Anglo African Agriculture : Final results - October 2021

ANGLO AFRICAN AGRICULTURE PLC

DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 OCTOBER 2021

Company Registration No. 07913053 (England and Wales)

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Contents
Directors and advisors	3
Chairman's statement	4
Strategic report	5
Directors' report	11
Directors' remuneration report	16
Chairman's corporate governance statement	18
Corporate governance report	23
Independent Auditor's report	25
Statement of Comprehensive Income	32
Statement of Changes in Equity	33
Statement of Financial Position	34
Statement of Cash Flows	35
Notes to Group annual financial statements	36 - 83
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Directors and Advisors

Directors:

Secretary:

Company Number:

Robert Scott Andrew Monk Matthew Bonner

Stephen Clow 07913053

Registered Address:Head OfficeFinancial Advisor and BrokerAuditorsSolicitors to the Company

Park House

16-18 Finsbury Circus London

EC2M 7EB

Park House

16-18 Finsbury Circus London

EC2M 7EB

VSA Capital Limited Park House

16-18 Finsbury Circus London

EC2M 7EB

Jeffreys Henry LLP Finsgate

5-7 Cranwood Street London

EC1V 9EE

Keystone Law

48 Chancery Lane London

WC2A 1JF

Registrars

Neville Registrars Limited Neville House

Steelpark Road Halesowen West Midlands B63 3DA

Chairman's Statement

Overview

The most recent financial period was a very disappointing year in that after 30 months of trying to reverse the Comarco port and marine operations into AAA ("the Company") the vendors decided in September 2021 to withdraw from the transaction. AAA made a $1m loan available to Comarco in November 2018 for an initial period of 24 months (the "Loan"). The Loan was subsequently extended and was due for repayment on 30 September

2021. The Loan, together with accrued interest, amounting in aggregate to $1.5m, has now been repaid although no full and final settlement was signed by Comarco.

As mentioned previously the Company's 100% subsidiary, Dynamic Intertrade, on its own cannot sustain an LSE listing. As a result of the aborted Comarco transaction the board is looking at various alternative transactions to increase the size of the Company and thus secure its future prospects. The Board recognises that it needs to find a transaction with certainty to prevent a repeat of the failed Comarco transaction and it is also aware of the recent FCA rule changes to Standard listing requirements. As such, the Board is also looking to complete a transaction as soon as practicably possible.

AAA's primary operations and source of revenue remains Dynamic Intertrade ("Dynamic"), our Cape Town based spice blender and trader. The Company's operations have been negatively affected by COVID-19 with sales in local currency falling 23.2% and 20.8% in reporting currency. This was primarily driven by the South African economy being impacted by COVID-19. In addition, fish stocks for Dynamic's largest customers dwindled and the clients in effect had no production for a number of months during the year under review. Lastly, the product mix requested by Dynamic's material customers changed and price increases could not be passed on to the company's customers, which reduced the gross margin. Group turnover reduced by 20.8% (2020: a reduction of 2.5%). Group operating losses decreased to £515,660(increased to £1,079,505 in 2020) for the current year. Included in the prior year's group operating losses is the impairment of the investment in AAA's subsidiary, Dynamic, amounting to £226,644, being a once off write off. Excluding the impairment, normal operating losses for the year were £515,660 (2020: £852,861).

COVID-19 has had a devasting effect on the world economy and social fabric. Although the company has been affected by the pandemic, the effects have been minimised. There is a concern however that the long term effects may be more than what is currently being experienced.

As announced on 15 December 2021, since the year end we have reached agreement with all of AAA's creditors. This has left the group with a cash balance currently in excess of £0.4 million.

Andrew Monk

Non-Executive Chairman

31st March 2022

Strategic Report

Overview

The primary objective of the strategic report is to provide information for the shareholders and help them to assess how the directors have performed their duty, under section 172 of the Act, to promote the success of the Company and to provide context for the related financial statements as well as assist them in their decision making.

The duty of a director, as set out in section 172 of the Act, is to act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members, and in doing so have regard (amongst other matters) to:

• (a) the likely consequences of any decision in the long term;

• (b) the interests of the company's employees;

• (c) the need to foster the company's business relationships with suppliers, customers and others;

• (d) the impact of the company's operations on the community and the environment;

• (e) the desirability of the company maintaining a reputation for high standards of business conduct; and

• (f) the need to act fairly as between members of the company.

As a Board, we must always seek and be open to feedback from anyone affected by our activities. This enables the Board to understand the impact of its decisions on key stakeholders, but also ensures that we are aware of any significant changes in the market or the external environment, including the identification of emerging risks, which can be fed into our strategy discussions and our risk management process. The Board considers our strategic stakeholders as follows:

Customers

We listened to our customers and endeavoured to supply them with relevant product - this was particularly true throughout the crisis where not only did we supply relevant products but also in line with safety protocols as recommended by the Government Health Department.

Suppliers

We have worked with a number of our suppliers for many years, and any loss of our sales or product mix impacts their business. We communicated to them where possible to reduce the impact on their businesses.

Shareholders and Lenders

We have a clear responsibility to engage with shareholders and lenders of our business and their views are an important driver of our strategy. We keep our shareholders regularly informed while lenders receive quarterly updates on the performance of the organisation.

Staff

During the year under review and in particular during the pandemic, Dynamic Intertrade endeavoured to keep its staff fully employed although operating times were erratic due to supply chain disruptions. We managed to do this,