R.E.A. HOLDINGS PLC 8. Tax
2020 2019
USD'000 USD'000
Current tax:
UK corporation tax - -
Overseas withholding tax 968 1,289
Foreign tax 343 737
Total current tax 1,311 2,026
Deferred tax:
Current year (9,830) (24,329)
Prior year 1,183 -
Total deferred tax (8,647) (24,329)
Total tax (7,336) (22,303) Taxation is provided at the rates prevailing for the relevant jurisdiction. For Indonesia, the current and deferred taxation provision is based on a tax rate of 20 per cent (2019: 25 per cent) and for the United Kingdom, the taxation provision re?ects a corporation tax rate of 19 per cent (2019: 19 per cent) and a deferred tax rate of 19 per cent (2019: 17 per cent).
The rate of corporation tax in the United Kingdom had been expected to reduce from 19 per cent to 17 per cent from 1 April 2020 however in March 2020 it was announced that the rate would continue at 19 per cent. In March 2021 it was announced that UK corporation tax rates would rise to 25 per cent from 2023.
The main rate of corporation tax in Indonesia is reducing from 25 per cent to 22 per cent in 2021 then to 20 per cent for accounting periods after 2022. In computing the deferred tax liabilities, it is assumed that as neither deferred tax assets nor liabilities will crystallise in the immediate future then calculations based on a rate of 20 per cent are appropriate.
9. Dividends
In view of the dif?cult trading conditions prevailing during 2020 and the group's financial performance, the directors concluded that the payment of the ?xed semi-annual dividends on the 9 per cent cumulative preference shares that fell due on 30 June and 31 December 2020 should be deferred and that the half yearly preference dividends that were due on 30 June 2019 and 31 December 2019 should also continue to be deferred.
Provided that CPO prices remain at current levels, the preference dividends arising on 30 June 2021 and 31 December 2021 are expected to be paid during the year. Whilst the group recognises the importance of paying the arrears on the preference dividend, which now stand at 18p per share, it is not yet in a position to provide guidance as to when it might be able to commence doing so. The directors are well aware that preference shares are bought for income and aim progressively to catch up the preference dividend arrears as soon as circumstances prudently permit.
While the dividends on the preference shares are more than six months in arrear, the company is not permitted to pay dividends on its ordinary shares. In view of the results reported for 2020, the directors would not anyway have considered it appropriate to declare or recommend the payment of any dividend on the ordinary shares in respect of 2020 even if this were permitted.
10. Loss per share
2020 2019
USD'000 USD'000
Loss for the purpose of calculating loss per share* (13,183) (17,814)
'000 '000
Weighted average number of ordinary shares for the purpose of loss per share 43,951 41,358 * Being net loss attributable to ordinary shareholders
11. Property, plant and equipment
Plantings Buildings Plant, Construction Total
and equipment in progress
structures and vehicles
USD'000 USD'000 USD'000 USD'000 USD'000
Cost:
At 1 January 2019 182,549 236,930 114,963 7,242 541,684
Additions 2,367 3,068 5,518 7,275 18,228
Reclassifications and adjustments (7,012) 10,227 3,525 (6,858) (118)
Disposals - property, plant and equipment (2,575) (4,436) (1,799) - (8,810)
At 31 December 2019 175,329 245,789 122,207 7,659 550,984
Additions 1,250 2,051 2,757 4,702 10,760
Reclassifications and adjustments - 1,450 1,781 (3,248) (17)
Disposals - property, plant and equipment (1,164) (696) (2,597) - (4,457)
At 31 December 2020 175,415 248,594 124,148 9,113 557,270
Accumulated depreciation:
At 1 January 2019 36,565 37,821 57,852 - 132,238
Charge for year 9,734 6,904 10,183 - 26,821
Reclassifications and adjustments - 414 (854) - (440)
Disposals - property, plant and equipment (91) (124) (1,776) - (1,991)
At 31 December 2019 46,208 45,015 65,405 - 156,628
Charge for year 10,012 7,297 9,615 - 26,924
Reclassifications and adjustments - 59 (38) - 21
Disposals - property, plant and equipment (206) (51) (2,597) - (2,854)
At 31 December 2020 56,014 52,320 72,385 - 180,719
Carrying amount:
At 31 December 2020 119,401 196,274 51,763 9,113 376,551
At 31 December 2019 129,121 200,774 56,802 7,659 394,356 The depreciation charge for the year includes USD56,000 (2019: USD95,000) which has been capitalised as part of additions to plantings and buildings and structures.
At the balance sheet date, the group had entered into contractual commitments for the acquisition of property, plant and equipment amounting to USD2.6 million (2019: USD3.4 million).
At the balance sheet date, property, plant and equipment of USD141.3 million (2019: USD153.5 million) had been charged as security for bank loans.
12. Sterling notes
The sterling notes comprise GBP30.9 million nominal of 8.75 per cent guaranteed 2025 sterling notes (2019: GBP30.9 million nominal) issued by the company's subsidiary, REA Finance B.V. ("REAF").
On 1 April 2020 a proposal to extend the repayment date for the sterling notes from 31 August 2020 to 31 August 2025 was implemented. In accordance with the terms of the proposal the company issued a total of 4,010,760 warrants to subscribe, for a period of ?ve years, for ordinary shares in the capital of the company at a price of GBP1.26 per share to the holders of the sterling notes on the basis of 130 warrants per GBP1,000 nominal of sterling notes held at the close of business (London time) on 24 March 2020.
The sterling notes are guaranteed by the company and another wholly owned subsidiary of the company, REAS, and are secured principally on unsecured loans made by REAS to Indonesian plantation operating subsidiaries of the company. Unless previously redeemed or purchased and cancelled by the issuer, the sterling notes are now repayable on 31 August 2025. A premium of 4p per GBP1 nominal of sterling notes will now be paid on redemption of the sterling notes on 31 August 2025 (or earlier in the event of default) or on surrender of the sterling notes in satisfaction, in whole or in part, of the subscription price payable on exercise of the warrants on the ?nal subscription date (namely 15 July 2025).
The repayment obligation in respect of the sterling notes of GBP30.9 million (USD42.1 million) is carried in the balance sheet net of the unamortised balance of the note issuance costs plus the present value of the premium payable on redemption discounted at the coupon rate.
13. Share capital
2020 2019
USD'000 USD'000
Issued and fully paid (in dollars):
72,000,000 - 9 per cent cumulative preference shares of GBP1 each (2019: 72,000,000) 116,516 116,516
43,950,529 - ordinary shares of 25p each (2019: 43,950,529) 18,071 18,071
132,500 - ordinary shares of 25p each held in treasury (2019: 132,500) (1,001) (1,001)
133,586 133,586 The preference shares entitle the holders thereof to payment, out of the profits of the company available for distribution and resolved to be distributed, of a fixed cumulative preferential dividend of 9 per cent per annum on the nominal amount paid up on such preference shares. The preference shares shall rank for dividend in priority to the payment of any dividend to the holders of any other class of shares. In the event of the company being wound up, holders of the preference shares shall be entitled to the amount paid up on the nominal value of such shares together with any arrears and accruals of the fixed dividend thereon, irrespective of whether such dividend has been declared or earned or not. The preference shares shall rank on a winding up or other return of capital in priority to any other shares of the company for the time being in issue.
Subject to the rights of the holders of preference shares, holders of ordinary shares are entitled to share equally with each other in any dividend paid on the ordinary share capital and, on a winding up of the company, in any surplus assets available for distribution among the members.
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