Feronia Inc. Announces Filing of Amended and Restated Interim Financial Statements and MD&A for First Three Quarters of 2011
TORONTO, July 4, 2012 /CNW/ - Feronia Inc. ("Feronia" or the "Company") (TSX-V: FRN) today announced that it has filed on SEDAR amended and restated interim financial statements and management's discussion and analysis for the first three quarters of 2011 (the "2011 Refilings"). As previously announced, as a result of the audit of the financial statements for the year ended December 31, 2011, the Company determined that certain IFRS-determined information in its interim filings for each of the first three quarters of 2011 would require adjustments to correct for IFRS-related changes in the valuation model for the biological assets of the Company and the reclassification of the warrants as financial liabilities. A summary of the adjustments made in the 2011 Refilings is set forth below:
(1) Non-current biological asset valuation
As a result of the adoption of IFRS in 2011, management was required to apply the accounting standard IAS 41, Biological Assets (IAS 41) for each interim period from the transition date, being January 1, 2010. Accordingly, the 2011 Refilings include adjustments to reflect the proper application of IAS 41 and to correct for formula errors noted in the valuation models and errors in the valuation methodology, resulting in an elimination of gain on the biological assets of the Company, an elimination of non-current biological assets and a corresponding reduction in income tax expense and deferred tax liabilities.
(2) Warrant liability
As a result of the adoption of IFRS, the Company was required to record certain non-broker warrants as financial liabilities based on the fact that the warrants have anti-dilution clauses which did not meet the "fixed-for-fixed" rule set out in IAS 32. Accordingly, the 2011 Refilings include adjustments to reflect the proper application of IAS 32, resulting in the recognition of a fair value gain or loss, as the case may be, in the warrants as part of finance costs.
(3) Arable and other adjustments
In preparing the 2011 year-end consolidated financial statements, management noted that certain transactions were not accounted for correctly during the interim periods, which resulted in adjustments being made to certain line items in the interim financial statements for the first three quarters of 2011. The adjustments in the 2011 Refilings primarily relate to an increase in selling, general and administrative expenses as a result of expensing previously deferred costs relating to arable land preparation and adjusting amortization expense.
Please refer to Note 2 of the amended and restated consolidated interim financial statements for the first three quarters of 2011 for a detailed breakdown of the adjustments associated with the foregoing items, available at www.sedar.com.
Executive Chairman Ravi Sood commented: "As indicated in previous filings the Company had identified various items, relating primarily to our transition to IFRS accounting, that required restating. All of these restatements were non-cash items and not related to the fundamental performance and progress in our business. Since December 2011, we have strengthened our finance team with the addition of two experienced professionals. We believe that the Company is well positioned to handle the accounting and finance requirements of the growth ahead of us."
About Feronia Inc.
Feronia is a large-scale commercial farmland and plantation operator in the Democratic Republic of Congo ("DRC"). The Company uses modern agricultural practices to operate and develop its oil palm plantations and arable farming business division. Feronia believes in the immense agricultural potential of the DRC for high-quality foodstuffs and edible oils given its ideal climate, excellent soil and highly skilled and experienced workforce. Feronia's management team is comprised of senior agriculturalists with extensive experience in managing both plantations and large-scale mechanized farming operations in emerging markets. Feronia is committed to sustainable agriculture, environmental protection and providing support for local communities. For more information please see www.feronia.com.
Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "anticipates", "plans", "proposes", "estimates", "intends", "expects", "believes", "may", "will" and include without limitation, statements regarding proposed capital expenditure; the Company's plan of operations and comparative advantages; plans regarding sowing rice and replanting oil palms; improvements in harvesting and collection; and positive trends regarding OERs. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others: risks related to foreign operations (including various political, economic and other risks and uncertainties), the interpretation and implementation of the "Loi Portant Principes Fondamentaux Relatifs A L'Agriculture" (the DRC's agriculture law, as discussed in the Company's management's discussion and analysis for the period ended March 31, 2012), termination or non-renewal of concession rights or expropriation of property rights, political instability and bureaucracy, limited operating history, lack of profitability, lack of infrastructure in the DRC, high inflation rates, limited availability of debt financing in the DRC, fluctuations in currency exchange rates, competition from other businesses, reliance on various factors (including local labour, importation of machinery and other key items and business relationships), the Company's reliance on two refining factories and one major customer, lower productivity at the Company's plantations and arable farming operations, risks related to the agricultural industry (including adverse weather conditions, shifting weather patterns, and crop failure due to infestations), a shift in commodity trends and demands, vulnerability to fluctuations in the world market, the lack of availability of qualified management personnel and stock market volatility. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.
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