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Reporte Anual 2015
La Plantación de Cacao más
Importante del Mundo…
The World’s Premier Cacao Estate Emerges…
... En Asociación con la Comunidad.
…In Partnership with the Community.
CCN 51 (Vintage 2013 Plantings / Siembra del 2013)
CONTENIDO
Company & Market overview
Resumen de la Compañía y del Mercado
Small Farmer Out-Grower Programme (PAPEC)
Programa de Alianza de Producción Estratégica de Cacao (PAPEC)
DIRECTORS’ PROFILE
Perfil DE LOS DIRECTORES
Corporate Information
INFORMACIÓN CORPORATIVA
Chairman’s Statement
DECLARACIÓN DEL PRESIDENTE
Annual Financial Statements
ESTADOS FINANCIEROS ANUALES
Independent auditors’ report
INFORME INDEPENDIENTE DEL AUDITOR
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ESTADOS DE LA SITUACIÓN FINANCIERA CONSOLIDADOS
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
ESTADOS DE RESULTADOS INTEGRALES CONSOLIDADOS
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
ESTADOS DE CAMBIOS EN EL PATRIMONIO NETO CONSOLIDADOS
CONSOLIDATED STATEMENTS OF CASH FLOWS
ESTADOS DE FLUJOS DE EFECTIVO CONSOLIDADOS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTAS A LOS ESTADOS FINANCIEROS CONSOLIDADOS
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The Company at a Glance…
Una Mirada General de la Compañía...
3. Proper Field Density
4.TREE pruning
The Company has over 1,800 hectares planted
in the corporate estate and small farmer
programme (PAPEC). UCL is the world’s largest
cacao estate investment ever under-taken in
recent decades.
Cacao is indigenous and thrives in the local
climate due to perfect rainfall and high sunlight
hours. The area is protected from climate change
or oceanic weather patterns by the Andes
mountain barrier.
Industry-leading specialists and agronomists who
have achieved output of 2.5 tonnes of cacao per
hectare previously. The Board of Directors has
built and and sold natural resources assets across
emerging markets.
La Compañía posee más de 1,800 hectáreas
hectáreas sembradas en la plantación corporativa
y en el Programa de Pequeños Agricultores
(PAPEC). UCL es la inversión de cacao más
grande del mundo en las últimas décadas.
7. Transport
El cacao es originario de la zona y crece en el
clima local debido a la lluvia perfecta y mayores
horas de luz solar. La zona está protegida contra
el cambio climático o los patrones climáticos
oceánicos por la barrera montañosa de los Andes.
Especialistas líderes en la industria y agrónomos
quienes han alcanzado la producción de
2.5 toneladas por hectárea de cacao previamente.
El Directorio ha desarrollado y vendido activos de
recursos naturales en los mercados emergentes.
8. Purchase by Grinders
Título
Ownership of freehold, agriculturally titled land
of 4,000 ha. An additional 12,000 ha are under
application from the government’s land privatization
11. Chocolate making
programme. This landbank provides opportunity to
expand the operations for years to come.
Over US$25,000,000 of invested capital to
develop the estates and small farmer programme
(PAPEC). Substantial equity capital invested
provides a stable platform for further incremental
growth.
Peru is a stable, free-market economy rated
“Investment Grade” by Moody’s and S&P.
Numerous local advantages including zero
export tax and zero corporate income tax on
cacao production.
La propiedad de dominio absoluto de
4,000 ha de terreno titulado para uso agrícola.
Adicionalmente, 12,000 ha han sido solicitadas bajo
el programa de privatización de tierras del gobierno.
Esta reserva de terreno ofrece la oportunidad de
expandir las operaciones en los próximos años.
Más de US$25,000,000 de capital invertido
para desarrollar la plantación y el Programa
de Pequeños Agricultores (PAPEC). Un nivel
considerable de capital social invertido
proporciona una plataforma estable para mayor
crecimiento.
Perú tiene una economía estable, de libre
mercado, calificado como “grado de inversión”
por Moody’s y S&P. Numerosas ventajas locales,
incluyendo cero impuestos a la exportación y
el cero impuesto a la renta corporativa para la
producción de cacao.
Rapid Growth in Planted Area / Rápido Crecimiento del Área Sembrada
2,000
Total Hectares Planted
1,656
1,837
1,500
A strong platform that can be scaled for future growth.
1,000
Es un logro sin precedentes en la industria del cacao
mundial alcanzar más de 1,800 hectáreas plantadas
en menos de tres años.
527
500
0
Unprecedented in the global cacao industry to achieve
over 1,800 hectares planted in less than three years.
29
Corporate
PAPEC Small Farmer
Una plataforma sólida que se puede escalar para el
crecimiento futuro.
Reporte Anual 2015
1
Cacao is a Non-Substitutable, Niche Consumer Food Ingredient
El Cacao es un Ingrediente No Sustituible, Nicho de Consumidores
4.0m x $3,000 = $12bn
Tonnes of Cacao Produced (2016 E)
Toneladas de Cacao Producidas
$100bn
Current Price per Tonne
Actual Precio Por Tonelada
Value of Cacao Grown per Annum
Valor de Cacao Cultivado por Año
Global Chocoate Confectionary Market Del Mercado Global de Chocolate para
of which 50% is Controlled by 7 Food Repostería, el 50% está Controlado
por 7 Compañías de Comida
Companies
Demand has Risen from 1.5m Tonnes (1980) to 4.2m Tonnes this Year — CAGR 2.8%
over 36 Years
There is no substitute for the cacao bean. Rising emerging market incomes, particularly in Asia, and
consumer preferences for high cacao content bars in western markets continue to drive demand higher.
La Demanda se Ha Incrementado de 1.5mm toneladas (1980) a 4.2mm Toneladas
este Año — Tasa Compuesta de Crecimiento Anual de 2.8% en los últimos 36 años
No hay sustituto para el cacao. El incremento de los ingresos de los mercados emergentes, particularmente
en Asia, y las preferencias de los consumidores por barras de chocolate de alto contenido de cacao en los
mercados del occidente continúa llevando la demanda a puntos más elevados.
Global Supply has been Contracting Since 2011 (4.3m Tonnes) to an Estimated 4.0m
Tonnes this Year — 7% Total Reduction over 5 Years
Unprecedented “plateauing” of global production has supported the market price of cacao over the last five
years despite a general commodity rout.
El Suministro Global se ha Contraído desde el Año 2011 (4.3mm Toneladas) a un Estimado
de 4.0mm Toneladas este Año — Una Reducción Total del 7% en los últimos 5 Años
El estancamiento sin precedente de la producción global ha sustentado el precio de mercado del cacao en
los últimos cinco años a pesar de la tendencia general pésima de los commodities.
Cacao Price Has Steadily Risen since 2000 Reflecting a Lack of Upstream Investment...
El Precio del Cacao se ha Incrementado Sostenidamente desde el Año 2000, Reflejando la Escasa
Inversión para su Explotación...
A pesar de una caída de los precios de los commodities en los últimos cinco
años, el precio del cacao se ha mantenido en los niveles máximos de los últimos
cinco años debido a la contracción de la oferta y la demanda creciente.
500
500
450
450
400
400
Price Index
Price Index
Despite a collapse in commodity prices over the
last five years, cacao price has remained at five-year
highs due to shrinking supply and rising demand.
350
300
250
200
350
200
100
100
50
50
Cacao
Cacao
Price
Price
Index
Index
FAO
FAO
Food
Food
Price
Price
Index
Index
Bloomberg
Commodity
Index
Cacao
Price Index
Reporte Anual 2015
8.25%
178
3.55%
94
-.037%
250
150
2
370
300
150
modity
mmodity
Index
Index
16 Year CAGR
Bloomberg
Commodity
Index
FAO Food
Price Index
Cacao Price Index
United Cacao’s Peruvian Location Offers Numerous Advantages...
La Ubicación de United Cacao en el Perú Ofrece Numerosas Ventajas...
Cacao production has high geographic barriers to
entry and only a very limited area of the Earth’s surface
has suitable climate and rainfall patterns for this crop.
It is projected that by 2050, most of the current West
African cacao growing zone may become unsuitable for
production due to decreasing rainfall patterns. All three
of the world’s largest producers (Cote d’Ivoire, Ghana
& Indonesia) are contracting for the 2016 growing
season. In particular, Indonesia production continues to
struggle as it has been declining annually since 2005. It
is expected that Ecuador will soon overtake Indonesia
as the world’s third largest producer; this evidences the
rising importance of Latin America as a stable and key
production location. Peru, however, offers a superior
growing zone for cacao when compared to Ecuador.
Peru
Ecuador
Cote D’Ivoire
Ghana
Indonesia
85,000
220,000
1.65m
696,000
320,000
#8 / 2%
#4 / 5%
#1 / 40%
#2 / 17%
#3 / 8%
Cacao Production 2016
(ICCO Estimate in tonnes)
Market Position /
% Market Share
La producción de cacao tiene altas barreras de acceso geográficas ya
que sólo un área muy limitada de la superficie de la Tierra cuenta con
un clima apropiado con precipitaciones adecuadas para su cultivo. Se
proyecta que para el año 2050, la mayor parte de la zona de cultivo
de cacao del África Occidental actual, llegue a ser inadecuado para la
producción, debido a los patrones decrecientes de lluvia. Tres de los
mayores productores del mundo (Costa de Marfil, Ghana e Indonesia)
están contrayendo de crecimiento para la temporada de siembra del
2016. En particular, Indonesia continúa enfrentando dificultades, ya
que la producción ha ido disminuyendo cada año desde el 2005.
Se espera que Ecuador pronto superará a Indonesia como el tercer
mayor productor del mundo lo cual pone de manifiesto la creciente
importancia de América Latina como un lugar de producción clave y
estable. Sin embargo, Perú ofrece numerosas zonas de crecimiento
superiores para el cacao, en comparación con Ecuador.
Freehold Land
Investment Grade Country
Tax Free Production of Cacao
Tax Free Cacao Exports
Corporate Production Model
High Yield Clones Availability
(CCN 51 / Sacha Gold)
Positive 5 Year Production Trend
The World’s 2nd & 3rd Largest Cacao Producers are in Structural Year-on-Year Decline...
Los 2° y 3° Productores de Cacao Más Grandes del Mundo Están en Declive Año tras Año…
West African production peaked in 2011; the large decreases in Ghanian production have not been off-set by Cote d’Ivoire’s
growth. Indonesia also suffers from decreasing production year-on-year after peaking in 2005. Both the Asian and African growing
zones suffer from: (i) poor land titling regimes which restrict corporate and small holder investment; (ii) punitive export taxes; (iii)
competition from other crops which are more suitable for those particular growing zones such as palm oil or cashews in the case
of Ghana; (iv) limited investment or professional cacao expertise.
000's Tonnes of Cacao Production
1200
Ghana Peaked in 2011
1000
800
600
400
Indonesia Peaked in 2005
200
Malaysia Peaked in 1989
0
10 years before
Peak
Malaysia
Indonesia
10 years after
Ghana
La producción de África Occidental alcanzó su punto máximo
en 2011. Las grandes disminuciones en la producción de
Ghana no han sido compensadas por el crecimiento de Costa
de Marfil. Indonesia también sufre de la disminución de la
producción año a año tras alcanzar un máximo en 2005.
Las zonas de cultivo que se encuentran en Asia y África
sufren de: (i) escasos regímenes de titulación de tierras que
limitan la inversión empresarial y la obtención de inversiones
para pequeños agricultores; (ii) excesivos impuestos a la
exportación; (iii) la competencia de otros cultivos que son
más adecuados para aquellas zonas particulares, tales como el
aceite de palma o de nueces de la India en el caso de Ghana;
(iv) una inversión o experiencia profesional de cacao limitada.
Reporte Anual 2015
3
UCL Follows Global Best Practice
Las5. Harvesting
Mejores Prácticas Globales
para Mejorar la Productividad
6. fermenattion
7. Transport
9. Roasting
3m
3m
4
Reporte Anual 2015
HIGH YIELDING MATERIAL
Material de alto rendimiento
CCN 51, originally from Ecuador, is a
proven planting material in the Peruvian
and Ecuadorian growing zones for
several decades. Sacha Gold, similarly
from Ecuador, is revolutionizing the
production of fine flavour cacao as it
exhibits the productivity of CCN 51 but
with distinct fine flavour characteristics.
CCN51, originario de Ecuador, es un material de
rendimiento probado en las zonas de siembra en el
Perú y Ecuador donde se ha cultivado desde hace
varias décadas. Sacha Gold, también proveniente
de Ecuador, está revolucionando la producción
del cacao de sabor fino, ya que posee la misma
productividad que CCN51 pero con diferentes
características de sabor fino.
GRAFTING
Injertación
Grafted cacao
results in superior long-term
10. Pressing
productivity. A local “patron” seedling is
generally utilized as the root stock in the
nursery and a specialty clonal material (such
as CCN 51 or Sacha Gold) is grafted on to this
base material.
El cacao
injertadomaking
genera una mayor
11. Chocolate
productividad a largo plazo. Un patrón local
se utiliza generalmente como el rizoma en el
vivero y un material clocado (como CCN51
o Sacha Gold) se injerta en esta material
de base.
AGRO – FORESTRY MODEL
Modelos Agro – forestales
Cacao is an indigenous tree species to Peru
and falls under the agro-forest regulations in
Peru. The installation of native tree species
in the estate is an integral part of the cacao
planting programme.
El cacao es un árbol originario del Perú y
se encuentra bajo las regulaciones agro
– forestales del Perú. La instalación de las
especies nativas de árboles en la plantación es
una parte integral del programa de siembra
de cacao.
ETHICAL LABOUR PRACTICE
Prácticas Éticas Laborales
Consumers will eventually demand “childlabour free” cacao, no different than in
the textile or electronics industry. The vast
majority of cacao sourced from West Africa
involves child labour as able-bodied adults
seek alternative forms of employment
- rising child labour in West Africa is
a symptom of an industry in decline.
http://www.childlaborcocoa.org
Los consumidores eventualmente demandarán
un cacao “libre de explotación infantil”, al igual
que en la industria de la ropa o la electrónica.
La gran mayoría de cacao procedente de
África occidental involucra el trabajo infantil
ya que adultos aptos para el trabajo buscan
formas alternativas de empleo. El incremento
de trabajo infantil en África Occidental es
un síntoma de una industria en declive.
http://www.childlaborcocoa.org
HIGH DENSITY PLANTING
Alta densidad en la siembra
In Peru, density of 1,111 cacao trees per
hectare is proven to achieve 2.5 tonnes of
productivity per hectare at maturity. The
Company is experimenting with even higher
density plantings.
En Perú, la densidad de 1,111 árboles de
cacao por hectárea permite alcanzar una
productividad de 2.5 toneladas de cacao
por hectárea en el período de madurez.
La compañía está experimentando con
densidades aún más altas.
Installed Ground Cover / Cobertura de suelo instalada
Installed ground cover is one of the many field enhancements developed by the senior estate managers.
La cobertura de suelo instalada sobre el campo es una de las tantas mejoras realizadas por nuestros gerentes de plantación.
Sacha Gold Fine Flavor Cacao / Sacha Gold Cacao de Sabor Fino
Given consumer preferences for single-origin, fine flavour chocolate, the Company has imported and successfully propogated the high yield
Sacha Gold cacao from Ecuador. It is expected this variety will comprise 40% of the total planted area.
Teniendo en cuenta las preferencias del consumidor de un chocolate de un solo origen, de fino sabor, la Compañia ha importado y propagado
exitosamente el cacao de alto rendimiento Sacha Gold proveniente de Ecuador. Se espera que esta variedad abarque el 40% del área total plantada.
Reporte Anual 2015
5
Small Farmer Out-Grower Programme (PAPEC)
Programa de Alianza de Producción Estratégica de Cacao (PAPEC)
PAPEC is an agricultural micro-finance program established by
United Cacao to allow small farmers in surrounding communities
around our estate to grow cacao and bring themselves out of
poverty. Inaugurated on 17 April 2015, the PAPEC programme
has 194 hectares planted as of June 2016; this is expected to rise
to 400 hectares by the end of 2017. Peruvians in the Amazon
suffer from horrific levels of poverty due to the lack of formal
employment and access to capital. This program provides
for tangible opportunity for impoverished Peruvians for selfempowerment. Under the PAPEC program, the Company provides
technical assistance and training as well as supplies and fertilizers
to qualified small farmers. These agricultural credits are not a
donation but documented as loans which are ultimately repaid
from future cacao harvests, which the Company undertakes to
purchase in order to ensure top quality dried, fermented beans
for the export market.
PAPEC es un programa de micro-financiamiento agrícola
establecido por United Cacao para permitir que los pequeños agricultores en las comunidades en áreas cercanas a nuestra finca de cacao puedan sembrar
cacao y salir de la pobreza. Se inauguró el 17 de abril de 2015, y el programa de préstamos PAPEC tenía 194 hectáreas de cacao sembradas con 147
participantes al final de 2015. En 2016, se espera plantar 113 hectáreas adicionales y expandir el programa a 400 hectáreas en total para finales del 2017. Los
peruanos en el Amazonas sufren de terribles niveles de pobreza debido a la falta de empleo formal y el acceso al capital. Este programa prevé la oportunidad
tangible para los peruanos empobrecidos para el auto-empoderamiento. En el marco del PAPEC, la Compañía ofrece asistencia técnica y capacitación,
así como abonos y fertilizantes a los pequeños agricultores calificados. Estos créditos agrícolas no son donaciones, sino préstamos que finalmente serán
reembolsados a través de futuras cosechas de cacao que la empresa se compromete a comprar con el fin de garantizar granos secos y fermentados de alta
calidad para el mercado de exportación.
There is no other agricultural company or social enterprises of our size and scale in the Iquitos area. The Company’s presence has invigorated the community
and provided stable employment. Anniversary of Fernando Lores District - 6 September 2015
No hay ninguna otra empresa agrícola o empresa social de nuestro tamaño y escala en Iquitos. La presencia de la empresa ha mejorado la comunidad y ha
proporcionado empleo estable. Aniversario del Distrito de Fernando Lores - 6 de septiembre del 2015
The PAPEC program provides tangible opportunities for impoverished
Peruvians for self-empowerment. 147 farmers have planted 194 hectares
of their land with cacao through the PAPEC micro-financing program.
The Company has invested in over 25 community building and strengthening
activities throughout the year. These include investments in community sports
activities, education and cultural events for children, freshwater and sanitation
infrastructure, flood assistance, Christmas celebrations and many more.
El programa PAPEC ofrece oportunidadades tangibles para que
peruanos en situación de pobreza puedan contar con un medio de autoempoderamiento. 147 agricultores han sembrado 194 hectareas con cacao
en terrenos de su propiedad a través del Programa de micro-financiación
PAPEC.
La Compañía ha invertido en mas de 25 activitidades que fortalecen a
las comunidades durante todo el año. Éstas actividades incluyen eventos
deportivos, eventos culturales y educativos para los niños, infraestructura para
acceso a agua potable, asistencia para inundaciones, celebraciones de Navidad
y muchos más.
6
Reporte Anual 2015
Meet a Few Members of the Community / Conoce a los Agricultores
GEORGINA COTRINA LIRA
Village / Comunidad: Tamshiyacu
Tito Santillan Machoa
Village / Comunidad: Nuevo Tarapaca
RODBER INUMA MORI
Village / Comunidad: Centro Industrial
Ms. Georgina Cotrina Lira is a resident of
Tamshiyacu. She is 65 years old and there
are two members in her household. Before
the PAPEC program she worked cultivating
humarí fruit. Now she is cultivating
one hectare of cacao. Georgina hopes she
can plant an additional four hectares of her
land with cacao.
Mr. Machoa is a 47 year old native to
Nuevo Tarapaca where he lives with his
family of seven. He has always worked
growing yucca, plantains and vegetables
but now that he is a beneficiary of PAPEC
he has a one hectare cacao parcel.
Mr. Rodber Mori is from the community
of Centro Industrial where he lives with
his family composed of four. Additionally
he has three other children. Before PAPEC,
he worked cultivating yucca, plantains,
pineapple and passion fruit. He has now
planted two hectares of cacao.
La señora Georgina Cotrina Lira es residente
de Tamshiyacu. Ella tiene 65 años de edad
y vive con dos miembros de su familia
en su hogar. Antes del programa PAPEC,
ella trabajaba cultivando la fruta humarí.
Ahora ella cultiva una hectárea de cacao.
Georgina espera poder sembrar cacao en
cuatro hectáreas adicionales de su terreno.
El señor Machoa tiene 47 años de edad y
es nativo de Nuevo Tarapacá, donde vive
con 7 miembros de su familia. Él siempre
ha trabajado sembrando yuca, plátanos y
vegetales pero ahora que es beneficiario del
PAPEC, él tiene una hectárea de cacao.
El señor Rodber Mori es de la comunidad
Centro Industrial, donde vive con su
familia conformada por cuatro integrantes.
Adicionalmente, él tiene 3 hijos. Antes del
programa PAPEC, trabajaba cultivando
yuca, plátanos, piña y maracuyá. Él ha
plantado 2 hectáreas de cacao a través del
PAPEC.
Palmira Ayala Cotrina
Village / Comunidad: Collpa
Armando Fasabi Diaz
Village / Comunidad: Santa Cruz
Cesar Augusto Icomena Navarro
Village / Comunidad: Nuevo Valentin
Ms. Cotrina is a 48 year old resident of
Collpa where she lives with her family
composed of four. To support her family,
she has small businesses including
selling food, making wood charcoal and
cultivating humari fruit. She has planted
one hectare of cacao and hopes to make
this her full-time activity.
Mr. Diaz is a 16 year resident of Santa Cruz
and is married with six children. For many
years, he worked cultivating yucca and
plantains while his wife worked making
handcrafts. Now that he is in PAPEC, he has
planted one hectare of cacao and wishes to
leave a better type of work for his children.
Mr. Navarro is 74 years old and has lived in
Nuevo Valentin for over 31 years. He is the
father of two grown children and lives with
his family on a household composed of
four. He has planted one hectare of cacao
through PAPEC and hopes to improve his
life and be able to afford necessities such
as medication.
La señora Cotrina tiene 48 años, es residente
de Collpa, donde vive con 4 miembros de
su familia. A diario, ella se dedica a diversas
actividades para sostener a su familia, como
vender comida, fabricar carbón vegetal de
madera y cultivar la fruta humarí. Ella ha
plantado una hectárea de cacao.
El señor Díaz es residente de Santa Cruz
desde hace 16 años, está casado y tiene
6 hijos. Por muchos años, él ha trabajado
cultivando yuca y plátanos, mientras que
su esposa trabajaba haciendo artesanías.
Ahora que forma parte del PAPEC, ha
plantado una hectárea de cacao y desea
dejar mejores oportunidades laborales para
sus hijos.
El señor Navarro tiene 74 años y ha vivido
en Nuevo Valentín por más de 31 años.
Él tiene dos hijos adultos y vive con 4
miembros de su familia. Él ha plantado
una hectárea de cacao a través del PAPEC
y espera mejorar su calidad de vida y ser
capaz de solventar sus necesidades, como
sus medicinas.
Reporte Anual 2015
7
Location Map & Population Survey
Mapa de Localización y Encuesta a la Población
72
78
Manta
Puerto
Leguízamo
Quito
R ío Nap
Riobamba
P
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as taza
am
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Rí
Paita
Macará
R ío
Pu
tu
Loja
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Na
La Pedrera
purá
R io J a
Ama z o
Iquitos
R ío M
a ra
A ma z o n
Leticia
Tabatinga
ñó n
ya
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Piura
n
varí
R ío Ya
a ri
R io J a v
Nauta
Sullana
Vila Bittencourt
po
R io Iç á
S a ntia go
Talara
R
Cuenca
Machala
Tumbes
0
R ío C
Puerto
a qu
e tá
Santander
Cacao Indigenous
Growing Zone /
(Zona nativa de
crecimiento de cacao)
Rí
ECUADOR
Guayaquil
Pantoja
yo
ma
Quevedo
Portoviejo Ambato
COLOMBIA
o
Nuevo
Rocafuerte
R ío
Population / Población:
422,000 people
r
ve s)
Ri na
on zo
az ma
Am ío A
(R
Iquitos
Santo Domingo
de los Colorados
Equator
0
Yurimaguas ío U
R
Moyobamba
6
Chachapoyas
ca
6
Tarapoto
Chiclayo
R ío H u
ag
a ll
R ío
Trujillo Salaverry
R io J uruá
PERU
Cajamarca
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Santa
Lucia
Cruzeiro
do Sul
Pucallpa
Ma
ra
Tingo
María
a ya
Ap
urím
P an
-
Hig
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BOLIVIA
Puno
fe rry
Lago
Titicaca
way
Arequipa
Desaguadero Guaqui
De
200 Miles
sa
Toquepala
g ua d e r
o
Tacna
Oruro
Transverse Mercator Projection, CM 75 W
Arica
CHILE
Centro Industrial
r
ve s)
Ri na
on zo
az ma
Am ío A
(R
Panguana I
18 de Febrero
Company
Project Area /
Área plantación
de la compañía
Collpa
Tamshiyacu
San Felipe
San Rafael
Santa Ana I
Santa Ana II
Nuevo Tarapaca
Magdalena
Santa Rosa de Shato
Pachacutec
Nuevo Horizonte
Nuevo San Martin
Nuevo San Juan
Alianza
Puerto Inca
Triunfo
Buenos Aires
Monte Sinai
Nuevo Valentín
Constancia
Chavin
er
on Riv
Amaz azonas)
m
(Río A
Serafin Filomeno
Punga
Rivera Alta
Santa Cruz
Canaan
Esperanza
San Carlos
San Juan de Cunshico
Legend / Leyenda
Villages with PAPEC / Comunidades con PAPEC
Villages / Comunidades
State Capital of Loreto / Capital de Loreto
Buena Vista
8
Reporte Anual 2015
Chino
18
Base 803152AI (G00212) 1-06
Gran Perú
Huaysi
Lago
Poopó
72
Panguana II
Terrabona
La Paz
Viacha
R ío
Moquegua
Matarani
78
D io s
Rurrenabaque
ig
y
mer
ican
200 Kilometers
100
H
a
hw
0
18
an
Juliaca
-A
de
12
Cusco
ac
Am
er
ic
Pan
re
Machupicchu
(ruins)
Ilo
Nuevo Jerusalen
ad
e ni
R ío
M
Puerto
Maldonado
Nazca
Road
Road under construction
100
Cobija
Rí
ba
ba m
Abancay
Railroad
0
Assis Brasil
Manú
Ica
National capital
s
rú
o
U ru
Quillabamba
Ayacucho
Chincha
Alta
Pisco
San Martín
Pu
R ío
o
ar
Huancavelica
United OCEAN
Cacao Estates
International boundary
Alto
Iñapari
MTarma
a nt
Huancayo
SOUTH
Peru
PACIFIC
R ío
R ío B
R ío
ay
hw
Monte Verde
La Oroya
Callao
Libertad Aucayo
Rio
Branco
Atalaya
H ig
Rosario Aucayo
s
P uru
li
an
Goyllarisquizga Cerro
de Pasco
Lima
Unión-Qbda Aucayo
R io
Huánuco
Huacho
12
BRAZIL
Uc
e ri c
-Am
P an
Huaraz
R ío
n
ñó
Chimbote
Small Farmer Parcels /
Parcelas de Pequeños Agricultores
43 Communities Live Around the Company’s Estate
43 Comunidades Viven Alrededor de la Plantación de la Compañía
The Company has undertaken a detailed social survey
in the area of its plantations and identified forty three
communities with over 11,900 residents. It is the
Company’s philosophy to improve the lives of those
around our operating area.
As of end June 2016, 147 villagers are participating in the
PAPEC program and have currently planted 194 hectares.
We intend to increase this to a total of 400 hectares by
end 2017.
No
Comunidad
Estimated
Population /
Población
Estimada
PAPEC
Participants /
Participantes
de PAPEC
La Compañía ha realizado una encuesta social detallada en la zona de influencia
de sus plantaciones y ha identificado cuarenta y tres comunidades con más de
11,900 pobladores. Es la filosofía de la Compañía mejorar las condiciones de
vida de los pobladores que viven alrededor de su zona de operaciones.
A finales de junio de 2016, 147 comunidades están participando en el
programa PAPEC y actualmente se han sembrado 194 hectáreas. Tenemos la
intención de aumentar esta cifra a un total de 400 hectáreas hacia finales del
año 2017.
PAPEC Hectares
Planted /
Hectáreas
Plantadas de
PAPEC
1
18 de Febrero
48
-
-
2
Alianza
119
-
1 Ha
3
Buena Vista
150
1
4
Buenos Aires
80
-
-
5
Canaan
60
9
12 Ha
6
Centro Industrial
389
16
27 Ha
7
Chavin
80
-
-
8
Chino
180
-
-
9
Collpa
80
3
3 Ha
10
Constancia
275
-
-
11
Esperanza
350
3
4 Ha
12
Gran Perú
376
-
-
13
Huaysi
40
-
-
14
Libertad Aucayo
86
-
-
15
Magdalena
80
-
-
16
Monte Sinai
75
-
-
17
Monte Verde
18
Nuevo Horizonte
60
-
-
130
-
-
19
Nuevo Jerusalen
80
10
12 Ha
20
Nuevo San Juan
70
4
4 Ha
21
Nuevo San Martin
70
-
-
22
Nuevo Tarapaca
75
12
13 Ha
23
Nuevo Valentín
280
9
12 Ha
24
Pachacutec
90
-
-
25
Panguana I
234
-
-
26
Panguana II
556
6
7 Ha
27
Puerto Inca
70
-
7 Ha
28
Punga
29
Rivera Alta
30
Rosario Aucayo
70
7
150
-
-
1,200
-
-
31
San Carlos
160
-
-
32
San Felipe
45
-
-
33
San Juan de Cunshico
30
5
10 Ha
34
San Rafael
65
-
6 Ha
35
Santa Ana I
380
5
36
Santa Ana II
70
-
-
37
Santa Cruz
80
8
8 Ha
5 Ha
38
Santa Rosa de Shato
39
Serafin Filomeno
40
Tamshiyacu
41
Terrabona
25
4
115
-
-
4,638
22
34 Ha
90
23
29 Ha
42
Triunfo
140
-
-
43
Unión-Qbda Aucayo
490
-
-
11,931
147
194 Ha
Total
Esperanza
Panguana II
Tamshiyacu
Magdalena
Reporte Anual 2015
9
Directors’ Profile / Perfíl de Directores
Directors’ Profile
10 Reporte Anual 2015
Perfíl de Directores
Dennis Nicholas Melka
Age 43, he is Founder, Chairman and Chief
Executive Officer of United Cacao Limited SEZC.
Dennis Nicholas Melka
43 años, es el Fundador, Presidente Ejecutivo y Director
Ejecutivo Conjunto de United Cacao Limited SEZC.
Previously, Mr Melka was the Co-Founder, Executive
Director and Joint Chief Executive Officer of Asian
Plantations Limited, a plantation company on the
London Stock Exchange’s Alternative Investment
Market (AIM). Asian Plantations Limited was
admitted to AIM in November 2009 at 75 pence
per share and was subsequently purchased by
a strategic acquirer for 220 pence per share in
October 2014; during this time period, the market
capitalization grew from £22m (at Admission) to
£110 m at the time of acquisition. Since 2006,
he has co-founded and launched companies in
agriculture, consumer finance, hotels and mobile
telecommunications. Mr Melka started his career
as an investment banker with Credit Suisse First
Boston from 1995 to 2005 in New York, London,
Prague, Singapore and Bangkok.
Mr Melka
graduated magna cum laude from the Edmund
A. Walsh School of Foreign Service, Georgetown
University in Washington D.C. He is a Czech
citizen and resident in the Cayman Islands.
Previamente, el señor Melka fue el co-fundador,
Presidente Ejecutivo y Director Ejecutivo conjunto de
Asian Plantations Limited, una compañía agroindustrial
cotizada en la Bolsa de Valores Alternativa de Londres
(AIM). Asian Plantations Limited fue admitida en la
AIM en Noviembre de 2009 a 75 peniques por acción
y posteriormente fue comprada por un comprador
estratégico a 220 peniques por acción en Octubre de
2014; durante este periodo de tiempo, la capitalización
del mercado creció de £22 millones (en su admisión) a
£110 millones al momento de la adquisición. Desde el
año 2006, el señor Melka ha co-fundado y emprendido
compañías en agricultura, consumo financiero, hoteles
y telecomunicaciones de teléfonos móviles. El señor
Melka inició su carrera como banquero de inversión
con Credit Suisse First Boston del año 1995 al 2005
en Nueva York, Londres, Praga, Singapur y Bangkok. El
señor Melka se graduó magna cum laude de la escuela
Edmund A. Walsh de Servicio Exterior de la Universidad
de Georgetown, en Washington D.C. Él es ciudadano
Checo y residente en Islas Gran Caimán.
ANTHONY J. KOZUCH
Age 42, he is an Executive Director of United Cacao
Limited SEZC.
ANTHONY J. KOZUCH
42 años, es Director Ejecutivo de United Cacao Limited
SEZC.
Mr. Kozuch was born and raised in Mexico City
and is a native Spanish speaker. Over the last 14
years, Mr. Kozuch has been the Chief Financial
Officer of Communiqué Conferencing, Inc., an
international conferencing services company he
co-founded in 2001. Prior to Communiqué, Mr.
Kozuch served in various channel marketing,
program management, and business development
roles with voice and data providers in the U.S. and
Latin America including Winstar Communications,
Concert and Avantel (MCI’s venture in Mexico).
Mr. Kozuch travels frequently to Central and South
America and is an Adviser for United Oils Limited
SEZC, a developer of palm oil plantation estates
with a land bank in excess of 30,000 hectares.
Mr. Kozuch graduated from the Edmund A. Walsh
School of Foreign Service, Georgetown University
in Washington DC. He is a U.S. citizen and resident.
El señor Kozuch nació y creció en la ciudad de México
y tiene como lengua nativa el español. En los últimos
13 años, el señor Kozuch ha sido el Director Financiero
de la empresa Communiqué Conferencing, Inc., una
compañía internacional de servicios de conferencia
que co-fundó en el año 2001. Antes de formar parte
de Communiqué Conferencing, Inc., el señor Kozuch
trabajó en varios roles de marketing, programas de
gerenciamiento y de desarrollo de negocios con
proveedores de servicios de voz y datos en los EE.UU. y
América Latina, incluyendo Winstar Communications,
Concert y Avantel (un Joint Venture de MCI en
México). El señor Kozuch viaja con frecuencia a
Centro y Sudamerica y es asesor para United Oils
Limited SEZC, un desarrollador de plantaciones de
palma aceitera con una reserva de suelo de más de
30,000 hectáreas. El señor Kozuch se graduó de la
Escuela Edmund A. Walsh de Servicio Exterior de la
Universidad de Georgetown, en Washington D.C. Él
es un ciudadano y residente estadounidense.
Directors’ Profile / Perfíl de Directores
Constantine Gonticas
Age 49, he is a Non Executive Director of United
Cacao Limited SEZC and also a Senior Advisor to
the Blackstone Group since 2012.
Constantine Gonticas
49 años, es Director No Ejecutivo de United Cacao
Limited SEZC y también se desempeña como asesor
experimentado del Grupo Blackstone desde el año 2012.
He is an active investor through Green Square
Capital Limited, his personal investment vehicle.
Previously, from 2004 to 2011, Mr Gonticas
was the Managing Partner of Novator LLP, an
investment company specializing in Central &
Eastern Europe. Whilst at Novator, Constantine
sourced a number of investments, including
PLAY (a Polish mobile telephony company which
is one of the largest ever start-ups in the region),
Netia (Polish fixed line telephony) and Forthnet
(fixed line telephony in Greece). He has served as
Vice Chairman of the Supervisory Board of PLAY
and was also Vice Chairman of the Boards of
Netia and Forthnet. Before Novator, Mr Gonticas
was Head of Investment Banking for Central and
Eastern Europe, Middle East and Africa for Merrill
Lynch and prior to that spent 12 years at Credit
Suisse First Boston. Mr Gonticas has a law degree
from Oxford University. He is a UK citizen and
resident in London.
Es un inversionista activo a través de Green Square Capital
Limited, su vehículo personal de inversión. Previamente,
desde el año 2004 hasta el año 2011, el señor Gonticas
fue el Socio Principal de Novator LLP, una compañía
de inversiones especializada en el Centro y Este de
Europa. Mientras estuvo en Novator, el señor Gonticas
financió una serie de inversiones, incluyendo PLAY (una
compañía Polaca de telefonía móvil, considerada como
una de las más grandes empresas de nueva creación en
la región), Netia (una empresa Polaca de telefonía fija)
y Forthnet (una compañía de telefonía fija en Grecia).
Él ha trabajado como Vicepresidente del Consejo de
Supervisión de PLAY y Vicepresidente de los Directorios
de Netia y Forthnet. Antes de Novator, el señor Gonticas
fue el líder de la banca de inversión en el Centro y Este
de Europa, Medio Oriente y África para Merrill Lynch y
anteriormente a ello, pasó 12 años en Credit Suisse First
Boston. El señor Gonticas es licenciado en Derecho por la
Universidad de Oxford. Es ciudadano del Reino Unido y
residente en Londres.
Roberto Tello
Age 45, he is a Non Executive Director of United
Cacao Limited SEZC. He is also the principal legal
counsel for the Company’s wholly owned operating
subsidiary, Cacao Del Peru Norte SAC, in Iquitos, Peru.
Roberto Tello
45 años, es Director No Ejecutivo de United Cacao Limited
SEZC. También es el asesor legal principal de la subsidiaria
en el Perú, de propiedad íntegra de la Compañía, Cacao del
Perú Norte SAC, en Iquitos, Perú.
As the founding partner of Estudio Juridico Tello
Pereyra Abogados, Mr. Tello advises corporate
clients and municipalities throughout the Peruvian
state of Loreto. Mr. Tello is a frequent lecturer for
legal forums and congresses throughout Latin
America with a specialization in administrative
law. In Peru, Mr. Tello is at the forefront of Peru’s
newly instituted legal procedural code and has
organized training seminars for government
appointed superior justices and prosecutors. He
achieved his law degree from the Universidad
Nacional Mayor de San Marcos and he is the
President of the Council of Arbitration for the
Loreto Chamber of Commerce. Mr Tello is a
Peruvian citizen and resides in Iquitos, Peru.
Como socio fundador del Estudio Jurídico Tello
Pereyra Abogados en Iquitos, el señor Tello asesora
clientes corporativos y municipalidades localizadas
en la Región peruana de Loreto. El señor Tello es un
conferencista frecuente para foros y congresos jurídicos
en toda América Latina, con una especialización en
derecho administrativo. En el Perú, el señor Tello está
a la vanguardia del recientemente instituido código de
procedimientos penales y ha organizado seminarios
de capacitación para jueces y fiscales superiores
nombrados por el Gobierno. El señor Tello obtuvo su
título de abogado en la Universidad Nacional Mayor de
San Marcos y es el Presidente del Consejo de Arbitraje
de la Cámara de Comercio de Loreto. El señor Tello es
ciudadano peruano y reside en Iquitos, Perú.
Reporte Anual 2015 11
Corporate Information / Información Corporativa
Corporate Information / Información Corporativa
Directors / DIRECTORES
Dennis Nicholas Melka
Founder, Executive Chairman and Chief Executive Officer
Fundador, Presidente Ejecutivo y Gerente General
Anthony (“Tony”) John Kozuch
Executive Director
Director Ejecutivo
Brokers / CORREDORES DE BOLSA
Beaufort Securities Ltd
131 Finsbury Pavement
London EC2A 1NT
United Kingdom
Constantine Gonticas
Non-Executive Director
Director No Ejecutivo
Roberto Tello Pereyra
Non-Executive Director
Director No Ejecutivo
Registered Office / OFICINA REGISTRADA
United Cacao Limited SEZC
Codan Trust Company (Cayman) Limited
Cricket Square, Hutchins Drive, PO Box 2681
Grand Cayman, KY1-1111, Cayman Islands
BUSINESS ADDRESS / DOMICILIO CORPORATIVO
United Cacao Limited SEZC
HSBC House
68 West Bay Road, PO Box 10315
Georgetown, KY1-1003
Grand Cayman, Cayman Islands
Company Secretary / SECRETARIO DE LA COMPAÑÍA
Codan Trust Company (Cayman) Limited
Cricket Square, Hutchins Drive, PO Box 2681
Grand Cayman, KY1-1111, Cayman Islands
KALLPA Securities Sociedad Agente de Bolsa S.A.
Jr. Monterosa 233
Oficina 902
Urb. Chacarilla del Estanque
Surco, Lima 33
Peru
Registrars / REGISTRADORES
Computershare Investor Services (Cayman) Limited
The R&H Trust Co. Ltd.
Windward 1, Regatta Office Park
West Bay Road
Grand Cayman, KY1-1103
Cayman Islands
Depositary / DEPOSITARIO
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS13 8AE
United Kingdom
Nominated Adviser / CONSEJERO NOMINADO
CONTACT / CONTACTO
Phone: +1 345 815 2710
Strand Hanson Limited
26 Mount Row, London W1K 3SQ
United Kingdom
Email: [email protected]
Website: www.unitedcacao.com
ISIN: KYG9271M1078
LSE Ticker / Símbolo: CHOC
Auditor / AUDITOR
Paredes, Zaldivar, Burga & Asociados S.Civil.de R.L.
Member of Ernst & Young Global
Av. Víctor Andrés Belaunde 171
San Isidro, Lima 27
Peru
12 Reporte Anual 2015
BVL Ticker / Símbolo: CHOC
Shares Outstanding / Acciones en circulación:
19,171,574 (as of 26 June / al 26 de Junio, 2016)
Chairman’s Statement / Declaración del Presidente
Chairman’s Statement
Declaración del Presidente
Introduction
Introducción
Thank you for being a shareholder, or having an interest, in
Gracias por ser accionista o tener interés de ser accionista en United
United Cacao Limited SEZC (the “Company”). It is with your
Cacao Limited SEZC (La “Compañía”). Con su apoyo hemos creado,
support that we have created, in shortly under three years,
en poco menos de tres años, una de las plantaciones de cacao más
one of the world’s largest cacao estates and are confident
grandes del mundo y estamos seguros que nos convertiremos en el
of becoming the world’s lowest-cost cacao producer as our
productor de cacao de más bajo costo cuando nuestra plantación
estates mature in the years ahead. In an industry plagued by
madure en los próximos años. En una industria plagada por el trabajo
child labour and slavery in West Africa, your Company has
y la esclavitud infantil en el Oeste de África, nuestra Compañía ha
created ethical employment opportunities for over 500 staff in
creado oportunidades de trabajo de forma ética para más de 500
one of the poorest parts of Latin America. Programa Alianza
pobladores en una de las zonas más pobres de Latinoamérica. Nuestro
Producción Estratégica Cacao (“PAPEC”), our small farmer co-
Programa de Alianza de Producción Estratégica de Cacao (“PAPEC”),
operative programme, now involves almost 150 families from
es un proyecto cooperativo de pequeños agricultores que incluye
17 neighbouring communities around the estate.
cerca de 150 familias de 17 comunidades aledañas a la plantación.
As of publication of this statement, your Company:
A la publicación de esta declaración, nuestra Compañía:
• Owns over 3,985 hectares (9,847 acres) hectares of
• Es propietaria de más de 3,985 hectáreas (9,847 acres) de
private, freehold land that is fully zoned and pre-approved
propiedad privada e íntegramente zonificada y pre-aprobada para
for agricultural purposes since 1997 under Legislative
propósitos agrícolas desde el año 1997, según el Decreto Legislativo
Decree 838 approved by the then President, Congress and
838 aprobado por el Presidente del Congreso y el Ministerio de
Ministry of Agriculture;
Agricultura;
• Has over 1,825 hectares (4,509 acres) of cacao planted
• Tiene más de 1,825 hectáreas (4,509 acres) de cacao plantado al
at 31 May 2016 comprising 1,638 hectares of corporate
31 de mayo de 2016, que abarca 1,638 hectáreas de la plantación
estate and 187 hectares of PAPEC. The planting mix of the
corporativa y 187 hectáreas de PAPEC. Aproximadamente la mitad
corporate estate is approximately half fine flavour and half
de la siembra de cacao en la plantación corporativa es cacao fino
CCN 51; however, all the PAPEC plantings are CCN 51.
aromático y la otra mitad, CCN 51; sin embargo, toda la siembra
The trees we plant, approximately 1,111 per hectare, are
efectuada con el PAPEC es de CCN 51. Los árboles que plantamos,
indigenous to the Amazon area and will have a productive
aproximadamente 1,111 por hectárea, son originarios de la Amazonía
life in excess of 40 years.
y tendrán una vida productiva de más de 40 años.
Reporte Anual 2015 13
Chairman’s Statement / Declaración del Presidente
• Has
applied,
via
the
Peruvian
government’s
land
• El 24 de mayo del 2016, la Compañía presentó a través
privatization programme, for a 12,097 hectare (29,892
del programa de privatización de terrenos del Gobierno
acre) extension, on 24 May 2016, which the Company
Peruano, una solicitud por 12,097 hectáreas (29,892 acres) de
expects to be approved in approximately eighteen months
extensión, la cual esperamos sea aprobada en dieciocho meses
time. We believe this increases the strategic attractiveness
aproximadamente. Consideramos que esto incrementará la
of the Company over the long term;
competitividad estratégica de la Compañía a largo plazo.
• Launched an innovative small farmer out-grower financing
programme known as PAPEC in April 2015. PAPEC now
has 187 hectares planted with an additional 13 hectares
expected to be planted in June 2016. For the remainder
of 2016, we expect to plant an additional 100 hectares in
PAPEC; it is our intention to plant an additional final 100
hectares in 2017. Thereafter, we only intend to expand
the PAPEC programme when we achieve net income
profitability or have secured third-party financing for
expansion of the programme.
• Ha lanzado un programa innovador de financiamiento a
pequeños agricultores conocido como PAPEC en abril de
2015. PAPEC ahora tiene 187 hectáreas plantadas y esperan
que 13 hectáreas sean plantadas en Junio de 2016. Para
el resto del año 2016, nosotros esperamos sembrar 100
hectáreas adicionales en PAPEC; es nuestra intención sembrar
finalmente unas 100 hectáreas adicionales en el año 2017.
Después de ello, nosotros tenemos planificado expandir el
programa PAPEC solo cuando hayamos alcanzado la utilidad
neta o hayamos asegurado un financiamiento externo para la
expansión de este programa.
A CORPORATE MODEL FOR CACAO
UN MODELO CORPORATIVO PARA EL CACAO
As discussed in last year’s Statement, we believe that, cacao
Como se discutió en la Declaración del año pasado, nosotros
is extremely well-suited for large-scale corporate cultivation.
creemos que el cacao es extremadamente bueno para el cultivo
Cacao is a high-input agricultural crop with concentrated
corporativo a gran escala. El cacao es un cultivo que requiere insumos
periods of productivity. The cacao tree requires specialised
mayores y ofrece períodos de productividad. Así mismo, el árbol
knowledge for care and maintenance, in particular, regular
de cacao requiere conocimiento especializado para su cuidado y
pruning by trained technicians; furthermore, it requires regular,
mantenimiento, en particular, la poda regular efectuada por técnicos
consistent application of fertilizer. More than 75 per cent. of the
entrenados; además, requiere la aplicación regular y consistente de
output of the tree is concentrated during a few months of the
fertilizantes. Más del 75 por ciento de la producción del árbol se
year, and this output then needs to be exported via containers
concentra en pocos meses del año, y esta cosecha luego es exportada
to destination markets.
a través de contenedores a los mercados de destino.
Neither of these characteristics is favourable for small, under-
Ninguna de éstas características es favorable para pequeños
agricultores con capital insuficiente ubicados en lugares remotos.
Pues este alto requerimiento de recursos implica comprar y pagar
por adelantado fertilizantes y otros insumos agrícolas a distribuidores
locales a costos elevados (si existen distribuidores en la zona). La
producción concentrada significa que los ingresos de todo el año son
recibidos en efectivo en un breve periodo de tiempo, y usualmente, las
necesidades familiares urgentes impiden a la inversión para la cosecha
del siguiente año. Así mismo, la logística para la exportación implica
la existencia de una serie de intermediarios que buscan maximizar
sus beneficios, por lo que estarían felices de tomar ventaja de las
necesidades de pequeños agricultores para vender rápidamente.
capitalized small farmers in remote locations. This high input
requirement means buying, and paying for in advance,
fertilizer and other agricultural inputs from local dealers at
high costs (if any dealers exist in the area). Concentrated
output means all the year’s revenues are received in cash in
a short time frame, and usually, pressing family needs for this
cash outweigh investment in the following year’s crop. Export
logistics means there are usually an entire series of profitmaximizing middlemen happy to take advantage of a small
farmer’s need to sell quickly.
A corporate cacao estate is able to invest appropriately,
provide reliable regular care and maintenance, take a scientific
approach to fertilization, leverage industry best practice
and handle direct-to-chocolate maker sales eliminating the
industry’s numerous middlemen. Essentially, it comes down to
having a sufficiently large and stable balance sheet to ensure
maximum productivity. This is no different to what we see
in the grinding industry globally, a handful of large players
(three) dominate nearly 50 per cent. of the global grinding
capacity. We find it slightly ironic that there is incredible
concentration in chocolate confectionary production and
14 Reporte Anual 2015
Una plantación corporativa de cacao es capaz de invertir de
manera apropiada, proporcionando de manera confiable el
cuidado y mantenimiento regular, adoptar un enfoque científico
para la fertilización, impulsando la industria con las mejores
prácticas y manejar directamente las ventas a los productores de
chocolate, eliminando los numerosos intermediarios en la industria.
Esencialmente, todo se reduce a tener un balance suficientemente
grande y estable para garantizar la máxima productividad. Ello no
es diferente a lo que vemos en la industria mundial de molienda de
granos, donde un grupo de jugadores grandes (tres) dominan casi el
50 por ciento de la molienda global. Creemos que es un poco irónico
que exista una alta concentración en la producción de chocolate para
Chairman’s Statement / Declaración del Presidente
cacao grinding capacity yet industry pundits insist
confitería y en la molienda de granos de cacao; sin embargo, expertos de la
production must remain in the realm of impoverished small
industria
farmers! In fact, basic agronomy demands precisely the
debe permanecer en el ámbito de los pequeños agricultores
opposite.
empobrecidos.
ESTIMATED PRODUCTION TONNAGE
PRODUCCIÓN ESTIMADA EN TONELADAS
We expect the following production ramp-up based on
Nosotros proyectamos que la siguiente producción aumente por el área
the Company’s existing planted area of 1,638 hectares of
de la Compañía actualmente sembrada de 1,638 hectáreas de plantación
corporate estate and 400 hectares of PAPEC:
corporativa y 400 hectáreas de PAPEC:
insisten
en
sostener
que
¡la
producción
In Tonnes
del
cacao
En Toneladas
YEAR
CORPORATE
PAPEC
TOTAL
AÑO
CORPORATIVO
PAPEC
TOTAL
2017
25
-
25
2017
25
-
25
2018
100
10
110
2018
100
10
110
2019
600
150
750
2019
600
150
750
2020
1,500
300
1,800
2020
1,500
300
1,800
2021
2,500
500
3,000
2021
2,500
500
3,000
2022
3,300
600
3,950
2022
3,300
600
3,950
2023+
4,500
700
5,200
2023+
4,500
700
5,200
From 2023 onwards, the peak productivity will have been
Desde el año 2023 en adelante, la productividad máxima habrá sido
reached and we expect the trees to be these production
alcanzada y nosotros esperamos que los árboles mantengan estos niveles
levels for several decades.
de producción por varias décadas.
Senior management inspection of the first stage of Sacha
Gold plantings. Originally from Ecuador, Sacha Gold is a
high yielding fine flavour cacao species.
La Alta Gerencia inspecciona la primera etapa de plantación de Sacha
Gold. Originariamente de Ecuador, Sacha Gold es una especie cacao de
fino sabor con un alto rendimiento.
Reporte Anual 2015 15
Chairman’s Statement / Declaración del Presidente
FINANCING ACTIVITIES & POSITION
On 19 June 2015, the Company secured a secondary
ACTIVIDADES DE FINANCIACIÓN Y POSICIÓN
FINANCIERA
listing on the Lima Stock Exchange (Bolsa de Valores de
El 19 de junio de 2015, la Compañía listó por segunda vez en la Bolsa de
Lima, or “BVL”). On 27 October 2015, the Company raised
Valores de Lima – BVL. El 27 de octubre de 2015, la Compañía recaudó
US$7,360,000 (before fees and expenses) via a placement
US$7,360,000 (antes de gastos) a través de la colocación de acciones y
of shares and convertible bond issue. Cash balances
and short-term receivables as of year-end 2015 were
US$4,666,287 compared with US$7,760,041 for the
prior year. The Company’s only indebtedness is the
US$6,080,000 Senior Convertible Bond and reported no
revenue for the reporting period. The total reported loss
de la emisión de un bono convertible. Los saldos de efectivo y cuentas
por cobrar a corto plazo al cierre del 2015 fueron de US$4,666,287
comparado con US$7,760,041 del año anterior. El único endeudamiento
de la Compañía fue de US$6,080,000 por el Bono Convertible Senior y
no reportó ingresos por el periodo. La pérdida total reportada por el año
for the year ended 31 December 2014 was US$4,229,375
terminado fue de US$4,229,375 al 31 de Diciembre de 2014 (una pérdida
(a loss per share of 23 cents) compared with a loss of
de 23 centavos por acción), comparado con la pérdida de US$2,981,983
US$2,981,983 (a loss per share of 24 cents) for the year
(una pérdida de 24 centavos por acción) al 31 de Diciembre de 2014.
ended 31 December 2014. Net assets for the period were
Los activos netos por el periodo fueron US$14,477,897 en comparación
US$14,477,897 compared with US$15,480,358 in the
con los US$15,480,358 en el año anterior.
prior year.
CLOSING THOUGHTS
PENSAMIENTOs FINALES
Como la segunda mitad del año 2016 se acerca, tomamos nota de
As the second half of 2016 approaches, we take note of the
las tendencias del mercado que están impactando positivamente a la
market trends positively impacting the Company:
Compañía:
•
•
Shrinking Global Production. The ICCO estimates that
global cacao production will be only 4.0m tonnes for
2016. This is a 7 per cent. reduction from 2011. In
the context of global commodity surpluses, cacao is
unique.
16 Reporte Anual 2015
Disminución de la producción mundial. La ICCO estima que la
producción mundial de cacao será únicamente de 4.0mm toneladas
en el año 2016. Esto constituye una reducción del 7 por ciento desde
el año 2011. En el contexto actual donde existe excedente global de
comodities, el cacao es único.
Chairman’s Statement / Declaración del Presidente
•
M&A in Upstream Cacao Production. Virtually
precedentes, a principios de este año una marca global de confitería
brand acquired a 485 hectare cacao estate, largely
adquirió una finca de cacao de 485 hectáreas, en gran parte plantada con
planted with CCN 51, in Ecuador. This is a testament
CCN 51, en el Ecuador. Este es un testimonio de la creciente importancia
to the rising importance of Latin America to the
de América Latina para la cadena de suministro mundial del cacao.
•
Robust Cacao Price. Cacao price continues to show
its five year trailing average of US$2,785.
encima del promedio de los últimos cinco años de US$2,785.
•
Estabilidad Política y Macro económica. En medio de una cierta agitación
Peru Macro-Economic & Political Stability. In the
en los países de América Latina, el Perú sigue siendo estable con una
midst of some turmoil in Latin American countries,
economía de rápido crecimiento.
Peru remains a stable, rapidly growing economy.
•
Sólido Precio del cacao. El precio del cacao continúa mostrando
estabilidad por encima de US$3,000 por tonelada, ligeramente por
resiliance above US$3,000 per tonne, slightly above
•
Fusiones y Adquisiciones en la extracción del Cacao. Prácticamente sin
unprecedented, earlier this year a global confectionary
global cacao supply chain.
•
•
•
Desarrollo continuo en la Región Amazónica Peruana.
Obras
Continued development in the Peruvian Amazon
públicas significativas están siendo desarrolladas en esta área,
Region. Significant public works are developing this
incluyendo (i) la modernización de puertos fluviales; (ii) el dragado
area including: (i) upgraded river ports; (ii) river
del río para la mercancía que será enviada a alta mar entre Iquitos
dredging for ocean-going cargo between Iquitos
y Pucallpa; y (iii) el lanzamiento de una instalación de exportación
and Pucallpa; and, (iii) the launch of a international
internacional de minerales en Pucallpa. Tambien es probable que la
mineral export facility in Pucallpa. The new federal
nueva administración regional financie la expansión de carreteras
administration is likely to fund significant road
significativa en el área.
expansion in the area as well.
Estamos muy satisfechos con el entorno operativo y regulatorio
We are very pleased with the operating and regulatory
en el Perú. Nosotros esperamos la aprobación final de nuestras
environment in Peru. We expect final approval of our
certificaciones ambientales, un PAMA completo, en la segunda
environmental certifications, a completed PAMA, in the
mitad del año 2016, el cual será un hito clave para la Compañía.
second half of 2016, which will be a key milestone for the
Company.
También somos conscientes de las condiciones actuales del mercado
de valores, como tal, ahora hemos completado el programa principal
We are also cognisant of the current equity market
de siembra en 1,638 hectáreas en nuestra plantación corporativa. Esto
conditions, as such we have now completed the main
puede ser marginalmente incrementado en unos pocos cientos de
planting programme at 1,638 hectares on our corporate
hectáreas, pero en no más de esto. Nuestro objetivo es contar con
estate. This may be marginally increased by a few hundred
una plantación en plena producción y mejorar nuestras habilidades
hectares but by no more than this. Our focus is to bring
para asegurar que somos la Compañía de más bajo costo en la
the estate into full production and fine-tune our skill set
industria. Tenemos previsto incrementar únicamente el programa
to ensure we are the lowest cost platform in the industry.
PAPEC de las actuales 187 hectáreas a 400 hectáreas a finales del año
We plan to only increase the PAPEC programme from the
2017.
current 187 hectares to 400 hectares by end 2017.
Como se discutió en la Declaración del año pasado, es esencial que el
As discussed in last year’s Statement, it is essential that the
world uses land efficiently by:
•
Using the highest yielding cacao species available;
•
Operating in areas with sufficient natural rainfall;
and,
mundo utilice terrenos eficientemente para:
•
Usar
las
especies
de
cacao
de
más
alto
rendimiento
disponible;
•
Operar en areas con suficiente lluvia natural; y,
•
Operar con las normas laborales éticas.
to be unethical labour practices. The market will adapt
No hay sentido para la industria del cacao que se expanda en el África
occidental, considerando que los rendimientos son de 500 kg por
hectarea por año, cuando en el Perú se logra producir hasta 2,500 kg al
año. La gran mayoría del cacao producido en el mundo, principalmente
en África occidental, se realiza de manera ineficiente, utilizando materiales
clonados de hace décadas, en zonas con precipitaciones insuficientes y
con las prácticas laborales que consideramos poco éticas. El mercado se
está adaptando y cambiando, y nuestra empresa está a la vanguardia de
este cambio. Tenemos una ventaja significativa del primero en mover de
un commodity poco conocido.
and change, and your Company is at the forefront of this
Existen numerosas barreras de entrada a nuestro modelo de negocio.
•
Operating with ethical labour standards.
It makes absolutely no sense for the cacao industry to
be expanding in West Africa when the yields per hectare
are 500 kg per annum when a hectare in Peru can yield
in excess of 2,500 kg per annum. The vast majority of
cacao produced in the world, principally in West Africa,
is done inefficiently, using decades old clonal materials
in areas with insufficient rainfall and what we consider
Reporte Anual 2015 17
Chairman’s Statement / Declaración del Presidente
change. We have a significant first mover advantage in a poorly
Algunos son obvios, tales como los requisitos de lluvia del árbol
understood commodity.
y la limitada disponibilidad de tierras en África Occidental y
There are numerous barriers to entry surrounding our business
model. Some are obvious, such as the rainfall requirements of
the tree and limited land availability in West Africa and Asia. It
is worth noting that freehold land is not available to plantation
groups in Asia and Africa. Some barriers are slightly more
complex, in that cacao is a far more intensive tree species to
plant given the high planting density and grafting requirement;
this dramatically slows the pace of planting when compared
to palm oil for example. The complexity of a cacao estate also
requires a specialised managerial base with a passion for the crop
something that Peru has but sorely lacking in Asia or Africa.
We wish to thank all of our staff, who have worked to
make the Company the success that it is been thus far.
We wish to thank our shareholders, who share our vision
of creating the leading cacao estate in the world. We
look forward to updating you on our progress in the
months ahead.
Dennis Nicholas Melka
Executive Chairman
30 May 2016
18 Reporte Anual 2015
Asia. Vale la pena señalar que la propiedad absoluta no está
disponible para grupos de plantaciones en Asia y África. Algunas
barreras son un poco más complejas, como que el cacao es
una especie de árbol mucho más intensiva de plantar dada
la alta densidad de siembra y la exigencia de injertacion; esto
desacelera drásticamente el ritmo de siembra en comparación
con el aceite de palma, por ejemplo. La complejidad de
una plantación de cacao también requiere de una gestión
especializada que se apasione por el cultivo de cacao en el
Perú, lo cual ocurre escasamente en Asia o África.
Queremos agradecer a todo nuestro personal, que ha trabajado
para lograr el éxito que la Compañía ha alcanzado hasta
la actualidad. Así mismo, queremos agradecer a nuestros
accionistas, que comparten nuestra visión de crear una
plantación de cacao líder en el mundo. Los mantendremos
actualizados sobre nuestro progreso en los meses que vienen.
Dennis Nicholas Melka
Presidente Ejecutivo
30 de Mayo de 2016
United Cacao Limited SEZC
and its Subsidiaries
Annual Financial Statements for the Year
ended 31 December 2015
Estados Financieros Anuales al
31 de diciembre 2015
Reporte Anual 2015 19
United Cacao Limited SEZC and its Subsidiaries
Paredes, Zaldívar, Burga & Asociados
Sociedad Civil de Responsabilidad Limitada
Independent auditors’ report
Independent auditor’s report
To the Directors and Shareholders of United Cacao Limited SEZC and Subsidiaries
We have audited the accompanying consolidated financial statements of United Cacao Limited SEZC
(a holding investment company, incorporated in the Cayman Islands’ Special Economic Zone) and its
Subsidiaries (the “Group”), which comprise the consolidated statements of financial position as of
31 December 2015 and 2014, and the consolidated statement of comprehensive income, the
consolidated statements of changes in equity and the consolidated statements of cash flows for the
years then ended, and the summary of significant accounting policies and related notes to the
consolidated financial statements. The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting Standards (IFRS), as adopted by
the European Union.
This report is made solely for the company’s directors as a body. Our audit work has been
undertaken so that we might state to the Company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Company and the Company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Directors’ responsibility for the consolidated financial statements
The Directors are responsible for the preparation of these consolidated financial statements in
accordance with International Financial Reporting Standards as adopted by the European Union and
for being satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of consolidated financial statements that are free
from material misstatements, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to audit and express an opinion on these consolidated financial statements in
accordance with the applicable law and International Standards on Auditing (International
Federation of Accountants). Those standards require us to comply with the Auditing Practices
Board’s Ethical Standards for Auditors.
Inscrita en la partida 11396556 del Registro de Personas Jurídicas de Lima y Callao
Miembro de Ernst & Young Global
20 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Independent auditors’ report (continued)
Independent auditor’s report (continued)
Scope of the audit of the consolidated financial statements
An audit involves obtaining evidence about the amounts and disclosures in the consolidated
financial statements sufficient to give reasonable assurance that the consolidated financial
statements are free from material misstatement, whether caused by fraud or error. This includes an
assessment of: (i) whether the accounting policies are appropriate to the Company’s circumstances
and have been consistently applied and adequately disclosed; (ii) the reasonableness of significant
accounting estimates made by the Directors; and (iii) the overall presentation of the consolidated
financial statements.
Opinion of the consolidated financial statements
In our opinion:
-
the consolidated financial statements give a true and fair view of the state of the Group’s
affairs as of 31 December 2015 and 2014, and of the Group’s loss for the years then ended;
-
the consolidated financial statements have been properly prepared in accordance with IFRS
as adopted by the European Union
Lima, Peru,
27 May 2016
Countersigned by:
Manuel Díaz
C.P.C.C. Registration N° 30296
Reporte Anual 2015 21
United Cacao Limited SEZC and its Subsidiaries
United Cacao Limited SEZC and Subsidiaries
Consolidated statements of financial position
As of 31 December 2015 statements
and 2014
Consolidated
of financial position
As of December 31, 2015 and 2014
Note
2015
US$
2014
US$
Assets
Current assets
Cash
4
4,666,287
5,949,459
Other accounts receivable, net
Inventories
6
15,170
1,810,582
7
208,944
65,296
65,988
___________
92,541
___________
4,956,389
___________
7,917,878
___________
14,493,846
___________
8,115,242
___________
14,493,846
___________
8,115,242
___________
19,450,235
___________
16,033,120
___________
Prepaid expenses
Non-current assets
Land, agriculture machinery, vehicles, bearer plants,
equipment and construction in progress, net
8
Total assets
Liabilities and shareholders’ equity, net
Current liabilities
Secured convertible bond
9
828,184
-
Trade and other accounts payable
10
384,676
445,734
Accounts payable to related parties
5(c)
___________
107,028
___________
1,212,860
___________
552,762
___________
3,759,478
___________
___________
4,972,338
___________
552,762
___________
19,172
18,430
20,129,054
18,613,436
Non – current liability
Secured convertible bond
9
Total liabilities
Shareholders’ equity, net
Issued capital
Share premium
Other reserves
11
2,287,647
566,743
Accumulated losses
(7,957,976)
___________
(3,718,251)
___________
Total shareholders’ equity, net
14,477,897
___________
15,480,358
___________
Total liabilities and shareholders’ equity, net
19,450,235
___________
16,033,120
___________
The accompanying notes are an integral part of these consolidated financial statements.
22 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
United Cacao Limited SEZC and Subsidiaries
Consolidated statement
of comprehensive
income income
Consolidated
statements
of comprehensive
For the
ended
as of 31as
December
2015 and 2014
For
theyears
years
ended
of December
31, 2015 and 2014
Note
2015
2014
14
(3,940,522)
___________
(2,876,639)
___________
(3,940,522)
(2,876,639)
US$
US$
Pre-operating expenses
Administrative expenses
Pre-operating loss
Other expenses
Financial expenses
(129,941)
-
(158,912)
___________
(105,344)
___________
Loss before income tax
(4,229,375)
___________
(2,981,983)
___________
Total comprehensive loss
(4,229,375)
___________
(2,981,983)
___________
(0.23)
___________
(0.23)
___________
Exchange rate difference, net
Loss per share
9(c)
3
16
The accompanying notes are an integral part of these consolidated financial statements.
Annual Report 2015 / Informe Annual 2015
23
Annual Report 2015 / Informe Annual 2015 24
Balance as of 31 December 2015
Secured Convertible Bond, 9(c)
Share based payments, note 12(b)
Capital contributions, note 11(b)
Net loss
Balance as of 31 December 2014
Other adjustments
Share based payments, note 12(b)
Capital contributions, note 1(c) and 11(b)
Net loss
Balance as of 1 January 2014
19,172
___________
___________
-
742
-
18,430
___________
-
11,835
-
6,595
US$
Issued
capital
For the years ended as of December 31, 2015 and 2014
-
2,510,215
US$
Share
Premium
20,129,054
___________
___________
-
1,515,618
-
18,613,436
___________
-
16,103,221
Consolidated
statements
in equity
For the years ended as of
31 December 2015of
and changes
2014
Consolidated statements of changes in equity
United Cacao Limited SEZC and Subsidiaries
US$
1,064,046
___________
___________
497,303
-
-
566,743
___________
440,890
-
-
125,853
-
-
-
-
1,223,601
___________
1,223,601
___________
-
-
-
-
___________
US$
Other reserves
__________________________________
Senior Note
Shared based
equity
payment reserve
component
(7,957,976)
___________
___________
(10,350)
-
(4,229,375)
(3,718,251)
(371)
___________
-
-
(2,981,983)
(735,897)
US$
Accumulated
losses
14,477,897
___________
1,223,601
___________
486,953
1,516,360
(4,229,375)
15,480,358
(371)
___________
440,890
16,115,056
(2,981,983)
1,906,766
US$
Total
United Cacao Limited SEZC and its Subsidiaries
United Cacao Limited SEZC and its Subsidiaries
United Cacao Limited SEZC and Subsidiaries
Consolidated statements of cash flows
Consolidated
statements
of cash flows
For
the years ended
as of December
31, 2015 and 2014
For the years ended as of 31 December 2015 and 2014
2015
US$
2014
US$
Operating activities Net loss
(4,229,375)
(2,981,983)
Reconciliation of net loss to cash used in operating activities:
Share based payments provision, note 14(a)
Allowance for VAT impairment, note 14(a)
345,169
336,505
70,536
129,387
104,431
-
Depreciation, note 8(d)
40,889
4,312
Write-off of seeds, note 14(a)
11,980
3,542
Accrued interest expenses, note 8
54,549
-
Gain for disposal of vehicle
(1,738)
-
Allowance for PAPEC, note 14 (a)
Amortization
Other, net
21
(5,100)
(5,665)
Net changes in assets and liabilities accounts:
Decrease (Increase) in other accounts receivable
(Increase) in inventory
1,484,723
(143,648)
(1,918,034)
(63,348)
Decrease (Increase) in prepaid expenses
26,553
(86,376)
(Decrease) Increase in trade and other accounts payable
98,227
413,731
-
90,845
(Decrease) increase in payable to related parties
Cash collections from related parties, note 5(a)
136,127
3,657,574
Cash payments to related parties
(236,618)
___________
(3,657,574)
___________
Net cash used in operating activities
(2,243,274)
___________
(4,077,084)
___________
(6,220,309)
(6,847,101)
Investment activities Acquisition of land, equipment, vehicles and bearer plants , note 8
Acquisition of vehicles to related parties,note 5(c)
Additions to intangibles
(107,028)
-
(425)
-
Disposal of vehicle and lands, note 5(a)
14,790
___________
14,968
___________
Net cash used in investment activities
(6,312,972)
___________
(6,832,133)
___________
Financing activities Capital contributions, net
1,516,360
16,115,056
Proceeds from issuance of convertible bonds, net
5,756,714
___________
___________
Net cash provided by financing activities
7,273,074
___________
16,115,056
___________
Net (decrease) increase in cash
(1,283,172)
5,205,839
Cash at the beginning of the year
5,949,459
___________
743,620
___________
Cash at the end of the year
4,666,287
___________
5,949,459
___________
347,409
246,043
Non-cash transaction:
Depreciation and share-based payment reserve capitalized as land,
agriculture machinery, vehicles, bearer plants,equipment and
construction in progress, net
The accompanying notes are an integral part of these consolidated financial statements.
Reporte Anual 2015 25
United Cacao Limited SEZC and its Subsidiaries
United Cacao Limited SEZC and Subsidiaries
Notes
to to
thethe
consolidated
financial
statements
Notes
consolidated
financial
statements
As of 31 December 2015 and 2014
As of December 31, 2015 and 2014
1.
Identification and business activity of the Company
(a)
Identification United Cacao Limited SEZC (hereinafter “the Company” or “UCL”) is an investment holding
Company incorporated in the Cayman Islands on 21 May 2013 and licensed by the Special
Economic Zone Authority of the Cayman Islands Government.
As of 31 December 2015, there was no majority shareholder in the registry of the Company;
however, East Pacific Capital Private Limited, an entity controlled by the Chairman and CEO,
holds approximately 27 percent of the Company’s capital stock (28 percent as of 31 December
2014) with telephone +1 (345) 815 2710.
The legal domicile of the Company is Cricket Square, Hutchins Drive, PO Box 2681 Grand
Cayman KY1-1111, Cayman Islands. Also the Company maintains an office at HSBC House, 68
West Bay Road, PO Box 10315, Georgetown, Grand Cayman, KY1-1003, Cayman Islands.
(b)
Business activity UCL is a holding company for its Peruvian subsidiaries, Cacao Del Peru Norte S.A.C. (“CDPN”)
and Cooperativa de Cacao Peruano S.A.C. (CCP) (the “Subsidiaries”), which operate in the
agricultural sector. The Company’s participation in its Subsidiaries is as follows:
Ownership in capital as of 31 December 2015
__________________________________________________
Incorporated in
Direct
%
Indirect
%
Investment holding
Grupo Cacao del Perú Limited
British Virgin
Islands
100.00
-
Perú
99.99
0.01
Perú
99.99
0.01
Agricultural operations (cacao cultivation)
Cacao del Perú Norte S.A.C. (previously
“Plantaciones de Loreto Sur S.A.C.”)
Cooperativa de Cacao Peruano S.A.C. (previously
“Plantaciones de Loreto Norte S.A.C.”)
As of 31 December 2015 and 2014, the Company and its Subsidiaries are involved in the
ownership development and management of cacao estates which consists of acquisition,
development and preparation of land for planting. As of 31 December 2015, the Company,
through its operating subsidiaries owned agriculturally, titled land of 3,985 hectares (unaudited),
cleared 2,032 hectares (unaudited) and planted 1,469 hectares of land (unaudited) (compare
with titled land 3,877 (unaudited) and planted 527 hectares of land (unaudited), as of December
31, 2014), see note 8(b).
26 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
The Company’s Board of Directors and Management have established business plans and
assumptions to ensure the continuity of the Company. In this sense, the continuity of the
business operations depends of the success of such plans. The main plan established by the
Board is the purchase of agricultural land in order to plant and harvest approximately 2,000
hectares of cacao.
(c)
Initial Public Offering (IPO) On 2 December 2014, the Company conducted an international offering of new shares through
Alternative Investment Market of the London Stock Exchange (“AIM”) on 2 December 2014.
As part of the offering, the Company: (i) authorized the issuance of 5,000,000 common shares
with par value of US$0.001, and (ii) set the issuance price of the new shares at 128 pence
(equivalent to approximately US$2.00 at the time) per share in the Peruvian and international
markets. The issuance of new common shares represented for the Company a gross cash
contribution of US$9,955,044 and a net cash contribution of US$8,739,055 (equivalent to £6.4
million approximately) after fees and expenses. Such cash contribution was recorded in the
shareholders’ equity as share capital and share premium of US$5,000 and US$8,734,055,
respectively, see note 11(b).
2.
Significant accounting policies and practices
(a)
Basis of preparation –
Declaration of compliance –
These consolidated financial statements of the Company for the years ended 31 December 2015
and 2014 have been prepared in accordance with International Financial Reporting Standards
(“IFRS”) as adopted by the European Union (“EU”).
Responsibility for the information The information contained in these consolidated financial statements are the responsibility of
Management and the Board of the Company, which expressly state they have fully implemented
the principles and criteria contained in the International Financial Reporting Standards ("IFRS")
as adopted by EU as of 31 December 2015 and 2014.
Basis of measurement The consolidated financial statements have been prepared under the historical cost basis, from
the accounting records kept by the Company. The accompanying consolidated financial
statements are presented in U.S. Dollars (functional and presentation currency).
Used of judgments and estimates The preparation of financial information in accordance with IFRS as adopted by the EU requires
management to make judgments, estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial information and the reported amounts of income
and expenses during the reporting period. Although these estimates are based on Management’s
best knowledge of the amount, event or actions, actual events ultimately may differ from those
estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
2
Reporte Anual 2015 27
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Revisions to accounting estimates are recognized in the period in which the estimate is revised
and in any future periods affected.
Information about significant areas of estimation, uncertainly and critical judgments in applying
accounting policies that have the most significant effect on the amounts recognized in the
consolidated financial statements are described in note (f) below. IFRS also require management
to exercise its judgment in the process of applying the Company’s accounting policies.
(b)
Going Concern–
This historical financial information relating to the Company has been prepared on a going
concern basis, which assumes that the Company will continue its operations and will be able to
meet its liabilities as they fall due for the foreseeable future. Management considers that the
Company has sufficient funds for the foreseeable future that is for at least twelve months from
the date of this document.
(c)
New and revised IFRS adopted by the EU The accounting policies adopted are consistent with those applied in previous years, except that
the Company has adopted the new and revised IFRS and IAS's that are mandatory for periods
beginning on or after 1 January 2015, as described below:
-
Annual Improvements 2010-2012 Cycle
These improvements did not generate impacts on the Group’s financial statements. They
include:
IFRS 8 Operating Segments
The amendment clarifies that:
An entity must disclose the judgments made by management in applying the aggregation
criteria in paragraph 12 of IFRS 8, including a brief description of operating segments that
have been aggregated and the economic characteristics (e.g., sales and gross margins)
used to assess whether the segments are “similar”.
The reconciliation of segment assets to total assets is only required to be disclosed if the
reconciliation is reported to the chief operating decision maker, similar to the required
disclosure for segment liabilities.
This amendment is not relevant for the Group.
IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets
The amendment clarifies in IAS 16 and IAS 38 that the asset may be revalued by
reference to observable data by either adjusting the gross carrying amount of the asset to
market value or by determining the market value of the carrying value and adjusting the
gross carrying amount proportionately so that the resulting carrying amount equals the
market value. In addition, the accumulated depreciation or amortization is the difference
between the gross and carrying amounts of the asset. This amendment did not have any
impact to the Group during the current period.
3
28 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
IAS 24 Related Party Disclosures
The amendment clarifies that a management entity (an entity that provides key
management personnel services) is a related party subject to the related party
disclosures. In addition, an entity that uses a management entity is required to disclose
the expenses incurred for management services. This amendment is not relevant for the
Group as it does not receive any management services from other entities.
-
Annual Improvements 2011-2013 Cycle
These improvements did not generate impacts on the Group’s financial statements. They
include:
IFRS 13 Fair Value Measurement
The amendment is applied prospectively and clarifies that the portfolio exception in IFRS
13 can be applied not only to financial assets and financial liabilities, but also to other
contracts within the scope of IFRS 9 (or IAS 39, as applicable). The Group does not apply
the portfolio exception in IFRS 13.
IFRS 3 Business Combinations
This amendment did not have any impact to the Group during the current period.
IFRS 40 Investment property
This amendment to clarify that IAS 40 and IFRS 3 are not mutually exclusive. IAS 40
assists users to distinguish between investment property and owner-occupied property.
Preparers also need to consider the guidance in IFRS 3 to determine whether the
acquisition of an investment property is a business combination. This amendment did not
have any impact to the Group during the current period.
-
Annual Improvements 2012-2014 Cycle
These improvements did not generate impacts on the Group’s financial statements. They
include:
IAS 19 “Defined Benefit Plans: Employee Contributions”
Applicable for annual periods beginning on or after February 1, 2015. The amendments
clarify how an entity should account for contributions made by employees or third parties
that are linked to services to defined benefit plans, based on whether those contributions
are dependent on the number of years of service provided by the employee. This
amendment did not have any impact to the Group during the current period.
The Group has not yet adopted any other standard, interpretation or amendment that has
been issued but is not yet effective.
4
Reporte Anual 2015 29
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
(d)
Basis of consolidationThe consolidated financial statements comprise the financial statements of the Company and the
controlled entities. Control is presumed when the Company owns, directly or indirectly, more
than half of the voting rights of the issued share capital of Subsidiaries, and has the power to
govern the financial and operating policies of an entity so as to obtain benefits from its activities.
All balances, sales and other transactions between the Company and its Subsidiaries have been
eliminated in full, including the realized and unrealized gains and losses resulting from such
transactions.
(e)
Segment Reporting–
Operating segments are reporting in a manner consistent with the internal reporting provided to
the chief operating decision-maker. The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of operating segments, has been identified as
the Board of Directors and the Financial Controller.
(f)
Estimates and assumptions The preparation of the consolidated financial statements requires management to use estimates
and assumptions to determine the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities as of the date of the consolidated financial statements, as well as
the reported amounts of revenues and expenses for the year ended 31 December 2015 and
2014.
These accounting judgments and estimates are based on the best knowledge by Management of
material events and circumstances, taking into account historical experience; however, the actual
results obtained in future periods may differ from the estimated amounts. The Company and
Subsidiaries’ Management do not expect that these changes, if any, will have a significant effect
on the consolidated financial statements.
Significant estimates and assumptions are as follows:
-
Fair value of financial assets and liabilities.
-
Determination of the useful life and depreciation method of Property, plant and
equipment.
-
Estimation of the provision for impairment of long-lived assets.
-
Estimation of the provision for contingencies arising from legal processes and
administrative procedures.
-
Stock options valuation (share-based payments) and senior note equity component
Any difference between estimates and actual results thereafter is recorded in year’s results in
which it occurs.
5
30 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
(g)
Foreign currency transactions Functional and presentation currency The functional currency was determined by Management at the Company and its Subsidiaries and
is the U.S. Dollar, which is also its presentation currency.
Transactions and balances in foreign currency Transactions in foreign currencies are initially recorded at the functional currency rates
prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency spot rate of exchange ruling as of the date of
the consolidated statements of financial position. Gains or losses from exchange difference
resulting from the settlement of such transactions and translation of monetary assets and
liabilities in foreign currencies at rates of exchange ruling as of the date of the consolidated
statements of financial position are recognized in the consolidated statements of comprehensive
income. Non-monetary assets and liabilities that are measured in terms of historical cost in a
foreign currency are translated to the functional currency using the exchange rates as of the
dates of the initial transactions.
(h)
Financial assets Financial assets are classified as financial assets at fair value through profit or loss, loans and
receivables, held-to-maturity investments, available-for-sale investments, or as derivatives
designated as hedging instruments in an effective hedge, as appropriate.
All financial assets are recognized initially at fair value plus, in the case of investments not at fair
value through profit or loss, directly attributable transaction costs. The Company and its
Subsidiaries determine the classification of its financial assets at initial recognition.
The Company and its Subsidiaries’ financial assets include cash, and other receivable. As of 31
December 2015 and 2014 the Company and its Subsidiaries do not have financial assets at fair
value through profit or loss, held-to-maturity investments, available-for-sale investments, or
derivatives designated as hedging instruments.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. After initial measurement, these financial assets are
subsequently measured at amortized cost using the effective interest rate method (EIR), less
impairment. Gains and losses are recognized in the consolidated statements of comprehensive
income when the loans and receivables are derecognized or impaired, as well as through the
amortization process.
Amortized cost
Any premium or discount in the debt instruments classified into the loans and receivables
category is considered in the calculation of the amortized cost by applying the effective interest
rate methodology, recognizing the accrued interest in the “Financial income” caption of the
income statements.
6
Reporte Anual 2015 31
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
(i)
Impairment of financial assets The Company and its Subsidiaries assess at each reporting date whether there is any objective
evidence that a financial asset or a group of financial assets is impaired. An impairment exists if
one or more events that has occurred since the initial recognition of the asset (an incurred ‘loss
event’), has an impact on the estimated future cash flows of the financial asset or the group of
financial assets that can be reliably estimated. If there is objective evidence that an impairment
loss has been incurred, the amount of the loss is measured as the difference between the assets
carrying amount and the present value of estimated future cash flows (excluding future expected
credit losses that have not yet been incurred). The present value of the estimated future cash
flows is discounted at the financial asset’s original effective interest rate (for example, the
effective interest rate calculated at initial recognition). The carrying amount of the asset is
reduced through the use of an allowance account and the amount of the loss is recognized in the
consolidated statements of comprehensive income.
If, in a subsequent year, the amount of the estimated impairment loss decreases and the loss can
be related to an event occurring after the impairment was recognized, the previously recognized
impairment loss is reduced up to the point where the carrying value of the assets does not exceed
its amortized cost as of the reduction date. Any subsequent reduction related to an impairment
loss will be recognized in the consolidated statements of comprehensive income.
(j)
Cash Cash in the consolidated statements of financial position comprise current bank accounts.
(k)
Inventories Inventories correspond mainly to cacao seeds and supplies. Such are valued at the lower of cost
and net realizable value. Costs incurred in bringing each product to its present location and
condition is accounted for as follows:
-
Inventory At acquisition cost, using the weighted average cost method.
-
Inventory in transit At specific acquisition cost.
Management periodically assesses the devaluation and obsolescence of these assets.
Obsolescence and devaluation are recorded when it is estimated that these are necessary
changes to the assets based on technical areas of the Company.
(l)
Land, vehicles, agriculture machinery, bearer plants, equipment and construction in progress,
net Land, vehicles, agriculture machinery, bearer plants and equipment are stated at cost, net of
accumulated depreciation and/or accumulated impairment losses, if any.
7
32 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
The initial cost comprises the purchase price, including import duties and non-refundable
purchase taxes and any directly attributable cost necessary to place and bring the asset to its
working condition. For land, including subsequent costs and charges related to preparation and
adaptation in order to use as growing field. Other subsequent disbursements related to repair
and maintenance costs are recognized in the results of the period when incurred. Subsequent
disbursements that will result in future economic benefits, in excess of the originally assessed
standard of performance, are capitalized as an additional cost.
Land is not be depreciated. Depreciation is calculated on a straight-line basis over the estimated
useful lives of the assets as follows:
Years
Roads
25
Buildings
15
Agriculture machinery
10
Vehicles
5
Furniture and fixtures
10
Computer equipment
4
Other equipment
10
When selling or retiring vehicles and equipment, the cost and associated accumulated
depreciation is eliminated, and any gain or loss arising on such disposal is included in the
consolidated statements of comprehensive income.
Construction in progress –
Construction in progress includes the costs incurred for the construction of assets and other
expenses directly attributable to such constructions, accrued during its execution. Constructions
in progress are capitalized when completed and its depreciation is measured and recorded since
the moment when they are put into use.
To capitalize directly attributable personnel expenses, the Company identifies each one of the
areas and time dedicated to the planning, execution and management of the construction.
The book value of an asset is provisioned immediately to its recoverable amount if the carrying
amount of the asset is greater than its estimated recoverable value.
(m)
Impairment of long-lived assets –
Whenever events or circumstances indicate that the carrying amount of long-term duration
assets may not be recoverable, the Company assesses the value of land, vehicles and equipment;
and biological assets to verify that there is no impairment. When the book value exceeds its
recoverable value, an impairment loss is recognized in the consolidated statements
comprehensive income.
8
Reporte Anual 2015 33
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
The recoverable value is the higher between the net sale price and its value in use. The net sale
price is the amount that can be obtained from the sale of an asset on a free market, while the
value in use is the present value of estimated future cash flows from the continuing use of an
asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for
each asset or cash generating unit.
(n)
Administrative and other expenses recognition Costs and expenses are recognized on an accrual basis, regardless of when they are paid, and are
recorded in the periods to which they relate.
(o)
Share based payments –
The Company operates an equity settled share based option scheme under which the entity
receives services from employees’ in consideration for equity instruments (options) of the
Company. The cost of equity-settled transactions is determined by the fair value at the date
when the grant is made using an appropriate valuation model. The fair value of the employees'
services received in exchange for the grant of options is recognized as an expense. The total
amount to be expensed is determined by reference to the fair value of the options granted,
excluding the impact of any non-market service and performance vesting conditions. The total
amount expensed is recognized over the vesting period, which is the period over which all the
specified conditions are satisfied. At each balance sheet date, the entity revises its estimates of
the number of options that are expected to vest based on the vesting conditions. The dilutive
effect of outstanding stock options is reflected as additional share dilution in the computation of
diluted earnings per share, when it is applicable (further details are given in Note 16).
(p)
Compound financial instruments –
The Company recognizes separately the components of a financial instrument that creates (a) a
financial liability of the company and (b) grants an option to the holder of the instrument to
convert it into an equity instrument of the company.
The classification of the liability and equity components of a convertible instrument is not revised
as a result of a change in the likelihood that a conversion option will be exercised, even when
exercise of the option may appear to have become economically advantageous to some holders.
The Company, as an issuer of a Secured Convertible Bond with a warrant instrument which may
convert into ordinary shares, determines initially the carrying amount of the liability component
by measuring the fair value of a similar liability that does not have an associated equity
component. The carrying amount of the equity instrument represented by the option to convert
the warrant instrument into ordinary shares is then determined by deducting the fair value of the
financial liability from the fair value of the compound financial instrument as a whole.
(q)
Income tax –
Current income tax
Assets and liabilities for current income tax are measured by the amount expected to be
recovered or paid to the Tax Authority. The tax rates and tax laws used to compute the amount
are those in effect on the date of closing of the reporting period reported in Peru.
9
34 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Deferred income tax
Deferred tax is recognized using the liability method on temporary differences at the reporting
date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes. Deferred tax assets and liabilities are measured at the tax rates that have
been enacted and are expected to apply in the year when the asset is realized or the liability is
settled. The measurement of deferred assets and deferred liabilities reflects the tax
consequences that arise from the manner in which the Company and its Subsidiaries expect, as of
the date of the consolidated statement of financial position, to recover or settle the carrying
amount of its assets and liabilities.
Value added tax Revenue, expenses and assets are recognized excluding the amount of Value Added Tax (VAT),
except:
-
When the VAT incurred on a purchase of asset or service is not recoverable from the Tax
Authorities, in which case, the VAT is recognized as part of the cost of acquisition of the
asset or as part of the expenditure, as appropriate;
(r)
Receivables and payables that are already expressed by the amount of VAT included.
Provisions –
Provisions are recognized when the Company and its Subsidiaries have 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. The expense relating to any provision is presented in the
consolidated statements of comprehensive income, net of any reimbursement. If the effect of the
time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, where appropriate, the risks specific to the liability. Where discounting is used, the
increase in the provision due to the passage of time is recognized as a finance cost.
(s)
Share capital –
Ordinary shares are classified as equity. Any excess above the par value of shares received upon
issuance of those shares is classified as “share premium”.
(t)
New accounting pronouncements –
New and revised IFRS adopted by the EU that are not mandatorily effective (but allow early
application) for the year ending 31 December 2015:
Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations, applicable
for annual periods beginning on or after January 2016.
The amendments to IFRS 11 provide guidance on how to account for the acquisition of an
interest in a joint operation in which the activities constitute a business as defined in IFRS 3
Business Combinations. Specifically, the amendments state that the relevant principles on
accounting for business combinations in IFRS 3 and other standards (e.g. IAS 36 Impairment of
Assets regarding impairment testing of a cash generating unit to which goodwill on acquisition of
a joint operation has been allocated) should be applied. The same requirements should be applied
10
Reporte Anual 2015 35
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
to the formation of a joint operation if and only if an existing business is contributed to the joint
operation by one of the parties that participate in the joint operation. A joint operator is also
required to disclose the relevant information required by IFRS 3 and other standards for business
combinations.
Amendments to IAS 1 disclosure initiative, applicable for annual periods beginning on or after
January 2016.
The amendments to IAS 1 Presentation of Financial Statements clarify, rather than significantly
change, existing IAS 1 requirements. The amendments clarify:
-
The materiality requirements in IAS 1.
-
That specific line items in the statement(s) of profit or loss and OCI and the statement of
financial position may be disaggregated.
-
That entities have flexibility as to the order in which they present the notes to financial
statements.
-
That the share of OCI of associates and joint ventures accounted for using the equity
method must be presented in aggregate as a single line item, and classified between those
items that will or will not be subsequently reclassified to profit or loss.
Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and
amortization, applicable for annual periods beginning on or after January 2016.
The amendments to IAS 16 prohibit entities from using a revenue-based depreciation method for
items of property, plant and equipment. The amendments to IAS 38 introduce a rebuttable
presumption that revenue is not an appropriate basis for amortization of an intangible asset. This
presumption can only be rebutted in the following two limited circumstances: when the intangible
asset is expressed as a measure of revenue or when it can be demonstrated that revenue and the
consumption of the economic benefits of the intangible asset are highly correlated.
Annual improvements in the 2012-2014 cycle are applicable for annual periods beginning on or
after January 2016.
These improvements relate to IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations, IFRS 7 Financial Instruments: Disclosures, IAS 19 Employee Benefits, and IAS 34
Interim Financial Reporting and are effective from 1 January 2016.
Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants are applicable for annual periods
beginning on or after January 2016. The amendments to IAS 16 Property, Plant and Equipment
and IAS 41 Agriculture define a bearer plant and require biological assets that meet the definition
of a bearer plant to be accounted for as property, plant and equipment in accordance with IAS
16, instead of IAS 41. In terms of the amendments, bearer plants can be measured using either
the cost model or the revaluation model set out in IAS 16. On the initial application of the
amendments, entities are permitted to use the fair value of items of bearer plant as their deemed
cost as at the beginning of the earliest period presented. Any difference between the previous
11
36 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
carrying amount and fair value should be recognized in opening retained earnings at the
beginning of the earliest period presented. The produce growing on bearer plants continues to be
accounted for in accordance with IAS 41.
2.1. Change in accounting policy
The Company’s Board decided to early adopt amendments to IAS 16 “Property, Plant and Equipment”
and IAS 41 “Agriculture”; which change the scope of IAS 16 to include biological assets that meet the
definition of bearer plants (e.g. fruit trees). Agricultural products grown in the bearer plants (e.g. fruit
that grows on a tree) will remain within the scope of IAS 41. As a result of these amendments, bearer
plants (production plants) will be subject to all the requirements for recognition and measurement of IAS
16, including the choice between the cost model and the revaluation model. In addition, government
grants related to bearer plants will be accounted for in accordance with IAS 20 instead of IAS 41. This
standard is effective for annual periods beginning on or after 1 January 2016.
This early adoption has no significant accounting effects in the consolidated financial statement
considering the early start-up stage of the Company’s activities (indicated in note 1). As of 31 December
2015 and 2014, the Company considered the costs incurred in the planted cacao tree as bearer plants,
valued at its historical cost. Based on this amendment, these costs are considered as bearer plants
under IAS 16, also valued at its historical cost. See (l).
Then table below describes the main modification on the financial statements as of 31 December 2014:
Balance
reported 2014
US$
Accounting
policy change
US$
Modified
Balances 2014
US$
Consolidated statements of financial position Biological assets
Land, agriculture, machinery, vehicles and constructions
in progress, net
1,722,976
(1,722,976)
6,392,266
1,722,976
8,115,242
Standards and Interpretations issued by the IASB but not yet adopted by the EU –
As of the date of these financial statements, IFRS as adopted by the EU do not significantly differ from
regulations adopted by the International Accounting Standards Board (IASB) except for the following
standards and amendments to the existing standards, which were not endorsed for use in the EU as of 31
December 2015 and cannot be applied by the entities preparing their financial statements in accordance
with IFRS as adopted by the EU:
-
IFRS 9 “Financial Instruments”, not yet endorsed by the EU.
In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments which reflects all
phases of the financial instruments project and replaces IAS 39 Financial Instruments:
Recognition and Measurement and all previous versions of IFRS 9. The standard introduces new
requirements for classification and measurement, impairment and hedge accounting. IFRS 9 is
effective for annual periods beginning on or after 1 January 2018, with early application
permitted. Retrospective application is required, but comparative information is not compulsory.
12
Reporte Anual 2015 37
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
-
IFRS 14 “Regulatory Deferral Accounts”, not yet endorsed by the EU.
IFRS 14 permits an entity which is a first-time adopter of International Financial Reporting
Standards to continue to account, with some limited changes, for 'regulatory deferral account
balances' in accordance with its previous GAAP, both on initial adoption of IFRS and in
subsequent financial statements. IFRS 14 is effective for an entity’s first annual IFRS financial
statements for annual periods beginning on or after 1 January 2016, with earlier application
permitted.
-
IFRS 15 “Revenue from contracts with customers”, not yet endorsed by the EU.
IFRS 15 was issued in May 2014 and establishes a new five-step model that will apply to revenue
arising from contracts with customers. Under IFRS 15 revenue is recognized at an amount that
reflects the consideration to which an entity expects to be entitled in exchange for transferring
goods or services to a customer. The principles in IFRS 15 provide a more structured approach to
measuring and recognizing revenue. The new revenue standard is applicable to all entities and
will supersede all current revenue recognition requirements under IFRS. Either a full or modified
retrospective application is required for annual periods beginning on or after 1 January 2018
with early adoption permitted.
-
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture, not yet endorsed by the EU.
These amendments clarify the treatment of the sale or contribution of assets from an investor to
its associate or joint venture requiring full recognition in the investor's financial statements of
gains and losses arising on the sale or contribution of assets that constitute a business (as
defined in IFRS 3 Business Combinations) and the partial recognition of gains and losses where
the assets do not constitute a business, i.e. a gain or loss is recognized only to the extent of the
unrelated investors’ interests in that associate or joint venture. These amendments are effective
for annual periods beginning on or after January 1, 2016.
-
Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying the Consolidation
Exception, not yet endorsed by the EU.
The amendments address issues that have arisen in the context of applying the consolidation
exception for investment entities. The amendments confirm that the exemption from preparing
consolidated financial statements for an intermediate parent entity is available to a parent entity
that is a subsidiary of an investment entity, even if the investment entity measures all of its
subsidiaries at fair value. A subsidiary that provides services related to the parent's investment
activities should not be consolidated if the subsidiary itself is an investment entity. These
amendments are effective for annual periods beginning on or after 1 January 2016.
-
Amendments to IAS 27 Equity Method in Separate Financial Statements, not yet endorsed by the
EU.
IAS 27 Separate Financial Statements requires an entity to account for its investments in
subsidiaries, joint ventures and associates either at cost or in accordance with IFRS 9 Financial
Instruments (or IAS 39 Financial Instruments: Recognition and Measurement for entities that
have not yet adopted IFRS 9). The amendments allow an entity to apply also the equity method in
accounting for its investments in subsidiaries, joint ventures and associates in its separate
13
38 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
financial statements. The accounting option must be applied by category of investments. The
amendments also clarify that when a parent ceases to be an investment entity, or becomes an
investment entity, it shall account for the change from the date when the change in status
occurred. These amendments are effective for annual periods beginning on or after 1 January
2016.
The Company is in the process of evaluating the impact of the application of these rules, if any, on its
consolidated financial statements and disclosures in the notes of the consolidated financial statements.
3.
Transactions and balances in foreign currency
The main foreign exchange operations are stated in “Soles” (Peruvian currency), which are carried out
at market exchange rates published by the Peruvian Superintendencia de Banca y Seguros y AFP. As of
31 December 2015, the exchange rates issued for Soles for that institution were US$0.2930 for buying
and US$0.2934 for sale (US$0.3346 and US$0.3355 as of 31 December 2014, respectively), and have
been applied by the Company for the accounts of assets and liabilities, respectively.
As of the dates of statements of financial position, the Company had the following assets and liabilities
denominated in Soles:
2015
S/
2014
S/
Asset
Cash
Other accounts receivable
481,590
5,450,697
32,935
___________
13,822
___________
514,525
___________
5,464,519
___________
997,861
___________
1,000,503
___________
997,861
___________
1,000,503
___________
(483,336)
___________
4,464,016
___________
Liabilities
Trade and other accounts payable
Net (liability) asset position
As of 31 December 2015 and 2014, the Company and its Subsidiaries do not use derivative instruments
to reduce the foreign exchange risk.
During year 2015, the net loss originated from exchange differences was US$158,912 (US$105,344,
during 2014). All of these effects are presented in the “Exchange rate differences, net” caption in the
consolidated statement of comprehensive income.
4.
Cash
The Company and its Subsidiaries held current accounts mainly in Peruvian and Singaporean banks and
are denominated in Soles and U.S. Dollar. These funds are freely available and do not earn interest.
14
Reporte Anual 2015 39
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
5.
Transactions and balances with related parties
(a)
During 2015 and 2014, the Company carried out the following transactions with related parties:
2015
US$
2014
US$
14,790
___________
14,968
___________
___________
20,487
___________
Revenue Income from disposal of vehicle and land (d)
Expenses Management operating services (e)
Cash granted/(collected) (b)
Plantaciones Perú Este
Plantaciones de San Francisco S.A.C.
107,055
10,709
25,089
10,064
Cacao de la Amazonía S.A.C.
1,573
-
Plantaciones de Loreto S.A.C.
1,089
524
Plantaciones de Ucayali S.A.C.
694
1,379,952
Cacao de Requena Este S.A.C.
135
60
Plantaciones de Napo Norte S.A.C.
135
60
Plantaciones de Lima S.A.C.
129
-
Plantaciones de Iquitos S.A.C.
114
-
Cacao de Requena Oeste S.A.C.
82
60
Plantaciones de Loreto Este S.A.C.
27
8
Plantaciones de Marin S.A.C.
5
42
Plantaciones de Pucallpa S.A.C.
-
1,780,871
Servicios Ripio S.A.C
-
262,160
Grupo Palmas del Peru S.A.C.
-
87,219
Industrias de Palma Aceitera S.A.C.
-
51,255
Plantaciones de Masisea S.A.C
-
1,006
Plantaciones de Napo S.A.C.
-
60
Plantaciones de Napo Sur S.A.C.
-
60
Cash collected from related parties
(136,127)
___________
(3,584,110)
___________
___________
___________
Secured Convertible Bond
Book value of Secured Convertible Bond due 30 June
2019, note 9(b)
Accrued interest expense
15Anual 2015
40 Reporte
1,275,000
-
27,249
__________
___________
1,302,249
___________
___________
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
2015
US$
2014
US$
Cash received /(paid) –(b)
Plantaciones de Lima S.A.C.
235,551
-
Plantaciones Loreto S.A.C.
425
27,189
Plantaciones de San Francisco S.A.C
317
-
Plantaciones de Iquitos S.A.C.
133
-
Plantaciones de Inahuaya S.A.C.
104
-
88
21,793
-
7,009
Plantaciones de Pucallpa S.A.C.
Plantaciones de Ucayali S.A.C.
Cacao de Requena Oeste S.A.C.
-
711
Servicios Ripio S.A.C.
-
16,728
Industrias de Palma Aceitera S.A.C.
-
34
(236,618)
___________
(73,464)
___________
___________
___________
___________
107,028
___________
Cash paid to related parties
Purchase of boats (c)
(b)
The Company received and performed money transfers from/to its related parties during the
year to cover temporary working capital needs. These transfers don’t accrue interest and have
maturities in less than 30 days.
(c)
As of 31 December 2014, the Company had an accounts payable for the purchase of boats used
in the transportation of people and goods to the location of the Company’s plantations through
the Amazon river to Plantaciones del Perú Este S.A.C., a related party, amounting to
US$107,028. Such balances are denominated in U.S. Dollar and Soles (Peruvian currency); have
current maturities, are not interest earning and have been provided no guarantees. The said
amount was entirely paid by the Company during 2015.
(d)
Corresponds to the sale of vehicles by Cacao Del Peru Norte S.A.C. to Plantaciones de Ucayali
S.A.C during 2015 and to the sale of land to Plantaciones de Loreto S.A.C during 2014.
(e)
Corresponds to support and management services in the operation provided by its related party
Grupo Palmas del Perú S.A.C. in 2014.
(f)
Key management compensation Key management comprises the Directors and Executive Officers of the Company. During 2015,
the compensation of key management personnel amounted to US$89,250 (US$44,517, during
2014), which corresponds to short-term employee benefits. No post-retirement and termination
benefits are paid to key management. The share-based payment pertaining to key management
amounted approximately to US$127,745 during 2015 (US$143,613, during 2014).
16
Reporte Anual 2015 41
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Classified by Directors –
Bonus
and Salary
US$
Share-based
payment
US$
84,250
41,162
5,000
__________
86,583
__________
89,250
__________
127,745
__________
2015
Dennis Melka (Chairman)
Anthony Kozuch (Executive Director)
2014
Dennis Melka (Chairman)
36,250
65,219
Anthony Kozuch (Executive Director)
5,000
78,394
Constantine Gonticas (Non-Executive Director)
2,614
-
653
__________
__________
44,517
__________
143,613
__________
Roberto Tello (Non-Executive Director)
6.
Other accounts receivable, net
(a)
This item is made up as follows:
2015
US$
Accounts receivable from broker (b)
2014
US$
-
1,806,238
Tax credit of VAT (c)
225,898
155,362
Estimate PAPEC (d)
104,431
-
Advances to suppliers
5,102
-
Guarantee deposit for operating lease
2,054
2,348
8,014
__________
1,996
__________
345,499
1,965,944
Other
Less:
Allowance for impairment of other accounts receivable (e)
(b)
(330,329)
__________
(155,362)
__________
15,170
__________
1,810,582
__________
As of 31 December 2014, this balance corresponds to an account receivable provided by IPO
contributions collected by the Company’s broker. This balance was credited to the Company on 6
January 2015.
(c)
Corresponds to the tax credit of VAT generated from the purchase of goods and services in
accordance with the tax regime described in Note 13.
17
42 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
(d)
Productive Strategic Alliance Program of Cocoa (“PAPEC”) is a small farmer financing
mechanism established by Cooperativa de Cacao Peruano S.A.C. to promote the cacao industry
in communities around their plantations. As of 31 December 2015, there were 147 participants
who planted 187 hectares of cacao. The Company is financing approximately S/6,800 per
hectare. The interest rate is 11.0% which accretes to the loan and in the fourth year, the
participant begins to pay back cash to reduce the loan balance. Based on the terms of the PAPEC
programme, the Company undertakes to pay 75% of the benchmark price for wet beans up to
US$4,000 per tonne or 65% of any price above US$4,000 per tonne. As of 31 December 2015,
the Company has givens loans of approximately US$103,964 with an accumulated interest of
approximately US$467.
(e)
The movement of the allowance for doubtful accounts is as follows:
2015
US$
2014
US$
155,362
25,975
Additions, note 14 (a)
174,967
_________
129,387
_________
Ending balance
330,329
_________
155,362
_________
Opening balance
As of 31 December 2015 corresponds to: (i) an amount of US$225,898 related to the full
amount of tax credit of VAT from the purchase of goods and services recognized as expense due
to the uncertainty of its recoverability and (ii) an amount of US$104,431 related to PAPEC
recognized as expense.
(f)
All receivables at each reporting date are current. Any receivables are neither past due nor
impaired. The Company considers that the carrying amount of the other receivables do not differ
significantly from their estimated fair value at each reporting date.
7.
Inventories
(a)
This item is made up as follows:
Fertilizer and agricultural consumables (b)
Fuel
(b)
2015
US$
2014
US$
186,027
65,296
22,917
__________
__________
208,944
__________
65,296
__________
Corresponds to fertilizers and other agricultural consumables to be used in the Company’s
operations. In Management’s opinion, it is not necessary to record a provision for inventory
obsolescence as of 31 December 2015 and 2014.
18
Annual Report 2015 / Informe Annual 2015
43
Annual Report 2015 / Informe Annual 2015 44
8.
(a)
5,743,004
___________
Balance as of 31 December
___________
___________
5,743,004
___________
Balance as of 31 December
Net cost
Additions (d)
Transfers
-
-
Balance as of 1 January
Accumulated depreciation -
___________
-
Stock options, note12(b)
Transfers
-
Disposals and adjustments
3,694,054
2,048,950
Additions (b)
Lands
US$
Balance as of 1 January
Cost -
progress, net
-
-
-
-
356,938
___________
2,163
___________
___________
2,163
-
359,101
___________
359,101
___________
Buildings
US$
-
-
-
-
732,642
___________
14,952
___________
___________
14,952
-
747,594
___________
747,594
___________
Roads
US$
832,786
___________
169,717
___________
___________
92,412
77,305
1,002,503
___________
___________
-
(48,000)
113,964
936,539
Agriculture
machinery
US$
368,189
___________
153,873
___________
(5,743)
___________
98,277
61,339
522,062
___________
(107,028)
___________
-
(18,795)
60,563
587,322
Vehicles
US$
40,957
___________
1,933
___________
___________
1,610
323
42,890
___________
___________
-
-
37,865
5,025
Furniture and
fixtures
US$
20,208
___________
11,511
___________
___________
7,813
3,698
31,719
___________
___________
-
-
16,862
14,857
Computer
equipment
US$
297,315
___________
37,998
___________
___________
29,286
8,712
335,313
___________
107,028
___________
-
(23,333)
86,485
165,133
Other
equipment
US$
4,297,737
___________
___________
___________
-
-
4,297,737
___________
___________
141,784
-
2,432,977
1,722,976
Bearer
Plants(f)
US$
1,789,315
___________
___________
___________
-
-
1,789,315
___________
(1,106,695)
___________
-
-
1,755,297
1,140,713
Construction
in progress (e)
US$
14,755
___________
___________
___________
-
-
14,755
___________
___________
-
-
14,755
-
Other assets
in progress
US$
14,493,846
___________
392,147
___________
(5,743)
___________
246,513
151,377
14,885,993
___________
___________
141,784
(90,128)
6,567,718
8,266,619
Total
US$
2015
________________________________________________________________________________________________________________________________________________________________________________________________
The movement and composition of this item is as follows:
Land, agriculture machinery, vehicles, bearer plants, equipment and constructions in
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
8,115,242
___________
151,377
___________
___________
143,501
7,876
8,266,619
___________
___________
106,854
(15,685)
6,986,290
1,189,160
Total
US$
2014
_____________
United Cacao Limited SEZC and its Subsidiaries
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
(b)
During 2015, the Company acquired 159 hectares of titled agricultural land for a total cost
amounting to US$19,993 (compare with 442 hectares of titled agriculture land during 2014 for
a total cost amounting to US$74,613). Improvements include costs of approximately
US$2,028,957 (US$2,771,876 during 2014) related to the preparation and adaptation in order
to use the land as a growing field.
Additionally, the Company acquired equipment and vehicles for an amount of approximately
US$174,527, which were principally trucks, motorcycles and heavy construction equipment
(compare with US$1,415,000 during 2014).
(c)
The Company keeps insurance contracts on their main non-land assets, in accordance with the
policy established by Management. In Management’s opinion, its insurance policies are consistent
with industry practice. The risk of potential losses for claims considered in the insurance policy is
reasonable considering the type of assets held.
(d)
During the periods presented, the depreciation was allocated as follows:
2015
US$
Land
Administrative expenses, note 14(a)
(e)
2014
US$
205,625
139,189
40,888
__________
4,312
__________
246,513
__________
143,501
__________
Construction in progress correspond to disbursements related to the construction of roads
necessary for transportation from and to the plantations as well as to costs incurred in the fields
of the operating locations.
(f)
During 2015 and 2014, the Company prepared 87 and 49 hectares (unaudited) land for
cultivation, respectively; and during 2015 planted 918 hectares (unaudited) in the final growing
fields. The Company incurred costs amounting to US$2,432,977 that mainly correspond to
disbursements for the preparation of agricultural land, treatment of seeds in the nursery and
operating costs for planting seedlings in the final growing field, payroll dedicated to such
activities (salaries), and other consumables (US$1,445,069 during 2014).
(g)
As of 31 December 2015 and 2014, Management has assessed the recoverable amount of its
long-term assets and did not find any impairment indicator.
20
Reporte Anual 2015 45
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
9.
Secured Convertible Bond
(a)
This item is made up as follows:
2015
US$
Face value of senior notes (b)
2014
US$
6,080,000
-
Less: Senior note equity component (c)
(1,292,316)
-
Less: Transaction costs on liability component
(254,571)
___________
___________
Liability component at initial recognition
Add: Accretion of interest on the senior notes
4,533,113
-
54,549
___________
___________
4,587,662
___________
___________
Classification for maturity:
Current portion
Non – current portion
828,184
-
3,759,478
___________
___________
4,587,662
___________
___________
The fair value of the Secured Convertible Bond is as follows:
Secured Convertible Bond
27 October 2015
2015
___________________________________
US$
(face value)
US$
(fair value)
6,080,000
___________
4,533,113
___________
6,080,000
___________
4,533,113
___________
Accretion of interest on the Secured Convertible Bond
54,549
___________
4,587,662
___________
(b)
The Secured Convertible Bond was issued in one series for a total amount of US$6,080,000 on
27 October 2015 and is listed on the ISDX exchange; which have the maturity date on 30 June
2019 (unless previously prepaid by acceleration), bear a cash interest coupon of 7 percent per
annum and is payable semi-annually (commencing on 27 October 2015).
The Secured Convertible Bond were issued to third parties and directors of the Company; whose
total face value for each group amounted to US$4,805,000 and US$1,275,000; respectively,
see note 5(a).
21
46 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
(c)
At maturity, Bondholders may choose to either convert the outstanding principal of the Bonds
into Ordinary Shares at a conversion price of US$3.40 per share (approximately 222 pence) or to
redeem it in cash. At maturity, the maximum number of Ordinary Shares that may be issued
under Tranche one, assuming full conversion to equity is 1,788,235.
Based on accounting policies described in note 2(p), the value of the equity component is
determined as follow:
2015
US$
Contractual value of the compound instrument
6,080,000
Less: fair value of Secured Convertible Bond without transaction costs
(4,787,684)
___________
Fair value liability component
1,292,316
Less: Transaction costs on equity component
(68,715)
___________
1,223,601
___________
During 2015, interest expense was approximately US$129,941, which is included in the
"Financial expenses" caption in the consolidated statement of comprehensive income. Interest
paid during the year was amounting to US$75,392.
10.
Trade and other accounts payable
(a)
This item is made up as follows:
2015
US$
2014
US$
238,375
_________
349,908
_________
Vacation payable
70,796
45,493
Taxes and contributions
40,637
27,775
Social benefits
8,524
7,099
Wages payable
21,356
2,334
4,988
_________
13,125
_________
146,301
_________
95,826
_________
384,676
_________
445,734
_________
Trade payables (b)
Other:
Other
(b)
As of 31 December 2015 and 2014, mainly corresponds to the provision for professional
services payable such as audit, legal and accounting services.
22
Reporte Anual 2015 47
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
11.
Shareholders' equity, net
(a)
Issued capital As of 31 December 2015, the Company’s share capital amounted to US$19,172, which is
represented by 19,171,574 ordinary shares issued and fully paid as set out below (US$18,430
and 18,430,000 ordinary shares respectively, as of 31 December 2014). All of which have a par
book value of US$0.001:
Class of shares
Ordinary shares (previously Class A shares)
2015
2014
Number
Number
4,500,000
4,500,000
Ordinary shares (previously Class A-1 shares)
6,020,000
6,020,000
Ordinary shares (previously Class A-2 shares)
2,910,000
2,910,000
Public ordinary shares issuance, note 1(c)
5,000,000
5,000,000
267,500
-
474,074
___________
___________
19,171,574
___________
18,430,000
___________
Ordinary shares (exercised options)
Public ordinary share issuance
All classes of shares have the same rights, mainly related to voting rights (one vote per share),
dividends as the Board may from time to time declare, and others.
(b)
Share premium This item is made up for the share premium account, as follows:
Nominal
value
US$
As of 1 January 2014
Ordinary
shares issued
Number
Share
capital
US$
Share
premium
US$
6,595,000
6,595
2,510,215
Class A-1 Ordinary Shares Issued (i)
0.001
3,925,000
3,925
3,888,575
Class A-2 Ordinary Shares Issued (ii)
0.001
2,910,000
2,910
3,480,591
New Ordinary Shares Issued (iv)
0.001
5,000,000
____________
5,000
____________
8,734,055
____________
18,430,000
18,430
18,613,436
0.001
267,500
268
312,232
0.001
474,074
____________
474
____________
1,203,386
____________
19,171,574
____________
19,172
____________
20,129,054
____________
As of 31 December 2014
New ordinary shares exercised
options (v)
New Ordinary Shares Issued (vi)
As of 31 December 2015
23
48 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
(i)
On 15 January 2014, the Company and third parties (“Investors”) entered the Class A-1
Share Subscription Agreement, whereby, each Investor agreed to subscribe and purchase
a number of Class A-1 Shares, at a price of US$1.00 per subscription share (the par value
was US$0.001 each), as follows:
Closing
Subscription
Shares Number
Aggregate
Purchase Price
US$
15 January 2014
3,925,000
3,892,500
The Company received a total amount of US$3,892,500, net of its corresponding
transaction costs.
(ii)
On 28 April 2014, the Investors entered the Class A-2 Share Subscription Agreement,
whereby each Investor agreed to subscribe and purchase a number of Class A-2 Shares, at
a price of US$1.25 per subscription share (the par value was agreed in US$0.001 each),
as follows:
Closing
28 April 2014 (first closing)
30 May 2014 (second closing)
Subscription
Shares Number
Aggregate
Purchase Price
US$
2,828,327
3,385,733
81,673
97,768
The Company received a total amount of US$3,483,501, net of its corresponding
transaction costs.
(iii)
On 11 November 2014, all members of the Class A Ordinary Shares, the Class A-1
Ordinary Shares and the Class A-2 Ordinary Shares agreed to amend their respective class
rights and restrictions, so that each share class has equal rights and restrictions effective
upon Admission. Contingent on and effective upon Admission, all Members in the
Company approved the conversion of all classes presently in issue into Ordinary Shares.
(iv)
On 2 December 2014, 5,000,000 new ordinary shares were allotted in the Company, each
at a price of 128 pence (equivalent to approximately US$2.00) (the nominal value was
agreed in US$0.001 each), and consisting of 1,447,753 Placing Shares and 3,552,247
Subscription Shares, to raise gross proceeds of £6.4m equivalent to US$9,955,044
(approximately £5.5m net of expenses, equivalent to US$8,739,055).
Closing
2 December 2014
24
Subscription
Shares Number
5,000,000
Net Proceeds
US$
8,739,055
Reporte Anual 2015 49
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
(v)
On 5 January 2015, the Company´s Chairman, Dennis Melka, exercised options for
150,000 ordinary shares of US$0.001 at an exercise price of US$1.00 per Ordinary Share
and 10,000 Ordinary Shares at an exercise price of US$1.25 per Ordinary Share.
On 27 October 2015, an employee exercised options for 50,000 ordinary shares of
US$0.001 at an exercise price of US$1.00 per Ordinary Share, 20,000 Ordinary Shares at
an exercise price of US$1.25 per Ordinary Share and 37,500 Ordinary Shares at an
exercise price of US$2.00 per Ordinary Share.
Closing
(vi)
Subscription
Shares Number
Net Proceeds
US$
5 January 2015
160,000
162,340
27 October 2015
107,500
149,892
On 27 October 2015, the Company completed a US$1,203,278 equity placement in Peru,
net of transaction costs, through the placing of 474,074 new ordinary shares with par
value of US$0.001 each at a placing price of US$2.70 (approximately 176 pence at the
time) per Ordinary Share.
Closing
Subscription
Shares Number
27 October 2015
(c)
474,074
Net Proceeds
US$
1,203,860
Other reserves Share-based payments The share-based payment reserve is used to recognize the value of equity-settled share-based
payments provided to employees, including key management personnel, as part of their
remuneration, see Note 12 for further details of these plans.
Senior note equity component Represents the equity component of the senior notes issued on 27 October 2015, see note 9.
When the initial carrying amount of a compound financial instrument is allocated to its equity and
liability components, the equity component is assigned the residual amount after deducting the
fair value of the instrument as a whole the amount separately determined for the liability
component.
25
50 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
12.
Share based payments
(a)
The Company operates a share option scheme for the benefit of its employees. Grants are made
at the discretion of the Board of Directors. The exercise price of the share options is equal to the
market price of the underlying shares on the date of grant. The contractual term of each option
granted is 10 years and there are no cash settlement alternative employees (employees must
remain in service until 2017). Options are forfeited three months following the employee
termination date with the Company and can only be exercised to the extent that they have
vested.
The fair value of share options granted is estimated at grant date using a Hull and White 2002
valuation model, taking into account the terms and conditions upon which the share options were
granted.
(b)
The movement on options in issue under these schemes is set out below:
2015
____________________________
2014
____________________________
Weighted
average
exercise price
(WAEP)
Weighted
average
exercise price
(WAEP)
Number of
share options
Number of
share options
Outstanding at the beginning of
the year
Granted during the year
2,140,000
1.43
1,000,000
1.00
-
-
1,140,000
1.82
Exercised
(267,500)
__________
1.17
_____
__________
_____
Outstanding at the end of the year
1,872,500
__________
1.47
_____
2,140,000
__________
1.43
_____
Exercisable at the end of the year
902,500
__________
1.47
_____
685,000
__________
1.34
_____
During 2015, no options were granted to employees and the options outstanding as of that date
had a weighted average remaining contractual life of 8.2 years. During 2014, 1,140,000 options
were granted to employees at fair value of US$877,800, and the options outstanding had a
weighted average remaining contractual life of 9.2 years.
Based on the calculation of the total fair value of the options granted, during 2015, the Company
recognized a total charge through the consolidated statements of comprehensive income of
US$345,169 (US$336,505 during 2014) and a charge of US$141,784 during 2015 to biological
assets for the portion related to operating personnel (US$106,854 during 2014). The total fair
value amounted to US$497,303 (US$440,890 during 2014) was accredited to “Stock options
reserve” caption in the consolidated statement of changes in equity.
26
Reporte Anual 2015 51
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
The inputs used in the Hull and White option pricing model are as follows:
Weighted average share price
1.82
Weighted average share exercise price
1.43
Expected volatility
Contractual life
41.10%
10 years
Post vesting factor
Risk free rate
1.83
2.42%
Expected dividend yield
0%
Expected volatility and the expected life used in the model are based in management’s best
estimates and are adjusted for the effects on non-transferability, exercise restrictions and
behavioral considerations. The risk free rate is based on the US Treasury rate.
13.
Tax situation
(a)
UCL is subject to the tax and regulatory regime established by the Special Economic Zone
Authority of The Cayman Islands.
(b)
Peruvian tax regime Peruvian Subsidiaries are subject to the Peruvian tax law. As of December 31, 2015 and 2014,
the statutory Income Tax rate was 28 and 30 percent, respectively, on the taxable income,
calculated on the period results in Soles.
From the financial year 2015, in response to the Law 30296 published on 31 December 2014
and effective from 1 January 2015, the tax rate applicable on taxable income, after deducting
the workers’ profit sharing will be as follows:
-
Year 2015 and 2016: 28 per cent.
-
Years 2017 and 2018: 27 per cent.
-
Year 2019 onwards: 26 per cent.
Legal persons not domiciled in Peru and individuals are subject to retention of an additional tax
on dividends received. In attention to Law 30296, the additional tax on dividends is as follows:
-
4.1 per cent of the profits generated until 31 December 2014.
-
For profits generated from 2015, whose distribution is made after that date will be the
following:
27
52 Reporte Anual 2015
-
2015 and 2016: 6.8 per cent.
-
2017 and 2018: 8 per cent.
-
2019 onwards: 9.3 per cent.
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
According to Law No. 27037 - Taxation of Investment Promotion in the Amazon (hereinafter "the
Amazon Law"), if the Peruvian Subsidiaries qualify for the requirements of this Law, they could
enjoy tax benefits related to the value added tax, such as exemption from the sale of goods for
consumption in the Amazon, services and construction contracts made in this area, special tax
credit of 25 or 50 per cent depending on the area in which the activities of the Peruvian
Subsidiaries and the nature of activity are carried out, and that tax exemption on the import of
goods contained in the Appendix to Decree Law No. 21503 and specified and fully released in the
common tariff annexed to the protocol amending of the Convention Colombian Peruvian Customs
Cooperation (PECO), 1938. Furthermore, in compliance with the Amazon Law, the Peruvian
Subsidiaries may also access the related tax benefits on income tax, which basically consist of
obtaining reduced rates of 0 percent, 5 percent and 10 percent depending on the activities to be
performed, the specific area where they develop and the type of crop.
Tax benefits related to income tax and value added tax will be effective until 2048, except for the
benefit of the tax exemption for the import of goods to be consumed in the Amazon region, which
expires in 2018.
According to the Amazon Law, the Subsidiaries may use the benefits indicated in the previous
paragraph only if all the requirements below are fulfilled:
(i)
The head office must be in the Amazon, where the administration and accounting is
carried out.
(ii)
The administration shall be held in the Amazon.
(iii)
The accounting records and the individual responsible of keeping the books shall be
located in the Amazon.
(iv)
The company must be registered in the registry office of the Amazon.
(v)
At least 70 percent of the assets must be in the Amazon.
(vi)
Production should be in the Amazon. Service companies cannot provide services outside
the Amazon. Goods produced in the Amazon may be placed inside or outside the Amazon.
As of 31 December, 2015 and 2014, the Company and its Subsidiaries are performing
procedures to comply with the requirements of the Tax Authorities, and thus enjoy the benefits
of the Amazon Law.
(b.1) Transfer pricing transactions For the purpose of determining the income tax, the transfer pricing of transactions with
related companies and companies residing in areas of low or no taxation, should be
supported by documentation and information on the valuation methods used and the
criteria used for its determination. To date, the transfer pricing rules are in force in Peru
and these regulate transactions with related companies and local or foreign companies
domiciled in tax havens must be carried at market value. Based on the analysis of the
Company's and Subsidiaries operations, in Management’s opinions and of its legal
advisors, as a result of the application of these standards will not result in significant
contingencies for the Company and its Subsidiaries as of 31 December 2015 and 2014.
28
Reporte Anual 2015 53
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
(b.2) Tax Authority reviews The Peruvian Tax Authority is entitled to review and, if applicable, amend the income tax
calculated by the Company’s Subsidiaries up to four years after the tax return was filed.
Due to the interpretations likely to be given by the Peruvian Tax Authority on current legal
regulations, it is not possible to determine, as of this date, if whether the reviews to be
conducted will result or not in liabilities for the Company and its Subsidiaries, therefore,
any increased tax or surcharge that could arise from possible tax reviews will be applied to
the consolidated results of the year in which is determined. In Management’s opinion and
of its tax advisors, any additional tax settlement will not be significant for the consolidated
historical financial information as of 31 December 2015 and 2014.
(b.3) During the years 2015 and 2014, the Company’s Subsidiaries generated tax losses.
According to the recovery system chosen by the Management, the tax loss can be carried
forward indefinitely and offset up to a maximum of 50 per cent of taxable earnings for
each year. The amount of the tax loss carry forward is subject to the outcome of the
reviews referred to in paragraph (b.2) above.
As of 31 December 2015 and 2014, Cacao Del Peru Norte S.A.C. had tax losses declared
to the tax administration amounting to S/9,401,285 and S/3,426,599, respectively
(equivalent to US$2,754,551 and US$1,146,403, respectively). The Subsidiaries are in
start-up phase and Management expects to have taxable income over the long term. In
addition, as explained in literal (b.2), Subsidiaries are subjected to the Tax Administrator’s
review in order to offset any tax losses. Management assessed there is no certainty about
when the Company would be able to apply its carry forward tax losses. Thus, Management
has decided not to recognize deferred tax asset on the carry forward tax loss as of 31
December 2015 and 2014.
14.
Administrative expenses
(a)
This item is made up as follows:
2015
US$
2014
US$
Services provided by third parties (b)
1,979,880
1,500,909
Personnel expenses (c)
1,033,084
682,652
Provision for share based payments, note 12(b)
345,169
336,505
Allowance for VAT and PAPEC impairment, note 6(e)
174,967
129,387
Depreciation, note 8(d)
40,888
4,312
Write-off of seeds
11,980
3,542
Taxes
12,555
15,511
21
-
341,978
__________
203,821
__________
3,940,522
__________
2,876,639
__________
Amortization
Other (d)
29
54 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
(b)
The services provided by third parties is further broken down as follows:
2015
US$
2014
US$
Advisory services
476,239
524,685
Travel expenses
173,835
328,213
Legal services
219,380
251,754
Other labor services
341,656
105,127
Publicity
142,291
-
Payroll services
168,738
100,030
Accounting and administrative services
257,795
84,045
22,568
22,519
177,378
__________
84,536
__________
1,979,880
__________
1,500,909
__________
2015
US$
2014
US$
Bank expenses
Other
(c)
Personnel expenses are made up as follows:
682,174
390,932
Ordinary benefits
Wages and salaries
93,319
84,914
Social security contributions
26,299
38,338
Vacation expenses
49,338
29,845
181,954
___________
138,623
__________
1,033,084
___________
682,652
__________
Other
Average number of employees The average number of people employed by the Company during the periods was:
2015
Administrative
Workers
2014
61
31
368
_________
182
_________
429
_________
213
_________
Reporte Anual 2015 55
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
(d)
The item is made up as follows:
2015
US$
Office and sundry supplies
95,097
101,287
Environment management activities
34,996
36,503
121,097
12,759
16,097
14,550
74,691
________
38,722
________
341,978
________
203,821
________
Machinery spare parts
Insurance
Other
15.
2014
US$
Contingencies
Certain non-governmental organizations have expressed concern on the internet and the AIM related to
the environmental impact of the Company's activities.
In accordance with the opinion of the Company's Management and its legal counsel, the Company
operates in full compliance with all applicable Peruvian environmental laws relating to planning, land
use, development, operation and plantation standards. It operates on freehold land zoned for
agricultural purposes by the relevant government authorities of Loreto, Peru. Additionally, on 12
January 2016, the Federal Supreme Court of Peru re-affirmed the Loreto Superior Court of Appeals'
ruling on 26 March 2015 (previously detailed via RNS on 29 September 2015), which itself originally
confirmed the Company's environmental permitting and agricultural zoning since 1997. Further to this
and as previously disclosed in its Admission Document, on 10 September 2013, the Company submitted
its terms of reference for the environmental reporting documentation, known locally as a PAMA. The
authorities requested that the Company submit a PAMA due to the on-going nature of agricultural
activities on the Company's land; since that time the authorities have not issued documentation to the
Company changing this position nor requesting an alternative environmental certification. The
Company's terms of reference for the PAMA were approved by the relevant authorities on 9 October
2013. As part of this PAMA, United Cacao's community participation plan was submitted to the relevant
authorities on 4 September 2014 and subsequently approved. Final approval of the PAMA is expected
during the course of 2016.
Thus, in the Company's opinion, this situation will not have a significant impact and there is no litigation
or other contingencies on the consolidated financial statements of the Company and its Subsidiaries as
of 31 December 2015 and 2014.
31
56 Reporte Anual 2015
United Cacao Limited and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
16.
Loss per share
Basic loss per share amounts are calculated by dividing net loss for the year attributable to equity
holders of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted loss per share amounts are calculated by dividing the net loss for the year attributable to
ordinary equity holders of the parent by the weighted average number of Ordinary Shares outstanding
during the year plus the weighted average number of ordinary shares that would be issued on the
conversion of all the dilutive potential ordinary shares into Ordinary Shares.
The following reflects the loss and share data used in the basic and diluted loss per share computations:
2015
2014
(4,229,375)
(2,981,983)
18,696,678
___________
12,745,429
___________
(0.23)
___________
(0.23)
___________
Net loss attributable to equity holders of the parent for basic and
diluted earnings (numerator)
Weighted average number of ordinary shares for basic and diluted
earnings per share (denominator) (*)
Basic and diluted loss per share (average)
(*)
The weighted average number of shares takes into account the weighted average effect of changes in
ordinary share transactions during the year
The Company has granted stock options to certain employees whose corresponding number of shares
related to outstanding options (see note 12) may have a dilutive effect in earnings per share in future
periods. However, considering that the Company had net losses during 2015 and 2014, these options
were not considered in the earnings per share calculation as of 31 December 2015 and 2014, due to its
potential anti-dilutive effect.
There have been no other transactions involving ordinary shares or potential ordinary shares between
the reporting date and the date of authorization of these consolidated financial statements.
17.
Financial risk management
The activities of the Company and its Subsidiaries are exposed to market risks during the normal course
of their operations; however, Management, based on its technical knowledge and experience, intends to
diminish the potential adverse effects in its financial performance, establishing policies for credit,
liquidity, currency and interest risks.
The Company’s Management is aware of market conditions and, based on its knowledge and experience,
manages liquidity, interest rate, currency and credit risks following the policies adopted by the Board.
The most important aspects of managing these risks are:
(a)
Market risksThe market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices. Market risks arise from open positions in interest
rates, currency and equity products. In case of the Company and its Subsidiaries, the financial
32
Annual Report 2015 / Informe Annual 2015
57
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
instruments affected by the market risks include bank deposits, receivable and payable accounts
which are exposed to currency, interest rates, credit and liquidity risks.
(b)
Currency risk The Company and its Subsidiaries obtain financing for working capital and investments in U.S.
Dollars, so there is no exchange rate risk. The Company’s Subsidiaries are in start-up stage so
there are some local buys in foreign currency (mainly Soles). Management believes that future
fluctuations in the exchange rate of Peruvian currency against the U.S. Dollar will not affect
significantly the results of the Company’s future operations.
The following table demonstrates the sensitivity to a reasonably possible change in the Nuevos
Soles (Peruvian Currency – S/.) exchange rate, with all other variables held constant. The impact
on the Company’s results before income tax is due to changes in the fair value of monetary
assets and liabilities:
Change in S/. rates
(Increase) decrease of net loss for the
year ended at 31 December
_______________________________________
2015
US$
2014
US$
%
+5
7,102
74,638
+10
14,204
149,276
-5
(7,102)
(74,638)
(14,204)
(149,276)
-10
(c)
Credit risk Credit risk is the risk that counterparty does not perform its assumed obligations in a financial
instruments or a commercial contract, and this causes a financial loss. The Company and its
subsidiaries are exposed to credit risk from its operating and financial activities, including
deposits in banks and financial institutions and other financial instruments.
Financial instruments and bank deposits The credit risk on bank balances is managed by the Finance Department in accordance with
Company’s policies. The counterparty credit limits are reviewed by Management and the Board of
Directors.
The limits are set to minimize the concentration of risks and therefore mitigate financial losses
from potential counterparty defaults. The Company and its subsidiaries’ maximum exposure to
credit risk for the components of the consolidated statements of financial position as of 31
December 2015 and 2014 is the carrying amount as illustrated in notes 4 and 6.
In Management’s opinion, as of 31 December 2015 and 2014, the Company does not consider
that those concentrations imply unusual risk for its operations.
33
58 Reporte Anual 2015
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
(d)
Liquidity risk Liquidity risk originates from the inability to obtain funds necessary to meet the Company’s
financial obligations.
The administration of the liquidity risk implies keeping enough cash as well as having the
availability to obtain financing through adequate credit sources and the capability to liquidate
transactions.
As of 31 December 2015 and 2014, the Company’s subsidiaries are in the initial agricultural
growth stage and have the financing support of its shareholders. In Management’s opinion, the
Company and its subsidiaries are not exposed to a significant risk of liquidity risk.
(e)
Interest rate risk The Company’s exposure to this risk arises from changes in interest rates, mainly for those longterm financial obligations which would keep at variable interest rates. The Company seeks to
minimize this risk by maintaining a balance between fixed and variable interest rates on its
obligations balanced. When assuming new loans or debt, Management applies its criterion in
order to decide whether a fixed or variable rate is more favorable to the Company during an
expected period until the new liability’s maturity.
As explained in note 9, as of 31 December 2015, the Company maintained financial obligations
related to Secured Convertible Bond, which are subject to fixed interest rates. As of 31
December 2043, the Company did not maintain financial obligations at variable interest rate.
In that sense, The Board considers that the Company is not exposed to significant fluctuations of
the interest rates.
(f)
Capital management The primary objective of the Company and its Subsidiaries capital management is to ensure that
it maintains a strong credit rating and healthy capital ratios in order to support its business and
maximize shareholder value.
The Company and its Subsidiaries manage its capital structure and makes adjustments to it in
light of changes in economic conditions. To maintain or adjust the capital structure, the Company
and its Subsidiaries may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares.
No changes were made in the objectives, policies or processes for managing capital during the
years ended as of 31 December 2015 and 2014.
34
Reporte Anual 2015 59
United Cacao Limited SEZC and its Subsidiaries
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
18.
Fair value information
The fair values of the financial assets and liabilities are included at the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than in a forced or liquidation
sale.
In Management’s opinion, the fair value of the Company and its Subsidiaries financial instruments is not
significantly different from their carrying values; therefore, the disclosure of this information has no
effect on the consolidated historical financial information as of 31 December 2015 and 2014.
The following table presents an analysis of the financial instruments that are measured at fair value as
of 31 December 2015 and 2014:
2015
____________________________
Book value
Fair value
US$
US$
Secured Convertible Bond
19.
4,587,662
4,954,470
2014
US$
-
Segment information
The Company’s activities consist of agricultural operations related to cacao cultivation. The Board of
Directors and the Financial Controller are together considered be the chief operating decision makers.
The business is managed as one entity, and activities are not split into any further regional or product
subdivisions in the internal management reporting as any such split would not provide management with
meaningful information. Consequently, all activities are related to this one segment. All non-current
assets are located in the Subsidiaries’ country of domicile, being Peru.
20.
Commitments
There were no capital commitments as of 31 December 2015 and 2014.
35
60 Reporte Anual 2015
Fotos de la Comunidad
The Company maintains an active community engagement programme. Please visit our website for more pictures and information.
La Compañía mantiene un programa activo de participación con la Comunidad. Por favor visitar nuestra pagina web para más informacion y fotos.
Tamshiyacu Senior Adults Association Donation – 27 February 2015
Cacao Cup Championship – 11, 18 & 25 October and 1 November 2015
Donación a la Asociación de Adultos Mayores de Tamshiyacu - 27 de
Febrero de 2015
Campeonato Copa Cacao - 11, 18 y 25 de Octubre y el 1 de Noviembre de
2015
The Company provides regular technical assistance, training and
education to local villagers and PAPEC members on growing cacao.
Concurso de Dibujo y Pintura para niños – 16, 23 y 30 de Mayo, 2015
La Compañía provee regularmente asistencia técnica, entrenamiento y
educación a los pobladores locales y a los miembros de PAPEC sobre el
cultivo de cacao.
Technicians from the Company teach PAPEC members best practice
techniques for preparing the nursery.
United Cacao provides local farmers with access to capital through our
PAPEC micro-lending package.
Los técnicos de la Compañía enseñan a los miembros del PAPEC las
mejores técnicas para preparar el vivero y plantar el cacao
United Cacao proporciona a los agricultores locales acceso a capital a
través de nuestro paquete de micro-préstamos del PAPEC
Drawing and Painting Contests for Children – 16, 23 & 30 May 2015
Admission to trading on the Lima Stock Exchange – 19 June 2015
www.unitedcacao.com