AfriAg Global Plc - Final Results

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 £3.035 million during the period, a significant increase from the previous year’s reported revenue of £1.977 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 £11.704 million for the twelve months ended 31 December 2016, versus revenues of £6.122 million for the previous year, with a gross profit of £927,000 (2015: £552,000) and a net profit for the year of £104,000 (2015: £359,000). The Company has equity-accounted for its 40% share of this profit for 2016, being £42,000.

Gross profit for the Group also increased significantly to £334,000 compared to the £50,000 reported for the previous year.

Group Results for the period:

• The Group’s gross turnover has increased by over 54% to £3.035 million for the year (2015 - £1.977 million).
• The Group’s net loss after taxation for the year was £9,000 (2015 - £96,000 loss).
• The Group’s current assets including cash at 31 December 2016 amounted to £1,261,000 (2015 - £810,000).
• The Group’s 40% owned agri-logistics investment, AfriAg (Pty) Ltd, gross turnover increased 91% to £11.704 million (2015 - £6.122 million) and reported a net profit of £104,000 (2015 - £359,000).

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 (£3.035 million) in 2016, compared to ZAR 38.395 million (£1.977 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 (£105,000) despite a forex loss of ZAR 1.297 million (£67,000) 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 £11.704 million in the full year to 31 December 2016, versus revenue of £6.122 million for the previous year, with a gross profit of £927,000, a net profit for the year of £104,000. The Company has equity-accounted for its 40% share of this profit for 2016, being £42,000.

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 31 December 2016	Year ended 31 December 2015
	Note	£’000	£’000
Revenue	4	3,035	1,977
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 holders of the parent		(9)	(96)
Other comprehensive income
Gain on revaluation of available for sale investments		5	36
Transfer to income statement		(55)	(7)
Translation exchange gain/(loss)		160	(102)
Other comprehensive income for the period net of taxation		110	(73)
Total comprehensive income for the year attributable to equity holders of the parent		101	(169)
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	£’000	£’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 Plc                                                                 David Lenigas (Executive Chairman) Anthony Samaha (Finance Director) Hamish Harris Donald Strang	[phone]
Peterhouse Corporate Finance Limited Guy Miller Fungai Ndoro	[phone]

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 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)

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	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. 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 £240,000 and borrowings of £nil. 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 (£) 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: 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)

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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.
	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.
	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 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)

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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 £3,035,000 (2015: £1,977,000), and £nil (2015: £nil) revenue is from management fees to the associate company. In respect of the total assets of £2,783,000 (2015: £2,288,000), £85,000 (2015: £245,000) arise in the parent company, and £2,698,000 (2015: £2,043,000) arise in South Africa.
5	Operating loss	Year to 31		Year to 31
		Dec 2016		Dec 2015
		£’000		£’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 £nil (2015 - £nil) relating to directors.
	In addition to auditors’ remuneration shown above, the auditors received the following fees for non-audit services.
		2016	2015
		£’000	£’000
	Other financial advisory services	-	-

Notes to the financial statements (continued)

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6	Directors’ emoluments			2016			2015
				£’000			£’000
	Fees and benefits			19			108
	The Parent Company has no other directly employed personnel.
		Fees and	Share based
		salaries	payments			Total
	2016	£’000	£’000			£’000
	D Lenigas (2)	3	-			3
	A Samaha (3)	4	-			4
	D Strang	6	-			6
	H Harris	6	-			6
		19	-			19
	2015	£’000	£’000			£’000
	D Lenigas (1)	36	-			36
	D Strang	36	-			36
	H Harris	36	-			36
		108	-			108
	Directors’ fees totalling £376,000 have been accrued and remain unpaid as at 31 December 2016 (2015: £387,000).
	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
					£’000			£’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)

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8	Finance costs	Year to 31	Year to 31
		Dec 2016	Dec 2015
	Interest paid	5	2
9	Taxation	Year to 31	Year to 31
		Dec 2016	Dec 2015
		£’000	£’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
		£’000	£’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 charged	2	19
	Current tax charge for the period	-	-
10	Loss per share
		2016	2015
	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)	(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 pence)	(0.001)	(0.01)
	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)

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11	Property, plant & equipment - Group		Total PPE
			£’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
				£’000		£’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 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%		Dormant Company
	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)

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13	Investment in associate - Group					31 December		31 December
						2016		2015
						£’000		£’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 incorporation	Assets	Liabilities	Revenues		Profit/(Loss)		% interest held
			As at 31 December 2016		Year to 31 December 2016
	AfriAg (Pty) Ltd	South Africa	£4,002,000	£3,490,000	£11,704,000		£104,000		40
	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	£’000	£’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 £2,000 for dividends received for the year to 31 December 2016. (2015: £3,000)

   

15	Inventories - Group	31 December	31 December
		2016	2015
		£’000	£’000
	Goods & Packaging	9	-
	Total	9	-

Notes to the financial statements (continued)

__________________________________________________________________________________________

16	Trade and other receivables	31 December 2016		31 December 2015
		Group £’000	Company £’000	Group £’000	Company £’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 £’000	Company £’000	Group £’000	Company £’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
		2016	2015
		£’000	£’000
	Allotted, issued and fully paid
	1,381,001,037 (2015 – 1,381,001,037) ordinary shares of £0.001 each	1,381	1,381
	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 £118,000, 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 £98,000 (2015 - £nil) 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				£0.00255			£0.00325
	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 Price	Grant Date	Expiry Date	31 December 2015	Granted	Expired			31 December 2016	Weighted average exercise  price
	Summary of options
	£0.001	07/12/2012	31/12/2020	69,000,000	-	-			69,000,000	£0.0010
	£0.0045	03/10/2014	31/12/2016	10,000,000	-	(10,000,000)			-	£0.0045
	£0.0025	01/07/2016	31/12/2020	-	50,000,000	-			50,000,000	£0.0025
	£0.0030	12/08/2016	31/12/2019	-	10,000,000	-			10,000,000	£0.0030
				79,000,000	60,000,000	(10,000,000)			129,000,000	£0.0021

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
			£’000		£’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
			£’000	£’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. 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 £149,000 (2015: £218,000).

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