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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| R.e.a. Holdings Plc | LSE:RE. | London | Ordinary Share | GB0002349065 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 3.50 | 4.59% | 79.75 | 79.50 | 80.00 | 80.00 | 78.50 | 78.50 | 12,292 | 16:35:18 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Chemicals & Chem Preps, Nec | 208.78M | 27.78M | 0.6318 | 1.27 | 35.17M |
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R.E.A. Holdings plc (RE.)
R.E.A. Holdings plc: Annual report in respect of 2016
28-Apr-2017 / 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.
*R.E.A. HOLDINGS PLC *(the 'company')
*ANNUAL FINANCIAL REPORT*
The company's annual report for the year ended 31 December 2016 (including
notice of the annual general meeting to be held on 13 June 2017) (the
'annual report') will shortly be available for downloading from the
company's web site at www.rea.co.uk [1].
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
www.hemscott.com/nsm.do [2]
The sections below entitled 'Chairman's statement', 'Dividends', 'Risks and
uncertainties', 'Viability statement', 'Going concern' and 'Directors'
confirmation of responsibility' 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 of the notes to
the financial statements below.
*HIGHLIGHTS*
*Financial*
*- *Adoption of amended IAS 41, effective 1 January 2016, on biological
assets has impacted 2016 profits due to a new additional depreciation charge
and the elimination of fair value gains; 2015 comparatives restated to
reflect the change with reduction in results before tax of $23.8 million
- Revenues of $79.3 million (2015: $90.5 million), reflecting lower
production following two year severe dry period
- Firmer CPO prices, continued focus on costs and exchange gains limiting
the impact of lower production: loss before tax of $9.3 million (2015: $12.2
million)
- Net new investment of $31.6 million (2015: $34.8 million)
- Permanent capital base to support extension planting programme
strengthened by $27.0 million, net of expenses, from combination of
acquisition by DSN group of 15 per cent in the REA Kaltim group and cash
placing of 3.7 million new ordinary shares
- Debt maturity profile improved by exchange of $13.8 million of 2017 dollar
notes for new 2022 dollar notes, repackaging of Indonesian bank loans and
new funding of $14.4 million to refinance maturing debt from combination of
sale of 2020 sterling notes held in treasury and loans from the DSN group
*Agricultural operations*
*- *Crop of FFB 468,371 tonnes (2015: 600,741 tonnes); CPO production of
127,697 tonnes (2015: 161,844 tonnes)
- Extraction rates averaged 22.8 per cent (2015: 22.2 per cent) despite
impact on FFB quality of disruptions to harvesting and transportation caused
by heavy rainfall in final quarter
- Significant progress with new development: over 5,700 hectares of new land
planted and a further 1,500 prepared for planting
- Reliability of mill operations benefiting from recent extensive
refurbishment programme and enhanced security systems
- New enhanced fertiliser regime targeted at mature areas initiated
*Stone and coal operations*
- Long term arrangements agreed for purchasing crushed stone for own use in
hardening roads and other infrastructure and for sale to third parties
- Agreements reached for resumption of coal operations at the coal
concession near Kota Bangun
*Sustainability*
*- *Renewable energy from methane capture plants supplying 26 local villages
and making an increasing contribution as household take up continues to grow
- RSPO recertification audits competed satisfactorily; ISCC renewals in
process
- Completion of new estate school and new housing at KMS
- Completion of five village water treatment community development projects
- REA Kaltim awarded Class 1 status by the regional governor following
assessment of local plantation companies, based on operational, social and
environmental criteria
*CHAIRMAN'S STATEMENT*
The accompanying financial statements for 2016 incorporate a significant
change in accounting policies in accordance with the amendment of IAS 41
Agriculture effective 1 January 2016. The amendment means that bearer plants
are no longer carried as biological assets at fair value but are instead
accounted for as property, plant and equipment, and are depreciated. The
2015 financial statements have been restated to reflect the change.
The effect has been to reduce the previously reported profit before tax for
2015 by $23.8 million and, whilst the comparable reduction for 2016 has not
been computed, it is most probably even higher given the likely benefit to
the fair value of what were formerly biological assets from the sizeable
extension planting achieved in 2016. As a result, with margins already
reduced by lower production, and despite improved crude palm oil ('CPO')
prices, the group incurred a loss before taxation for the year, albeit
reduced from the restated loss of the preceding year.
Total revenue for the year amounted to $79.3 million, compared with $90.5
million in 2015; at the operating level, the group incurred a loss of $5.0
million for the year, compared with a restated loss of $6.6 million in 2015.
Firmer CPO prices in 2016 as well as continued focus on cost controls
restricted the loss before tax in 2016 to $9.3 million compared with a
restated loss of $12.2 million in 2015.
As previously reported, the group's lower production mirrored the production
experience reported by many other oil palm plantations in East Kalimantan
and several other areas of South East Asia and is attributed to the severe
dry periods experienced in both 2014 and 2015. The group's cropping rates
started to recover from September onwards, but heavy rainfall in November
and December disrupted collection, which meant that production in the final
months of the year fell short of crop availability as not all crop could be
recovered. Oil quality was also affected. Whilst the change in precipitation
is positive for future productivity, such a dramatic increase after a
prolonged period of drought, with average rainfall in 2016 more than 60 per
cent higher than in 2015, had a short term negative impact on conditions for
both harvesting and transportation. With the easing of the rains, essential
repairs to, and hardening of, estate roads have become feasible and these
should progressively benefit production as the current year progresses.
Fresh fruit bunches ('FFB') harvested in 2016 amounted to some 468,000
tonnes compared with 601,000 tonnes in 2015. Smallholder and other third
party FFB purchased by the group also fell short of 2015 levels at 98,000
tonnes compared with 139,000 tonnes in the previous year. CPO production
amounted to 128,000 tonnes compared with 162,000 tonnes in 2015, while CPO
extraction rates averaged 22.8 per cent compared with 22.2 per cent in 2015.
Extraction rates in 2016 would have been higher were it not for the impact
on FFB quality of the disruptions to harvesting and transportation in the
last part of the year.
The CPO price, CIF Rotterdam, edged steadily upwards through 2016 from an
opening price of $570 per tonne to close at $801 per tonne but has since
fallen back and currently stands at $710 per tonne. Whilst there is an
expectation of better CPO production in 2017, soybean oil production may be
constrained by a relatively weak market for soya meal so that, with
vegetable oil and CPO stocks much depleted following the poor harvests of
2016, there is a reasonable prospect that prices will stabilise at above the
$700 per tonne level during the second half of 2017.
Through PLN, the Indonesian state electricity company, the group now
supplies power to 26 villages and sub-villages surrounding the estates.
Revenue from electricity generated from the group's two methane capture
plants amounted to some $563,000 in 2016, compared with $233,000 in the
first eight months of operation in 2015.
Excellent progress was made with the group's extension planting programme in
2016, following completion of the bunding and construction of the water
gates to control the flood prone lower lying areas of PT Putra Bongan Jaya
('PBJ'). A total of 5,758 hectares were planted during the year and a
further 4,000 hectares of plantings are planned for 2017. The latter
programme will require extension of existing bunding into the northern
section of PBJ and new bunding along the southern boundary of PT Cipta Davia
Mandiri ('CDM'). Work on this additional bunding is already well in hand.
As reported previously, in December 2016, PT Dharma Satya Nusantara Tbk
('DSN') completed its acquisition of a 15 per cent interest in the group's
principal operating subsidiary in Indonesia, PT REA Kaltim Plantations ('REA
Kaltim'). In addition, the DSN group has provided loans to the REA Kaltim
group. DSN's investment and provision of loans will help to finance the
group's extension planting programme and accords with the long-held
intention of increasing Indonesian participation in the group.
The group successfully addressed several key elements of funding that were
highlighted in the 2015 annual report. Specifically, the group issued new US
dollar denominated notes maturing in 2022 by way of an exchange offer to
existing 2017 dollar noteholders to extend the maturity of $13.8 million and
latterly issued 3.7 million ordinary shares by way of a placing to raise
some GBP10.5 million. In addition, GBP1.5 million of 2020 sterling notes held in
treasury were sold by a group subsidiary and Indonesian bank loans were
repackaged so as to extend the maturities and significantly reduce nearer
term repayments under the existing facilities.
Under fresh agreements recently reached with third parties, operations at
the group's coal concession near Kota Bangun are expected to resume shortly
following dewatering of the concession area. Under these agreements, the
group should receive a steady cash flow based upon the prevailing coal prices but with an agreed floor. Previously reported negotiations with another third party in relation to the Liburdinding concession proved abortive but the group is continuing to hold discussions regarding this concession with several potentially interested parties. The group is also continuing to review options for developing suitable road access to the group's andesite stone concession. This will be a necessary preliminary to commencing extraction operations. Previous discussions with potential strategic investors have not been renewed pending the outcome of such review. Arrangements have been agreed, however, in respect of a limestone deposit adjacent to PBJ. These arrangements will provide the group with the crushed stone required for infrastructure in the agricultural operations and other construction programmes, as well as for sale to third parties. Revenue from these recent developments in the stone and coal operations will provide a useful addition to the group's cash flow. However, depending upon the level of CPO prices and operational performance during the remainder of 2017, some further funding may be required to enable the group to continue its expansion programme at the speed that it would like. Accordingly, the group is actively engaged in discussions to obtain new longer term debt financing to replace, or replace in part, the remaining component of the group's maturing sterling and dollar notes that has not yet been refinanced. The directors are optimistic of a successful outcome to these discussions. In view of the financial performance in 2016, the directors have not declared, or recommended the payment of any ordinary dividend in respect of the year. Provided that crops continue to recover as expected and prices for the group's produce are maintained around current levels, the directors will consider recommending the payment of a final ordinary dividend in respect of 2017. Following the resignation of Mark Parry, I would like to welcome Carol Gysin as the company's new managing director. Carol has worked for the group for over eight years and is very familiar with its operations. Further, I also welcome Michael St Clair-George who joined the board in October 2016 as the senior independent non-executive director and chairman of both the audit and remuneration committees. Michael has over 40 years' experience in the plantation and agribusiness industries in Malaysia and Indonesia. Looking ahead, the recent return to more normal levels of rainfall, allowing harvesting rounds gradually to improve and renovation and repairs to the estate roads to become fully effective, should see both harvesting and production levels increase. With extraction rates expected to improve further, an increasing hectarage of mature plantings and CPO prices that could well remain around current levels, a significant improvement in revenues should be possible. This and the continuing development of the group's land bank, coupled with further progress in the stone and coal operations, should lead to enhanced shareholder value. *DIVIDS* The fixed semi-annual dividends on the 9 per cent cumulative preference shares that fell due on 30 June and 31 December 2016 were duly paid. In view of the difficult conditions that faced the group during 2016, the directors have concluded that, as previously announced, they should not declare or recommend the payment of any dividend on the ordinary shares in respect of 2016. The group's programme of planting its land bank remains ongoing. This will continue to require major capital expenditure and constrain the rates at which the directors feel that they can prudently declare, or recommend the payment of, ordinary dividends over the next few years. Nevertheless, the directors will consider recommending the payment of a final ordinary dividend in respect of 2017, although this will necessarily depend upon crops and CPO prices over the balance of 2017. *ANNUAL GENERAL MEETING* The fifty-seventh annual general meeting of R.E.A. Holdings plc will be held at the London office of Ashurst LLP at Broadwalk House, 5 Appold Street, London EC2A 2HA on 13 June 2017 at 10.00 am. *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 of the company has ultimate responsibility. The board discharges that responsibility as described in 'Corporate governance' in the annual report. Those risks and uncertainties that the directors currently consider to be material are described below. There are or may be other risks and uncertainties faced by the group that the directors currently deem immaterial, or of which they are unaware, that may have a material adverse impact on the group. 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. Risks assessed by the directors as being of particular significance are those detailed below under climatic and other operational factors, produce prices and funding. In the case of climatic and other operational factors and produce prices, the directors' assessment reflects the negative impact on revenues that could be caused by adverse climatic conditions or operational circumstances and, in the case of funding, the possibility that the group's expansion programme might have to be curtailed. +----------------------+-------------------+-------------------+ |*Risk* |*Potential impact* |*Mitigating or | | | |other relevant | | | |considerations* | +----------------------+-------------------+-------------------+ |*Agricultural | | | |operations* | | | +----------------------+-------------------+-------------------+ |*Climatic factors* | | | +----------------------+-------------------+-------------------+ |Material variations |A loss of crop or |Over a long period,| |from the norm in |reduction in the |crop levels should | |climatic conditions |quality of harvest |be reasonably | | |resulting in loss |predictable | | |of potential | | | |revenue | | +----------------------+-------------------+-------------------+ |Unusually low levels |A reduction in |Operations are | |of rainfall that lead |subsequent crop |located in an area | |to a water |levels resulting in|of high rainfall. | |availability below the|loss of potential |Notwithstanding | |minimum required for |revenue; |some seasonal | |the normal development|the reduction is |variations, annual | |of the oil palm |likely to be |rainfall is usually| | |broadly |adequate for normal| | |proportional to the|development | | |cumulative size of | | | |the water deficit | | +----------------------+-------------------+-------------------+ |Overcast conditions |Delayed crop |Normal sunshine | | |formation resulting|hours in the | | |in loss of |location of the | | |potential revenue |operations are well| | | |suited to the | | | |cultivation of oil | | | |palm | +----------------------+-------------------+-------------------+ |Low levels of rainfall|Inability to obtain|The group has | |disrupting river |delivery of estate |established a | |transport or, in an |supplies or to |permanent | |extreme situation, |evacuate CPO and |downstream loading | |bringing it to a |CPKO (possibly |facility, where the| |standstill |leading to |river is tidal. In | | |suspension of |addition, road | | |harvesting) |access between the | | | |ports of Samarinda | | | |and Balikpapan and | | | |the estates now | | | |offers a viable | | | |alternative route | | | |for transport and | | | |any associated | | | |additional cost is | | | |more than | | | |outweighed by the | | | |potential negative | | | |impact of | | | |disruption to the | | | |business cycle by | | | |any delay in |
| | |evacuating CPO | +----------------------+-------------------+-------------------+ |*Cultivation risks* | | | +----------------------+-------------------+-------------------+ |Pest and disease |A loss of crop or |The group adopts | |damage to oil palms |reduction in the |best agricultural | |and growing crops |quality of harvest |practice to limit | | |resulting in loss |pests and diseases | | |of potential | | | |revenue | | +----------------------+-------------------+-------------------+ |*Other operational | | | |factors* | | | +----------------------+-------------------+-------------------+ |Shortages of necessary|Disruption of |The group maintains| |inputs to the |operations or |stocks of necessary| |operations, such as |increased input |inputs to provide | |fuel and fertiliser |costs leading to |resilience and is | | |reduced profit |investing to | | |margins |improve its | | | |self-reliance in | | | |relation to fuel | | | |and fertiliser | +----------------------+-------------------+-------------------+ |A hiatus in collection|FFB crops becoming |The group | |or processing of FFB |rotten or over-ripe|endeavours to | |crops |leading either to a|maintain resilience| | |loss of CPO |in its palm oil | | |production (and |mills with each of | | |hence revenue) or |the mills operating| | |to the production |separately and some| | |of CPO that has an |ability within each| | |above average free |mill to switch from| | |fatty acid content |steam based to | | |and is saleable |biogas or diesel | | |only at a discount |based electricity | | |to normal market |generation | | |prices | | +----------------------+-------------------+-------------------+ |Disruptions to river |The requirement for|The group's bulk | |transport between the |CPO and CPKO |storage facilities | |main area of |storage exceeding |have substantial | |operations and the |available capacity |capacity and | |Port of Samarinda or |and forcing a |further storage | |delays in collection |temporary cessation|facilities are | |of CPO and CPKO from |in FFB harvesting |afforded by the | |the transhipment |or processing with |fleet of barges. | |terminal |a resultant loss of|Together, these | | |crop resulting in a|have hitherto | | |loss of potential |always proved | | |revenue |adequate to meet | | | |the group's | | | |requirements for | | | |CPO and CPKO | | | |storage | +----------------------+-------------------+-------------------+ |Occurrence of an |Material loss of |The group maintains| |uninsured or |potential revenues |insurance at levels| |inadequately insured |or claims against |that it considers | |adverse event; certain|the group |reasonable against | |risks (such as crop | |those risks that | |loss through fire or | |can be economically| |other perils), for | |insured and | |which insurance cover | |mitigates uninsured| |is either not | |risks to the extent| |available or is | |reasonably feasible| |considered | |by management | |disproportionately | |practices | |expensive, are not | | | |insured | | | +----------------------+-------------------+-------------------+ |*Produce prices* | | | +----------------------+-------------------+-------------------+ |Volatility of CPO and |Reduced revenue |Price swings should| |CPKO prices which as |from the sale of |be moderated by the| |primary commodities |CPO and CPKO |fact that the | |may be affected by |production and a |annual oilseed | |levels of world |consequent |crops account for | |economic activity and |reduction in cash |the major | |factors affecting the |flow and profit |proportion of world| |world economy, | |vegetable oil | |including levels of | |production and | |inflation and interest| |producers of such | |rates | |crops can reduce or| | | |increase their | | | |production within a| | | |relatively short | | | |time frame | +----------------------+-------------------+-------------------+ |Restriction on sale of|Reduced revenue |The Indonesian | |the group's CPO and |from the sale of |government allows | |CPKO at world market |CPO and CPKO |the free export of | |prices including |production and a |CPO and CPKO but | |restrictions on |consequent |applies a sliding | |Indonesian exports of |reduction in cash |scale of duties on | |palm products and |flow and profit |exports which | |imposition of high | |allows producers | |export duties (as has | |economic margins. | |occurred in the past | |The extension of | |for short periods) | |this sliding scale | | | |to incorporate a | | | |$50 per tonne | | | |export levy to fund| | | |biodiesel subsidies| | | |is supporting the | | | |local price of CPO | | | |and CPKO | +----------------------+-------------------+-------------------+ |Distortion of world |Depression of |The imposition of | |markets for CPO and |selling prices for |controls or taxes | |CPKO by the imposition|CPO and CPKO if |on CPO or CPKO in | |of import controls or |arbitrage between |one area can be | |taxes in consuming |markets for |expected to result | |countries |competing vegetable|in greater | | |oils proves |consumption of | | |insufficient to |alternative | | |compensate for the |vegetable oils | | |market distortion |within that area | | |created |and the | | | |substitution | | | |outside that area | | | |of CPO and CPKO for| | | |other vegetable | | | |oils | +----------------------+-------------------+-------------------+ |*Expansion* | | | +----------------------+-------------------+-------------------+ |Failure to secure in |Inability to |The group holds | |full, or delays in |complete, or delays|substantial fully | |securing, the land or |in completing, the |titled or allocated| |funding required for |planned extension |land areas suitable| |the group's planned |planting programme |for planting. It | |extension planting |with a |works continuously | |programme |consequential |to obtain and | | |reduction in the |maintain up to date| | |group's prospective|permits for the | | |growth |planting of these | | | |areas and aims to | | | |manage its finances| | | |to ensure, in so | | | |far as practicable,| | | |that it will be | | | |able to fund the | | | |planned extension | | | |planting programme | +----------------------+-------------------+-------------------+ |A shortfall in |A possible adverse |The group maintains| |achieving the group's |effect on market |flexibility in its | |planned extension |perceptions as to |planting programme | |planting programme |the value of the |to be able to | |impacting negatively |company's |respond to changes | |the continued growth |securities |in circumstances | |of the group | | | +----------------------+-------------------+-------------------+
|*Environmental, social| | | |and governance | | | |practices* | | | +----------------------+-------------------+-------------------+ |Failure by the |Reputational and |The group has | |agricultural |financial damage |established | |operations to meet the| |standard practices | |standards expected of | |designed to ensure | |them as a large | |that it meets its | |employer of | |obligations, | |significant economic | |monitors | |importance to local | |performance against| |communities | |those practices and| | | |investigates | | | |thoroughly and | | | |takes action to | | | |prevent recurrence | | | |in respect of any | | | |failures identified| +----------------------+-------------------+-------------------+ |Criticism of the |Reputational and |The group is | |group's environmental |financial damage |committed to | |practices by | |sustainable | |conservation | |development of oil | |organisations | |palm and has | |scrutinising land | |obtained RSPO | |areas that fall within| |certification for | |a region that in | |most of its current| |places includes | |operations. All | |substantial areas of | |group oil palm | |unspoilt primary rain | |plantings are on | |forest inhabited by | |land areas that | |diverse flora and | |have been | |fauna | |previously logged | | | |and zoned by the | | | |Indonesian | | | |authorities as | | | |appropriate for | | | |agricultural | | | |development. The | | | |group maintains | | | |substantial | | | |conservation | | | |reserves that | | | |safeguard landscape| | | |level biodiversity | +----------------------+-------------------+-------------------+ |*Community relations* | | | +----------------------+-------------------+-------------------+ |A material breakdown |Disruption of |The group seeks to | |in relations between |operations, |foster mutually | |the group and the host|including blockages|beneficial economic| |population in the area|restricting access |and social | |of the agricultural |to oil palm |interaction between| |operations |plantings and |the local villages | | |mills, resulting in|and the | | |reduced and poorer |agricultural | | |quality CPO and |operations. In | | |CPKO production |particular, the | | | |group gives | | | |priority to | | | |applications for | | | |employment from | | | |members of the | | | |local population, | | | |encourages local | | | |farmers and | | | |tradesmen to act as| | | |suppliers to the | | | |group, its | | | |employees and their| | | |dependents and | | | |promotes | | | |smallholder | | | |development of oil | | | |palm plantings | +----------------------+-------------------+-------------------+ |Disputes over |Disruption of |The group has | |compensation payable |operations, |established | |for land areas |including blockages|standard procedures| |allocated to the group|restricting access |to ensure fair and | |that were previously |to the area the |transparent | |used by local |subject of the |compensation | |communities for the |disputed |negotiations and | |cultivation of crops |compensation |encourages the | |or as respects which | |local authorities, | |local communities | |with whom the group| |otherwise have rights | |has developed good | | | |relations and who | | | |are therefore | | | |generally | | | |supportive of the | | | |group, to assist in| | | |mediating | | | |settlements | +----------------------+-------------------+-------------------+ |Individuals party to a|Disruption of |Where claims from | |compensation agreement|operations, |individuals in | |subsequently denying |including blockages|relation to | |or disputing aspects |restricting access |compensation | |of the agreement |to the areas the |agreements are | | |subject of the |found to have a | | |compensation |valid basis the | | |disputed by the |group seeks to | | |affected |agree a new | | |individuals |compensation | | | |arrangement; where | | | |such claims are | | | |found to be falsely| | | |based the group | | | |encourages | | | |appropriate action | | | |by the local | | | |authorities | +----------------------+-------------------+-------------------+ |*Stone and coal | | | |operations* | | | +----------------------+-------------------+-------------------+ |*Operational factors* | | | +----------------------+-------------------+-------------------+ |Failure by external |Loss of prospective|The group | |contractors to achieve|revenue |endeavours to use | |agreed production | |experienced | |volumes | |contractors, to | | | |supervise them | | | |closely and to take| | | |care to ensure that| | | |they have equipment| | | |of capacity | | | |appropriate for the| | | |planned production | | | |volumes once | | | |operations have | | | |commenced | +----------------------+-------------------+-------------------+ |External factors, in |Delays to receipt |Deliveries are not | |particular weather, |or loss of revenue |normally time | |delaying or preventing| |critical and | |delivery of extracted | |adverse external | |stone and coal | |factors would not | | | |normally have a | | | |continuing impact | | | |for more than a | | | |limited period | +----------------------+-------------------+-------------------+ |Geological |Unforeseen |The group seeks to | |assessments, which are|extraction |ensure the accuracy| |extrapolations based |complications |of geological | |on statistical |causing cost |assessments of any | |sampling, proving |overruns and |extraction | |inaccurate |production delays |programme and | | | |taking expert | | | |geological advice | | | |on the results |
+----------------------+-------------------+-------------------+ |*Prices* | | | +----------------------+-------------------+-------------------+ |Local competition |Reduced revenue and|There are currently| |reducing stone prices |a consequent |no other stone | |and volatility of |reduction in cash |quarries in the | |international coal |flow and profit |vicinity of the | |prices | |group's deposits | | | |and the cost of | | | |transporting stone | | | |should restrict | | | |competition. In | | | |relation to coal, | | | |the cooperation | | | |arrangement | | | |negotiated for the | | | |mining of the | | | |group's main coal | | | |concession provides| | | |a floor price for | | | |the coal mined | +----------------------+-------------------+-------------------+ |Imposition of |Reduced revenue and|The Indonesian | |additional royalties |a consequent |government has not | |or duties on the |reduction in cash |to date imposed | |extraction of stone or|flow and profit |measures that would| |coal | |seriously affect | | | |the viability of | | | |Indonesian stone | | | |quarrying or coal | | | |mining operations | +----------------------+-------------------+-------------------+ |Unforeseen variations |Inability to supply|Geological | |in quality of deposits|product within the |assessments ahead | | |specifications that|of commencement of | | |are, at any |extraction | | |particular time, in|operations should | | |demand with |have identified any| | |consequent loss of |material variations| | |revenue |in quality | +----------------------+-------------------+-------------------+ |*Environmental, social| | | |and governance | | | |practices* | | | +----------------------+-------------------+-------------------+ |Failure by the stone |Reputational and |The area of the | |and coal operations to|financial damage |stone and coal | |meet the expected | |concessions are | |standards | |relatively small | | | |and should not be | | | |difficult to | | | |supervise. The | | | |group is committed | | | |to international | | | |standards of 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* | | | +----------------------+-------------------+-------------------+ |Strengthening of |Adverse exchange |As respects costs | |sterling or the |movements on those |and sterling | |Indonesian rupiah |components of group|denominated | |against the dollar |costs and funding |shareholder | | |that arise in |capital, the group | | |Indonesian rupiah |considers that this| | |or sterling and are|risk is inherent in| | |not hedged against |the group's | | |the dollar |business and | | | |structure and must | | | |simply be accepted.| | | |As respects | | | |borrowings, where | | | |efficient the group| | | |seeks 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* | | | +----------------------+-------------------+-------------------+ |Bank debt repayment |Inability to meet |The group maintains| |instalments and other |liabilities as they|good relations with| |debt maturities |fall due |its bankers and | |coincide with periods | |other holders of | |of adverse trading and| |debt who have | |negotiations with | |generally been | |bankers and investors | |receptive to | |are not successful in | |reasonable requests| |rescheduling | |to moderate debt | |instalments, extending| |profiles when | |maturities or | |circumstances | |otherwise concluding | |require; moreover, | |satisfactory | |the directors | |refinancing | |believe that the | |arrangements | |fundamental | | | |profitability of | | | |the group's | | | |business will | | | |facilitate | | | |divestment of | | | |assets or | | | |procurement of | | | |additional equity | | | |capital should this| | | |prove necessary | +----------------------+-------------------+-------------------+ |*Counterparty risk* | | | +----------------------+-------------------+-------------------+ |Default by a supplier,|Loss of any |The group maintains| |customer or financial |prepayment, unpaid |strict controls | |institution |sales proceeds or |over its financial | | |deposit |exposures which | | | |include regular | | | |reviews of the | | | |creditworthiness of| | | |counterparties and | | | |limits on exposures| | | |to counterparties. | | | |Export sales are | | | |made either against| | | |letters of credit | | | |or on the basis of | | | |cash against | | | |documents | +----------------------+-------------------+-------------------+ |*Regulatory exposure* | | | +----------------------+-------------------+-------------------+ |Failure to renegotiate|Limitation of the |Current regulations| |the existing |group's return from|in Indonesia limit | |arrangements relating |these interests to |foreign investment | |to the stone interests|the loans advanced |in mining | | | |concessions | +----------------------+-------------------+-------------------+ |New, and changes to, |Restriction on the |Save as noted above| |laws and regulations |group's ability to |regarding interests| |that affect the group |retain its current |in stone, the |
|(including, in |structure or to |directors are not | |particular, laws and |continue operating |aware of any | |regulations relating |as currently |specific changes | |to land tenure, work | |that would | |permits for expatriate| |adversely affect | |staff and taxation) | |the group to a | | | |material extent; | | | |current regulations| | | |restricting the | | | |size of oil palm | | | |growers in | | | |Indonesia will not | | | |impact the group | | | |for the foreseeable| | | |future | +----------------------+-------------------+-------------------+ |Breach of the various |Civil sanctions |The group | |continuing conditions |and, in an extreme |endeavours to | |attaching to the |case, loss of the |ensure compliance | |group's land rights |affected rights or |with the continuing| |and the stone quarry |concessions |conditions | |concession (including | |attaching to its | |conditions requiring | |land rights and | |utilisation of the | |concessions and | |rights and | |that activities are| |concessions) or | |conducted within | |failure to maintain | |the terms of the | |all permits and | |licences and | |licences required for | |permits that are | |the group's operations| |held and that | | | |licences and | | | |permits are | | | |obtained and | | | |renewed as | | | |necessary | +----------------------+-------------------+-------------------+ |Failure by the group |Reputational damage|The group has | |to meet the standards |and criminal |traditionally had, | |expected in relation |sanctions |and continues to | |to bribery and | |maintain, strong | |corruption | |controls in this | | | |area because | | | |Indonesia, where | | | |all of the group's | | | |operations are | | | |located, has been | | | |classified as | | | |relatively high | | | |risk by the | | | |International | | | |Transparency | | | |Corruption | | | |Perceptions Index | +----------------------+-------------------+-------------------+ |*Country exposure* | | | +----------------------+-------------------+-------------------+ |Deterioration in the |Difficulties in |In the recent past,| |political or economic |maintaining |Indonesia has been | |situation in Indonesia|operational |stable and the | | |standards |Indonesian economy | | |particularly if |has continued to | | |there was a |grow but, in the | | |consequential |late 1990s | | |deterioration in |Indonesia | | |the security |experienced severe | | |situation |economic turbulence| | | |and there have been| | | |subsequent | | | |occasional | | | |instances of civil | | | |unrest, often | | | |attributed to | | | |ethnic 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 | +----------------------+-------------------+-------------------+ |Introduction of |Restriction on the |The directors are | |exchange controls or |transfer of profits|not aware of any | |other restrictions on |from Indonesia to |circumstances that | |foreign owned |the UK with |would lead them to | |operations in |potential |believe that, under| |Indonesia |consequential |current political | | |negative |conditions, any | | |implications for |Indonesian | | |the servicing of UK|government | | |obligations and |authority would | | |payment of |impose exchange | | |dividends; loss of |controls or | | |effective |otherwise seek to | | |management control |restrict the | | | |group's freedom to | | | |manage its | | | |operations | +----------------------+-------------------+-------------------+ |Mandatory reduction of|Forced divestment |The group accepts | |foreign ownership of |of interests in |there is a | |Indonesian plantation |Indonesia at below |significant | |operations |market values with |possibility that | | |consequential loss |foreign owners may | | |of value |be required over | | | |time to partially | | | |divest ownership of| | | |Indonesian oil palm| | | |operations but has | | | |no reason to | | | |believe that such | | | |divestment would be| | | |at anything other | | | |than market value. | | | |Moreover, the group| | | |has recently | | | |increased local | | | |participation by a | | | |transaction with a | | | |local investor | +----------------------+-------------------+-------------------+ |*Miscellaneous | | | |relationships* | | | +----------------------+-------------------+-------------------+ |Disputes with staff |Disruption of |The group | |and employees |operations and |appreciates its | | |consequent loss of |material dependence| | |revenues |upon its staff and | | | |employees and | | | |endeavours to | | | |manage this | | | |dependence in | | | |accordance with | | | |international | | | |employment | | | |standards as | | | |detailed under | | | |'Employees' in | | | |'Sustainability' of| | | |the annual report | +----------------------+-------------------+-------------------+ |Breakdown in |Reliance on the |The group | |relationships with the|Indonesian courts |endeavours to | |local shareholders in |for enforcement of |maintain cordial | |the company's |the agreements |relations with its | |Indonesian |governing its |local investors by | |subsidiaries |arrangements with |seeking their | | |local partners with|support for | | |the uncertainties |decisions affecting| | |that any juridical |their interests and|
| |process involves |responding |
| |and with any |constructively to |
| |failure of |any concerns that |
| |enforcement likely |they may have |
| |to have a material | |
| |negative impact on | |
| |the value of the | |
| |stone and coal | |
| |operations because | |
| |the concessions are| |
| |at the moment | |
| |legally owned by | |
| |the group's local | |
| |partners | |
+----------------------+-------------------+-------------------+
The directors have also considered the implications of the notice given to
terminate UK membership of the European Union in the context of the group
and its operations. Any ensuing weakness of sterling will positively impact
the group as its operations are essentially dollar denominated and costs
incurred and liabilities recognised in sterling will be reduced in dollar
terms. Any reduction in UK interest rates may negatively impact the level of
the technical provisions of the REA Pension Scheme by, given the Scheme's
estimated funding position and having regard to the performance of the
assets, the directors do not expect that the impact will be material in the
context of the group.
*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' in 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 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 'Risks and uncertainties'
section of the Strategic 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 crude palm oil ('CPO') and
crude palm kernel oil over which it has no control.
As respects funding risk, the group has material indebtedness, in the form
of bank loans and listed notes. Some $3.1 million of bank term indebtedness
falls due for repayment during 2017, and a further $25.5 million of
revolving working capital lines fall due for renewal during the same period.
In addition, $20.2 million of dollar notes fall due for repayment in June
2017 and GBP8.3 million of sterling notes in December 2017. In 2018 and 2019
bank term loans of $6.0 million and $12.9 million respectively fall due for
repayment and $31.3 million of a committed revolving bank line falls due for
renewal. A further GBP31.9 million ($38.9 million) sterling notes will become
repayable in August 2020. In view of the material proportion of the group's
indebtedness falling due in the period to 31 December 2020, as described
above, the directors have chosen this period for their assessment of the
long-term viability of the group.
In April 2017, PT Dharma Satya Nusantara Tbk, the non-controlling
shareholder in PT REA Kaltim Plantations ('REA Kaltim'), provided further
loans of $16.6 million to REA Kaltim's plantation subsidiaries. The group
continues in discussions to refinance, with longer term debt, indebtedness
falling due in 2017 and 2018. Furthermore, the directors have no reason to
believe that the revolving working capital facilities falling due in 2017
and 2019 will not be rolled over when these facilities fall due for renewal.
Limited further capital expenditure will be required on the group's mills
until construction is commenced on the fourth mill. This is scheduled for
2018 but could be postponed if cash constraints so require.
In 2020 consideration will be given to proposals to the holders of the
sterling notes to refinance these with securities of longer duration. The
group holds in treasury $9.9 million of dollar notes 2022 which it acquired
in the placing in December 2016; the group plans to sell these over time as
market conditions permit. Should funding be required pending completion of
any of the debt financing initiatives, the group will seek to place for cash
a limited number of ordinary and/or preference shares, authority for which
will be sought as and when appropriate.
The directors fully expect that the foregoing measures will refinance, or
permit the group to repay, the group indebtedness falling due for repayment
during the period of assessment. As the benefits of recent improvements in
operational efficiencies start to flow through, with CPO prices likely to
remain at current better levels, the group's plantation operations can be
expected to generate increasing cash flows going forward. Operations are
expected to restart shortly at one of the group's coal concessions and to
commence at a new stone deposit. Together these are expected to result in
increasing cash flow.
Based on the foregoing and after making enquiries, the directors therefore
have a reasonable expectation that the company and the group have adequate
resources to continue in operational existence for the period to 31 December
2020 and to remain viable during that period.
*GOING CONCERN*
The business risks are set out in the Strategic report with an indication of
those risks regarded by the directors to be potentially significant together
with mitigating and other relevant considerations for the management of
risks. The financing policies are described in the Strategic report and the
2016 developments relating to capital structure are contained in the
'Finance' section of the strategic report under 'Capital structure'. The
directors have set out their assessment of liquidity and financing adequacy
in the strategic report including the actions either in progress or
contemplated in order to ensure adequate liquidity for the next twelve
months.
Accordingly, having made due enquiries, the directors reasonably expect that
the company and the group have adequate resources to continue in operational
existence for at least twelve months from the date of approval of the
financial statements, and therefore they continue to adopt the going concern
basis of accounting in preparing the financial statements.
*DIRECTORS'* *CONFIRMATION OF* *RESPONSIBILITY*
The directors are responsible for the preparation of the annual report.
To the best of the knowledge of each of the directors:
* 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 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 YEARED 31 DECEMBER 2016*
+-----------------------------------++------------+------------+
| || 2016| 2015*|
+-----------------------------------++------------+------------+
| || $'000| $'000|
+-----------------------------------++------------+------------+
|*Revenue* || 79,265| 90,515|
+-----------------------------------++------------+------------+
|Net gain/(loss) arising from || 632| (1,147)|
|changes in fair value of || | |
|agricultural produce inventory || | |
+-----------------------------------++------------+------------+
|Cost of sales || | |
+-----------------------------------++------------+------------+
|Depreciation and amortisation || (20,959)| (21,676)|
+-----------------------------------++------------+------------+
|Other costs || (50,868)| (61,448)|
+-----------------------------------++------------+------------+
| ||------------|------------|
+-----------------------------------++------------+------------+
|*Gross profit* || 8,070| 6,244|
+-----------------------------------++------------+------------+
|Other operating income || 1| 2|
+-----------------------------------++------------+------------+
|Distribution costs || (1,110)| (1,097)|
+-----------------------------------++------------+------------+
|Administrative expenses || (11,987)| (11,702)|
+-----------------------------------++------------+------------+
| ||------------|------------|
+-----------------------------------++------------+------------+
|*Operating loss* || (5,026)| (6,553)|
+-----------------------------------++------------+------------+ |Investment revenues || 1,742| 259| +-----------------------------------++------------+------------+ |Finance costs || (6,005)| (5,951)| +-----------------------------------++------------+------------+ | ||------------|------------| +-----------------------------------++------------+------------+ |*Loss before tax* || (9,289)| (12,245)| +-----------------------------------++------------+------------+ |Tax || (2,019)| (686)| +-----------------------------------++------------+------------+ | ||------------|------------| +-----------------------------------++------------+------------+ |*Loss for the year* || (11,308)| (12,931)| +-----------------------------------++------------+------------+ | ||------------|------------| +-----------------------------------++------------+------------+ | || | | +-----------------------------------++------------+------------+ |Attributable to: || | | +-----------------------------------++------------+------------+ |Ordinary shareholders || (17,800)| (20,912)| +-----------------------------------++------------+------------+ |Preference shareholders || 7,402| 8,461| +-----------------------------------++------------+------------+ |Non-controlling interests || (910)| (480)| +-----------------------------------++------------+------------+ | ||------------|------------| +-----------------------------------++------------+------------+ | || (11,308)| (12,931)| +-----------------------------------++------------+------------+ | ||------------|------------| +-----------------------------------++------------+------------+ | || | | +-----------------------------------++------------+------------+ |*Basic and diluted loss per 25p ||(48.2 cents)|(59.0 cents)| |ordinary share* || | | +-----------------------------------++------------+------------+ | || | | +-----------------------------------++------------+------------+ |All operations for both years are || | | |continuing || | | +-----------------------------------++------------+------------+ * restated - see Accounting policies (group) in the annual report. *CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2016* +-------------------------------++---------+---------+---------+ | || 2016| 2015*| 2014*| +-------------------------------++---------+---------+---------+ | || $'000| $'000| $'000| +-------------------------------++---------+---------+---------+ |*Non-current assets* || | | | +-------------------------------++---------+---------+---------+ |Goodwill || 12,578| 12,578| 12,578| +-------------------------------++---------+---------+---------+ |Intangible assets || 4,176| -| -| +-------------------------------++---------+---------+---------+ |Property, plant and equipment || 471,922| 468,850| 459,096| +-------------------------------++---------+---------+---------+ |Prepaid operating lease rentals|| 34,230| 34,295| 33,879| +-------------------------------++---------+---------+---------+ |Stone and coal interests || 37,208| 35,338| 31,334| +-------------------------------++---------+---------+---------+ |Deferred tax assets || 12,781| 15,669| 8,909| +-------------------------------++---------+---------+---------+ |Non-current receivables || 3,136| 1,395| 2,749| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ |Total non-current assets || 576,031| 568,125| 548,545| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ | || | | | +-------------------------------++---------+---------+---------+ |*Current assets* || | | | +-------------------------------++---------+---------+---------+ |Inventories || 15,767| 11,190| 16,180| +-------------------------------++---------+---------+---------+ |Biological assets || 2,037| 2,105| 2,251| +-------------------------------++---------+---------+---------+ |Investments || 9,880| 2,158| -| +-------------------------------++---------+---------+---------+ |Trade and other receivables || 42,554| 29,103| 25,487| +-------------------------------++---------+---------+---------+ |Cash and cash equivalents || 24,593| 15,758| 16,224| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ |Total current assets || 94,831| 60,314| 60,142| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ |*Total assets* || 670,862| 628,439| 608,687| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ |*Current liabilities* || | | | +-------------------------------++---------+---------+---------+ |Trade and other payables || (43,426)| (27,025)| (17,818)| +-------------------------------++---------+---------+---------+ |Current tax liabilities || (317)| (3,406)| (2,581)| +-------------------------------++---------+---------+---------+ |Bank loans || (28,628)| (50,906)| (40,326)| +-------------------------------++---------+---------+---------+ |Sterling notes || (10,103)| -| (14,693)| +-------------------------------++---------+---------+---------+ |US dollar notes || (20,048)| -| -| +-------------------------------++---------+---------+---------+ |Hedging instruments || -| -| (9,590)| +-------------------------------++---------+---------+---------+ |Other loans and payables || (519)| (93)| (1,238)| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ |Total current liabilities ||(103,041)| (81,430)| (86,246)| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ |*Non-current liabilities* || | | | +-------------------------------++---------+---------+---------+ |Bank loans || (97,771)| (72,034)| (60,638)| +-------------------------------++---------+---------+---------+ |Sterling notes || (37,037)| (55,853)| (37,713)| +-------------------------------++---------+---------+---------+ |US dollar notes || (23,646)| (33,637)| (33,472)| +-------------------------------++---------+---------+---------+ |Deferred tax liabilities || (80,830)| (86,105)| (77,191)| +-------------------------------++---------+---------+---------+ |Other loans and payables || (18,987)| (5,558)| (6,802)| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ |Total non-current liabilities ||(258,271)|(253,187)|(215,816)| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ |*Total liabilities* ||(361,312)|(334,617)|(302,062)| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ |*Net assets* || 309,550| 293,822| 306,625| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ | || | | | +-------------------------------++---------+---------+---------+ |*Equity* || | | | +-------------------------------++---------+---------+---------+ |Share capital || 121,426| 120,288| 112,974| +-------------------------------++---------+---------+---------+ |Share premium account || 42,585| 30,683| 23,366| +-------------------------------++---------+---------+---------+ |Translation reserve || (39,127)| (46,282)| (44,324)| +-------------------------------++---------+---------+---------+
|Retained earnings || 161,839| 187,481| 212,928| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ | || 286,723| 292,170| 304,944| +-------------------------------++---------+---------+---------+ |Non-controlling interests || 22,827| 1,652| 1,681| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ |*Total equity* || 309,550| 293,822| 306,625| +-------------------------------++---------+---------+---------+ | ||---------|---------|---------| +-------------------------------++---------+---------+---------+ * restated - see Accounting policies (group) in the annual report. *CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31 DECEMBER 2016* +------------------------------------------++--------++--------+ | || 2016|| 2015*| +------------------------------------------++--------++--------+ | || $'000|| $'000| +------------------------------------------++--------++--------+ |*Loss for the year* ||(11,308)||(12,931)| +------------------------------------------++--------++--------+ | ||--------||--------| +------------------------------------------++--------++--------+ | || || | +------------------------------------------++--------++--------+ |*Other comprehensive income* || || | +------------------------------------------++--------++--------+ |Items that may be reclassified to profit || || | |or loss: || || | +------------------------------------------++--------++--------+ |Actuarial losses || (569)|| (489)| +------------------------------------------++--------++--------+ |Deferred tax on actuarial losses || 143|| 122| +------------------------------------------++--------++--------+ | ||--------||--------| +------------------------------------------++--------++--------+ | || (426)|| (367)| +------------------------------------------++--------++--------+ |Items that will not be reclassified to || || | |profit or loss: instrument || || | +------------------------------------------++--------++--------+ |Exchange differences on translation of || 5,222|| 3,575| |foreign operations || || | +------------------------------------------++--------++--------+ |Exchange differences on deferred tax || 2,617|| (5,082)| +------------------------------------------++--------++--------+ | ||--------||--------| +------------------------------------------++--------++--------+ | || 7,413|| (1,874)| +------------------------------------------++--------++--------+ | ||--------||--------| +------------------------------------------++--------++--------+ | || || | +------------------------------------------++--------++--------+ |*Total comprehensive income for the year* || (3,895)||(14,805)| +------------------------------------------++--------++--------+ | ||--------||--------| +------------------------------------------++--------++--------+ | || || | +------------------------------------------++--------++--------+ |Attributable to: || || | +------------------------------------------++--------++--------+ |Ordinary shareholders ||(10,387)||(22,786)| +------------------------------------------++--------++--------+ |Preference shareholders || 7,402|| 8,461| +------------------------------------------++--------++--------+ |Non-controlling interests || (910)|| (480)| +------------------------------------------++--------++--------+ | ||--------||--------| +------------------------------------------++--------++--------+ | || (3,895)||(14,805)| +------------------------------------------++--------++--------+ | ||--------||--------| +------------------------------------------++--------++--------+ * restated - see Accounting policies (group) in the annual report. *CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31 DECEMBER 2016* +---------+-------+-------+-----------+--------+-----+-----------+------+ | | Share| Share|Translation|Retained| Sub| Non-| Total| +---------+-------+-------+-----------+--------+-----+-----------+------+ | |capital|premium| reserve|earnings|total|controlling|Equity| +---------+-------+-------+-----------+--------+-----+-----------+------+ | | | | | | | interests| | +---------+-------+-------+-----------+--------+-----+-----------+------+ | | $'000| $'000| $'000| $'000|$'000| $'000| $'000| +---------+-------+-------+-----------+--------+-----+-----------+------+ |At 1 |112,974| 23,366| (44,324)| 212,928|304,9| 1,681|306,62| |January | | | | | 44| | 5| |2015* | | | | | | | | +---------+-------+-------+-----------+--------+-----+-----------+------+ |Total | -| -| (1,958)|(12,818)|(14,7| (29)|(14,80| |comprehen| | | | | 76)| | 5)| |sive | | | | | | | | |income | | | | | | | | +---------+-------+-------+-----------+--------+-----+-----------+------+ |Issue of | 6,639| 1,199| -| -|7,838| -| 7,838| |new | | | | | | | | |preferenc| | | | | | | | |e | | | | | | | | |shares | | | | | | | | |(cash) | | | | | | | | +---------+-------+-------+-----------+--------+-----+-----------+------+ |Issue of | 675| 6,118| -| -|6,793| -| 6,793| |new | | | | | | | | |ordinary | | | | | | | | |shares | | | | | | | | |(cash) | | | | | | | | +---------+-------+-------+-----------+--------+-----+-----------+------+ |Dividends| -| -| -| (8,461)|(8,46| -|(8,461| |to | | | | | 1)| | )| |preferenc| | | | | | | | |e | | | | | | | | |sharehold| | | | | | | | |ers | | | | | | | | +---------+-------+-------+-----------+--------+-----+-----------+------+ |Dividends| -| -| -| (4,168)|(4,16| -|(4,168| |to | | | | | 8)| | )| |ordinary | | | | | | | | |sharehold| | | | | | | | |ers | | | | | | | | +---------+-------+-------+-----------+--------+-----+-----------+------+ | |-------|-------|-----------|--------|-----|-----------|------| +---------+-------+-------+-----------+--------+-----+-----------+------+ |At 31 |120,288| 30,683| (46,282)| 187,481|292,1| 1,652|293,82| |December | | | | | 70| | 2| |2015 | | | | | | | | +---------+-------+-------+-----------+--------+-----+-----------+------+ |Total | -| -| 7,155|(10,824)|(3,66| (226)|(3,895| |comprehen| | | | | 9)| | )| |sive | | | | | | | | |income | | | | | | | | +---------+-------+-------+-----------+--------+-----+-----------+------+ |Sale of | -| -| -| (7,416)|(7,41| 21,401|13,985| |sharehold| | | | | 6)| | | |ing in | | | | | | | | |sub-group| | | | | | | | +---------+-------+-------+-----------+--------+-----+-----------+------+ |Issue of | 1,138| 11,902| -| -|13,04| -|13,040| |new | | | | | 0| | | |ordinary | | | | | | | | |shares | | | | | | | | |(cash) | | | | | | | | +---------+-------+-------+-----------+--------+-----+-----------+------+
|Dividends| -| -| -| (7,402)|(7,40| -|(7,402|
|to | | | | | 2)| | )|
|preferenc| | | | | | | |
|e | | | | | | | |
|sharehold| | | | | | | |
|ers | | | | | | | |
+---------+-------+-------+-----------+--------+-----+-----------+------+
| |-------|-------|-----------|--------|-----|-----------|------|
+---------+-------+-------+-----------+--------+-----+-----------+------+
|At 31 |121,426| 42,585| (39,127)| 161,839|286,7| 22,827|309,55|
|December | | | | | 23| | 0|
|2016 | | | | | | | |
+---------+-------+-------+-----------+--------+-----+-----------+------+
| |-------|-------|-----------|--------|-----|-----------|------|
+---------+-------+-------+-----------+--------+-----+-----------+------+
* restated - see Accounting policies (group) in the annual report.
*CONSOLIDATED CASH FLOW STATEMENT FOR THE YEARED 31 DECEMBER 2016*
+------------------------------------------++--------++--------+
| || 2016|| 2015|
+------------------------------------------++--------++--------+
| || $'000|| $'000|
+------------------------------------------++--------++--------+
|*Net cash from operating activities* || 2,598|| 20,063|
+------------------------------------------++--------++--------+
| ||--------||--------|
+------------------------------------------++--------++--------+
| || || |
+------------------------------------------++--------++--------+
|*Investing activities* || || |
+------------------------------------------++--------++--------+
|Interest received || 1,742|| 259|
+------------------------------------------++--------++--------+
|Proceeds from disposal of property, plant || 61|| 2,512|
|and equipment || || |
+------------------------------------------++--------++--------+
|Purchases of property, plant and equipment||(31,137)||(32,348)|
+------------------------------------------++--------++--------+
|Expenditure on prepaid operating lease || (367)|| (1,250)|
|rentals || || |
+------------------------------------------++--------++--------+
|Investment in stone and coal interests || (1,860)|| (4,004)|
+------------------------------------------++--------++--------+
| ||--------||--------|
+------------------------------------------++--------++--------+
|Net cash used in investing activities ||(31,561)||(34,831)|
+------------------------------------------++--------++--------+
| ||--------||--------|
+------------------------------------------++--------++--------+
| || || |
+------------------------------------------++--------++--------+
|*Financing activities* || || |
+------------------------------------------++--------++--------+
|Preference dividends paid || (7,402)|| (8,461)|
+------------------------------------------++--------++--------+
|Ordinary dividends paid || -|| (4,168)|
+------------------------------------------++--------++--------+
|Repayment of borrowings ||(11,004)|| (9,620)|
+------------------------------------------++--------++--------+
|Proceeds of issue of ordinary shares, less|| 13,040|| 6,793|
|costs of issue || || |
+------------------------------------------++--------++--------+
|Proceeds of issue of US dollar notes, less|| (44)|| |
|costs of issue || || |
+------------------------------------------++--------++--------+
|Redemption of US dollar notes || (45)|| -|
+------------------------------------------++--------++--------+
|Proceeds of issue/sale of sterling notes, || 1,922|| 4,086|
|less costs of issue || || |
+------------------------------------------++--------++--------+
|Proceeds of issue of sterling notes, by || -|| 39,921|
|exchange || || |
+------------------------------------------++--------++--------+
|Proceeds of issue of preference shares, || -|| 7,838|
|less costs of issue || || |
+------------------------------------------++--------++--------+
|Redemption of sterling notes, by exchange || -||(39,921)|
+------------------------------------------++--------++--------+
|Payment on termination of hedging contract|| -||(10,184)|
+------------------------------------------++--------++--------+
|Purchase of sterling notes || -|| (2,158)|
+------------------------------------------++--------++--------+
|Proceeds of sale of shareholding in || 13,985|| -|
|subsidiary || || |
+------------------------------------------++--------++--------+
|New borrowings from related party || 12,446|| -|
+------------------------------------------++--------++--------+
|New bank borrowings drawn || 14,939|| 30,326|
+------------------------------------------++--------++--------+
| ||--------||--------|
+------------------------------------------++--------++--------+
|Net cash from financing activities || 37,837|| 14,452|
+------------------------------------------++--------++--------+
| ||--------||--------|
+------------------------------------------++--------++--------+
| || || |
+------------------------------------------++--------++--------+
|*Cash and cash equivalents* || || |
+------------------------------------------++--------++--------+
|Net increase/(decrease) in cash and cash || 8,874|| (316)|
|equivalents || || |
+------------------------------------------++--------++--------+
|Cash and cash equivalents at beginning of || 15,758|| 16,224|
|year || || |
+------------------------------------------++--------++--------+
|Effect of exchange rate changes || (39)|| (150)|
+------------------------------------------++--------++--------+
| ||--------||--------|
+------------------------------------------++--------++--------+
|Cash and cash equivalents at end of year || 24,593|| 15,758|
+------------------------------------------++--------++--------+
| ||--------||--------|
+------------------------------------------++--------++--------+
* Net of capitalised depreciation and amortisation
*NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS*
*1. Basis of preparation *
The accompanying financial statements and notes 1 to 14 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 2016 (the '2016 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 2016 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 2016 financial statements have been prepared in accordance with
International Financial Reporting Standards ('IFRS') as adopted by the
European Union as at the date of authorisation of those accounts, the
accompanying financial information does not itself contain sufficient
information to comply with IFRS.
The 2016 financial statements and the accompanying financial information
were approved by the board of directors on 27 April 2017.
*2. Revenue*
+----------------------++-------++-------+
| || 2016|| 2015|
+----------------------++-------++-------+
| || $'000|| $'000|
+----------------------++-------++-------+
|Sales of goods || 77,642|| 87,824|
+----------------------++-------++-------+
|Revenue from services || 1,623|| 2,691|
+----------------------++-------++-------+
| ||-------||-------|
+----------------------++-------++-------+
| || 79,265|| 90,515|
+----------------------++-------++-------+
|Other operating income|| 1|| 2|
+----------------------++-------++-------+
|Investment revenue || 1,742|| 259|
+----------------------++-------++-------+
| ||-------||-------|
+----------------------++-------++-------+
|Total revenue || 81,008|| 90,776|
+----------------------++-------++-------+
| ||-------||-------|
+----------------------++-------++-------+
* restated - see Accounting policies (group) in the annual report.
*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 operations. In 2016 and 2015, the latter did not meet the quantitative thresholds set out in IFRS 8 'Operating segments' and, accordingly, no analyses are provided by business segment. +-------------------------------++-------++-------+ | || 2016|| 2015*| +-------------------------------++-------++-------+ | || $'m|| $'m| +-------------------------------++-------++-------+ |Sales by geographical location:|| || | +-------------------------------++-------++-------+ |Indonesia || 79.3|| 90.5| +-------------------------------++-------++-------+ |Rest of World || -|| -| +-------------------------------++-------++-------+ | ||-------||-------| +-------------------------------++-------++-------+ | || 79.3|| 90.5| +-------------------------------++-------++-------+ | ||-------||-------| +-------------------------------++-------++-------+ +--------------------------------------------++-------++-------+ |Carrying amount of net assets by || || | |geographical area of asset location: || || | +--------------------------------------------++-------++-------+ |UK, Continental Europe and Singapore || 56.0|| 58.0| +--------------------------------------------++-------++-------+ |Indonesia || 253.6|| 237.9| +--------------------------------------------++-------++-------+ | ||-------||-------| +--------------------------------------------++-------++-------+ | || 309.6|| 295.9| +--------------------------------------------++-------++-------+ | ||-------||-------| +--------------------------------------------++-------++-------+ * restated - see Accounting policies (group) in the annual report. *4. Agricultural produce inventory movement* The net gain/(loss) arising from changes in fair value of agricultural produce inventory represents the movement in the fair value of that inventory less the amount of the movement in such inventory at historic cost (which is included in cost of sales). *5. Administrative expenses* +--------------------------------------------++-------++-------+ | || 2016|| 2015| +--------------------------------------------++-------++-------+ | || $'000|| $'000| +--------------------------------------------++-------++-------+ |Net foreign exchange losses || 1,290|| 818| +--------------------------------------------++-------++-------+ |Net credit for additional pension || -||(2,267)| |contributions || || | +--------------------------------------------++-------++-------+ |Loss on disposal of property, plant and || 12|| 49| |equipment || || | +--------------------------------------------++-------++-------+ |Indonesian operations || 9,621|| 11,556| +--------------------------------------------++-------++-------+ |Head office || 5,377|| 6,160| +--------------------------------------------++-------++-------+ | ||-------||-------| +--------------------------------------------++-------++-------+ | || 16,300|| 16,316| +--------------------------------------------++-------++-------+ |Amount included as additions to property, ||(4,313)||(4,614)| |plant and equipment || || | +--------------------------------------------++-------++-------+ | ||-------||-------| +--------------------------------------------++-------++-------+ | || 11,987|| 11,702| +--------------------------------------------++-------++-------+ | ||-------||-------| +--------------------------------------------++-------++-------+ *6. Finance costs* +-------------------------------------------++--------++-------+ | || 2016|| 2015| +-------------------------------------------++--------++-------+ | || $'000|| $'000| +-------------------------------------------++--------++-------+ |Interest on bank loans and overdrafts || 12,617|| 8,130| +-------------------------------------------++--------++-------+ |Interest on US dollar notes || 2,899|| 2,716| +-------------------------------------------++--------++-------+ |Interest on sterling notes || 5,184|| 5,042| +-------------------------------------------++--------++-------+ |Interest on other loans || 273|| -| +-------------------------------------------++--------++-------+ |Change in value of sterling notes arising ||(10,470)||(2,694)| |from exchange fluctuations || || | +-------------------------------------------++--------++-------+ |Movements relating to derivative financial || -|| 1,685| |instruments || || | +-------------------------------------------++--------++-------+ |Change in value of loans arising from || 1,378||(4,946)| |exchange fluctuations || || | +-------------------------------------------++--------++-------+ |Other finance charges || 251|| 887| +-------------------------------------------++--------++-------+ | ||--------||-------| +-------------------------------------------++--------++-------+ | || 12,132|| 10,820| +-------------------------------------------++--------++-------+ |Amount included as additions to property, || (6,127)||(4,869)| |plant and equipment || || | +-------------------------------------------++--------++-------+ | ||--------||-------| +-------------------------------------------++--------++-------+ | || 6,005|| 5,951| +-------------------------------------------++--------++-------+ | ||--------||-------| +-------------------------------------------++--------++-------+ Amounts included as additions to property, plant and equipment and construction in progress arose on borrowings applicable to the Indonesian operations and reflected a capitalisation rate of 22.0 per cent (2015: 27.3 per cent); there is no directly related tax relief. *7. Tax* +------------------------++-------++-------+ | || 2016|| 2015*| +------------------------++-------++-------+ | || $'000|| $'000| +------------------------++-------++-------+ |Current tax: || || | +------------------------++-------++-------+ |UK corporation tax || 1|| -| +------------------------++-------++-------+ |Overseas withholding tax|| 1,604|| 1,467| +------------------------++-------++-------+ |Foreign tax || 38|| 50| +------------------------++-------++-------+ |Foreign tax - prior year|| 3|| 1,778| +------------------------++-------++-------+ | ||-------||-------| +------------------------++-------++-------+ |Total current tax || 1,646|| 3,295| +------------------------++-------++-------+ | ||-------||-------| +------------------------++-------++-------+ +------------------++-------++-------+ |Deferred tax: || || | +------------------++-------++-------+ |Current year || 373||(2,987)| +------------------++-------++-------+ |Prior year || -|| 378| +------------------++-------++-------+ | ||-------||-------| +------------------++-------++-------+ |Total deferred tax|| 373||(2,609)| +------------------++-------++-------+ | ||-------||-------| +------------------++-------++-------+ +---------++-------++-------+ |Total tax|| 2,019|| 686| +---------++-------++-------+ | ||-------||-------| +---------++-------++-------+ * restated - see Accounting policies (group) in the annual report. 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 25 per cent (2015: 25 per cent) and for the United Kingdom, the taxation provision reflects a corporation tax rate of 20 per cent (2015: 20.25 per cent) and a deferred tax rate of 19 per cent (2015: 20 per cent). *8. Loss per share* +------------------------------------------++--------++--------+ | || 2016|| 2015*| +------------------------------------------++--------++--------+ | || $'000|| $'000| +------------------------------------------++--------++--------+ |Basic and diluted loss for the purpose of ||(17,800)||(20,912)| |calculating loss per share** || || | +------------------------------------------++--------++--------+ | ||--------||--------| +------------------------------------------++--------++--------+ | || || | +------------------------------------------++--------++--------+ +--------------------------------------------++-------++-------+
| || '000|| '000| +--------------------------------------------++-------++-------+ |Weighted average number of ordinary shares || 36,950|| 35,455| |for the purposes of basic and diluted loss || || | |per share || || | +--------------------------------------------++-------++-------+ | ||-------||-------| +--------------------------------------------++-------++-------+ * restated - see Accounting policies (group) in the annual report. ** being net loss attributable to ordinary shareholders *9. Dividends* +----------------------+----------------------+-------++-------+ | | | 2016|| 2015| +----------------------+----------------------+-------++-------+ | | | $'000|| $'000| +----------------------+----------------------+-------++-------+ |Amounts recognised as distributions to | || | |equity holders: | || | +----------------------+----------------------+-------++-------+ |Preference dividends | | 7,402|| 8,461| |of 9p per share (2015:| | || | |9p per share) | | || | +----------------------+----------------------+-------++-------+ |Ordinary dividends | | -|| 4,168| |(2015: 7.75p per | | || | |share) | | || | +----------------------+----------------------+-------++-------+ | | |-------||-------| +----------------------+----------------------+-------++-------+ | | | 7,402|| 12,629| +----------------------+----------------------+-------++-------+ | | |-------||-------| +----------------------+----------------------+-------++-------+ *10. Property, plant and equipment* +------------+---------+----------+---------+------------+-----+ | |Plantings| Buildings| Plant|Construction|Total| +------------+---------+----------+---------+------------+-----+ | | | and|equipment| in progress| | +------------+---------+----------+---------+------------+-----+ | | |structures| and| | | | | | | vehicles| | | +------------+---------+----------+---------+------------+-----+ | | | | vehicles| | | +------------+---------+----------+---------+------------+-----+ | | $'000| $'000| $'000| $'000|$'000| +------------+---------+----------+---------+------------+-----+ |Cost: | | | | | | +------------+---------+----------+---------+------------+-----+ |At 1 January| 178,420| 213,898| 104,431| 12,510|509,2| |2015 | | | | | 59| |(restated) | | | | | | +------------+---------+----------+---------+------------+-----+ |Opening | (363)| 363| -| -| -| |balance | | | | | | |adjustment | | | | | | +------------+---------+----------+---------+------------+-----+ |Additions | 9,411| 15,629| 1,897| 5,412|32,34| | | | | | | 9| +------------+---------+----------+---------+------------+-----+ |Exchange | -| -| (36)| -| (36)| |differences | | | | | | +------------+---------+----------+---------+------------+-----+ |Disposals | -| (1)| (2,530)| -|(2,53| | | | | | | 1)| +------------+---------+----------+---------+------------+-----+ |Transfers | (8,202)| 8,202| -| -| -| |from | | | | | | |plantings | | | | | | +------------+---------+----------+---------+------------+-----+ |Transfers | -| 1,708| 6,281| (7,989)| -| |to/(from) | | | | | | |construction| | | | | | |in progress | | | | | | +------------+---------+----------+---------+------------+-----+ |Transfers to| (345)| -| -| (2)|(347)| |current | | | | | | |receivables | | | | | | +------------+---------+----------+---------+------------+-----+ | |---------|----------|---------|------------|-----| | | | | | | | +------------+---------+----------+---------+------------+-----+ |At 31 | 178,921| 239,799| 110,043| 9,931|538,6| |December | | | | | 94| |2015 | | | | | | |(restated) | | | | | | +------------+---------+----------+---------+------------+-----+ |Additions | 7,104| 18,082| 2,173| 3,778|31,13| | | | | | | 7| +------------+---------+----------+---------+------------+-----+ |Exchange | -| -| (63)| -| (63)| |differences | | | | | | +------------+---------+----------+---------+------------+-----+ |Disposals | (24)| (16)| (439)| -|(479)| +------------+---------+----------+---------+------------+-----+ |Transfers | -| 1,008| 82| (1,090)| -| |to/(from) | | | | | | |construction| | | | | | |in progress | | | | | | +------------+---------+----------+---------+------------+-----+ |Transfers to| -| -| (124)| (3,999)|(4,12| |intangible | | | | | 3)| |assets | | | | | | +------------+---------+----------+---------+------------+-----+ |Transfers to| -| -| -| (3,025)|(3,02| |deferred | | | | | 5)| |charges | | | | | | +------------+---------+----------+---------+------------+-----+ |Transfers to| (4)| -| -| -| (4)| |current | | | | | | |receivables | | | | | | +------------+---------+----------+---------+------------+-----+ |Transfers to| (141)| -| -| -|(141)| |income | | | | | | |statement | | | | | | +------------+---------+----------+---------+------------+-----+ | |---------|----------|---------|------------|-----| | | | | | | | +------------+---------+----------+---------+------------+-----+ |At 31 | 185,856| 258,873| 111,672| 5,595|561,9| |December | | | | | 96| |2016 | | | | | | +------------+---------+----------+---------+------------+-----+ | |---------|----------|---------|------------|-----| | | | | | | | +------------+---------+----------+---------+------------+-----+ | | | | | | | +------------+---------+----------+---------+------------+-----+ |Accumulated | | | | | | |depreciation| | | | | | |: | | | | | | +------------+---------+----------+---------+------------+-----+ |At 1 January| -| 16,291| 33,872| -|50,16| |2015 | | | | | 3| |(restated) | | | | | | +------------+---------+----------+---------+------------+-----+ |Opening | -| 1,682| -| -|1,682| |balance | | | | | | |adjustment | | | | | | +------------+---------+----------+---------+------------+-----+ |Charge for | 8,689| 4,061| 6,898| -|19,64| |year | | | | | 8| +------------+---------+----------+---------+------------+-----+ |Exchange | -| -| (29)| -| (29)| |differences | | | | | | +------------+---------+----------+---------+------------+-----+ |Disposals | -| (1)| (1,619)| -|(1,62| | | | | | | 0)| +------------+---------+----------+---------+------------+-----+ | |---------|----------|---------|------------|-----| | | | | | | | +------------+---------+----------+---------+------------+-----+ |At 31 | 8,689| 22,033| 39,122| -|69,84| |December | | | | | 4| |2015 | | | | | | |(restated) | | | | | |
+------------+---------+----------+---------+------------+-----+ |Charge for | 9,082| 5,076| 6,608| -|20,76| |year | | | | | 6| +------------+---------+----------+---------+------------+-----+ |Transfers to| -| -| (124)| -|(124)| |intangible | | | | | | |assets | | | | | | +------------+---------+----------+---------+------------+-----+ |Disposals | -| (11)| (401)| -|(412)| +------------+---------+----------+---------+------------+-----+ | |---------|----------|---------|------------|-----| +------------+---------+----------+---------+------------+-----+ |At 31 | 17,771| 27,098| 45,205| -|90,07| |December | | | | | 4| |2016 | | | | | | +------------+---------+----------+---------+------------+-----+ | |---------|----------|---------|------------|-----| +------------+---------+----------+---------+------------+-----+ | | | | | | | +------------+---------+----------+---------+------------+-----+ |Carrying | | | | | | |amount: | | | | | | +------------+---------+----------+---------+------------+-----+ |At 31 | 168,085| 231,775| 66,467| 5,595|471,9| |December | | | | | 22| |2016 | | | | | | +------------+---------+----------+---------+------------+-----+ | |---------|----------|---------|------------|-----| +------------+---------+----------+---------+------------+-----+ |At 31 | 170,232| 217,766| 70,921| 9,931|468,8| |December | | | | | 50| |2015 | | | | | | +------------+---------+----------+---------+------------+-----+ | |---------|----------|---------|------------|-----| +------------+---------+----------+---------+------------+-----+ |At 1 January| 178,420| 197,607| 70,559| 12,510|459,0| |2015 | | | | | 96| +------------+---------+----------+---------+------------+-----+ | |---------|----------|---------|------------|-----| +------------+---------+----------+---------+------------+-----+ The depreciation charge for the year includes $313,000 (2015:?$233,000) which has been capitalised as part of additions to plantings. In accordance with the amendments to IAS 41: Agriculture and IAS 16: Property, plant and equipment, the assets previously disclosed as 'Biological assets' have been transferred as follows. Growing produce, which is still classified as a biological asset, is now disclosed in current assets. As regards the balance, the group has adopted, as permitted by the amended provisions of IAS 41, the fair value as at 31 December 2014 as deemed cost. The assets concerned comprise oil palm trees, nurseries and the field infrastructural improvements relating to the planting of trees. This balance of deemed cost has been allocated by separating the infrastructural improvements at estimated depreciated current cost and treating the remaining balance as attributable to the oil palm trees (plantings). At the balance sheet date, the book value of finance leases included in property, plant and equipment was $nil (2015: $nil). At the balance sheet date, the group had entered into contractual commitments for the acquisition of property, plant and equipment amounting to $1.4 million (2015: $1.2 million). At the balance sheet date, property, plant and equipment of $298.6 million had been charged as security for bank loans. *11. Issuance of equity securities* Changes in share capital: * On 20 December 2016 3,670,000 ordinary shares were issued, credited as fully paid, by way of placing at GBP2.95 per share (total consideration GBP10.8 million - $13.4 million) to Mirabaud Pereire Nominees Limited and Emba Holdings Limited (a related party). The middle market price at close of business on 14 December 2016 (being the date at which the terms of issue were fixed) was GBP2.94 *12. Movement in net borrowings* +----------------------------------------++---------++---------+ | || 2016|| 2015| +----------------------------------------++---------++---------+ | || $'000|| $'000| +----------------------------------------++---------++---------+ |Change in net borrowings resulting from || || | |cash flows: || || | +----------------------------------------++---------++---------+ |Decrease in cash and cash equivalents || 8,874|| (316)| +----------------------------------------++---------++---------+ |Net increase in borrowings || (3,935)|| (20,706)| +----------------------------------------++---------++---------+ |Increase in related party borrowings || (12,469)|| -| +----------------------------------------++---------++---------+ | ||---------||---------| +----------------------------------------++---------++---------+ | || (7,530)|| (21,022)| +----------------------------------------++---------++---------+ |Issue of sterling notes || -|| (4,086)| +----------------------------------------++---------++---------+ |Issue of US dollar notes || (345)|| -| +----------------------------------------++---------++---------+ |Amortisation of sterling note expenses || (318)|| (109)| +----------------------------------------++---------++---------+ |Amortisation of US dollar notes expenses|| (266)|| (165)| +----------------------------------------++---------++---------+ | ||---------||---------| +----------------------------------------++---------++---------+ | || (8,459)|| (25,382)| +----------------------------------------++---------++---------+ |Currency translation differences || 2,036|| (2,686)| +----------------------------------------++---------++---------+ |Net borrowings at beginning of year ||(198,686)||(170,618)| +----------------------------------------++---------++---------+ | ||---------||---------| +----------------------------------------++---------++---------+ |Net borrowings at end of year ||(205,109)||(198,686)| +----------------------------------------++---------++---------+ | ||---------||---------| +----------------------------------------++---------++---------+ *13. Related parties* 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. 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'. +------------------------++-------++-------+ | || 2016|| 2015| +------------------------++-------++-------+ | || $'000|| $'000| +------------------------++-------++-------+ |Short term benefits || 1,405|| 2,111| +------------------------++-------++-------+ |Post employment benefits|| -|| -| +------------------------++-------++-------+ |Other long term benefits|| -|| -| +------------------------++-------++-------+ |Termination benefits || -|| -| +------------------------++-------++-------+ |Share based payments || -|| -| +------------------------++-------++-------+ | ||-------||-------| +------------------------++-------++-------+ | || 1,405|| 2,111| +------------------------++-------++-------+ | ||-------||-------| +------------------------++-------++-------+ As described in note 11 above, ordinary shares were placed with Emba Holdings Limited on 20 December 2016. *14. Events after the reporting period* There have been no material post balance sheet events that would require disclosure or adjustment to these financial statements. Press enquiries to: R.E.A. Holdings plc Tel: 020 7436 7877 Language: English ISIN: GB0002349065 Category Code: ACS TIDM: RE. OAM Categories: 1.1. Annual financial and audit reports Sequence No.: 4116 End of Announcement EQS News Service 568567 28-Apr-2017 1: http://public-cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=6cdd5d8dfd08427a6180e6c6c7a9b26d&application_id=568567&site_id=vwd_london&application_name=news 2: http://public-cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=b78e8a7665ae1d41c84fd9819f4e2030&application_id=568567&site_id=vwd_london&application_name=news
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April 28, 2017 02:02 ET (06:02 GMT)
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