AGRIBEL HOLDINGS LTD FINANCIAL REVIEW 2021
Service level agreement income (" SLA ") Senwes performs certain administrative duties to it subsidiaries , joint ventures and associates .
The performance obligation is satisfied by Senwes over a period of time as the customer receives and consumes the benefit from the service as its being performed .
As the customer pays for specific activities to be performed , an output based method to measure the completion of the service is appropriate . This entails that revenue is recognised on the basis of the value of services transferred to date relative to the total service promised .
Revenue from SLA is currently recognised on a fixed monthly-basis , which is derived from the SLA agreement between the parties .
Precision farming income Senwes make GPS signals available to customers for a specified period .
Revenue is recognised over the period of the agreement , which may be terminated by either party at one month ' s notice . The customer simultaneously receives and consumes the benefit as the service obligation is performed by Senwes .
Income from sale of goods Sale of whole goods / parts without warranty The group supplies specified equipment or parts to the customer . No warranty or guarantee is provided .
Revenue is recognised at a point in time when control of the asset is transferred to the customer . The timing of revenue recognition depends on when the ability to direct the use and obtain the benefits from the asset transfers to the customer . This in turn depends on the terms of the sale ( delivery terms , timing of the transfer of risk , etc .). This may be demonstrated , and will depend on , the circumstances as evidenced by a combination of the following : - when the customer becomes liable to make payment for the equipment ; - when legal title to the equipment passes to the customer ; - when physical possession passes to the customer ; - when the significant risks and rewards of ownership pass to the customer ; and - when the customer has accepted the asset .
Sale of whole goods / parts with John Deere warranty Revenue terms , conditions and recognition criteria are the same as above except for the warranty provided . The warranty is provided by John Deere and administered by Senwes Equipment . As the warranty obligation is on John Deere , Senwes Equipment does not recognise any provision for the costs involved with this liability .
Trade in fuel , meat , vehicles , raisins , cattle hides and sheep skins . Revenue relating to the sale of these products are measured at the transaction price which is the amount of consideration that the Group expects to be entitled to in exchange for the products provided . Revenue from the sale of these goods is recognised when the goods are delivered and have been accepted by customers .
Revenue from other sources
Interest income Interest income on all financial instruments measured at amortised cost is recorded using the effective interest rate ( EIR ) method . EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period , where appropriate , to the net carrying amount of the financial asset or liability . Interest income is included in interest income in the statement of profit or loss .
As finance is provided continuously , the service obligation is performed over a period of time and as the client receives the benefit from the services as its being performed .
Interest is accrues daily and is recognised on a monthly-basis .
Investment income
Dividends received Dividends received from investments are recognised when the shareholders ’ right to receive payment is established .
Agribel Holdings Limited Reg nr : 1996 / 017629 / 06 AGRIBEL ANNUAL FINANCIAL REVIEW 2021
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