AfriAg Global Plc - Results for the Year Ended 31 December 2019

AfriAg Global plc
(“AfriAg Global” or the “Company”)

Audited Final Results for the Year Ended 31 December 2019
 

Chairman’s report (incorporating the strategic report)

AfriAg Global PLC (AQSE: AFRI), presents its Annual Report for year ended 31 December 2019.

Like many public companies around the world, the COVID-19 pandemic has unfortunately slowed down the Company’s efforts with respect to completing the Apollon UK transaction (see below), however we are totally focused on working through the delays and proceeding with this very exciting transaction. We are working diligently with our advisers and regulators towards putting this deal to shareholders for their careful consideration and approval.

Investment policy change to include Medical Cannabis investments:

In September 2018, shareholder approval was obtained at a general meeting for the expansion of the Company’s investment strategy to include medicinal cannabis. The Company has now expanded its existing investment strategy to also include investments in companies, projects or products that are progressing research in and development of medicinal cannabis and its derivatives, producing or cultivating medicinal cannabis, producing or supplying products derived from or related to cannabis (including, but not limited to, hemp and cannabidiol products); and/or commercialising or marketing medicinal cannabis and its derivatives. The Company sees tremendous opportunities in the sector, especially in the field of medical research.

Medical Cannabis Investments:

The Company currently owns 4.64 million shares (representing 2.68%) of the share capital of Apollon Formularies Ltd (“Apollon UK”). The Company raised £1.41 million during the period to assist with the acquisition of this investment.

The Company is currently working with Apollon UK to satisfy all regulatory requirements for the proposed acquisition of the entire issued share capital of Apollon UK (the “Acquisition”) as announced. In due course, subject to making an offer to the shareholders of Apollon UK and obtaining the necessary approvals, the Company intends to send an explanatory circular and notice of general meeting to its shareholders seeking approval of the Acquisition. It is intended that the Company will acquire all the issued and outstanding shares from the shareholders of Apollon UK pursuant to a right of first refusal in consideration for the issue and allotment to those shareholders of new ordinary shares in the capital of the Company at a price of 10 pence per new ordinary share.

Apollon UK is entitled to 95% of the net profit of Apollon Formularies Jamaica, Limited (“Apollon Jamaica”). Subject to approval from the Cannabis Licensing Authority in Jamaica, Apollon UK has the right to acquire a 49% interest in the issued share capital of Apollon Jamaica.

Apollon Jamaica holds the following licenses: 

1. Licence to cultivate cannabis for the sole purposes of undertaking research, including clinical research as approved by the Ministry of Health;
2. License to process and manufacture any cannabis-based products that have been approved by the Ministry of Health for medical, therapeutic and scientific purposes (Processing Licence 170209113513) at designated premises of Apollon Jamaica; and
3. License to provide therapeutic services using cannabis (Retail (Therapeutic Services) Licence 170209153635).

Agriculture Investments:

The market appeared to give little credit for the investments the Company had previously made in the agricultural sector. The Company therefore put it to shareholders that we should divest our agri investments and focus on the legal medical cannabis sector. Shareholder approval for the disposal of these investments was received in late November 2019, and the full disposal of the Company’s subsidiaries has been accounted for in the 31 December 2019 accounts.
 

Share consolidation:

The Company also received shareholder approval for a share consolidation (“Consolidation”) in late 2019. The effect of the Consolidation was to reduce the number of ordinary shares in issue by a factor of 100, whilst increasing the trading price of the Company’s new ordinary shares. Following completion of the Consolidation, 30,110,011 new consolidated ordinary shares of no par value each, were on issue. This was increased to 31,710,011 by 31 December 2019 with further equity fund raising.
 

Financial Results:

During the period, the Group had revenues of £2.22 m (2018: £2.24 m) and made a gross profit of £258,000 (2018: £66,000). The total comprehensive loss for the period attributable to equity holders of the parent was £2,463,000 (2018: £347 000). These results include the Group’s share of the Subsidiaries results up to date of disposal.

There was a weighted loss per share of 9.759 p (2018: loss per share of 1.7 p).

Current assets at 31 December 2019 amounted to £1,281,000 (2018: £1,056,000).

No dividends have been paid or proposed.

Outlook:

We have a very unique ability, being one of the few companies listed in London and indeed Europe, to actually undertake investments in the fast-growing legal medical cannabis sector. Although the global cannabis market has come off its highs of last year, the medical research side will become more significant as time goes by.

Having recently completed our initial investment in Apollon UK, we are actively pursuing to further increase our stake in this key investment further as discussed above. We fully appreciate that time is of the essence, and your board, its lawyers and indeed the Apollon UK team are working tirelessly to wrap up this transaction as soon as possible.

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.
 

The directors of the Company accept responsibility for the contents of this announcement.


David Lenigas
Executive Chairman
15 July 2020

The Directors of the Company accept responsibility for the contents of this announcement.


AfriAg Global Plc:
David Lenigas (Executive Chairman)         [phone]  
 
Peterhouse Capital Limited                       [phone]  
Guy Miller/Allie Feuerlein  

 

Financial statements
Consolidated statement of comprehensive income for the period to 31 December 2019

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		Year ended 31 December 2019	Year ended 31 December 2018
	Note	£’000	£’000
Revenue	4	2,217	2,236
Cost of sales		(1,959)	(2,170)
Gross Profit		258	66
Administration expenses		(411)	(430)
Share Based Payment Charge		-	-
Operating (loss)	5	(153)	(364)
Share of associate result	13	(2)	97
(Loss) on disposal of subsidiaries	22	(346)	-
Loans advanced to subsidiaries written-off	22	(1,953)	-
Investment income	7	(22)	(51)
Finance costs	8	(4)	-
(Loss) before taxation		(2,480)	(318)
Taxation	9	-	-
(Loss) for the period attributable to equity holders of the parent		(2,480)	(318)
Other comprehensive income
Transfer to income statement		-	22
Translation exchange (loss)		17	(51)
Other comprehensive income for the period net of taxation		17	(29)
Total comprehensive income for the year attributable to equity holders of the parent		(2,463)	(347)
Loss per share
Basic and diluted (pence)	10	(9.76)	(1.7)

The accompanying accounting policies and notes form part of these financial statements.

Consolidated statement of financial position at 31 December 2019

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		31 December	31 December
		2019	2018
	Note	£’000	£’000
Non-current assets
Property, plant & equipment	11	-	5
Investments in associates	13	-	1,687
		-	1,692
Current assets
Inventory	15	-	-
Trade and other receivables	16	16	925
Available for sale assets	14	1,167	30
Cash and cash equivalents		98	101
		1,281	1,056
Total assets		1,281	2,748
Current liabilities
Trade and other payables	17	(525)	(844)
		(525)	(844)
Net current assets		756	213
Net assets		756	1,904
Equity
Share capital	18	3,171	1,761
Share premium account		8,535	8,630
Share based payment reserve		128	279
Revaluation reserves		-	-
Foreign currency reserve		-	(17)
Retained earnings		(11,078)	(8,749)
		756	1,904

The financial statements of AfriAg Global plc (registered number 002845V) were approved by the Board of Directors and authorised for issue on 15 July 2020 and were signed on its behalf by:



David Lenigas       Donald Strang
Chairman             Director

The accompanying accounting policies and notes form part of these financial statements.

Company statement of financial position at 31 December 2019

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		31 December	31 December
		2019	2018
	Note	£’000	£’000
Non-current assets
Investments in subsidiary undertakings	12	-	-
Trade and other receivables	16	-	1,836
		-	1,836
Current assets
Trade and other receivables	16	16	134
Available for sale assets	14	1,167	30
Cash and cash equivalents		98	81
		1,281	245
Total assets		1,281	2,081
Current liabilities
Trade and other payables	17	(525)	(458)
		(525)	(458)
Net current assets/(liabilities)		756	(213)
Net assets		756	1,623
Equity
Share capital	18	3,171	1,761
Share premium account		8,535	8,630
Share based payment reserve		128	279
Revaluation reserves		-	-
Retained earnings		(11,078)	(9,047)
		756	1,623

The financial statements of AfriAg Global plc (registered number 002845V) were approved by the Board of Directors and authorised for issue on 14 July 2020 and were signed on its behalf by:



David Lenigas            Donald Strang
Chairman                   Director
   

The accompanying accounting policies and notes form part of these financial statements.

Consolidated statement of changes in equity for the period to 31 December 2019

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	Share capital	Share premium	Share based payment reserve	Foreign currency reserve	Revaluation reserves	Retained earnings	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
At 31 December 2017	1,461	8,648	279	34	(22)	(8,431)	1,969
(Loss) for the period	-	-	-	-	-	(318)	(318)
Currency translation gain	-	-	-	(51)	-	-	(51)
Transfer to income statement	-	-	-	-	22	-	22
Total Comprehensive Income	-	-	-	(51)	22	(318)	(347)
Shares issued	300	-	-	-	-	-	300
Share Issue cost	-	(18)	-	-	-	-	(18)
Share based payment charge	-	-	-	-	-	-	-
Total contributions by and distributions to owners of the Company	300	(18)	-	-	-	-	282
At 31 December 2018	1,761	8,630	279	(17)	-	(8,749)	1,904
(Loss) for the period	-	-	-	-	-	(2,480)	(2,480)
Currency translation gain	-	-	-	17	-	-	17
Transfer to income statement	-	-	-	-	-	-	-
Total Comprehensive Income	-	-	-	17	-	(2,480)	(2,463)
Shares issued	1,410	-	-	-	-	-	1,410
Share Issue cost	-	(95)	-	-	-	-	(95)
Transfer with equity	-	-	(151)	-	-	151	-
Total contributions by and distributions to owners of the Company	1,410	(95)	(151)	-	-	151	1,315
At 31 December 2019	3,171	8,535	128	-	-	(11,078)	756

The accompanying accounting policies and notes form part of these financial statements.

Company statement of changes in equity for the period to 31 December 2019

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	Share capital	Share premium	Share based payment reserve	Revaluation reserves	Retained earnings	Total
	£’000	£’000	£’000	£’000	£’000	£’000
At 31 December 2017	1,461	8,648	279	(22)	(8,783)	1,583
(Loss) for the period	-	-	-	-	(264)	(264)
Transfer to income statement	-	-	-	22	-	22
Total Comprehensive Income	-	-	-	22	(264)	(242)
Shares issued	300	-	-	-	-	300
Share issue costs	-	(18)	-	-	-	(18)
Total contributions by and distributions to owners of the Company	300	(18)	-	-	-	282
At 31 December 2018	1,761	8,630	279	-	(9,047)	1,623
(Loss) for the period	-	-	-	-	(2,182)	(2,182)
Total Comprehensive Income	-	-	-	-	(2,182)	(2,182)
Shares issued	1,410	-	-	-	-	1,410
Share issue costs	-	(95)	-	-	-	(95)
Transfer with equity	-	-	(151)	-	151	-
Total contributions by and distributions to owners of the Company	1,410	(95)	(151)	-	151	1,315
At 31 December 2019	3,171	8,535	128	-	(11,078)	756

The accompanying accounting policies and notes form part of these financial statements.

Consolidated statement of cash flows for the period ended 31 December 2019

__________________________________________________________________________________________

		Year ended	Year ended
		31 Dec 2019	31 Dec 2018
		£’000	£’000
Cash flows from operating activities
Operating (loss)		(153)	(364)
(Increase)/decrease in inventory		(12)	3
Decrease in trade and other receivables		81	38
(Decrease) in trade and other payables		(71)	(75)
Depreciation		1	3
Share option charge		-	-
Net cash (outflow) in operating activities		(154)	(395)
Investing activities
Investment income		1	3
Finance costs		(4)	-
Loan advanced to related party company		-	(117)
Receipts on sale of AFS investments		-	1
Payments on purchase of AFS investments		(1,160)	(62)
Cash disposed with subsidiaries		(13)	-
Payments for PPE assets		-	(3)
Net cash (outflow) in investing activities		(1,176)	(178)
Financing activities
Issue of share capital		1,410	300
Issue costs		(95)	(18)
Net cash inflow from financing activities		1,315	282
Net (decrease) in cash and cash equivalents		(15)	(291)
Cash and cash equivalents at beginning of period		101	443
Effect of foreign exchange on cash and cash equivalents		12	(51)
Cash and cash equivalents at end of period		98	101

The accompanying accounting policies and notes form part of these financial statements.

Company statement of cash flows for the period ended 31 December 2019

_____________________________________________________________________________________

		Year ended	Year ended
		31 Dec 2019	31 Dec 2018
		£’000	£’000
Cash flows from operating activities
Operating (loss)		(206)	(210)
Decrease/(increase) in trade and other receivables		1	(9)
Increase in trade and other payables		67	73
Share option charge		-	-
Net cash (outflow) in operating activities		(138)	(146)
Investing activities
Investment income		-	-
Loan advanced to related party company		-	(117)
Receipts on sale of AFS investments		-	1
Payments on purchase of AFS investments		(1,160)	(62)
Net cash (outflow) in investing activities		(1,160)	(178)
Financing activities
Issue of share capital		1,410	300
Issue costs		(95)	(18)
Net cash inflow from financing activities		1,315	282
Net increase/(decrease) in cash and cash equivalents		17	(42)
Cash and cash equivalents at beginning of period		81	123
Cash and cash equivalents at end of period		98	81

The accompanying accounting policies and notes form part of these financial statements.

Notes to the financial statements

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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 AQSE Exchange Growth Market as operated by Aquis Stock Exchange Ltd (“AQSE”). The financial statements of Afriag Global plc for the year ended 31 December 2019 were authorised for issue by the Board on 15 July 2020 and the statements of financial position signed on the Board's behalf by Mr. David Lenigas and Mr Donald Strang.
	Investing policy The Company’s investment strategy focuses on acquisitions of direct and/or indirect interests in the agricultural and medicinal cannabis sectors. Agriculture The Board intend to seek acquisitions of direct and/or indirect interests in businesses involved in agriculture generally and the production, processing, logistics and distribution of agricultural produce. The Company will focus on opportunities in this sector in Europe, Africa and the Middle East, but will consider possible opportunities anywhere in the world. Medicinal Cannabis The Board intend to seek investments in companies, projects or products that are: ·      progressing medicinal cannabis research and development; ·      producing or cultivating medicinal cannabis; ·      producing or supplying products derived from or related to cannabis (including, but not limited to, hemp and cannabidiol products); and/or ·      commercialising or marketing medicinal cannabis and its derivatives. The Company will seek investments in companies and projects in jurisdictions which have well-developed and reputable laws and regulations for the research and production of medicinal cannabis and in jurisdictions that are signatories to the United Nation’s conventions on narcotics. Types of Investments The Company is likely to be an active investor within these sectors and acquire control of certain target companies although it may also consider acquiring non-controlling shareholdings. The proposed investments to be made by the Company may be in either quoted or unquoted securities and made by direct acquisition of an interest in companies, partnerships or joint ventures, or direct interests in projects and can be at any stage of development. Accordingly, the Company’s equity interest in a proposed investment may range from a minority position to 100 per cent. ownership and a controlling interest. The Directors’ primary objective is to achieve the best possible value over time for Shareholders, primarily through capital growth. If the Company takes a controlling stake, the acquisition could trigger a Reverse Takeover under Rule 58 of the AQSE Exchange Rules. The Board intend to acquire one or more investments in quoted or unquoted businesses or companies (in whole or in part) thereby creating a platform for further investments. There is no limit on the number of companies, projects or products that the Company may invest in with the agricultural and medicinal cannabis sectors. The Company may need to raise additional funds for these purposes and may use both debt and/or equity.

Notes to the financial statements (continued)

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	Investing policy (continued)
	The Board believes that their collective experience, together with their extensive network of contacts and the Company’s Technical Committee, will assist them in the identification, evaluation and funding of appropriate investment opportunities within the medicinal cannabis sector. When necessary, other external professionals will be engaged to assist in the due diligence on prospective targets and their management teams. The Directors will also consider appointing additional directors and/or advisors with relevant experience if the need arises. It is anticipated that there may be opportunities to spin out businesses privately or by initial public offerings where Shareholders may be able to be benefit through distributions of cash and/or shares and/or rights to subscribe in listings. Given the nature of the investment strategy, the Company does not intend to make additional regular and periodic disclosures or calculations of net asset value outside of the requirements for a NEX Exchange Growth Market traded company. It is anticipated that the Company will hold investments for the medium to long term, although where opportunities exist for shorter term investments, the Company may undertake advantage of such opportunities. The Directors intend to review the investment strategy on an annual basis and, subject to their review and in the absence of unforeseen circumstances, the Directors intend to adhere to the investment strategy. Changes to the investment strategy may be prompted, inter alia, by changes in government policies or economic conditions which alter or introduce additional investment opportunities. It is the intention of the Directors to invest the Company’s cash resources, as far as practicable, in accordance with the investment strategy. However, due to market and other investment considerations, it may take some time before the cash resources of the Company are fully invested. It is intended that the funds currently available to the Company will be used to meet general working capital requirements, to undertake due diligence on potential target acquisitions and to make investments in accordance with the investment guidelines described above.
	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.
	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 2019 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 17 in respect of Insurance Contracts will be effective for accounting periods beginning on or after 1 January 2021 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.

Notes to the financial statements (continued)

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	Going Concern
	The Directors noted the losses that the Group has made for the Year Ended 31 December 2019.  The Directors have prepared cash flow forecasts for the period ending 31 July 2021 which take account of the current cost and operational structure of the Company. The cost structure of the 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 Company to operate within its available funding. These forecasts demonstrate that the Company 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 Company remains as going concerns. At 31 December 2019, the Company had cash and cash equivalents of £98,000 and borrowings of £nil. The Company has minimal contractual expenditure commitments and the Board considers the present funds sufficient to maintain the working capital of the 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 (£) and all values are rounded to the nearest thousand pounds (£‘000) unless otherwise stated.

Notes to the financial statements (continued)

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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)

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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: ·      Plant and Equipment – between 5 per cent and 25 per cent 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 and unrealised Gains and losses are recognised in the income statement. Interest calculated using the effective interest method and dividends are recognised in the income statement within investment income.

Notes to the financial statements (continued)

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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.
	Retained earnings include all current and prior period results as disclosed in the income statement.
	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)

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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 any 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 Company expects to further review its segmental information during the forthcoming financial year. The Group has generated revenues from external customers during the period of £2,217,000 (2018: £2,236,000), and £nil (2018: £nil) revenue is from management fees to the associate company. In respect of the total assets of £1,281,000 (2018: £2,748,000), £1,218,000 (2018: £128,000) arise in the parent company, and £nil (2018: £2,620,000) arise in South Africa as a result of the disposal of the South African subsidiaries.
5	Operating loss	Year to 31		Year to 31
		Dec 2019		Dec 2018
		£’000		£’000
	Operating loss is stated after charging:
	Wages and salaries	76		27
	Depreciation	1		3
	Currency losses	13		1
	Audit fees	11		12
	Included in share options is £nil (2018 - £nil) relating to directors.
	In addition to auditors’ remuneration shown above, the auditors received the following fees for non-audit services.
		2019	2018
		£’000	£’000
	Other financial advisory services	-	-

Notes to the financial statements (continued)

__________________________________________________________________________________________

6	Directors’ emoluments			2019			2018
				£’000			£’000
	Fees and benefits			112			114
	The Parent Company has no other directly employed personnel.
		Fees and	Share based
		salaries	payments			Total
	2019	£’000	£’000			£’000
	D Lenigas	36	-			36
	A Samaha *	4	-			4
	D Strang	36	-			36
	H Harris	36	-			36
		112	-			112
	2018	£’000	£’000			£’000
	D Lenigas	36	-			36
	A Samaha	6	-			6
	D Strang	36	-			36
	H Harris	36	-			36
		114	-			114
	(*) - A Samaha resigned as a director on 9 August 2019. The Directors’ fees totalling £494,000 that have been accrued and remain unpaid as at 31 December 2019 all relate to the current and previous years unpaid fees. (2018: £428,000).
7	Investment income				Year to 31			Year to 31
					Dec 2019			Dec 2018
					£’000			£’000
	Interest received				1			3
	(Loss) on sale of AFS investments				-			(22)
	(Loss) on market value revaluation at 31 December				(23)			(32)
	Total investment income				(22)			(51)

Notes to the financial statements (continued)

__________________________________________________________________________________________

8	Finance costs	Year to 31	Year to 31
		Dec 2019	Dec 2018
	Interest paid	4	-
9	Taxation	Year to 31	Year to 31
		Dec 2019	Dec 2018
		£’000	£’000
	Total current tax	-	-
	The actual tax charges for the period differs from the standard rate applicable in the UK of 19% (2018 – 19%) for the reasons set out in the following reconciliation:
		2019	2018
		£’000	£’000
	Loss on ordinary activities before tax	(2,480)	(318)
	Tax thereon @ rates above	(471)	(60)
	Factors affecting charge for the period:
	Losses arising in territories where no tax is charged	(471)	60
	Current tax charge for the period	-	-
10	Loss per share
		2019	2018
	The calculation of loss per share is based on the loss after taxation divided by the weighted average number of shares in issue during the period:	£’000	£’000
	Net loss after taxation (£000’s)	(2,480)	(318)
	Number of shares
	Weighted average number of ordinary shares for the purposes of basic loss per share (millions)	25.41	15.93
	Basic and diluted loss per share (expressed in pence)	(9.76)	(1.7)
	The year to 31 December 2019 reflects the share consolidation of 27 November 2019 of 100:1, with the prior year re-stated for comparison accordingly. 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
			£’000
	Costs
	At 1 January 2018		9
	Additions		3
	At 31 December 2018		12
	At 1 January 2019		12
	Additions		-
	Disposed with subsidiaries		(12)
	At 31 December 2019		-
	Depreciation & impairment
	At 1 January 2018		4
	Additions		3
	At 31 December 2018		7
	At 1 January 2019		7
	Additions		1
	Disposed with subsidiaries		(8)
	At 31 December 2019		-
	Net Book Values
	At 31 December 2019		-
	At 31 December 2018		5
	Impairment Review At 31 December 2019, the directors have carried out an impairment review and have considered that no impairment is required.

   

12	Investments in subsidiaries - Company
				31 December		31 December
				2019		2018
				£’000		£’000
	Cost and net book value
	At 1 January			-		-
	Additions			-		-
	Disposals (See Note 22)			-		-
	At 31 December			-		-
	All of the Company’s following subsidiary undertakings held directly or indirectly by the Company during the year were disposed of on 30 November 2019, or as noted below (See Note xx):
	Name	Country of incorporation	Proportion of voting rights and ordinary share capital held voting right		Nature of business
	AfriAg Limited	England	100%		Holding Company
	Afriag International Limited	England	100%		Dissolved on 24 December 2019
	AfriAg Limited	BVI	100%		Dormant Company
	Afriag Holdings (Pty) Limited	South Africa	100%		Holding Company
	Afriag Marketing (Pty) Limited	South Africa	100%		Marketing Company

Notes to the financial statements (continued)

__________________________________________________________________________________________

13	Investment in associate - Group					31 December		31 December
						2019		2018
						£’000		£’000
	At 1 January					1,687		1,590
	Addition at cost					-		-
	Share of associate result					(2)		97
	Disposal of associate (See Note 22)					(1,685)		-
	Carrying value at 31 December					-		1,687
	The Group's share of results of its associate, which is unlisted, and its aggregated assets and liabilities at the date of disposal of 30 November 2019, is as follows:
	Name	Country of incorporation	Assets	Liabilities	Revenues		Profit/(Loss)		% interest held
			As at 30 November 2019		9 months to 30 November 2019
	AfriAg (Pty) Ltd	South Africa	£4,483,000	£4,199,000	£8,931,000		£4,000		40
	AfriAg (Pty) Limited's year end is 28 February.

   

14	Available-for-sale investments – Group & Company	31 December	31 December
		2019	2018
	Current Assets - Listed investments	£’000	£’000
	At 1 January – market value	30	1
	Disposals during the period	-	(1)
	Purchases during the period	1,160	62
	(Loss) on disposal of investments	-	(22)
	Transfers to income statement	-	22
	Movement in market value	(23)	(32)
	At 31 December – market value	1,167	30
	Represented by;
	Listed securities	7	30
	Unlisted securities	1,160	-
		1,167	30
	Available-for-sale investments comprise investments in listed and unlisted 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 £nil for dividends received for the year to 31 December 2019. (2018: £nil)

   

15	Inventories - Group	31 December	31 December
		2019	2018
		£’000	£’000
	Goods & Packaging	-	-
	Total	-	-

Notes to the financial statements (continued)

__________________________________________________________________________________________

16	Trade and other receivables	31 December 2019		31 December 2018
		Group £’000	Company £’000	Group £’000	Company £’000
	Current trade and other receivables
	Trade receivables	-	-	219	3
	Other debtors	5	5	585	10
	Loan to related party company	-	-	117	117
	Prepayments & accrued income	11	11	4	4
	Total	16	16	925	134
	Non-Current trade and other receivables
	Loans due from subsidiaries	-	-	-	1,836
	Total	-	-	-	1,836
	Loans due from subsidiaries and related party totalling £1,953,000 were written off on the disposal of the subsidiaries on 30 November 2019.

   

17	Trade and other payables	31 December 2019		31 December 2018
		Group £’000	Company £’000	Group £’000	Company £’000
	Current trade and other payables
	Trade creditors	13	13	215	9
	Other creditors	1	1	152	3
	Accruals	511	511	477	446
	Total	525	525	844	458

   

18	Share capital	Ordinary	Nominal
		Shares	Value
	Ordinary shares of 0.1p each	Number	£’000
	Allotted, called up and fully paid
	At 31 December 2017	1,461,001,037	1,461
	On 12 July 2018 - 300 million shares issued at 0.1p per share	300,000,000	300
	At 31 December 2018	1,761,001,037	1,761
	On 16/05/2019 - 300 million shares issued at 0.01p per share	300,000,000	300
	On 29/05/2019 - 700 million shares issued at 0.01p per share	700,000,000	700
	On 21/06/2019 - 250 million shares issued at 0.01p per share	250,000,000	250
	On 14/11/2019 - 160 million shares issued at 0.01p per share	160,000,000	160
	Pre – consolidation 100:1 (see below)	3,171,001,037	3,171
	Post – consolidation shares – Ordinary shares of 10p each	31,710,011	3,171
	At 31 December 2019	31,710,011	3,171

Notes to the financial statements (continued)

_________________________________________________________________________________________

18	Share capital (continued)
	Shares issued during the year ended 31 December 2019: 300 million shares were issued by the Company, by way of a placing on 16 May 2019 for cash at a price of 0.1p per share. 700 million shares were issued by the Company, by way of a placing on 29 May 2019 for cash at a price of 0.1p per share. 250 million shares were issued by the Company, by way of a placing on 26 June 2019 for cash at a price of 0.1p per share. 160 million shares were issued by the Company, by way of a placing on 14 November 2019 for cash at a price of 0.1p per share. On 27 November 2019 at a General Meeting of the Company it was approved that the Ordinary Shares were consolidated on the basis of 1 new Ordinary Share with the nominal value of £0.10 for every 100 Ordinary shares held with a nominal value of £0.001. Shares issued during the year ended 31 December 2018: 300 million shares were issued by the Company, by way of a placing on 12 July 2018 for cash at a price of 0.001p per share during the year to 31 December 2018
		Warrants in issue
		As at 31 December 2019, nil warrants (2018: nil) remain outstanding. No warrants were issued, exercised, or lapsed during the year ended 31 December 2019 (2018: nil).
		Share Options
		The Company has as at 31 December 2019, 1,190,000 (2018: 129,000,000 pre consolidation) share options issued through its share schemes. During the year nil options were issued (2018: nil), no options were exercised (2018: nil), nil options were cancelled (2018: nil) 100,000 options lapsed (2018: nil).

Notes to the financial statements (continued)

__________________________________________________________________________________________

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 £nil (2018- £nil). On the lapse of the 100,000 share options, £151,000 was transferred from the share based payment reserve to retained earnings by way of an equity reserve transfer. The options currently in issue are detailed below:
	Exercise Price	Grant Date	Expiry Date	31 December 2018	Granted	Expired	31 December 2019	Weighted average exercise price
	Summary of options
	£0.10	07/12/2012	31/12/2020	690,000	-	-	690,000	£0.10
	£0.25	01/07/2016	31/12/2020	500,000	-	-	500,000	£0.25
	£0.30	12/08/2016	31/12/2019	100,000	-	(100,000)	-	£0.30
				1,290,000	-	-	1,190,000	£0.21
	The above table represents the post ordinary share consolidation options, on the basis of 100:1.

   

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.
			2019		2018
			£’000		£’000
	Financial assets (current)
	Trade receivables		-		219
	Cash and cash equivalents		98		101
	Financial liabilities (current)
	Trade payables		13		215

Notes to the financial statements (continued)

__________________________________________________________________________________________

20	Financial instruments (continued)
	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 was directly exposed to currency risk of its subsidiaries, as they were based in South Africa, and exposed to movement against the South African Rand as their assets, liabilities, revenue and expenditure are denominated therein (This exposure is now immaterial since the disposal of the subsidiaries during the year).  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.
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 prior year to 31 December 2018, the parent company granted an interest free, repayable on demand loan of £117,000 to Afriag Global (Pty) Ltd, a South African company related to the parent by virtue of common Directors’ (with the group’s subsidiaries) in South Africa. No loans were advanced to subsidiaries or related parties during the year ended 31 December 2019. All loans to subsidiaries and related parties as detailed above were written-off on the disposal of the Group’s subsidiaries on 30 November 2019, totalling £1,953,000.
	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.
		2019	2018
		£’000	£’000
	Short-term employee benefits	112	114
	Share-based payments	-	-
		112	114

Directors’ fees totalling £494,000 that have been accrued and remain unpaid as at 31 December 2019 all relate to the current and previous years unpaid fees. (2018: £428,000).

Notes to the financial statements (continued)

__________________________________________________________________________________________

22	Business Combination – Disposal of Subsidiaries
	On 30 November 2019, the Company completed the disposal of all of its subsidiaries as disclosed in Note 12, including its holding in the associate company as detailed in Note 13, for a nominal £1 consideration. The results of the subsidiaries and associate are reported in the current period in the consolidated statement of comprehensive income. Financial information relating to the disposal is set out below.
		2019
	Consideration received or receivable;	£’000
	Cash	-
	Total disposal consideration	-
	Carrying amount of net assets sold	360
	(Loss) on sale before income tax and reclassification of foreign currency translation reserve	(360)
	Reclassification of foreign currency translation reserve & current year FX translation	14
	Income tax expense on gain	-
	(Loss) on sale after income tax	(346)
	On disposal the Company wrote off loans which had been previously advanced to the subsidiaries during the period of ownership. The total amount of £1,953,000 has been written off through the Consolidated statement of comprehensive income during the year.
23	Capital Commitments & Contingent Liabilities
	There are no non-cancellable capital commitments as at the balance sheet date. The Group has no contingent liabilities at the balance sheet date.
24	Ultimate control
	The Company has no individual controlling party.
25	Events after the end of reporting period
	There are no events after the end of the reporting period to disclose.
26	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 £2,182,000 (2018: £264,000).

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