The accompanying notes are an integral part of the consolidated financial statements.

 

 

 

 

The accompanying notes are an integral part of the consolidated financial information.

NOTE 1:-   GENERAL

 

a.       Dekel Agri-Vision PLC ("the Company") is a public limited company incorporated in Cyprus on 24 October 2007. The Company's Ordinary shares are admitted for trading on the AIM, a market operated by the London Stock Exchange. The Company is engaged through its subsidiaries in developing and cultivating palm oil plantations in Cote d'Ivoire for the purpose of producing and marketing Crude Palm Oil ("CPO"), as well as constructing a Raw Cashew Nut ("RCN") processing plant, which is currently in the initial production phase. The Company's registered office is in Limassol, Cyprus.

 

b.      CS DekelOil Siva Ltd. ("DekelOil Siva") a company incorporated in Cyprus, is a wholly-owned subsidiary of the Company. DekelOil CI SA, a subsidiary in Cote d'Ivoire currently held 99.85% by DekelOil Siva, is engaged in developing and cultivating palm oil plantations for the purpose of producing and marketing CPO. DekelOil CI SA constructed and is currently operating its first palm oil mill.

 

c.       Pearlside Holdings Ltd. ("Pearlside") a company incorporated in Cyprus, is a subsidiary of the Company since December 2020.  The assets and liabilities of Pearlside are included for the first time by the Company in the consolidated statement of financial position at 31 December 2020. The Company holds 70.7% interest since February 2021 (previously 54%). Pearlside has a wholly owned subsidiary in Cote d'Ivoire, Capro CI SA ("Capro"). Capro is currently engaged in the initial production phase of its RCN processing plant in Cote d'Ivoire near the village of Tiabisu (see also Note 6).

 

d.      DekelOil Consulting Ltd. a company located in Israel and a wholly owned subsidiary of DekelOil Siva, is engaged in providing services to the Company and its subsidiaries.

 

e.       Cash flow from operations and working capital deficiency

 

          In FY2021 the Company recognised record revenue, record Palm Oil operating profit and returned to Group profitability.  This resulted in the Group working capital deficiency materially decreasing from €8.6 million as at 31 December 2020 to €3.3 million. Although in 2021 there was a negative cash flow from Group operations of €1.4 million, this was due to the activities of the RCN operation. The positive cash flow from the Palm Oil operations in 2021was approximately € 2.2 million.  In 2022, CPO prices have continued to materially increase during the first few months, and through the date of approval of these financial statements. Despite softer CPO volumes, the Palm Oil operations are continuing to generate positive operating cash flow. In addition, expenditures for the completion of the RCN processing plant of Pearlside have been almost entirely paid and have now entered the production phase with operational capacity in the process of increasing materially over the coming months.  As a result, the RCN operation is expected to produce additional operating cash flow for the Group in the latter half of 2022 and beyond. The Group has prepared detailed forecasted cash flows through the end of 2023, which indicate that the Group should have positive cash flows from its operations. However, the operations of the Group are subject to various market conditions, including quantity and quality of fruit harvests and market prices, that are not under the Group's control that could have an adverse effect on the Group's future cash flows.

 

Based on the above, Company management believes it will have sufficient funds necessary to continue its operations and to meet its obligations as they become due for at least a period of twelve months from the date of approval of the financial statements.

 

f.       The recent outbreak of COVID-19 had a significant effect on the global economic conditions and CPO prices, but it had no significant impact on the Company's operations during 2021. The outbreak of COVID-19 may resume its negative effect on economic conditions regionally as well as globally, disrupt operations situated in countries particularly exposed to the contagion, affect the Company's customers and suppliers or business practices previously applied by those entities, or otherwise impact the Company's activities. Governments in affected countries have imposed travel bans, quarantines and other emergency public safety measures. Those measures, though apparently temporary in nature, may continue and increase depending on developments in the COVID-19 pandemic. The ultimate severity of the COVID-19 outbreak is uncertain at this time and therefore the Company cannot reasonably estimate the impact it may have on its end markets and its future revenues, profitability, liquidity and financial position.

 

g.       Definitions:

 

The Group	-	DEKEL AGRI-VISION PLC and its subsidiaries.
The Company	-	DEKEL AGRI-VISION PLC.
Subsidiaries	-	Companies that are controlled by the Company- CS DekelOil Siva Ltd, DekelOil CI SA, DekelOil Consulting Ltd, and commencing from December 2020 - Pearlside Holdings, Capro CI SA.
Associate	-	Company in which the Group has significant influence over the financial and operating policies without having control - Pearlside Holdings Ltd (until December 2020).

 

NOTE 2:-   SIGNIFICANT ACCOUNTING POLICIES

 

The following accounting policies have been applied consistently in the financial statements for all periods presented, unless otherwise stated.

 

a.       Basis of presentation of the financial statements:

 

These financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS").

 

The financial statements have been prepared on a cost basis.

 

The Company has elected to present profit or loss items using the function of expense method.

 

b.  Consolidated financial statements:

 

The consolidated financial statements comprise the financial statements of companies that are controlled by the Company (subsidiaries). Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Potential voting rights are considered when assessing whether an entity has control. The consolidation of the financial statements commences on the date on which control is obtained and ends when such control ceases.

 

The financial statements of the Company and of the subsidiaries are prepared as of the same dates and periods. The consolidated financial statements are prepared using uniform accounting policies by all companies in the Group. Significant intragroup balances and transactions and gains or losses resulting from intragroup transactions are eliminated in full in the consolidated financial statements.

 

Non-controlling interests in subsidiaries represent the equity in subsidiaries not attributable, directly or indirectly, to a parent. Non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Profit or loss and components of other comprehensive income are attributed to the Company and to non-controlling interests. Losses are attributed to non-controlling interests even if they result in a negative balance of non-controlling interests in the consolidated statement of financial position.

 

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as a change in equity by adjusting the carrying amount of the non-controlling interests with a corresponding adjustment of the equity attributable to equity holders of the Company less / plus the consideration paid or received.

 

c. Business combinations and goodwill:

 

Business combinations are accounted for by applying the acquisition method. The cost of the acquisition is measured at the fair value of the consideration transferred on the acquisition date with the addition of non-controlling interests in the acquiree. In each business combination, the Company chooses whether to measure the non-controlling interests in the acquiree based on their fair value on the acquisition date or at their proportionate share in the fair value of the acquiree's net identifiable assets.

 

Direct acquisition costs are carried to the statement of profit or loss as incurred.

 

In a business combination achieved in stages, equity interests in the acquiree that had been held by the acquirer prior to obtaining control are measured at the acquisition date fair value while recognizing a gain or loss resulting from the revaluation of the prior investment on the date of achieving control.

 

Contingent consideration is recognized at fair value on the acquisition date and classified as a financial asset or liability in accordance with IAS 39. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss. If the contingent consideration is classified as an equity instrument, it is measured at fair value on the acquisition date without subsequent remeasurement.

 

d.      Investment in an associate:

 

Associates are companies in which the Group has significant influence over the financial and operating policies without having control. The investment in an associate is accounted for using the equity method.

 

e.       Functional currency, presentation currency and foreign currency:

 

1.       Functional currency and presentation currency:

 

The local currency used in Cote d'Ivoire is the West African CFA Franc ("FCFA"), which has a fixed exchange rate with the Euro (Euro 1 = FCFA 655.957). A substantial portion of the Group's revenues and expenses is incurred in or linked to the Euro. The Group obtains debt financing mostly in FCFA linked to Euros and the funds of the Group are held in FCFA. Therefore, the Company's management has determined that the Euro is the currency of the primary economic environment of the Company and its subsidiaries, and thus its functional currency. The presentation currency is Euro.

 

2.       Transactions, assets and liabilities in foreign currency:

 

Transactions denominated in foreign currency are recorded upon initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at each reporting date into the functional currency at the exchange rate at that date. Exchange rate differences, other than those capitalized to qualifying assets or accounted for as hedging transactions in equity, are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currency and measured at cost are translated at the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currency and measured at fair value are translated into the functional currency using the exchange rate prevailing at the date when the fair value was determined.

 

f.       Cash equivalents:

 

Cash equivalents are considered as highly liquid investments, including unrestricted short-term bank deposits with an original maturity of three months or less from the date of acquisition.

 

g.       Financial instruments:

 

1.       Financial assets:

 

Financial assets are measured upon initial recognition at fair value plus transaction costs that are directly attributable to the acquisition of the financial assets, except for financial assets measured at fair value through profit or loss in respect of which transaction costs are recorded in profit or loss.

 

The Company classifies and measures debt instruments in the financial statements based on the following criteria:

 

-         The Company's business model for managing financial assets; and

 

-         The contractual cash flow terms of the financial asset.

 

a)       Debt instruments are measured at amortized cost when:

 

The Company's business model is to hold the financial assets in order to collect their contractual cash flows, and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. After initial recognition, the instruments in this category are measured according to their terms at amortized cost using the effective interest rate method, less any provision for impairment.

 

On the date of initial recognition, the Company may irrevocably designate a debt instrument as measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency, such as when a related financial liability is also measured at fair value through profit or loss.

 

 

b)      Equity instruments and other financial assets held for trading:

 

Investments in equity instruments do not meet the above criteria and accordingly are measured at fair value through profit or loss.

 

Other financial assets held for trading, including derivatives, are measured at fair value through profit or loss unless they are designated as effective hedging instruments.

Dividends from investments in equity instruments are recognized in profit or loss when the right to receive the dividends is established.

  

2.       Impairment of financial assets:

 

The Company evaluates at the end of each reporting period the loss allowance for financial debt instruments which are not measured at fair value through profit or loss.

 

The Company has short-term financial assets such as trade receivables in respect of which the Company applies a simplified approach and measures the loss allowance in an amount equal to the lifetime expected credit losses. An impairment loss on debt instruments measured at amortized cost is recognized in profit or loss with a corresponding loss allowance that is offset from the carrying amount of the financial asset.

 

As of 31 December 2021, there were no past-due trade receivables.

 

3.       Financial liabilities:

 

a)       Financial liabilities measured at amortized cost:

 

Financial liabilities are initially recognized at fair value less transaction costs that are directly attributable to the issue of the financial liability.

 

After initial recognition, the Company measures all financial liabilities at amortized cost using the effective interest rate method.

 

4.       Derecognition of financial instruments:

 

a)       Financial assets:

 

A financial asset is derecognized when the contractual rights to the cash flows from the financial asset expire.

 

b)      Financial liabilities:

 

A financial liability is derecognized when it is extinguished, that is when the obligation is discharged or cancelled or expires.

 

h.      Borrowing costs:

 

The Group capitalizes borrowing costs that are attributable to the acquisition, construction, or production of qualifying assets which necessarily take a substantial period of time to get ready for their intended use or sale.

 

The capitalization of borrowing costs commences when expenditures for the asset are incurred, the activities to prepare the asset are in progress and borrowing costs are incurred and ceases when substantially all the activities to prepare the qualifying asset for its intended use or sale are complete. The amount of borrowing costs capitalized in a reporting period includes specific borrowing costs and general borrowing costs based on a weighted capitalization rate.

 

i.       Leases:

The Company accounts for a contract as a lease when the contract terms convey the right to control the use of an identified asset for a period of time in exchange for consideration.

 

The Group as a lessee:

 

For leases in which the Company is the lessee, the Company recognizes on the commencement date of the lease a right-of-use asset and a lease liability, excluding leases whose term is up to 12 months and leases for which the underlying asset is of low value. For these excluded leases, the Company has elected to recognize the lease payments as an expense in profit or loss on a straight-line basis over the lease term. In measuring the lease liability, the Company has elected to apply the practical expedient in the Standard and does not separate the lease components from the non-lease components (such as management and maintenance services, etc.) included in a single contract.

 

On the commencement date, the lease liability includes all unpaid lease payments discounted at the interest rate implicit in the lease, if that rate can be readily determined, or otherwise using the Group's incremental borrowing rate. After the commencement date, the Group measures the lease liability using the effective interest rate method.

 

On the commencement date, the right-of-use asset is recognized in an amount equal to the lease liability plus lease payments already made on or before the commencement date and initial direct costs incurred. The right-of-use asset is measured applying the cost model and depreciated over the shorter of its useful life or the lease term.

 

Following are the periods of depreciation of the right-of-use assets by class of underlying asset:

 

		Years
Land		99
Motor vehicles		5

 

The Group tests for impairment of the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36.

         

j.       Biological assets:

 

Biological assets of the Company are fresh fruit bunches (FFB) that grow on palm oil trees. The period of biological transformation of FFB from blossom to harvest and then conversion to inventory and sale is relatively short (about 2 months). Accordingly, any changes in fair value at each reporting date are generally immaterial.

 

k.      Property and equipment:

 

Property and equipment are stated at cost, net of accumulated depreciation. Palm oil trees before maturity are measured at accumulated cost, and depreciation commences upon reaching maturity.

 Depreciation is calculated by the straight-line method over the estimated useful lives of the assets at the following annual rates:

 

		%
Extraction mill		2.5
Palm oil plantations		3.33
Computers and peripheral equipment		33
Equipment and furniture		15 - 20
Motor vehicles		25
Agriculture equipment		15

 

The useful life, depreciation method and residual value of an asset are reviewed at least each year-end and any changes are accounted for prospectively as a change in accounting estimate. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale and the date that the asset is derecognized.

 

l.       Impairment of non-financial assets:

 

The Company evaluates the need to record an impairment of non-financial assets whenever events or changes in circumstances indicate that the carrying amount is not recoverable.

 

If the carrying amount of non-financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount is the higher of fair value less costs of sale and value in use. In measuring value in use, the expected future cash flows are discounted using a pre-tax discount rate that reflects the risks specific to the asset. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses are recognized in profit or loss.

 

An impairment loss of an asset, other than goodwill, is reversed only if there have been changes in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognized. Reversal of an impairment loss, as above, shall not be increased above the lower of the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the asset in prior years and its recoverable amount. The reversal of impairment loss of an asset presented at cost is recognized in profit or loss.

 

m.     Revenue recognition:

 

Revenue from contracts with customers is recognized when the control over the services is transferred to the customer. The transaction price is the amount of the consideration that is expected to be received based on the contract terms. 

 

In determining the amount of revenue from contracts with customers, the Company evaluates whether it is a principal or an agent in the arrangement. The Company is a principal when the Company controls the promised goods or services before transferring them to the customer. In these circumstances, the Company recognizes revenue for the gross amount of the consideration. When the Company is an agent, it recognizes revenue for the net amount of the consideration, after deducting the amount due to the principal.

 

Revenue from the sale of goods:

 

Revenue from sale of goods is recognized in profit or loss at the point in time when the control of the goods is transferred to the customer, generally upon delivery of the goods to the customer.

 

Contract balances:

 

Amounts received from customers in advance of performance by the Company are recorded as contract liabilities/advance payments from customers and recognized as revenue in profit or loss when the work is performed. For all years presented in these financial statements, such advances were recognized as revenues in the year subsequent to their receipt.

  

n.      Inventories:

 

Inventories are measured at the lower of cost and net realizable value. The cost of inventories comprises costs of purchase and costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale. The Company periodically evaluates the condition and age of inventories and makes provisions for slow moving inventories accordingly.

 

Cost of finished goods inventories is determined on the basis of average costs including materials, labor and other direct and indirect manufacturing costs based on normal capacity.

 

o.      Earnings (loss) per share:

 

Earnings (loss) per share are calculated by dividing the net income attributable to equity holders of the Company by the weighted number of Ordinary shares outstanding during the period.

Potential Ordinary shares are included in the computation of diluted earnings per share when their conversion decreases earnings per share from continuing operations. Potential Ordinary shares that are converted during the period are included in diluted earnings per share only until the conversion date and from that date in basic earnings per share. The Company's share of earnings of investees is included based on its share of earnings per share of the investees multiplied by the number of shares held by the Company.

 

p.      Provisions:

 

A provision in accordance with IAS 37 is recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects part or all of the expense to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense is recognized in profit or loss net of any reimbursement.

 

q.  Fair value measurement:

 

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

 

Fair value measurement is based on the assumption that the transaction will take place in the asset's or the liability's principal market, or in the absence of a principal market, in the most advantageous market.

 

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

 

Fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

 

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

 

All assets and liabilities measured at fair value or for which fair value is disclosed are categorized into levels within the fair value hierarchy based on the lowest level input that is significant to the entire fair value measurement:

 

Level 1	-	quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2	-	inputs other than quoted prices included within Level 1 that are observable either directly or indirectly.
Level 3	-	inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data).

 

r.       Share-based payment transactions:

 

The Company's employees / other service providers are entitled to remuneration in the form of equity-settled share-based payment transactions and certain employees / other service providers are entitled to remuneration in the form of cash-settled share-based payment transactions that are measured based on the increase in the Company's share price.

 

Equity-settled transactions:

The cost of equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date on which they are granted. The fair value is determined using an acceptable option model.

 

The cost of equity-settled transactions is recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ("the vesting date"). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest.

 

s.       Taxes on income:

 

Current or deferred taxes are recognized in profit or loss, except to the extent that they relate to items which are recognized in other comprehensive income or equity.

 

1.       Current taxes:

 

The current tax liability is measured using the tax rates and tax laws that have been enacted or substantively enacted by the end of reporting period as well as adjustments required in connection with the tax liability in respect of previous years.

 

2.       Deferred taxes:

 

Deferred taxes are computed in respect of temporary differences between the carrying amounts in the financial statements and the amounts attributed for tax purposes.

 

Deferred taxes are measured at the tax rate that is expected to apply when the asset is realized or the liability is settled, based on tax laws that have been enacted or substantively enacted by the reporting date.

 

Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is not probable that they will be utilized. Temporary differences for which deferred tax assets had not been recognized are reviewed at each reporting date and a respective deferred tax asset is recognized to the extent that their utilization is probable.

 

Taxes that would apply in the event of the disposal of investments in investees have not been taken into account in computing deferred taxes, as long as the disposal of the investments in investees is not probable in the foreseeable future.

Also, deferred taxes that would apply in the event of distribution of earnings by investees as dividends have not been taken into account in computing deferred taxes, since the distribution of dividends does not involve an additional tax liability or since it is the Company's policy not to initiate distribution of dividends from a subsidiary that would trigger an additional tax liability.

 

t.       Significant accounting estimates and assumptions used in the preparation of the financial statements:

 

The preparation of the financial statements requires management to make estimates and assumptions that have an effect on the application of the accounting policies and on the reported amounts of assets, liabilities, revenues and expenses. Changes in accounting estimates are reported in the period of the change in estimate.

 

u.      Changes in accounting policies - initial application of new financial reporting and accounting standards and amendments to existing financial reporting and accounting standards:

 

 

1.       Amendments to IFRS 9, IFRS 7, IFRS 16, IFRS 4 and IAS 39 regarding the IBOR reform:

In August 2020, the IASB issued amendments to IFRS 9, "Financial Instruments", IFRS 7, "Financial Instruments: Disclosures", IAS 39, "Financial Instruments: Recognition and Measurement", IFRS 4, "Insurance Contracts", and IFRS 16, "Leases" ("the Amendments").

 

The Amendments provide practical expedients when accounting for the effects of the replacement of benchmark InterBank Offered Rates (IBORs) by alternative Risk Free Interest Rates (RFRs).

 

Pursuant to one of the practical expedients, an entity will treat contractual changes or changes to cash flows that are directly required by the reform as changes to a floating interest rate. That is, an entity recognizes the changes in interest rates as an adjustment of the effective interest rate without adjusting the carrying amount of the financial instrument. The use of this practical expedient is subject to the condition that the transition from IBOR to RFR takes place on an economically equivalent basis.

 

In addition, the Amendments permit changes required by the IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued, provided certain conditions are met. The Amendments also provide temporary relief from having to meet the "separately identifiable" requirement according to which a risk component must also be separately identifiable to be eligible for hedge accounting.

 

The Amendments include new disclosure requirements in connection with the expected effect of the reform on an entity's financial statements, such as how the entity is managing the process to transition to the interest rate reform, the risks to which it is exposed due to the reform and quantitative information about IBOR-referenced financial instruments that are expected to change.

 

The Amendments are effective for annual periods beginning on or after January 1, 2021. The Amendments are to be applied retrospectively. However, restatement of comparative periods is not required.

 

The application of the Amendments did not have a material impact on the Company's financial statements.

 

 

NOTE 3:-   DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION

 

a.       Amendment to IAS 16, "Property, Plant and Equipment":

 

In May 2020, the IASB issued an amendment to IAS 16, "Property, Plant and Equipment" ("the Amendment"). The Amendment prohibits a company from deducting from the cost of property, plant and equipment ("PP&E") consideration received from the sales of items produced while the company is preparing the asset for its intended use. Instead, the company should recognize such consideration and related costs in profit or loss.

 

The Amendment is effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted. The Amendment is to be applied retrospectively, but only to items of PP&E made available for use on or after the beginning of the earliest period presented in the financial statements in which the company first applies the Amendment. The company should recognize the cumulative effect of initially applying the Amendment as an adjustment to the opening balance of retained earnings at the beginning of the earliest period presented.

 

The Company estimates that the application of the Amendment is not expected to have a material impact on the financial statements.

 

d.      Amendment to IAS 1, "Presentation of Financial Statements":

 

In January 2020, the IASB issued an amendment to IAS 1, "Presentation of Financial Statements" ("the Amendment") regarding the criteria for determining the classification of liabilities as current or non-current.

 

The Amendment includes the following clarifications:

 

What is meant by a right to defer settlement;

 

That a right to defer must exist at the end of the reporting period;

 

That classification is unaffected by the likelihood that an entity will exercise its deferral right;

 

That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.

 

The Amendment is effective for annual periods beginning on or after January 1, 2023 and must be applied retrospectively.

 

The Company is evaluating the possible impact of the Amendment on its current loan agreements.

 

f.       Amendment to IAS 8, "Accounting Policies, Changes to Accounting Estimates and Errors":

 

In February 2021, the IASB issued an amendment to IAS 8, "Accounting Policies, Changes to Accounting Estimates and Errors" ("the Amendment"), in which it introduces a new definition of "accounting estimates".

 

Accounting estimates are defined as "monetary amounts in financial statements that are subject to measurement uncertainty". The Amendment clarifies the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors.

 

The Amendment is to be applied prospectively for annual reporting periods beginning on or after January 1, 2023 and is applicable to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Early application is permitted.

 

The Company is evaluating the effects of the Amendment on its financial statements.

 

 

NOTE 4:-   INVENTORY

		31 December
		2021			2020
		Euros in thousands
Palm oil mill final products		902			212
Plants		186			172
Raw cashew nuts		1,381
Spare parts, tools & materials		771			899
		3,240			1,283

 

 

 

NOTE 5:-   ACCOUNTS AND OTHER RECEIVABLES

		31 December
		2021			2020
		Euros in thousands
Government authorities (VAT)		10			3
Prepaid expenses and other receivables		7			12
Loans to employees		29			41
Advance payment to contractor		319			236
		365			292

 

 

NOTE 6:-   INVESTMENT IN PEARLSIDE HOLDINGS LTD

 

On 20 December 2018 the Company entered into an agreement to purchase a 43.8% interest in Pearlside Holdings Ltd ("Pearlside") by way of issuing 52,612,613 Ordinary shares of the Company. Pearlside, through its wholly-owned subsidiary, was in the advanced stages of development and construction of a Raw Cashew Nut (RCN) processing plant in Cote d'Ivoire, The closing of this purchase transaction occurred on 7 January 2019 (See also Note 11 Equity).

 

Based on the market price of the Company's shares on the date of the purchase, the cost of the investment in Pearlside amounted to approximately €1.9 million.

 

On 30 October 2020 the Company entered into an agreement to increase its holding in Pearlside to 52% by way of issuing 28,552,800 Ordinary shares of the Company. Based on the market price of the Company's shares on the date of the purchase, the cost of this additional investment in Pearlside is €740 thousand. The shares were issued, and the transaction was completed on 25 November 2020.

 

Following this transaction, the Company gained control over Pearlside. The assets and liabilities of Pearlside are included for the first time in the consolidated statement of financial position as of 31 December 2020. As Pearlside was in the process of construction of its RCN plant, the results of operations of Pearlside from the date of acquisition to 31 December 2020 were immaterial.

 

On 8 December 2020 the Company entered into an agreement to purchase an additional 2% and to increase its holding to 54% by way of issuing 3,922,789 Ordinary shares of the Company. Based on the market price of the Company's shares on the date of the purchase, the cost of this additional investment in Pearlside is €144 thousand.

 

As of the date of obtaining control, the RCN plant under construction represented substantially all of the gross assets of Pearlside. All of the activity of Pearlside related to the construction of the plant. There were a few employees that were involved in the supervision of the construction which was being performed by external contractors. Accordingly, the purchase transaction was accounted for as an acquisition of assets.

 

Pursuant to IFRS 3, the Company records the cash and other financial assets and liabilities at their fair value on date of acquisition (which approximated their carrying amounts, including loans which were recently obtained at market terms). The excess of (i) the cost of the investment plus (ii) the non-controlling interest recognized over (iii) the carrying amount of the net assets acquired (equity of Pearlside) was allocated to the RCN plant. The non-controlling interest in the amount of € 700 was measured at its proportionate share of the net assets (equity) of Pearlside. 

 

Following are the assets and liabilities acquired at the date of acquisition (Euros in thousands):

 

Deficiency in working capital		(373)
Non- current deposits		264
Property, plant and equipment		12,191
Lease liability		(114)
Long-term debt		(8,174)

 

On 8 February 2021, the Company signed an agreement to purchase an additional 16.7% of Pearlside for a total consideration of £1.062 million (€1.2 million), of which £354,000 (€403 thousand) was settled via the issue of 7,080,000 new Ordinary shares at 5 pence per share (see Note 11), and the remaining £708,000 (€806 thousand) of the consideration was settled in cash. Following this acquisition, the Company holds 70.7% of Pearlside. The difference between the total consideration and the carrying amount of the non-controlling interests, in the amount of € 956 thousand, was recorded as a charge to "capital reserve from transactions with non-controlling interests" in equity.

During 2021 the shareholders of Pearlside invested additional funds as a loan to Pearlside, in order to finance the construction and activity of Pearlside. The portion of the loan provided by the non-controlling interests amounted to €915 thousand. The loan bears no interest and is to be repaid only from available funds of Pearlside.  The loan is presented as a current liability in the consolidated statement of financial position as of 31 December 2021.

NOTE 7:-   PROPERTY AND EQUIPMENT, NET

 

Composition and movement:

 

	Computers and peripheral equipment	Equipment and furniture	Motor vehicles		Agriculture equipment	Extraction mill and land	Palm oil plantations	Cashew processing mill under construction and land	Total
Cost:
Balance as of 1 January, 2020	290	110	1,495		464	26,281	7,620	-	36,260
Acquisitions during the year	4	-	103		-	-	12	-	119
Disposals during the year	(15)	(7)	(72)		-	-	-	-	(94)
Initial consolidation of subsidiary	3	3	26		26	-	-	12,133	12,191
Balance as of 31 December, 2020	282	106	1,552		490	26,281	7,632	12,133	48,476
Acquisitions during the year	87	453	723		-	247	-	3,079	4,589
Disposals during the year	-	-	(149)		-	-	-	-	(149)
Balance as of 31 December, 2021	369	559	2,126		490	26,528	7,632	15,212	52,916
Accumulated depreciation:
Balance as of 1 January 2020	163	98	825		394	3,693	779	-	5,952
Depreciation during the year	29	8	205		15	876	236	-	1,369
Disposals during the year	(15)	(7)	(72)		-	-	-	-	(94)
Balance as of 31 December 2020	177	99	958	409		4,569	1,015	-	7,227
Depreciation during the year	31	15	220		26	861	789	-	1,942
Disposals during the year	-	-	(145)		-	-	-	-	(145)
Balance as of 31 December 2021	208	114	1,033		435	5,430	1,1,804	-	9,024
Depreciated cost as of 31 December 2021	161	445	1,093		55	21,098	5,828	15,212	43,892
Depreciated cost as of 31 December 2020	105	7	594		81	21,712	6,617	12,133	41,249

 

NOTE 8:-   OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

		31 December
		2021		2020
		Euros in thousands
Employees and payroll accruals		917		993
VAT payable		405		100
Other accounts payable & accrued expenses		1,325		731
		2,647		1,824

 

NOTE 9:-   RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

 

On 24 June 2008, DekelOil CI SA signed a lease agreement for 42 hectares near the village of Ayenouan, Cote d'Ivoire. The agreement is with the village of Adao and the people occupying the land in Ayenouan. The lease is for 90 years and the payment for the lease is FCFA 3,000,000 (app. € 4,573) per annum.

 

In January 2018 a subsidiary of the Company signed a lease agreement for a vehicle. The lease is for 5 years and the payment is €1,080 per month.

 

A subsidiary consolidated for the first time at 31 December 2020 signed a lease agreement with the government authorities for 6 hectares near the village of Tiabissuo, Cote d'Ivoire. The agreement is for a lease of 99 years with an annual lease payment of 6 million FCFA (app. € 9,146)

 

The right-of-use assets in respect of the above leases are included in Property and Equipment (Note 7). The balance of the lease liabilities at 31 December 2021 amounted to € 161 (2020 - €169).

 

NOTE 10:- LOANS

 

a.       Long-term loans:

				Interest rate as of 31 December		31 December
		Currency		2021		2021		2020
						Euros in thousands
SGBCI		In FCFA		6.2%-7.3%		-		1
SOGEBOURSE (c.1)		In FCFA		8.4%		4,568		6,387
SIB (c.2)		In FCFA		6.85%		256		377
AgDevCo (c.3)		In Euro		8.2%		7,200		7,200
BGFI (c.4)		In FCFA		7.5%		941		1,153
BIDC (c.5)		In FCFA		7.25%		4,053		4,053
NSIA (c.6)		In FCFA		8.5%		2,287		1,834
NSIA (c.7)		In FCFA		7.75%		133		762
BGFI (c.8)		In FCFA		7.75%		1,524		1,524
HUDSON (c.9)		In FCFA		7.5%		5,991		-
Total loans						26,953		23,291
Less - current maturities						(2,391)		(3,239)
						24,562		20,052

 

b.      Short-term loans and current maturities:

 

		31 December
		2021		2020
		Euros in thousands
Bank Credit line		1,888		2,437
Short-term loan from bank		1,152
Current maturities - per a. above		2,391		3,239
		5,431		5,676

c.       1.       In September 2016 DekelOil CI SA signed a long-term financing facility agreement with a consortium of institutional investors arranged by SOGEBOURSE for a long-term loan of up to FCFA 10 billion (approximately €15.2 million). Of this amount,  FCFA 5.5 billion (approximately €8.4 million) was utilized to refinance the West Africa Development Bank ("BOAD") loan The loan  is repayable  over 7 years in fourteen semi annual payments. and bears  interest at a rate of 6.85% per annum.

On 22 October 2016 SOGEBOURSE transferred the funds and the BOAD loan was repaid in full.

On 1 February 2018 the DekelOil CI SA drew  down a second tranche of FCFA 2.8 billion (€4.34 million)  from its FCFA 10 billion (€15.2 million)  long-term Syndicated Loan Facility with Sogebourse CI. on the same terms as the first tranche.  Part of the funds were used to repay a short-term loan in the amount of €1,524 thousand and a long-term loan in the amount of €497 thousand.

 

2.       In October 2018 DekelOil CI SA signed a loan agreement with Societe Ivorienne de Banque ("SIB") for FCFA 400 million (approximately €610 thousand). The loan is for 5 years and bears interest at a rate of 8.2% per annum. One of the boilers in the CPO extraction mill serves as a security for the loan.

 

3.       In July 2019 DekelOil CI SA signed an agreement with AgDevCo Limited ("AgDevCo"), a leading African agriculture sector impact investor for a €7.2 million loan for a term of 10 years, 4 years of principal grace and 6 years of repayment, with a gross interest rate of 7.5% per annum, variable and based on  12-month Euro Short Term Rate published by the European Central Bank (which replaced the Euro Libor used previously)  plus a pre-defined spread, and collared with a minimum rate of 6% per annum and a maximum rate of 9% per annum. The funds from the loan were used as follows: (i) €6.2 million to replace existing NSIA Bank loan and (ii) €1.0 million for Environmental, Social and Governance ("ESG") activities and general working capital purposes. The fixed assets of DekelOil CI SA serves as a security for this loan.

The loan agreement contains the following financial covenants to be tested on a quarterly basis: (1) Current Ratio of at least 0.5; (2) Debt Service Coverage Ratio of at least 1. The Company met these financial covenants on 31 December 2021 and is expected to meet these financial covenants during 2022.

 

4.       On 7 July 2020 DekelOil CI SA signed a loan agreement with Banque  Gabonaise Francaise International ("BGFI") for FCFA 800 million (approximately €1,220 thousand). The loan is for 5 years and bears interest at a rate of 7.25% per annum.

 

5.       On 16 March 2016 Capro CI SA signed a loan agreement with the Bank of Investment and Development of CEDEAO ("EBID") according to which EBID agreed to grant Capro CI SA a facility of 3,000 million FCFA (€ 4,573 thousand).

 

The EBID loan shall bear interest at a rate of 8.5% per annum. The loan has a tenure of seven years and shall be repaid in 20 quarterly installments over five years, commencing after a grace period on principal payments of two years. Principal payments start in January 2022. . According to the loan agreement as a security for this loan there is a lien over the equipment of Capro CI SA and an amount of €97 thousand has been deposited in a bank by Capro CI SA (non-current bank deposits).

 

6.     In 2018 Capro CI SA signed a loan agreement with NSIA bank, Togo ("NSIA Togo") according to which NSIA Togo agreed to grant Capro CI SA a facility of 1,500 million FCFA (€ 2,278 thousand).

NSIA Togo loan shall bear interest at a rate of 7.25%% per annum. The loan has a tenure of seven years and shall be repaid in 20 quarterly installments over five years, commencing after a grace period on principal payments of two years from the first withdrawal made on 20 February 2020.

 

7.       On 30 March 2020 Capro CI SA signed a loan agreement with NSIA bank Cote d'Ivoire ("NSIA") according to which NSIA agreed to grant Capro CI SA a facility of 500 million FCFA (€ 762 thousand).

NSIA loan shall bear interest at a rate of 7.25% per annum. The loan is for two years with one year grace period on principal payments.

 

8.       On 3 February 2020 Capro CI SA signed a loan agreement with Banque Gabonaise Francaise International ("BGFI") for FCFA 1,000 million (approximately €1,542 thousand). The loan shall bear interest at a rate of 7.5% per annum. The loan has a tenure of seven years and shall be repaid in monthly installments over five years, commencing after a grace period on principal payments of two years from the first withdrawal made in September 2020. According to the loan agreement as a security for this loan an amount of €114 thousand has been deposited in a bank by Capro CI SA (non-current bank deposits).

 

9.       On 25 January 2021 DekelOil CI SA signed an agreement with Hudson for issuance of a long-term bond of up to €15.2 million (10,000 million FCFA). The first tranche of €6 million (3,930 million FCFA) was received on 27 January 2021. The bond is for 7 years with a 3-year grace for principal repayments. The bond bears annual interest of 7.75%.  According to the agreement DekelOil CI SA accumulates the funds for each payment prior to each payment by a monthly payment to be made for that purpose to a designated deposit account. In addition, a fixed amount has been deposited in a separate bank account. As of 31 December 2021, the deposits amount to €283 thousand and €239 thousand (current and non-current deposits), respectively.

 

NOTE 11:- EQUITY

 

a.       Composition of share capital:

		31 December				31 December
		2021		2020		2021		2020
		Authorized				Issued and outstanding
		Number of shares
Ordinary shares of € 0.0003367 par value each		1,000,000,000		1,000,000,000		535,863,569		457,126,075

 

Each Ordinary share confers upon its holder voting rights, the right to receive cash and share dividends, and the right to share in excess assets upon liquidation of the Company.

 

Commencing from December 2019, pursuant to his remuneration contract, the General Manager of the company's subsidiary, shall be issued 400,000 Ordinary Shares per year at par value over the next 3 years, vesting on a monthly basis. The fair value of the Ordinary shares to be issued at the date of grant amounts to € 34 thousand. As of 31 December 2021, 800,000 Ordinary shares are fully vested. These shares were issued to the General Manager in 2022.

 

On 25  November 2020 the Company issued 28,552,800 Ordinary Shares according to an agreement  to increase its holding of Pearlside to 52% by way of a share swap. Based on the market price of the Company's shares on the date of the purchase, the cost of this additional investment in Pearlside is €740 thousand.

 

On 10 December 2020 the Company completed a purchase of an additional 2% of Pearlside Holding Ltd, reaching a total holding of 54% of Pearlside, by way of issuing 3,922,789 Ordinary shares of the Company. Based on the market price of the Company's shares on the date of the purchase, the cost of this additional investment in Pearlside is €144 thousand.

 

In 2020 the Company issued 1,587,043 ordinary shares to certain brokers in consideration for services provided. The fair value of the shares issued amounting to € 24 thousand was recorded in general and administrative expenses

 

On 29 January 2021 the Company raised equity totaling to £3.3 million (€3.7 million, (net of £0.23 million (€0.26 million) fund raising costs) through the placing of 70,000,000 new Ordinary Shares at an issue price of 5 pence per share.

 

On 8 February 2021, the Company signed an agreement to purchase an additional 16.7% of Pearlside for a total consideration of £1.062 million (€1.2 million), of which £354,000 (€403 thousand) was settled via the issue of 7,080,000 new Ordinary shares at 5 pence per share -see Note 6.

 

 

In 2021 (January & September) the Company issued 1,656,029 ordinary shares to certain brokers in consideration for services provided. The fair value of the shares issued amounting to € 64 thousand was recorded in general and administrative expenses

 

b.      Share option plan:

 

On 15 January 2015 the Company granted directors and senior employee's options to purchase 8,100,000 Ordinary shares. Of that amount, 1,800,000 options vested immediately, and the remainder will vest ratably over 3 years. Half of the options have an exercise price of 12.5 pence per share while the remainder is exercisable at a price of 20 pence per share. The fair value of the options granted calculated

On 19 October 2015 the Company granted directors and senior employee's options to purchase 1,800,000 Ordinary shares. The options will vest ratably over 3 years. Half of the options have an exercise price of 12.5 pence per share while the remainder is exercisable at a price of 20 pence per share. The fair value of the options granted calculated based on Black-Scholes option pricing model was approximately €139 thousand.

 

On 30 June 2017 the Company granted directors and senior employee's options to purchase 10,750,000 Ordinary shares. The options will vest ratably over 5 years. The exercise price of the options is €0.1359 per share. The fair value of the options granted calculated based on Black-Scholes option pricing model was approximately €612 thousand.

 

On 1 January 2017 a subsidiary appointed a new CEO, and as part of his employment compensation he was granted 1,200,000 options to purchase Ordinary shares of the Company at a nominal exercise price. The options vest linearly over three years. The fair value of the options at the date of grant was calculated based on the share price at that date and was approximately €151 thousand.

 

On 2 December 2019 the Company granted directors and advisers options to purchase 17,600,000 Ordinary shares. The 2019 Options expire 10 years from the date of grant and have an exercise price of 2.45 pence per Ordinary Share. One third of the 2019 Options vest immediately. The balance of the 2019 Options are subject to vesting conditions as follows:

(i)  One third of the options may only be exercised if at any point following the date of grant, the 30-day Volume Weighted Average Price (VWAP) of the Ordinary Shares achieves a price per share equal to or exceeding 4.0 pence, this condition was met during 2020. These options vest over 12 months following the date of grant.

(ii) A further one third of the options may only be exercised if at any point following the date of grant, the 30-day VWAP of the Ordinary Shares achieves a price per share equal to or exceeding 6.0 pence. These options vest over 12 months from the first anniversary of the date of grant.

The fair value of the options granted calculated based on Black-Scholes option pricing model was approximately €289 thousand for the 14,100,000 options granted to directors and approximately €72 thousand for the 3,500,000 options granted to advisors.

 

In addition, in December 2019 the Company amended the terms of 7,200,000 of the options granted in January 2015 (see above) and of the terms of 9,100,000 option granted on 30 June 2017 (see above), to reflect the same terms, vesting terms and duration of the options granted on 2 December 2019. 

The incremental fair value of the amended options totaling approximately €212 thousand was calculated based on the difference between the fair value of the options immediately before the amendment and their fair value immediately after the amendment. The calculation was based on Black-Scholes option pricing model. This incremental fair value will be recorded as an expense over the amended vesting period in addition to the expense recorded in respect of the original grant of these options.

A summary of the activity in options for the years 2021 and 2020 is as follows:

 

		Year ended 31 December
		2021				2020
		Number of options		Weighted average exercise  price-Euro		Number of options		Weighted average exercise price-Euro
Outstanding at beginning of year		35,522,314		0.0332		35,522,314		0.0332
Exercised		-		-		-		-
Granted		-		-		-		-
Expired		-		-		-		-
Forfeited		-		-		-		-
Outstanding at end of year		35,522,314		0.0332		35,522,314		0.0332
Exercisable options		29,655,647		0.0352		24,222,314		0.0352

 

c.       Capital reserve

 

The capital reserve comprises the contribution to equity of the Company by the controlling shareholders.

 

 

 

NOTE 12:- REVENUES

 

a.       All of the revenues are derived from the sales of Palm Oil, Palm Kernel Oil and Palm Kernel Cake in Cote d'Ivoire see also Note 19.

 

b.      Major customers:

		Year ended 31 December
		2021		2020
		Euros in thousands
Revenues from major customers which each account for 10% or more of total revenues reported in the financial statements:
Customer A -		23,925		18,531
Customer B -		5,241		-

 

 

NOTE 13:- FAIR VALUE MEASUREMENT

 

The fair value of accounts and other receivables, loans, and trade and other payables approximates their carrying amount due to their short-term maturities. The fair value of long-term loans with a carrying amount of €26,953 thousands and €23,291 thousands (including current maturities) approximates their fair value as of 31 December 2021 and 2020, respectively (level 3 of the fair value hierarchy).

 

 

NOTE 14:- INCOME TAXES

 

a.       Tax rates applicable to the income of the Company and its subsidiaries:

 

The Company and its subsidiaries, CS DekelOil Siva Ltd and Pearlside Holdings Ltd, were incorporated in Cyprus and are taxed according to Cyprus tax laws. The statutory tax rate is 12.5%.

 

The carryforward losses of the Company are approximately €31 thousand of CS DekelOil Siva Ltd are approximately €20 thousand, and of Pearlside are approximately €12 thousand.

 

The subsidiary, DekelOil CI SA, was incorporated in Cote d'Ivoire and is taxed according to Cote d'Ivoire tax laws. Based on its investment plan, DekelOil CI SA received a full tax exemption from local income tax, "Tax on Industrial and Commercial profits," for the thirteen years starting 1 January 2014, 50% tax exemption for the fourteenth year and 25% tax exemption for the fifteenth year.

 

The tax exemptions were conditional upon meeting the terms of the investment plan, which the Group has met.

 

The subsidiary, Capro CI SA, was incorporated in Cote d'Ivoire and is taxed according to Cote d'Ivoire tax laws. Based on its investment plan, Capro CI SA received a full tax exemption from local income tax, "Tax on Industrial and Commercial profits," for the thirteen years starting from commencement of production, 50% tax exemption for the fourteenth year and 25% tax exemption for the fifteenth year.

 

The tax exemptions were conditional upon meeting the terms of the investment plan, which the Group is expecting to meet.

 

The subsidiary DekelOil Consulting Ltd was incorporated in Israel and is taxed according to Israeli tax laws.

 

b.      Tax assessments:

 

The Company's subsidiary, DekelOil CI SA, received a final tax assessment through 2020.

As of 31 December 2020, the Company and all its other subsidiaries had not yet received final tax assessments

 

c.      The tax expense during the year ended 31 December, 2021 relate to tax of the Company's subsidiaries DekelOil CI SA and DekelOil Consulting Ltd.

 

NOTE 15:- SUPPLEMENTARY INFORMATION TO THE STATEMENT OF COMPREHENSIVE INCOME

			Year ended 31 December
			2021		2020
			Euros in thousands
a.	Cost of revenues:
	Cost of fruits		23,064		14,233
	Salaries and related benefits		1,937		1,680
	Cultivation & Nursery costs		588		578
	Vehicles		356		372
	Maintenance and other operating costs		3,251		2,111
	Depreciation		1,684		1,233
			30,880		20,207
b.	General and administrative expenses:
	Salaries and related benefits		1,610		1,131
	Subcontractors		452		310
	Rents & related office expenses		160		108
	Travel expenses		84		99
	Legal & accounting and professional fees		378		283
	Vehicle maintenance		118		86
	Insurance		168		86
	Brokerage & nominated advisor fees		99		82
	Depreciation		204		138
	Share-based compensation		271		271
	Other		325		167
			3,869		2,761
c.	Finance cost:
	Interest on loans (*)		1,438		1,144
	Bank fees		400		429
	Exchange rate differences		(112)		9
			1,726		1,582

 

* Net of interest capitalized of € 827 thousands

 

NOTE 16:-      INCOME (LOSS) PER SHARE

 

The following reflects the income (loss) and share data used in the basic and diluted earnings per share computations:

		Year ended 31 December
		2021			2020
		Euros in thousands
Net income(loss) attributable to equity holders of the Company		757			(2,226)
Weighted average number of Ordinary shares used for computation of: Basic earnings (loss) per share		528,368,244		428,930,844
Diluted net earnings (loss) per share (after effect of options)		529,217,521		428,930,844

 

In 2020, share options are excluded from the calculation of diluted loss per share as their effect is antidilutive.

 

 

NOTE 17:-      BALANCES AND TRANSACTIONS WITH RELATED PARTIES

 

			Year ended 31 December
			2021		2020
			Euros in thousands
a.1	Balances:
	Other accounts payable and accrued expenses		452		191
a.2	Transactions:
	Services and expense reimbursements		-		33
b.	Compensation of key management personnel of the Company:
	Short-term employee benefits		801		625
	Share-based compensation		224		224

 

c.       Significant agreements with related parties:

1.       In February 2008, DekelOil Consulting Limited ("Consulting") signed an employment agreement with a shareholder, who is a director of the Company, the CEO of the Company and the chairman of the Board of Directors of DekelOil CI SA.

Under the employment agreement, the CEO is entitled to a monthly salary of € 20,000 per month. The agreement is terminable by the Company with 24 months' notice. The total annual salary, social benefits, bonuses and management fee paid to the CEO during 2021 and 2020 was approximately €239 thousand and €217 thousand, respectively.

 

2.       In March 2008, DekelOil Consulting Limited signed an employment agreement with a shareholder, who is a director of the Company, its Deputy CEO and Chief Financial Officer. The agreement was amended on 11 July 2014 by the board of the subsidiary to reflect the same salary terms as those of the CEO described in c (1) above.  The total annual salary and social benefits paid to the employee during 2021 and 2020 was approximately €239 thousand and €217 thousand, respectively.

 

NOTE 18:- FINANCIAL INSTRUMENTS

 

a.       Classification of financial liabilities:

 

The financial liabilities in the statement of financial position are classified by groups of financial instruments pursuant to IFRS 9:

 

		31 December
		2021		2020
		Euros in thousands
Financial liabilities measured at amortized cost:
Trade and other payables		4,022		2,717
Short-term loans		3,040		2,437
Long-term lease liabilities		169		192
Long-term loans (including current maturities)		26,947		23,291
Total		34,178		28,637

 

b.      Financial risks factors:

 

The Group's activities expose it to market risk (foreign exchange risk). Certain of the Group's long-term obligations at the reporting date also bear variable interest rates which are linked to the inter banking interest rate in Cote d'Ivoire and in the UK, and therefore the Group is exposed to cash flow risks due to changes in that base interest rate. The effect on profit or loss is approximately €80 thousand for each 1% change in the base interest rate.

 

Foreign exchange risk:

 

The Company is exposed to foreign exchange risk resulting from the exposure to different currencies, mainly, NIS and GBP. Since the FCFA is fixed to the Euro, the Group is not exposed to foreign exchange risk in respect of the FCFA. As of 31 December 2021, the foreign exchange risk is immaterial.

 

Liquidity risk:

The table below summarizes the maturity profile of the Group's financial liabilities based on contractual undiscounted payments (including interest payments):

 

31 December 2021

		Less than one year		1 to 2 years		2 to 3 years		3 to 4 years		4 to 5 years		> 5 years		Total
		Euros in thousands
Long-term loans (1)		4,117		3,269		4,563		4,447		4,225		10,937		31,558
Loan from non-controlling interest		915												915
Short-term loan		3,040												3,040
Trade payables and other accounts payable		4,022												4,022
Long-term lease liabilities		30		15		15		15		15		1,365		1,455
		12,124		3,284		4,578		4,462		4,240		12,302		40,990

 

 

31 December 2020

		Less than one year		1 to 2 years		2 to 3 years		3 to 4 years		4 to 5 years		> 5 years		Total
		Euros in thousands
Long-term loans (1)		4,254		4,784		3,935		4,504		3751		11,758		32,986
Short-term loan		2,437		-		-		-		-		-		2,437
Trade payables and other accounts payable		2,717		-		-		-		-		-		2,717
Long-term lease liabilities		20		20		6		6		6		328		386
		9,428		4,804		3,941		4,510		3,757		12,086		36,091

Movement in financial liabilities:

 

		Short term loans		Long term loans (1)		Lease liabilities		Loan from non-controlling interest		Total
Balance as of 1 January 2020		1,490		16,302		90		-		17,882
Receipt of short-term loan		2,437		-		-		-		2,437
Repayment of long-term lease		-		-		(12)		-		(12)
New lease upon consolidation of subsidiary.		-		-		114		-		114
Repayment of loans		(1,490)		(3,584)		-		-		(5,038)
Receipt of long-term loans		-		2,363		-		-		2,363
Initial consolidation of subsidiary		-		8,174		-		-		8,174
Balance as of 31 December 2020		2,437		23,291		192		-		23,557
Receipt of short-term loan		3,040						915		3,955
Repayment of long-term lease						(23)				(23)
Repayment of loans		(2,437)		(2,339)						(4,776)
Receipt of long-term loans				5,991						5,991
Balance as of 31 December 2021		3,040		26,943		169		915		28,704

 

1)      Including current maturities and accrued interest.

 

NOTE 19:-            OPERATING SEGMENTS

 

a.       General:

 

The operating segments are identified on the basis of information that is reviewed by the Companies management to make decisions about resources to be allocated and assess its performance. Accordingly, for management purposes, the Group is organized into two operating segments based on the two business units the Group has. The two business units are incorporated under two separate subsidiaries of the Company, the CPO production unit is incorporated under CS DekelOil Siva Ltd and its subsidiary and the RCN processing plant under construction is incorporated under Pearlside Holdings Ltd and its subsidiary (see Note 1)

 

The RCN processing activity was consolidated for the first time on 31 December 2020, and 2021 is the first year that the results of RCN operations are consolidated (see Note 6).

 

Segment performance (segment income (loss)) and the segment assets and liabilities are derived from the financial statements of each separate group of entities as described above. Unallocated items are mainly the Group's headquarter costs, finance expenses and taxes on income.

 

b.       Reporting operating segments:

 

		Crude Palm Oil		Raw Cashew Nut		Total
		Euros in thousands
Year ended 31 December 2021:
Revenues-External customers		37,391		-		37,391
Segment profit (loss)		3,830		(391)		3,439
Unallocated corporate expenses						(797)
Finance cost						(1,809)
Profit before taxes on income						833
Depreciation and amortization		(1,888)		-		(1,888)
Year ended 31 December 2020:
Revenues-External customers		22,546		-		22,546
Segment profit (loss)		137		-		137
Unallocated corporate expenses						(559)
Finance cost						(1,582)
Share of loss of associate						(167)
Profit before taxes on income						(2,171)
Depreciation and amortization		(1,369)		-		(1,369)

 

		Crude Palm Oil		Raw Cashew Nut		Total
		Euros in thousands
As of 31 December 2021:
Segment assets		33,393		18,199		51,592
Segment liabilities		24,180		10,943		35,123
As of 31 December 2020:
Segment assets		30,580		12,728		43,308
Segment liabilities		21,912		8,934		30,846