizes the maturity profile of the Group's financial liabilities based
on contractual undiscounted payments (including interest payments):
31 December 2019
Less than
one year
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
> 5 years
Total
Euros in thousands
Long-term loans (1)
Short-term loan
Trade payables and other
accounts payable
3,147
1,490
1,687
2,863
2,739
1,852
2,421
7,368
20,390
-
-
-
-
-
-
6
-
-
6
-
-
334
1,490
1,687
409
Long-term lease liabilities
23
20
20
6,347
2,883
2,759
1,858
2,427
7,702
23,976
(1)
Including current maturities.
31 December 2018
Less than
one year
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
> 5 years
Total
Euros in thousands
Long-term loans (1)
4,622
4,307
4,024
3,900
1,737
699
19,289
Short-term loan
Trade payables and other
accounts payable
670
1,261
-
-
-
-
-
-
Long-term lease
liabilities
25
18
18
18
-
-
6
-
-
670
1,261
340
425
6,578
4,325
4,042
3,918
1,743
1,039
21,645
(2)
Including current maturities.
67
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Movement in financial liabilities:
Short term
loans
Long term
loans (1)
Lease
liabilities
Total
DEKEL AGRI-VISION PLC.
Balance as of 1 January 2018
1,533
15,934
Receipt of short-term loan
Receipt of long-term lease
Repayment of long-term lease
670
-
-
-
-
-
46
-
72
(24)
17,513
670
72
(24)
Repayment of loans
(1,533)
(3,617)
-
(5,150)
Receipt of long-term loans
-
4,976
- -
4,976
Balance as of 31 December 2018
670
17,293
94
18,057
Receipt of short-term loan
Repayment of long-term lease
Repayment of loans
Receipt of long-term loans
1,490
-
-
-
(670)
(8,191)
-
7,200
14
(18)
-
-
1,504
(18)
(8,861)
7,200
Balance as of 31 December 2019
1,490
16,302
90
17,882
1) Including current maturities.
68
DEKEL AGRI-VISION PLC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18:-
SUBSEQUENT EVENTS
On 13 January 2020 a total of 831,408 Ordinary shares were issued to certain advisers in
settlement of fees for services provided in the amount of €9 thousand.
69