Anglo-Eastern Plantations
Annual Report 2004

Plain-text annual report

C O N T E N T S Financial Summary 1 Chairman’s Statement 2 Financial Record 7 Additional Information 8 Location of Estates 10 Estate Areas 11 Directors’ Report 12 Directors’ Responsibilities Directors 15 Statement on Corporate Governance 16 Directors' Remuneration Report 18 Auditors’ Report 21 Consolidated Profit and Loss Account ($) 22 Consolidated and Company Balance Sheets ($) 23 Statement of Total Recognised Gains and Losses ($) Reconciliation of Movement in Shareholders’ Funds ($) Historical Cost Profits and Losses ($) 24 Consolidated Cash Flow Statement ($) 25 Notes to the Financial Statements ($) 26 Consolidated Profit and Loss Account (£) 39 Consolidated and Company Balance Sheets (£) 40 Consolidated Cash Flow Statement (£) 41 Notice of Annual General Meeting 42 Company Addresses, Advisers and Website 44 Photographs Crude palm oil despatch (cover) Blankahan oil mill (page 2) Bina Pitri estate (page 5) Anglo-Eastern Plantations Plc, quoted on the London Stock Exchange, operates and is developing plantations in Indonesia and Malaysia, amounting to some 45,000 hectares producing palm oil, rubber and cocoa. FINANCIAL SUMMARY 2004 2003 US$000 US$000 2004 £000 2003 £000 65,618 24,808 48,519 35,662 29,495 19,587 13,483 11,907 Turnover Profit before tax Shareholders’ funds (year end) 102,166 89,162 53,212 49,812 Earnings per share Dividends per share 34.5cts 8.0cts 28.6cts 6.0cts 18.8p 4.26p 17.4p 3.27p A N G L O - E A S T E R N P L A N TAT I O N S P L C 1 C H A I R M A N ’ S S TAT E M E N T Iam glad to report record turnover and profit for 2004.The satisfactory results and our strong financial position allowed the group to make two acquisitions in the past 12 months of approximately 10,000 ha of land. These new acquisitions will bring our total plantable area to 42,000 ha, closer to 50,000 ha, an objective set by the board when my family assumed control of the company in late 1993. The group profit before tax was $24.8 million, an increase of 27% over the previous record profit of $19.6 million achieved in 2003. Turnover at $65.6 million was 35% higher than the $48.5 million recorded in the previous year. This record result was due to our highest ever production of fresh fruit bunches (FFB) at 429,000 mt, a successful policy of buying in crop for processing, and favourable crude palm oil (CPO) prices. Our production of CPO passed the 100,000 mt mark for the first time, reaching 118,000 mt. Earnings per share (EPS) was 34.5 cts, up 21% on 2003, a smaller increase relative to pre- tax profit because of higher corporation tax and withholding tax charges. The increase in EPS in sterling terms to 18.8p from 17.4p was only 8% because of the strength of sterling against the US dollar during the year. The appreciation of sterling also affected the increase in the group’s net asset value in sterling terms, up 9p or 7% to 135p at the end of 2004. In dollar terms, net asset value was 260 cts, an increase of 16%. Group operating cash flow continued to be strong. Bina Pitri estate was acquired in March 2004 for $10.0 million and capital expenditure during the year on oil mills and field development was $11.0 million. In late December, we were able to buy in 468,000 of the company’s shares (1.1% of issued capital) for a cost of $1.4 million or 153p per share. These shares have not been cancelled and are being held as treasury shares. Despite this heavy expenditure, group cash, net of all borrowings, A N G L O - E A S T E R N P L A N TAT I O N S P L C 2 C H A I R M A N ’ S S TAT E M E N T ended the year at $3.8 million compared to $7.0 million at the end of 2003. is that we may not have to commence replanting there until 2008/09. The total cost of Bina Pitri was refinanced in the second half of the year by a long term loan of $5.0 million. Against that, repayments of existing long term loans elsewhere in the group amounted to $2.0 million, leaving at the end of 2004 group total borrowings of $11.1 million and cash of $14.9 million. Commodity prices CPO prices for much of 2004 were even more favourable than 2003, averaging $460/mt compared to $440/mt in 2003. However, having started the year at $450/mt and peaked at $550/mt in April, they fell to $418/mt by the close of 2004. Rubber prices were also very strong throughout the year, reaching the highest average level of $1.28/kg for ten years compared to an average of $1.09/kg in 2003. Our small but high yielding area of rubber made another contribution of about $1.1 million. Cocoa prices fell during the year from the peaks of 2003. We have not been successful in obtaining satisfactory yields from this problematic crop and are likely to replant our remaining small areas over the next few years with another crop. Indonesia FFB production from Tasik and Anak Tasik in North Sumatra, at 174,000 mt, was 3,000 mt higher than in 2003 and close to the record of 176,000 mt in 2000. Tasik continues to surprise us with its performance from what, in theory, should be areas past their prime. The first plantings are now 22 years old, but the returns from these continue to be so satisfactory we have decided to defer replanting for as long as the palms are harvestable. Our present estimate Production from the three smaller estates around Medan in North Sumatra was 58,000 mt, a new record and 3,000 mt more than the previous record in 2003. These properties are now in their prime. We cannot expect any dramatic increases in yield but they should continue to perform satisfactorily for quite a few years. In December 2004, we commissioned the new 20mt/hr mill at Blankahan at a cost of $2.3 million; a picture appears on the opposite page. This mill is processing FFB from Blankahan, Sungei Musam and Rambung at an oil extraction rate of 25%, well in excess of the 21-22% we achieve at our other mills, where rates are reduced by the crop bought in from outside, as well as from our own older planting material at Tasik. The Blankahan mill will improve significantly the profitability of our smaller North Sumatra estates. Production from the Bengkulu estates in southern Sumatra was on target at 145,000 mt, 35% up on the previous year. Started in 1996, this project is at last beginning to look an established operation. The estates are becoming significant earners of profit and cash. At the end of 2004, there was still an immature area of 3,378 ha out of the total planted area of 12,627 ha. New planting in 2004 amounted to 1,365 ha, which was below our budget at 1,600 ha. The delay was caused by extended negotiations with squatters on our land title areas. We expect to complete the 2004 programme by May 2005. There remain another 2,900 ha of reserves which we plan to plant over the next two years. The Bengkulu project will then be fully planted. Continuing what is now established policy, we purchased record quantities of crop from outside in 2004, totalling 241,000 mt of FFB, up 41% over 2003. The production from bought in crop has become a useful profit contributor. A N G L O - E A S T E R N P L A N TAT I O N S P L C 3 C H A I R M A N ’ S S TAT E M E N T Bought in crop amounted to about 42% of total mill throughput of 560,000 mt in 2004. To meet the increasing throughput from our own and from outside crop, extension of the Puding Mas mill from 40mt/hr to 60mt/hr was completed in October 2004 at a cost of $1.8 million. We are now extending the Tasik mill from 45mt/hr to 60mt/hr, also at a cost of about $1.8 million. Some of this decline was weather, and some management, related; we continue to work to improve the latter. The Malaysian operation made a small profit of $131,000 in group terms in 2004. It has been able to meet all its outside loan interest and repayment commitments, but it is not well placed to meet any significant fall in the CPO price. Bina Pitri, (pictured on the opposite page) in Group development the province of Riau, produced 15,000 mt of FFB in its first nine months under our ownership. Shareholders will recall that this 4,300 ha estate was in a very derelict condition. It has required an enormous effort to clear out the undergrowth and begin to establish a proper infrastructure of roads, housing and transport. We are very pleased with the result and our local management are to be praised for all they have achieved. It will be another 18 months before we begin to see the delayed effects of a proper fertiliser regime after years of neglect. We plan to begin construction of a 30mt/hr mill, expandable to 60mt/hr, towards the end of 2005. During the year, we applied for rights over a further 2,000 ha of vacant land contiguous to Bina Pitri. Before issue of any final land title, it is normal in Indonesia to be required to demonstrate commitment by beginning to plant some of this area. We shall plant 900 ha during 2005, as well as continuing to replant and rehabilitate 400 ha in our existing land title area. While it is unlikely we shall be able to acquire the whole extra area for which we have applied, we are optimistic of making this at least a 5,000 ha estate. Malaysia 2004 was a disappointing year on our Cenderung estates with FFB production of 36,000 mt, down 4% on the previous year. Our objective is to reach a planted area of 50,000 ha. Ten years ago, planted area was 10,000 ha. Now, it is 30,000 ha. With the Bengkulu estates earmarked to be fully planted by the end of 2006, the group will have a total planted area of some 35,000 ha. Given the difficulty in acquiring developed estates at attractive prices, it is likely that future growth will come from acquisition of land suitable for development. In December 2004, we completed negotiations for the acquisition of land rights over 4,800 ha of vacant land, called Labuhan Bilik, about 130 km north of Tasik. We have just completed the survey to confirm that area, the consideration for which is $388,000. Development of this area will commence in 2006 and, assuming the land title is issued without complications, then the group’s total land title area will be about 45,000 ha. Upon full development of this property, the group will have a planted area of some 40,000 ha. Our long established local partner in Tasik has joined us in investing in 20% of Bina Pitri and Labuhan Bilik. We are looking for further land in the Labuhan Bilik area with the intention of building a larger land bank for the group’s future development. Vacant land in North Sumatra is now scarce and we may well have to pay more than for Labuhan Bilik. However, we believe it is a great advantage to the group to A N G L O - E A S T E R N P L A N TAT I O N S P L C 4 C H A I R M A N ’ S S TAT E M E N T remain operating only in Sumatra, if possible within reach of the group’s existing estates and mills, rather than to look further afield to less developed parts of Indonesia. With the expected replanting of our Tasik estates beginning in 2008/09, the temporary fall in production there will be offset partly by increasing output of the Bengkulu estates and the new Bina Pitri estate. The new mill in Blankahan and the two mill extensions described earlier will provide processing capacity of 140mt/hr by the end of this year. I expect these developments, together with the future development of Bina Pitri and Labuhan Bilik, to enable the group to achieve continued long term growth in production. Directors The Combined Code of Corporate Governance now requires non-executive directors who have served more than nine years with a listed company to submit themselves for re-election. You will see from the notice of the forthcoming annual general meeting page 42 that three directors, each of whom have served eleven years, are affected by the provision. Madam S K Lim has a controlling interest in Anglo-Eastern through her 100% interest in Genton International, which owns 50.9% of the company. In addition, she controls directly and indirectly a further 0.7% of the company. As Madam Lim’s husband, I generally represent the interests of our family on the board but by virtue of her holding I recommend that she be re-elected as a director. Mr Peter O’Connor, who is our senior non- executive director, brings to the group extensive UK, Asian and North American stock market investment, board and corporate governance experience. Similarly, Mr Ho Soo Ching has extensive corporate finance, board and management experience in Asia. A N G L O - E A S T E R N P L A N TAT I O N S P L C 5 C H A I R M A N ’ S S TAT E M E N T Both Mr O'Connor and Mr Ho are thoroughly independent minded, something confirmed by the rest of the board, and I have no hesitation in recommending that shareholders vote in favour of their re-election. International Accounting Standards As mentioned in my last half year statement, all listed companies are required, under EU regulations, to apply International Accounting Standards (IAS) to their consolidated financial statements for accounting periods commencing on or after 1 January 2005. Comparative figures for 2004 will have to be amended accordingly. Therefore, the results included in the financial statements which follow will change when shown as comparatives in the 2005 financial statements. A review of the main effects of applying IAS to the group has been undertaken. The principal impact relates to the requirement to: 1) value our biological assets at market value and charge or credit the changes in an accounting period to profit and loss account (IAS 41); and 2) provide deferred taxation on all property valuation surpluses even if there is no intention to dispose of those properties. This will reduce the reported net assets by approximately the figure already shown in note 16 of the financial statements - $17.9 million or about 24p/share. Outlook The CPO price weakened to $395/mt in the first two months of 2005 largely on expectation of record soya oil production from South America in the first half of 2005. This expectation has been lowered in the past few weeks and the CPO price is now about $430/mt. Weather in Indonesia and Malaysia has been unusually dry and, while group crops in the first three months of 2005 have been 15% ahead of last year, they are 3% below expectations. The rubber price has remained fairly stable and our rubber production is on target. In the absence of unfavourable weather conditions, the group is expected to increase its crop production on the back of increasing contribution from the Bengkulu and Bina Pitri estates as well as CPO output from the expanded mill processing capacity. However, the group’s operating results depend heavily on the movement in CPO prices and I do not think the high prices in 2004 will be repeated this year. Nonetheless, if the CPO price stays at the present level, I am hopeful the group will be able to maintain the same level of profit for the current year. Dividend In spite of the less optimistic price outlook for 2005 and the continuing heavy development expenditure, the board feels shareholders should be rewarded on the back of a satisfactory performance and proposes a dividend of 8.0 cts per share, an increase of 33% over 2003. CHAN TEIK HUAT Chairman 1 April 2005 A N G L O - E A S T E R N P L A N TAT I O N S P L C 6 F I N A N C I A L R E C O R D Profit and Loss Account Turnover Operating profit Net interest - (paid)/received - capitalised Profit before tax Taxation Minority interests Profit attributable to shareholders Dividends 2004 $000 65,618 25,095 (361) 74 24,808 (8,450) (2,694) 13,664 (3,147) 2003 $000 48,519 19,994 (537) 130 19,587 (6,141) (2,201) 11,245 (2,375) 2002 $000 31,139 12,767 (895) 220 12,092 (4,367) (1,250) 6,475 (1,571) 2001 $000 16,992 3,369 (320) 310 3,359 (1,638) 320 2,041 (785) 2000 $000 17,562 6,560 27 56 6,643 (3,147) (522) 2,974 (588) Retained profit 10,517 8,870 4,904 1,256 2,386 Balance Sheet Fixed assets Cash net of short term borrowings Long term loans Other working capital and deferred tax $000 127,302 9,357 (5,558) (7,115) $000 105,096 13,067 (6,108) (3,664) $000 103,558 6,376 (8,085) (3,339) $000 104,333 2,149 (6,460) (1,594) $000 97,556 1,660 (1,412) (2,910) Minority interests (21,820) (19,229) (17,377) (17,799) (17,993) 123,986 108,391 98,510 98,428 94,894 Net worth 102,166 89,162 81,133 80,629 76,901 Share capital Treasury shares Share premium and capital redemption account Revaluation and exchange reserve Profit and loss account 15,424 (1,387) 24,912 8,998 54,219 15,319 - 24,766 5,375 43,702 15,171 - 24,657 6,586 34,719 15,171 - 24,657 10,986 29,815 15,171 - 24,657 8,514 28,559 Shareholders’ funds 102,166 89,162 81,133 80,629 76,901 Ordinary shares in issue (‘000s) Earnings per share (US cents) Dividends per share (US cents) Asset value per share (US cents) Earnings per share (pence equivalent) Dividends per share (pence equivalent) Asset value per share (pence equivalent) Borrowings net of cash: shareholders’ funds (%) 39,804 34.5cts 8.0cts 260cts 18.8p 4.26p 135p - 39,581 28.6cts 6.0cts 225cts 17.4p 3.27p 126p - 39,227 16.5cts 4.0cts 207cts 10.9p 2.58p 128p 2% 39,227 5.2cts 2.0cts 206cts 3.6p 1.40p 141p 5% 39,227 7.6cts 1.50cts 196cts 5.0p 1.04p 132p - Relevant exchange rates shown on page 8. A N G L O - E A S T E R N P L A N TAT I O N S P L C 7 A D D I T I O N A L I N F O R M AT I O N Planted area Oil palm - mature - immature - total Rubber Cocoa Total Crops FFB - all estates - bought in or processed for third parties Saleable crude palm oil (CPO) Saleable palm kernels Rubber Cocoa Sales CPO – Tasik/Puding Mas Palm kernels – Tasik/Puding Mas FFB – other estates Rubber Cocoa Average Sales Prices – Indonesia CPO (after export tax) Palm kernels Rubber Cocoa FFB 2004 Ha 25,533 4,500 30,033 434 258 30,725 Tonnes 428,657 241,359 118,197 28,526 1,370 208 119,250 28,315 107,844 1,376 221 Rp/kg 3,600 2,233 10,618 10,894 764 2003 Ha 19,910 4,507 24,417 757 258 25,432 Tonnes 372,290 170,948 94,523 22,325 1,800 154 91,238 22,302 90,119 1,800 141 Rp/kg 3,320 1,500 8,451 14,544 719 2002 Ha 19,335 3,389 22,724 843 258 23,825 Tonnes 294,062 101,906 63,240 15,033 1,491 178 63,042 15,018 93,929 1,508 170 Rp/kg 3,113 1,468 6,698 15,214 617 2001 Ha 16,753 5,550 22,303 992 258 23,553 Tonnes 252,632 74,789 52,073 12,127 1,376 120 52,072 12,050 89,620 1,351 127 Rp/kg 2,271 1,067 5,254 9,712 380 2000 Ha 12,961 8,507 21,468 996 258 22,722 Tonnes 253,094 38,730 52,297 11,537 1,253 131 53,169 11,589 54,114 1,251 134 Rp/kg 2,026 1,283 5,206 6,029 358 Average Sales Prices – Malaysia FFB RM/mt 319 RM/mt 284 RM/mt 242 RM/mt 152 RM/mt 158 Exchange Rates – Year End Rp : $ $ : £ RM: $ Exchange Rates – Average Rp : $ $ : £ RM: $ 9,290 1.92 3.80 9,001 1.84 3.80 8,447 1.79 3.80 8,563 1.65 3.80 8,940 1.61 3.80 9,253 1.51 3.80 10,400 1.46 3.80 10,270 1.44 3.80 9,595 1.49 3.80 8,510 1.51 3.80 A N G L O - E A S T E R N P L A N TAT I O N S P L C 8 A D D I T I O N A L I N F O R M AT I O N A N G L O - E A S T E R N P L A N TAT I O N S P L C 9 U A R I A N I B I R T I P % 0 8 s e r a t c e h U L U K G N E B % 0 9 O N L A s e r a t c e h S A M % 0 9 s e r a t c e h I G N D U P I E G N U S M A S U M % 5 7 s e r a t c e h A R T A M U S H T R O N % 0 0 1 s e r a t c e h % 5 7 s e r a t c e h G N U B M A R N A H A K N A L B % 0 8 K I L I B s e r a t c e h N A H U B A L K A N A K I S A T % 0 0 1 s e r a t c e h A I S E N O D N I A I S Y A L A M P U O R G 4 0 0 2 r e b m e c e D 1 3 t A E S TAT E A R E A S 8 7 9 , 3 6 1 6 , 5 3 3 6 , 3 0 5 3 , 1 0 3 0 7 5 5 3 0 , 4 0 9 4 8 8 8 , 2 4 9 9 , 8 0 0 6 5 1 2 0 3 3 3 6 , 3 8 0 8 , 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5 3 0 , 4 4 9 9 , 8 3 3 6 , 3 8 0 8 , 1 0 4 2 2 0 7 4 9 2 9 2 3 , 4 0 0 1 , 1 9 2 4 , 5 6 7 8 , 2 8 1 1 , 1 4 0 3 8 9 2 , 4 5 6 3 9 0 2 6 1 1 0 9 6 0 0 6 1 1 6 1 1 0 0 0 2 9 2 , 3 1 3 2 3 , 4 4 2 9 , 1 2 9 2 , 3 1 3 2 3 , 4 4 2 9 , 1 0 6 0 1 6 3 1 0 4 3 4 4 3 4 8 4 2 0 1 8 5 2 0 8 2 8 0 7 2 2 2 9 4 0 7 7 8 7 7 8 8 1 9 0 0 8 1 9 0 0 0 0 0 0 0 8 1 9 0 2 6 3 8 3 0 6 5 9 6 5 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8 , 4 0 0 8 , 4 6 6 7 0 0 6 6 7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4 3 4 0 4 3 4 8 4 2 0 1 8 5 2 0 6 6 7 2 1 0 , 6 4 9 9 , 6 2 0 0 1 3 1 3 0 7 9 7 7 9 7 0 1 1 3 7 4 8 0 6 9 0 , 6 6 9 0 , 6 1 4 2 , 3 1 9 5 , 1 8 6 7 0 0 6 , 5 4 9 5 , 2 3 0 0 9 , 5 4 9 4 , 8 3 0 0 0 0 0 0 8 4 9 7 7 , 3 2 8 8 , 1 0 4 7 7 1 9 3 6 , 2 8 1 4 , 6 0 8 1 4 , 6 % 0 8 K I S A T s e r a t c e h L A T O T G N U R E D N E C L A T O T s e r a t c e h % 5 5 s e r a t c e h s e r a t c e h 2 1 0 , 6 3 0 3 , 2 2 0 3 2 , 3 3 3 5 , 5 2 0 0 6 4 6 3 5 3 , 3 0 1 0 5 2 1 0 , 6 2 0 3 , 6 2 1 3 7 , 3 7 4 1 , 1 3 5 3 , 3 3 3 0 , 0 3 4 3 4 0 4 3 4 8 4 2 0 1 8 5 2 8 4 5 0 0 2 e r u t a m o t e u D t s e r e t n i p u o r G e r u t a m m I e r u t a M m l a P l i O r e h t O l a t o T e r u t a m m I e r u t a M l a t o T r e b b u R a o c o C e r u t a m m I e r u t a M l a t o T r e b m T i 3 7 7 , 0 3 a e r a d e t n a l p l a t o T 3 2 1 , 5 1 3 3 , 2 e l b a t n a l p n U e l b a t n a l P s e v r e s e R 5 8 7 c t e , s d a o r , g n i s u o h - r e h t O 9 3 2 , 8 2 1 0 , 9 3 0 0 9 , 5 2 1 9 , 4 4 s e l t i t d n a l l a t o T s t h g i r d n a L a e r a l a t o T A N G L O - E A S T E R N P L A N TAT I O N S P L C 11 D I R E C TO R S ’ R E P O RT The directors present their annual report on the affairs of the group, together with the financial statements and auditors' report, for the year ended 31 December 2004. Principal Activity The company acts as a holding company and manages and co-ordinates the businesses of its subsidiaries. At 31 December 2004 these comprised principally the cultivation of oil palm, rubber and cocoa in Indonesia and Malaysia. The subsidiary undertakings which principally affected the profits or net assets of the group in the year are listed in note 26 to the financial statements. Results and Dividends The audited financial statements for the year ended 31 December 2004 are set out on pages 22 to 41. The group profit for the year on ordinary activities before taxation was $24,808,000 (2003 - $19,587,000) and the profit attributable to ordinary shareholders was $13,664,000 (2003 - $11,245,000). No interim dividend was paid.The directors recommend a final dividend of 8.0 cts (2003 - 6.00 cts) to be paid on 6 July 2005 to shareholders on the register on 10 June 2005. Shareholders who elect to receive their dividend in sterling as described on page 14 will receive a dividend of 4.26p (2003 - 3.27p). Fixed Assets Information relating to changes in tangible fixed assets is given in note 10 to the financial statements. directors served throughout the year. No directors are required under the provisions of the Articles of Association to retire by rotation, at the forthcoming annual general meeting. However Madam S K Lim, Mr P E O'Connor and Mr Ho Soo Ching, who have each served for eleven years, will be submitting themselves for re-election as provided in the Combined Code of Corporate Governance. Directors' interests The interests of the directors together with those of their immediate families in the securities of the company were as shown below: Directors’ beneficial interests at 31 December 2004 Ordinary shares 186,000 - - - 300,000 20,521,314 250,000 2003 Ordinary shares 63,000 71,400 - - 300,000 20,917,914 250,000 R O B Barnes T H Chan Datuk Chin S K Foo S C Ho S K Lim P E O’Connor The interests disclosed for Madam S K Lim are held by Genton International Limited and certain other companies of which Madam Lim is the controlling shareholder. The interest of Mr Chan in 71,400 shares at 31 December 2003 was transferred during 2004 to Genton International Limited at no cost. There have been no changes in the interests of the directors in the securities of the company between 31 December 2004 and the date of this report. Other than as set out in note 18 to the financial statements no director had a material interest in any contract of the company subsisting during, or at the end of, the financial year. Directors A full list of directors appears on page 15. All Substantial Share Interests As at 1 April 2005 the following interests had A N G L O - E A S T E R N P L A N TAT I O N S P L C 12 D I R E C TO R S ’ R E P O RT been notified to the company under Part VI of the Companies Act 1985 (as modified by the Companies Act 1989) being interests in excess of 3% of the issued ordinary share capital of the company: Name of holder Genton International Limited Alcatel Bell Pension Fund S N Roditi Number 20,247,814 5,940,000 2,116,900 Percentage held 50.9% 14.9% 5.3% Authority to Allot Shares At the annual general meeting held on 27 May 2004 shareholders authorised the board under the provisions of section 80 of the Companies Act 1985 to allot relevant securities within specified limits for a period of five years. Renewal of this authority on similar terms is being sought under Resolution 6 at the forthcoming annual general meeting. Such authority will be limited to shares up to a maximum nominal amount of £3,316,981 which represents 33.3% of the company's issued share capital. The authority will last for up to five years from the date of the resolution. The directors do not have any present intention of issuing any shares under this authority. A fresh authority is also being sought under the provisions of section 95 of the Companies Act 1985 to enable the board to make an issue to existing shareholders without being obliged to comply with certain technical requirements of the Companies Act, which create problems with regard to fractional entitlements and overseas shareholders. In addition, the authority will give the board power to make issues of shares for cash to persons other than existing shareholders up to a maximum aggregate nominal amount of £497,547 representing 5% of the current issued share capital. The section 95 authority will last for up to 15 months from the date of the annual general meeting. Scrip Dividends Resolution 7 to be proposed at the annual general meeting seeks renewal for a further five years of the authority under which the directors are able to offer shareholders a scrip dividend alternative. No scrip alternative is being offered in respect of the 2004 final dividend. Acquisition of the Company's Own Shares and Authority to Purchase Own Shares Following the purchase of 468,000 shares at 153p per share in December 2004, the directors had remaining authority at 1 April 2005, under the shareholders' resolution of 27 May 2004, to make purchases of 3,490,062 of the company's ordinary shares. This authority expires on 27 June 2005. The board will only make purchases if they believe the earnings or net assets per share of the company would be improved by such purchases. All such purchases will be market purchases made through the London Stock Exchange. Companies are now allowed to hold their own shares which have been purchased in this way in treasury rather than having to cancel them. The directors would, therefore, consider holding the company's own shares which have been purchased by the company as treasury shares as this would give the company the flexibility of being able to sell such shares quickly and effectively where it considers it in the interests of shareholders to do so. Whilst any such shares are held in treasury, no dividends will be payable on them and they will not carry any voting rights. A N G L O - E A S T E R N P L A N TAT I O N S P L C 13 D I R E C TO R S ’ R E P O RT Resolution 8 to be proposed at the forthcoming annual general meeting seeks renewed authority to purchase up to a maximum of 3,980,377 ordinary shares of 25p each on the London Stock Exchange, representing 10% of the company's issued ordinary share capital. The maximum price which may be paid for ordinary shares on any exercise of the authority will be restricted to 5% above the average middle market quotations for such shares as derived from the London Stock Exchange Daily Official List for the 5 business days before the purchase is made. The maximum number of shares and the price range are stated for the purpose of compliance with statutory requirements in seeking this authority and should not be taken as an indication of the level of purchases, or the prices thereof, that the company would intend to make. Share Option Schemes The share option schemes adopted in 1994 expired on 3 June 2004. Resolution 9 to be proposed at the annual general meeting seeks approval for the introduction of two replacement schemes. Background to these schemes is set out in the report of the Remuneration Committee on page 18. Payment of Dividends The group reporting currency is US dollars. However at the time of acquiring their interest shareholders can choose to receive dividends in US dollars or in sterling. In the absence of any specific instruction up to the date of closing the register, shareholders with addresses in the UK are deemed to have elected to receive their dividends in sterling and those with addresses outside the UK in US dollars. The sterling equivalent dividend will be paid at the exchange rate ruling at the date of the preliminary announcement of the company’s results and in the case of the current year is recorded within the section "Results and Dividends" on page 12. Supplier Payment Policy It is the group’s policy to pay suppliers promptly in accordance with agreed terms of payment. Year end trade creditor days were about 30 (2003 - 30). Liability Insurance for Company Officers As permitted by the Companies Act 1985 the company has maintained insurance cover for the directors against liabilities in relation to the company. Political and Charitable Donations None (2003: none). Following the tsunami in December 2004, the company is investigating with its Acehnise staff the construction of a school or clinic in 2005 in the affected area of Aceh using the company's own resources and contractors. Income and Corporation Taxes Act 1988 In the opinion of the directors, the company is not a close company within the meaning of the above Act. By order of the board R O B Barnes Secretary 1 April 2005 A N G L O - E A S T E R N P L A N TAT I O N S P L C 14 D I R E C TO R S ’ R E S P O N S I B I L I T I E S Company law requires the directors to prepare - state whether applicable accounting standards financial statements for each financial year which have been followed, subject to any material give a true and fair view of the state of affairs of departures disclosed and explained in the the company and group and of the profit or loss financial statements; of the group for that period. - prepare the financial statements on the going After making enquiries, the directors have a concern basis unless it is inappropriate to reasonable expectation that the company and the presume that the group will continue in business. group have adequate resources to continue The directors are responsible for keeping operations for the foreseeable future. For this proper accounting records which disclose with reason, they continue to adopt the going concern reasonable accuracy at any time the financial basis in preparing the financial statements. position of the company and group and to enable In preparing those financial statements, the them to ensure that the financial statements comply directors are required to: with the Companies Act 1985. They are also - select suitable accounting policies and then responsible for safeguarding the assets of the apply them consistently; company and the group and hence for taking - make judgements and estimates that are reasonable steps for the prevention and detection reasonable and prudent; of fraud and other irregularities. D I R E C TO R S T H Chan (Chairman and CEO, aged 65) Chartered accountant; managing director of Metroplex Berhad, an investment holding company, listed on the Kuala Lumpur Stock Exchange, primarily engaged in property development, investment property, hotel ownership, building materials, leisure and gaming; founder and managing partner of a leading accounting firm in Malaysia for some 17 years. Datuk H Chin Poy-Wu (Independent non- executive, chairman of remuneration committee, aged 68) Chairman of Hap Seng Consolidated Bhd, director of Glenealy Plantations Bhd, both listed on the Kuala Lumpur Stock Exchange, and director of Sabah Forest Industries Sdn Bhd. Commissioner of Police - Kuala Lumpur, retired 1993. R O B Barnes (Chief Financial Officer, aged 60) Chartered accountant; director of The Chillington Corporation Plc from 1986 to 1989. Madam S K Lim (Non-executive, aged 56) Executive chairman of Metroplex Berhad. S K Foo (Independent non-executive, aged 56) Chartered accountant (England & Wales and Malaysia). 29 years with Ernst & Young, Malaysia; managing partner 1997-2002. Director of Salcon Bhd and of Symphony House Bhd listed on the Kuala Lumpur Stock Exchange and Kuala Lumpur MESDEQ Exchanges respectively. P E O'Connor (Senior independent non- executive, chairman of nomination committee, aged 64) Chairman of City Merchants High Yield Trust Plc, and of Advance Developing Markets Plc; director of AMR Technologies Inc and of IMS Investment Manager Selection Limited; director of GT Management Plc 1975 to 1990 (in London and Hong Kong). S C Ho (Independent non-executive, chairman of audit committee, aged 55) Director of MS Corporate Finance (Pte) Ltd in Singapore. A N G L O - E A S T E R N P L A N TAT I O N S P L C 15 S TAT E M E N T O N C O R P O R AT E G OV E R N A N C E During 2004 the company has complied with the decide strategy, major investment and financing majority of the requirements of the Combined decisions and the appointment and removal of Code of Corporate Governance which was issued executive directors. In addition the board is in July 2003 by the Financial Reporting Council responsible for ensuring resources are adequate to (the 2003 FRC Code) and which came into effect meet objectives and for reviewing performance, for accounting periods commencing after 1 financial controls and risk. The audit, November 2003. remuneration and nomination committees have Where provisions of the 2003 FRC Code written terms of reference. The activities of the appeared for the first time, or where other remuneration committee are dealt with on page requirements were not met during 2004, particular 18. comment is made in the statements below and in The board normally meets three times each the Directors' Remuneration Report on page 18. year. Other meetings to deal with formalities take place by telephone or written resolution. During The Board 2004 there were three full meetings, attended by The board comprises two executive and five non- all directors, except Mr O'Conner who attended executive directors, four of whom are one and Madam S K Lim who did not attend any. independent. Of these four, two, Mr O'Connor Mr O'Connor was indisposed in the second half and Mr Ho Soo Ching, have served for eleven of 2004 but has attended the two full meetings years which is above the limit of nine years held so far in 2005. In the absence of major issues reckoned by the Combined Code to indicate Mr Chan represents the interests of Madam S K prima facie independence. Both Mr O'Connor Lim. and Mr Ho have a wide range of business interests All the independent non-executive directors beyond their position with the company and the met on their own in January 2005. The chairman rest of the board agree unanimously that they have met all the non-executive directors, in the absence shown themselves to be fully independent. Mr T of the other executive directors, at least once in H Chan has been both chairman and chief 2004. executive since 1998. His other commitments are Mr O’Connor has been senior non-executive shown on page 15. Together with his wife, director since January 1999. Madam S K Lim, he is a controlling shareholder Non-executives are not appointed for of the company. In the opinion of the board, specified terms. There have been changes in non- given the size of his family's commitment to the company, his common interest as shareholder and executive directors at intervals in the past (as recently as 2003) for a variety of reasons. While manager in the company make it reasonable that accepting the need to maintain the vitality of the the post of chairman and chief executive are board the directors do not intend to specify terms combined. The other members of the board are of office for non-executives. However, the board satisfied that through the specific powers reserved will review the position of each director at the for the board, and given the presence of four time set for his normal three yearly reappointment wholly independent non-executives, there is a under the Articles. reasonable balance of influence. A schedule of duties and decisions reserved New directors have not received formal training on the occasion of their appointment to for the board and management respectively has the board as all have previous experience of public been adopted. This provides that the board should company directorships and some of them have A N G L O - E A S T E R N P L A N TAT I O N S P L C 16 S TAT E M E N T O N C O R P O R AT E G OV E R N A N C E worked in financial or accounting service auditors. industries. A programme of regular visits by the Internal Control non-executive directors to the group's operations The company has followed the Combined Code is being implemented. provisions and Turnbull Committee guidance on In January 2005 the board conducted a internal control since 1999. The board has overall review of its performance in 2004. This review responsibility for the group’s internal control and covered balance of powers, independence of risk management; the audit committee reviews members, contribution to strategy, monitoring/ and monitors specific risks and internal control evaluation and accountability to stakeholders. No procedures and reports to the board where major issues arose from this review. appropriate. Executive staff and directors are responsible for implementation of control Relations with Shareholders procedures and for identifying and managing Company executives attempt to contact principal business risks. The audit committee review is a shareholders at least twice a year and at all times continuous but sequential process and in any one are pleased to speak to and meet any shareholder. year does not necessarily cover all risks which are Given the dispersion of directors and shareholders significant to the group. The process aims to it is not possible for every non-executive director provide reasonable assurance against material to meet shareholders in the presence of misstatement or loss. In 2004 for example the management. A member of the audit and audit committee reviewed, among other things, remuneration committees will be available at the risks relating to outside crop, and the control of 2004 annual general meeting. contracts for field development. The board receives monthly reports from Accountability and Audit executive management in Indonesia and Malaysia The directors confirm their responsibilities and focuses at each meeting on the principal regarding the financial statements and their continuing risks to which the group is exposed statement of going concern, both set out on page including, but not limited to, commodity price 15. movements, exchange rate movements, political The audit committee comprises Mr Ho and social change and government legislation. (chairman), Mr O'Connor and Datuk H Chin The group has an internal audit department Poy-Wu. Mr Ho and Mr O'Connor have current which visits each operating site in Indonesia and financial experience from their present principal occupations in corporate finance and investment. Malaysia twice a year and provides a wide ranging report to the managing director of those The committee met prior to the completion of operations. The work and conclusions of the the 2004 accounts, and three times during 2004. internal audit department are reviewed These meetings were attended by all members independently by the audit committee twice each except Mr O'Connor who could only attend one year. meeting in 2004 for reasons mentioned above. In addition to its work on internal control and risk Nomination committee evaluation described below, the committee reviews annual and interim statements, the findings and The nomination committee comprises Mr O'Connor (chairman), Datuk Chin and Mr Ho. effectiveness of auditors; it advises the board on The committee held one discussion during 2004, appointment, independence and objectivity of attended by all members. A N G L O - E A S T E R N P L A N TAT I O N S P L C 17 D I R E C TO R S ’ R E M U N E R AT I O N R E P O RT This report by the remuneration committee has senior executives and managers which is generally been approved by the board of directors for determined by operating performance criteria. submission to shareholders for their approval Annual bonuses for senior executives and pursuant to Resolution 3 at the forthcoming managers are capped at 66% of base salary. annual general meeting. Unaudited information Membership Executive directors are eligible to receive a bonus which has ranged from 0% to 41% in past years, at the discretion of the board. The remuneration committee comprised Share option schemes throughout the year Mr S C Ho and Mr P E The company's share option schemes, which were O'Connor and was chaired by Datuk H Chin adopted in 1994 expired on 3 June 2004. There Poy-Wu. During the year, the committee met were no changes to the terms of these schemes twice, attended by all members except Mr during 2004. Over the ten year period, options O'Connor, who was absent from one meeting. over 597,750 shares were granted to executive The company secretary has provided directors and senior expatriate employees and over administrative support and information to the 217,000 shares to local managers, in total committee. amounting to about 2.0% of the ordinary issued share capital. The schemes have been successful in Remuneration policy encouraging among local staff an interest in the The remuneration committee makes overall performance of the company and its share recommendations on senior management pay and price and in promoting an identity of interest of conditions and, after consultation with the all option holders with shareholders. chairman and chief executive, recommends to the Therefore Resolution 9, to be proposed at the board all the terms for executive directors. forthcoming annual general meeting seeks approval Non-executive directors' remuneration is for the introduction of these two replacement considered by the board as a whole. share option schemes. Summaries of the proposed The committee recommends remuneration new schemes are contained in the circular which terms by reference to individual performance, accompanies the 2004 annual report and accounts. market conditions, the company's performance The new schemes are similar to the previous and the need to maintain an economic operation. schemes except that they provide for options to be The committee is also charged with overseeing the company's share option schemes. granted over treasury shares and shares held by an employees' benefit trust as well as over new issue shares. To avoid dilution, the board intends Components of executive remuneration generally to follow the treasury share route. Base salary One of the new schemes will be an UK Base salaries are reviewed on an annual basis by Inland Revenue approved share option scheme the remuneration committee or when an and will operate in respect of United Kingdom individual changes responsibilities. Non-executive employees who, to benefit from UK tax directors receive no benefits other than a fee. Bonus exemption, will only be able to receive options over shares with a maximum market value of £30,000 at the time of grant. The other scheme The group operates a cash bonus scheme for will take the form of an “unapproved” executive A N G L O - E A S T E R N P L A N TAT I O N S P L C 18 D I R E C TO R S ’ R E M U N E R AT I O N R E P O RT share option scheme which will not have a management. In the case of one executive £30,000 limit but otherwise is intended to director, Mr Barnes, the company makes operate within the same overall limits as the contributions based on base salary to a personal approved executive share option scheme. money purchase scheme. Participants in the unapproved scheme will be Senior executives who leave voluntarily after resident overseas or will be resident in the United more than five years' service are entitled to a Kingdom but merit a grant of options with a gratuity of one month's base salary for each year higher market value than the £30,000 limited of service. described above. The approved and unapproved executive share Service contracts option schemes will be administered and Other than Mr Barnes, as a matter of policy no supervised by a committee consisting, in the executive director has either a service contract or majority, of non-executive directors. notice period. Mr Barnes has a contract dated 29 These schemes will be limited over their 10 March 2005 which expires in May 2007. In the year life to issuing no more than 5% of the issued event of an early termination by the company this ordinary share capital of the company from time contract provides for a termination payment to time. It is intended that grants will be made equivalent to the lower of one year or the annually. As for the old schemes, no payment is outstanding term of the contract. Notice periods required on grant. The total market value of each for all other senior management are generally individual annual grant at date of grant is limited three months. to 100% of annual salary. However it is expected Non-executive directors have appointment that options will normally be granted well below letters for periods of three years within which this level. The board does have discretion to either party can terminate with one month’s notice. increase this to 200% of annual salary in exceptional circumstances. Exercise of options is Performance graph normally only permitted three years after grant. The following graph shows the company's The remuneration committee believes that performance, measured by capital return, the use of performance targets for the new and compared to the Kuala Lumpur Stock Exchange old share option schemes is not appropriate as the performance of the group is so dependent upon commodity prices and exchange rates, both of which are outside the control of management. In addition, the remuneration committee does not consider that there is a suitable comparator group against which performance could be compared. The new scheme rules contain the flexibility to impose performance targets should the remuneration committee change its current position. Pensions There is no company pension scheme for executive directors or senior executives and Graph source: Lipper Hindsight A N G L O - E A S T E R N P L A N TAT I O N S P L C 19 D I R E C TO R S ’ R E M U N E R AT I O N R E P O RT (KLSE) Plantation Index for the period 29 February 2000 to 28 February 2005. This is the Audited information Directors' share options and remuneration only relevant index available in terms of sector Share options granted to the directors of the but, any comparison should be qualified; many company under the company's Share Option listed Malaysian plantation companies have Scheme for Senior Executives and Overseas Share substantial interests outside the plantations sector, Option Scheme for Senior Executives and as well as not holding as great a proportion of outstanding at 31 December 2004 and their assets in Indonesia as Anglo-Eastern. remuneration of all directors who served during In determining senior management the year are set out in the tables below. compensation, the remuneration committee is influenced by the operating performance of the company and not directly by the share price. Directors’ share options Name of Director R O B Barnes Date of grant 5.11.94 24.5.96 25.10.99 Exercise price 93.2p 124.0p 47.0p Period of option 5.11.97 - 4.11.04 24.5.99 - 23.5.06 25.10.02 - 24.10.09 T H Chan 30.04.02 44.7p 30.04.05 - 29.04.12 Number of shares subject to option 1 Jan 04 31,412 14,338 150,000 195,750 30,000 (Exercised) (31,412) (14,338) (150,000) (195,750) 31 Dec 04 0 0 0 0 - 30,000 Date of exercise 1.11.04 22.11.04 22.11.04 Gain before tax at point of exercise of the above options: R O B Barnes $390,000 (2003 - $102,000); T H Chan $nil (2003 - $123,000). The market price of the shares at 31 December 2004 was 164p. The highest and lowest market prices of the shares during 2004 were 152.5p and 196p. Name of director Executive: T H Chan (Chairman and CEO) R O B Barnes Non-executive: Dato Haron (resigned Sept 2003) S K Lim Datuk H Chin S K Foo (appointed Oct 2003) S C Ho P E O’Connor S T Wee (resigned June 2003) 2004 2003 Directors' remuneration Fees $000 Executive salary $000 Bonus (re 2003) $000 Benefits in kind $000 - - - 15 22 15 22 22 - 96 92 79 173 - - - - - - - 252 256 - 68 - - - - - - - 68 32 - 19 - - - - - - - 19 20 Total 2004 $000 79 260 - 15 22 15 22 22 - 435 Total 2003 $000 80 186 52 13 20 3 20 20 6 400 Pension contribution 2003 $000 2004 $000 - 30 - - - - - - - 30 - 27 - - - - - - - 27 The remuneration report was approved by the board of directors on 1 April 2005 and was signed on its behalf by R O B Barnes A N G L O - E A S T E R N P L A N TAT I O N S P L C 20 AU D I TO R S ’ R E P O RT Independent auditors' report to the shareholders of Anglo-Eastern Plantations Plc We have audited the financial statements of Anglo-Eastern Plantations Plc for the year ended 31 December 2004 on pages 22 to 41 which have been prepared under the accounting policies set out on pages 26 and 27. We have also audited the information in the Directors' Remuneration Report that is described as having been audited. Respective responsibilities of directors and auditors The directors' responsibilities for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards are set out in the Statement of Directors' Responsibilities. Our responsibility is to audit the financial statements and the parts of the Directors' Remuneration Report to be audited in accordance with relevant legal and regulatory requirements, United Kingdom Auditing Standards and the Listing Rules of the Financial Services Authority. We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part of the Directors' Remuneration Report to be audited have been properly prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors' Report is not consistent with the financial statements, if the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law or the Listing Rules regarding directors' remuneration and transactions with the group is not disclosed. We review whether the Corporate Governance Statement reflects the group's compliance with the nine provisions of the 2003 FRC Code specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider whether the board's statement on internal control covers all risks and controls, or form an opinion on the effectiveness of the group's corporate governance procedures or its risk and control procedures. We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. This other information comprises only the Financial Summary, Chairman's Statement, Location of Estates, Estate Areas, Financial Record, Additional Information, Directors' Report, the Statement on Corporate Governance and the unaudited parts of the Directors' Remuneration Report. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information. Our report has been prepared pursuant to the requirements of the Companies Act 1985 and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of the Companies Act 1985 or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability. Basis of audit opinion We conducted our audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the part of the Directors' Remuneration Report to be audited. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the Directors' Remuneration Report to be audited are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements and the part of the Directors' Remuneration Report to be audited. Opinion In our opinion: • the financial statements give a true and fair view of the state of the group's and the company's affairs as at 31 December 2004 and of the group's profit for the year then ended; and • the financial statements and the part of the Directors' Remuneration Report to be audited have been properly prepared in accordance with the Companies Act 1985. 1 April 2005 BDO Stoy Hayward LLP Chartered Accountants and Registered Auditors 8 Baker Street London W1U 3LL A N G L O - E A S T E R N P L A N TAT I O N S P L C 21 C O N S O L I DAT E D P RO F I T A N D L O S S AC C O U N T FOR THE YEAR ENDED 31 DECEMBER 2004 Turnover - continuing operations Cost of sales Gross profit - continuing operations Administration and other expenses Operating profit - continuing operations Interest - receivable - payable Profit on ordinary activities before taxation Tax on profit on ordinary activities Profit on ordinary activities after taxation Minority interests (all equity interests) Profit for the financial year Dividends proposed Retained profit for the year Earnings per ordinary share (basic and diluted) - basic - diluted Notes 2 3 4 5 2 7 19 8 19 9 9 2004 US$000 65,618 2003 US$000 48,519 (38,485) (26,705) 27,133 (2,038) 21,814 (1,820) 25,095 19,994 251 (538) 24,808 (8,450) 16,358 (2,694) 13,664 (3,147) 156 (563) 19,587 (6,141) 13,446 (2,201) 11,245 (2,375) 10,517 8,870 34.5cts 34.4cts 28.6cts 28.4cts The accompanying notes are an integral part of this consolidated profit and loss account. A N G L O - E A S T E R N P L A N TAT I O N S P L C 22 C O N S O L I DAT E D A N D C O M PA N Y B A L A N C E S H E E T S 31 DECEMBER 2004 Fixed Assets Tangible assets Investments in subsidiary undertakings Current Assets Stocks Debtors Investments Cash at bank and in hand Current Liabilities Creditors: falling due within one year Borrowings Other creditors Net current assets/(liabilities) Total assets less current liabilities Non-current Assets/Liabilities (Creditors)/assets: due after more than one year Borrowings Deferred taxation Net assets Capital and Reserves Called-up share capital Treasury shares Share premium account Share capital redemption reserve Revaluation and exchange reserve Profit and loss account Notes 10 26 11 12 13,24 24 15,24 14 Consolidated Company 2004 US$000 2003 US$000 2004 US$000 2003 US$000 127,302 105,096 - - 127,302 105,096 1,535 3,778 405 14,933 20,651 1,713 2,736 313 15,127 19,889 - 48,475 48,475 - 41 405 1,208 1,654 - 46,992 46,992 - 53 313 1,118 1,484 (5,576) (13,192) (18,768) 1,883 (2,060) (9,439) (11,499) 8,390 - (3,269) (3,269) (1,615) - (2,648) (2,648) (1,164) 129,185 113,486 46,860 45,828 15,24 16 (5,558) 359 (6,108) 1,013 - - - - 123,986 108,391 46,860 45,828 17 17 19 19 19 19 15,424 (1,387) 23,825 1,087 8,998 54,219 102,166 21,820 15,319 - 23,679 1,087 5,375 43,702 89,162 19,229 15,424 (1,387) 23,825 1,087 3,872 4,039 15,319 - 23,679 1,087 3,872 1,871 46,860 45,828 - - Shareholders’ funds - all equity interests Minority interests - all equity interests 19,27 Total capital employed 123,986 108,391 46,860 45,828 The financial statements were approved by the board of directors on 1 April 2005 and were signed on its behalf by R O B Barnes. The accompanying notes are an integral part of these balance sheets. A N G L O - E A S T E R N P L A N TAT I O N S P L C 23 S TAT E M E N T O F TOTA L R E C O G N I S E D G A I N S A N D L O S S E S R E C O N C I L I AT I O N O F M OV E M E N T I N S H A R E H O L D E R S ’ F U N D S H I S TO R I C A L C O S T P RO F I T S A N D L O S S E S FOR THE YEAR ENDED 31 DECEMBER 2004 Statement of Total Recognised Gains and Losses Consolidated Company 2004 US$000 2003 US$000 2004 US$000 Profit for the financial year 13,664 11,245 5,315 Surplus on deemed disposal of interest in subsidiary Unrealised surplus/(deficit) on revaluation of the estates (Loss)/profit on exchange translation - 10,505 (6,882) 113 (5,126) 3,915 - - - 2003 US$000 2,623 - - - Total recognised gains relating to the year 17,287 10,147 5,315 2,263 Reconciliation of Movement in Shareholders’ Funds Total recognised gains Share capital subscription Dividends Purchase of treasury shares Net increase in shareholders’ funds Beginning of year End of year Historical Cost Profits and Losses 17,287 251 (3,147) (1,387) 13,004 89,162 10,147 257 (2,375) - 8,029 81,133 5,315 251 (3,147) (1,387) 1,032 45,828 2,263 257 (2,375) - 505 45,323 102,166 89,162 46,860 45,828 Reported profit on ordinary activities before taxation 24,808 19,587 5,352 2,649 Difference between historical cost depreciation charge and the actual depreciation charge for the year (782) (742) - - Historical cost profit on ordinary activities before taxation 24,026 18,845 5,352 2,649 Historical cost retained profit for the year 9,735 8,128 781 248 The accompanying notes are an integral part of this statement of total recognised gains and losses, and this note of historical cost profits and losses. A N G L O - E A S T E R N P L A N TAT I O N S P L C 24 C O N S O L I DAT E D C A S H F L OW S TAT E M E N T FOR THE YEAR ENDED 31 DECEMBER 2004 Net cash inflow from operating activities Returns on Investments and Servicing of Finance Interest received Interest paid Dividends paid to minority shareholders Taxation Foreign tax paid Capital Expenditure Payments to acquire tangible fixed assets Payments to acquire land Proceeds from sale of tangible fixed assets Acquisitions and disposals Acquistion of subsidiaries Equity Dividends Paid Parent company Cash inflow before financing Financing Share options exercised Purchae of own shares Repayment of existing long term loans Repayment of loans in newly acquired subsidiary Drawdown of new long term loan Finance lease (repayment)/drawdown Advance to minority shareholders Notes 22 2004 US$000 US$000 29,098 2003 US$000 US$000 22,142 (1,060) (6,928) (11,135) (4,777) (2,375) 2,823 27 251 (612) (699) (11,247) - 112 251 (1,387) (2,023) (4,154) 5,000 (15) (693) (1,157) (5,364) (5,639) - (1,571) 8,411 156 (693) (620) (5,715) (40) 116 257 - (2,023) - - 47 - (Decrease)/increase in cash in year 23 (3,021) (198) (1,719) 6,692 The accompanying notes are an integral part of this consolidated cash flow statement. A N G L O - E A S T E R N P L A N TAT I O N S P L C 25 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 1 Accounting Policies The principal accounting policies are summarised below. Except as noted below they have all been applied consistently throughout the year and the preceding year. Basis of accounting The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain tangible fixed assets, and in accordance with applicable United Kingdom law and accounting standards. Basis of consolidation The group financial statements consolidate those of Anglo-Eastern Plantations Plc and its subsidiary undertakings, drawn up to 31 December each year under the acquisition method of accounting. Foreign currency Normal trading transactions in foreign currencies are recorded at the rates of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in the profit and loss account. In the group financial statements the results and year end balances of foreign group companies are translated using the average and closing rates respectively which are shown on page 8. Exchange rate adjustments arising from translation are transferred direct to the revaluation and exchange reserves. Exchange differences on foreign currency intercompany loans, to the extent that they relate to investments in overseas operations, are also taken to the revaluation and exchange reserve. Tangible fixed assets Tangible fixed assets are stated at cost or valuation, net of depreciation and any provision for impairment. Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost or valuation, less estimated residual value, of each asset as described below. Estates are shown at valuations, which are calculated internally every year and reviewed by an external valuer every five years. Estates are valued at the lower of replacement cost and recoverable amount, which is the higher of value in use and net realisable value. Value in use is calculated as the net present value of the local currency cash flows of each estate over the next twenty years, including replanting where required. Any surplus or deficit on revaluation is transferred to the revaluation and exchange reserve, except that a deficit which is in excess of any previously recognised surplus relating to the same property is charged to the profit and loss account. On the disposal or recognition of a provision for impairment of a revalued fixed asset, any related balance remaining in the revaluation and exchange reserve is transferred to the profit and loss account as a movement on reserves. Oil mills are included at cost less depreciation. The depreciation charge on Indonesian estates is based on mature values at the beginning of the year and is provided at a rate of 2% per annum. Oil mills are depreciated at a rate of 5% per annum. The Malaysian leasehold land is depreciated over the remaining term of the lease. Mature plantations in Malaysia are depreciated at a rate of 5% per annum. Fixed asset investments The company's fixed asset investments in subsidiary undertakings are stated at cost less provisions for impairment. Only dividends received or receivable are credited to the company’s profit and loss account. Leasing Assets financed by leasing agreements which give rights approximating to ownership (finance leases) are capitalised at amounts equal to the original cost of the asset to the lessors and depreciation is provided on the asset over the shorter of the lease term or its useful economic life on the basis of group depreciation policy. The capital elements of future obligations under finance leases are included as liabilities in the balance sheet and the current year’s interest element is charged to the profit and loss account to produce a constant rate of charge on the balance of capital repayments outstanding. There are no operating leases. Stocks Stocks are stated at the lower of cost and net realisable value. Current asset investments The company's current asset investments are stated at the lower of cost or market value. Where relevant changes in market value are charged or credited to profit and loss account. Treasury shares Consideration paid or received for the purchase or sale of the company’s own shares for holding in treasury is taken directly to shareholder's funds. The difference between the consideration received on the sale of treasury shares and the weighted average cost of shares sold, is taken to the share premium account. Any shares held in treasury are treated as cancelled for the purpose of calculating earnings per share, and net asset value per share. A N G L O - E A S T E R N P L A N TAT I O N S P L C 26 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 1 Accounting Policies - continued Turnover Turnover represents amounts receivable for goods and services provided by the group in the normal course of business, net of trade discounts,VAT and export taxes. Overhead capitalisation Directly attributable overheads are capitalised in respect of immature areas. Interest capitalisation Interest on loans directly related to field development is capitalised in the proportion that the opening immature area bears to the total planted area of the relevant estate. Interest on loans related to construction in progress (such as an oil mill) is capitalised up to the commissioning of that asset. Pensions The group operates a number of defined benefit pension schemes in respect of its Indonesian operations. The pension costs of these schemes charged to the profit and loss accounts comprise the annual payments to the schemes together with any provision required for any shortfall in funding as disclosed by annual valuations of the schemes as advised by the schemes’ actuaries. This policy is not in accordance with SSAP24 ‘Accounting for Pension Costs’, but any differences are not material. Taxation UK and foreign corporation tax is provided at amounts expected to be paid or recovered using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax Deferred Tax is recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that: • deferred tax is not recognised on timing differences arising on revalued properties unless the company has entered into a sale agreement and is not proposing to take advantage of rollover relief; and • the recognition of deferred tax assets is limited to the extent that the company anticipates making sufficient taxable profits in the future to absorb the reversal of the underlying timing differences. Deferred tax balances are not discounted. Acquisitions Acquisitions are accounted for under the acquisition method. Net assets are brought in at fair values and any difference from consideration is taken to goodwill. Operating results are included from the date of acquisition. 2 Segment Information Net assets Turnover 2004 $000 By activity: Oil palm Rubber Cocoa Administration and other expenses Interest Unallocated assets 111,648 1,719 580 - - 10,039 2003 $000 94,654 2,193 772 - - 10,772 123,986 108,391 2004 $000 63,745 1,623 250 - - - 65,618 2003 $000 46,503 1,777 239 - - - 48,519 By geographic origin: Indonesia Malaysia UK By location of customer: Indonesia Malaysia Net assets Turnover 2004 $000 105,866 17,721 399 2003 $000 90,734 17,600 57 123,986 108,391 2004 $000 62,593 3,025 - 65,618 62,593 3,025 65,618 2003 $000 45,702 2,817 - 48,519 45,702 2,817 48,519 A N G L O - E A S T E R N P L A N TAT I O N S P L C 27 Profit/(loss) before taxation 2003 $000 2004 $000 25,957 1,146 30 (2,038) (287) - 24,808 20,464 1,195 155 (1,820) (407) - 19,587 Profit/(loss) before taxation 2003 $000 2004 $000 25,982 (14) (1,160) 24,808 20,407 47 (867) 19,587 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 3 Administration and Other Expenses Administrative expenses Other operating income Income from current asset investments Profit on disposal of fixed assets Movement in market value of current asset investments Exchange profit 4 Operating Profit Operating profit is stated after charging: Depreciation (including $16,000 (2003 - $3,000) in respect of leased assets) Auditors’ remuneration - audit - other advisory services – company only 5 Interest Payable Payable on loans repayable within five years: Development loans Overdraft - (note 15) - (note 15) Other (including $3,000 (2003 - $ nil) in respect of finance leases) Interest capitalised on loans related to field development and construction in progress 6 Employees' and Directors' Remuneration Average numbers employed (primarily overseas) during the year - full time - casual Staff costs (primarily overseas): Wages and salaries Social security costs Retirement benefit costs 2004 $000 (2,384) 58 33 17 91 147 (2,038) 2004 $000 2,917 94 1 2004 $000 600 9 3 (74) 538 2004 number 3,075 4,478 2004 $000 7,433 132 607 8,172 2003 $000 (2,203) 1 16 25 79 262 (1,820) 2003 $000 2,493 78 4 2003 $000 683 10 - (130) 563 2003 number 2,949 2,877 2003 $000 5,674 162 231 6,067 The company has contributed $43,000 (2003 - $38,000) to directors’ and employees’ money purchase pension plans administered by UK insurance companies. Only one director is a member of such plans and no other director has a pension entitlement. The remaining amount of $564,000 (2003 -$193,000) for retirement benefit costs charged to profit and loss account relates to schemes described in note 21. The information required by the Company Act and the listing rules of the Financial Services Authority is contained in the directors' report on remuneration on pages 18 to 20 of which certain information on page 20 has been audited. Directors emoluments Pension contributions Gains at point of exercise of options 2004 $000 435 30 390 855 2003 $000 400 27 225 652 A N G L O - E A S T E R N P L A N TAT I O N S P L C 28 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 7 Taxation The tax charge comprises: Foreign corporation tax - current year Foreign withholding tax on remittances Deferred tax adjustment - current year 2004 $000 7,003 866 581 8,450 2003 $000 5,552 321 268 6,141 The corporation tax rates in Indonesia and Malaysia, the group's countries of operation, are close to the 30% standard rate of corporation tax in the UK but the charge for the year differs from the standard UK rate of corporation tax for the reasons below. Profit on ordinary activities before tax Profit on ordinary activities multiplied by standard rate of UK corporation tax of 30% (2003 - 30%) Effects of: Rate adjustment relating to overseas profits Group accounting adjustments not subject to tax Expenses not allowable for tax Timing differences Losses not offsetable against fellow subsidiary profits Utilisation of tax losses brought forward Current tax charge for period 8 Dividends Final proposed – 8.00 cts per ordinary share (2003 - 6.00cts) 9 Earnings per Ordinary Share 2004 $000 24,808 2003 $000 19,587 7,442 5,876 (11) (35) 50 46 500 (989) (10) (132) 28 56 33 (299) 7,003 5,552 2004 $000 3,147 2003 $000 2,375 Basic net earnings per ordinary share have been calculated on the profit attributable to ordinary shareholders being $13,664,000 (2003: - $11,245,000) divided by 39,609,447 (2003 - 39,378,899) ordinary shares, being the weighted average number of ordinary shares in issue during the year. The equivalent figure for diluted net earnings per share is 39,746,175 (2003 - 39,581,527) which includes the effect of share options granted to directors and employees. 10 Tangible Fixed Assets Cost or valuation Beginning of year Revaluations and exchange translations Additions Estates acquired at valuation on acquisition of a subsidiary Disposals End of year Depreciation Beginning of year Revaluations and exchange translations Charge for the year Disposals End of year Net book value Beginning of year End of year Estates $000 Oil mills $000 Total $000 98,406 2,037 6,282 9,962 (92) 8,603 (780) 5,039 - (10) 107,009 1,257 11,321 9,962 (102) 116,595 12,852 129,447 - 2,494 (2,494) - - (1,913) 184 (423) 7 (2,145) (1,913) 2,678 (2,917) 7 (2,145) 98,406 116,595 6,690 10,707 105,096 127,302 Net book value of estates includes $61,000 (2003 - $75,000) in respect of assets held under finance leases. A N G L O - E A S T E R N P L A N TAT I O N S P L C 29 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 10 Tangible Fixed Assets - continued The directors valued the estates at 31 December 2004 and 2003 at the higher of net realisable value and value in use. Consistent with the requirements of FRS 15 relating to interim valuations these values were reviewed internally by the company's own senior staff who are familiar with the properties and the necessary assumptions underlying the calculation. The Indonesian estates have been included at values in use, which in the opinion of the directors are probably slightly above market values at the date of this report. The loss, if any, has not been accounted for as the directors believe that valuations of the Indonesian estates on the basis of their value to the company as a going concern best reflect their worth as opposed to general market values, which are impacted by current conditions in Indonesia and current palm oil prices and are in any event difficult to determine. The Malaysian estates were professionally valued by Messrs Khong & Jafaar in December 2001 on an open market existing use basis and are included at this valuation plus subsequent additions at cost less depreciation. Tangible fixed assets include $74,000 (2003: $130,000) of interest and $1,192,000 (2003: $1,187,000) of overheads capitalised during the year in respect of expenditure on estates under development during 2004. Original cost and depreciation at historical rates of exchange of tangible fixed assets at 31 December 2004 were: Original cost Cumulative depreciation based on original cost Estates $000 133,736 (25,219) Oil mill $000 20,484 (7,265) Total $000 154,220 (32,484) 108,517 13,219 121,736 The Indonesian authorities have granted certain land exploitation rights and operating permits for the estates. In the case of estates in North Sumatra these rights and permits expire between 2023 and 2033 with rights of extension or renewal thereafter for periods of 25 and 35 years respectively. In the case of estates in Bengkulu outstanding land titles were issued in 2002 and the titles expire between 2028 and 2032 with rights of renewal thereafter for two consecutive periods of 25 and 35 years respectively. In the case of estates in Riau, land titles were issued in 2003 and expire in 2033 with subsequent rights of renewal similar to those in Bengkulu. Renewal is subject to compliance with the laws and regulations of Indonesia. As described in note 1 the values in use of the Indonesian estates are depreciated over a period of fifty years since the directors expect the renewals will take place. The land title of the estate in Malaysia is a long lease expiring in 2084. 11 Stocks These are estate and mill stores of $875,000 (2003 - $708,000), and produce stocks of $660,000 (2003 - $1,005,000), stated at the lower of cost and net realisable value. Replacement value is not materially different. 12 Debtors Consolidated balance sheet Due within one year: Trade debtors Other debtors Taxation Prepayments and accrued income Minority shareholders (due after more than one year $1,071,000 (2003 - $1,071,000) - note 28) Company balance sheet Due within one year: Other debtors Prepayments and accrued income 2004 $000 320 964 269 461 1,764 3,778 2004 $000 5 36 41 2003 $000 793 432 203 237 1,071 2,736 2003 $000 5 48 53 A N G L O - E A S T E R N P L A N TAT I O N S P L C 30 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 13 Investments These represent short term investments listed on the Kuala Lumpur Stock Exchange and are shown at market value, being lower than cost of $591,000 (2003 - $591,000). 14 Creditors: Amounts Falling Due Within One Year Consolidated balance sheet Trade creditors Overseas taxation Other creditors Proposed dividend Accruals Company balance sheet Other creditors Proposed dividend Accruals 15 Borrowings Consolidated balance sheet Bank overdraft (a) Finance lease obligations (b) Long term development loan (c) Long term development loan (d) Long term development loan (e) Amounts repayable after more than one year, as follows: in more than one year but not more than two years in more than two years but not more than five years more than five years 2004 $000 1,148 4,518 2,362 3,147 2,017 13,192 2004 $000 5 3,147 117 3,269 2003 under one year $’000 19 18 1,600 423 2,060 2003 $000 606 3,513 1,387 2,375 1,558 9,439 2003 $000 10 2,375 263 2,648 more than one year year $’000 - 49 4,800 1,259 6,108 5,238 870 - 6,108 under one year $’000 23 18 4,800 312 423 5,576 2004 more than one year year $’000 - 34 - 4,688 836 5,558 1,689 3,869 - 5,558 (a) The bank overdraft is secured by a fixed and floating charge over the land titles and assets of the company’s Malaysian operating subsidiary, Anglo-Eastern Plantations (M) Sdn Bhd (“AEP Malaysia”) as well as over the Interest is at 2% above company’s shareholding in AEP Malaysia. The company has guaranteed the overdraft. Malaysian Bank Lending Rate of about 8.0% (2003: 8.2%). (b) Finance lease obligations relate to vehicles and machinery, on which the obligations are secured, in the Malaysian subsidiaries (2003 – Malaysia). Interest is effectively at 4.6%. Payments complete by the end of 2007. (c) The long term development loan, which is part of an original facility of $8,000,000, is made to and secured by a fixed and floating charge on the land titles and other assets of PT Mitra Puding Mas and PT Alno Agro Utama. The company has guaranteed the loan. Interest is at 3% under the US dollar Indonesian prime rate of about 6% through 2004 (2003: 7.3%). The remaining loan is repayable in four quarterly instalments of $1,200,000 from January 2005 to October 2005. (d)The long term development loan, which is part of a facility of $5,000,000, was made in July 2004 to and secured by a fixed and floating charge on the land titles and other assets of PT Bina Pitri Jaya. Interest is on the same terms as for the loan under 15(c) above. The loan is repayable in sixteen quarterly instalments of $312,500 from October 2005 to July 2009. (e) The long term development loan is made to AEP Malaysia on the same security and interest terms described for the overdraft in note 15(a) above. The loan is repayable in equal monthly instalments amounting to $423,000 per annum over five years from January 2004. A N G L O - E A S T E R N P L A N TAT I O N S P L C 31 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 16 Deferred Taxation Consolidated balance sheet Beginning of year asset (Charge)/credit to profit and loss account during year Exchange adjustment End of year asset Deferred tax asset at end of year comprises: Unutilised tax losses Other timing differences Potential tax payable if revalued assets realised for their carrying value 2004 $000 1,013 (581) (73) 359 2004 $000 62 297 359 2004 $000 17,920 2003 $000 1,215 (268) 66 1,013 2003 $000 803 210 1,013 2003 $000 13,742 Unutilised tax losses for which no deferred tax asset recognised 17 Share Capital 2004 $000 1,332 Company Consolidated 2003 $000 913 2004 $000 2003 $000 13,923 13,198 Issued and fully paid $000 15,319 105 15,424 Authorised £000 15,000 - 15,000 Issued and fully paid £000 9,895 57 9,952 Authorised Number Issued and fully paid Number Authorised $000 Ordinary shares of 25p each Beginning of year Share options exercised End of year Treasury shares Beginning of year Purchased in year End of year 60,000,000 - 39,580,622 223,150 60,000,000 39,803,772 Number - (468,000) (468,000) Market value of treasury shares Beginning of year End of year 23,865 - 23,865 $000 - (1,387) (1,387) - 1,474 The above treasury shares were purchased in December 2004 at 153p/share. Options have been granted under the company's 1994 Executive Share Option Scheme and Overseas Share Option Scheme to subscribe for ordinary shares of 25p each of the company as follows: Date of grant Price per share Period of option 1 Jan 04 5.11.94 3.11.95 24.5.96 25.10.99 16.10.00 16.04.02 21.05.03 13.05.04 93.2p 115.8p 124.0p 47.0p 38.0p 44.7p 108.5p 181.2p 5.11.97 - 4.11.04 3.11.98 - 2.11.05 24.5.99 - 23.5.06 25.10.02 – 24.10.09 16.10.03 – 15.10.10 30.04.05 – 29.04.12 21.05.06 – 29.05.13 13.05.07 – 12.05.14 1 1 1 2 9 23 10 0 47 31 Dec 04 Number of options Granted/ (Lapsed/ Exercised) (1) (1) (1) (2) (7) 0 0 9 (3) 0 0 0 0 2 23 10 9 44 1 Jan 04 31 Dec 04 Number of shares subject to option Granted/ (Lapsed/ Exercised) (31,412) (8,000) (14,338) (153,200) (16,200) (800) 0 30,000 0 0 0 0 5,400 159,700 42,800 30,000 31,412 8,000 14,338 153,200 21,600 160,500 42,800 0 431,850 (193,950) 237,900 Options granted to directors, included above, are shown on page 20. A N G L O - E A S T E R N P L A N TAT I O N S P L C 32 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 18 Ultimate Controlling Shareholder and Related Party Transactions At 31 December 2004 Genton International Limited, a company registered in Hong Kong, held 20,247,814 (2003 - 20,176,414) shares of the company representing 50.9% (2003 - 51.0%) of the issued share capital of the company. Madam S K Lim, a director of the company has advised the company that she is the controlling shareholder of Genton International Limited. During the year a subsidiary of the company managed, for a fee of $9,000 p.a. (2003 - $9,000), small plantations owned by companies controlled by Madam S K Lim. This contract is on an arm's length basis. In 2003 the same subsidiary rented office space at $20,000 p.a. from a company controlled by Madam S K Lim, an arrangement which ceased in December 2003. During the year the company paid MS Corporate Finance (Pte) Ltd, of which Mr S C Ho is a director, a one off fee of $30,000 for work in connection with a possible dual listing of the company's shares in Singapore. 19 Reserves and Minority Interests (a) Consolidated balance sheet Beginning of year Share options exercised Revaluation Exchange translation Retained profit for year Minority dividends Purchase of interest in subsidiary End of year Share premium account $000 23,679 146 - - - - - 23,825 Share capital redemption $000 1,087 - - - - - - 1,087 Revaluation and exchange reserve $000 5,375 - 10,505 (6,882) - - - Profit and loss account $000 43,702 - - - 10,517 - - 8,998 54,219 Minority interests $000 19,229 - 1,894 (1,491) 2,694 (1,622) 1,116 21,820 As significantly all foreign exchange translation is attributable to fixed assets, foreign exchange translation effects have been included in the revaluation and exchange reserve. This reserve includes cumulative revaluation reserve of $81,635,000 (credit), the reserve of $3,449,000 (credit) referred to in note 19(b) below and exchange translation loss of $76,086,000 (debit). No deferred tax has been provided by the group in respect of the revaluation and exchange reserve. (b) Company balance sheet Beginning of year Share options exercised Profit for the financial year Proposed dividend Retained profit for year End of year Share premium account $000 23,679 146 - - - 23,825 Share capital redemption $000 1,087 - - - - Revaluation and exchange reserve $000 3,872 - - - - Profit and loss account (distributable) $000 1,871 - 5,315 (3,147) 2,168 1,087 3,872 4,039 As permitted by section 230 of the Companies Act 1985, a separate profit and loss account dealing with the results of the company has not been presented. The profit before tax of the company for the year was $5,352,000 (2003 - $2,649,000). Of the revaluation and exchange reserve, $3,449,000 is available to meet any reduction in dollar terms of investments in and loans to subsidiaries caused by adverse exchange rate movements on the underlying assets. A N G L O - E A S T E R N P L A N TAT I O N S P L C 33 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 20 Guarantees and Other Financial Commitments Consolidated Capital commitments at 31 December Contracted for but not provided for - normal estate operations - new/extended oil mills - normal estate operations - new/extended oil mills - land acquistion Authorised but not contracted for 2004 $000 2003 $000 52 1,445 4,144 879 720 363 1,987 3,545 2,895 - Contingent liabilities A subsidiary is claiming restitution of 236ha of unplanted land in Indonesia. The subsidiary in question has a valid HGU land title covering the relevant area and has won its case in the local and Appeal courts but the plaintiff has appealed to the Supreme Court. While the company is reasonably confident of winning this case it is not confident of regaining physical possession and has made a provision of $45,000 equivalent to the value of the land, in the profit and loss account in earlier years. Company The company has provided a guarantee for loans and overdrafts to subsidiaries totalling $11,082,000 (2003 - $8,101,000), as set out in note 15. The company had no capital commitments at 31 December 2004 (2003 - nil). 21 Retirement Benefits The group maintains a defined benefit funded pension scheme for labour in Indonesia. The scheme is valued by an actuary at the end of each financial year. The major assumptions used by the actuary were: Inflation Rate of increase in wages Discount rate The fair values of assets in the scheme were: Cash (expected long term rate of return: 12%) 2004 10% 10% 12% 2004 $000 616 2003 10% 10% 12% 2003 $000 503 The following amounts were measured in accordance with the requirements of FRS 17. Fair value of scheme assets Actuarial value of scheme liabilities Deficit in scheme provided within accruals (note 14) 2004 $000 616 (813) (197) Movement in year $000 113 (257) (144) 2003 $000 503 (556) (53) Movement in year $000 106 (83) 23 2002 10% 10% 12% 2002 $000 397 2002 $000 397 (473) (76) The group also operates a non-contributory non-funded retirement plan for staff in Indonesia. Retirement benefits are paid to employees in a single lump sum at the time of retirement. Retirement benefit is accrued by the group based on individual employees’ service up to the end of the financial year. Amount included in accruals (note 14) 2004 $000 436 2003 $000 321 2002 $000 227 Since deficits have been provided in full within the group financial statements the group net assets and results would be unaffected if the schemes were combined within the financial statements in accordance with FRS 17 – Retirement Benefits. A N G L O - E A S T E R N P L A N TAT I O N S P L C 34 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 22 Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities 2004 $000 25,095 2,917 (17) (91) 178 57 796 163 Operating profit Depreciation and amortisation (Profit) on sale of fixed assets Movement in market value of investments Decrease/(increase) in stocks Decrease/(increase) in debtors Increase in creditors Foreign exchange Net cash inflow from ordinary activities 23 Reconciliation of Net Cash Flows to Movement in Net Debt (Decrease)/increase in cash in year Cash (inflow)/outflow from (increase)/decrease in long term loans Cash outflow/(inflow) from decrease/(increase) in finance leases Change in net debt resulting from cash flows Change in market value of current asset investments Movement in net debt in year Net funds/(debt) at start of year (note 24) Net funds at end of year (note 24) 29,098 2004 $000 (198) (2,977) 15 (3,160) 92 (3,068) 7,272 4,204 2003 $000 19,994 2,493 (25) (79) (785) (268) 378 434 22,142 2003 $000 6,692 2,023 (47) 8,668 79 8,747 (1,475) 7,272 24 Analysis of Net Debt Cash at bank and in hand Overdraft Net cash Loans due within 1 year Finance leases due within 1 year Borrowings due in more than 1 year Finance leases due in more than 1 year Current asset investments Net (debt)/funds At 31 Dec 2003 $000 15,127 (19) 15,108 (2,023) (18) (6,059) (49) 313 7,272 Flows $000 (194) (4) (198) 2,023 15 (5,000) - - (3,160) Reclas- sification $000 - - - (5,535) (15) 5,535 15 - - Change in market value $000 - - - - - - - 92 92 At 31 Dec 2004 $000 14,933 (23) 14,910 (5,535) (18) (5,524) (34) 405 4,204 25 Disclosure of Financial Instruments and Other Risks General The group’s financial instruments at present comprise cash and liquid resources, some short term creditors, together with normal trade debtors and creditors, and long term loans in Indonesia and Malaysia. The main risks which arise from these financial instruments relate to liquidity, interest rates and exchange rates. Liquidity risk At 31 December 2004 the group had the following loans and facilities: Malaysia: ringgit denominated - overdraft - long term loan Indonesia: US dollar denominated - long term loan Borrowings $000 23 1,259 9,800 Facilities $000 790 1,259 9,800 Repayable on demand 2005 – 2007 (note 15) 2005 – 2009 (note 15) A N G L O - E A S T E R N P L A N TAT I O N S P L C 35 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 25 Disclosure of Financial Instruments and Other Risks - continued Liquidity risk - continued The total long term loan facilities of $11,059,000 are repayable as follows: 2005 $000 5,535 2006 $000 1,671 2007 $000 1,665 2008 $000 1,250 2009 $000 938 The loans listed above are all at variable rates of interest as described in note 15. The group’s financial liabilities comprise long term loans as set out above, as well as short term creditors, and a potential short term overdraft facility. The group’s financial assets comprise short term debtors, short term portfolio investments, cash at bank and long term debtors. All surplus cash is in bank deposits at variable short term rates of interest. Long term debtors comprise dollar denominated amounts due from minority shareholders, as described in note 28, on which amounts interest is due at 6% (fixed) but not accrued in the group accounts; these debts are expected to be settled in about five years. The interest rate profiles of the group’s financial liabilities at 31 December 2004 and 2003 were: Currency 2004 Sterling US dollar Rupiah Ringgit Total 2003 Sterling US dollar Rupiah Ringgit Total All currencies - 2004 Total Fixed rate financial liabilities $000 (121) (14,297) (8,401) (1,507) (24,326) $000 - - - (53) (53) Total Fixed rate financial assets/(liabilities) $000 (122) (10,177) (5,329) (1,979) (17,607) $000 - - - - - Variable rate financial liabilities $000 - (9,800) - (1,282) (11,082) Variable rate financial assets/(liabilities) $000 - (6,400) - (1,768) Financial liabilities on which no interest is paid $000 (121) (4,497) (8,401) (172) (13,191) Financial assets/ (liabilities) on which no interest is paid $000 (122) (3,777) (5,329) (211) (8,168) (9,439) Fixed rate financial liabilities Weighted average interest rate % 6 Weighted average period on which rate is fixed Years 3 Financial liabilities on which no interest is paid Weighted average period until maturity Years less than 1 Foreign currency risk All the group’s operations are overseas. The group is therefore exposed to currency movements on its net investment overseas. The effects of devaluation in local currencies on the group's operations are as follows: Since selling prices of the group's produce are linked directly to the US dollar, a depreciation of local currencies against the US dollar would increase the profit of the Malaysian and Indonesian subsidiaries in terms of local currencies and by a lesser amount in US dollars. However, this benefit is partly offset over time by consequent inflation in local costs. Cost of development in dollar terms also reduces. Value of plantations in Indonesia are included in the group's financial statements based on estimated future cash flows in rupiah. The net effect of depreciation of the rupiah is to increase values in rupiah terms and to a lesser extent in US dollars. Plantations in Malaysia have been included in the group's financial statements at ringgit market valuation determined by a professional valuer. In the cases of both Indonesia and Malaysia, exchange losses on translation of plantation values into US dollars are offset against revaluation surpluses. A N G L O - E A S T E R N P L A N TAT I O N S P L C 36 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 25 Disclosure of Financial Instruments and Other Risks - continued Foreign currency risk - continued The group retains little of its cash balances in local currencies. The exchange profits or losses arising in overseas subsidiaries holding foreign currency balances are also credited or charged in the group profit and loss account. The group’s subsidiaries which are borrowing US dollars, as shown under “Liquidity risk” above, could face significant exchange losses, which would be charged in the group profit and loss account. This risk is mitigated in part by the dollar denomination of the group’s income, and by any dollar liquid assets. Exchange losses on long term dollar intercompany debt are charged against the revaluation surpluses referred to above and do not affect the group’s profit. The table below shows the net monetary assets and liabilities of the group at 31 December 2004 and 2003 that were not denominated in the operating (or “functional”) currency of the operating unit involved. Functional currency of group operation 2004 Indonesian rupiah US dollar Total 2003 Indonesian rupiah US dollar Total Net foreign currency assets/(liabilities) US dollar $000 (3,408) - (3,408) $000 2,988 - 2,988 Ringgit $000 - 453 453 $000 - 338 338 Sterling $000 - 151 151 $000 - 38 38 Total $000 (3,408) 604 (2,804) $000 2,988 376 3,364 Fair values of financial assets and financial liabilities There is no material difference between the book values and fair values of the group’s financial assets and liabilities as at 31 December 2004. Gains and losses on hedges The group enters into no hedging transactions and normally does not contract to sell produce more than one month ahead. Other risks Changes in the Indonesian government or in policy towards foreign investment and the plantation industry could affect the group’s future profits and cash flow. The net assets of the group in Indonesia subject to this risk are set out in note 2. 26 Investments in Subsidiary Undertakings - Company At beginning of year Movements in year At end of year Investments in subsidiary undertaking $000 7,745 - 7,745 Loans to subsidiary undertakings $000 39,247 1,483 40,730 Total $000 46,992 1,483 48,475 Loans to and from subsidiary companies do not have fixed repayment terms. They are effectively long term in nature and therefore classified with investments in subsidiaries. A N G L O - E A S T E R N P L A N TAT I O N S P L C 37 N OT E S TO T H E F I N A N C I A L S TAT E M E N T S 26 Investments in Subsidiary Undertakings - Company - continued Percentage holding of ordinary shares Principal United Kingdom sub-holding company Anglo-Indonesian Oil Palms Limited UK management company Indopalm Services Limited Malaysian operating companies Anglo-Eastern Plantations (M) Sdn Bhd Anglo-Eastern Plantations Management Sdn Bhd Indonesian operating companies PT Alno Agro Utama PT Anak Tasik PT Bina Pitra Jaya (acquired March 2004) PT Hijau Pryan Perdana (acquired December 2004) PT Mitra Puding Mas PT Musam Utjing PT Simpang Ampat PT Tasik Raja PT United Kingdom Indonesia Plantations 100 100 55 100 90 100 80 80 90 75 100 80 75 The principal United Kingdom sub-holding company and UK management company are registered in England and Wales and are direct subsidiaries of the company. Details of United Kingdom subsidiaries which are not significant have been omitted. The Malaysian operating companies are incorporated in Malaysia and are direct subsidiaries of the company. The Indonesian operating companies are incorporated in Indonesia and are direct subsidiaries of the principal sub-holding company. The principal activity of the operating companies is plantation agriculture. The company’s entire interest in Anglo-Eastern Plantations (M) Sdn Bhd has been secured against the loans to that subsidiary as set out in note 15. 27 Acquisitions In March 2004 the group acquired an 80% interest in PT Bina Pitri Jaya (BPJ) for a cash consideration of $4,467,000. BPJ owns a planted oil palm estate of 4,328 ha in the province of Riau in North Sumatra. This acquisition was accounted for by the acquisition method and the assets and liabilities of BPJ were brought into the group financial statements at fair value equivalent to the consideration paid. The assets and liabilities and their fair value adjustment were assessed as follows: Fixed assets Cash Current borrowings Other net current (liabilities) Net assets acquired Group share - 80% Book value $'000 4,451 - (4,154) (223) 74 Revaluation to fair value $'000 5,511 - 5,511 Fair value $'000 9,962 - (4,154) (223) 5,585 4,467 In December 2004 the company acquired an 80% interest in the issued share capital of PT Hijau Pryan Perdana (HPP) for a consideration of $310,000 paid in cash. HPP has no assets or liabilities other than the right to acquire a land title over 4,800ha at Labuhan Bilik in the province of North Sumatra. The acquisition has been accounted for under the acquisition method. 28 Minority Interests Anglo-Indonesian Oil Palms Limited has funded the interests of the minority shareholders in PT Mitra Puding Mas and PT Alno Agro Utama on deferred terms. The resulting debts together with accrued interest will be settled from dividends arising from these companies. A N G L O - E A S T E R N P L A N TAT I O N S P L C 38 C O N S O L I DAT E D P RO F I T A N D L O S S AC C O U N T ( £ S T E R L I N G ) FOR THE YEAR ENDED 31 DECEMBER 2004 Turnover - continuing operations Cost of sales Gross profit - continuing operations Administration and other expenses 2004 £000 2003 £000 35,662 (20,915) 14,747 (1,108) 29,495 (16,234) 13,261 (1,107) Operating profit - continuing operations 13,639 12,154 Interest - receivable - payable Profit on ordinary activities before taxation Tax on profit on ordinary activities Profit on ordinary activities after taxation Minority interests (all equity interests) Profit for the financial year Dividends proposed 136 (292) 13,483 (4,592) 8,891 (1,464) 7,427 (1,710) 95 (342) 11,907 (3,733) 8,174 (1,338) 6,386 (1,444) Retained profit for the year 5,717 5,392 Earnings per ordinary share (basic and diluted) - basic - diluted 18.8p 18.7p 17.4p 17.3p A N G L O - E A S T E R N P L A N TAT I O N S P L C 39 C O N S O L I DAT E D A N D C O M PA N Y B A L A N C E S H E E T S ( £ S T E R L I N G ) 31 DECEMBER 2004 Fixed Assets Tangible assets Investments in subsidiary undertakings Current Assets Stocks Debtors Investments Cash at bank and in hand Current Liabilities Creditors: falling due within one year Borrowings Other creditors Net current assets/(liabilities) Total assets less current liabilities Non-current Assets/Liabilities (Creditors)/assets: falling due after more than one year Borrowings Deferred taxation Net assets Capital and Reserves Called-up share capital Treasury shares Share premium account Share capital redemption reserve Revaluation and exchange reserve Profit and loss account Consolidated Company 2004 £000 2003 £000 2004 £000 2003 £000 66,303 58,712 - - 66,303 58,712 - 25,247 25,247 - 26,253 26,253 800 1,968 211 7,778 958 1,528 175 8,450 10,757 11,111 - 21 211 629 861 - 30 175 624 829 (2,904) (6,871) (9,775) 982 67,285 (2,895) 187 64,577 (1,150) (5,273) (6,423) 4,688 63,400 (3,412) 566 - (1,703) (1,703) (842) 24,405 - (1,396) (1,396) (567) 25,686 - - - - 60,554 24,405 25,686 9,952 (722) 9,895 - 9,952 (722) 9,895 - 15,474 15,395 15,474 15,395 663 (394) 663 (556) 28,239 24,415 663 (3,066) 2,104 663 (1,396) 1,129 Shareholders’ funds - all equity interests Minority interests - all equity interests 53,212 11,365 49,812 10,742 24,405 25,686 - - Total capital employed 64,577 60,554 24,405 25,686 A N G L O - E A S T E R N P L A N TAT I O N S P L C 40 C O N S O L I DAT E D C A S H F L OW S TAT E M E N T ( £ S T E R L I N G ) FOR THE YEAR ENDED 31 DECEMBER 2004 Net cash inflow from operating activities 15,250 12,604 2004 2003 £000 £000 £000 £000 Returns on Investments and Servicing of Finance Interest received Interest paid Dividends paid to minority shareholders Taxation Foreign tax paid Capital Expenditure Payments to acquire tangible fixed assets Payments to acquire land Proceeds from sale of tangible fixed assets Acquisitions and disposals Acquistion of subsidiary Equity Dividends Paid Parent company Cash inflow before financing Financing Share options exercised Purchae of own shares Repayment of existing long term loans Repayment of loans in newly acquired subsidiary Drawdown of new long term loan Finance lease (repayment)/drawdown Advance to minority shareholders (Decrease)/increase in cash in year (577) (3,766) (6,050) (2,596) (1,291) 970 136 (334) (379) (6,111) - 61 136 (754) (1,100) (2,258) 2,717 (8) (377) (703) (3,261) (3,428) - (955) 4,257 95 (421) (377) (3,474) (24) 70 156 - (1,230) - - 29 - (1,644) (674) (1,045) 3,212 A N G L O - E A S T E R N P L A N TAT I O N S P L C 41 N OT I C E O F A N N UA L G E N E R A L M E E T I N G Notice is hereby given that the twentieth Annual General Meeting of Anglo-Eastern Plantations Plc will be held at the offices of Lovells, Atlantic House, Holborn Viaduct, London EC1A 2FG on 28 June 2005 at 11.30 am for the following purposes: As Ordinary Business 1 2 3 4 To receive and consider the company’s annual report for the year ended 31 December 2004. To declare a dividend. To approve the directors' remuneration report for the year ended 31 December 2004. To re-elect the following non-executive directors each of whom has served for more than nine years: a) Madam S K Lim b) Mr Peter E O'Connor c) Mr Ho Soo Ching To appoint BDO Stoy Hayward LLP as auditors and to authorise the directors to fix their remuneration. 5 As Special Business 6 To consider and, if thought fit, to pass the following resolutions as special resolutions: That (a) the directors be generally and unconditionally authorised pursuant to and in accordance with section 80 of the Companies Act 1985 (“the Act”) to exercise for the period ending on 27 June 2010 all the powers of the company to allot relevant securities up to an aggregate nominal amount equal to the company's authorised but unissued share capital at the date of this resolution; (b) during the period expiring on the date of the next Annual General Meeting or on 27 September 2006 (whichever shall be earlier) the directors be empowered to allot equity securities for cash pursuant to the authority conferred under paragraph (a) above or by way of sale of treasury shares (within the meaning of section 162A of the Act): in connection with a rights issue; and (i) (ii) up to an aggregate nominal amount of £497,547 otherwise than in connection with a rights issue; as if section 89 (1) of the Act did not apply to any such allotment; (c) by such authority and power the directors may during such periods make offers or agreements which would or might require the making of allotments after the expiry of such periods; and (d) for the purposes of this resolution: (i) "rights issue" means an offer of equity securities open for acceptance for a period fixed by the directors to holders of equity securities (other than the company) on the register on a fixed record date in proportion to their respective holdings of such securities or in accordance with the rights attached thereto (but subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation to fractional entitlements or legal or practical problems under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory); (ii) the nominal amount of any securities shall be taken to be, in the case of rights to subscribe for or convert any securities into shares of the company, the nominal amount of such shares which may be allotted pursuant to such rights; and (iii) words and expressions defined in or for the purposes of part IV of the Act shall bear the same meanings herein. 7 To consider and if thought fit to pass the following resolution as a special resolution: That the directors be and they are hereby authorised (i) to exercise the powers contained in the Articles of Association of the company so that, to the extent determined by the directors, the holders of ordinary shares be permitted to elect to receive new ordinary shares in the capital of the company, credited as fully paid, instead of all or part of any interim or final dividend or dividends which may be declared or paid at any time or times prior to 27 June 2010; and (ii) to capitalise the appropriate nominal amount of additional ordinary shares, falling to be allotted pursuant to elections made as aforesaid, out of the amount standing to the credit of any reserves of the company, to apply such sum in paying up such ordinary shares and pursuant to section 80 of the Act to allot such ordinary shares up to a maximum nominal value of an aggregate nominal amount equal to the company's authorised but unissued share capital at the date of this resolution to members of the company validly making such elections at A N G L O - E A S T E R N P L A N TAT I O N S P L C 42 N OT I C E O F M E E T I N G S any time or times prior to 27 June 2010 as if sub-section (1) of section 89 of the said Act did not apply thereto and so that this authority shall be without prejudice and additional to the authority conferred by resolution no 6. 8 To consider and if thought fit to pass the following as a special resolution: That the company is hereby generally and unconditionally authorised to make market purchases (within the meaning of section 163 of the Act) of ordinary shares of 25p each in the capital of the company provided that: (a) the maximum number of ordinary shares hereby authorised to be purchased is 3,980,377 (representing 10% of the issued ordinary share capital); (b) the minimum price which may be paid for each ordinary share is 25p; (c) the maximum price which may be paid for each ordinary share is an amount equal to 105% of the average of the middle market quotations for such share as derived from the Daily Official List of the London Stock Exchange plc for the five business days immediately preceding the date of purchase; and (d) the authority hereby conferred shall expire on 27 September 2006 or, if earlier, at the conclusion of the next Annual General Meeting of the company save that the company may before the expiry of this authority make a contract of purchase which will or may be executed wholly or partly after such expiry and may make a purchase of shares pursuant to any such contract. 9 To consider and if thought fit to pass the following resolution as an ordinary resolution: That (i) subject to the approval of the Inland Revenue, the Anglo-Eastern Plantations Plc Approved Executive Share Option Scheme, summarised in the circular accompanying the annual report and accounts of the company for the financial year ended 31 December 2004, a copy of which is produced to the meeting and initialled by the Chairman for the purpose of identification, be and is hereby approved and established; (ii) The Anglo-Eastern Plantations Plc Unapproved Executive Share Option Scheme, summarised in the circular accompanying the annual report and accounts of the company for the financial year ended 31 December 2004, a copy of which is produced to the meeting and initialled by the Chairman for the purpose of identification, be and is hereby approved and established; (iii) The directors be and they are hereby authorised to do all acts and things in respect of and to make all amendments to the rules of the schemes referred to in paragraphs (i) and (ii) above as they shall consider necessary or desirable to carry the same into effect and, where relevant, to obtain the said approval of the Inland Revenue provided that no such amendment shall alter the essential nature of either of the schemes as approved and established pursuant to this resolution no 9. 1 April 2005 By order of the board R O B BARNES Secretary A member of the company entitled to attend and vote at the meeting may appoint one or more proxies to attend and. on a poll, vote instead of him. A proxy need not be a member of the company. The instrument appointing a proxy must be deposited at the office of the registrars not less than forty-eight hours before the time appointed for holding the meeting (or any adjournment thereof). Pursuant to regulation 34 of the Uncertified Securities Regulations 1995, the company has specified that only those shareholders on the register of members of the company at 11.30 am on 26 June 2005 shall be entitled to attend and vote at the meeting in respect of the number of shares registered in their name at that time. Changes to the register of members after 11.30 am on 26 June 2005 shall be disregarded in determining the rights of any person to attend and vote at the meeting. The register of directors' interests, showing any transactions of directors and of their families in the securities of the company, will be available for inspection at the registered office of the company during usual business hours from the date of this notice until the date of the Annual General Meeting and on that day until the conclusion of the meeting. No directors have service agreements exceeding one year's duration. A N G L O - E A S T E R N P L A N TAT I O N S P L C 43 C O M PA N Y A D D R E S S E S C O M PA N Y A DV I S E R S Malaysian Office 7th Floor Wisma Equity 150 Jalan Ampang 50450 Kuala Lumpur Tel: 60 (3) 2162 9808 Fax: 60 (3) 2164 8922 Indonesian Office P T United Kingdom Indonesia Plantations Wisma HSBC Jalan Diponegoro, Kav 11 Medan 20152 North Sumatra Tel: 62 (0)61 4528683 Fax: 62 (0)61 4520029 Auditors BDO Stoy Hayward LLP 8 Baker Street London W1U 3LL Principal Bankers National Westminster Bank Plc 15 Bishopsgate London EC2P 2AP The Hong Kong and Shanghai Banking Corporation Limited Wisma HSBC Jalan Diponegoro, Kav 11 Medan 20152 North Sumatra Secretary and Registered Office (Number Malayan Banking Corporation Bhd 1884630) R O B Barnes 6/7 Queen Street London EC4N 1SP Tel: 44 (0)20 7236 2838 Fax: 44 (0)20 7236 8283 C O M PA N Y W E B S I T E www.angloeastern.co.uk Menara Promenade 100 Jalan Tun Razak 50050 Kuala Lumpur Registrars Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 4TU Solicitors Lovells Atlantic House Holborn Viaduct London EC1A 2FG A N G L O - E A S T E R N P L A N TAT I O N S P L C 44 

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