During 2020, the Company did not employ personnel; nor did it employ personnel in the previous years.
Research and development
The Company does not perform any research and development.
Environmental and other non-financial information
Climatic factors and respect for the environment, though having limited impact on the Company, are integral to the
operations of the REAH group. Detailed information about the group's commitment to sustainable practices may be found
in the "Sustainability" section on the group's website at www.rea.co.uk.
Future outlook
Management is of the opinion that the present level of activities will be maintained during the next financial year.
Management expects that the average number of employees will not change during the next financial year.
The impact of Covid-19 has been considered and is not expected to have a significant impact on the activities of the
Company.
Subsequent events
There have been no material post-balance sheet events that would require disclosure in, or adjustment to, these
accounts.
Management representation statement
Management declares that, to the best of its knowledge, the annual accounts prepared in accordance with the applicable
set of accounting standards give a true and fair view of the assets, liabilities, financial position and profit or loss
of the Company and that the management board report includes a fair review of the development and performance of the
business and the financial position of the Company, together with a description of the principal risks and
uncertainties it faces.
Amstelveen, 9 June 2021
The Management board:
Apex Financial Services B.V.
2. FINANCIAL STATEMENTS
2.1 Balance sheet as at 31 December 2020
(After result appropriation)
31 December 2020 31 December 2019
ASSETS GBP GBP GBP GBP
Fixed assets
Financial fixed assets [1]
Loan to parent company 32,144,755 -
Current assets
Receivables
Loan to parent company [2] - 31,327,000
Receivables from parent company [3] 588,283 537,801
Taxes [4] 6,125 4,968
594,408 31,869,769
Cash [5] 50,956 40,123
Total assets 32,790,119 31,909,892
SHAREHOLDER'S EQUITY AND LIABILITIES
Shareholder's equity [6]
Issued share capital 16,183 15,373
Share premium reserve 475,000 475,000
Other reserves 555,901 522,100
1,047,084 1,012,473
Long-term liabilities [7]
Sterling notes 31,679,213 -
Current liabilities
Accounts payable [8] 5,899 471
Taxes [9] 296 264
Sterling notes [10] - 30,852,000
Accrued liabilities [11] 57,627 44,684
63,822 30,897,419
Total shareholder's equity and liabilities 32,790,119 31,909,892
2.2 Profit and loss account for the year ended 31 December 2020
2020 2019*
GBP GBP
Financial income [12] 3,769,647 2,856,989
Financial expenses [13] (3,547,323) (2,699,550)
Gross financial result 222,324 157,439
Administrative expenses [14] (181,385) (97,213)
Result before taxes 40,939 60,226
Taxation [15] (6,328) (11,858)
Result after taxation 34,611 48,368
* restated, see 2.3 Notes to the financial statements page 16
2.3 Notes to the financial statements
General
REA Finance B.V. (the "Company") is a private company with limited liability, incorporated under Dutch law on 7 November 2006, having its corporate seat at Amsterdam, the Netherlands with offices at Van Heuven Goedhartlaan 935A, 1181 LD Amstelveen. The Company has been registered at the Chamber of Commerce under file number 34259527. The principal activity of the Company is to act as a finance company. The Company receives all of its income from its parent company, REAH. The Company has received proceeds from the issue of sterling notes which have been used to grant a loan to its parent company, R.E.A. Holdings plc ("REAH").
100 per cent of the shares of the Company are held by REAH. REAH is a public listed company located in the United Kingdom and the ultimate parent company of a group (the "group") which is principally engaged in the cultivation of oil palms in the province of East Kalimantan in Indonesia and in the production and sale of crude palm oil ("CPO") and crude palm kernel oil ("CPKO").
The financial information of the Company is included in the consolidated financial statements of REAH.
Financial reporting period
These financial statements cover the year 2020, which ended at the balance sheet date of 31 December 2020.
Basis of preparation
The financial statements of the Company have been prepared in accordance with Title 9, Book 2 of the Dutch Civil Code.
Functional and presentation currency
The annual accounts have been prepared in pounds sterling ("GBP") since the majority of the transactions within the Company occur in pounds sterling, which is therefore considered to be the Company's functional currency.
Going concern
The financial statements of the Company have been prepared on the basis of the going concern assumption.
At the time of signing the 2019 Company accounts, it was concluded that it was appropriate to prepare the financial statements on a going concern basis. With the onset of the Covid-19 pandemic early in 2020, CPO prices suffered a sharp fall which, coupled with the possibility of operational issues caused by the pandemic, could have resulted in liquidity issues and trigger the need for bank loan repayment within the group to be deferred or covenants waived. This meant that there was a material uncertainty about the ability of REAH and, therefore, the Company to continue as a going concern. During 2020, significant progress was made in improving the group's overall financial position. Whilst two Indonesian group subsidiaries were in breach of certain loan covenants at 31 December 2020, these breaches were waived subsequent to the year-end by the lender Mandiri. With better CPO prices now prevailing allowing significantly higher revenues to be generated, these companies are expected to meet their loan covenants in 2021. In addition, proposals are currently under discussion between the group and Mandiri to replace the existing loans to Indonesian subsidiaries with new loans that would provide additional funding of longer tenor, materially improving group cash flows for the period to 31 December 2023.
Management has made a considered assessment of going concern of the Company, including in-depth reviews of REAH's projections and detailed cashflow forecasts. Consideration of possible on-going impacts of Covid-19 on the Company have also been taken into account. In making this
2.3 Notes to the financial statements (continued)
assessment, management has considered the period up to 12 months after the end of the reporting period, as well as the period up to 12 months after the date of these accounts.
Management is of the view that uncertainties associated with Covid-19 do not currently trigger uncertainties as respects going concern and that no events or conditions have been identified that might cast significant doubt on the Company's ability to continue as a going concern.
Having regard to the foregoing, management expects that, based on the Company's projections and cash flow forecasts and having regard to the REAH's cash position and available borrowings, the Company should be able to operate for at least 12 months from the date of approval of the financial statements.
Staff members
During 2020 there were an average of nil employees in full time employment or its equivalent (2019: nil).
2.3 Notes to the financial statements (continued)
ACCOUNTING POLICIES FOR THE MEASUREMENT OF ASSETS AND LIABILITIES AND THE DETERMINATION OF THE RESULT
General
Assets and liabilities are measured at historical cost, unless stated otherwise in the policies below.
An asset is recognised in the balance sheet when it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and the asset has a cost price or value of which the amount can be measured reliably. Assets that are not recognised in the balance sheet are considered as off-balance sheet assets.
A liability is recognised in the balance sheet when it is expected that the settlement of an existing obligation will result in an outflow of resources embodying economic benefits and the amount necessary to settle this obligation can be measured reliably. Provisions are included in the liabilities of the Company. Liabilities that are not recognised in the balance sheet are considered as off-balance sheet liabilities.
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