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REG-R.E.A. Holdings plc R.E.A. Holdings plc: Annual report in respect of 2020

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R.E.A. Holdings plc (RE.)
R.E.A. Holdings plc: Annual report in respect of 2020

27-Apr-2021 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

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R.E.A. HOLDINGS PLC (the "company")

 

ANNUAL FINANCIAL REPORT 2020

 

The company's annual report for the year ended 31 December 2020 (including notice
of the annual general meeting to be held on 10 June 2021) (the "annual report")
will shortly be available for downloading from the group's website at
www.rea.co.uk.

 

A copy of the notice of annual general meeting will also be available to download
from the Investors section (under Shareholder information) of the website. The
company has arranged for shareholders to be able to listen to the live proceedings
of the meeting via an audio webcast available to shareholders via the internet.
Shareholders are advised to check the home page of the website for details of how
to access the AGM webcast.

 

Upon completion of bulk printing, copies of the annual report will be despatched
to persons entitled thereto and will be submitted to the National Storage
Mechanism to be made available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

 

The sections below entitled "Chairman's statement", "Dividends", "Principal risks
and uncertainties", "Viability statement", "Going concern" and "Directors'
responsibilities" have been extracted without material adjustment from the annual
report. The basis of presentation of the financial information set out below is
detailed in note 1 to the financial statements below.

 

 

HIGHLIGHTS

 

Overview

 

  • Limited Covid-19 effect on operations; revenues increased and FFB crop
    consistent with previous years

 

  • Steady recovery and firm CPO prices with corresponding improvement in group's
    financial performance

 

Financial

 

  • Revenue up 11 per cent to $139.1 million (2019: $125.0 million)

 

  • Cost of sales reduced by 10 per cent to $110.2 million (2019: $121.8 million)
    in part reflecting a full year of the cost saving initiatives implemented in
    previous year

 

  • EBITDA more than doubled to $36.8 million and cash generated doubled to $53.6
    million

 

  • Pre-tax loss significantly reduced to $23.2 million (2019: loss of $43.7
    million), after non-recurring impairment and similar charges of $9.5 million
    (2019: $3.3 million)

 

  • Repayment date of £30.9 million nominal of 8.75 per cent sterling notes
    extended from 2020 to 2025

 

  • $7.5 million of loan from DSN converted to equity in REA Kaltim and repayment
    date of balance of loan of $11.1 million postponed from 2020 to 2025

 

  • Advanced stage discussions to replace outstanding bank loans to REA Kaltim and
    SYB with new term loans of longer duration, substantially increasing the net
    bank funding available to the group over the next three years

 

  • Group net indebtedness reduced from $207.8 million in 2019 to $189.4 million
    in 2020

 

Agricultural operations

 

  • FFB production of 785,850 tonnes (2019: 800,666 tonnes) despite excessively
    wet weather and Covid-19 related travel restrictions impacting harvester
    availability in peak cropping months

 

  • Third party FFB of 185,515 tonnes (2019: 198,737 tonnes)

 

  • Pressure on CPO extraction rates from adverse Covid-19 impact on progress of
    mill works and sub-optimal loose fruit collection in the peak crop period,
    with average extraction rate of 22.5 per cent (2019: 23.0 per cent)

 

Stone and coal interests

 

  • Arrangements progressing for quarrying of the andesite stone concession (held
    by local partner, ATP) to produce crushed stone for a neighbouring coal
    company road through the group's estates, for local government projects and
    for other local users of crushed stone

 

  • With better coal prices and Covid-19 concerns subsiding, activity at the Kota
    Bangun coal concession (held by local partner, IPA) resumed with the
    contractor aiming to commence operations later in 2021

 

  • Revenue from IPA coal operations also expected in 2021 from shipping coal on
    behalf of other coal concessions through IPA's port

 

  • Group aiming to recover its loans to the coal concession holding companies and
    to withdraw from its coal interests as soon as practicable

 

  • Unmeritorious arbitration claims against IPA dismissed and indemnity costs
    awarded to and recovered by IPA

 

Outlook

 

  • CPO prices expected to remain firm at or around current levels with growth in
    global demand for vegetable oils outstripping the growth in supply

 

  • Annual capital expenditure to be maintained at recent more moderate levels; 
    2021 expenditure to be concentrated on completing expansion of the group's
    newest oil mill and extension planting of remaining small pockets of land
    available in existing estates

 

  • Firm CPO prices and steady operational performance underpinning the group's
    improving financial position and outlook

 

  • Financing options, including equity, equity-linked instruments and trade
    finance, being explored to strengthen the balance sheet

 

  • Preference dividends arising in 2021 to be paid during the year with the group
    aiming progressively to catch up preference dividend arrears as soon as
    circumstances prudently permit
     

 

 

CHAIRMAN'S STATEMENT

 

2020 was a year of two halves. While operationally, satisfactory crop yields were
achieved, the sharp fall in the market prices of CPO and CPKO immediately
following the onset of the Covid-19 pandemic had a significant negative impact on
results for the first half. As prices steadily recovered through the second half,
there was a corresponding improvement in financial performance.

 

Operationally, the impact of Covid-19 on the group has been limited. The group
experienced delays in deliveries of some supplies, as well as travel restrictions
that prevented or delayed employees and contractors from returning to the estates.
Changes to work practices, on-site testing of employees and other preventative
measures, as recommended in the Indonesian government's guidelines, have been
introduced and it is pleasing to report that, to date, only some 0.2 per cent of
the work force has been infected with Covid-19, the majority with no serious
symptoms as categorised by the Indonesian health department.

 

Climatic factors and respect for the environment are integral to the operations of
an agricultural group and the directors are conscious of, and seek to mitigate as
far as possible, the impacts of climate change. For some years the group has been
monitoring and publishing its carbon footprint calculated by using PalmGHG, a tool
developed by the Roundtable on Sustainable Palm Oil. For 2020, emissions are now
disclosed under "Sustainability" in the "Strategic report" of the annual report in
accordance with the recently implemented Streamlined Energy and Carbon Reporting
rules ("SECR"); emissions under PalmGHG as well as SECR will continue to be
published on the group's website at www.rea.co.uk.

 

After an encouraging start to the year, the CPO price fell sharply to a low of
$510 per tonne, CIF Rotterdam, in mid May, reflecting the dramatic slowdown in
world demand as a result of Covid-19. The recovery in the second half of the year
saw prices closing the year at $940 per tonne as a result of restocking in India
and China and reduced production in the major producing countries.

 

Unfortunately, producers were not able to realise the full benefit of the price
increase as the Indonesian government made changes to the export levy scale in
order to fund continuing subsidies to Indonesian manufacturers of biodiesel, who
were under pressure from relatively low crude oil prices, and to support measures
designed to benefit the oil palm industry.

 

Notwithstanding the impact of export duty and the increased export levy (as set
out in the company's press release in December 2020), gross margins in 2020 were a
considerable improvement on 2019. The average selling price for the group's CPO in
2020, on an FOB basis at the port of Samarinda, net of export levy and duty, was
$558 (2019: $453) per tonne. The average selling price for the group's CPKO, on
the same basis, was $601 (2019: $533) per tonne.

 

Despite the impact of delayed crop ripening and excessively wet weather in the
second half of the year, as well as some shortfall in the availability of
harvesters who were unable to travel to the estates due to Covid-19 related travel
restrictions, the group achieved a good production outcome in 2020. FFB at 785,850
tonnes were slightly short of the total for 2019 of 800,666 tonnes, producing a
yield per mature hectare of 22.6 tonnes (2019: 24.2 tonnes). Third party harvested
FFB was similarly impacted in 2020, with FFB totalling 185,515 tonnes compared
with 198,737 tonnes in 2019.

 

CPO production totalled 213,536 tonnes in 2020 compared with 224,856 tonnes in
2019, reflecting both the lower level of FFB and lower extraction rates. CPO
extraction rates, which averaged 22.5 per cent for the year compared with 23.0 per
cent in 2019, were squeezed by a combination of delays in completing scheduled
works in the mills and some inefficiencies in loose fruit collection during the
peak crop period in the latter months of the year. The mill works were delayed by
a shortage of spare parts and the unavailability of contractors during the worst
periods of the Covid-19 pandemic. Production of both CPKO and palm kernels fared
better by contrast at, respectively, 16,164 (2019: 15,305) tonnes and 47,186
tonnes (2019: 46,326).

 

Revenue for 2020 amounted to $139.1 million, approximately 11 per cent higher than
the $125.0 million for 2019, reflecting the higher prices for CPO and CPKO during
the second half of the year. With a full year's benefit of the cost saving
initiatives implemented during 2019, cost of sales was successfully reduced by
some 10 per cent to $110.2 million compared with $121.8 million in 2019. These
improvements led to a doubling of earnings before interest, taxation, depreciation
and amortisation ("EBITDA") to $36.8 million in 2020 (2019: $18.2 million) and a
significant improvement in the operating result, a profit of $8.8 million in 2020
(2019: loss of $9.1 million).

 

Finance costs for the year totalled $23.1 million compared with $31.9 million in
2019, although the comparison is distorted by exchange rate movements (arising in
relation to sterling and rupiah borrowings) which produced a loss of $0.3 million
in 2020 compared with a loss of $8.6 million in 2019. Moreover, additional finance
costs of $2.2 million were incurred in 2020 in connection with the extension of
the repayment date of the £30.9 million 8.75 per cent sterling notes from 2020 to
2025. Excluding such movements, with the reduction in average borrowings between
2019 and 2020, finance charges were slightly lower in 2020 at $20.6 million
against $23.3 million in 2019.

 

Impairment costs, consisting principally of provisions against costs of
transferring land to smallholder schemes and expenditure on a land allocation that
has been relinquished and therefore written off, amounted to $9.5 million compared
with $3.3 million in 2019. In consequence, the group made a loss before tax of
$23.2 million compared with $43.7 million in 2019.

 

Immediate cash constraints and the prospect of the very significant debt
repayments falling due in 2021 and 2022 caused the directors again to defer
payment of dividends on the preference shares.

 

Group equity (including preference share capital) at 31 December 2020 totalled
$225.8 million compared with $239.7 million at 31 December 2019. The group's local
partner in REA Kaltim supported the group in increasing the equity of REA Kaltim
during 2020, converting $7.5 million of loans to REA Kaltim into new equity.
Similar changes to the capital structures of CDM, KMS and SYB resulted in new
equity being contributed by the minority shareholders of those subsidiaries
resulting in an overall increase in the equity of REA Kaltim and its subsidiaries
of $9.9 million. As a result, non-controlling interests at 31 December 2020
amounted to $20.0 million compared with $13.0 million at 31 December 2019.

 

Current liabilities shown by the consolidated balance at 31 December 2020 amounted
to $113.1 million, reflecting the inclusion of amounts totalling $30.5 million of
loans from the group's Indonesian bankers, PT Bank Mandiri (Persero) Tbk
("Mandiri"), to SYB and KMS that would have been classified as non-current
liabilities were it not for certain breaches by those companies of loan covenants
applicable at the balance sheet date. Mandiri has subsequently waived the breaches
in question.

 

Bank indebtedness was reduced by $15.8 million in 2020, although the reduction was
in part financed by increased pre-sale advances from customers against forward
sale commitments of CPO and CPKO. As at 31 December 2020, net indebtedness
amounted to $189.4 million, compared with $207.8 million at 31 December 2019.

 

Proposals are currently under discussion with Mandiri whereby the existing Mandiri
loans to REA Kaltim and SYB would be repaid and replaced with new loans to those
companies. The working capital facility provided to REA Kaltim would also be
repaid and replaced with two new annual revolving working capital facilities. The
new term loans would provide additional funding to the group and would be
repayable over a period of eight years while the new working capital facilities
would be renewable annually. The proposals are subject to approval by the credit
committee of Mandiri. If approved, net bank funding available to the group over
the three years to end 2023 would be substantially increased.

 

Concurrently with the discussions with Mandiri, the directors have been exploring
other financing options, including equity (in the form of ordinary or preference
shares), equity linked instruments and trade finance with the aim of strengthening
the group's balance sheet and addressing the arrears of preference dividend.

 

Provided that CPO prices remain at current levels, the directors believe that cash
flows are currently adequate to support payment of the current year's preference
share dividends but, pending greater certainty on future cash flows, they are not
yet in a position to provide guidance regarding payment of the arrears of
preference dividend, which now stand at 18p per share. The directors recognise the
importance of paying these arrears and will aim progressively to catch up such
arrears as soon as circumstances prudently permit.

 

The group aims to recover its loans from the coal concession holding companies and
to withdraw from its coal interests as soon as practicable. Following a recovery
in Indonesian coal prices, activity is now resuming at the Kota Bangun coal
concession held by the group's local partners in its stone and coal interests with
a view to commencing operations later in 2021. Additional revenues are expected to
accrue to the concession holding company, PT Indo Pancadasa Agrotama ("IPA"), from
fees charged to two neighbouring coal concessions that are planning to ship coal
through IPA's port, as well as potentially through the sale of building sand
recovered from the overburden that will be removed when mining recommences.

 

During 2020, the stone concession holding company entered into an agreement with a
neighbouring coal company to supply andesite stone for a new road to be built by
the coal company through the group's estates. After being put on hold for much of
the year due to Covid-19, road building works are now being progressed. For both
the coal mining and stone quarrying projects, it is intended that the appointed
contractors will fund the required development expenditure in exchange for a
participation in the profits from the mine or quarry.

 

The first few months of 2021 have seen continuing firm CPO prices. At reference
prices (being prices broadly equivalent to CIF Rotterdam prices) between $770 and
$1,000 per tonne, an Indonesian exporter of CPO receives, after deduction of
export duty and levy, substantially the same net price per tonne. However, the CPO
price, CIF Rotterdam, currently stands at $1,240 per tonne and exporters benefit
from approximately half of the excess of this price over $1,000. With these good
prices, the group's financial position and outlook continues to improve.
Production is at good levels, and maintenance and completion of repair works
throughout the operations should enhance efficiencies between the estates and
mills leading to improving extraction rates. Whilst some capital expenditure will
necessarily be incurred on replacement of plant, replanting of the oldest
plantings and limited extension planting, completion of the extension of the
group's newest mill, which was delayed by the Covid-19 pandemic, will ensure that
the group continues to have sufficient processing capacity for the foreseeable
future. With better cash flows, the group looks forward to strengthening the group
balance sheet and addressing the arrears on the preference dividend.

 

David J BLACKETT

Chairman

 

 

DIVIDENDS

 

In view of the difficult trading conditions prevailing during 2020 and the group's
financial performance, the directors concluded that the payment of the fixed
semi-annual dividends on the 9 per cent cumulative preference shares that fell due
on 30 June and 31 December 2020 should be deferred and that the half yearly
preference dividends that were due on 30 June 2019 and 31 December 2019 should
also continue to be deferred.

 

Provided that CPO prices remain at current levels, the preference dividends
arising on 30 June 2021 and 31 December 2021 are expected to be paid during the
year. The group recognises the importance of paying the arrears on the preference
dividend, which now stand at 18p per share, and aims progressively to catch up the
preference dividend arrears as soon as circumstances prudently permit.

 

While the dividends on the preference shares are more than six months in arrear,
the company is not permitted to pay dividends on its ordinary shares. In view of
the results reported for 2020, the directors would not anyway have considered it
appropriate to declare or recommend the payment of any dividend on the ordinary
shares in respect of 2020 even if this were permitted.

 

 

ANNUAL GENERAL MEETING

 

The sixty first annual general meeting of R.E.A. Holdings plc will be held at
32-36 Great Portland Street, London W1W 8QX on 10 June 2021 at 10.00 am.

 

Attendance

 

Ordinarily, the company welcomes shareholders to attend the annual general meeting
in person and particularly so after the restrictions necessitated by the Covid-19
pandemic that prevented in-person meetings in 2020. At the time of publication of
this Notice, however, the UK Government's guidance with respect to Covid-19 does
not permit the company to hold large in-person meetings. Accordingly, the annual
general meeting is to be held as a closed meeting with the minimum attendance
required to form a quorum.

 

Shareholders and others entitled to attend will not be permitted to attend the
annual general meeting in person but can be represented by the chairman of the
meeting acting as their proxy.

 

Shareholders are:

a)  strongly encouraged to submit a proxy vote on each of the resolutions in the
notice in advance of the meeting:

 

(i) via the website of the registrars, Link Group ("Link"), at
www.signalshares.com (and so that the appointment is received by the service by no
later than 10.00 am on 8 June 2021) or via the CREST electronic proxy appointment
service; or

 

(ii) by completing, signing and returning a form of proxy to Link as soon as
possible and, in any event, so as to arrive by no later than 10.00 am on 8 June
2021

 

and given the restrictions on attendance, shareholders are strongly encouraged to
appoint the chairman of the meeting as their proxy rather than a named person who
will not be permitted to attend the meeting.

 

b) encouraged to submit ahead of the meeting any questions for the directors,
together with the name of the submitting shareholder (and, if different, the name
of the registered shareholder as it appears on the company's register of members)
to the following email address: AGM2021@rea.co.uk so as to be received by no later
than 5.00 pm on 7 June 2021. Shareholders are directed to the notes pages of the
notice for guidance on members' rights to ask questions and when the company will
cause them to be answered.

 

The company:

 

a) has arranged for shareholders to be able to listen to the live proceedings of
the meeting via an audio webcast available to shareholders via the internet.
Shareholders are advised to check the home page of the group's website at
www.rea.co.uk for details of how to access the AGM webcast. Please note that
shareholders will not be able to actively participate in the meeting by voting on
the resolutions during the webcast. Accordingly, and as noted above, shareholders
are encouraged to vote on the resolutions and to submit questions in advance of
the meeting, although questions may also be submitted via the webcast during the
meeting; and

 

b) will continue to closely monitor the situation in the lead up to the meeting
and will make any further updates about the meeting on the home page and the
Investors section (under Regulatory news) of the group's website at www.rea.co.uk.
Shareholders are accordingly requested to watch the group's website for any such
further updates.

 

The health and wellbeing of the company's shareholders, directors and employees,
is of paramount importance and the company shall take such further steps in
relation to the meeting as are appropriate with this in mind.

 

The directors and the chairman of the meeting and any person so authorised by the
directors reserve the right, as set out in article 67 in the company's articles of
association, to take such action as they think fit for securing the safety of
people at the meeting and promoting the orderly conduct of business at the
meeting.

 

 

PRINCIPAL RISKS AND UNCERTAINTIES

 

The group's business involves risks and uncertainties. Identification, assessment,
management and mitigation of the risks associated with environmental, social and
governance matters forms part of the group's system of internal control for which
the board has ultimate responsibility. The board discharges that responsibility as
described in "Corporate governance" in the annual report.

 

Those principal risks and uncertainties that the directors currently consider to
be material or prospectively material are described below. There are or may be
other risks and uncertainties faced by the group (such as future natural disasters
or acts of God, such as the Covid-19 pandemic) that the directors currently deem
immaterial, or of which they are unaware, that may have a material adverse impact
on the group.

 

In addition to the risks that have long been normal aspects of its business, the
group faced potential impacts from the Covid-19 pandemic in 2020 and continues to
do so. Assessment of the continuing risk of this pandemic is measured against the
impacts experienced to date and the likelihood of further impacts in the future.
The pandemic has had limited direct effect on the group's day to day operations,
albeit that it has necessitated changes to certain working practices, but there
was a negative impact on markets for CPO and CPKO in 2020, the extent of which is
covered elsewhere in the "Strategic report". Potential future consequences of
Covid-19 could include a further economic downturn depressing prices for CPO and
CPKO, adverse effects on employee health, loss of production and inability to make
deliveries of palm products. Each of these could then negatively affect the
group's finances. However, as economies have firmed, CPO and CPKO prices have
strengthened and with the gradual rollout of vaccines, the risks associated with
Covid-19 to the group's employees, production, deliveries and markets are
diminishing.

 

The risks detailed below as relating to "Agricultural operations - Expansion" and
"Stone and coal interests" are prospective rather than immediate material risks
because the group is currently not expanding its agricultural operations and the
stone and coal concessions in which the group holds interests are not currently
being mined. However, such risks will apply when, as is contemplated, expansion
and mining are resumed or commence. The effect of an adverse incident relating to
the stone and coal interests, as referred to below, could impact the ability of
the stone and coal companies to repay their loans. As noted in the "Strategic
report" of the annual report, it is ultimately the group's intention to withdraw
from its coal interests.

 

Material risks, related policies and the group's successes and failures with
respect to environmental, social and governance matters and the measures taken in
response to any failures are described in more detail under "Sustainability" in
the annual report. Where risks are reasonably capable of mitigation, the group
seeks to mitigate them. Beyond that, the directors endeavour to manage the group's
finances on a basis that leaves the group with some capacity to withstand adverse
impacts from identified areas of risk, but such management cannot provide insurance
against every possible eventuality.

 

The directors have carefully reviewed the potential impact on its operations of
the various possible outcomes following the termination of UK membership of the
European Union ("Brexit"). Such outcomes may result in a movement in sterling
against the dollar and rupiah with consequential impact on the group dollar
translation of its sterling costs and sterling liabilities. The directors do not
believe that such impact (which could be positive or negative) would be material
in the overall context of the group. Beyond this, and considering that the group's
entire operations are in Indonesia, the directors do not see Brexit as posing a
significant risk to the group.

 

Risks assessed by the directors as being of particular significance, including
climate change, are those detailed below under:

 

  • "Agricultural operations - Produce prices"
  • "General - Funding"
  • "Agricultural operations - Climatic factors"
  • "Agricultural operations - Other operational factors".

 

The directors' assessment, as respects produce prices and funding, reflects the key
importance of those risks in relation to the matters considered in the "Viability
statement" in the "Directors' report" of the annual report and, as respects
climatic and other factors, the negative impact that could result from adverse
incidence of such risks.

 

Risk                        Potential impact          Mitigating or other relevant
                                                      considerations
                             
                                                       
Agricultural operations
                                                       
 
Climatic factors
                                                       
 
Material variations from    A loss of crop or         Over a long period, crop
the norm in climatic        reduction in the quality  levels should be reasonably
conditions                  of harvest resulting in   predictable
                            loss of potential revenue
                                                       
                             
                            A reduction in subsequent
Unusually low levels of     crop levels resulting in  Operations are located in an
rainfall that lead to a     loss of potential         area of high rainfall.
water availability below    revenue; the reduction is Notwithstanding some
the minimum required for    likely to be broadly      seasonal variations, annual
the normal development of   proportional to the       rainfall is usually adequate
the oil palm                cumulative size of the    for normal development
                            water deficit
                                                       
                             
                            Delayed crop formation    Normal sunshine hours in the
Overcast conditions         resulting in loss of      location of the operations
                            potential revenue         are well suited to the
                                                      cultivation of oil palm
                             
                                                       
                                                      The group has established a
                                                      permanent downstream loading
                                                      facility, where the river is
                                                      tidal. In addition, road
                                                      access between the ports of
Low levels of rainfall      Inability to obtain       Samarinda and Balikpapan and
disrupting river transport  delivery of estate        the estates offers a viable
or, in an extreme           supplies or to evacuate   alternative route for
situation, bringing it to a CPO and CPKO (possibly    transport with any
standstill                  leading to suspension of  associated additional cost
                            harvesting)               more than outweighed by
                                                      avoidance of the potential
                                                      negative impact of
                                                      disruption to the business
                                                      cycle by any delay in
                                                      evacuating CPO

                                                       
Cultivation risks
                                                       
 
                            A reduction in harvested  The group has adopted
Failure to achieve optimal  crop resulting in loss of standard operating practices
upkeep standards            potential revenue         designed to achieve required
                                                      upkeep standards
                             
                                                       
                            A loss of crop or         The group adopts best
Pest and disease damage to  reduction in the quality  agricultural practice to
oil palms and growing crops of harvest resulting in   limit pests and diseases
                            loss of potential revenue
                                                       
                             
Other operational factors
                                                       
 
                                                      The group maintains stocks
Shortages of necessary      Disruption of operations  of necessary inputs to
inputs to the operations,   or increased input costs  provide resilience and has
such as fuel and fertiliser leading to reduced profit established biogas plants to
                            margins                   improve its self-reliance in
                                                      relation to fuel
                             
                                                       
                                                      The group endeavours to
                            FFB crops becoming rotten maintain a sufficient
                            or over‑ripe leading      complement of harvesters
                            either to a loss of CPO   within its workforce to
                            production (and hence     harvest expected crops and
A hiatus in harvesting,     revenue) or to the        to maintain resilience in
collection or processing of production of CPO that    its palm oil mills with each
FFB crops                   has an above average free of the mills operating
                            fatty acid content and is separately and some ability
                            saleable only at a        within each mill to switch
                            discount to normal market from steam based to biogas
                            prices                    or diesel based electricity
                                                      generation
                             
                                                       
                                                      The group's bulk storage
                            The requirement for CPO   facilities have adequate
                            and CPKO storage          capacity and further storage
Disruptions to river        exceeding available       facilities are afforded by
transport between the main  capacity and forcing a    the fleet of barges.
area of operations and the  temporary cessation in    Together, these have
Port of Samarinda or delays FFB harvesting or         hitherto always proved
in collection of CPO and    processing with a         adequate to meet the group's
CPKO from the transhipment  resultant loss of crop    requirements for CPO and
terminal                    and consequential loss of CPKO storage and may be
                            potential revenue         expanded to accommodate
                                                      anticipated increases in
                                                      production

                                                       
Occurrence of an uninsured
or inadequately insured                               The group maintains
adverse event; certain                                insurance at levels that it
risks (such as crop loss                              considers reasonable against
through fire or other       Material loss of          those risks that can be
perils), for which          potential revenues or     economically insured and
insurance cover is either   claims against the group  mitigates uninsured risks to
not available or is                                   the extent reasonably
considered                                            feasible by management
disproportionately                                    practices
expensive, are not insured
                                                       
 
Produce prices
                                                       
 
Volatility of CPO and CPKO                            Price swings should be
prices which as primary                               moderated by the fact that
commodities may be affected Reduced revenue from the  the annual oilseed crops
by levels of world economic sale of CPO and CPKO      account for the major
activity and factors        production and a          proportion of world
affecting the world         consequent reduction in   vegetable oil production and
economy, including levels   cash flow                 producers of such crops can
of inflation and interest                             reduce or increase their
rates                                                 production within a
                                                      relatively short time frame
 
                                                       
                                                      The Indonesian government
                                                      allows the free export of
                                                      CPO and CPKO but applies
Restriction on sale of the                            sliding scales of charges on
group's CPO and CPKO at     Reduced revenue from the  exports, which are varied
world market prices         sale of CPO and CPKO      from time to time in
including restrictions on   production and a          response to prevailing
Indonesian exports of palm  consequent reduction in   prices, to allow producers
products and imposition of  cash flow                 economic margins. The export
high export charges                                   levy charge funds biodiesel
                                                      subsidies and thus supports
                                                      the local price of CPO and
                                                      CPKO

                                                       
Distortion of world markets                           The imposition of controls
for CPO and CPKO by the     Depression of selling     or taxes on CPO or CPKO in
imposition of import        prices for CPO and CPKO   one area can be expected to
controls or taxes in        if arbitrage between      result in greater
consuming countries, for    markets for competing     consumption of alternative
example, by imposition of   vegetable oils proves     vegetable oils within that
reciprocal trade barriers   insufficient to           area and the substitution
or tariffs between major    compensate for the market outside that area of CPO and
economies                   distortion created        CPKO for other vegetable
                                                      oils
                             
                                                       
Expansion
                                                       
 
                                                      The group holds significant
                                                      fully titled or allocated
                            Inability to complete, or land areas suitable for
Failure to secure in full,  delays in completing, the planting. It works
or delays in securing, the  planned extension         continuously to maintain up
land or funding required    planting programme with a to date permits for the
for the group's planned     consequential reduction   planting of these areas and
extension planting          in the group's            aims to manage its finances
programme                   prospective growth        to ensure, in so far as
                                                      practicable, that it will be
                                                      able to fund any planned
                                                      extension planting programme

                                                       
A shortfall in achieving
the group's planned                                   The group maintains
extension planting          A possible adverse effect flexibility in its planting
programme impacting         on market perceptions as  programme to be able to
negatively the continued    to the value of the       respond to changes in
growth of the group         company's securities      circumstances

                                                       

 
Climate change
                                                       
 
                                                      A negative effect on
                                                      production would similarly
                                                      affect many other oil palm
                                                      growers in South East Asia
Changes to levels and                                 leading to a reduction in
regularity of rainfall and  Reduced production        CPO and CPKO supply, which
sunlight hours                                        would be likely to result in
                                                      higher prices for CPO and
                                                      CPKO in turn providing at
                                                      least some offset against
                                                      reduced production

                                                       
                                                      Only five to ten per cent of
                            Increasing requirement    the group's existing
Increase in water levels in for bunding or loss of    plantings are in low lying
the rivers running though   plantings in low lying    or flood prone areas. These
the estates                 areas susceptible to      areas are being bunded,
                            flooding                  subject to environmental
                                                      considerations
                             
                                                       
Environmental, social and
governance practices                                   

 
                                                      The group has established
Failure by the agricultural                           standard practices designed
operations to meet the                                to ensure that it meets its
standards expected of them                            obligations, monitors
as a large employer of      Reputational and          performance against those
significant economic        financial damage          practices and investigates
importance to local                                   thoroughly and takes action
communities                                           to prevent recurrence in
                                                      respect of any failures
                                                      identified

                                                       
                                                      The group is committed to
                                                      sustainable development of
                                                      oil palm and has obtained
Criticism of the group's                              RSPO certification for most
environmental practices by                            of its current operations.
conservation organisations                            All group oil palm plantings
scrutinising land areas                               are on land areas that have
that fall within a region   Reputational and          been previously logged and
that in places includes     financial damage          zoned by the Indonesian
substantial areas of                                  authorities as appropriate
unspoilt primary rain                                 for agricultural
forest inhabited by diverse                           development. The group
flora and fauna                                       maintains substantial
                                                      conservation reserves that
                                                      safeguard landscape level
                                                      biodiversity

                                                       
Community relations
                                                       
 
                                                      The group seeks to foster
                                                      mutually beneficial economic
                                                      and social interaction
                                                      between the local villages
                            Disruption of operations, and the agricultural
A material breakdown in     including blockages       operations. In particular,
relations between the group restricting access to oil the group gives priority to
and the host population in  palm plantings and mills, applications for employment
the area of the             resulting in reduced and  from members of the local
agricultural operations     poorer quality CPO and    population, encourages local
                            CPKO production           farmers and tradesmen to act
                                                      as suppliers to the group,
                                                      its employees and their
                                                      dependents and promotes
                                                      smallholder development of
                                                      oil palm plantings

                                                       
                                                      The group has established
Disputes over compensation                            standard procedures to
payable for land areas                                ensure fair and transparent
allocated to the group that Disruption of operations, compensation negotiations
were previously used by     including blockages       and encourages the local
local communities for the   restricting access to the authorities, with whom the
cultivation of crops or as  area the subject of the   group has developed good
respects which local        disputed compensation     relations and who are
communities otherwise have                            therefore generally
rights                                                supportive of the group, to
                                                      assist in mediating
                                                      settlements

                                                       
                                                      Where claims from
                                                      individuals in relation to
                                                      compensation agreements are
Individuals party to a      Disruption of operations, found to have a valid basis
compensation agreement      including blockages       the group seeks to agree a
subsequently denying or     restricting access to the new compensation
disputing aspects of the    areas the subject of the  arrangement; where such
agreement                   compensation disputed by  claims are found to be
                            the affected individuals  falsely based the group
                                                      encourages appropriate
                                                      action by the local
                                                      authorities

                                                       
Stone and coal interests
                                                       
 
Operational factors
                                                       
 
                                                      The stone and coal
                                                      concession companies
Failure by external                                   endeavour to use experienced
contractors to achieve      Under recovery of         contractors, to supervise
agreed production volumes   receivables               them closely and to take
with optimal stripping                                care to ensure that they
values or extraction rates                            have equipment of capacity
                                                      appropriate for the planned
                                                      production volumes

                                                       
External factors, in                                  Deliveries are not normally
particular weather,                                   time critical and adverse
delaying or preventing      Delays to or under        external factors would not
delivery of extracted stone recovery of receivables   normally have a continuing
and coal                                              impact for more than a
                                                      limited period
 
                                                       
Geological assessments,     Unforeseen extraction     The stone and coal
which are extrapolations    complications causing     concession companies seek to
based on statistical        cost overruns and         ensure the accuracy of
sampling, proving           production delays or      geological assessments of
inaccurate                  failure to achieve        any extraction programme
                            projected production
                                                       
                             
Prices
                                                       
 
                                                      There are currently no other
                                                      stone quarries in the
Local competition reducing                            vicinity of the stone
stone prices and volatility Reduced revenue and a     concessions and the cost of
of international coal       consequent reduction in   transporting stone should
prices                      recovery of receivables   restrict competition. The
                                                      high quality of the coal in
                                                      the main coal concession may
                                                      limit volatility

                                                       
                                                      The Indonesian government
                                                      has not to date imposed
Imposition of additional    Reduced revenue and a     measures that would
royalties or duties on the  consequent reduction in   seriously affect the
extraction of stone or coal recovery of receivables   viability of Indonesian
                                                      stone quarrying or coal
                                                      mining operations

                                                       
                            Inability to supply       Geological assessments ahead
                            product within the        of commencement of
Unforeseen variations in    specifications that are,  extraction operations should
quality of deposits         at any particular time,   have identified any material
                            in demand with consequent variations in quality
                            loss of revenue
                                                       
                             
Environmental, social and
governance practices                                   

 
                                                      The areas of the stone and
                                                      coal concessions are
                                                      relatively small and should
                                                      not be difficult to
                                                      supervise. The stone and
                                                      coal concession companies
Failure by the stone and                              are committed to
coal interests to meet the  Reputational and          international standards of
standards expected of them  financial damage          best environmental and
                                                      social practice and, in
                                                      particular, to proper
                                                      management of waste water
                                                      and reinstatement of
                                                      quarried and mined areas on
                                                      completion of extraction
                                                      operations

                                                       
General
                                                       
 
Currency
                                                       
 
                                                      As respects costs and
                                                      sterling denominated
                                                      shareholder capital, the
                                                      group considers that this
                                                      risk is inherent in the
                                                      group's business and
                            Adverse exchange          structure and must simply be
Strengthening of sterling   movements on those        accepted. As respects
or the rupiah against the   components of group costs borrowings, where
dollar                      and funding that arise in practicable the group seeks
                            rupiah or sterling        to borrow in dollars but,
                                                      when borrowing in another
                                                      currency, considers it
                                                      better to accept the
                                                      resultant currency risk than
                                                      to hedge that risk with
                                                      hedging instruments

                                                       
Funding
                                                       
 
                                                      The group maintains good
                                                      relations with its bankers
                                                      and other holders of debt
                                                      who have generally been
Bank debt repayment                                   receptive to reasonable
instalments and other debt                            requests to moderate debt
maturities coincide with                              profiles or waive covenants
periods of adverse trading                            when circumstances require
and negotiations with       Inability to meet         as was the case when waivers
bankers and investors are   liabilities as they fall  of certain breaches of bank
not successful in           due                       loan covenants by group
rescheduling instalments,                             companies at 31 December
extending maturities or                               2020 were subsequently
otherwise concluding                                  waived; moreover, the
satisfactory refinancing                              directors believe that the
arrangements                                          fundamentals of the group's
                                                      business will normally
                                                      facilitate procurement of
                                                      additional equity capital
                                                      should this prove necessary

                                                       
Counterparty risk
                                                       
 
                                                      The group maintains strict
                                                      controls over its financial
                                                      exposures which include
Default by a supplier,      Loss of any prepayment,   regular reviews of the
customer or financial       unpaid sales proceeds or  creditworthiness of
institution                 deposit                   counterparties and limits on
                                                      exposures to counterparties.
                                                      Sales are generally made on
                                                      the basis of cash against
                                                      documents

                                                       
Regulatory exposure
                                                       
 
                                                      The directors are not aware
New, and changes to, laws                             of any specific planned
and regulations that affect Restriction on the        changes that would adversely
the group (including, in    group's ability to retain affect the group to a
particular, laws and        its current structure or  material extent; current
regulations relating to     to continue operating as  regulations restricting the
land tenure, work permits   currently                 size of oil palm growers in
for expatriate staff and                              Indonesia will not impact
taxation)                                             the group for the
                                                      foreseeable future
 
                                                       
                                                      The group endeavours to
Breach of the various                                 ensure compliance with the
continuing conditions                                 continuing conditions
attaching to the group's                              attaching to its land rights
land rights and the stone                             and concessions and that its
and coal concessions        Civil sanctions and, in   activities and the
(including conditions       an extreme case, loss of  activities of the stone and
requiring utilisation of    the affected rights or    coal concession companies
the rights and concessions) concessions               are conducted within the
or failure to maintain all                            terms of the licences and
permits and licences                                  permits that are held and
required for the group's                              that licences and permits
operations                                            are obtained and renewed as
                                                      necessary
 
                                                       
                                                      The group has traditionally
                                                      had, and continues to
Failure by the group to                               maintain, strong controls in
meet the standards expected                           this area because Indonesia,
in relation to human        Reputational damage and   where all of the group's
rights, slavery,            criminal sanctions        operations are located, has
anti-bribery and corruption                           been classified as
                                                      relatively high risk by the
                                                      International Transparency
                                                      Corruption Perceptions Index

                                                       
Restrictions on foreign
investment in Indonesian                              The group endeavours to
mining concessions,         Constraints on the        maintain good relations with
limiting the effectiveness  group's ability to        local partners to ensure
of co-investment            recover its investment    that returns appropriately
arrangements with local                               reflect agreed arrangements
partners                     
                                                       
 
Country exposure
                                                       
 
                                                      In the recent past,
                                                      Indonesia has been stable
                                                      and the Indonesian economy
                                                      has continued to grow but,
                                                      in the late 1990s, Indonesia
                            Difficulties in           experienced severe economic
                            maintaining operational   turbulence and there have
Deterioration in the        standards particularly if been subsequent occasional
political or economic       there was a consequential instances of civil unrest,
situation in Indonesia      deterioration in the      often attributed to ethnic
                            security situation        tensions, in certain parts
                                                      of Indonesia. The group has
                                                      never, since the inception
                                                      of its East Kalimantan
                                                      operations in 1989, been
                                                      adversely affected by
                                                      regional security problems

                                                       
                            Restriction on the        The directors are not aware
                            transfer of fees,         of any circumstances that
                            interest and dividends    would lead them to believe
Introduction of exchange    from Indonesia to the UK  that, under current
controls or other           with potential            political conditions, any
restrictions on foreign     consequential negative    Indonesian government
owned operations in         implications for the      authority would impose
Indonesia                   servicing of UK           exchange controls or
                            obligations and payment   otherwise seek to restrict
                            of dividends; loss of     the group's freedom to
                            effective management      manage its operations
                            control
                                                       
                             
                                                      The group accepts there is a
                                                      significant possibility that
                                                      foreign owners may be
                                                      required over time to divest
                            Forced divestment of      partially ownership of
Mandatory reduction of      interests in Indonesia at Indonesian oil palm
foreign ownership of        below market values with  operations but has no reason
Indonesian plantation       consequential loss of     to believe that such
operations                  value                     divestment would be at
                                                      anything other than market
                                                      value. Moreover, the group
                                                      has local participation in
                                                      all its Indonesian
                                                      subsidiaries

                                                       
Miscellaneous relationships
                                                       
 
                                                      The group appreciates its
                                                      material dependence upon its
                                                      staff and employees and
                            Disruption of operations  endeavours to manage this
Disputes with staff and     and consequent loss of    dependence in accordance
employees                   revenues                  with international
                                                      employment standards as
                                                      detailed under "Employees"
                                                      in "Sustainability" of the
                                                      annual report

                                                       
                            Reliance on the
                            Indonesian courts for
                            enforcement of the
                            agreements governing its
                            arrangements with local   The group endeavours to
                            partners with the         maintain cordial relations
Breakdown in relationships  uncertainties that any    with its local investors by
with the local shareholders juridical process         seeking their support for
in the company's Indonesian involves and with any     decisions affecting their
subsidiaries                failure of enforcement    interests and responding
                            likely to have a material constructively to any
                            negative impact on the    concerns that they may have
                            value of the stone and
                            coal interests because     
                            the concessions are
                            legally owned by the
                            group's local partners

                             

 

VIABILITY STATEMENT

 

The group's business activities, together with the factors likely to affect its
future development, performance and position are described in the "Strategic
report" of the annual report which also provides (under the heading "Finance") a
description of the group's cash flow, liquidity and financing adequacy and treasury
policies. In addition, note 23 to the consolidated financial statements in the
annual report includes information as to the group's policy, objectives, and
processes for managing capital, its financial risk management objectives, details
of financial instruments and hedging policies and exposures to credit and liquidity
risks.

 

The "Principal risks and uncertainties" section of the "Strategic report" in the
annual report describes the material risks faced by the group and actions taken to
mitigate those risks. In particular, there are risks associated with the group's
local operating environment and the group is materially dependent upon selling
prices for CPO and CPKO over which it has no control. Possible risks associated
with the Covid-19 pandemic and emerging risks are also addressed in this section
of the report.

 

The group has material indebtedness, in the form of bank loans and listed notes.
At 31 December 2020 (after reflecting the waiver of covenant breaches referred to
in "Capital structure" under the heading "Finance" in the "Strategic report" of
the annual report), the equivalent of $54.1 million rupiah denominated term bank
loans were due for repayment over the period 2021 to 2023 and, in addition, a
rupiah working capital loan, equivalent to $5.0 million, was subject to annual
renewal in November of each year. Of the listed notes, $27.0 million of 7.5 per
cent dollar notes 2022 (the "dollar notes") are due for repayment on 30 June 2022.
In view of the material component of the group's indebtedness falling due in the
period to 31 December 2023, the directors have chosen this period for their
assessment of the long term viability of the group.

 

The group's present level of indebtedness reflects a number of challenges that
have confronted the group in recent years. Over the period 2015 to 2017, group
crops fell considerably short of the levels that had been expected. The reasons
for this were successfully identified and addressed but, as crops recovered to
better levels, the group had to contend with falling CPO prices. The resultant
negative cash flow impact over a number of years had to be financed and led to the
group assuming greater debt obligations from funding sources that nevertheless
continued to be forthcoming.

 

The closing months of 2019 saw a sharp recovery in CPO prices and the group was
optimistic at the outset of 2020 that the forthcoming year would see a
considerable improvement in the group's financial position. Unfortunately, as the
Covid-19 pandemic spread in 2020, CPO prices fell away and, notwithstanding the
increase in operating cashflows (before working capital movements) to $37.7
million (2019: $12.2 million), the group's performance for the year fell short of
initial expectations. Nevertheless, progress was made during 2020 in improving the
group's financial position.

 

A combination of cost reductions and a recovery in CPO prices in the second half
of the year meant that earnings before interest, taxation, depreciation and
amortisation for the year amounted to $36.8 million against $18.2 million in the
preceding year. The maturity date of the £30.9 million nominal of 8.75 per cent
sterling notes (the "sterling notes") issued by REA Finance B.V. (and guaranteed
by the company) was extended by five years to 31 August 2025 and the group's local
partner in its principal Indonesian subsidiary, REA Kaltim, agreed to support an
increase in the capital of REA Kaltim by converting debt to equity thus reducing
indebtedness to the local partner by $7.5 million. In addition, gross bank
indebtedness was reduced by $15.8 million, although this reduction was in part
financed by increased pre-sale advances from customers against forward commitments
of CPO and CPKO (all such commitments being on the basis of pricing fixed shortly
ahead of delivery by reference to market prices prevailing at that time). In
addressing each of these elements, the group was able to support current borrowing
levels but addressing the group's capital structure for the longer term remains
its objective.

 

Bank term loans at 31 December 2020 comprised three separate loans from PT Bank
Mandiri (Persero) Tbk ("Mandiri") to group companies. As noted under "Liquidity
and financing adequacy" in the "Strategic report", proposals are currently under
discussion between the group and Mandiri whereby the existing Mandiri loans to REA
Kaltim and SYB would be repaid and replaced with new loans to those companies. The
working capital facility provided to REA Kaltim would also be repaid and replaced
with two new annual revolving working capital facilities. The new term loans would
provide additional funding to the group and would be repayable over a period of
eight years. The new working capital facilities would be renewable annually. The
proposals are subject to approval by the credit committee of Mandiri. If approved,
net bank funding available to the group over the three years to end 2023 would be
substantially increased. This would materially improve the projected group cash
flows over the period to 31 December 2023.

 

As noted under "Capital structure" in the "Strategic report" of the annual report,
at 31 December 2020, two of the group companies in receipt of loans from Mandiri,
SYB and KMS, were in breach of certain loan covenants. The breaches in question
have been subsequently waived by Mandiri. The breaches principally arose as a
result of insufficient revenue generation in SYB and KMS during 2020. With the
better CPO prices now prevailing, SYB and KMS can reasonably expect significantly
higher revenues in 2021 and should therefore be able to meet the loan covenants
applicable to their existing loans from Mandiri and, in the case of SYB, the loan
covenants expected to be attached to the proposed replacement Mandiri loan to SYB.

 

The group's agricultural operations continue to perform satisfactorily and the
group is now benefiting from considerably improved prices for CPO and CPKO.
Following the rise in the CPO price in the second half of 2020, the Indonesian
government announced changes to the export levy scale. An effect of the changes is
that, at reference prices between $770 and $1,000 per tonne, an exporter of
Indonesian CPO receives, after deduction of export duty and levy, substantially
the same net price per tonne. This means that the group can reasonably expect that
the net prices that it receives from sale of its CPO and CPKO production to remain
stable at current levels for the immediate future even if international CPO prices
fall to an extent.

 

The award of indemnity costs on successful conclusion of the arbitration
proceedings, brought against one of the coal concession companies to which the
group has advanced monies, resulted in recovery in January 2021 of $5.8 million of
the group's advances. If, as is expected, the coal concession company concerned
commences mining in the near future, further repayments of group advances can be
expected. As detailed under "Stone and coal interests" in the "Strategic report"
of the annual report, the group can also expect the stone concession company to
which the group has advanced monies to commence repayment of those advances.

 

Whilst the group will continue to incur capital expenditure on necessary
replacement of plant, replanting of the oldest plantings and limited extension
planting, completion of the extension of the group's newest mill (which was
delayed by the Covid-19 pandemic) will provide the group with sufficient
processing capacity for the foreseeable future. Annual capital expenditure on the
plantation operations going forward can therefore be expected to be nearer to the
level incurred in 2020 than the much higher levels seen in earlier years. This
should mean that the group's improving cash flows can be used to reduce
indebtedness, the level of pre-sale advances and address the arrears of preference
dividend.

 

Concurrently with the discussions with Mandiri, the group has been exploring
alternative sources of finance, including equity (in the form of ordinary or
preference shares), equity linked instruments and trade finance to strengthen the
group's balance sheet. The group is confident that funding from pre-sale advances
can if necessary be continued at current levels and that the group's improving
financial position will support further financing if required.

 

Based on the foregoing and whether or not the current proposals for the
replacement of the existing Mandiri loans are agreed, the directors have a
reasonable expectation that the company and the group have adequate resources to
continue in operational existence for the period to 31 December 2023 and to remain
viable during that period.

 

 

GOING CONCERN  

 

Factors likely to affect the group's future development, performance and position
are described in the "Strategic report" of the annual report. The directors have
carefully considered those factors, together with the principal risks and
uncertainties faced by the group as well as emerging risks which are set out in
the "Principal risks and uncertainties" section of the "Strategic report" in the
annual report, and have reviewed key sensitivities which could impact on the
liquidity of the group.

 

As at 31 December 2020, the group had cash and cash equivalents of $11.8 million
and borrowings of $201.2 million (in both cases as set out in note 23 to the group
financial statements).

 

As noted under "Liquidity and financing adequacy" in the "Strategic report" of the
annual report, proposals are currently under discussion between the group and
Mandiri whereby the existing Mandiri loans to REA Kaltim and SYB would be repaid
and replaced with new loans to those companies. The working capital facility
provided to REA Kaltim would also be repaid and replaced with two new annual
revolving working capital facilities. The new term loans would provide additional
funding to the group and would be repayable over a period of eight years. The new
working capital facilities would be renewable annually. The proposals are subject
to approval by the credit committee of Mandiri. If approved, the proposals would
mean that the bank repayments falling due over the 12 month period following the
date of approval of the financial statements will be more than covered by the
additional funding provided.

 

As noted under, and for the reason given in, the "Viability statement" above, the
group does not expect the breaches of loan covenants by SYB and KMS that occurred
in 2020 to recur in 2021.

 

Concurrently with the discussions with Mandiri, the group has been exploring
alternative sources of finance, including equity (in the form of ordinary or
preference shares), equity linked instruments and trade finance to strengthen the
group's balance sheet. The group is confident that funding from pre-sale advances
can if necessary be continued at current levels and that the group's improving
financial position will support further financing if required.

 

As noted in the "Viability statement" above, the group's agricultural operations
continue to perform satisfactorily and the group is benefiting from considerably
improved prices for CPO and CPKO which seem set to continue for the immediate
future, with a currently favourable balance of supply and demand. In addition, the
group has received a recent repayment of an advance made to the stone and coal
concession companies that are provided with loan funding by the group and can
reasonably anticipate further repayments.

 

Having regard to the foregoing, based on the group's forecasts and projections
(taking into account reasonable possible changes in trading performance and other
uncertainties) and having regard to the group's cash position and available
borrowings, the directors expect that, whether or not the current proposals for
the replacement of the existing Mandiri loans are agreed, the group should be able
to operate within its available borrowings for at least 12 months from the date of
approval of the financial statements.

 

For these reasons, the directors have concluded that it is appropriate to prepare
the financial statements on a going concern basis.

 

 

DIRECTORS' RESPONSIBILITIES

 

The directors are responsible for preparing the annual report and the financial
statements in accordance with applicable law and regulations.

 

To the best of the knowledge of each of the directors, they confirm that:

 

  ▪ the financial statements, prepared in accordance with International Financial
    Reporting Standards, give a true and fair view of the assets, liabilities,
    financial position and profit or loss of the company and the undertakings
    included in the consolidation taken as a whole;

 

  ▪ the "Strategic report" section of the annual report includes a fair review of
    the development and performance of the business and the position of the
    company and the undertakings included in the consolidation taken as a whole,
    together with a description of the principal risks and uncertainties that they
    face; and

 

  ▪ the annual report and financial statements, taken as a whole, are fair,
    balanced and understandable and provide the information necessary for
    shareholders to assess the company's position, performance, business model and
    strategy.

 

The current directors of the company and their respective functions are set out in
the "Board of directors" section of the annual report.

 

 

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2020

 

                                                                     2020     2019
                                                                    $'000    $'000
Revenue                                                           139,088  124,986
Net (loss) / gain arising from changes in fair value of             (777)    5,127
agricultural produce inventory 
Cost of sales:                                                                    
Depreciation and amortisation                                    (27,969) (27,287)
Other costs                                                      (82,215) (94,495)
Gross profit                                                       28,127    8,331
Distribution costs                                                (2,835)  (1,348)
Administrative expenses                                          (16,486) (16,097)
Operating profit / (loss)                                           8,806  (9,114)
Investment revenues                                                   525      595
Impairments and similar charges                                   (9,483)  (3,267)
Finance costs                                                    (23,098) (31,890)
Loss before tax                                                  (23,250) (43,676)
Tax                                                                 7,336   22,303
Loss for the year                                                (15,914) (21,373)
                                                                                  
Attributable to:                                                                  
Equity shareholders                                              (13,183) (17,814)
Non-controlling interests                                         (2,731)  (3,559)
                                                                 (15,914) (21,373)
                                                                                  
Loss per 25p ordinary share (US cents)                             (30.0)   (43.1)

 

The company is exempt from preparing and disclosing its profit and loss account.
All operations for both years are continuing.

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2020

 

                                                              2020     2019
                                                             $'000    $'000
Loss for the year                                         (15,914) (21,373)
                                                                           
Other comprehensive income                                                 
Items that may be reclassified to profit or loss:                          
Exchange differences on translation of foreign operations  (3,504)       59
Deferred tax on exchange differences                         1,769    1,589
                                                           (1,735)    1,648
Items that will not be reclassified to profit or loss:                     
Actuarial gains / (losses)                                   1,835    (316)
Deferred tax on actuarial (gains) / losses                   (367)       79
                                                             1,468    (237)
                                                                           
Total comprehensive income for the year                   (16,181) (19,962)
                                                                           
Attributable to:                                                           
Equity shareholders                                       (13,450) (16,403)
Non-controlling interests                                  (2,731)  (3,559)
                                                          (16,181) (19,962)

 

 

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2020

 

                                                2020      2019
                                               $'000     $'000
Non-current assets                                            
Goodwill                                      12,578    12,578
Intangible assets                              1,098     2,135
Property, plant and equipment                376,551   394,356
Land                                          39,879    38,598
Financial assets: stone and coal interests    57,548    50,329
Deferred tax assets                            8,931    12,642
Non-current receivables                        5,302     3,889
Total non-current assets                     501,887   514,527
Current assets                                                
Inventories                                   16,069    18,565
Biological assets                              2,953     2,764
Trade and other receivables                   41,059    53,760
Cash and cash equivalents                     11,805     9,528
Total current assets                          71,886    84,617
Total assets                                 573,773   599,144
Current liabilities                                           
Trade and other payables                    (51,644)  (63,452)
Bank loans                                  (54,148)  (19,168)
Sterling notes                                     -  (38,996)
Other loans and payables                     (7,321)  (14,457)
Total current liabilities                  (113,113) (136,073)
Non-current liabilities                                       
Trade and other payables                    (20,712)         -
Bank loans                                  (56,062) (107,757)
Sterling notes                              (42,908)         -
Dollar notes                                (26,891)  (26,804)
Deferred tax liabilities                    (39,581)  (51,941)
Other loans and payables                    (28,690)  (23,879)
Total non-current liabilities              (214,844) (210,381)
Total liabilities                          (327,957) (346,454)
Net assets                                   245,816   252,690
                                                              
Equity                                                        
Share capital                                133,586   133,586
Share premium account                         47,358    47,358
Translation reserve                         (25,833)  (26,032)
Retained earnings                             70,693    84,779
                                             225,804   239,691
Non-controlling interests                     20,012    12,999
Total equity                                 245,816   252,690

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2020

 

                  Share   Share Translation Retained      Sub        Non-    Total
                capital premium     reserve earnings    total controlling   Equity
                                                                interests         
                  $'000   $'000       $'000    $'000    $'000       $'000    $'000
At 1 January    132,528  42,401    (42,470)  114,360  246,819      14,455  261,274
2019
Loss for the          -       -           - (17,814) (17,814)     (3,559) (21,373)
year
Other
comprehensive         -       -         987    (179)      808         603    1,411
income for the
year
Adjustment in
respect of
deferred tax          -       -      15,451 (11,588)    3,863           -    3,863
provision
release
Issue of new
ordinary shares   1,058   5,079           -        -    6,137           -    6,137
(cash)
Costs of issue        -   (122)           -        -    (122)           -    (122)
New equity from
non-controlling       -       -           -        -        -       1,500    1,500
interests
At 31 December  133,586  47,358    (26,032)   84,779  239,691      12,999  252,690
2019
Loss for the          -       -           - (13,183) (13,183)     (2,731) (15,914)
year
Reserve
adjustment            -       -           -    1,133    1,133           -    1,133
relating to
warrant issue
Other
comprehensive         -       -         199  (2,036)  (1,837)       (200)  (2,037)
income for the
year
New equity from
non-controlling       -       -           -        -        -       9,944    9,944
interests
At 31 December  133,586  47,358    (25,833)   70,693  225,804      20,012  245,816
2020

 

 

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2020

 

                                                                    2020     2019
                                                                   $'000    $'000
Net cash from operating activities                                33,479    2,185
                                                                                 
Investing activities                                                             
Interest received                                                    525      595
Proceeds on disposal of property, plant and equipment              1,066    7,639
Purchases of property, plant and equipment                      (10,768) (18,133)
Purchases of intangible assets                                         -     (20)
Expenditure on land                                              (3,897)  (4,552)
Investment in stone and coal interests                           (7,218)  (4,319)
Net cash used in investing activities                           (20,292) (18,790)
                                                                                 
Financing activities                                                             
Repayment of bank borrowings                                    (18,734) (14,512)
New bank borrowings drawn                                          5,250    4,999
New borrowings from related party                                  4,031    5,437
Repayment of borrowings from related party                             -  (5,437)
Repayment of borrowings from non-controlling shareholder         (7,514)        -
New borrowings from non-controlling shareholder                        -    1,758
New equity from non-controlling interests                          9,944    1,500
Proceeds of issue of ordinary shares, less costs of issue              -    6,015
Proceeds of issue of 2022 dollar notes                                 -    3,000
Costs of extending repayment date of sterling notes                (459)        -
Payment of warranty obligations relating to divested subsidiary    (663)        -
Repayment of lease liabilities                                   (2,434)  (2,303)
Net cash (used in) / from financing activities                  (10,579)      457
                                                                                 
Cash and cash equivalents                                                        
Net increase / (decrease) in cash and cash equivalents             2,608 (16,148)
Cash and cash equivalents at beginning of year                     9,528   26,279
Effect of exchange rate changes                                    (331)    (603)
Cash and cash equivalents at end of year                          11,805    9,528

 

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

1. Basis of preparation

The accompanying financial statements and notes 1 to 16 below (together the
"accompanying financial information") have been extracted without material
adjustment from the financial statements of the group for the year ended 31
December 2020 (the "2020 financial statements"). The auditor has reported on those
accounts; the reports were unqualified and did not contain statements under
sections 498(2) or (3) of the Companies Act 2006. Copies of the 2020 financial
statements will be filed in the near future with the Registrar of Companies. The
accompanying financial information does not constitute statutory accounts within
the meaning of section 434 of the Companies Act 2006 of the company.

 

Whilst the 2020 financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union and with the
Companies Act 2006, as at the date of authorisation of those accounts the
accompanying financial information does not itself contain sufficient information
to comply with IFRS.

 

The 2020 financial statements and the accompanying financial information were
approved by the board of directors on 26 April 2020.

 

 

2. Revenue

 

                         2020    2019
                        $'000   $'000
Sales of goods        137,993 124,000
Revenue from services   1,095     986
                      139,088 124,986
                                     
Investment revenue        525     595

 

 

3. Segment information

 

In the table below, the group's sales of goods are analysed by geographical
destination and the carrying amount of net assets is analysed by geographical area
of asset location. The group operates in two segments: the cultivation of oil
palms and stone and coal interests. In 2020 and 2019, the latter did not meet the
quantitative thresholds set out in IFRS 8 "Operating segments" and, accordingly,
no analyses are provided by business segment.

 

                                                                       2020   2019
                                                                        $'m    $'m
Sales by geographical destination:                                                
Indonesia                                                             117.3  118.1
Rest of World                                                          21.8    6.9
                                                                      139.1  125.0
                                                                                  
Carrying amount of net (liabilities) / assets by geographical area                
of asset location:
UK and Continental Europe                                            (73.3) (68.0)
Indonesia                                                             319.1  320.7
                                                                      245.8  252.7

 

 

4. Agricultural produce inventory movement

 

The net (loss) / gain arising from changes in fair value of agricultural produce
inventory represents the movement in the carrying value of such inventory after
reflecting the movement in the fair value of the FFB input into that inventory
(measured at fair value at point of harvest) less the amount of the movement in
such inventory at historic cost (which is included in cost of sales).

 

 

5. Administrative expenses

 

                                                                 2020    2019
                                                                $'000   $'000
Loss / (profit) on disposal of property, plant and equipment      537   (707)
Indonesian operations                                          12,785  13,480
Head office and other corporate functions                       4,781   5,928
                                                               18,103  18,701
Amount included as additions to property, plant and equipment (1,617) (2,604)
                                                               16,486  16,097

 

 

6. Impairments and similar charges

 

                                                                      2020    2019
                                                                     $'000   $'000
Provision against costs incurred in respect of land to be            6,203       -
transferred to plasma cooperatives
Land compensation payments in connection with divested subsidiary      663       -
Write off of expenditure on land                                     2,617   5,022
Correction to non-current receivables                                    - (1,755)
                                                                     9,483   3,267

 

The group intends to transfer some further areas of land developed by the group to
plasma cooperatives. It is hoped that all costs incurred in respect of such areas
can be recovered in full, but this may not be possible. Accordingly, an impairment
provision has been made against the costs in question.

 

The land compensation payments are in respect of certain outstanding warranty
obligations relating to the subsidiary divested in 2018, PT Putra Bongan Jaya.

 

In both the current and prior year, the write off of expenditure on land
represents costs incurred by the group on a land allocation (izin lokasi) that has
been relinquished. Having regard to evolving environmental considerations and
prospective titling problems arising from conflicting land claims, the group
concluded that renewal should not be sought following expiry of the land
allocations concerned.

 

In 2019, an amount of $1.7 million relating to the correction of an understatement
of non-current receivables comprising loans to third parties by the company was
set off against the write off of expenditure on land.

 

 

7. Finance costs

 

                                                                       2020   2019
                                                                      $'000  $'000
Interest on bank loans and overdrafts                                12,591 14,664
Interest on dollar notes                                              2,028  1,859
Interest on sterling notes                                            3,498  3,462
Interest on other loans                                               1,095  1,539
Interest on lease liabilities                                           301    311
Change in value of sterling notes arising from exchange               1,869  1,357
fluctuations
Change in value of loans arising from exchange fluctuations         (1,538)  7,246
Finance charge related to warrant issue                               1,133      -
Other finance charges                                                 2,380  1,488
                                                                     23,357 31,926
Amount included as additions to property, plant and equipment         (259)   (36)
                                                                     23,098 31,890

 

Other finance charges in 2020 include $1.1 million being the present value of the
premium payable on redemption discounted at the coupon rate.

 

Amounts included as additions to property, plant and equipment arose on borrowings
applicable to the Indonesian operations and reflected a capitalisation rate of 1.2
per cent (2019: nil per cent); there is no directly related tax relief.

 

 

8. Tax

 

                            2020     2019
                           $'000    $'000
Current tax:                             
UK corporation tax             -        -
Overseas withholding tax     968    1,289
Foreign tax                  343      737
Total current tax          1,311    2,026
                                         
Deferred tax:                            
Current year             (9,830) (24,329)
Prior year                 1,183        -
Total deferred tax       (8,647) (24,329)
                                         
Total tax                (7,336) (22,303)

 

Taxation is provided at the rates prevailing for the relevant jurisdiction. For
Indonesia, the current and deferred taxation provision is based on a tax rate of
20 per cent (2019: 25 per cent) and for the United Kingdom, the taxation provision
reflects a corporation tax rate of 19 per cent (2019: 19 per cent) and a deferred
tax rate of 19 per cent (2019: 17 per cent).

 

The rate of corporation tax in the United Kingdom had been expected to reduce from
19 per cent to 17 per cent from 1 April 2020 however in March 2020 it was
announced that the rate would continue at 19 per cent. In March 2021 it was
announced that UK corporation tax rates would rise to 25 per cent from 2023.

 

The main rate of corporation tax in Indonesia is reducing from 25 per cent to 22
per cent in 2021 then to 20 per cent for accounting periods after 2022. In
computing the deferred tax liabilities, it is assumed that as neither deferred tax
assets nor liabilities will crystallise in the immediate future then calculations
based on a rate of 20 per cent are appropriate.

 

 

9. Dividends

 

In view of the difficult trading conditions prevailing during 2020 and the group's
financial performance, the directors concluded that the payment of the fixed
semi-annual dividends on the 9 per cent cumulative preference shares that fell due
on 30 June and 31 December 2020 should be deferred and that the half yearly
preference dividends that were due on 30 June 2019 and 31 December 2019 should
also continue to be deferred.

 

Provided that CPO prices remain at current levels, the preference dividends
arising on 30 June 2021 and 31 December 2021 are expected to be paid during the
year. Whilst the group recognises the importance of paying the arrears on the
preference dividend, which now stand at 18p per share, it is not yet in a position
to provide guidance as to when it might be able to commence doing so. The
directors are well aware that preference shares are bought for income and aim
progressively to catch up the preference dividend arrears as soon as circumstances
prudently permit.

 

While the dividends on the preference shares are more than six months in arrear,
the company is not permitted to pay dividends on its ordinary shares. In view of
the results reported for 2020, the directors would not anyway have considered it
appropriate to declare or recommend the payment of any dividend on the ordinary
shares in respect of 2020 even if this were permitted.

 

 

10. Loss per share

 

                                                                     2020     2019
                                                                    $'000    $'000
Loss for the purpose of calculating loss per share*              (13,183) (17,814)
                                                                                  
                                                                     '000     '000
Weighted average number of ordinary shares for the purpose of      43,951   41,358
loss per share

* Being net loss attributable to ordinary shareholders

 

 

11. Property, plant and equipment

 

                            Plantings  Buildings       Plant, Construction   Total
                                             and    equipment  in progress        
                                      structures and vehicles                     
                                $'000      $'000        $'000        $'000   $'000
Cost:                                                                             
At 1 January 2019             182,549    236,930      114,963        7,242 541,684
Additions                       2,367      3,068        5,518        7,275  18,228
Reclassifications and         (7,012)     10,227        3,525      (6,858)   (118)
adjustments
Disposals - property, plant   (2,575)    (4,436)      (1,799)            - (8,810)
and equipment
At 31 December 2019           175,329    245,789      122,207        7,659 550,984
Additions                       1,250      2,051        2,757        4,702  10,760
Reclassifications and               -      1,450        1,781      (3,248)    (17)
adjustments
Disposals - property, plant   (1,164)      (696)      (2,597)            - (4,457)
and equipment
At 31 December 2020           175,415    248,594      124,148        9,113 557,270
                                                                                  
Accumulated depreciation:                                                         
At 1 January 2019              36,565     37,821       57,852            - 132,238
Charge for year                 9,734      6,904       10,183            -  26,821
Reclassifications and               -        414        (854)            -   (440)
adjustments
Disposals - property, plant      (91)      (124)      (1,776)            - (1,991)
and equipment
At 31 December 2019            46,208     45,015       65,405            - 156,628
Charge for year                10,012      7,297        9,615            -  26,924
Reclassifications and               -         59         (38)            -      21
adjustments
Disposals - property, plant     (206)       (51)      (2,597)            - (2,854)
and equipment
At 31 December 2020            56,014     52,320       72,385            - 180,719
                                                                                  
Carrying amount:                                                                  
At 31 December 2020           119,401    196,274       51,763        9,113 376,551
At 31 December 2019           129,121    200,774       56,802        7,659 394,356

 

The depreciation charge for the year includes $56,000 (2019: $95,000) which has
been capitalised as part of additions to plantings and buildings and structures.

 

At the balance sheet date, the group had entered into contractual commitments for
the acquisition of property, plant and equipment amounting to $2.6 million (2019:
$3.4 million).

 

At the balance sheet date, property, plant and equipment of $141.3 million (2019:
$153.5 million) had been charged as security for bank loans.

 

 

12. Sterling notes

 

The sterling notes comprise £30.9 million nominal of 8.75 per cent guaranteed 2025
sterling notes (2019: £30.9 million nominal) issued by the company's subsidiary,
REA Finance B.V. ("REAF").

 

On 1 April 2020 a proposal to extend the repayment date for the sterling notes
from 31 August 2020 to 31 August 2025 was implemented. In accordance with the
terms of the proposal the company issued a total of 4,010,760 warrants to
subscribe, for a period of five years, for ordinary shares in the capital of the
company at a price of £1.26 per share to the holders of the sterling notes on the
basis of 130 warrants per £1,000 nominal of sterling notes held at the close of
business (London time) on 24 March 2020.

 

The sterling notes are guaranteed by the company and another wholly owned
subsidiary of the company, REAS, and are secured principally on unsecured loans
made by REAS to Indonesian plantation operating subsidiaries of the company.
Unless previously redeemed or purchased and cancelled by the issuer, the sterling
notes are now repayable on 31 August 2025. A premium of 4p per £1 nominal of
sterling notes will now be paid on redemption of the sterling notes on 31 August
2025 (or earlier in the event of default) or on surrender of the sterling notes in
satisfaction, in whole or in part, of the subscription price payable on exercise
of the warrants on the final subscription date (namely 15 July 2025).

 

The repayment obligation in respect of the sterling notes of £30.9 million ($42.1
million) is carried in the balance sheet net of the unamortised balance of the
note issuance costs plus the present value of the premium payable on redemption
discounted at the coupon rate.

 

 

13. Share capital

 

                                                                      2020    2019
                                                                     $'000   $'000
Issued and fully paid (in dollars):                                               
72,000,000 - 9 per cent cumulative preference shares of £1 each    116,516 116,516
(2019: 72,000,000)
43,950,529 - ordinary shares of 25p each (2019: 43,950,529)         18,071  18,071
132,500 - ordinary shares of 25p each held in treasury (2019:      (1,001) (1,001)
132,500)
                                                                   133,586 133,586

 

The preference shares entitle the holders thereof to payment, out of the profits
of the company available for distribution and resolved to be distributed, of a
fixed cumulative preferential dividend of 9 per cent per annum on the nominal
amount paid up on such preference shares.  The preference shares shall rank for
dividend in priority to the payment of any dividend to the holders of any other
class of shares.  In the event of the company being wound up, holders of the
preference shares shall be entitled to the amount paid up on the nominal value of
such shares together with any arrears and accruals of the fixed dividend thereon,
irrespective of whether such dividend has been declared or earned or not.  The
preference shares shall rank on a winding up or other return of capital in
priority to any other shares of the company for the time being in issue.

 

Subject to the rights of the holders of preference shares, holders of ordinary
shares are entitled to share equally with each other in any dividend paid on the
ordinary share capital and, on a winding up of the company, in any surplus assets
available for distribution among the members.

 

Changes in share capital

Issued and fully paid:     9 per cent cumulative preference Ordinary shares of 25p
                                          shares of £1 each                   each
At 1 January 2019                                72,000,000             40,509,529
Issued during the year                                    -              3,441,000
At 31 December 2019 and                          72,000,000             43,950,529
2020

 

 

14. Movement in net borrowings

 

                                                                    2020      2019
                                                                   $'000     $'000
Change in net borrowings resulting from cash flows:                               
Increase / (decrease) in cash and cash equivalents, after          2,277  (16,751)
exchange rate effects
Net decrease in bank borrowings                                   13,484     4,049
Decrease in borrowings from non-controlling shareholder            7,514         -
Net increase in related party borrowings                         (4,031)   (1,711)
                                                                  19,244  (14,413)
Issue of dollar notes                                                  -   (3,000)
Amortisation of sterling note issue expenses and premium         (1,545)     (420)
Amortisation of dollar note issue expenses                          (87)      (80)
Amortisation of bank loan expenses                                 (175)         -
Transfer from current assets - unamortised bank loan expenses      1,126         -
                                                                  18,563  (17,913)
Currency translation differences                                    (87)     (363)
Net borrowings at beginning of year                            (207,827) (189,551)
Net borrowings at end of year                                  (189,351) (207,827)

 

 

15. Related party transactions 

 

Transactions between the company and its subsidiaries, which are related parties,
have been eliminated on consolidation and are not disclosed in this note.
Transactions between the company and its subsidiaries are dealt with in the
company's individual financial statements.

 

Remuneration of key management personnel

 

The remuneration of the directors, who are the key management personnel of the
group, is set out below in aggregate for each of the categories specified in IAS 24
"Related party disclosures". Further information about the remuneration of, and
fees paid in respect of services provided by, individual directors is provided in
the audited part of the "Directors' remuneration report" of the annual report.

 

                     2020  2019
                    $'000 $'000
Short term benefits 1,181 1,041

 

Loan from related party

 

During the year, R.E.A. Trading Limited ("REAT"), a related party, made unsecured
loans to the company on commercial terms. REAT is owned by Richard Robinow (a
director of the company) and his brother who, with members of their family, also
own Emba Holdings Limited, a substantial shareholder in the company. Total loans
outstanding at 31 December 2020 were $4.0 million (2019: nil). The maximum amount
loaned was $6.1 million (2019: $5.4 million, all of which had been repaid by 31
December 2019). Total interest paid during the year was $165,000 (2019: $83,000).
This disclosure is also made in compliance with the requirements of Listing Rule
9.8.4(10).

 

 

16. Events after the reporting period

 

There have been no material post balance sheet events that would require
disclosure in, or adjustment to, these financial statements.

 

Current liabilities shown by the consolidated balance at 31 December 2020 amounted
to $113.1 million, reflecting the inclusion of bank loans totalling $30.5 million
from the group's Indonesian bankers, Mandiri, to SYB and KMS that would have been
classified as non-current liabilities were it not for certain breaches by those
companies of loan covenants applicable at the balance sheet date. Mandiri has
subsequently waived the breaches in question. If the waivers had been received
before the balance sheet date, such loans would have been classified as
non-current liabilities.

 

 

 

References to group operating companies in Indonesia are as listed under the map
on page 5 of the annual report.

 

The terms "FFB", "CPO" and "CPKO" mean, respectively, "fresh fruit bunches",
"crude palm oil" and "crude palm kernel oil".

 

References to "dollars" and "$" are to the lawful currency of the United States of
America.

 

References to "rupiah" are to the lawful currency of Indonesia.

 

References to "sterling" or "pounds sterling" are to the lawful currency of the
United Kingdom.

 

 

 

Press enquiries to:

R.E.A. Holdings plc

Tel: 020 7436 7877

══════════════════════════════════════════════════════════════════════════════════

   ISIN:          GB0002349065
   Category Code: ACS
   TIDM:          RE.
   LEI Code:      213800YXL94R94RYG150
   Sequence No.:  100677
   EQS News ID:   1188356


    
   End of Announcement EQS News Service

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