AGRIBEL HOLDINGS LTD FINANCIAL REVIEW 2021
Processing of grain Senwes processes grain on behalf of a counter party . This process includes various actions , i . e .: - Quality control of grain ; - Fumigation of seed ; - Processing to predetermined condition ( including cleaning ); - Packing of processed seed ; - Protection of seed ; and - Storage of seed .
The primary performance obligation ( cleaning ) is performed at a point in time once the cleaning process has been completed based on the following indicators : - The client only benefits from the processing upon completion . - Senwes only has a right to be paid once processing has been completed ; and - Senwes only transfers physical possession of the product which value has been enhanced back to the client once processing is completed .
Thus , the full revenue from the transaction price is recognised upon completion of the processing activity by Senwes .
Commission received Commission is received on the procurement and sale of grain .
Revenue is recognised at the point in time when grain is delivered .
Servicing of equipment The customer is charged for time spent , parts and consumables . If it is not possible to complete the service due to work beyond the initial scope , the client is liable for the charges for additional time spent and materials used to the point when the service ceases .
If the service does not take a significant period of time to perform , the revenue will be recognised when the service is completed . If the service does however , take a significant amount of time , revenue will be recognised as the customer ’ s asset is enhanced and the group obtains a right to receive payment .
Credit initiation fees The client pays the group the initial fee to perform certain necessary work and to prepare loan documentation .
The performance obligation is fulfilled at a specific point in time , as opposed to over a period of time . This point in time is when all the procedures to put the loan agreement have in place been completed .
Management fees Senwes will enter into instalment agreements with clients and conclude the related security in respect of such agreements . Following the conclusion of this agreement Senwes may , subject to the approval of the counterparty , sell its rights and obligations from this transaction to the counterparty by assignment .
The group is appointed by the counterparty to administer the accounts and collect the amounts due to the counterparty , in the capacity as an agent , in respect of the transaction assigned .
This performance obligation is satisfied by the group over a period of time as the counterparty receives and consumes the benefit from the service as it is being performed .
The counterparty pays the group a monthly management fee based on a percentage of the average account balances administered for the duration of the month . The Management fee constitutes the revenue stream .
Revenue is recognised on a monthly-basis , which is derived from the agreement between the parties .
78 AGRIBEL ANNUAL FINANCIAL REVIEW 2021 Agribel Holdings Limited Reg nr : 1996 / 017629 / 06