REG - Dekel Agri-Vision - 2021 Final Results
23/06/2022 07:01
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RNS Number : 8620P Dekel Agri-Vision PLC 23 June 2022
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food Producers
Dekel Agri-Vision Plc ('Dekel' or the 'Company')
2021 Final Results
Dekel Agri-Vision Plc (AIM: DKL), the West African agribusiness company
focused on building a portfolio of sustainable and diversified projects, is
pleased to announce its audited results for the year ended 31 December 2021
(the 'Accounts'). The Company also gives notice that its Annual General
Meeting ('AGM') will be held at Hill Dickinson LLP, The Broadgate Tower, 20
Primrose Street, London EC2A 2EW on 26 July 2022 at 10am BST. The Notice of
AGM will be sent to shareholders and the Notice of AGM and Accounts will be
made available to download later today from the Company's website
www.dekelagrivision.com.
Financial Highlights
· Record Revenue and EBITDA delivered from the Ayenouan palm oil plant
in Côte d'Ivoire ('Palm Oil Operation') primarily driven by record Crude Palm
Oil ('CPO') production and record CPO pricing:
o 66.2% increase in revenues to €37.4m (2020: €22.5m) - includes sale of
CPO, Palm Kernel Oil ('PKO'), Palm Kernel Cake ('PKC') and Nursery Plants
o Gross margin increased by 70.6% to 17.4% (2020: 10.2%), with post period
end margins further improving towards historical levels
o 333.3% increase in EBITDA to €5.2m (2020: €1.2m)
o Net profit after tax of €1.0m (2020: €2.2m net loss)
· The Company's cashew processing plant at Tiebissou in Côte
d'Ivoire (the 'Cashew Operation') recorded a Net Loss of €0.4m in 2021
during its construction phase and entered the commissioning phase in December
2021 with pilot production and sales commencing in early January after 2021
year-end.
Year ended 31 December 2021 2020 % change
Palm Oil Operation
Revenue €37.4m €22.5m 66.2%
Gross Margin €6.5m €2.3m 182.6%
Gross Margin % 17.4% 10.2% 70.6%
G&A (€3.5m) (€2.8m) (25.0%)
EBITDA €5.2m €1.2m 333.3%
Net profit / (loss) after tax €1.0m (€2.2m) n/a
Cashew Operation
Net Loss* (€0.4m) Nil n/a
Dekel Group Net profit / (loss) after tax €0.6m (€2.2m) n/a
*Cashew pilot production commenced in early January post-2021 year-end
Operational Highlights - Palm Oil Operation
· 17.5% increase in FY2021 CPO production compared to FY2020,
resulting in record annual production of 39,953 tonnes
· 21.0% extraction rate achieved in FY 2021 (FY2020: 22.1%)
· 14.9% increase in FY2021 CPO sales compared to FY2020, resulting
in record annual sales of 39,092 tonnes
· 44.2% increase in average CPO prices to €868 per tonne in FY2021
(FY2020: €602). This represents an annual Company record sales price
· 22.7% increase in FY2021 PKO sales compared to FY2020
· 42.5% increase in average PKO prices to €851 in FY2021 (FY2020:
€597)
Operational Highlights - Cashew Operation
· Cashew Operation capital works progressed significantly in FY2021
from a project at an early land preparation and construction phase to a
largely commissioned plant with pilot production having commenced in early
January 2022
· Delays in final key equipment items have stalled the ramp-up of
production in H1 2022; however, with the arrival of the colour sorter on 12
June 2022, we expect to see a material increase in operating capacity shortly
· Cashew Operation expected to become net operating cash flow
positive in Q4 2022
Lincoln Moore, Dekel's Executive Director, said: "It was a significant year
for Dekel with our Palm Oil Operation delivering record breaking operating and
financial results and our Cashew Operation moving materially towards first
production, albeit with unprecedented macro conditions impacting the timing of
delivery of full capacity. Whilst macro conditions are challenging, CPO
prices continue to remain strong, underpinning the profitability of the Palm
Oil Operation despite a period of weaker fresh fruit bunches ('FFB') volumes
in H1 2022 and, together with the imminent ramp-up phase of the Cashew
Operation, Dekel is well positioned to deliver a period of transformational
operating and financial growth."
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
** ENDS **
For further information please visit the Company's website
www.dekelagrivision.com or contact:
Dekel Agri-Vision Plc +44 (0) 207 236 1177
Youval Rasin
Shai Kol
Lincoln Moore
WH Ireland Ltd (Nomad and Joint Broker) +44 (0) 20 7220 1666
James Joyce
Ben Good
Optiva Securities Limited (Joint Broker) +44 (0) 203 137 1903
Christian Dennis
Daniel Ingram
Notes:
Dekel Agri-Vision Plc is a multi-project, multi-commodity agriculture company
focused on West Africa. It has a portfolio of projects in Côte d'Ivoire at
various stages of development: a fully operational palm oil project in
Ayenouan where fruit produced by local smallholders is processed at the
Company's 60,000tpa capacity crude palm oil mill and a cashew processing
project in Tiebissou, which commenced production in early January 2021.
CHAIRMAN'S STATEMENT
2021 has seen a year of record breaking results in our Palm Oil Operation and
considerable progress towards commencement of production from our Cashew
Operation, our second commodity to enter production and a key part of our
short and medium term strategies to increase both the scale and diversity of
Dekel.
The excellent performance of our Palm Oil Operation has been reflected in our
full year financial results. Both revenue of €37.4 million (2020: €22.5
million) and EBITDA of €5.2 million (2020: €1.2m) were records for our
Palm Oil Operation. 2021 also saw a return to net profitability of the Palm
Oil Operation which delivered a net profit after tax of €1.0m, having
reported a loss of €2.2 million in 2020. While supportive palm oil prices
have played a major role in these results, it is also due to Dekel's ability
to navigate and withstand the various operational challenges resulting from
Covid-19 and maintain stability within the Palm 0il Operation.
In terms of delivering the Cashew Operation to production, significant
progress was achieved in 2021, albeit slower than we envisaged. At the time
of writing this statement, we will now shortly commence the process of
increasing production to over 50% of capacity with final commissioning and
100% capacity to follow. We believe the delivery of this project will be
transformational in terms of increasing the scale, diversity and most
importantly the future profit potential of Dekel.
Palm Oil Operation
2021 Palm Oil production can be summarised in two halves: a solid high season
during H1 where production increased 11% compared to H1 2020 and an
exceptionally high low season during H2 where production increased 33%
compared to H2 2020. Combined, the FY2021 CPO production of 39,959 tn was an
annual record. Tempering this result to a small degree was a lower CPO
extraction rate of 21.0% in FY2021 compared to FY2020 of 22.1%.
The high levels of CPO production continued into January 2022; however, over
the past few months we have seen unusually weak quantities of FFB during the
high season which typically takes place from February to May. The weak FFB
levels have been experienced throughout the east of Cote d'Ivoire and into the
west of Ghana. Our agronomists and other technical experts have had
difficulty pin-pointing the exact reason for this unusual seasonal trend.
However, we have historically seen that periods of exceptionally high
production, as we experienced in H2 2021, are often followed by a weaker
period of production. Critically, during H1 2022, we have seen a dramatic
improvement in the CPO extraction rate to well over 22%, which is in part
offsetting the weaker FFB volumes. Again, this is consistent with historical
trends where FFB production volumes and extraction rates have had an indirect
relationship.
CPO prices achieved by the Company commenced 2021 at €796 per tonne and
ended the year significantly higher at €968 per tonne. During 2021 we saw
CPO demand rise as economies reopened after Covid-19 lockdowns and supply
remained constricted following a number of years of low global new planting
levels, coupled with labour, logistics and shipping challenges associated with
the reopening of economies.
Currently, we are experiencing a 'super peak' in CPO prices as the impact of
the war in Ukraine, which produces approximately 50% of the world's sunflower
oil (a substitute for CPO) has created further supply constraints and has led
to numerous vegetable oil producing countries (including soya producers, the
main substitute to CPO) to restrict exports in order to meet local demands.
This has resulted in global CPO prices rising to as high as €1,800 per tonne
in March 2022. Whilst the current global uncertainty means predictions are
difficult, we expect to see some softening in prices during 2022 from these
unprecedented levels. However, we maintain our view that CPO prices should
remain well above the long-term average of €700 per tonne for the
foreseeable future which would be very supportive for our Palm Oil Operation.
We also remain bullish on medium to long term price dynamics.
The CPO and PKO prices achieved by Dekel locally in Côte d'Ivoire in FY2021
rose by 44.2% and 42.5% respectively compared to FY2020. Despite these
significant increases, local prices have now traded at a material discount to
the international market due to local market price caps being set at
approximately €900 per tonne to protect local consumers. Whilst we continue
to sell the majority of our products locally, we have also commenced the
export of a portion of our products in 2021. This commenced with our PKO
which we are currently selling for over €400 per tonne more than in 2021. In
addition we are now exporting a portion of our CPO production where our prices
achieved have increased over €200 per tonne in recent months. We aim to
continue to export a portion of our products to gain access to the higher
international prices while balancing our obligations to local stakeholders.
Final Roundtable on Sustainable Palm Oil ('RSPO') audit and certification of
our Palm Oil Mill has been stalled firstly as a result of the inability of
consultants and auditors to travel in H1 2021 due to Covid-19 and a current
resultant backlog of companies seeking RSPO audits and RSPO renewal audits
post Covid-19 travel restrictions. During this waiting period we have been
consulting with RSPO in relation to the audit of our Company estates. As our
estates consist of over 100 small plots rather than one large plot the audit
process, in our view, needed clarification and a bespoke approach. RSPO has
now provided a clear pathway to completing the Company estates audit and we
are now preparing the works required with the objective of completing the
audits of the Palm Oil Mill and Company estates at the same time. We will
continue to update the market with our progress on this process.
Cashew Operation
The Cashew Operation site commenced 2021 as an early-stage construction site
and finished the year with all site and infrastructure works completed. The
equipment, with the exception of the sorting and shelling machinery was also
largely commissioned, with pilot cashew production commencing in early January
after year-end. Whilst progress has been considerable, we have encountered a
host of supplier equipment delays due to our suppliers experiencing raw
material shortages, logistics and shipping issues and additional Covid-19
lockdowns. This has meant a number of key components, most notably the
sorting and shelling machines, have been severely delayed and stalled our
intended timeline to ramp-up the Cashew Operation towards full production.
We believe we are finally seeing the light at the end of the tunnel including
the arrival of the colour sorting equipment from China on 12 June 2022 which,
once installed, will allow production to increase to above 50% of capacity
shortly. In addition, shipment of the shelling machines are being prepared
for shipment imminently. These machines when working together with
substitute shelling machines already on site will enable 100% capacity to
finally be delivered. As announced on 15 June 2021, we acquired
approximately 2,000tn of raw cashew nut feedstock during 2021 and we are
continuing to acquire feedstock with the current objective of transitioning to
full scale production as quickly as possible.
Whilst the delays have been very frustrating, we remain excited about the
potential of the Cashew Operation which is being developed in such a way that
capacity can be increased significantly once the initial raw material capacity
of 10,000 tonnes per annum is reached. With a nameplate capacity of 15,000
tonnes per annum ('tpa'), production at the plant can be ramped up by 50% at
no extra cost by increasing the number of shifts from two to three when
operations have reached an appropriate sustained period of stabilisation.
From 15,000tpa and at a cost of €5-6 million, the mill's capacity can be
doubled to 30,000tpa, which we estimate could generate revenues in the region
of approximately €35-40 million per annum based on today's cashew prices.
Other projects
We continue to assess and undertake low-cost feasibility studies on additional
projects, including a third commodity for which we believe we can leverage our
existing infrastructure, logistics network and technical expertise. In
addition, we have medium term plans to create a clean energy operation from
waste material from both our Palm Oil Operation and Cashew Operation, which
would underpin a biomass operation. Both projects are proceeding cautiously
with current work being low cost and will remain so, at least until the Cashew
Operation is up and running. We will provide further updates as appropriate.
Financial
A summary of the financial performance for FY2021, in addition to the
comparatives for the previous 5 years, is outlined in the table below.
FY2021 FY 2020 FY 2019 FY 2018 FY 2017 FY 2016
FFB collected (tonnes) 190,020 154,151 176,019 146,036 171,696 171,301
CPO production (tonnes) 39,953 34,002 37,649 33,077 38,736 39,111
CPO sales (tonnes) 39,092 34,008 37,713 32,692 38,373 39,498
Average CPO price per tonne €868 €602 €491 €542 €680 €575
Total Revenue (all products) €37.4m €22.5m €20.9m €20.9m €30.2m €26.6m
Gross Margin €6.5m €2.3m €1.7m €1.7m €6.9m €6.6m
Gross Margin % 17.4% 10.2% 8.1% 8.3% 22.8% 24.8%
Overheads €3.8m €2.8m €3.2m €3.2m €3.6m €3.2m
EBITDA €4.8m €1.2m €0.2m (€0.2m) €4.5m €4.1m
EBITDA % 12.8% 5.3% 1.0% - 14.9% 15.4%
Net Profit / (Loss) After Tax €0.6m (€2.2m) (€3.3m) (€3.3m) €1.6m €1.3m
Net Profit / (Loss) After Tax % 1.6% - - - 5.3% 4.9%
FY2021 Revenue was a record for the Company and 66.2% higher than FY2020.
This was driven by both record production in addition to record CPO and PKO
pricing. The Gross Margin improved by 7.2 percentage points compared to
FY2020, largely due to increased efficiencies associated with processing
higher volumes, as well as premium sales prices. However, the Gross Margin %
fell short of previous strong years in FY2016 and FY2017 due to a relatively
low CPO extraction rate of 21.0% compared to historical levels above 22%.
The CPO extraction rate is primarily driven by variation in the FFB oil
content and, pleasingly, we have seen the extraction rate increase to
historical levels above 22% in early 2022.
FY2021 Overheads rose by €1m to €3.8m compared to FY2020. This was
mainly attributable to the first-time consolidation of the Cashew Operation
overhead (€0.4m), increases in salaries post Covid-19 (€0.4m) and one-off
expenses related to the equity and debt raises completed in FY2021 (€0.2m).
Dekel achieved record FY2021 EBITDA of €4.8m, in addition to a return to
profitability with a Net Profit After Tax of €0.6m. We believe this was a
strong outcome, particularly in a year of significant pre-production
investment, operating and financial costs of the Cashew Operation. We expect
to see the financial benefits of this significant investment start to pay
dividends in Q4 2022 and beyond.
Outlook
We believe we have entered a period of supportive macro conditions in terms of
selling prices of CPO and PKO. Whilst FY2022 high season FFB volume levels
have been weak, the financial results remain relatively robust due to a
combination of further increases in the selling prices of CPO and PKO compared
to FY2021 and a material improvement in our extraction rate which, together,
are driving an improvement in current gross profit margins. We continue to
operate as efficiently as possible during what has been a weak high season and
remain focused on controlling overheads in a high inflationary macro
environment. The Cashew Operation is now finally reaching the point where
production volumes can be ramped up and we believe we will see net
contributions to Dekel from this operation commence in Q4 and importantly we
expect it to be a catalyst for a material uplift in financial performance of
Dekel over the next 12 months.
I would like to thank the Board, management, our employees and advisers for
their support and hard work over the course of the year. I believe
shareholders can look forward to an exciting year ahead.
Andrew Tillery
Non-Executive
Chairman
Date: 22 June 2022
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
2021 2020
Note Euros in thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 1,595 202
Trade receivables 1,487 -
Inventory 4 3,240 1,283
Deposits in banks 10 595 -
Accounts and other receivables 5 365 292
Total current assets 7,282 1,777
NON-CURRENT ASSETS:
Deposits in banks 10 501 282
Property and equipment, net 7 43,892 41,249
Total non-current assets 44,393 41,531
Total assets 51,675 43,308
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
2021 2020
Note Euros in thousands
EQUITY AND LIABILITIES
CURRENT LIABILITIES:
Short-term loans and current maturities of long-term loans 10 5,431 5,676
Trade payables 1,374 893
Advance payments from customers 108 1,971
Loan from non-controlling interest 6 915 -
Other accounts payable and accrued expenses 8 2,646 1,824
Total current liabilities 10,474 10,364
NON-CURRENT LIABILITIES:
Long-term lease liabilities 9 169 192
Accrued severance pay, net 135 238
Long-term loans 10 24,562 20,052
Total non-current liabilities 24,866 20,482
Total liabilities 35,340 30,846
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY 11
Share capital 170 142
Additional paid-in capital 39,985 35,569
Accumulated deficit (17,971) (18,728)
Capital reserve 2,532 2,532
Capital reserve from transactions with non-controlling interests (8,710) (7,754)
16,006 11,762
Non-controlling interests 329 700
Total equity 16,335 12,462
Total liabilities and equity 51,675 43,308
The accompanying notes are an integral part of the consolidated financial
statements.
June 22, 2022.
Date of approval of the Youval Rasin Yehoshua Shai Kol Lincoln John Moore
financial statements Director and Chief Executive Officer Director and Chief Finance Officer Executive Director
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended
31 December
2021 2020
Note Euros in thousands
(Except per share amounts)
Revenues 12 37,391 22,546
Cost of revenues 15a 30,880 20,207
Gross profit 6,511 2,339
General and administrative 15b 3,869 2,761
Operating profit (loss) 2,642 (422)
Finance cost 15c (1,726) 1,582
Share of loss of associate - 167
Profit (loss) before taxes on income 916 (2,171)
Taxes on income 14 275 55
Net income (loss) and total comprehensive income (loss) 641 (2,226)
Attributable to: 757 (2,226)
Equity holders of the Company
Non-controlling interests (116) -
Net income (loss) and total comprehensive income (loss) 641 (2,226)
-
Net earnings (loss) per share attributable to equity holders of the Company
Basic and diluted net earnings (loss) per share 16 0.00 (0.01)
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
Share Additional paid-in Accumulated deficit Capital reserve Capital reserve from transactions with non-controlling interests Total Non-controlling interests Total Equity
capital capital
Euros in thousands
Balance as of 1 January, 2020 141 34,368 (16,502) 2,532 (7,754) 12,785 - 12,785
Loss and total comprehensive loss - - (2,226) - - (2,226) - (2,226)
Issuance of shares (Note 10) 1 907 - - - 908 - 908
Non-controlling interests arising from initially consolidated subsidiary - - - - - - 700 700
Share-based compensation - 295 - - - 295 - 295
Balance as of 31 December 2020 142 35,570 (18,728) 2,532 (7,754) 11,762 700 12,462
Net income (loss)and total comprehensive income (loss) 757 757 (116) 641
Issuance of shares (Note 11) 26 3,720 - 3,745 3,745
Acquisition of non-controlling interests (Note 6) 2 401 - (956) (553) (255) (808)
Share-based compensation - 295 - 295 295
Balance as of 31 December 2021 170 39,985 (17,971) 2,532 (8,710) 16,006 329 16,335
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended
31 December
2021 2020
Euros in thousands
Cash flows from operating activities:
Net income (loss) 641 (2,226)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Adjustments to the profit or loss items:
Depreciation 1,888 1,369
Share-based compensation 295 295
Accrued interest on long-term loans and non-current liabilities 1,188 1,141
Change in employee benefit liabilities, net (103) 205
Share of loss of associate - 167
Changes in asset and liability items:
Decrease (increase) in inventories (1,957) (366)
Decrease (increase) in accounts and other receivables (1,296) (39)
Decrease (increase) in bank deposits - (18)
Increase in trade payables 498 83
Increase (decrease) in advance from customers (1,863) 802
Increase in accrued expenses and other accounts payable 859 325
(491) 3,964
Cash paid during the year for: (264) (9)
Income taxes
Interest (1,188) (1,296)
(1,452) (1,305)
Net cash provided by (used in) operating activities (1,302) 433
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended
31 December
2021 2020
Euros in thousands
Cash flows from investing activities:
Increase in cash upon initial consolidation of subsidiary (a) - 89
Loan to associate - (378)
Increase in deposits (814)
Purchase of property and equipment (4,568) (118)
Net cash used in investing activities (5,382) (407)
Cash flows from financing activities:
Issuance of shares (offering net of expenses) 3,726 -
Cash paid on acquisition of non-controlling interests (806) -
Long-term lease, net (23) (12)
Loan to subsidiary by non-controlling interests 915 -
Receipt of short-term loans, net 605 945
Receipt of long-term loans 5,997 1,220
Repayment of long-term loans (2,338) (2,250)
Net cash provided by financing activities 8,077 (97)
Increase (decrease) in cash and cash equivalents 1,393 (71)
Cash and cash equivalents at beginning of year 202 273
Cash and cash equivalents at end of year 1,595 202
Supplemental disclosure of non-cash activities:
Issuance of shares in consideration for investment in Pearlside 403 884
(a) Acquisition of initially consolidated subsidiary:
The subsidiaries' assets and liabilities at date of acquisition:
Deficiency in working capital (excluding cash and cash equivalents) - 462
Deposits - (264)
Property, plant and equipment - (12,191)
Right of use asset - 114
Long-term debt - 8,174
Non-controlling interests - 700
Issuance of shares for acquisition - 884
Investment in company accounted for at equity - 2,210
- 89
The accompanying notes are an integral part of the consolidated financial
information.
NOTE 1:- GENERAL
a. Dekel Agri-Vision PLC ("the Company") is a public limited
company incorporated in Cyprus on 24 October 2007. The Company's Ordinary
shares are admitted for trading on the AIM, a market operated by the London
Stock Exchange. The Company is engaged through its subsidiaries in developing
and cultivating palm oil plantations in Cote d'Ivoire for the purpose of
producing and marketing Crude Palm Oil ("CPO"), as well as constructing a Raw
Cashew Nut ("RCN") processing plant, which is currently in the initial
production phase. The Company's registered office is in Limassol, Cyprus.
b. CS DekelOil Siva Ltd. ("DekelOil Siva") a company incorporated in
Cyprus, is a wholly-owned subsidiary of the Company. DekelOil CI SA, a
subsidiary in Cote d'Ivoire currently held 99.85% by DekelOil Siva, is engaged
in developing and cultivating palm oil plantations for the purpose of
producing and marketing CPO. DekelOil CI SA constructed and is currently
operating its first palm oil mill.
c. Pearlside Holdings Ltd. ("Pearlside") a company incorporated in
Cyprus, is a subsidiary of the Company since December 2020. The assets and
liabilities of Pearlside are included for the first time by the Company in the
consolidated statement of financial position at 31 December 2020. The Company
holds 70.7% interest since February 2021 (previously 54%). Pearlside has a
wholly owned subsidiary in Cote d'Ivoire, Capro CI SA ("Capro"). Capro is
currently engaged in the initial production phase of its RCN processing plant
in Cote d'Ivoire near the village of Tiabisu (see also Note 6).
d. DekelOil Consulting Ltd. a company located in Israel and a wholly
owned subsidiary of DekelOil Siva, is engaged in providing services to the
Company and its subsidiaries.
e. Cash flow from operations and working capital deficiency
In FY2021 the Company recognised record revenue, record Palm
Oil operating profit and returned to Group profitability. This resulted in
the Group working capital deficiency materially decreasing from €8.6 million
as at 31 December 2020 to €3.3 million. Although in 2021 there was a
negative cash flow from Group operations of €1.4 million, this was due to
the activities of the RCN operation. The positive cash flow from the Palm Oil
operations in 2021was approximately € 2.2 million. In 2022, CPO prices
have continued to materially increase during the first few months, and through
the date of approval of these financial statements. Despite softer CPO
volumes, the Palm Oil operations are continuing to generate positive operating
cash flow. In addition, expenditures for the completion of the RCN processing
plant of Pearlside have been almost entirely paid and have now entered the
production phase with operational capacity in the process of increasing
materially over the coming months. As a result, the RCN operation is
expected to produce additional operating cash flow for the Group in the latter
half of 2022 and beyond. The Group has prepared detailed forecasted cash flows
through the end of 2023, which indicate that the Group should have positive
cash flows from its operations. However, the operations of the Group are
subject to various market conditions, including quantity and quality of fruit
harvests and market prices, that are not under the Group's control that could
have an adverse effect on the Group's future cash flows.
Based on the above, Company management believes it will have sufficient funds
necessary to continue its operations and to meet its obligations as they
become due for at least a period of twelve months from the date of approval of
the financial statements.
f. The recent outbreak of COVID-19 had a significant effect on the
global economic conditions and CPO prices, but it had no significant impact on
the Company's operations during 2021. The outbreak of COVID-19 may resume its
negative effect on economic conditions regionally as well as globally, disrupt
operations situated in countries particularly exposed to the contagion, affect
the Company's customers and suppliers or business practices previously applied
by those entities, or otherwise impact the Company's activities. Governments
in affected countries have imposed travel bans, quarantines and other
emergency public safety measures. Those measures, though apparently temporary
in nature, may continue and increase depending on developments in the COVID-19
pandemic. The ultimate severity of the COVID-19 outbreak is uncertain at this
time and therefore the Company cannot reasonably estimate the impact it may
have on its end markets and its future revenues, profitability, liquidity and
financial position.
g. Definitions:
The Group - DEKEL AGRI-VISION PLC and its subsidiaries.
The Company - DEKEL AGRI-VISION PLC.
Subsidiaries - Companies that are controlled by the Company- CS DekelOil Siva Ltd, DekelOil
CI SA, DekelOil Consulting Ltd, and commencing from December 2020 - Pearlside
Holdings, Capro CI SA.
Associate - Company in which the Group has significant influence over the financial and
operating policies without having control - Pearlside Holdings Ltd (until
December 2020).
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been applied consistently in the
financial statements for all periods presented, unless otherwise stated.
a. Basis of presentation of the financial statements:
These financial statements have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union ("IFRS").
The financial statements have been prepared on a cost basis.
The Company has elected to present profit or loss items using the function of
expense method.
b. Consolidated financial statements:
The consolidated financial statements comprise the financial statements of
companies that are controlled by the Company (subsidiaries). Control is
achieved when the Company is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns
through its power over the investee. Potential voting rights are considered
when assessing whether an entity has control. The consolidation of the
financial statements commences on the date on which control is obtained and
ends when such control ceases.
The financial statements of the Company and of the subsidiaries are prepared
as of the same dates and periods. The consolidated financial statements are
prepared using uniform accounting policies by all companies in the Group.
Significant intragroup balances and transactions and gains or losses resulting
from intragroup transactions are eliminated in full in the consolidated
financial statements.
Non-controlling interests in subsidiaries represent the equity in subsidiaries
not attributable, directly or indirectly, to a parent. Non-controlling
interests are presented in equity separately from the equity attributable to
the equity holders of the Company. Profit or loss and components of other
comprehensive income are attributed to the Company and to non-controlling
interests. Losses are attributed to non-controlling interests even if they
result in a negative balance of non-controlling interests in the consolidated
statement of financial position.
A change in the ownership interest of a subsidiary, without a change of
control, is accounted for as a change in equity by adjusting the carrying
amount of the non-controlling interests with a corresponding adjustment of the
equity attributable to equity holders of the Company less / plus the
consideration paid or received.
c. Business combinations and goodwill:
Business combinations are accounted for by applying the acquisition method.
The cost of the acquisition is measured at the fair value of the consideration
transferred on the acquisition date with the addition of non-controlling
interests in the acquiree. In each business combination, the Company chooses
whether to measure the non-controlling interests in the acquiree based on
their fair value on the acquisition date or at their proportionate share in
the fair value of the acquiree's net identifiable assets.
Direct acquisition costs are carried to the statement of profit or loss as
incurred.
In a business combination achieved in stages, equity interests in the acquiree
that had been held by the acquirer prior to obtaining control are measured at
the acquisition date fair value while recognizing a gain or loss resulting
from the revaluation of the prior investment on the date of achieving control.
Contingent consideration is recognized at fair value on the acquisition date
and classified as a financial asset or liability in accordance with IAS 39.
Subsequent changes in the fair value of the contingent consideration are
recognized in profit or loss. If the contingent consideration is classified as
an equity instrument, it is measured at fair value on the acquisition date
without subsequent remeasurement.
d. Investment in an associate:
Associates are companies in which the Group has significant influence over the
financial and operating policies without having control. The investment in an
associate is accounted for using the equity method.
e. Functional currency, presentation currency and foreign
currency:
1. Functional currency and presentation currency:
The local currency used in Cote d'Ivoire is the West African CFA Franc
("FCFA"), which has a fixed exchange rate with the Euro (Euro 1 = FCFA
655.957). A substantial portion of the Group's revenues and expenses is
incurred in or linked to the Euro. The Group obtains debt financing mostly in
FCFA linked to Euros and the funds of the Group are held in FCFA. Therefore,
the Company's management has determined that the Euro is the currency of the
primary economic environment of the Company and its subsidiaries, and thus its
functional currency. The presentation currency is Euro.
2. Transactions, assets and liabilities in foreign currency:
Transactions denominated in foreign currency are recorded upon initial
recognition at the exchange rate at the date of the transaction. After initial
recognition, monetary assets and liabilities denominated in foreign currency
are translated at each reporting date into the functional currency at the
exchange rate at that date. Exchange rate differences, other than those
capitalized to qualifying assets or accounted for as hedging transactions in
equity, are recognized in profit or loss. Non-monetary assets and liabilities
denominated in foreign currency and measured at cost are translated at the
exchange rate at the date of the transaction. Non-monetary assets and
liabilities denominated in foreign currency and measured at fair value are
translated into the functional currency using the exchange rate prevailing at
the date when the fair value was determined.
f. Cash equivalents:
Cash equivalents are considered as highly liquid investments, including
unrestricted short-term bank deposits with an original maturity of three
months or less from the date of acquisition.
g. Financial instruments:
1. Financial assets:
Financial assets are measured upon initial recognition at fair value plus
transaction costs that are directly attributable to the acquisition of the
financial assets, except for financial assets measured at fair value through
profit or loss in respect of which transaction costs are recorded in profit or
loss.
The Company classifies and measures debt instruments in the financial
statements based on the following criteria:
- The Company's business model for managing financial assets;
and
- The contractual cash flow terms of the financial asset.
a) Debt instruments are measured at amortized cost when:
The Company's business model is to hold the financial assets in order to
collect their contractual cash flows, and the contractual terms of the
financial assets give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding. After
initial recognition, the instruments in this category are measured according
to their terms at amortized cost using the effective interest rate method,
less any provision for impairment.
On the date of initial recognition, the Company may irrevocably designate a
debt instrument as measured at fair value through profit or loss if doing so
eliminates or significantly reduces a measurement or recognition
inconsistency, such as when a related financial liability is also measured at
fair value through profit or loss.
b) Equity instruments and other financial assets held for trading:
Investments in equity instruments do not meet the above criteria and
accordingly are measured at fair value through profit or loss.
Other financial assets held for trading, including derivatives, are measured
at fair value through profit or loss unless they are designated as effective
hedging instruments.
Dividends from investments in equity instruments are recognized in profit or
loss when the right to receive the dividends is established.
2. Impairment of financial assets:
The Company evaluates at the end of each reporting period the loss allowance
for financial debt instruments which are not measured at fair value through
profit or loss.
The Company has short-term financial assets such as trade receivables in
respect of which the Company applies a simplified approach and measures the
loss allowance in an amount equal to the lifetime expected credit losses. An
impairment loss on debt instruments measured at amortized cost is recognized
in profit or loss with a corresponding loss allowance that is offset from the
carrying amount of the financial asset.
As of 31 December 2021, there were no past-due trade receivables.
3. Financial liabilities:
a) Financial liabilities measured at amortized cost:
Financial liabilities are initially recognized at fair value less transaction
costs that are directly attributable to the issue of the financial liability.
After initial recognition, the Company measures all financial liabilities at
amortized cost using the effective interest rate method.
4. Derecognition of financial instruments:
a) Financial assets:
A financial asset is derecognized when the contractual rights to the cash
flows from the financial asset expire.
b) Financial liabilities:
A financial liability is derecognized when it is extinguished, that is when
the obligation is discharged or cancelled or expires.
h. Borrowing costs:
The Group capitalizes borrowing costs that are attributable to the
acquisition, construction, or production of qualifying assets which
necessarily take a substantial period of time to get ready for their intended
use or sale.
The capitalization of borrowing costs commences when expenditures for the
asset are incurred, the activities to prepare the asset are in progress and
borrowing costs are incurred and ceases when substantially all the activities
to prepare the qualifying asset for its intended use or sale are complete. The
amount of borrowing costs capitalized in a reporting period includes specific
borrowing costs and general borrowing costs based on a weighted capitalization
rate.
i. Leases:
The Company accounts for a contract as a lease when the contract terms convey
the right to control the use of an identified asset for a period of time in
exchange for consideration.
The Group as a lessee:
For leases in which the Company is the lessee, the Company recognizes on the
commencement date of the lease a right-of-use asset and a lease liability,
excluding leases whose term is up to 12 months and leases for which the
underlying asset is of low value. For these excluded leases, the Company has
elected to recognize the lease payments as an expense in profit or loss on a
straight-line basis over the lease term. In measuring the lease liability, the
Company has elected to apply the practical expedient in the Standard and does
not separate the lease components from the non-lease components (such as
management and maintenance services, etc.) included in a single contract.
On the commencement date, the lease liability includes all unpaid lease
payments discounted at the interest rate implicit in the lease, if that rate
can be readily determined, or otherwise using the Group's incremental
borrowing rate. After the commencement date, the Group measures the lease
liability using the effective interest rate method.
On the commencement date, the right-of-use asset is recognized in an amount
equal to the lease liability plus lease payments already made on or before the
commencement date and initial direct costs incurred. The right-of-use asset is
measured applying the cost model and depreciated over the shorter of its
useful life or the lease term.
Following are the periods of depreciation of the right-of-use assets by class
of underlying asset:
Years
Land 99
Motor vehicles 5
The Group tests for impairment of the right-of-use asset whenever there are
indications of impairment pursuant to the provisions of IAS 36.
j. Biological assets:
Biological assets of the Company are fresh fruit bunches (FFB) that grow on
palm oil trees. The period of biological transformation of FFB from blossom to
harvest and then conversion to inventory and sale is relatively short (about 2
months). Accordingly, any changes in fair value at each reporting date are
generally immaterial.
k. Property and equipment:
Property and equipment are stated at cost, net of accumulated depreciation.
Palm oil trees before maturity are measured at accumulated cost, and
depreciation commences upon reaching maturity.
Depreciation is calculated by the straight-line method over the estimated
useful lives of the assets at the following annual rates:
%
Extraction mill 2.5
Palm oil plantations 3.33
Computers and peripheral equipment 33
Equipment and furniture 15 - 20
Motor vehicles 25
Agriculture equipment 15
The useful life, depreciation method and residual value of an asset are
reviewed at least each year-end and any changes are accounted for
prospectively as a change in accounting estimate. Depreciation of an asset
ceases at the earlier of the date that the asset is classified as held for
sale and the date that the asset is derecognized.
l. Impairment of non-financial assets:
The Company evaluates the need to record an impairment of non-financial assets
whenever events or changes in circumstances indicate that the carrying amount
is not recoverable.
If the carrying amount of non-financial assets exceeds their recoverable
amount, the assets are reduced to their recoverable amount. The recoverable
amount is the higher of fair value less costs of sale and value in use. In
measuring value in use, the expected future cash flows are discounted using a
pre-tax discount rate that reflects the risks specific to the asset. The
recoverable amount of an asset that does not generate independent cash flows
is determined for the cash-generating unit to which the asset belongs.
Impairment losses are recognized in profit or loss.
An impairment loss of an asset, other than goodwill, is reversed only if there
have been changes in the estimates used to determine the asset's recoverable
amount since the last impairment loss was recognized. Reversal of an
impairment loss, as above, shall not be increased above the lower of the
carrying amount that would have been determined (net of depreciation or
amortization) had no impairment loss been recognized for the asset in prior
years and its recoverable amount. The reversal of impairment loss of an asset
presented at cost is recognized in profit or loss.
m. Revenue recognition:
Revenue from contracts with customers is recognized when the control over the
services is transferred to the customer. The transaction price is the amount
of the consideration that is expected to be received based on the contract
terms.
In determining the amount of revenue from contracts with customers, the
Company evaluates whether it is a principal or an agent in the arrangement.
The Company is a principal when the Company controls the promised goods or
services before transferring them to the customer. In these circumstances, the
Company recognizes revenue for the gross amount of the consideration. When the
Company is an agent, it recognizes revenue for the net amount of the
consideration, after deducting the amount due to the principal.
Revenue from the sale of goods:
Revenue from sale of goods is recognized in profit or loss at the point in
time when the control of the goods is transferred to the customer, generally
upon delivery of the goods to the customer.
Contract balances:
Amounts received from customers in advance of performance by the Company are
recorded as contract liabilities/advance payments from customers and
recognized as revenue in profit or loss when the work is performed. For all
years presented in these financial statements, such advances were recognized
as revenues in the year subsequent to their receipt.
n. Inventories:
Inventories are measured at the lower of cost and net realizable value. The
cost of inventories comprises costs of purchase and costs incurred in bringing
the inventories to their present location and condition. Net realizable value
is the estimated selling price in the ordinary course of business less
estimated costs of completion and estimated costs necessary to make the sale.
The Company periodically evaluates the condition and age of inventories and
makes provisions for slow moving inventories accordingly.
Cost of finished goods inventories is determined on the basis of average costs
including materials, labor and other direct and indirect manufacturing costs
based on normal capacity.
o. Earnings (loss) per share:
Earnings (loss) per share are calculated by dividing the net income
attributable to equity holders of the Company by the weighted number of
Ordinary shares outstanding during the period.
Potential Ordinary shares are included in the computation of diluted earnings
per share when their conversion decreases earnings per share from continuing
operations. Potential Ordinary shares that are converted during the period are
included in diluted earnings per share only until the conversion date and from
that date in basic earnings per share. The Company's share of earnings of
investees is included based on its share of earnings per share of the
investees multiplied by the number of shares held by the Company.
p. Provisions:
A provision in accordance with IAS 37 is recognized when the Group has a
present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. When the Group expects part or all of the expense to
be reimbursed, for example under an insurance contract, the reimbursement is
recognized as a separate asset but only when the reimbursement is virtually
certain. The expense is recognized in profit or loss net of any reimbursement.
q. Fair value measurement:
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date.
Fair value measurement is based on the assumption that the transaction will
take place in the asset's or the liability's principal market, or in the
absence of a principal market, in the most advantageous market.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
Fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would
use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximizing
the use of relevant observable inputs and minimizing the use of unobservable
inputs.
All assets and liabilities measured at fair value or for which fair value is
disclosed are categorized into levels within the fair value hierarchy based on
the lowest level input that is significant to the entire fair value
measurement:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2 - inputs other than quoted prices included within Level 1 that are observable
either directly or indirectly.
Level 3 - inputs that are not based on observable market data (valuation techniques
which use inputs that are not based on observable market data).
r. Share-based payment transactions:
The Company's employees / other service providers are entitled to remuneration
in the form of equity-settled share-based payment transactions and certain
employees / other service providers are entitled to remuneration in the form
of cash-settled share-based payment transactions that are measured based on
the increase in the Company's share price.
Equity-settled transactions:
The cost of equity-settled transactions with employees is measured by
reference to the fair value of the equity instruments at the date on which
they are granted. The fair value is determined using an acceptable option
model.
The cost of equity-settled transactions is recognized, together with a
corresponding increase in equity, over the period in which the performance
and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award ("the vesting date").
The cumulative expense recognized for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which the vesting
period has expired and the Company's best estimate of the number of equity
instruments that will ultimately vest.
s. Taxes on income:
Current or deferred taxes are recognized in profit or loss, except to the
extent that they relate to items which are recognized in other comprehensive
income or equity.
1. Current taxes:
The current tax liability is measured using the tax rates and tax laws that
have been enacted or substantively enacted by the end of reporting period as
well as adjustments required in connection with the tax liability in respect
of previous years.
2. Deferred taxes:
Deferred taxes are computed in respect of temporary differences between the
carrying amounts in the financial statements and the amounts attributed for
tax purposes.
Deferred taxes are measured at the tax rate that is expected to apply when the
asset is realized or the liability is settled, based on tax laws that have
been enacted or substantively enacted by the reporting date.
Deferred tax assets are reviewed at each reporting date and reduced to the
extent that it is not probable that they will be utilized. Temporary
differences for which deferred tax assets had not been recognized are reviewed
at each reporting date and a respective deferred tax asset is recognized to
the extent that their utilization is probable.
Taxes that would apply in the event of the disposal of investments in
investees have not been taken into account in computing deferred taxes, as
long as the disposal of the investments in investees is not probable in the
foreseeable future.
Also, deferred taxes that would apply in the event of distribution of earnings
by investees as dividends have not been taken into account in computing
deferred taxes, since the distribution of dividends does not involve an
additional tax liability or since it is the Company's policy not to initiate
distribution of dividends from a subsidiary that would trigger an additional
tax liability.
t. Significant accounting estimates and assumptions used in the
preparation of the financial statements:
The preparation of the financial statements requires management to make
estimates and assumptions that have an effect on the application of the
accounting policies and on the reported amounts of assets, liabilities,
revenues and expenses. Changes in accounting estimates are reported in the
period of the change in estimate.
u. Changes in accounting policies - initial application of new
financial reporting and accounting standards and amendments to existing
financial reporting and accounting standards:
1. Amendments to IFRS 9, IFRS 7, IFRS 16, IFRS 4 and IAS 39
regarding the IBOR reform:
In August 2020, the IASB issued amendments to IFRS 9, "Financial Instruments",
IFRS 7, "Financial Instruments: Disclosures", IAS 39, "Financial Instruments:
Recognition and Measurement", IFRS 4, "Insurance Contracts", and IFRS 16,
"Leases" ("the Amendments").
The Amendments provide practical expedients when accounting for the effects of
the replacement of benchmark InterBank Offered Rates (IBORs) by alternative
Risk Free Interest Rates (RFRs).
Pursuant to one of the practical expedients, an entity will treat contractual
changes or changes to cash flows that are directly required by the reform as
changes to a floating interest rate. That is, an entity recognizes the changes
in interest rates as an adjustment of the effective interest rate without
adjusting the carrying amount of the financial instrument. The use of this
practical expedient is subject to the condition that the transition from IBOR
to RFR takes place on an economically equivalent basis.
In addition, the Amendments permit changes required by the IBOR reform to be
made to hedge designations and hedge documentation without the hedging
relationship being discontinued, provided certain conditions are met. The
Amendments also provide temporary relief from having to meet the "separately
identifiable" requirement according to which a risk component must also be
separately identifiable to be eligible for hedge accounting.
The Amendments include new disclosure requirements in connection with the
expected effect of the reform on an entity's financial statements, such as how
the entity is managing the process to transition to the interest rate reform,
the risks to which it is exposed due to the reform and quantitative
information about IBOR-referenced financial instruments that are expected to
change.
The Amendments are effective for annual periods beginning on or after January
1, 2021. The Amendments are to be applied retrospectively. However,
restatement of comparative periods is not required.
The application of the Amendments did not have a material impact on the
Company's financial statements.
NOTE 3:- DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION
a. Amendment to IAS 16, "Property, Plant and Equipment":
In May 2020, the IASB issued an amendment to IAS 16, "Property, Plant and
Equipment" ("the Amendment"). The Amendment prohibits a company from deducting
from the cost of property, plant and equipment ("PP&E") consideration
received from the sales of items produced while the company is preparing the
asset for its intended use. Instead, the company should recognize such
consideration and related costs in profit or loss.
The Amendment is effective for annual reporting periods beginning on or after
January 1, 2022, with earlier application permitted. The Amendment is to be
applied retrospectively, but only to items of PP&E made available for use
on or after the beginning of the earliest period presented in the financial
statements in which the company first applies the Amendment. The company
should recognize the cumulative effect of initially applying the Amendment as
an adjustment to the opening balance of retained earnings at the beginning of
the earliest period presented.
The Company estimates that the application of the Amendment is not expected to
have a material impact on the financial statements.
d. Amendment to IAS 1, "Presentation of Financial Statements":
In January 2020, the IASB issued an amendment to IAS 1, "Presentation of
Financial Statements" ("the Amendment") regarding the criteria for determining
the classification of liabilities as current or non-current.
The Amendment includes the following clarifications:
What is meant by a right to defer settlement;
That a right to defer must exist at the end of the reporting period;
That classification is unaffected by the likelihood that an entity will
exercise its deferral right;
That only if an embedded derivative in a convertible liability is itself an
equity instrument would the terms of a liability not impact its
classification.
The Amendment is effective for annual periods beginning on or after January 1,
2023 and must be applied retrospectively.
The Company is evaluating the possible impact of the Amendment on its current
loan agreements.
f. Amendment to IAS 8, "Accounting Policies, Changes to Accounting
Estimates and Errors":
In February 2021, the IASB issued an amendment to IAS 8, "Accounting Policies,
Changes to Accounting Estimates and Errors" ("the Amendment"), in which it
introduces a new definition of "accounting estimates".
Accounting estimates are defined as "monetary amounts in financial statements
that are subject to measurement uncertainty". The Amendment clarifies the
distinction between changes in accounting estimates and changes in accounting
policies and the correction of errors.
The Amendment is to be applied prospectively for annual reporting periods
beginning on or after January 1, 2023 and is applicable to changes in
accounting policies and changes in accounting estimates that occur on or after
the start of that period. Early application is permitted.
The Company is evaluating the effects of the Amendment on its financial
statements.
NOTE 4:- INVENTORY
31 December
2021 2020
Euros in thousands
Palm oil mill final products 902 212
Plants 186 172
Raw cashew nuts 1,381
Spare parts, tools & materials 771 899
3,240 1,283
NOTE 5:- ACCOUNTS AND OTHER RECEIVABLES
31 December
2021 2020
Euros in thousands
Government authorities (VAT) 10 3
Prepaid expenses and other receivables 7 12
Loans to employees 29 41
Advance payment to contractor 319 236
365 292
NOTE 6:- INVESTMENT IN PEARLSIDE HOLDINGS LTD
On 20 December 2018 the Company entered into an agreement to purchase a 43.8%
interest in Pearlside Holdings Ltd ("Pearlside") by way of issuing 52,612,613
Ordinary shares of the Company. Pearlside, through its wholly-owned
subsidiary, was in the advanced stages of development and construction of a
Raw Cashew Nut (RCN) processing plant in Cote d'Ivoire, The closing of this
purchase transaction occurred on 7 January 2019 (See also Note 11 Equity).
Based on the market price of the Company's shares on the date of the purchase,
the cost of the investment in Pearlside amounted to approximately €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 was in the process of construction of its RCN plant, the results of
operations of Pearlside from the date of acquisition to 31 December 2020 were
immaterial.
On 8 December 2020 the Company entered into an agreement to purchase an
additional 2% and to increase its holding to 54% by way of issuing 3,922,789
Ordinary shares of the Company. Based on the market price of the Company's
shares on the date of the purchase, the cost of this additional investment in
Pearlside is €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 related to the construction of the plant. There were a
few employees that were involved in the supervision of the construction which
was being performed by external contractors. Accordingly, the purchase
transaction was accounted for as an acquisition of assets.
Pursuant to IFRS 3, the Company records the cash and other financial assets
and liabilities at their fair value on date of acquisition (which approximated
their carrying amounts, including loans which were recently obtained at market
terms). The excess of (i) the cost of the investment plus (ii) the
non-controlling interest recognized over (iii) the carrying amount of the net
assets acquired (equity of Pearlside) was allocated to the RCN plant. The
non-controlling interest in the amount of € 700 was measured at its
proportionate share of the net assets (equity) of Pearlside.
Following are the assets and liabilities acquired at the date of acquisition
(Euros in thousands):
Deficiency in working capital (373)
Non- current deposits 264
Property, plant and equipment 12,191
Lease liability (114)
Long-term debt (8,174)
On 8 February 2021, the Company signed an agreement to purchase an additional
16.7% of Pearlside for a total consideration of £1.062 million (€1.2
million), of which £354,000 (€403 thousand) was settled via the
issue of 7,080,000 new Ordinary shares at 5 pence per share (see Note 11),
and the remaining £708,000 (€806 thousand) of the consideration was settled
in cash. Following this acquisition, the Company holds 70.7% of Pearlside. The
difference between the total consideration and the carrying amount of the
non-controlling interests, in the amount of € 956 thousand, was recorded as
a charge to "capital reserve from transactions with non-controlling interests"
in equity.
During 2021 the shareholders of Pearlside invested additional funds as a loan
to Pearlside, in order to finance the construction and activity of Pearlside.
The portion of the loan provided by the non-controlling interests amounted to
€915 thousand. The loan bears no interest and is to be repaid only from
available funds of Pearlside. The loan is presented as a current liability
in the consolidated statement of financial position as of 31 December 2021.
NOTE 7:- PROPERTY AND EQUIPMENT, NET
Composition and movement:
Computers Equipment and Motor vehicles Agriculture equipment Extraction mill Palm oil plantations Cashew processing mill under construction and land Total
and peripheral equipment furniture and land
Cost:
Balance as of 1 January, 2020 290 110 1,495 464 26,281 7,620 - 36,260
Acquisitions during the year 4 - 103 - - 12 - 119
Disposals during the year (15) (7) (72) - - - - (94)
Initial consolidation of subsidiary 3 3 26 26 - - 12,133 12,191
Balance as of 31 December, 2020 282 106 1,552 490 26,281 7,632 12,133 48,476
Acquisitions during the year 87 453 723 - 247 - 3,079 4,589
Disposals during the year - - (149) - - - - (149)
Balance as of 31 December, 2021 369 559 2,126 490 26,528 7,632 15,212 52,916
Accumulated depreciation:
Balance as of 1 January 2020 163 98 825 394 3,693 779 - 5,952
Depreciation during the year 29 8 205 15 876 236 - 1,369
Disposals during the year (15) (7) (72) - - - - (94)
Balance as of 31 December 2020 177 99 958 409 4,569 1,015 - 7,227
Depreciation during the year 31 15 220 26 861 789 - 1,942
Disposals during the year - - (145) - - - - (145)
Balance as of 31 December 2021 208 114 1,033 435 5,430 1,1,804 - 9,024
Depreciated cost as of 31 December 2021 161 445 1,093 55 21,098 5,828 15,212 43,892
Depreciated cost as of 31 December 2020 105 7 594 81 21,712 6,617 12,133 41,249
NOTE 8:- OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES
31 December
2021 2020
Euros in thousands
Employees and payroll accruals 917 993
VAT payable 405 100
Other accounts payable & accrued expenses 1,325 731
2,647 1,824
NOTE 9:- RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
On 24 June 2008, DekelOil CI SA signed a lease agreement for 42 hectares near
the village of Ayenouan, Cote d'Ivoire. The agreement is with the village of
Adao and the people occupying the land in Ayenouan. The lease is for 90 years
and the payment for the lease is FCFA 3,000,000 (app. € 4,573) per annum.
In January 2018 a subsidiary of the Company signed a lease agreement for a
vehicle. The lease is for 5 years and the payment is €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 7). The balance of the lease liabilities at 31
December 2021 amounted to € 161 (2020 - €169).
NOTE 10:- LOANS
a. Long-term loans:
Interest rate as of 31 December 31 December
Currency 2021 2021 2020
Euros in thousands
SGBCI In FCFA 6.2%-7.3% - 1
SOGEBOURSE (c.1) In FCFA 8.4% 4,568 6,387
SIB (c.2) In FCFA 6.85% 256 377
AgDevCo (c.3) In Euro 8.2% 7,200 7,200
BGFI (c.4) In FCFA 7.5% 941 1,153
BIDC (c.5) In FCFA 7.25% 4,053 4,053
NSIA (c.6) In FCFA 8.5% 2,287 1,834
NSIA (c.7) In FCFA 7.75% 133 762
BGFI (c.8) In FCFA 7.75% 1,524 1,524
HUDSON (c.9) In FCFA 7.5% 5,991 -
Total loans 26,953 23,291
Less - current maturities (2,391) (3,239)
24,562 20,052
b. Short-term loans and current maturities:
31 December
2021 2020
Euros in thousands
Bank Credit line 1,888 2,437
Short-term loan from bank 1,152
Current maturities - per a. above 2,391 3,239
5,431 5,676
c. 1. In September 2016 DekelOil CI SA signed a
long-term financing facility agreement with a consortium of institutional
investors arranged by SOGEBOURSE for a long-term loan of up to FCFA 10 billion
(approximately €15.2 million). Of this amount, FCFA 5.5 billion
(approximately €8.4 million) was utilized to refinance the West Africa
Development Bank ("BOAD") loan The loan is repayable over 7 years in
fourteen semi annual payments. and bears interest at a rate of 6.85% per
annum.
On 22 October 2016 SOGEBOURSE transferred the funds and the BOAD loan was
repaid in full.
On 1 February 2018 the DekelOil CI SA drew down a second tranche of FCFA 2.8
billion (€4.34 million) from its FCFA 10 billion (€15.2 million)
long-term Syndicated Loan Facility with Sogebourse CI. on the same terms as
the first tranche. Part of the funds were used to repay a short-term loan in
the amount of €1,524 thousand and a long-term loan in the amount of €497
thousand.
2. 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.
3. 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 Short Term Rate published by the European Central
Bank (which replaced the Euro Libor used previously) plus a pre-defined
spread, and collared with a minimum rate of 6% per annum and a maximum rate of
9% per annum. The funds from the loan were used as follows: (i) €6.2 million
to replace existing NSIA Bank loan and (ii) €1.0 million for Environmental,
Social and Governance ("ESG") activities and general working capital purposes.
The fixed assets of DekelOil CI SA serves as a security for this loan.
The loan agreement contains the following financial covenants to be tested on
a quarterly basis: (1) Current Ratio of at least 0.5; (2) Debt Service
Coverage Ratio of at least 1. The Company met these financial covenants on 31
December 2021 and is expected to meet these financial covenants during 2022.
4. On 7 July 2020 DekelOil CI SA signed a loan agreement with
Banque Gabonaise Francaise International ("BGFI") for FCFA 800 million
(approximately €1,220 thousand). The loan is for 5 years and bears interest
at a rate of 7.25% per annum.
5. On 16 March 2016 Capro CI SA signed a loan agreement with the
Bank of Investment and Development of CEDEAO ("EBID") according to which EBID
agreed to grant Capro CI SA a facility of 3,000 million FCFA (€ 4,573
thousand).
The EBID loan shall bear interest at a rate of 8.5% per annum. The loan has a
tenure of seven years and shall be repaid in 20 quarterly installments over
five years, commencing after a grace period on principal payments of two
years. Principal payments start in January 2022. . According to the loan
agreement as a security for this loan there is a lien over the equipment of
Capro CI SA and an amount of €97 thousand has been deposited in a bank by
Capro CI SA (non-current bank deposits).
6. In 2018 Capro CI SA signed a loan agreement with NSIA bank, Togo
("NSIA Togo") according to which NSIA Togo agreed to grant Capro CI SA a
facility of 1,500 million FCFA (€ 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.
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. According to the loan agreement as a security for this loan an amount of
€114 thousand has been deposited in a bank by Capro CI SA (non-current bank
deposits).
9. On 25 January 2021 DekelOil CI SA signed an agreement with
Hudson for issuance of a long-term bond of up to €15.2 million (10,000
million FCFA). The first tranche 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%. According to
the agreement DekelOil CI SA accumulates the funds for each payment prior to
each payment by a monthly payment to be made for that purpose to a designated
deposit account. In addition, a fixed amount has been deposited in a separate
bank account. As of 31 December 2021, the deposits amount to €283 thousand
and €239 thousand (current and non-current deposits), respectively.
NOTE 11:- EQUITY
a. Composition of share capital:
31 December 31 December
2021 2020 2021 2020
Authorized Issued and outstanding
Number of shares
Ordinary shares of € 0.0003367 par value each 1,000,000,000 1,000,000,000 535,863,569 457,126,075
Each Ordinary share confers upon its holder voting rights, the right to
receive cash and share dividends, and the right to share in excess assets upon
liquidation of the Company.
Commencing from December 2019, pursuant to his remuneration contract, the
General Manager of the company's subsidiary, shall be issued 400,000 Ordinary
Shares per year at par value over the next 3 years, vesting on a monthly
basis. The fair value of the Ordinary shares to be issued at the date of grant
amounts to € 34 thousand. As of 31 December 2021, 800,000 Ordinary shares
are fully vested. These shares were issued to the General Manager in 2022.
On 25 November 2020 the Company issued 28,552,800 Ordinary Shares according
to an agreement to increase its holding of Pearlside to 52% by way of a
share swap. Based on the market price of the Company's shares on the date of
the purchase, the cost of this additional investment in Pearlside is €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
On 29 January 2021 the Company raised equity totaling to £3.3 million (€3.7
million, (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 £354,000 (€403 thousand) was settled via the
issue of 7,080,000 new Ordinary shares at 5 pence per share -see Note 6.
In 2021 (January & September) the Company issued 1,656,029 ordinary shares
to certain brokers in consideration for services provided. The fair value of
the shares issued amounting to € 64 thousand was recorded in general and
administrative expenses
b. Share option plan:
On 15 January 2015 the Company granted directors and senior employee's options
to purchase 8,100,000 Ordinary shares. Of that amount, 1,800,000 options
vested immediately, and the remainder will vest ratably over 3 years. Half of
the options have an exercise price of 12.5 pence per share while the remainder
is exercisable at a price of 20 pence per share. The fair value of the options
granted calculated
On 19 October 2015 the Company granted directors and senior employee's options
to purchase 1,800,000 Ordinary shares. The options will vest ratably over 3
years. Half of the options have an exercise price of 12.5 pence per share
while the remainder is exercisable at a price of 20 pence per share. The fair
value of the options granted calculated based on Black-Scholes option pricing
model was approximately €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.
(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.
A summary of the activity in options for the years 2021 and 2020 is as
follows:
Year ended
31 December
2021 2020
Number Weighted average exercise Number of Weighted average exercise
of options price-Euro options price-Euro
Outstanding at beginning of year 35,522,314 0.0332 35,522,314 0.0332
Exercised - - - -
Granted - - - -
Expired - - - -
Forfeited - - - -
Outstanding at end of year 35,522,314 0.0332 35,522,314 0.0332
Exercisable options 29,655,647 0.0352 24,222,314 0.0352
c. Capital reserve
The capital reserve comprises the contribution to equity of the Company by the
controlling shareholders.
NOTE 12:- REVENUES
a. All of the revenues are derived from the sales of Palm Oil,
Palm Kernel Oil and Palm Kernel Cake in Cote d'Ivoire see also Note 19.
b. Major customers:
Year ended 31 December
2021 2020
Euros in thousands
Revenues from major customers which each account for 10% or more of total
revenues reported in the financial statements:
Customer A - 23,925 18,531
Customer B - 5,241 -
NOTE 13:- FAIR VALUE MEASUREMENT
The fair value of accounts and other receivables, loans, and trade and other
payables approximates their carrying amount due to their short-term
maturities. The fair value of long-term loans with a carrying amount of
€26,953 thousands and €23,291 thousands (including current maturities)
approximates their fair value as of 31 December 2021 and 2020, respectively
(level 3 of the fair value hierarchy).
NOTE 14:- INCOME TAXES
a. Tax rates applicable to the income of the Company and its
subsidiaries:
The Company and its subsidiaries, CS DekelOil Siva Ltd and Pearlside Holdings
Ltd, were incorporated in Cyprus and are taxed according to Cyprus tax laws.
The statutory tax rate is 12.5%.
The carryforward losses of the Company are approximately €31 thousand of CS
DekelOil Siva Ltd are approximately €20 thousand, and of Pearlside are
approximately €12 thousand.
The subsidiary, DekelOil CI SA, was incorporated in Cote d'Ivoire and is taxed
according to Cote d'Ivoire tax laws. Based on its investment plan, DekelOil CI
SA received a full tax exemption from local income tax, "Tax on Industrial and
Commercial profits," for the thirteen years starting 1 January 2014, 50% tax
exemption for the fourteenth year and 25% tax exemption for the fifteenth
year.
The tax exemptions were conditional upon meeting the terms of the investment
plan, which the Group has met.
The subsidiary, Capro CI SA, was incorporated in Cote d'Ivoire and is taxed
according to Cote d'Ivoire tax laws. Based on its investment plan, Capro CI SA
received a full tax exemption from local income tax, "Tax on Industrial and
Commercial profits," for the thirteen years starting from commencement of
production, 50% tax exemption for the fourteenth year and 25% tax exemption
for the fifteenth year.
The tax exemptions were conditional upon meeting the terms of the investment
plan, which the Group is expecting to meet.
The subsidiary DekelOil Consulting Ltd was incorporated in Israel and is taxed
according to Israeli tax laws.
b. Tax assessments:
The Company's subsidiary, DekelOil CI SA, received a final tax assessment
through 2020.
As of 31 December 2020, the Company and all its other subsidiaries had not yet
received final tax assessments
c. The tax expense during the year ended 31 December, 2021 relate to
tax of the Company's subsidiaries DekelOil CI SA and DekelOil Consulting Ltd.
NOTE 15:- SUPPLEMENTARY INFORMATION TO THE STATEMENT OF COMPREHENSIVE INCOME
Year ended
31 December
2021 2020
Euros in thousands
a. Cost of revenues:
Cost of fruits 23,064 14,233
Salaries and related benefits 1,937 1,680
Cultivation & Nursery costs 588 578
Vehicles 356 372
Maintenance and other operating costs 3,251 2,111
Depreciation 1,684 1,233
30,880 20,207
b. General and administrative expenses:
Salaries and related benefits 1,610 1,131
Subcontractors 452 310
Rents & related office expenses 160 108
Travel expenses 84 99
Legal & accounting and professional fees 378 283
Vehicle maintenance 118 86
Insurance 168 86
Brokerage & nominated advisor fees 99 82
Depreciation 204 138
Share-based compensation 271 271
Other 325 167
3,869 2,761
c. Finance cost:
Interest on loans (*) 1,438 1,144
Bank fees 400 429
Exchange rate differences (112) 9
1,726 1,582
* Net of interest capitalized of € 827 thousands
NOTE 16:- INCOME (LOSS) PER SHARE
The following reflects the income (loss) and share data used in the basic and
diluted earnings per share computations:
Year ended 31 December
2021 2020
Euros in thousands
Net income(loss) attributable to equity holders 757 (2,226)
of the Company
Weighted average number of Ordinary shares used for computation of: 528,368,244 428,930,844
Basic earnings (loss) per share
Diluted net earnings (loss) per share (after effect of options) 529,217,521 428,930,844
In 2020, share options are excluded from the calculation of diluted loss per
share as their effect is antidilutive.
NOTE 17:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Year ended
31 December
2021 2020
Euros in thousands
a.1 Balances:
Other accounts payable and accrued expenses 452 191
a.2 Transactions:
Services and expense reimbursements - 33
b. Compensation of key management personnel of the Company:
Short-term employee benefits 801 625
Share-based compensation 224 224
c. Significant agreements with related parties:
1. In February 2008, DekelOil Consulting Limited ("Consulting")
signed an employment agreement with a shareholder, who is a director of the
Company, the CEO of the Company and the chairman of the Board of Directors of
DekelOil CI SA.
Under the employment agreement, the CEO is entitled to a monthly salary of
€ 20,000 per month. The agreement is terminable by the Company with 24
months' notice. The total annual salary, social benefits, bonuses and
management fee paid to the CEO during 2021 and 2020 was approximately €239
thousand and €217 thousand, respectively.
2. In March 2008, DekelOil Consulting Limited signed an employment
agreement with a shareholder, who is a director of the Company, its Deputy CEO
and Chief Financial Officer. The agreement was amended on 11 July 2014 by the
board of the subsidiary to reflect the same salary terms as those of the CEO
described in c (1) above. The total annual salary and social benefits paid
to the employee during 2021 and 2020 was approximately €239 thousand and
€217 thousand, respectively.
NOTE 18:- FINANCIAL INSTRUMENTS
a. Classification of financial liabilities:
The financial liabilities in the statement of financial position are
classified by groups of financial instruments pursuant to IFRS 9:
31 December
2021 2020
Euros in thousands
Financial liabilities measured at amortized cost:
Trade and other payables 4,022 2,717
Short-term loans 3,040 2,437
Long-term lease liabilities 169 192
Long-term loans (including current maturities) 26,947 23,291
Total 34,178 28,637
b. Financial risks factors:
The Group's activities expose it to market risk (foreign exchange risk).
Certain of the Group's long-term obligations at the reporting date also bear
variable interest rates which are linked to the inter banking interest rate in
Cote d'Ivoire and in the UK, and therefore the Group is exposed to cash flow
risks due to changes in that base interest rate. The effect on profit or loss
is approximately €80 thousand for each 1% change in the base interest rate.
Foreign exchange risk:
The Company is exposed to foreign exchange risk resulting from the exposure to
different currencies, mainly, NIS and GBP. Since the FCFA is fixed to the
Euro, the Group is not exposed to foreign exchange risk in respect of the
FCFA. As of 31 December 2021, the foreign exchange risk is immaterial.
Liquidity risk:
The table below summarizes the maturity profile of the Group's financial
liabilities based on contractual undiscounted payments (including interest
payments):
31 December 2021
Less than one year 1 to 2 years 2 to 3 3 to 4 years 4 to 5 years > 5 years Total
years
Euros in thousands
Long-term loans (1) 4,117 3,269 4,563 4,447 4,225 10,937 31,558
Loan from non-controlling interest 915 915
Short-term loan 3,040 3,040
Trade payables and other accounts payable 4,022 4,022
Long-term lease liabilities 30 15 15 15 15 1,365 1,455
12,124 3,284 4,578 4,462 4,240 12,302 40,990
31 December 2020
Less than one year 1 to 2 years 2 to 3 3 to 4 years 4 to 5 years > 5 years Total
years
Euros in thousands
Long-term loans (1) 4,254 4,784 3,935 4,504 3751 11,758 32,986
Short-term loan 2,437 - - - - - 2,437
Trade payables and other accounts payable 2,717 - - - - - 2,717
Long-term lease liabilities 20 20 6 6 6 328 386
9,428 4,804 3,941 4,510 3,757 12,086 36,091
Movement in financial liabilities:
Short term loans Long term loans (1) Lease liabilities Loan from non-controlling interest Total
Balance as of 1 January 2020 1,490 16,302 90 - 17,882
Receipt of short-term loan 2,437 - - - 2,437
Repayment of long-term lease - - (12) - (12)
New lease upon consolidation of subsidiary. - - 114 - 114
Repayment of loans (1,490) (3,584) - - (5,038)
Receipt of long-term loans - 2,363 - - 2,363
Initial consolidation of subsidiary - 8,174 - - 8,174
Balance as of 31 December 2020 2,437 23,291 192 - 23,557
Receipt of short-term loan 3,040 915 3,955
Repayment of long-term lease (23) (23)
Repayment of loans (2,437) (2,339) (4,776)
Receipt of long-term loans 5,991 5,991
Balance as of 31 December 2021 3,040 26,943 169 915 28,704
1) Including current maturities and accrued interest.
NOTE 19:- OPERATING SEGMENTS
a. General:
The operating segments are identified on the basis of information that is
reviewed by the Companies management to make decisions about resources to be
allocated and assess its performance. Accordingly, for management purposes,
the Group is organized into two operating segments based on the two business
units the Group has. The two business units are incorporated under two
separate subsidiaries of the Company, the CPO production unit is incorporated
under CS DekelOil Siva Ltd and its subsidiary and the RCN processing plant
under construction is incorporated under Pearlside Holdings Ltd and its
subsidiary (see Note 1)
The RCN processing activity was consolidated for the first time on 31 December
2020, and 2021 is the first year that the results of RCN operations are
consolidated (see Note 6).
Segment performance (segment income (loss)) and the segment assets and
liabilities are derived from the financial statements of each separate group
of entities as described above. Unallocated items are mainly the Group's
headquarter costs, finance expenses and taxes on income.
b. Reporting operating segments:
Crude Palm Oil Raw Cashew Nut Total
Euros in thousands
Year ended 31 December 2021:
Revenues-External customers 37,391 - 37,391
Segment profit (loss) 3,830 (391) 3,439
Unallocated corporate expenses (797)
Finance cost (1,809)
Profit before taxes on income 833
Depreciation and amortization (1,888) - (1,888)
Year ended 31 December 2020:
Revenues-External customers 22,546 - 22,546
Segment profit (loss) 137 - 137
Unallocated corporate expenses (559)
Finance cost (1,582)
Share of loss of associate (167)
Profit before taxes on income (2,171)
Depreciation and amortization (1,369) - (1,369)
Crude Palm Oil Raw Cashew Nut Total
Euros in thousands
As of 31 December 2021:
Segment assets 33,393 18,199 51,592
Segment liabilities 24,180 10,943 35,123
As of 31 December 2020:
Segment assets 30,580 12,728 43,308
Segment liabilities 21,912 8,934 30,846
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