Mark Learmonth: Sorry, a question €“ the effect of the tax, I’m very pleased that Chester can talk about the tax rate. A tax rate, as the previous CFO, I think Chester made the point clearly enough. The bulk of the tax we pay is tax in Zimbabwe, okay. And the Zimbabwean tax computations are done on the basis of local currency denominated accounts, okay. We actually report our accounts in U.S. dollars. And so if you then try and reconcile the U.S. dollar tax charge back to something that makes sense to you, it won’t work because the actual underlying calculation is done the basis of different of a €“ completely different currency, which means you’ve got very different realized exchange gains and exchange losses. I’m very happy to hand that over to Chester for further clarification if you can, Chester?
Chester Goodburn: Yes. I’ll leave the fact that it’s calculated in , I think you explained that well, Mark. Also something would be non-cash items that we don’t get a deduction for. Like in payment expenses of approximately $8 million, you don’t see the benefit of that in the profit before tax. Unrealized foreign exchange losses, that’s also deducted before profit before tax. And you’ll note that that deferred tax is a very big component of our tax expense, that’s a non-cash item, approximately $7 million.
Mark Learmonth: Yes. We also €“ there’s other two areas of inefficiencies in our tax structure. The first is withholding tax, and that’s withholding tax as we move money around the group. So in particular we incur withholding tax on the management fees paid from Zimbabwe to South Africa. Then further we incur withholding tax on the distribution of dividends from Zimbabwe up to the UK. And then the second area, now we are looking to €“ and so we also end up paying tax in South Africa on intercompany profits made in South Africa and the tax in South Africa on the intercompany profits is primarily from our procurement business. So to try and minimize that we are setting up a procurement business focused on Bilboes. So we’ll service just Bilboes based in Dubai so that we will, it is a lower tax regime that in South Africa.
We can’t move the existing procurement business from South Africa to Dubai because that will be a deemed disposal which will give rise to South African CGT. And then the other area of tax sort of inefficiency is the fact that we will, the top company is based in Jersey where the tax rate is zero. And so it means that expense expenses incurred in Jersey don’t have any tax relief. So I think all of those things together explain why our headline tax rate is quite high. Having said that, the underlying tax regime in Zimbabwe is a) very stable and b) is quite sympathetic in particular because you get a 100% capital allowances in Zimbabwe for capital expenditure in the year in which is incurred. Okay. So that’s the tax rate. So question here about EPS, we don’t give EPS guidance we used to, and it just became an absolute nightmare because there’s so many variable factors that we cannot control.
So things like foreign exchange gains, foreign exchange losses. A few years ago you had the export credit incentive scheme, which saw us being paid a premium. It just became €“ we ended up chasing our tail in terms of trying to reconcile and explain stuff over which we had no control. So we give guidance as to production costs, CapEx and you can make your own view on the gold price. And then everything after that, and frankly, you’d have to take your own view. We found ourselves just getting into ever decreasing circles on that, I’m afraid. Question on the interest rate on the bond. Look, Andrew Cooks asked a question on the interest rate expected on the bond. Chester can provide details of that, but I would caution you that we’re talking about the financial.
We’re not talking about Wall Street. We’re talking more about sort of Robert Mugabe Way avenue. And the sophistication of the Zimbabwe capital markets, it’s not as advanced as it would be elsewhere. And so there is appetite for green bonds outside Zimbabwe, but this is a purely domestic issue. And I don’t think it’s particularly tinged green. And the reason we’re not offering those bonds internationally is that then we would be expected to provide guarantees as to future ability to externalize capital. And we’re not in the business of backstopping future government policy, of which we’ve got no control. But Chester, do you want to talk more about the terms of the bond rise?