Rizobacter Argentina S.A. — Annual Report 2021

Sep 9, 2021

(Registration Number 2015 / 308733 / 07) Annual Financial Statements for the year ended 30 June 2021

Reviewed Financial Statements

in compliance with Companies Act 71 of 2008 Reviewed by: Chanette Haasbroek CA(SA)

(Registration Number 2015 / 308733 / 07) Annual Financial Statements for the year ended 30 June 2021

Index

The reports and statements set out below comprise the annual financial statements presented to the shareholders:

General Information	1
Report of the Independent Reviewer	2
The Chartered Accountant (South Africa) Declaration	3
Directors' Responsibilities and Approval	4
Directors' Report	5 - 6
Statement of Financial Position	7
Statement of Comprehensive Income	8
Statement of Changes in Equity	9
Statement of Cash Flows	10
Accounting Policies	11 - 12
Notes to the Financial Statements	13 - 16
Supplementary information: Detailed Income Statement Income Tax Computation	17 18

(Registration Number 2015 / 308733 / 07) Annual Financial Statements for the year ended 30 June 2021

General Information

Country of Incorporation and Domicile	South Africa
Nature of Business and Principal Activities	Agriculture
Directors	AG Lehmann PE Mac Mullen
Registered Office	510 Makou Street Monument Park x 2 Pretoria Gauteng 0181
Business Address	510 Makou Street Monument Park x 2 Pretoria Gauteng 0181
Bankers	The Standard Bank of South Africa Limited
Independent Reviewer	Chanette Haasbroek CA(SA) 494 Road A Rietvalleirand x 32 Pretoria Gauteng 0042

Independent Reviewer's Report

To the Shareholders of Rizobacter South Africa (Pty) Ltd

I have reviewed the annual financial statements of Rizobacter South Africa (Pty) Ltd set out on pages 7 to 16, which comprise the statement of financial position as at 30 June 2021, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Directors' Responsibility for the Annual Financial Statements

The company's directors are responsible for the preparation and fair presentation of these annual financial statements in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of annual financial statements that are free from material misstatement, whether due to fraud or error.

Independent Reviewer's Responsibility

My responsibility is to express a conclusion on these annual financial statements based on my review. I conducted my review in accordance with the International Standard on Review Engagements (ISRE) 2400 (Revised), Engagements to Review Historical Financial Statements. ISRE 2400 (Revised) requires me to conclude whether anything has come to my attention that causes me to believe that the annual financial statements, taken as a whole, are not prepared in all material respects in accordance with the applicable financial reporting framework. This Standard also requires me to comply with relevant ethical requirements.

A review of annual financial statements in accordance with ISRE 2400 (Revised) is a limited assurance engagement. The independent reviewer performs procedures, primarily consisting of making enquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluates the evidence obtained.

The procedures performed in a review engagement are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, I do not express an audit opinion on these annual financial statements.

0.1 Conclusion

Based on my review, nothing has come to my attention that causes me to believe that these annual financial statements do not present fairly, in all material respects, the financial position of Rizobacter South Africa (Pty) Ltd as at 30 June 2021, and its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Companies Act of South Africa.

0.2 Other reports required by the Companies Act

As part of my independent review of the annual financial statements for the year ended 30 June 2021, I have read the Directors' Report for the purpose of identifying whether there are material inconsistencies between this report and the reviewed annual financial statements. The Directors' Report is the responsibility of the directors. Based on reading the Directors' Report I have not identified material inconsistencies between this report and the reviewed annual financial statements. However, I have not reviewed the Directors' Report and accordingly do not express a conclusion thereon.

Chanette Haasbroek CA(SA) 31 August 2021

Per: Pretoria Director / Partner Gauteng Chartered Accountant (SA) 0042

494 Road A Rietvalleirand x 32

The Chartered Accountant (South Africa) Declaration

The following annual financial statements of Rizobacter South Africa (Pty) Ltd presented on pages 7 to 16 have been independently compiled by a Chartered Accountant (South Africa) (CA(SA)). Refer to compilation report on page 2.

Use of the CA(SA) designation is governed by the Chartered Accountants Designation (Private) Act, 1993 (Act 67 of 1993), which regulates and permits the use of the CA(SA) designation exclusively by members of The South African Institute of Chartered Accountants (SAICA). Use of the designation without SAICA membership is consequently a criminal offence, and misuse is subject to legal action.

SAICA is the premier accountancy body in South Africa and one of the leading chartered accountancy institutes in the world and all members must comply with the Code of Professional Conduct which conforms to the code released by the International Ethics Standards Board for Accountants (IESBA). The SAICA code and definitions contained therein are consistent in all material aspects with the International Federation of Accountants' (IFAC) code as well as the Independent Regulatory Board for Auditors (IRBA) code.

The following fundamental principles are embodied in the SAICA Code of Professional Conduct and are to be upheld by all CAs(SA) at all times.

• Integrity a duty to be straightforward and honest in all professional and business relationships.
• Objectivity a duty to not allow bias, conflict of interest or undue influence of others to override professional or business judgements.
• Professional competence and due care a duty to maintain professional knowledge and skill at the level required to ensure that a client receives competent professional services based on current developments in practice, legislation and techniques and act diligently and in accordance with applicable technical and professional standards.
• Confidentiality a duty to respect the confidentiality of information acquired as a result of professional and business relationships and, therefore, not disclose any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose, nor use the information for the personal advantage of the chartered accountant or third parties.
• Professional behaviour a duty to comply with relevant laws and regulations and avoid any action that discredits the accountancy profession.

A distinguishing characteristic of CAs(SA) are their responsibilities and duties which extend beyond the needs of individual clients and also includes the public as a whole.

Accordingly, this declaration serves to confirm that the above mentioned financial statements have been prepared by a CA(SA) who has observed and complied with the SAICA Code.

Chanette Haasbroek CA(SA) 31 August 2021

Per: Pretoria Director / Partner Gauteng Chartered Accountant (SA) 0042

494 Road A Rietvalleirand x 32

(Registration Number 2015 / 308733 / 07)

Annual Financial Statements for the year ended 30 June 2021

Directors' Report

The directors present their report for the year ended 30 June 2021.

1. Review of activities

Main business and operations

The principal activity of the company is agriculture and there were no major changes herein during the year.

The operating results and statement of financial position of the company are fully set out in the attached financial statements and do not in our opinion require any further comment.

2. Going concern

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

The directors have given due consideration to the potential impact of the COVID-19 pandemic on the company's ability to continue as a going concern. The directors believe that the pandemic will have a temporary impact on the business activities. Not withstanding these short-term challenges the directors are of the view that the company has sufficient resources to continue as a going concern.

3. Events after reporting date

All events subsequent to the date of the annual financial statements and for which the applicable financial reporting framework require adjustment or disclosure have been adjusted or disclosed.

The directors are not aware of any matter or circumstance arising since the end of the financial year to the date of this report that could have a material effect on the financial position of the company.

4. Directors' interest in contracts

To our knowledge none of the directors had any interest in contracts entered into during the year under review.

5. Authorised and issued share capital

No changes were approved or made to the authorised or issued share capital of the company during the year under review.

6. Borrowing limitations

In terms of the Memorandum of Incorporation of the company, the directors may exercise all the powers of the company to borrow money, as they consider appropriate.

7. Dividends

No dividends were declared nor paid to shareholders during the year.

8. Directors

The directors of the company during the year and to the date of this report are as follows:

(Registration Number 2015 / 308733 / 07) Annual Financial Statements for the year ended 30 June 2021

Directors' Report

Name AG Lehmann PE Mac Mullen

9. Secretary

No secretary has been formally appointed.

10. Shareholders

There have been no changes in ownership and the shareholders remain:

	%
AG Lehmann	5
Rizobacter Argentina S.A.	95

11. Independent Reviewer

Chanette Haasbroek CA(SA) was the independent reviewer for the year under review.

(Registration Number 2015 / 308733 / 07)

Financial Statements for the year ended 30 June 2021

Statement of Financial Position

Figures in R	Notes	2021	2020
Assets
Non-Current Assets
Property, plant and equipment	3	55,658	10,402
Loan to shareholder	4	8,334	8,334
		63,992	18,736
Current Assets
Trade and other receivables	5	94,828	105,990
Cash and cash equivalents	6	259,618	212,689
		354,446	318,679
Total Assets		418,438	337,415
Equity and Liabilities
Equity
Issued capital	7	686,683	686,683
Accumulated loss		(350,716)	(372,309)
		335,967	314,374
Current Liabilities
Trade and other payables	8	46,765	23,041
PAYE liability		35,706	-
		82,471	23,041
Total Equity and Liabilities		418,438	337,415

(Registration Number 2015 / 308733 / 07)

Financial Statements for the year ended 30 June 2021

Statement of Comprehensive Income

Figures in R	Notes	2021	2020
Revenue	9	1,631,271	482,917
Cost of sales		(512,355)	-
Gross profit		1,118,916	482,917
Other income	10	-	1,075
Operating costs		(1,098,889)	(843,481)
Operating profit / (loss)		20,027	(359,489)
Finance income		1,566	-
Finance costs	12	-	(7,059)
Profit / (loss) for the year		21,593	(366,548)

(Registration Number 2015 / 308733 / 07) Financial Statements for the year ended 30 June 2021

Statement of Changes in Equity

		Accumulated
Figures in R	Share capital	loss	Total
Balance at 1 July 2019	120,000	(5,761)	114,239
Total comprehensive income for the
year
Loss for the year		(366,548)	(366,548)
Total comprehensive income for the
year	-	(366,548)	(366,548)
Issue of share capital	566,683		566,683
Balance at 30 June 2020	686,683	(372,309)	314,374
Balance at 1 July 2020	686,683	(372,309)	314,374
Total comprehensive income for the
year
Profit for the year		21,593	21,593
Total comprehensive income for the
year	-	21,593	21,593
Balance at 30 June 2021	686,683	(350,716)	335,967
Note	7

9

(Registration Number 2015 / 308733 / 07) Financial Statements for the year ended 30 June 2021

Statement of Cash Flows

Figures in R	Note(s)	2021	2020
Cash flows from / (used in) operating activities
Profit/(loss) for the year		21,593	(366,548)
Adjustments for:
Finance costs		-	7,059
Depreciation of property, plant and equipment		12,707	89,437
Investment income		(1,566)	-
Operating cash flow before working capital changes		32,734	(270,052)
Working capital changes
Decrease in trade and other receivables		11,162	442,715
Increase in short term loans		-	(511,547)
Increase/(decrease) in trade and other payables		59,430	(16,673)
Net cash flows from / (used in) operations		103,326	(355,557)
Investment income		1,566	-
Finance costs		-	(7,059)
Net cash flows from / (used in) operating activities		104,892	(362,616)
Cash flows used in investing activities
Property, plant and equipment acquired	3	(57,963)	-
Net cash flows used in investing activities		(57,963)	-
Cash flows from financing activities
Capital issued		-	566,683
Shareholder's loan repaid		-	(28,334)
Net cash flows from financing activities		-	538,349
Net increase in cash and cash equivalents		46,929	175,733
Cash and cash equivalents at beginning of the year		212,689	36,956
Cash and cash equivalents at end of the year	6	259,618	212,689

(Registration Number 2015 / 308733 / 07) Financial Statements for the year ended 30 June 2021

Accounting Policies

1. General information

Rizobacter South Africa (Pty) Ltd is a private company incorporated in South Africa.

2. Summary of significant accounting policies

These annual financial statements have been prepared in accordance with the International Financial Reporting Standards for Small and Medium-sized Entities issued by the International Accounting Standards Board. The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

These financial statements have been prepared under the historical cost convention and are presented in South African Rands.

2.1 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and / or services in the ordinary course of the company's activities. Revenue is shown net of value-added tax, returns, and discounts.

The company recognises revenue when: the amount of revenue can be reliably measured; it is probable that future economic benefits will flow to the entity; and specific criteria have been met for each of the company's activities, as described below:

2.1.1 Sales of goods – wholesale

Sales of goods are recognised when the entity has delivered products to the wholesaler, the wholesaler has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the wholesaler's acceptance of the products. Delivery does not occur until the products have been shipped to the specified location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the entity has objective evidence that all criteria for acceptance have been satisfied.

2.1.2 Services revenue

The service rendered is recognised as revenue by reference to the stage of completion of the transaction at the reporting date.

2.1.3 Interest income

Interest income is recognised using the effective interest rate method.

2.2 Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

Depreciation is charged so as to allocate the cost of assets less their residual values over their estimated useful lives, using the straight-line method. The following rates are used for the depreciation of property, plant and equipment:

(Registration Number 2015 / 308733 / 07)

Financial Statements for the year ended 30 June 2021

Accounting Policies

Summary of significant accounting policies continued...

The residual value, depreciation method and useful life of each asset are reviewed at each annual reporting period if there are indicators present that there has been significant change from the previous estimates.

Motor vehicles	25.00%
Furniture and fittings	16.67%
Laptops and software	50.00%

2.3 Trade and other receivables

Trade receivables are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

2.4 Cash and cash equivalents

Cash and cash equivalents includes cash on hand, demand deposits and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown under current liabilities on the statement of financial position.

2.5 Share capital

Ordinary shares are classified as equity.

Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

2.6 Trade payables

Trade payables are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest rate method.

(Registration Number 2015 / 308733 / 07)

Financial Statements for the year ended 30 June 2021

Notes to the Annual Financial Statements

Figures in R 2021 2020
------------------------------

3. Property, plant and equipment

	Cost	Accumulated depreciation	2021 Carrying value	Cost	Accumulated depreciation	2020 Carrying value
Owned assets
Motor vehicles	372,550	(372,549)	1	372,550	(372,549)	1
Furniture and fittings	32,770	(27,831)	4,939	32,770	(22,369)	10,401
Laptops and software	57,963	(7,245)	50,718	-	-	-
	463,283	(407,625)	55,658	405,320	(394,918)	10,402

The carrying amounts of property, plant and equipment can be reconciled as follows:

	Carrying value at beginning of year	Additions	Disposals	Depreciation	2021 Carrying value at end of year
Owned assets
Motor vehicles	1	-	-	-	1
Furniture and fittings	10,401	-	-	(5,462)	4,939
Laptops and software	-	57,963	-	(7,245)	50,718
	10,402	57,963	-	(12,707)	55,658
		Carrying value at beginning				2020 Carrying value at end of
		of year	Additions	Disposals	Depreciation	year
Owned assets
Motor vehicles		83,976		- -	(83,975)	1
Furniture and fittings		15,863		- -	(5,462)	10,401
		99,839		- -	(89,437)	10,402

4. Loan to shareholder

AG Lehmann	8,334	8,334
	8,334	8,334

The loan is unsecured and interest free with no fixed terms of repayment.

5. Trade and other receivables

Trade debtors	86,166	97,089
Deposits	8,662	8,662
Value Added Tax	-	239
	94,828	105,990

(Registration Number 2015 / 308733 / 07) Financial Statements for the year ended 30 June 2021

Notes to the Annual Financial Statements

Figures in R	2021	2020
6. Cash and cash equivalents
Favourable cash balances
Standard Bank current account	258,608	211,699
Standard Bank Money Market account	990	990
Investec CCM	20	-
	259,618	212,689
7. Share capital
Authorised
10,000 Ordinary shares of no-par value	-	-
Issued
2,000 Ordinary shares of no-par value	686,683	686,683
Share reconciliation
Shares outstanding - beginning of the period	8,000	9,000
Issued	-	(1,000)
Shares outstanding - closing	8,000	8,000
The unissued shares are under the control of the directors until the next annual general meeting.
During the period ended 30 June 2020 a 1, 000 new ordinary no par value shares were issued by converting shareholders' loan accounts into equity pro-rata to the current shareholding. Issue price per ordinary share was calculated at R566.68.
8. Trade and other payables
Trade creditors	1	23,041
Value Added Tax	46,764	-
	46,765	23,041
9. Revenue
An analysis of revenue is as follows:
Commission received	-	482,917
Disposal of raw material income	325,802	-
Registration and field trial income	540,400	-
Sales - exports	584,900	-
Seed treatment services	180,169	-
	1,631,271	482,917

(Registration Number 2015 / 308733 / 07)

Financial Statements for the year ended 30 June 2021

Notes to the Annual Financial Statements

Figures in R	2021	2020
10. Other Income
Profit on foreign exchange	-	1,075
11. Profit before tax
The following items have been recognised as expenses (income) in determining profit before tax:
Depreciation - Tangible assets	12,707	89,437
Operating lease on premises - contractual obligation	108,028	106,485
	120,735	195,922
12. Finance costs
Interest on loan from shareholder	-	7,059
	-	7,059
13. Income tax expense
No provision has been made for tax as the company has no taxable income. The estimated tax loss available for set off against future taxable income amounts to R335,205.	-	-

14. Events after the balance sheet date

No events occurred between 30 June 2021 and the date the directors approved the financial statements that would have a material impact on the results as disclosed in the financial statements as set out on pages 7 to 16 or the continued existence of the company as a going concern.

(Registration Number 2015 / 308733 / 07)

Financial Statements for the year ended 30 June 2021

Notes to the Annual Financial Statements

Figures in R	2021	2020

15. Financial instruments

The company has classified its financial assets in the following categories:

	Fair value through profit	Debt instruments at	Equity
	loss	amortised cost	instruments	Total
2021
Non-current financial assets
Loan to shareholder (refer note 4)		- 8,334	-	8,334
Current financial assets
Trade and other receivables (refer note 5)		- 94,828	-	94,828
Cash and cash equivalents (refer note 6)		- 259,618	-	259,618

2020	Fair value through profit loss	Debt instruments at amortised cost	Equity instruments	Total
Non-current financial assets
Loan to shareholder (refer note 4)	-	8,334	-	8,334
Current financial assets
Trade and other receivables (refer note 5)		- 105,751	-	105,751
Cash and cash equivalents (refer note 6)	-	212,689	-	212,689

The company has classified its financial liabilities in the following categories

	Fair value through profit	Amortised
	loss	impairment	cost	Total
2021
Current financial liabilities
Trade and other payables (refer note 8)	-	-	1	1
PAYE liability	-	-	35,706	35,706

2020	Fair value through profit loss	Loan commitments at cost less impairment	Amortised cost	Total
Current financial liabilities
Trade and other payables (refer note 8)	-	-	23,041	23,041

16. Approval of annual financial statements

These financial statements were approved by the board of directors and authorised for issue on 31 August 2021.

(Registration Number 2015 / 308733 / 07)

Financial Statements for the year ended 30 June 2021

Detailed Income Statement

Figures in R	2021	2020
Gross Revenue
Commission received	-	482,917
Disposal of raw material income	325,802	-
Registration and field trial income	540,400	-
Sales - exports	584,900	-
Seed treatment services	180,169	-
	1,631,271	482,917
Cost of Sales
Cost of sales - exports	512,355	-
	512,355	-
Gross Profit	1,118,916	482,917
Other Income
Investment income	1,566	-
Profit on foreign exchange	-	1,075
	1,566	1,075
	1,120,482	483,992
Expenditure
Accounting fees	65,500	57,975
Bank charges	4,038	3,332
Computer expenses	3,522	3,268
Consulting fees	-	52,474
Depreciation - Tangible assets	12,707	89,437
Electricity and water	14,969	17,015
Field and Greenhouse trials	309,710	393,534
Finance costs	-	7,059
Insurance	17,028	28,050
Lease rental on operating lease	108,028	106,485
Legal expense	-	1,891
Logistics: Samples and others	(683)	56,697
Loss on foreign exchange	7,390	-
Marketing	212	4,348
Motor vehicle expense	3,573	2,011
Recruitment fees	180,000	-
Reviewer's remuneration	9,000	8,500
SABO Membership fees	-	5,000
Salaries	310,305	-
Secretarial fees	150	100
Telephone and internet	17,528	13,364
Travel - local and accommodation	26,687	-
Travel - overseas	9,225	-
	1,098,889	850,540
Profit / (loss) for the year	21,593	(366,548)

(Registration Number 2015 / 308733 / 07) Financial Statements for the year ended 30 June 2021

Income Tax Computation

Figures in R	Add Back	Deduct	2021	2020
Profit / (loss) before tax			21,593	(366,548)
Wear and tear		12,707		(89,437)
Depreciation per income statement	12,707			89,437
Forex loss - unrealised	11,709			2,812
Sec 23M: Recoupment of interest				55,178
	24,416	12,707	11,709	57,990
Computed income / (loss) for the year			33,302	(308,558)
Assessed loss brought forward			(368,507)	(59,949)
Computed loss before capital gain / (loss)			(335,205)	(368,507)