Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARMAJARO HOLDINGS LIMITED
COMPANY INFORMATION
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ARMAJARO HOLDINGS LIMITED
CONTENTS
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ARMAJARO HOLDINGS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The group’s principal activities during the year were the trading of soft commodities and related derivative products, investment in early stage and scaling businesses, and development of its South African real estate and agricultural assets.
The 3 lines of business have been the focus of the Board since the group became a family office during 2017. The Board and shareholders comprise family members exclusively. The group’s objective is the preservation and long-term growth of shareholder capital which is applied to support the Board’s social, economic, and environmental interests. The group duly invests in commercial opportunities across a range of asset classes and industry verticals without the constraints of a formal allocations mandate or performance benchmarks. The group’s investment activities help to sustain small and medium sized businesses and significant employment in both the UK and South Africa. They support government in offering a meaningful source of patient risk capital beyond that created by favourable personal tax incentives or the formal capital markets.
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ARMAJARO HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- Commodity Trading
The year ended 31 December 2023 was another good year for the commodities trading business. 6 years of profitable trading now underpin the consolidated group results since the company became a family office. The Board’s trading methodology and risk management strategies have remained relatively consistent year on year. Strong trading profits fund the group’s growing investment activities. - Non-Agricultural Investments The group’s non-agricultural investment activities focus predominantly on the support of British business start- ups, turnarounds, and growth opportunities. A range of equity and debt arrangements of varying quantum apply to the minority stakes taken up in these businesses. The group’s investments are concentrated in businesses operating within the green energy, education, marine, commodities, sports and leisure, hospitality, marketing and financial services industries. But the group’s investment appraisal activities are not exclusive to these industries. The investee businesses are often B2B and invariably feature the latest, life-enhancing disruptive technologies as their USP. The great majority of the Board’s non-agricultural investments to-date are not real estate backed. During the year £8.4m was invested in various new businesses and existing investments. At 31 December 2023, the total investments in unquoted businesses stated at their market value or original cost less accumulated impairment was £23.7m (2022 £22.2m). In mid November 2023, the new restaurant, Scape, opened and began trading. - Agricultural Investments The group holds interests in South African real estate and agriculture as well as other supporting commerce through its wholly owned subsidiary Armajaro Estates (Pty) Limited (AEL). The primary business asset is the Vondeling farm estate on the slopes of the Paardeberg Mountain in the Western Cape which has 98 hectares under vine and produces wines for distribution to the domestic and international markets. After some 20 years of development, the near-term business objective for the Vondeling estate wine business is to achieve breakeven. The estate recorded a loss £901k (2022 loss of £756k). During 2023, a further 35 hectares of almonds were planted in the neighbouring Vrymansfontein farm estates acquired by AEL in 2020). Further investment has been made to improve the irrigation across the farm and renew the dams and pumphouses. We have invested some 100 million Rand in the last 12 months for irrigation and land improvement, which should enhance yields once the trees mature (2 more years).
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ARMAJARO HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The group’s businesses operate in highly competitive markets. The group manages the risks of operating in
such environments by offering competitive prices, providing value added services and maintaining strong relationships with its customers and suppliers. Investment risk The group takes passive investment positions in new businesses, some of which may fail and cause loss to the group. This risk is managed by investing in a diverse range of opportunities so that on balance the group believes its gains will more than compensate for losses. Liquidity risk Liquidity risk is the risk that the group may not be able to meet its obligations when they fall due. The group therefore maintains sufficient cash to meet its obligations at all times. The group’s liquidity position is managed by a centralized group treasury function; short term cash requirements and long term funding projections are constantly reviewed to ensure that all funding requirements are adequately covered. Counterparty risk The group is exposed to the risk that its counterparties will default on their contractual obligations to pay fees, resulting in a financial loss. This is managed by use of third-party reputable administrators through which fees are received. Foreign exchange risk Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction or, if hedged, at the forward contract rate. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date or, if appropriate, at the forward contract rate. Any gain or loss arising from a change in exchange rates is included as an exchange gain or loss in the profit and loss account. The group has chosen GBP as the functional currency reflecting the fact that a substantial amount of the turnover is denominated in GBP. The directors therefore believe that GBP should be used as the presentation currency.
The performance of the commodities business is assessed using the reporting and analysis tools of the third- party trading platforms on which the group’s trading is transacted. Simple cumulative realised and unrealised profits and return on capital employed are the primary metrics referenced by the Board in conjunction with normal risk management measures including established standard returns deviations and margin limits. In achieving an acceptable risk return balance, the Board combines relevant and timely data from its global network of commodity specialists with its own experience of the markets’ idiosyncrasies garnered over many decades. Total assets under management in respect of client funds is an important KPI but is not useful in the context of the group’s own assets under management where these are not managed formally in a closed locked in fund but rather capable of rapid re-allocation by the Board to alternative longer term investment opportunities as they may arise.
The performance of the group’s non-agricultural business investments is assessed by reference to periodic investor reports issued by the managements of the businesses in which the group has acquired a minority interest. Typically investee updates to investors are monthly for key drivers and metrics and quarterly for fuller explanatory narratives. The Board instructs or performs its own full and proper due diligence on prospective investments and typically consults the views of industry experts prior to commitment. Much store is placed on the quality of the investee management teams by the Board, and in all cases these teams are required to be of an exceptional standard to qualify for funding. The performance of investee businesses depends on a wide range of commercial, financial, and operational factors. The ultimate indicator of the performance of the group’s investment activities derives from the consensus valuations placed on its investments by third parties. Such valuations typically arise when the investee business secures new financing monies in exchange for a proportion of the total equity based on a revised total equity valuation for the investee business.
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ARMAJARO HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The South African agricultural operation’s performance is assessed by reference to monthly management accounts which employ a range of KPIs for timely assessment of grape cultivation and wine production and distribution. The key metrics include yield per hectare, grape to wine conversion rates, full absorption cost tracking and recovery pricing, and channel priced profits per standard volume measure. In addition to familiar farming and agricultural processing risks and those inherent in viticulture and vinification in particular, the group closely monitors its political and currency exposure.
Future Developments The Board envisages no change to the group’s 3 lines of business activity in the foreseeable future. The group’s objective is to scale each in a controlled and value accretive manner.
This report was approved by the board on 23 September 2024 and signed on its behalf.
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ARMAJARO HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The directors who served during the year were:
The profit for the year, after taxation, amounted to £20,302 thousand (2022 - £5,224 thousand).
The Directors do not recommend a final dividend.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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ARMAJARO HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The auditors, Price Bailey LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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ARMAJARO HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ARMAJARO HOLDINGS LIMITED
We have audited the financial statements of Armajaro Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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ARMAJARO HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ARMAJARO HOLDINGS LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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ARMAJARO HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ARMAJARO HOLDINGS LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the company and the group and he industry in which they operate and considered the risk of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations. This included those regulations directly related to the financial statements, including financial reporting, tax legislation and distributable profits and industry regulations including GDPR, employment law and health and safety. We communicated the identified laws and regulations with the audit team and remained alert to any indications of non-compliance throughout the audit. We carried out specific procedures to address the risks identified. These included the following: • Enquiry of management around actual and potential litigation and claims; • Reviewing minutes of meetings; • Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
for and on behalf of
Chartered Accountants
Statutory Auditors
Causeway House
1 Dane Street
Hertfordshire
CM23 3BT
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ARMAJARO HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARMAJARO HOLDINGS LIMITED
REGISTERED NUMBER: 03575908
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 23 September 2024.
The notes on pages 19 to 37 form part of these financial statements.
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ARMAJARO HOLDINGS LIMITED
REGISTERED NUMBER: 03575908
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 19 to 37 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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ARMAJARO HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARMAJARO HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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ARMAJARO HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARMAJARO HOLDINGS LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Armajaro Holdings Limited is a private company limited by shares. The Company is incorporated in England and Wales. The registered office is 51-52 Frith Street London, W1D 4SH. Its registered number is 03575908.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 January 2015.
The Directors have at the time of approving the financial statements, a reasonable expectation that the group has adequate resources to continue in operational existence for the forseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
The estimated useful lives range as follows:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan. Investments in non-derivative instruments that are equity to the issuer are measured: • at fair value with changes recognised in the Consolidated Statement of Comprehensive Income if the shares are publicly traded or their fair value can otherwise be measured reliably; • at cost less impairment for all other investments. Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income. For financial assets measured at amortised cost, the impairment loss is measured as the difference etween an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate or measuring any impairment loss is the current effective interest rate determined under the contract. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date. Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
Analysis of turnover by country of destination:
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10.Taxation (continued)
There were no factors that may affect future tax charges.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent Company for the year was £23 million (2022 - £6 million).
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12.Tangible fixed assets (continued)
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Subsidiary undertakings (continued)
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Share premium account
issuing of shares are deducted from share premium.
Foreign exchange reserve
Profit and loss account
less any dividends paid.
The company operates a defined contributions pension scheme. The assets of the scheme are held
separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £8,000 (2022 - £8,000). Amounts of £9,000 (2022 - £1,000) were payable to the fund at the balance sheet date and are included in other creditors.
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ARMAJARO HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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