Annual Report & Financial
Statements
2020
DEKEL AGRI-VISION PLC
CONSOLIDATED FINANCIAL STATEMENTS
AS OF 31 DECEMBER 2020
EUROS IN THOUSANDS
- 2 -
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
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9
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12-15
16-22
23
24-25
26-27
28
29
30-31
32-64
CHAIRMAN’S STATEMENT
2020 was very much a year of two halves for Dekel Agri-Vision, its established palm oil operations and its
soon to be producing cashew processing plant in Cote d’Ivoire:
• Highly challenging first half due to the global pandemic and associated lockdowns
• Strong second half pick-up in activity which partially made up for the ground lost in the first half and
which has since gathered further momentum in 2021
Specifically, H1 2020 saw our Ayenouan crude palm oil (‘CPO’) operations contend with a near halving in
global prices from US$850 per tonne in January to US$500-550 per tonne in April and May 2020, a price
trajectory that was in line with other commodities following the onset of the pandemic. At the same time,
construction activity at our Tiebissou cashew plant was held back due to delays in the manufacture and
shipping of milling and infrastructure equipment in Italy and China, two countries that were severely
impacted by the pandemic in the first half.
H2 2020 witnessed a sharp rebound. Global CPO prices soared to the US$1,000 per tonne level they currently
trade at today following a strong recovery in CPO demand, which has enabled us to report an improvement
across all of Ayenouan’s key financial metrics for the full year compared to 2019. In addition, thanks to the
progress made on the ground in the second half, the commissioning of the 10,000tpa mill at Tiebissou is
expected in the coming weeks.
Importantly, the strong finish to the year has laid the foundations for what promises to be a transformative
2021 for the Company. Once operations commence at Tiebissou, Dekel will have two projects producing two
commodities and generating two independent revenue streams. Not only will this lead to the scaling up of
our revenues and earnings, but also to the diversification of our end markets. The directors have sought to
increase shareholder value by reducing risk through a combination of sustainably higher earnings and
multiple end markets.
With the commissioning of the cashew processing plant at Tiebissou within sight, we believe recent corporate
transactions indicate that we are already starting to see a lowering in the Company’s risk profile:
• Execution of transactions during the year and post period end, which resulted in the Company
securing a controlling stake in the Tiebissou cashew project in exchange for Dekel shares that were
issued at premia to the then market price
• Completion of a £3.2m equity raise post period end that was oversubscribed
•
c.€15.2 million bond facility secured post period end which extends the maturity of Dekel’s debt
profile and significantly strengthens the balance sheet - €5.9m was drawn down in January 2021
Taken together, it is clear that Dekel is entering a new phase in its history, in which a highly cash generative
platform and a strong balance sheet promise to accelerate the implementation of our growth strategy. This
remains focused on building a multi-project, multi-commodity agriculture company for the benefit of both
shareholders and the local communities in which we operate.
Ayenouan Palm Oil
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Being a producer of crude palm oil, key performance drivers for our Ayenouan operations are global CPO
prices, fresh fruit bunch (‘FFB’) deliveries / production levels, and extraction rates. The year under review
saw significant improvements in two of these metrics: global CPO prices and extraction rates. The 22.6%
increase in CPO prices to €602 per tonne and the jump in the extraction rate to 22.1% from 21.4% the
previous year were more than enough to offset a 12.5% drop in FFB delivered to the mill and a 9.6% fall in
volumes of CPO produced during the year. In turn, this has driven a material improvement in our full year
financial performance at the revenue, EBITDA and net profit / loss levels compared to 2019, as detailed in
the table below.
The average realised price of €602 per tonne of CPO achieved during the year does not tell the whole story.
Global CPO prices began and ended the year under review at over US$800 per tonne, a level rarely seen in
the eight years since our 60,000tpa mill was commissioned in 2013. Had prices traded at or around this level
throughout the year then, despite lower volumes of CPO produced at Ayenouan in 2020, it is likely we would
be reporting results closer to those of 2017, a record year in terms of revenue generation and profitability
with €30.2m revenues, €4.5m EBITDA and €1.6m net profits posted. During 2020 CPO prices were anything
but stable,, dropping below €500 per tonne as the pandemic took hold and societies around the world went
into lockdown, before rebounding equally dramatically in the second half of the year, as major importers in
Asia replenished inventories.
The above paragraph has not been included to illustrate a ‘what could have been’ scenario - rather a case of
‘what might be’. We are almost halfway through the current year and we have reported average realised
prices of €794 per tonne for Q1 2021, €803 for April and €774 for May. Together with a material
improvement in the peak harvest season, resulting in volumes of CPO produced increasing to 23,877 tonnes
during the five months to 31 May 2021, compared to 21,539 tonnes in the equivalent five-month period in
2020, we believe we are on course to report another year of material revenue and profits growth at
Ayenouan, one that could potentially challenge 2017’s record outcome. By way of illustration, in Q1 2017
16,398 tonnes of CPO were produced and average realised prices of €731 were achieved. The relevant
figures for Q1 2021 are 15,327 tonnes of CPO produced and average realised prices of €794 per tonne. Much
can happen between now and the end of the year but, as things stand, at the very least we are confident of
another year of progress at Ayenouan.
FY 2020
FY 2019
FY 2018
FY 2017
FY 2016
FFB collected (tonnes)
154,151
176,019
146,036
171,696
171,301
CPO production (tonnes)
34,002
37,649
33,077
38,736
39,111
CPO Sales (tonnes)
34,008
37,713
32,692
38,373
39,498
Average CPO price tonne
€602
€491
€542
€680
€575
Revenue (All products)
€22.5m
€20.9m
€20.9m
€30.2m
€26.6m
Gross Margin
€2.3m
€1.7m
€1.7m
€6.9m
€6.6m
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Gross Margin %
10.2%
8.1%
8.3%
22.8%
24.8%
EBITDA
EBITDA %
NPAT
NPAT %
ESG
€1.2m
€0.2m
(€0.2m)
€4.5m
€4.1m
5.3%
1%
-
14.9%
15.4%
(€2.2m)
(€3.3m)
(€3.3m)
€1.6m
€1.3m
-
-
-
5.3%
4.9%
Progress at Ayenouan this year will not be confined to operations and financials. Following major advances
made in 2020 preparing for the Round Table for Sustainable Palm Oil ('RSPO') certification process, we believe
we are on course to attain RSPO certification later this year. A pre-audit of the Company’s programmes and
management systems by Oxford-based environmental consultancy Proforest , as well as an assessment of
the processes and procedures to manage environmental and social risks and impacts at Ayenouan, has now
been completed. We are currently reviewing the final recommendations of the report ahead of commencing
the formal RSPO audit process later this year.
Certification would see Ayenouan become one of the few operations in the region with the RSPO stamp of
approval. It would also be a validation of our collaborative model which places local smallholders and
communities at the centre of our operations: over 90% of the CPO we produce at Ayenouan originates from
fruit harvested by local smallholders; while our state-of-the-art nursery supplies farmers with hundreds of
thousands of young trees each year. We have always believed that strong ESG credentials and corporate
profitability can go hand in hand, and we believe RSPO certification can demonstrate this. By providing third-
party endorsement, RSPO certification will differentiate Dekel from non-ESG focused peers. This has the
potential to increase deliveries of fruit grown in the region by local smallholders to Ayenouan for processing,
which in turn could help increase CPO production at the project towards the mill’s nameplate 60,000tpa
capacity. Furthermore, having RSPO certification has the potential to open up export markets for our CPO.
Tiebissou cashew project
Up until now, the financial results of Ayenouan and those of the group as a whole have mirrored each other,
at least at the revenue and gross profit levels, as our palm oil operation has been the only one in our portfolio
that has been in production. All this is set to change with the imminent commissioning of the 10,000tpa mill
at our cashew processing project. Thanks to the progress made during the second half of 2020, we are set to
commence production in the coming weeks and are also currently purchasing sufficient volumes of nuts from
local co-operatives for processing in the second half. Tiebissou is therefore on track to contribute to Dekel’s
financial performance in the current year before transforming Dekel’s financial profile in 2022, the first full
year of production.
We are confident that sufficient volumes of RCN will be secured to fully utilise the plant’s capacity because,
unlike palm oil, Cote d’Ivoire is not only one of the world’s largest RCN producers but there is a major shortfall
in cashew processing capacity in the country - just 15-20% of the c. 750,000MT of RCN grown each year is
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processed domestically. Even after taking into account additional processing capacity that is due to come on
stream in the years ahead, we believe RCN supply will continue to outstrip demand from local processing
plants for some time to come. This demand / supply imbalance also has positive implications for the project’s
margins which are expected to be higher than those of our palm oil operations at Ayenouan.
With such favourable RCN demand / supply dynamics and higher margins on offer, we are keen to expand
capacity at Tiebissou at the earliest opportunity and we have a roadmap in place to achieve this. The plant
we are installing has a nameplate capacity of 15,000tpa, which provides us with the opportunity to ramp up
production by 50% at no extra cost by increasing the number of shifts from two to three. We will look to do
this within 12-24 months of the commissioning of the plant. From this point onwards we aim to increase the
plant’s capacity to 30,000tpa which, based on today’s prices, could generate annual revenues of around €40
million. The imminent commissioning of the plant is therefore just the first of a series of growth steps at
Tiebissou.
That Tiebissou is on track to commence operations in the coming weeks is testament to the hard work of our
team on the ground and those of our equipment suppliers in Italy and China in the face of severe disruption
caused by the pandemic. The progress made in the second half of the year gave us the confidence to execute
the series of transactions, both during the year under review and post period end, that has seen Dekel’s
interest in the project increase to 70.7%.
Other projects
The development of our pipeline of projects was put on hold during the year in response to COVID-19. As
the global situation improves, and once Tiebissou is up and running, we will look to advance these projects,
one of which is centred around building a state-of-the-art processing plant for a third commodity. We also
have a joint venture with established renewable energy company Green Enesys Holdings to develop a hybrid
power project ('HCTPP') in Côte d'Ivoire. This project is at the feasibility study stage and is evaluating the
construction of a HCTPP comprising a 30MW solar PV plant and a 5-6MW biomass plant using empty fruit
bunches from Dekel's mill at Ayenouan as feedstock. Discussions with the government in Cote d’Ivoire are
ongoing.
Financial
During the period under review, total revenues at Ayenouan were €22.5 million, a 7.7% increase on the
previous year. The higher revenues were driven by a 22.6% increase in CPO prices achieved and a higher
extraction rate which together more than offset lower year on year CPO production at the mill during the
period (2020: 34,002 tonnes / 2019: 37,649 tonnes). The higher full year revenues generated a 500% increase
in EBITDA to €1.2 million (excluding share based compensation).
In response to the pandemic, management implemented a cost saving programme at both project and
corporate levels, resulting in a 12.5% reduction in general administration expenses compared to 2019.
In June 2020, Bloomfield Investment Corporation, the credit rating agent for West Africa, renewed the
Company’s credit rating as investment grade unchanged: long term BBB- and short term A3.
Outlook
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Dekel has emerged from what was a highly challenging year in a strengthened position, both operationally
and financially. In spite of the disruption caused by the pandemic, we have reported an improved set of full
year financial results for our palm oil operations, we have advanced our large-scale cashew processing
project, and we have secured a controlling interest in the same project ahead of the commencement of first
production.
The momentum behind the business continues to build in the current year: our palm oil operations are on
course to post another improved set of financial results for the first half; the cashew purchasing programme
has commenced in anticipation of the plant at Tiebissou commencing processing in the coming weeks; the
post period end long term debt refinancing has extended the maturity of our debt profile and strengthened
our balance sheet; and the planned completion of the RSPO certification process for our palm oil operations
later this year will potentially highlight the attractiveness of our project and open up export routes.
Takeaways from each of the above neatly sum up what we at Dekel Agri-Vision are focused on building: a
highly cash generative agriculture group; a diversified portfolio of growing revenues streams; a strong
balance sheet to support future growth; and a business with best-in-class ESG credentials among its peers.
Finally, I would like to thank the Board, management, our employees and advisers for their support and hard
work over the course of the year. It is because of their efforts that Dekel is in the strong position it is today
and that shareholders can look forward to an exciting year ahead.
Andrew Tillery
Non-Executive Chairman
Date: 23 June 2021
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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. He is currently on the board of a number of 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 14 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. Mr Moore is also
a non executive director of London Standard listed, Tirupati Graphite plc.
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.
- 10 -
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
- 11 -
DIRECTORS REPORT
The Directors present their annual report and the audited Financial Statements for the year ended
31 December 2020.
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 70.7% 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.
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 €2.2 million (2019 - €3.3 million). The Directors do not recommend the payment
of a dividend (2019 - 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 2020:
Key Performance Indicator
Budget
Actual
FFB Received
CPO Extraction Rate
CPO Produced
Future Developments
180,000 tn
154,151 tn
22.5%
40.500 tn
22.1%
34,002 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
-2020*
-2019
Shai Kol
-2020*
-2019
Lincoln Moore
-2020*
-2019
Non Executive Directors
Andrew Tillery
-2020*
-2019
Aristide Achybrou
-2020
-2019
Bernard Francois
(resigned 16 March 2020
-2020
Salaries and Fees
€'000
Benefits Bonuses
€'000
€'000
Total
€'000
154
223
31
-
185
29
-
252
115
30
145
166
28
-
191
54
-
-
54
102
-
-
102
7
-
-
40
-
-
7
40
19
-
-
19
n/a
n/a
n/a
n/a
7
-
-
-
7
-2019
27
-
-
27
Note 1: Board members partly deferred salaries during 2020 to support the company through the Covid-19 pandemic and ensure all
operating staff could be maintained on full salaries
- 13 -
Directors Shares and Options
Details of Directors’ interests as at 23 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
Number of
Ordinary
Shares
Number
of Vested
Options
Number
of
Unvested
Options
600,000
- 1,200,000
68,406,705 5.666.667 2,888,333
28,221,861 5.666.667 2,888,333
5,549,791 5.666.667 2,888,333
-
22,715,601
-
Substantial Shareholding
As at 23 June 2020, the Company had been notified of the following substantial shareholdings in the ordinary
share capital:
Directors
Youval Rasin
Shai Kol
Aristide Achy Brou
Lincoln Moore
Over 3%
68,406,705
28,221,861
22,715,601
5,549,791
12.77%
5.27%
4.24%
1.03%
Miton Group plc
50,147,629
9.36%
AgDevCo Ltd
41,188,990
7.69%
Biopalm Energy Limited
35,455,111
6.62%
Yossi Inbar
15,825,548
2.95%
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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: 23 June 2021
- 15 -
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. 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 6 logistic centres we have established (last year 5) to ease the transportation burden on
small holders delivering FFB to our Mill. We are also working to implement both a sustainable fertiliser
programme with our small holder farmers and a health care programme.
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 we are well advanced to full certification.
The falls in CPO prices through 2018 to 2020 (which has currently corrected to materially higher prices,
highlighted a need to further diversify our operations. We are currently in the process of rectifying this and
- 16 -
in Q3 2021 we will apply our small holder business model to the cashew industry via the completion of
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 once
operations commence at our cashew processing facility in Q3 2021 it will create at least an additional 300
new jobs. It is also expected that our market entry as a reliable sales partner for palm oil and cashew small
holders will continue to encourage the improvement of existing oil farm yields, enhance 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 well advanced towards full RSPO certification.
- 17 -
During the current Covid-19 pandemic we adhered 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 and 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).
The Company also recognise that from time to time board changes are appropriate to bring new a fresh
review of operations and strategy. In 2020 Aristide Achybrou replaced Bernard Francois as part of this
strategy.
Principle Six
Ensure that between them, the directors have the necessary up-to-date experience, skills and capabilities
- 18 -
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
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 directors’ 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
Full time
Yehohua Shai Kol Deputy CEO and Chief
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
- 19 -
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.
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. See principal 5 for 2020 board change
implemented.
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 Executives 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 2020 financial year.
Principle Nine
Maintain governance structures and processes that are fit for purpose and support good decision-making
- 20 -
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
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
- 21 -
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
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 and Principal 2 above.
Andrew Tillery
Non-Executive Chairman
Date: 23 June 2021
- 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.
- 23 -
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road, Building A,
Tel-Aviv 6492102, Israel
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
INDEPENDENT AUDITORS' REPORT
To the Shareholders of
DEKEL AGRI-VISION PLC.
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 2020 and 2019, 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
- 24 -
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 2020 and 2019, 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.
Tel-Aviv, Israel
23 June 2021
- 25 -
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
DEKEL AGRI-VISION PLC.
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Inventory
Accounts and other receivables
Total current assets
NON-CURRENT ASSETS:
Deposits in banks
Property and equipment, net
Investment in an associate
Total non-current assets
Total assets
31 December
2020
2019
Note
Euros in thousands
4
6
5
202
1,283
292
1,777
282
41,249
-
41,531
43,308
273
917
69
1,259
-
30,308
1,998
32,306
33,565
The accompanying notes are an integral part of the consolidated financial statements.
- 26 -
DEKEL AGRI-VISION PLC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
2020
2019
Note
Euros in thousands
EQUITY AND LIABILITIES
CURRENT LIABILITIES:
Short-term loans and current maturities of long-term loans
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
Total non-current liabilities
Total liabilities
9
7
8
9
EQUITY ATRIBUTED TO EQUITY HOLDERS OF THE COMPANY
10
Share capital
Additional paid-in capital
Accumulated deficit
Capital reserve
Capital reserve from transactions with non-controlling interests
Non-controlling interests
Total equity
Total liabilities and equity
5,676
893
1,971
1,824
10,364
192
238
20,052
20,482
30,846
142
35,569
3,829
680
1,169
1,016
6,694
90
33
13,963
14,086
20,780
141
34,368
(18,728)
(16,502)
2,532
(7,754)
2,532
(7,754)
11,762
12,785
700
12,462
43,194
-
12,785
33,565
The accompanying notes are an integral part of the consolidated financial statements.
23 June 2021
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
- 27 -
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
DEKEL AGRI-VISION PLC.
Year ended
31 December
2020
2019
Euros in thousands
(except share and per share
amounts)
22,546
20,207
2,339
2,761
(422)
1,582
167
20,947
19,252
1,695
3,158
(1,463)
1,829
-
Note
11
14a
14b
14c
(2,171)
(3,292)
13
55
47
(2,226)
(3,339)
Revenues
Cost of revenues
Gross profit
General and administrative
Operating loss
Finance cost
Share of loss of associate
Loss before taxes on income
Taxes on income
Loss and total comprehensive loss
Attributable to:
Equity holders of the Company
Non-controlling interests
Loss and total comprehensive loss
Loss per share attributable to equity holders of the Company
Basic and diluted loss per share
2,226
-
2,226
-
(
0.01
)
3,339
-
3,339
-
(0.01)
Weighted average number of shares used in computing basic and diluted
loss per share
428,930,844
379,838,186
The accompanying notes are an integral part of the consolidated financial statements.
- 28 -
DEKEL AGRI-VISION PLC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
Additional
paid-in
capital
Accumulated
deficit
Capital
reserve
Share capital
Euros in thousands
Capital
reserve from
transactions
with non-
controlling
interests
Total
Non-controlling
interests
Total Equity
Balance as of 1 January, 2019
99
29,862
(13,163)
2,532
(7,754)
11,576
Loss and total comprehensive
loss
Issuance of shares (Note 10)
Exercise of options (Note 10)
Share-based compensation
-
42
*)
-
-
4,186
-
320
(3,339)
-
-
-
-
-
-
-
-
-
-
-
(3,339)
4,228
*)
320
Balance as of 31 December 2019
141
34,368
(16,502)
2,532
(7,754)
12,785
Loss and total comprehensive
loss
Issuance of shares (Note 10)
Non-controlling interests arising
from initially consolidated
subsidiary
Share-based compensation
-
1
-
-
-
(2,226)
907
-
295
-
-
-
-
-
-
-
-
-
-
-
(2,226)
908
-
295
Balance as of 31 December 2020
142
35,570
(18,728)
2,532
(7,754)
(11,762)
*) Represents an amount lower than €1.
The accompanying notes are an integral part of the consolidated financial statements.
- 29 -
-
-
-
-
-
-
-
-
700
-
700
-
-
-
-
-
12,785
(2,226)
908
700
295
(12,462)
CONSOLIDATED STATEMENTS OF CASH FLOWS
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
Share of loss of associate
Changes in asset and liability items:
Decrease (increase) in inventories
Decrease (increase) in accounts and other receivables
Decrease in short-term deposits
Increase in trade payables
Increase (decrease) in advance from customers
Increase in accrued expenses and other accounts payable
Cash paid during the year for:
Income taxes
Interest
Net cash provided by (used in) operating activities
DEKEL AGRI-VISION PLC.
Year ended
31 December
2020
2019
Euros in thousands
(2,226)
(3,339)
1,369
295
1,141
205
167
(366)
(39)
(18)
83
802
325
3,964
(9)
(1,296)
(1,305)
433
1,357
320
1,306
1
-
626
351
-
16
(1,302)
420
3,095
-
(1,053)
(1,053)
(1,297)
The accompanying notes are an integral part of the consolidated financial statements.
- 30 -
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from investing activities:
Increase in cash upon initial consolidation of subsidiary (a)
Loan to associate
Purchase of property and equipment
Net cash used in investing activities
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
Net cash provided by financing activities
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:
DEKEL AGRI-VISION PLC.
Year ended
31 December
2020
2019
Euros in thousands
89
(378)
(118)
(407)
-
(12)
945
1,220
(2,250)
(97)
(71)
273
202
-
-
(435)
(435)
2,231
(4)
682
7,200
(8,366)
1,743
11
262
273
Issuance of shares in consideration for investment in Pearlside
884
1,998
(a) Acquisition of initially consolidated subsidiary:
The subsidiaries' assets and liabilities at date of acquisition:
Deficiency in working capital (excluding cash and cash equivalents)
Deposits
Property, plant and equipment
Right of use asset
Long-term debt
Non-controlling interests
Issuance of shares for acquisition
Investment in company accounted for at equity
462
(264)
(12,191)
114
8,174
700
884
2,210
89
-
-
-
-
-
-
-
-
-
The accompanying notes are an integral part of the consolidated financial information.
- 31 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1:- GENERAL
DEKEL AGRI-VISION PLC.
a.
b.
c.
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.
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.
Pearlside Holdings Ltd. (“Pearlside”) a company incorporated in Cyprus, is a 54%-owned
subsidiary of the Company since December 2020 (formerly a 43.8% owned associate). The
assets and liabilities of Pearlside are included for the first time by the Company in the
consolidated statement of financial position at 31 December 2020. Pearlside has a wholly-
owned subsidiary in Cote d’Ivoire, Capro CI SA (“Capro”). Capro is currently constructing
a Raw Cashew Nut (RCN) processing plant in Cote d’Ivoire near the village of Tiabisu (see
also Note 5 and Note 18)..
d.
DekelOil Consulting Ltd. a company located in Israel and a wholly-owned subsidiary of
DekelOil Siva, is engaged in providing services to the Company and its subsidiaries.
e.
Cash flow from operations and working capital deficiency
During the last three year the Company has operated in challenging economic conditions.
In 2018 due to unusually low fruit yields across Cote d'Ivoire and a decrease in the market
price of palm oil, the Group's cash flows generated from operations were nil. In 2019 the
fruit yields recovered to normal levels but the market price of palm oil continued to be at
cyclical low levels resulting in a negative cash flow from operations of approximately €1.3
million. There was a recovery in market prices at the beginning of 2020 which was reversed
with the outbreak of the COVID -19 pandemic, and the subsequent sharp decrease of
commodity prices. Despite this, the Group generated positive cash flow from operations of
approximately €0.4 million in 2020. CPO prices have continued to increase during the first
few months of 2021, and through the date of approval of these financial statements, the
Group is continuing to generate positive cash flow from operations. The Group has
prepared detailed forecasted cash flows through the end of 2022 based on estimates of
commodity prices expected to be in effect during that period, which forecasts indicate that
the Group should continue to have positive cash flows from its operations. However, the
operations of the Group are subject to various market conditions, including quantity and
quality of fruit harvests and market prices, that are not under the Group's control that could
have an adverse effect on the Group's future cash flows.
As of 31 December 2020, the Group has a deficiency in working capital of approximately
32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
€ 8.6 million. In December 2020, the Company was in advanced stages of debt refinancing
and an equity raise that were completed in early 2021 (see Note 18 “Subsequent events”).
These transactions resulted in immediate additional funds of approximately € 9.7 million,
with an additional € 9.2 million available to draw down in the future. As of the date of
approval of the financial statements, expenditures for the completion of the RCN
processing plant of Pearlside have been substantially paid. Additional funding for the initial
operation of the plant in the second half of 2021 are in place and are expected to be
sufficient until the plant reaches the production level necessary to provide a positive cash
flow from its operations.
Based on the above, Company management believes it will have sufficient funds necessary
to continue its operations and to meet its obligations as they become due for at least a period
of twelve months from the date of approval of the financial statements.
f.
The recent outbreak of Coronavirus, a virus causing potentially deadly respiratory tract
infections originating in China and spreading in various jurisdictions, had a significant
effect on the global economic conditions and CPO prices but it had no significant effect on
the Company’s operations during the reported year. The outbreak of Coronavirus may
resume its negative affect on economic conditions regionally as well as globally, disrupt
operations situated in countries particularly exposed to the contagion, affect the Company's
customers and suppliers or business practices previously applied by those entities, or
otherwise impact the Company's activities. Governments in affected countries are imposing
travel bans, quarantines and other emergency public safety measures. Those measures,
though apparently temporary in nature, may continue and increase depending on
developments in the virus’ outbreak. The ultimate severity of the Coronavirus outbreak is
uncertain at this time and therefore the Company cannot reasonably estimate the impact it
may have on its end markets and its future revenues, profitability, liquidity and financial
position.
NOTE 1:- GENERAL (Cont.)
g. Definitions:
The Group
- DEKEL AGRI-VISION PLC and its subsidiaries.
The Company
- DEKEL AGRI-VISION PLC.
Subsidiaries
- Companies that are controlled by the Company- CS DekelOil Siva Ltd,
DekelOil CI SA, DekelOil Consulting Ltd, and commencing from
December 2020 - Pearlside Holdings, Capro CI SA.
Associate
- Company in which the Group has significant influence over the financial
and operating policies without having control – Pearlside Holdings Ltd
(until December 2020).
33
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
are considered when assessing whether an entity has control. The consolidation of the
financial statements commences on the date on which control is obtained and ends when
such control ceases.
The financial statements of the Company and of the subsidiaries are prepared as of the same
dates and periods. The consolidated financial statements are prepared using uniform
accounting policies by all companies in the Group. Significant intragroup balances and
transactions and gains or losses resulting from intragroup transactions are eliminated in full
in the consolidated financial statements.
Non-controlling interests in subsidiaries represent the equity in subsidiaries not
attributable, directly or indirectly, to a parent. Non-controlling interests are presented in
equity separately from the equity attributable to the equity holders of the Company. Profit
or loss and components of other comprehensive income are attributed to the Company and
to non-controlling interests. Losses are attributed to non-controlling interests even if they
result in a negative balance of non-controlling interests in the consolidated statement of
financial position.
A change in the ownership interest of a subsidiary, without a change of control, is accounted
for as a change in equity by adjusting the carrying amount of the non-controlling interests
with a corresponding adjustment of the equity attributable to equity holders of the Company
less / plus the consideration paid or received.
34
DEKEL AGRI-VISION PLC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
c.
Investment in an associate:
The Group's investment in an associate is accounted for using the equity method.
Under the equity method, the investment in the associate is presented at cost with the
addition of post-acquisition changes in the Group's share of net assets, including other
comprehensive income of the associate. Gains and losses resulting from transactions
between the Group and the associate are eliminated to the extent of the interest in the
associate.
Goodwill relating to the acquisition of an associate is presented as part of the investment
in the associate, measured at cost and not systematically amortized. Goodwill is evaluated
for impairment as part of the investment in the associate as a whole.
The financial statements of the Company and of the associate are prepared as of the same
dates and periods. The accounting policies applied in the financial statements of the
associate are uniform and consistent with the policies applied in the consolidated financial
statements of the Group.
Losses of an associate in amounts which exceed its equity are recognized by the Company
to the extent of its investment in the associate plus any losses that the Company may incur
as a result of a guarantee or other financial support provided in respect of the associate. For
this purpose, the investment includes long-term receivables (such as loans granted) for
which settlement is neither planned nor likely to occur in the foreseeable future.
d.
Functional currency, presentation currency and foreign currency:
1.
Functional currency and presentation currency:
The local currency used in Cote d'Ivoire is the West African CFA Franc ("FCFA"),
which has a fixed exchange rate with the Euro (Euro 1 = FCFA 655.957). A
substantial portion of the Group's revenues and expenses is incurred in or linked to
the Euro. The Group obtains debt financing mostly in FCFA linked to Euros and the
funds of the Group are held in FCFA. Therefore, the Company's management has
determined that the Euro is the currency of the primary economic environment of the
Company and its subsidiaries, and thus its functional currency. The presentation
currency is Euro.
2.
Transactions, assets and liabilities in foreign currency:
Transactions denominated in foreign currency are recorded upon initial recognition
at the exchange rate at the date of the transaction. After initial recognition, monetary
assets and liabilities denominated in foreign currency are translated at each reporting
date into the functional currency at the exchange rate at that date. Exchange rate
differences, other than those capitalized to qualifying assets or accounted for as
35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
DEKEL AGRI-VISION PLC.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
at the exchange rate at the date of the transaction. Non-monetary assets and liabilities
denominated in foreign currency and measured at fair value are translated into the
functional currency using the exchange rate prevailing at the date when the fair value
was determined.
e.
Cash equivalents:
Cash equivalents are considered as highly liquid investments, including unrestricted short-
term bank deposits with an original maturity of three months or less from the date of
acquisition.
f.
Financial instruments:
1)
Financial assets:
Financial assets are measured upon initial recognition at fair value plus
transaction costs that are directly attributable to the acquisition of the financial
assets, except for financial assets measured at fair value through profit or loss
in respect of which transaction costs are recorded in profit or loss.
The Company classifies and measures debt instruments in the financial
statements based on the following criteria:
-
-
The Company's business model for managing financial assets; and
The contractual cash flow terms of the financial asset.
a)
Debt instruments are measured at amortized cost when:
The Company's business model is to hold the financial assets in order
to collect their contractual cash flows, and the contractual terms of the
financial assets give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
After initial recognition, the instruments in this category are measured
according to their terms at amortized cost using the effective interest
rate method, less any provision for impairment.
36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
b)
Equity instruments and other financial assets held for trading:
Investments in equity instruments do not meet the above criteria and
accordingly are measured at fair value through profit or loss.
Other financial assets held for trading such as derivatives, including
embedded derivatives separated from the host contract, are measured at
fair value through profit or loss unless they are designated as effective
hedging instruments.
Dividends from investments in equity instruments are recognized in
profit or loss when the right to receive the dividends is established.
2)
Impairment of financial assets:
The Company evaluates at the end of each reporting period the loss allowance
for financial debt instruments which are not measured at fair value through
profit or loss.
The Company has short-term financial assets such as trade receivables in
respect of which the Company applies a simplified approach and measures the
loss allowance in an amount equal to the lifetime expected credit losses. An
impairment loss on debt instruments measured at amortized cost is recognized
in profit or loss with a corresponding loss allowance that is offset from the
carrying amount of the financial asset.
3)
Financial liabilities:
a)
Financial liabilities measured at amortized cost:
Financial liabilities are initially recognized at fair value less transaction
costs that are directly attributable to the issue of the financial liability.
After initial recognition, the Company measures all financial liabilities
at amortized cost using the effective interest rate method.
4)
Derecognition of financial instruments:
a)
Financial assets:
A financial asset is derecognized when the contractual rights to the cash
flows from the financial asset expire.
37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
b)
Financial liabilities:
DEKEL AGRI-VISION PLC.
A financial liability is derecognized when it is extinguished, that is
when the obligation is discharged or cancelled or expires.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
g.
Borrowing costs:
The Group capitalizes borrowing costs that are attributable to the acquisition, construction,
or production of qualifying assets which necessarily take a substantial period of time to get
ready for their intended use or sale.
The capitalization of borrowing costs commences when expenditures for the asset are
incurred, the activities to prepare the asset are in progress and borrowing costs are incurred
and ceases when substantially all the activities to prepare the qualifying asset for its
intended use or sale are complete. The amount of borrowing costs capitalized in a reporting
period includes specific borrowing costs and general borrowing costs based on a weighted
capitalization rate.
h.
Leases:
On January 1, 2019, the Company first applied IFRS 16, "Leases" ("the Standard"). The
Company elected to apply the provisions of the Standard using the modified retrospective
method (without restatement of comparative data).
The Company accounts for a contract as a lease when the contract terms convey the right
to control the use of an identified asset for a period of time in exchange for consideration.
The Group as a lessee:
For leases in which the Company is the lessee, the Company recognizes on the
commencement date of the lease a right-of-use asset and a lease liability, excluding leases
whose term is up to 12 months and leases for which the underlying asset is of low value.
For these excluded leases, the Company has elected to recognize the lease payments as an
expense in profit or loss on a straight-line basis over the lease term. In measuring the
lease liability, the Company has elected to apply the practical expedient in the Standard
and does not separate the lease components from the non-lease components (such as
management and maintenance services, etc.) included in a single contract.
On the commencement date, the lease liability includes all unpaid lease payments
discounted at the interest rate implicit in the lease, if that rate can be readily determined,
or otherwise using the Group's incremental borrowing rate. After the commencement
date, the Group measures the lease liability using the effective interest rate method.
38
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.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
h. Biological assets:
Biological assets of the Company are fresh fruit bunches (FFB) that grow on palm oil trees.
The period of biological transformation of FFB from blossom to harvest and then
conversion to inventory and sale is relatively short (about 2 months). Accordingly, any
changes in fair value at each reporting date are generally immaterial.
i.
Property and equipment:
Property and equipment are stated at cost, net of accumulated depreciation. Palm oil trees
before maturity are measured at accumulated cost, and depreciation commences upon
reaching maturity. Depreciation is calculated by the straight-line method over the estimated
useful lives of the assets at the following annual rates:
%
2.5
3.33
33
Extraction mill
Palm oil plantations
Computers and peripheral
equipment
Equipment and furniture
15 – 20
Motor vehicles
Agriculture equipment
25
15
39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
DEKEL AGRI-VISION PLC.
The useful life, depreciation method and residual value of an asset are reviewed at least
each year-end and any changes are accounted for prospectively as a change in accounting
estimate. Depreciation of an asset ceases at the earlier of the date that the asset is classified
as held for sale and the date that the asset is derecognized.
j.
Impairment of non-financial assets:
The Company evaluates the need to record an impairment of non-financial assets
whenever events or changes in circumstances indicate that the carrying amount is not
recoverable.
If the carrying amount of non-financial assets exceeds their recoverable amount, the assets
are reduced to their recoverable amount. The recoverable amount is the higher of fair value
less costs of sale and value in use. In measuring value in use, the expected future cash flows
are discounted using a pre-tax discount rate that reflects the risks specific to the asset. The
recoverable amount of an asset that does not generate independent cash flows is determined
for the cash-generating unit to which the asset belongs. Impairment losses are recognized
in profit or loss.
An impairment loss of an asset, other than goodwill, is reversed only if there have been
changes in the estimates used to determine the asset's recoverable amount since the last
impairment loss was recognized. Reversal of an impairment loss, as above, shall not be
increased above the lower of the carrying amount that would have been determined (net of
depreciation or amortization) had no impairment loss been recognized for the asset in prior
years and its recoverable amount. The reversal of impairment loss of an asset presented at
cost is recognized in profit or loss.
The following criteria are applied in assessing impairment of these specific assets:
Investment in associate:
After application of the equity method, the Company determines whether it is necessary to
recognize any additional impairment loss with respect to the investment in associates. The
Company determines at each reporting date whether there is objective evidence that the
carrying amount of the investment in the associate is impaired. The test of impairment is
carried out with reference to the entire investment, including the goodwill attributed to the
associate.
k.
Revenue recognition:
40
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Revenue from contracts with customers is recognized when the control over the services
is transferred to the customer. The transaction price is the amount of the consideration
that is expected to be received based on the contract terms.
Revenue from the sale of goods:
Revenue from sale of goods is recognized in profit or loss at the point in time when the
control of the goods is transferred to the customer, generally upon delivery of the goods to
the customer.
Contract balances:
Amounts received from customers in advance of performance by the Company are recorded
as contract liabilities/advance payments from customers and recognized as revenue in profit
or loss when the work is performed. For all years presented in these financial statements,
such advances were recognized as revenues in the year subsequent to their receipt.
l.
Inventories:
Inventories are measured at the lower of cost and net realizable value. The cost of
inventories comprises costs of purchase and costs incurred in bringing the inventories to
their present location and condition. Net realizable value is the estimated selling price in
the ordinary course of business less estimated costs of completion and estimated costs
necessary to make the sale. The Company periodically evaluates the condition and age of
inventories and makes provisions for slow moving inventories accordingly.
Cost of finished goods inventories is determined on the basis of average costs including
materials, labor and other direct and indirect manufacturing costs based on normal capacity.
m.
Earnings (loss) per share:
Earnings (loss) per share are calculated by dividing the net income attributable to equity
holders of the Company by the weighted number of Ordinary shares outstanding during the
period.
Basic earnings (loss) per share only include shares that were actually outstanding during
the period. Potential Ordinary shares are only included in the computation of diluted
earnings (loss) per share when their conversion decreases earnings per share or increases
loss per share from continuing operations.
Further, potential Ordinary shares that are converted during the period are included in
diluted earnings (loss) per share only until the conversion date and from that date in basic
earnings (loss) per share. The Company's share of earnings of investees is included based
on the earnings (loss) per share of the investees multiplied by the number of shares held by
the Company.
41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Basic and diluted earnings per share are adjusted retrospectively due to changes in shares
outstanding resulting from bonus issues, share splits and share consolidations, including
those that occur after the reporting period and through the date the financial statements are
approved for issuance.
n.
Provisions:
A provision in accordance with IAS 37 is recognized when the Group has a present
obligation (legal or constructive) as a result of a past event, it is probable that an outflow
of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. When the Group expects part
or all of the expense to be reimbursed, for example under an insurance contract, the
reimbursement is recognized as a separate asset but only when the reimbursement is
virtually certain. The expense is recognized in profit or loss net of any reimbursement.
o. Fair value measurement:
Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.
Fair value measurement is based on the assumption that the transaction will take place in
the asset's or the liability's principal market, or in the absence of a principal market, in the
most advantageous market.
The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market participants
act in their economic best interest.
Fair value measurement of a non-financial asset takes into account a market participant's
ability to generate economic benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs.
42
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
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).
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
p.
Share-based payment transactions:
The Company applies the provisions of IFRS 2, "Share-Based Payment". IFRS 2 requires
an expense to be recognized where the Company buys goods or services in exchange for
shares or rights over shares ("equity-settled transactions"), or in exchange for other assets
equivalent in value to a given number of shares of rights over shares ("cash-settled
transactions"). The main impact of IFRS 2 on the Company is the expensing of employees'
and directors' share options (equity-settled transactions).
The cost of equity-settled transactions with employees is measured by reference to the fair
value of the equity instruments at the date on which they are granted. The fair value is
determined using an acceptable option model.
The cost of equity-settled transactions is recognized, together with a corresponding increase
in equity, over the period in which the performance and/or service conditions are fulfilled,
ending on the date on which the relevant employees become fully entitled to the award
("the vesting date"). The cumulative expense recognized for equity-settled transactions at
each reporting date until the vesting date reflects the extent to which the vesting period has
expired and the Company's best estimate of the number of equity instruments that will
ultimately vest.
q.
Taxes on income:
Current or deferred taxes are recognized in profit or loss, except to the extent that they
relate to items which are recognized in other comprehensive income or equity.
1.
Current taxes:
The current tax liability is measured using the tax rates and tax laws that have been
enacted or substantively enacted by the end of reporting period as well as
adjustments required in connection with the tax liability in respect of previous years.
2.
Deferred taxes:
43
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
Deferred taxes are computed in respect of temporary differences between the
carrying amounts in the financial statements and the amounts attributed for tax
purposes.
Deferred taxes are measured at the tax rate that is expected to apply when the asset
is realized or the liability is settled, based on tax laws that have been enacted or
substantively enacted by the reporting date.
Deferred tax assets are reviewed at each reporting date and reduced to the extent that
it is not probable that they will be utilized. Temporary differences for which deferred
tax assets had not been recognized are reviewed at each reporting date and a
respective deferred tax asset is recognized to the extent that their utilization is
probable.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Taxes that would apply in the event of the disposal of investments in investees have
not been taken into account in computing deferred taxes, as long as the disposal of
the investments in investees is not probable in the foreseeable future.
Also, deferred taxes that would apply in the event of distribution of earnings by
investees as dividends have not been taken into account in computing deferred taxes,
since the distribution of dividends does not involve an additional tax liability or since
it is the Company's policy not to initiate distribution of dividends from a subsidiary
that would trigger an additional tax liability.
r. Significant accounting estimates and assumptions used in the preparation of the financial
statements:
The preparation of the financial statements requires management to make estimates
and assumptions that have an effect on the application of the accounting policies and
on the reported amounts of assets, liabilities, revenues and expenses. Changes in
accounting estimates are reported in the period of the change in estimate.
s.
Changes in accounting policies – initial application of new financial reporting and
accounting standards and amendments to existing financial reporting and accounting
standards:
Amendment to IFRS 3, “Business Combinations”
In October 2018, the IASB issued an amendment to the definition of a "business" in
IFRS 3, "Business Combinations" ("the Amendment").
The Amendment clarifies that in order to meet the definition of a "business", an
acquired set of activities and assets must include, at a minimum, an input and a
substantive process that together significantly contribute to the ability to create
44
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
output. The Amendment also clarifies that a business can exist without including all
of the inputs and processes necessary to create outputs. The Amendment includes an
optional concentration test that permits a simplified assessment of whether an
acquired set of activities and assets is not a business, with no need for other
assessments.
The Amendment is to be applied to business combinations and asset acquisitions
for which the acquisition date is on or after January 1, 2020.
The Company has applied the Amendment to the acquisition of the controlling
interest in Pearlside in 2020.
45
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
NOTE 3:- DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION
a. Amendment to IAS 16, "Property, Plant and Equipment":
In May 2020, the IASB issued an amendment to IAS 16, "Property, Plant and Equipment"
("the Amendment"). The Amendment prohibits a company from deducting from the cost
of property, plant and equipment ("PP&E") consideration received from the sales of items
produced while the company is preparing the asset for its intended use. Instead, the
company should recognize such consideration and related costs in profit or loss.
The Amendment is effective for annual reporting periods beginning on or after January 1,
2022, with earlier application permitted. The Amendment is to be applied retrospectively,
but only to items of PP&E made available for use on or after the beginning of the earliest
period presented in the financial statements in which the company first applies the
Amendment. The company should recognize the cumulative effect of initially applying the
Amendment as an adjustment to the opening balance of retained earnings at the beginning
of the earliest period presented.
The Company estimates that the application of the Amendment is not expected to have a
material impact on the financial statements.
b.
Amendment to IAS 1, "Presentation of Financial Statements":
In January 2020, the IASB issued an amendment to IAS 1, "Presentation of Financial
Statements" ("the Amendment") regarding the criteria for determining the classification of
liabilities as current or non-current.
The Amendment includes the following clarifications:
• What is meant by a right to defer settlement;
•
•
•
That a right to defer must exist at the end of the reporting period;
That classification is unaffected by the likelihood that an entity will exercise its
deferral right;
That only if an embedded derivative in a convertible liability is itself an equity
instrument would the terms of a liability not impact its classification.
The Amendment is effective for annual periods beginning on or after January 1, 2023 and
must be applied retrospectively.
The Company is evaluating the possible impact of the Amendment on its current loan
agreements.
46
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
c.
Amendments to IFRS 9, IFRS 7, IFRS 16, IFRS 4 and IAS 39 regarding the IBOR
reform:
In August 2020, the IASB issued amendments to IFRS 9, "Financial Instruments", IFRS 7,
"Financial Instruments: Disclosures", IAS 39, "Financial Instruments: Recognition and
Measurement", IFRS 4, "Insurance Contracts", and IFRS 16, "Leases" ("the
Amendments").
The Amendments provide practical expedients when accounting for the effects of the
replacement of benchmark InterBank Offered Rates (IBORs) by alternative Risk Free
Interest Rates (RFRs).
Pursuant to one of the practical expedients, an entity will treat contractual changes or
changes to cash flows that are directly required by the reform as changes to a floating
interest rate. That is, an entity recognizes the changes in interest rates as an adjustment of
the effective interest rate without adjusting the carrying amount of the financial instrument.
The use of this practical expedient is subject to the condition that the transition from IBOR
to RFR takes place on an economically equivalent basis.
The Amendments include new disclosure requirements in connection with the expected
effect of the reform on an entity's financial statements, such as how the entity is managing
the process to transition to the interest rate reform, the risks to which it is exposed due to
the reform and quantitative information about IBOR-referenced financial instruments that
are expected to change.
The Amendments are effective for annual periods beginning on or after January 1, 2021.
The Amendments are to be applied retrospectively. However, restatement of comparative
periods is not required. Early application is permitted.
The Company is presently assessing the accounting implications, if any, of the transition
from IBORs to RFRs on the financial instrument contracts that are expected to be in effect
on the transition date, including the effects of the application of the above Amendments.
47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4:- ACCOUNTS AND OTHER RECEIVABLES
Government authorities (VAT)
Prepaid expenses and other receivables
Loans to employees
Advance payment to contractor
NOTE 5:- INVESTMENT IN PEARLSIDE HOLDINGS LTD
DEKEL AGRI-VISION PLC.
31 December
2020
2019
Euros in thousands
3
12
41
236
292
3
62
4
-
69
On 20 December 2018 the Company entered into an agreement to purchase a 43.8% interest in
Pearlside Holdings Ltd ("Pearlside") by way of issuing 52,612,613 Ordinary shares of the
Company. Pearlside, through its wholly-owned subsidiary, is in the final stages of development
and construction of a Raw Cashew Nut (RCN) processing plant in Cote d'Ivoire, which is expected
to be completed and operational in the second half of 2021. The closing of this purchase
transaction occurred on 7 January 2019 (See also Note 10 Equity).
Based on the market price of the Company's shares on the date of the purchase, the cost of the
investment in Pearlside amounted to approximately €1.9 million.
On 30 October 2020 the Company entered into an agreement to increase its holding in Pearlside
to 52% by way of issuing 28,552,800 Ordinary shares of the Company. Based on the market price
of the Company's shares on the date of the purchase, the cost of this additional investment in
Pearlside is €740 thousand. The shares were issued, and the transaction was completed on 25
November 2020.
Following this transaction, the Company gained control over Pearlside. The assets and liabilities
of Pearlside are included for the first time in the consolidated statement of financial position as
of 31 December 2020. As Pearlside is in the process of construction of its RCN plant, the results
of operations of Pearlside from the date of acquisition to 31 December 2020 are immaterial.
On 8 December 2020 the Company entered into an agreement to purchase an additional 2% and
to increase its holding to 54% by way of issuing 3,922,789 Ordinary shares of the Company.
Based on the market price of the Company's shares on the date of the purchase, the cost of this
additional investment in Pearlside is €144 thousand.
As of the date of obtaining control, the RCN plant under construction represented substantially
all of the gross assets of Pearlside. All of the activity of Pearlside relates to the construction of
the plant. There are a few employees that are involved in the supervision of the construction which
is being performed by external contractors. Accordingly, the purchase transaction is accounted
for as an acquisition of assets.
Pursuant to IFRS 3, the Company records the cash and other financial assets and liabilities at their
fair value on date of acquisition (which approximates their carrying amounts, including loans
which were recently obtained at market terms). The excess of (i) the cost of the investment plus
48
DEKEL AGRI-VISION PLC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ii) the non-controlling interest recognized over (iii) the carrying amount of the net assets acquired
(equity of Pearlside) is allocated to the RCN plant. The non-controlling interest in the amount of
€ 700 is measured at its proportionate share of the net assets (equity) of Pearlside.
Following are the assets and liabilities acquired at the date of acquisition (Euros in thousands):
Deficiency in working capital
Non- current deposits
Property, plant and equipment
Lease liability
Long-term debt
(373)
264
12,191
(114)
(8,174)
49
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6:- PROPERTY AND EQUIPMENT, NET
Composition and movement:
DEKEL AGRI-VISION PLC.
Computers
and
peripheral
equipment
Equipment
and
furniture
Motor
vehicles
Agriculture
equipment
Extraction
mill
and land
Palm oil
plantations
Cashew
processing
mill under
construction
and land
Total
Cost:
Balance as of 1
January, 2019
Acquisitions during the
year
Disposals during the
year
Balance as of 31
December, 2019
Acquisitions during the
year
Disposals during the
year
Initial consolidation of
subsidiary
Balance as of 31
December, 2020
Accumulated
depreciation:
Balance as of 1
January 2019
Depreciation during
the year
Disposals during the
year
Balance as of 31
December 2019
Depreciation during
the year
Disposals during the
year
Balance as of 31
December 2020
Depreciated cost as of
31 December 2020
Depreciated cost as of
31 December 2019
338
109
1,397
460
26,003
7,543
5
(53)
1
-
128
(30)
4
-
278
-
77
-
290
110
1,495
464
26,281
7,620
4
-
103
(15)
(7)
(72)
-
-
3
3
26
26
-
-
-
12
-
-
282
106
1,552
490
26,281
7,632
181
81
582
380
2,845
609
35
(53)
163
29
17
-
98
8
273
(30)
825
205
(15)
(7)
(72)
848
170
14
-
-
394
3,693
15
-
876
-
-
779
236
-
182
101
1,005
409
4,569
1,015
-
-
-
-
-
-
12,133
12,133
-
-
-
-
-
-
-
35,850
493
(83)
36,260
119
(94)
12,191
48,476
4,678
1,357
(83)
5,952
1,369
(94)
7,281
105
7
594
81
21,712
6,617
12,133
41,249
127
12
669
70
22,589
6,841
-
30,308
50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7:- OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Employees and payroll accruals
VAT payable
Other accounts payable
DEKEL AGRI-VISION PLC.
31 December
2020
2019
Euros in thousands
993
100
731
272
164
580
1,824
1,016
NOTE 8:- RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
On 24 June 2008, DekelOil CI SA signed a lease agreement for 42 hectares near the village of
Ayenouan, Cote d'Ivoire. The agreement is with the village of Adao and the people occupying the
land in Ayenouan. The lease is for 90 years and the payment for the lease is FCFA 3,000,000
(app. € 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.
A subsidiary consolidated for the first time at 31 December 2020 signed a lease agreement with
the government authorities for 6 hectares near the village of Tiabissuo, Cote d’Ivoire. The
agreement is for a lease of 99 years with an annual lease payment of 6 million FCFA (app.
€ 9,146)
The right-of-use assets in respect of the above leases are included in Property and Equipment
(Note 6). The balance of the lease liabilities at 31 December 2020 amounted to € 192 (2019 -
€90).
51
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
2020
2020
2019
Euros in thousands
In FCFA
6.2%-7.3%
In FCFA
In FCFA
In FCFA
In Euro
In FCFA
In FCFA
In FCFA
In FCFA
In FCFA
8.4%
6.85%
8.2%
7.5%
7.25%
8.5%
7.75%
7.75%
7.5%
SGBCI
NSIA
SOGEBOURSE (c.1)
SIB (c.2)
AgDevCo (c.3)
BGFI (c.4)
BIDC (c.5)
NSIA (c.6)
NSIA (c.7)
BGFI (c.8)
Total loans
Less - current maturities
b.
Short-term loans and current maturities:
Short-term loan from bank
Current maturities - per a. above
1
-
6,387
377
7,200
1,153
4,053
1,834
762
1,524
26
207
8,380
490
7,200
-
-
-
-
-
23,291
(3,239)
20,052
16,303
(2,339)
13,963
31 December
2020
2019
Euros in thousands
2,437
3,239
5,676
1,490
2,339
3,829
c.
1.
In September 2016 DekelOil CI SA signed a long-term financing facility agreement
with a consortium of institutional investors arranged by SOGEBOURSE for a long-
term loan of up to FCFA 10 billion (approximately €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
52
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
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.
2.
3.
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 DekelOil CI SA 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
financial covenants till 30 June 2020. AgDevCo then issued an extension to the
waiver covering 30 June 2020 and 31 December 2020. The Company is expected to
meet these financial covenants during 2021 (see Note 18 Subsequent Events).
4. On 7 July 2020 DekelOil CI SA signed a loan agreement with Banque Gabonaise
Francaise International ("BGFI") for FCFA 800 million (approximately €1,220
thousand). The loan is for 5 years and bears interest at a rate of 7.25% per annum.
5.
6.
On 16 March 2016 Capro CI SA signed a loan agreement with the Bank of
Investment and Development of CEDEAO ("EBID") according to which EBID
agreed to grant Capro CI SA a facility of 3,000 million FCFA (€ 4,573 thousand).
The EBID loan shall bear interest at a rate of 8.5% per annum. The loan has a tenure
of seven years, and shall be repaid in 20 quarterly installments over five years,
commencing after a grace period on principal payments of two years. Principal
payments start in January 2022.
in 2018 Capro CI SA signed a loan agreement with NSIA bank, Togo ("NSIA Togo")
according to which NSIA Togo agreed to grant Capro CI SA a facility of 1,500
million FCFA (€ 2,278 thousand).
NSIA Togo loan shall bear interest at a rate of 7.25%% per annum. The loan has a
tenure of seven years and shall be repaid in 20 quarterly installments over five years,
commencing after a grace period on principal payments of two years from the first
withdrawal made on 20 February 2020.
7. On 30 March 2020 Capro CI SA signed a loan agreement with NSIA bank Cote
d’Ivoire ("NSIA") according to which NSIA agreed to grant Capro CI SA a facility
of 500 million FCFA (€ 762 thousand).
NSIA loan shall bear interest at a rate of 7.25% per annum. The loan is for two years
with one year grace period on principal payments.
53
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
8. On 3 February 2020 Capro CI SA signed a loan agreement with Banque Gabonaise
Francaise International ("BGFI") for FCFA 1,000 million (approximately €1,542
thousand). The loan shall bear interest at a rate of 7.5% per annum. The loan has a
tenure of seven years and shall be repaid in monthly installments over five years,
commencing after a grace period on principal payments of two years from the first
withdrawal made in September 2020.
NOTE 10:- EQUITY
a.
Composition of share capital:
31 December
31 December
2020
2019
2020
2019
Authorized
Issued and outstanding
Number of shares
Ordinary shares of
€ 0.0003367 par value
each
1,000,000,000 1,000,000,000
457,126,075
423,064,443
Each Ordinary share confers upon its holder voting rights, the right to receive cash and
share dividends, and the right to share in excess assets upon liquidation of the Company.
In 2019 the Company issued 467,659 ordinary shares to certain brokers in consideration
for services provided. The fair value of the shares issued amounting to € 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 8 August 2019 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 Ordinary
shares to be issued at the date of grant amounts to € 34 thousand. As of 31 December 2020,
400,000 Ordinary shares which are fully vested have not yet been issued to the General
Manager.
On 25
November 2020 the Company issued 28,552,800 Ordinary Shares according to an
54
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
agreement to increase its holding of Pearlside to 52% by way of a share swap. Based on
the market price of the Company's shares on the date of the purchase, the cost of this
additional investment in Pearlside is €740 thousand.
On 10 December 2020 the Company completed a purchase of an additional 2% of Pearlside
Holding Ltd, reaching a total holding of 54% of Pearlside, by way of issuing 3,922,789
Ordinary shares of the Company. Based on the market price of the Company's shares on
the date of the purchase, the cost of this additional investment in Pearlside is €144 thousand.
In 2020 the Company issued 1,587,043 ordinary shares to certain brokers in consideration
for services provided. The fair value of the shares issued amounting to € 24 thousand was
recorded in general and administrative expenses
b.
Share option plan:
On 15 January 2015 the Company granted directors and senior employee's options to
purchase 8,100,000 Ordinary shares. Of that amount, 1,800,000 options vested
immediately, and the remainder will vest ratably over 3 years. Half of the options have an
exercise price of 12.5 pence per share while the remainder is exercisable at a price of 20
pence per share. The fair value of the options granted calculated based on Black-Scholes
option pricing model was approximately €820 thousand.
On 19 October 2015 the Company granted directors and senior employee's options to
purchase 1,800,000 Ordinary shares. The options will vest ratably over 3 years. Half of the
options have an exercise price of 12.5 pence per share while the remainder is exercisable
at a price of 20 pence per share. The fair value of the options granted calculated based on
Black-Scholes option pricing model was approximately €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, this condition was met during
2020. These options vest over 12 months following the date of grant.
55
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
(ii) A further one third of the options may only be exercised if at any point following the
date of grant, the 30-day VWAP of the Ordinary Shares achieves a price per share equal to
or exceeding 6.0 pence. These options vest over 12 months from the first anniversary of
the date of grant.
The fair value of the options granted calculated based on Black-Scholes option pricing
model was approximately €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 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:
Risk-free interest rate (%)
Dividend yield (%)
Expected volatility (%)
Expected term (in years)
2019
0.6%
0%
70%
10
56
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the activity in options for the years 2020 and 2019 is as follows:
DEKEL AGRI-VISION PLC.
Year ended
31 December
2020
2019
Weighted
average
exercise
Number
Number of
Weighted
average
exercise
of options
price-Euro
options
price-Euro
Outstanding at beginning of year
35,522,314
0.0332
18,722,314
0.1734
Exercised
Granted
Expired
Forfeited
-
-
-
-
-
-
-
-
(600,000)
nil
17,600,000
0.0288
-
-
(200,000)
nil
Outstanding at end of year
35,522,314
0.0332
35,522,314
0.0332
Exercisable options
24,222,314
0.0352
12,922,314
0.0408
c.
Capital reserve
The capital reserve comprises the contribution to equity of the Company by the controlling
shareholders.
NOTE 11:- REVENUES
a.
The Company has one operating segment - production and sale of Palm Oil, Palm Kernel
and Palm Kernel Oil. Substantially all of the revenues are derived from the sales of Palm
Oil, Palm Kernel Oil and Palm Kernel Cake in Cote d'Ivoire.
b. Major customers:
Year ended
31 December
2020
2019
Euros in thousands
18,531
-
13,583
3,720
Revenues from major customers which each account for 10%
or more of total revenues reported in the financial
statements:
Customer A -
Customer B -
57
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12:- FAIR VALUE MEASUREMENT
DEKEL AGRI-VISION PLC.
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 €23,291 thousands and € 16,303 thousands (including current maturities)
approximates their fair value as of 31 December 2020 and 2019, respectively (level 3 of the fair
value hierarchy).
NOTE 13:- INCOME TAXES
a.
Tax rates applicable to the income of the Company and its subsidiaries:
The Company and its subsidiaries, CS DekelOil Siva Ltd and Pearlside Holdings Ltd, were
incorporated in Cyprus and are taxed according to Cyprus tax laws. The statutory federal
tax rate is 10%.
The carryforward losses of the Company are approximately €26 thousand, of CS DekelOil
Siva Ltd are approximately €17 thousand, and of Pearlside are approximately €9 thousand.
The subsidiary, DekelOil CI SA, was incorporated in Cote d'Ivoire and is taxed according
to Cote d'Ivoire tax laws. Based on its investment plan, DekelOil CI SA received a full tax
exemption from local income tax, "Tax on Industrial and Commercial profits," for the
thirteen years starting 1 January 2014, 50% tax exemption for the fourteenth year and 25%
tax exemption for the fifteenth year.
The tax exemptions were conditional upon meeting the terms of the investment plan, which
the Group has met.
The subsidiary, Capro CI SA, was incorporated in Cote d'Ivoire and is taxed according to
Cote d'Ivoire tax laws. Based on its investment plan, Capro CI SA received a full tax
exemption from local income tax, "Tax on Industrial and Commercial profits," for the
thirteen years starting from commencement of production, 50% tax exemption for the
fourteenth year and 25% tax exemption for the fifteenth year.
The tax exemptions were conditional upon meeting the terms of the investment plan, which
the Group is expecting to meet.
The subsidiary DekelOil Consulting Ltd was incorporated in Israel and is taxed according
to Israeli tax laws.
NOTE 13:- INCOME TAXES (Cont.)
b.
Tax assessments:
The Company's subsidiary, DekelOil CI SA, received a final tax assessment through 2017.
As of 31 December 2020 the Company and all its other subsidiaries had not yet received
final tax assessments
58
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DEKEL AGRI-VISION PLC.
c. The tax expense during the year ended 31 December, 2020 relate to tax of the Company's
subsidiaries DekelOil CI SA and DekelOil Consulting Ltd.
59
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14:- SUPPLEMENTARY INFORMATION TO THE STATEMENT OF COMPREHENSIVE
INCOME
DEKEL AGRI-VISION PLC.
Year ended
31 December
2020
2019
Euros in thousands
14,233
1,680
578
372
2,111
1,233
20,207
14,243
1,587
379
364
1,550
1,129
19,252
1,131
1,189
310
108
99
283
86
86
82
138
271
167
364
111
98
293
106
98
134
228
296
241
2,761
3,158
1,144
429
9
1,582
1,304
463
62
1,829
a. Cost of revenues:
Cost of fruits
Salaries and related benefits
Cultivation & Nursery costs
Vehicles
Maintenance and other operating costs
Depreciation
b. General and administrative expenses:
Salaries and related benefits
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
60
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:
Net income(loss)
Year ended
31 December
2020
2019
Euros in thousands
(2,226)
(3,389)
Weighted average number of Ordinary shares for computing basic
and diluted earnings (loss) per share
428,930,844
352,290,622
In 2020 and 2019, share options are excluded from the calculation of diluted earnings per share
as their effect is antidilutive.
NOTE 16:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES
a.1 Balances:
Other accounts payable and accrued expenses
a.2 Transactions:
Services and expense reimbursements
b. Compensation of key management personnel of the Company:
Short-term employee benefits
Share-based compensation
Year ended
31 December
2020
2019
Euros in thousands
191
33
379
224
31
92
564
224
c.
Significant agreements with related parties:
1.
In February 2008, DekelOil Consulting Limited ("Consulting") signed an
employment agreement with a shareholder, who is a director of the Company, the
CEO of the Company and the chairman of the Board of Directors of DekelOil CI
SA.
61
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. The agreement is terminable by the Company with 24 months'
notice. The total annual salary, social benefits, bonuses and management fee paid to
the CEO during 2020 and 2019 was approximately €162 thousand and € 252
thousand, respectively.
2.
In March 2008, DekelOil Consulting Limited signed an employment agreement with
a shareholder, who is a director of the Company, its Deputy CEO and Chief Financial
Officer. The agreement was amended on 11 July 2014 by the board of the subsidiary
to reflect the same salary terms as those of the CEO described in c (1) above. The
total annual salary and social benefits paid to the employee during 2020 and 2019
was approximately €146 thousand and € 194 thousand, respectively.
NOTE 17:- FINANCIAL INSTRUMENTS
a.
Classification of financial liabilities:
The financial liabilities in the statement of financial position are classified by groups of
financial instruments pursuant to IFRS 9:
Financial liabilities measured at amortized cost:
Trade and other payables
Short-term loans
Long-term lease liabilities
Long-term loans (including current maturities)
Total
b.
Financial risks factors:
31 December
2020
2019
Euros in thousands
2,717
2,437
192
23,291
28,637
1,687
1,490
90
16,303
19,570
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.
62
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 2020
Less
than one
year
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
> 5 years
Euros in thousands
Total
Long-term loans (1)
4,254
4,784
3,935
4,504
3751
11,758
32,986
Short-term loan
2,437
Trade payables and
other accounts
payable
Long-term lease
liabilities
31 December 2019
-
-
2,717
20
20
-
-
6
-
-
6
-
-
6
-
-
2,437
2,717
328
386
9,428
4,804
3,941
4,510
3,757
12,086
36,091
Less
than one
year
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
> 5 years
Euros in thousands
Total
Long-term loans (1)
3,147
2,863
2,739
1,852
2,421
7,368
20,390
Short-term loan
1,490
Trade payables and
other accounts
payable
Long-term lease
liabilities
-
-
-
-
1,687
23
20
20
-
-
6
-
-
-
-
1,490
1,687
6
334
409
6,347
2,883
2,759
1,858
2,427
7,702
23,976
(1)
Including current maturities.
63
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Movement in financial liabilities:
Short term
loans
Long term
loans (1)
Lease
liabilities
Balance as of 1 January 2019
670
17,293
DEKEL AGRI-VISION PLC.
94
14
(18)
-
-
90
-
(12)
114
-
-
-
Total
18,057
1,504
(18)
(8,861)
7,200
17,882
2,437
(12)
114
(5,038)
2,363
8,174
Receipt of short-term loan
Receipt of long-term lease
Repayment of long-term lease
Repayment of loans
Receipt of long-term loans
Balance as of 31 December
2019
Receipt of short-term loan
Repayment of long-term lease
New lease upon consolidation
of subsidiary.
1,490
-
(670)
-
1,490
2,437
-
-
Repayment of loans
(1,490)
Receipt of long-term loans
Initial consolidation of
subsidiary
Balance as of 31 December
2020
-
-
-
-
(8,191)
7,200
16,302
-
-
-
(3,584)
2,363
8,174
2,437
23,291
192
23,557
1)
Including current maturities and accrued interest.
NOTE 18:- SUBSEQUENT EVENTS
On 25 January 2021 DekelOil CI SA signed an agreement for a long-term bond of up to
€15.2 million (10,000 million FCFA). The first tranch of €6 million (3,930 million FCFA)
was received on 27 January 2021. The bond is for 7 years with a 3 year grace for principal
repayments. The bond bears annual interest of 7.75%.
On 29 January 2021 the Company raised equity totaling to £3.27 million (€3.69 million).
This is net of £0.23 million (€0.26 million) fund raising costs through the placing of
70,000,000 new Ordinary Shares at an issue price of 5 pence per share.
On 8 February 2021, the Company signed an agreement to purchase an additional 16.7%
of Pearlside for a total consideration of £1.062 million (€1.2 million), of which £708,000
(€806 thousand) of the consideration is to be settled in cash with the remaining £354,000
(€403 thousand) to be settled via the issue of 7,080,000 new Ordinary shares at 5 pence
per share. Following this acquisition, the Company holds 70.7% of Pearlside (see also Note
6)
- - - - - - - - - - - - - - - -
64