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DJ AfriAg Global Plc Final Results

 
TIDMAFRI 
 
9 May 2017 
 
                               AfriAg Global PLC 
                      ("AfriAg Global" or the "Company") 
 
           Audited final results for the year ended 31 December 2016 
 
 Chairman's report (incorporating the strategic review) 
 
This has been an excellent year for the Company business growth as a global 
agri-logistics logistics provider, and I am pleased to present the annual 
report and financial statements for AfriAg Global plc (the "Company" and, 
together with its wholly owned subsidiaries, the "Group") for the year ended 31 
December 2016. 
 
Our global distribution footprint has expanded considerably during the year, as 
we moved to distributing perishable food products by road, air and sea for and 
to global customers (South Africa, Mauritius, Mozambique, Zimbabwe, Zambia, 
DRC, Kenya, USA, UK, France, Holland, Russia, Japan, New Zealand and others). 
 
AfriAg Marketing had a very strong year, with revenues growing 54% to GBP3.035 
million during the period, a significant increase from the previous year's 
reported revenue of GBP1.977 million. 
 
Specialist global agri-logistics group AfriAg SA, continues to grow at a fast 
pace and has developed into a significant global logistics enterprise. It has 
reported a 91% increase in full year revenues to GBP11.704 million for the twelve 
months ended 31 December 2016, versus revenues of GBP6.122 million for the 
previous year, with a gross profit of GBP927,000 (2015: GBP552,000) and a net 
profit for the year of GBP104,000 (2015: GBP359,000). The Company has 
equity-accounted for its 40% share of this profit for 2016, being GBP42,000. 
 
Gross profit for the Group also increased significantly to GBP334,000 compared to 
the GBP50,000 reported for the previous year. 
 
Group Results for the period: 
 
  * The Group's gross turnover has increased by over 54% to GBP3.035 million for 
    the year (2015 - GBP1.977 million). 
  * The Group's net loss after taxation for the year was GBP9,000 (2015 - GBP96,000 
    loss). 
  * The Group's current assets including cash at 31 December 2016 amounted to GBP 
    1,261,000 (2015 - GBP810,000). 
  * The Group's 40% owned agri-logistics investment, AfriAg (Pty) Ltd, gross 
    turnover increased 91% to GBP11.704 million (2015 - GBP6.122 million) and 
    reported a net profit of GBP104,000 (2015 - GBP359,000). 
 
Strategic Review for the Period: 
 
AfriAg Global was formed only 4 years ago with the view of establishing a 
global agri-logistics company, with the principal aim of exporting African 
perishable food products to the global market place. We are now seeing this 
business plan coming together as envisaged and are now rapidly expanding our 
operations to providing elite logistic solutions for the timely movement of 
perishable food not only from Africa to the world but also from the world in to 
Africa. 
 
At the heart of our business is our own global network, fleet and staff based 
in Johannesburg at our large modern facilities near O.R. Tambo International 
Airport. The AfriAg HQ is a full-service logistics facility equipped with the 
latest facilities to meet our customer's demanding needs. 
 
And our global partner network spans strategic road, air and sea routes 
harnessing our resources across this network enables us to deliver bespoke 
logistics solutions for our customers. 
 
We have strong relationships with our freight counterparties and their 
branches, fleet, facilities and infrastructure in locations across Europe, 
Asia, North Americas, and the Middle East. 
 
AfriAg has grown to supply our customers with world class global logistics 
delivering across our global footprint, international and domestic freight 
transport services, distribution and refrigerated warehousing services through 
to remote haulage logistics, aviation and marine logistics support services. 
 
Delivering these services are our main priority. Collectively, they enable us 
to efficiently and effectively deliver the solutions our customers are looking 
for, right around the world. 
 
AfriAg Marketing Pty Ltd (100% owned by AfriAg Global Plc): 
 
AfriAg Marketing has experienced an excellent year of trading, increasing 
revenues to ZAR 60.562 million (GBP3.035 million) in 2016, compared to ZAR 38.395 
million (GBP1.977 million) in 2015. This 54% increase in revenue not only 
demonstrates strong development, it also reinforces the belief that the 
company's low-overhead, grower-focused structure works in today's market. The 
model has been keenly welcomed by both growers and end clients. 
 
This year, the business has been active in the export, distribution and trading 
of blueberry, passion fruit, pineapple, apple, strawberry, butternut, peas, 
fine beans, mange tout, sugar snap, baby corn, chillies, baby veg, and herbs. 
 
As well as the UK, the company is now supplying Switzerland, the Netherlands, 
New Zealand, Russia, and the USA (New York and Los Angeles). 
 
In this respect, the addition of a UK office has proven very beneficial in 
terms of range development and in driving the business into more strategic 
markets. This maximises the potential of the growers, and the appetite from the 
market for a more direct relationship with growers has also been welcomed. 
 
Profit levels remained good at ZAR 2.057 million (GBP105,000) despite a forex 
loss of ZAR 1.297 million (GBP67,000) caused by the immediate fall-out from the 
UK's Brexit vote. The recovery from this exchange rate issue showed that the 
foundations of the business are strong and augurs well for ongoing growth. 
 
The company's core ethos (of maximising the return to growers, paying them on 
the best terms available, and ensuring that end clients get exactly what they 
want) is reaping its reward. Both sides are coming back and asking for more. 
This we feel is the main reason for continued success and will remain our 
motivation. 
 
The coming year promises more exciting times as the company builds on the 
foundations laid. The decision to drive into more diverse markets worldwide 
during periods of economic uncertainty is opening the door to significant 
growth, and our in-house logistics strength undoubtedly adds huge value. This 
stands out as a relatively unique offering in the market place. It remains 
clear that the model is both working and gaining momentum. 
 
AfriAg (Pty) Limited (40% owned by AfriAg Global Plc): 
 
AfriAg SA is a truly global and fast growing logistics business. Road haulage, 
air freight and sea freight of fresh and frozen food in to and out of Africa 
and to many destinations around the world. 
 
AfriAg SA now operates logistics services to many major global cities and ports 
around the globe. The company has turned into a truly global enterprise and we 
seeing tremendous growth across many markets. We are now one of the largest air 
freighters of perishable food out of southern Africa using some of the world's 
largest airlines and providing bespoke first world logistics to destinations 
all over the world through our rapidly expanding global network of airlines and 
agents. 
 
AfriAg SA had an outstanding trading year in 2016, reporting an increase of 91% 
in revenues to GBP11.704 million in the full year to 31 December 2016, versus 
revenue of GBP6.122 million for the previous year, with a gross profit of GBP 
927,000, a net profit for the year of GBP104,000. The Company has 
equity-accounted for its 40% share of this profit for 2016, being GBP42,000. 
 
Public Trading Platform for the Company's shares: 
 
On 25 January 2016, the Company posted a circular to Shareholders convening a 
general meeting on 16 February 2016 proposing that Shareholder's should vote to 
cancel the admission of the Company's Ordinary Shares to trading on AIM under 
AIM Rule 41. 
 
The Company's Board had determined that in their view and given the size and 
stage of development of the Company, that the ISDX Growth Market (now renamed 
NEX Exchange Growth Market) provides Shareholders with the most appropriate 
listing platform on which to promote the Company's growth strategy. 
 
On 16 February 2016, the Company's Shareholders voted in favour at that General 
Meeting to delist from the London AIM market. 
 
The Company's shares ceased trading on AIM market on 24 February 2016 and 
remain trading on London's NEX Exchange Growth Market under the Ticker Symbol 
"AFRI". 
 
Change of Name: 
 
The Company changed its name on 25 July 2016, from AfriAg Plc to AfriAg Global 
Plc to reflect the dramatic changes seen by the business since its birth from 
an African centric bespoke food logistics business to one that now provides 
global logistics, food sales, marketing and bespoke distribution services to 
many corporations and food wholesalers around the world. 
 
The Company's ticker symbol on the London ISDX Growth Market (now called NEX 
Exchange Growth Market) remained unchanged as "AFRI" and the Company's new 
website changed to www.afriagglobal.com. 
 
Outlook 
 
The Company anticipates another year of strong growth. The Company also intends 
to identify further investments in the African agri-logistics sector, to 
enhance the AfriAg brand, which has now become very well established. 
 
The Board would like to take this opportunity to thank our shareholders, staff 
and consultants for their continued support and I look forward to reporting 
further significant progress over the next period and beyond. 
 
David Lenigas 
Executive Chairman 
 
Consolidated statement of comprehensive income for the period to 31 December 
2016 
 
__________________________________________________________________________________________ 
 
                                                             Year ended      Year ended 
                                                            31 December     31 December 
                                                                   2016            2015 
 
                                                  Note            GBP'000           GBP'000 
 
Revenue                                             4             3,035           1,977 
 

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Cost of sales                                                   (2,701)         (1,927) 
 
Gross Profit                                                        334              50 
 
Administration expenses                                           (367)           (313) 
 
Share Based Payment Charge                                           98               - 
 
Operating (loss)                                   4-5            (131)           (263) 
 
Share of associate result                          13                42             143 
 
Investment income                                   7                85              26 
 
Finance costs                                       8               (5)             (2) 
 
(Loss) before taxation                                              (9)            (96) 
 
Taxation                                            9                 -               - 
 
(Loss) for the period attributable to equity                        (9)            (96) 
holders of the parent 
 
Other comprehensive income 
 
Gain on revaluation of available for sale                             5              36 
investments 
 
Transfer to income statement                                       (55)             (7) 
 
Translation exchange gain/(loss)                                    160           (102) 
 
Other comprehensive income for the period net of                    110            (73) 
taxation 
 
Total comprehensive income for the year                             101           (169) 
attributable to equity holders of the parent 
 
Loss per share 
 
Basic and diluted (pence)                          10           (0.001)          (0.01) 
 
 
The accompanying accounting policies and notes form part of these financial 
statements. 
 
Consolidated statement of financial position at 31 December 2016 
 
__________________________________________________________________________________________ 
 
                                                            31 December     31 December 
 
                                                                   2016            2015 
 
                                                  Note            GBP'000           GBP'000 
 
Non-current assets 
 
Property, plant & equipment                        11                 5               2 
 
Investments in associates                          13             1,518           1,476 
 
                                                                  1,523           1,478 
 
Current assets 
 
Inventory                                          15                 9               - 
 
Trade and other receivables                        16               976             385 
 
Available for sale assets                          14                35             177 
 
Cash and cash equivalents                                           240             248 
 
                                                                  1,261             810 
 
Total assets                                                      2,783           2,288 
 
Current liabilities 
 
Trade and other payables                           17             (987)           (691) 
 
                                                                  (987)           (691) 
 
Net current assets                                                  274             119 
 
Net assets                                                        1,796           1,597 
 
Equity 
 
Share capital                                      18             1,381           1,381 
 
Share premium account                                             8,528           8,528 
 
Share based payment reserve                                         279             213 
 
Revaluation reserves                                               (36)              14 
 
Foreign currency reserve                                             37           (123) 
 
Retained earnings                                               (8,393)         (8,416) 
 
                                                                  1,796           1,597 
 
The financial information contained within this announcement has been extracted 
from the audited financial information of the Company. 
 
The directors of the Company accept responsibility for the contents of this 
announcement. 
 
                                    -ENDS- 
 
AfriAg Global                                         +44 (0)20 7440 0640 
Plc 
 
David Lenigas (Executive Chairman) 
Anthony Samaha (Finance Director) 
Hamish Harris 
Donald Strang 
 
Peterhouse Corporate Finance Limited                  +44 (0)20 7469 0930 
Guy Miller 
Fungai Ndoro 
 
 
 
Notes to the financial statements 
 
__________________________________________________________________________________________ 
 
1   General information 
 
    AfriAg Global plc is a company incorporated in the Isle of Man under the Isle 
    of Man Companies Act 2006.  The address of its registered office is 34 North 
    Quay, Douglas, Isle of Man, IM1 4LB. The Company's ordinary shares are traded 
    on the NEX Exchange Growth Market as operated by NEX Exchange Ltd ("NEX"). On 
    19 July 2016, the Company changed its name from Afriag Plc to Afriag Global Plc 
    by way of a statutory notice of change of name filed at Isle of Man Registry. 
 
    The financial statements of Afriag Global plc for the year ended 31 December 
    2016 were authorised for issue by the Board on 9 May 2017 and the statements of 
    financial position signed on the Board's behalf by Mr. David Lenigas and Mr 
    Donald Strang. 
 
    Investing policy 
    AfriAg plc, was re-classified as an Investing Company and the following 
    investing strategy has been approved by shareholders: 
 
    The Directors intend to seek to acquire a direct and/or an indirect interest in 
    businesses involved in agriculture generally and the production, processing, 
    logistics and distribution of agricultural produce. 
 
    The Company will initially focus on opportunities in Europe, Africa and the 
    Middle East but will consider possible opportunities anywhere in the world. 
 
    The Company may invest by way of purchasing quoted shares in appropriate 
    companies, outright acquisition or by the acquisition of assets, including the 
    intellectual property, of a relevant business, or by entering into partnerships 
    or joint venture arrangements. Such investments may result in the Company 
    acquiring the whole or part of a company (which in the case of an investment in 
    a company may be private or listed on a stock exchange, and which may be 
    pre-revenue), and such investments may constitute a minority stake in the 
    company, partnership and/or joint venture in question. The Company will not 
    have a separate investment manager. 
 
    The Company may be both an active and a passive investor depending on the 
    nature of the individual investments. Although the Company intends to be a 
    medium to long-term investor, the Directors will place no minimum or maximum 
    limit on the length of time that any investment may be held and therefore 
    shorter term disposal of any investments cannot be ruled out. 
 
    There will be no limit on the number of businesses into which the Company may 
    invest, and the Company's financial resources may be invested in a number of 
    propositions or in just one investment. 
 
    Investments may be in all types of assets and there will be no investment 
    restrictions. The Company will require additional funding as investments are 
    made and new opportunities arise. The Directors may offer new Ordinary Shares 
    by way of consideration as well as cash, thereby helping to preserve the 
    Company's cash resources for working capital. The Company may in appropriate 
    circumstances, issue debt securities or otherwise borrow money to complete an 
    investment. The Directors do not intend to acquire any cross-holdings in other 
    corporate entities that have an interest in the Ordinary Shares. 
 
    Statement of compliance with IFRS 
 
    The financial statements have been prepared in accordance with International 
    Financial Reporting Standards (IFRS) as adopted by the European Union and as 
    applied in accordance with the provisions of the Companies Act 2006. The 
    principal accounting policies adopted by the Company are set out below. 
 
Notes to the financial statements (continued) 
 
__________________________________________________________________________________________ 
 
    New standards, amendments and interpretations adopted by the Company 
    No new and/or revised Standards and Interpretations have been required to be 
    adopted, and/or are applicable in the current year by/to the Company, as 
    standards, amendments and interpretations which are effective for the financial 
    year beginning on 1 January 2016 are not material to the Company. 
 
    New standards, amendments and interpretations not yet adopted 
    At the date of authorisation of these financial statements, the following 
    Standards and Interpretations which have not been applied in these financial 
    statements, were in issue but not yet effective for the year presented: 
 
    - IFRS 9 in respect of Financial Instruments which will be effective for the 
    accounting periods beginning on or after 1 January 2018. 
 
    - IFRS 15 in respect of Revenue from Contracts with Customers which will be 
    effective for accounting periods beginning on or after 1 January 2018. 
 
    - IFRS 16 in respect of Leases which will be effective for accounting periods 
    beginning on or after 1 January 2019. 
 
    There are no other IFRSs or IFRIC interpretations that are not yet effective 
    that would be expected to have a material impact on the Company. 
 
    Going Concern 
 
    The Directors noted the losses that the Group has made for the Year Ended 31 
    December 2016.  The Directors have prepared cash flow forecasts for the period 
    ending 31 May 2018 which take account of the current cost and operational 
    structure of the Group. 
 

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    The cost structure of the Group and Parent Company comprises a high proportion 
    of discretionary spend and therefore in the event that cash flows become 
    constrained, costs can be quickly reduced to enable the Group and Parent 
    Company to operate within its available funding. 
 
    These forecasts demonstrate that the Group has sufficient cash funds available 
    to allow it to continue in business for a period of at least twelve months from 
    the date of approval of these financial statements.  Accordingly, the financial 
    statements have been prepared on a going concern basis. 
 
    It is the prime responsibility of the Board to ensure the Group and Parent 
    Company remains as going concerns. At 31 December 2016, the Group had cash and 
    cash equivalents of GBP240,000 and borrowings of GBPnil. The Group and Parent 
    Company has minimal contractual expenditure commitments and the Board considers 
    the present funds sufficient to maintain the working capital of the Group and 
    Parent Company for a period of at least 12 months from the date of signing the 
    Annual Report and Financial Statements. For these reasons the Directors adopt 
    the going concern basis in the preparation of the Financial Statements. 
 
       Basis of preparation 
 
       The consolidated financial statements have been prepared on the historical cost 
       basis, except for the measurement to fair value of assets and financial 
       instruments as described in the accounting policies below, and on a going 
       concern basis. 
 
       The financial report is presented in Pound Sterling (GBP) and all values are 
       rounded to the nearest thousand pounds (GBP'000) unless otherwise stated. 
 
 
Notes to the financial statements (continued) 
 
_________________________________________________________________________________________ 
 
2     Significant accounting policies 
 
      Basis of Consolidation 
 
      The Group financial statements consolidate those of the Company and all of its 
      subsidiary undertakings drawn up to the balance sheet date.  Subsidiaries are 
      entities over which the Company has the power to control, directly or 
      indirectly, the financial and operating policies so as to obtain benefits from 
      their activities.  The Company obtains and exercises control through voting 
      rights.  Subsidiaries are fully consolidated from the date at which control is 
      transferred to the Company.  They are deconsolidated from the date that control 
      ceases. 
 
      Unrealised gains on transactions between the Company and its subsidiaries are 
      eliminated.  Unrealised losses are also eliminated unless the transaction 
      provides evidence of an impairment of the asset transferred.  Amounts reported 
      in the financial statements of subsidiaries have been adjusted where necessary 
      to ensure consistency with the accounting policies adopted by the Group. 
 
      Acquisitions of subsidiaries are dealt with by the acquisition method.  The 
      acquisition method involves the recognition at fair value of all identifiable 
      assets and liabilities, including contingent liabilities of the subsidiary, at 
      the acquisition date, regardless of whether or not they were recorded in the 
      financial statements of the subsidiary prior to acquisition.  On initial 
      recognition, the assets and liabilities of the subsidiary are included in the 
      consolidated balance sheet at their fair values, which are also used as the 
      bases for subsequent measurement in accordance with the Group accounting 
      policies.  Goodwill is stated after separating out identifiable intangible 
      assets.  Goodwill represents the excess of acquisition cost over the fair value 
      of the Group's share of the identifiable net assets of the acquired subsidiary 
      at the date of acquisition.  Acquisition costs are written off as incurred. 
 
      Investments in associates are initially recognised at cost and subsequently 
      accounted for using the equity method. Any goodwill or fair value adjustment 
      attributable to the Group's share in the associate is not recognised separately 
      and is included in the amount recognised as investment in associate. The 
      carrying amount of the investment in associates is increased or decreased to 
      recognise the Group's share of the profit or loss and other comprehensive 
      income of the associate, adjusted where necessary to ensure consistency with 
      the accounting policies of the Group. Unrealised gains and losses on 
      transactions between the Group and its associates are eliminated to the extent 
      of the Group's interest in those entities. Where unrealised losses are 
      eliminated, the underlying asset is also tested for impairment 
 
      Revenue recognition 
 
      Revenue is measured at the fair value of the consideration received or 
      receivable and represents amounts from the sales of goods provided in the 
      normal course of business, net of value added tax and discounts, and is 
      recognised when the significant risks and rewards of ownership of the product 
      have been transferred to a third party.  In the case of sale or return 
      transactions, revenue is only recognised when, and only to the level that, 
      risks and rewards are transferred. 
 
      Revenue is the invoiced value of goods and services supplied and excludes VAT 
      and other sales based taxes. 
 
Notes to the financial statements (continued) 
 
__________________________________________________________________________________________ 
 
2     Significant accounting policies (continued) 
 
      Finance costs / investment revenue 
 
      Borrowing costs are recognised as an expense when incurred. 
 
      Investment revenue is recognised as the Group becomes entitled to such 
      revenue.  Dividends are accounted for on receipt thereof. 
 
      Property, plant and equipment - General 
 
      Plant and equipment is stated at cost less accumulated depreciation and any 
      accumulated impairment losses. 
      Depreciation is provided on all tangible assets to write off the cost less 
      estimated residual value of each asset over its expected useful economic life 
      on a straight-line basis at the following annual rates: 
      All assets are subject to annual impairment reviews. 
 
      Inventories 
 
      Inventories are stated at the lower of cost and net realisable value. 
 
      Financial instruments 
 
      Financial assets and financial liabilities are recognised on the Group and 
      Company's statement of financial position when the Group or Company becomes a 
      party to the contractual provisions of the instrument. 
 
      The Company's activities give rise to some exposure to the financial risks of 
      changes in interest rates and foreign currency exchange rates.  The Company has 
      no borrowings and is principally funded by equity, maintaining all its funds in 
      bank accounts. 
 
      Financial assets 
 
      Financial assets are classified into the following specified categories; 
      financial assets "at fair value through profit or loss" (FVTPL), "held to 
      maturity" investments, "available for sale" (AFS) financial assets and "loans 
      and receivables".  The classification depends on the nature and purpose of the 
      financial assets and is determined at the time of initial recognition. 
 
      Available for sale financial assets 
 
      Available-for-sale financial assets are non-derivative financial assets that 
      are either designated to this category or do not qualify for inclusion in any 
      of the other categories of financial assets. The Group's available-for-sale 
      financial assets include listed securities. These available-for-sale financial 
      assets are measured at fair value. Realised Gains and losses are recognised in 
      the income statement and unrealised gains and losses in other comprehensive 
      income and reported within the available-for-sale reserve within equity, except 
      for permanent impairment losses and foreign exchange differences, which are 
      recognised in the income statement. When the asset is disposed of or is 
      determined to be impaired, the cumulative gain or loss recognised in other 
      comprehensive income is reclassified from the equity reserve to the income 
      statement and presented as a reclassification adjustment within other 
      comprehensive income. Interest calculated using the effective interest method 
      and dividends are recognised in the income statement within investment income. 
 
      Reversals of impairment losses are recognised in other comprehensive income. 
 
 
Notes to the financial statements (continued) 
 
__________________________________________________________________________________________ 
 
2     Significant accounting policies (continued) 
 
      Equity 
 
      Share capital is determined using the nominal value of shares that have been 
      issued. 
 
      The share premium account represents premiums received on the initial issuing 
      of the share capital.  Any transaction costs associated with the issuing of 
      shares are deducted from share premium, net of any related income tax benefits. 
 
      The share based payment reserve represents the cumulative amount which has been 
      expensed in the income statement in connection with share based payments, less 
      any amounts transferred to retained earnings on the exercise of share options. 
 
      Foreign currency reserve represents the exchange translation gains/(losses) on 
      converting overseas subsidiaries. 
 
      Revaluation reserve represents the unrealised gain or loss on fair/market value 
      movement on available for sale investments and other assets which are valued at 
      their fair value at the balance sheet date. 
 
      Retained earnings include all current and prior period results as disclosed in 
      the income statement. 
 

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      Cash and cash equivalents 
 
      Cash and cash equivalents includes cash in hand, deposits held at call with 
      banks, and bank overdrafts.  Bank overdrafts are shown within current 
      liabilities on the balance sheet. 
 
      Financial liabilities 
 
      Financial liabilities are obligations to pay cash or other financial assets and 
      are recognised when the Group becomes a party to the contractual provisions of 
      the instrument. 
 
      All financial liabilities initially recognised at fair value less transaction 
      costs and thereafter carried at amortised cost using the effective interest 
      method, with interest-related charges recognised as an expense in finance cost 
      in the income statement.  A financial liability is derecognised only when the 
      obligation is extinguished, that is, when the obligation is discharged or 
      cancelled or expires. 
 
      Trade payables 
 
      Trade payables are non-interest-bearing and are initially measured at fair 
      value and thereafter at amortised cost using the effective interest rate. 
 
      Taxation 
 
      The tax expense represents the sum of the tax currently payable and deferred 
      tax. 
 
      The tax currently payable is based on taxable profit for the period.  Taxable 
      profit differs from the net profit as reported in the income statement because 
      it excludes items of income or expense that are taxable or deductible in other 
      periods and it further excludes items that are never taxable or deductible. 
      The Group's liability for current tax is calculated using tax rates that have 
      been enacted or substantively enacted by the balance sheet date. 
 
 
Notes to the financial statements (continued) 
 
__________________________________________________________________________________________ 
 
2     Significant accounting policies (continued) 
 
      Provisions 
 
      Provisions are recognised when the Group has a present obligation as a result 
      of a past event, it is probable that the Group will be required to settle that 
      obligation and a reliable estimate can be made of the amount of the 
      obligation.  The amount recognised as a provision is the best estimate of the 
      consideration required to settle the present obligation at the balance sheet 
      date, taking into account the risks and uncertainties surrounding the 
      obligation 
 
      Share based payments 
 
      The Company issues equity-settled share based benefits to employees.  All 
      equity-settled share-based payments are ultimately recognised as an expense in 
      profit or loss with a corresponding credit to reserves. 
 
      Share-based payments relating to the subsidiary company increase the carrying 
      value of the investment in the subsidiary and are included in the loss on 
      disposal of the subsidiary. 
 
      If vesting periods or other non-market vesting conditions apply, the expense is 
      allocated over the vesting period, based on the best available estimate of the 
      number of share options expected to vest.  Estimates are subsequently revised 
      if there is any indication that the number of share options expected to vest 
      differs from previous estimates.  Any cumulative adjustment prior to vesting is 
      recognised in the current period.  No adjustment is made to any expense 
      recognised in prior periods if share options ultimately exercised are different 
      to that estimated on vesting. 
 
      Upon exercise of share options the proceeds received net of attributable 
      transaction costs are credited to share capital, and where appropriate share 
      premium. 
 
3     Critical accounting judgements and key sources of estimation uncertainty 
 
      In the process of applying the Group's accounting policies, as described in 
      note 2, management has made the following judgements that have the most 
      significant effect on the amounts recognised in the financial statements. 
 
      Valuation of share based payments to employees 
 
      The Company estimates the expected value of share based payments to employees 
      and this is charged through the income statement over the vesting period.  The 
      fair value is estimated using the Black Scholes valuation model which requires 
      a number of assumptions to be made such as level of share vesting, time of 
      exercise, expected length of service and employee turnover and share price 
      volatility.  This method of estimating the value of share based payments is 
      intended to ensure that the actual value transferred to employees is provided 
      for by the time such payments are made. 
 
 
Notes to the financial statements (continued) 
 
__________________________________________________________________________________________ 
 
4     Segmental information 
 
      An operating segment is a distinguishable component of the Group that engages 
      in business activities from which it may earn revenues and incur expenses, 
      whose operating results are regularly reviewed by the Group's chief operating 
      decision maker to make decisions about the allocation of resources and 
      assessment of performance and about which discrete financial information is 
      available. 
 
      The chief operating decision maker has defined that the Group's only reportable 
      operating segments during the period are the agriculture and logistics sector, 
      and the parent company/investment. 
 
      Subject to further acquisitions the Group expects to further review its 
      segmental information during the forthcoming financial year. 
 
      The Group has generated revenues from external customers during the period of GBP 
      3,035,000 (2015: GBP1,977,000), and GBPnil (2015: GBPnil) revenue is from management 
      fees to the associate company. 
 
      In respect of the total assets of GBP2,783,000 (2015: GBP2,288,000), GBP85,000 (2015: 
      GBP245,000) arise in the parent company, and GBP2,698,000 (2015: GBP2,043,000) arise 
      in South Africa. 
 
5     Operating loss 
                                                                    Year to 31    Year to 31 
 
                                                                      Dec 2016      Dec 2015 
 
                                                                         GBP'000         GBP'000 
 
      Operating loss is stated after charging: 
 
      Wages and salaries                                                    11            29 
 
      Share option charges                                                  98             - 
 
      Currency losses/ (gains)                                              73          (38) 
 
      Audit fees                                                            11            10 
 
      Included in share options is GBPnil (2015 - GBPnil) relating to directors. 
 
      In addition to auditors' remuneration shown above, the auditors received the 
      following fees for non-audit services. 
 
                                                                        2016            2015 
 
                                                                       GBP'000           GBP'000 
 
      Other financial advisory services                                    -               - 
 
 
Notes to the financial statements (continued) 
 
__________________________________________________________________________________________ 
 
6     Directors' emoluments                                       2016         2015 
 
                                                                 GBP'000        GBP'000 
 
      Fees and benefits                                             19          108 
 
      The Parent Company has no other directly employed personnel. 
 
                                      Fees and       Share based 
 
                                      salaries          payments              Total 
 
      2016                               GBP'000             GBP'000              GBP'000 
 
      D Lenigas (2)                          3                 -                  3 
 
      A Samaha (3)                           4                 -                  4 
 
      D Strang                               6                 -                  6 
 
      H Harris                               6                 -                  6 
 
                                            19                 -                 19 
 
      2015                               GBP'000             GBP'000              GBP'000 
 
      D Lenigas (1)                         36                 -                 36 
 
      D Strang                              36                 -                 36 
 
      H Harris                              36                 -                 36 
 
                                           108                 -                108 
 
      Directors' fees totalling GBP376,000 have been accrued and remain unpaid as at 
      31 December 2016 (2015: GBP387,000). 
 
      Directors' interest in share options is set out in the directors' report. 
 
7     Investment income                                       Year to 31 Year to 31 
 
                                                                Dec 2016   Dec 2015 
 
                                                                   GBP'000      GBP'000 
 
      Dividends received                                               2          3 
 
      Interest received                                                7          5 
 
      Gain on sale of AFS investments                                 76         18 
 
      Total investment income                                         85         26 
 
 
Notes to the financial statements (continued) 
 
__________________________________________________________________________________________ 
 
8    Finance costs                                      Year to 31 Year to 31 
 
                                                          Dec 2016   Dec 2015 
 

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     Interest paid                                               5          2 
 
9    Taxation                                           Year to 31 Year to 31 
 
                                                          Dec 2016   Dec 2015 
 
                                                             GBP'000      GBP'000 
 
     Total current tax                                           -          - 
 
     The actual tax charges for the period differs from the standard rate 
     applicable in the UK of 20% (2015 - 20/21%) for the reasons set out in 
     the following reconciliation: 
 
                                                              2016       2015 
 
                                                             GBP'000      GBP'000 
 
     Loss on ordinary activities before tax                    (9)       (96) 
 
     Tax thereon @ rates above                                 (2)       (19) 
 
     Factors affecting charge for the period: 
 
     Losses arising in territories where no tax is               2         19 
     charged 
 
     Current tax charge for the period                           -          - 
 
10   Loss per share 
 
                                                              2016       2015 
 
     The calculation of loss per share is based on the       GBP'000      GBP'000 
     loss after taxation divided by the weighted 
     average number of shares in issue during the 
     period: 
 
 
     Net loss after taxation (GBP000's)                          (9)       (96) 
 
     Number of shares 
 
     Weighted average number of ordinary shares for the 
     purposes of basic loss per share (millions)          1,381.00   1,381.00 
 
     Basic and diluted loss per share (expressed in        (0.001)     (0.01) 
     pence) 
 
     As inclusion of the potential ordinary shares would result in a decrease 
     in the earnings per share they are considered to be anti-dilutive, as 
     such, a diluted earnings per share is not included. 
 
Notes to the financial statements (continued) 
 
__________________________________________________________________________________________ 
 
11    Property, plant & equipment - Group                                     Total PPE 
 
                                                                                  GBP'000 
 
      Costs 
 
      At 1 January 2015                                                               - 
 
      Additions                                                                       2 
 
      At 31 December 2015                                                             2 
 
      At 1 January 2016                                                               2 
 
      Additions                                                                       3 
 
      At 31 December 2016                                                             5 
 
      Depreciation & impairment 
 
      As at 1 January 2015, 31 December 2015, & 31 December                           - 
      2016 
 
      Net Book Values 
 
      At 31 December 2015                                                             2 
 
      At 31 December 2016                                                             5 
 
      Impairment Review 
      At 31 December 2016, the directors have carried out an impairment review and 
      have considered that no impairment is required.  The depreciation charge is 
      immaterial currently in respect of disclosure within the table above, and 
      therefore not disclosed. 
 
 
 
 
12     Investments in subsidiaries - Company 
 
                                                                     31 December  31 December 
 
                                                                            2016         2015 
 
                                                                           GBP'000        GBP'000 
 
       Cost and net book value 
 
       At 1 January                                                            -            - 
 
       Additions                                                               -            - 
 
       Disposal                                                                -            - 
 
       At 31 December                                                          -            - 
 
       The following were subsidiary undertakings held directly or indirectly by the 
       Company at the end of the year: 
 
       Name                  Country of           Proportion of voting  Nature of business 
                             incorporation        rights and ordinary 
                                                  share capital held 
                                                  voting right 
 
       AfriAg Limited        England              100%                  Holding Company 
 
       Afriag International  England              100%                  Dormant Company 
       Limited 
 
       AfriAg Limited        BVI                  100%                  Dormant Company 
 
       Afriag Holdings (Pty) South Africa         100%                  Holding Company 
       Limited 
 
       Afriag Marketing      South Africa         100%                  Marketing Company 
       (Pty) Limited 
 
 
Notes to the financial statements (continued) 
 
__________________________________________________________________________________________ 
 
13    Investment in associate - Group                                31 December   31 December 
 
                                                                            2016          2015 
 
                                                                           GBP'000         GBP'000 
 
      At 1 January                                                         1,476         1,333 
 
      Addition at cost                                                         -             - 
 
      Share of associate result                                               42           143 
 
      Carrying value at 31 December                                        1,518         1,476 
 
      The Group's share of results of its associate, which is unlisted, and its 
      aggregated assets and liabilities, is as follows: 
 
      Name       Country of      Assets    Liabilities    Revenues    Profit/(Loss) % interest 
                 incorporation                                                            held 
 
                                As at 31 December 2016   Year to 31 December 2016 
 
      AfriAg     South Africa   GBP4,002,000   GBP3,490,000   GBP11,704,000      GBP104,000         40 
      (Pty) Ltd 
 
      AfriAg (Pty) Limited's year end is 31 December. 
 
 
 
 
14   Available-for-sale investments - Group & Company  31 December 31 December 
 
                                                              2016        2015 
 
     Current Assets - Listed investments                     GBP'000       GBP'000 
 
     At 1 January - market value                               177         186 
 
     Disposals during the period                             (168)        (56) 
 
     Gain on disposal of investments                            76          18 
 
     Transfers to income statement                            (55)         (7) 
 
     Movement in market value                                    5          36 
 
     At 31 December - market value                              35         177 
 
     Available-for-sale investments comprise investments in listed securities 
     which are traded on stock markets throughout the world, and are held by 
     the Group as a mix of strategic and short term investments. 
 
     Income from these investments was GBP2,000 for dividends received for the 
     year to 31 December 2016. (2015: GBP3,000) 
 
 
 
15    Inventories - Group                                      31 December  31 December 
 
                                                                      2016         2015 
 
                                                                     GBP'000        GBP'000 
 
      Goods & Packaging                                                  9            - 
 
      Total                                                              9            - 
 
 
Notes to the financial statements (continued) 
 
__________________________________________________________________________________________ 
 
16   Trade and other receivables                   31 December 2016     31 December 2015 
 
                                                   Group    Company     Group    Company 
                                                   GBP'000      GBP'000     GBP'000      GBP'000 
 
     Current trade and other receivables 
 
     Trade receivables                               345          2       226          - 
 
     Other debtors                                   627          1       140         10 
 
     Prepayments & accrued income                      4          4        19         19 
 
     Total                                           976          7       385         29 
 
 
     Non-Current trade and other receivables 
 
     Loans due from subsidiaries                       -      1,836         -      1,836 
 
     Total                                             -      1,836         -      1,836 
 
 
     Loans outstanding and due from subsidiaries, are interest free and repayable on 
     demand. 
 
 
 
17   Trade and other payables 
 
                                        31 December 2016      31 December 2015 
 
                                        Group    Company      Group    Company 
                                        GBP'000      GBP'000      GBP'000      GBP'000 
 
     Current trade and other 
     payables 
 
     Trade creditors                      402         22        213          9 
 
     Other creditors                      194         31         44          - 
 
     Accruals                             391        391        434        314 
 
     Total                                987        444        691        323 
 
 
 
18    Share capital                                             31 December  31 December 
 

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                                                                       2016         2015 
 
                                                                      GBP'000        GBP'000 
 
      Allotted, issued and fully paid 
 
      1,381,001,037 (2015 - 1,381,001,037) ordinary shares            1,381        1,381 
      of GBP0.001 each 
 
      Shares issued during the year ended 31 December 2016: 
      No shares were issued by the Company during the year to 31 December 2016 (2015: 
      nil). 
 
      Warrants in issue 
 
      As at 31 December 2016, nil warrants (2015: nil) remain outstanding. No 
      warrants were issued, exercised, or lapsed during the year ended 31 December 
      2016 (2015: nil). 
 
      Share Options 
 
      The Company has as at 31 December 2016, 129,000,000 (2015: 79,000,000) share 
      options issued through its share schemes. During the year 60,000,000 options 
      were issued (2015: nil), no options were exercised (2015: nil), 10,000,000 
      options were cancelled or lapsed (2015: nil). 
 
 
Notes to the financial statements (continued) 
 
_________________________________________________________________________________________ 
 
18    Share capital (continued) 
 
      Employment Benefit Trust ("EBT") 
 
      The Company established on 3 October 2014 a share incentive plan ("SIP") and 
      effective as of 3 October 2014. The purpose of the SIP is to incentivise 
      officers, employees and consultants of the Company by the award of ordinary 
      shares in the capital of the Company ("Ordinary Shares") for no cost. Ordinary 
      Shares under this plan will not exceed 10 per cent of the Company's issued 
      share capital from time to time without the prior approval of shareholders of 
      the Company. 
 
      The Company also established on 3 October 2014, an employee benefit trust 
      called the AfriAg Employee Benefit Trust ("EBT") to implement the use of the 
      SIP. The EBT is a discretionary trust for the benefit of directors, employees 
      and consultants of the Company and its subsidiaries. 
 
      Accordingly, the trustees of the EBT subscribed for 118,000,000 new ordinary 
      shares of 0.1p each in the Company, at par value per share at an aggregate cost 
      to the Company of GBP118,000, such shares representing 9% of the so enlarged 
      issued share capital of the Company.  The shares held in the EBT are intended 
      to be used to satisfy future awards made by the Company's Remuneration 
      Committee under the SIP. It is intended that any individual awards under the 
      scheme will be subject to vesting and performance conditions.  There have been 
      no further subscriptions during the year ended 31 December 2016 (2015 : nil). 
      On 11 August 2016, the Company awarded 100 million of the EBT shares to Mr P de 
      Robillard, who is responsible for managing the Group's logisitics divisions, 
      leaving 18 million shares held by the EBT. 
 
 
 
19   Share based payments 
 
     A modified Black-Scholes model has been used to determine the fair value of the 
     share options on the date of grant.  The fair value is expensed to the income 
     statement on a straight line basis over the vesting period, which is determined 
     annually.  The model assesses a number of factors in calculating the fair 
     value.  These include the market price on the date of grant, the exercise price 
     of the share options, the expected share price volatility of the Company's 
     share price, the expected life of the options, the risk free rate of interest 
     and the expected level of dividends in future periods. 
     As disclosed in note 5 the share option charge for the period was GBP98,000 (2015 
     - GBPnil) 
 
     The inputs into the model for the 2016 issues were as follows: 
 
                                                    July 2016 Options    August 2016 Options 
 
     Number of options                                     50,000,000             10,000,000 
 
     Volatility                                                79.00%                 79.00% 
 
     Market price                                            GBP0.00255               GBP0.00325 
 
     Interest rate                                              2.30%                  2.30% 
 
     Dividend yield                                               Nil                    Nil 
 
     Contractual life                                      4.50 years             3.39 years 
 
     The volatility assumption is based upon historic share price volatility of the 
     Company. 
 
     Exercise Grant     Expiry    31 December Granted    Expired        31 December Weighted 
     Price    Date      Date      2015                                  2016        average 
                                                                                    exercise 
                                                                                     price 
 
     Summary of options 
 
     GBP0.001   07/12/    31/12/     69,000,000          -              -  69,000,000  GBP0.0010 
              2012      2020 
 
     GBP0.0045  03/10/    31/12/     10,000,000          -   (10,000,000)           -  GBP0.0045 
              2014      2016 
 
     GBP0.0025  01/07/    31/12/              - 50,000,000              -  50,000,000  GBP0.0025 
              2016      2020 
 
     GBP0.0030  12/08/    31/12/              - 10,000,000              -  10,000,000  GBP0.0030 
              2016      2019 
 
                                   79,000,000 60,000,000   (10,000,000) 129,000,000  GBP0.0021 
 
 
Notes to the financial statements (continued) 
 
__________________________________________________________________________________________ 
 
20    Financial instruments 
 
      The Group's financial instruments comprise cash at bank and payables which 
      arise in the normal course of business.  It is, and has been throughout the 
      period under review, the Group's policy that no speculative trading in 
      financial instruments shall be undertaken.  The Group has been solely equity 
      funded during the period.  As a result, the main risk arising from the Group's 
      financial instruments is currency risk. 
 
      Details of the significant accounting policies and methods adopted, including 
      the criteria for recognition, the basis of measurement and the basis on which 
      income and expenses are recognised, in respect of each class of financial 
      asset, financial liability and equity instrument are disclosed in note 2 of the 
      accounts. 
 
                                                                          2016         2015 
 
                                                                         GBP'000        GBP'000 
 
      Financial assets (current) 
 
      Trade receivables                                                    345          226 
 
      Cash and cash equivalents                                            240          248 
 
      Financial liabilities (current) 
 
      Trade payables                                                       402          213 
 
      Interest rate risk and liquidity risk 
      The Group is funded by equity, maintaining all its funds in bank accounts.  The 
      Group's policy throughout the period has been to minimise the risk of placing 
      available funds on short term deposit.  The short-term deposits are placed with 
      banks for periods up to 1 month according to funding requirements. 
 
      The Group had no undrawn committed borrowing facilities at any time during the 
      period. 
 
      Currency risk 
      The group is directly exposed to currency risk of its subsidiaries, as they are 
      based in South Africa, and exposed to movement against the South African Rand 
      as their assets, liabilities, revenue and expenditure are denominated therein. 
      The parent company is denominated in pound sterling. 
 
      Market risk 
      The group and company's current exposure to market risk in relation to its AFS 
      investments, which are listed on stock markets throughout the world. 
 
      Fair values 
      Cash and cash equivalents (which are presented as a single class of assets on 
      the face of the balance sheet) comprise cash held by the company with an 
      original maturity of three months or less.  The carrying amount of these assets 
      approximates their fair value. 
 
      The directors consider there to be no material difference between the book 
      value of financial instruments and their values at the balance sheet date. 
 
 
Notes to the financial statements (continued) 
 
__________________________________________________________________________________________ 
 
21      Related party transactions 
 
 
        Transactions between the Company and its subsidiaries, which are related 
        parties, have been eliminated on consolidation and are not disclosed in this 
        note. Transactions between other related parties are discussed below. 
 
        During the period, there were no related party transactions to disclose. 
 
        Remuneration of Key Management Personnel 
 
        The remuneration of the Directors and other key management personnel of the 
        Group are set out below in aggregate for each of the categories specified in 
        IAS24 Related party Disclosures. 
 
                                                                                   2016          2015 
 
                                                                                  GBP'000         GBP'000 
 
        Short-term employee benefits                                                 30           137 
 
        Share-based payments                                                         79             - 
 
                                                                                    109           137 
 
22      Capital Commitments & Contingent Liabilities 
 
 
        There are no non-cancellable capital commitments as at the balance sheet date. 

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        The Group has no contingent liabilities at the balance sheet date. 
 
23      Ultimate control 
 
 
        The Company has no individual controlling party. 
 
24      Events after the end of reporting period 
 
 
        There are no events after the end of the reporting period to disclose. 
 
25      Profit and loss account of the parent company 
 
 
        As permitted by s408 of the Companies Act 2006, the profit and loss account of 
        the parent company has not been separately presented in these accounts. The 
        parent company loss for the year was GBP149,000 (2015: GBP218,000). 
 
 
 
 
END 
 

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