Contents
Financial summary
Chairman’s statement
Estate areas
Location of estates
Financial record
Additional information
Directors’ report
Directors’ responsibilities
Directors
Statement on corporate governance
Directors' remuneration report
Auditors’ report
Consolidated income statement
Consolidated statement of recognised income and expenses
Consolidated balance sheet
Consolidated cash flow statement
Notes to the consolidated financial statements
Company balance sheet
Notes to the company financial statements
Notice of annual general meeting
1
2
6
7
8
9
11
14
15
16
18
20
21
22
23
24
26
42
43
45
Company addresses, advisers and website
inside back cover
Photographs
Thirteen year old palms - Sungei Musam
New mill nearing completion - Bina Pitri; reservoir in foreground
Return of stripped fruit bunches to the field, as mulch - Blankahan
(cover)
(pages 2 - 3)
(page 4)
Anglo-Eastern Plantations Plc, fully listed on the London Stock Exchange,
operates and is developing plantations in Indonesia and Malaysia,
amounting to a total land area of 45,000 hectares producing mainly palm
oil and some rubber.
Financial highlights
Revenue
Profit before tax
- before biological asset (BA) adjustment
- after BA adjustment
EPS before BA adjustment
Dividend
TRADING PROFIT
30
25
20
15
10
5
0
0
0
0
$
’
2006
$ m
79.1
26.7
29.0
2005
$ m
64.3
21.5
21.4
cts/share
38.3
10.8
cts/share
31.0
8.8
Increase
23%
25%
36%
24%
23%
EARNINGS AND
DIVIDENDS PER SHARE
EPS
Dividend
45
35
25
15
5
0
s
t
n
e
c
S
U
2001
2002
2003
2004
2005
2006
2001 2002 2003 2004 2005 2006
ANGLO-EASTERN PLANTATIONS PLC
1
Chairman’s statement
Results
It is pleasing to report a record profit for 2006, which is 18% higher than 2005 and 6% higher than
the previous record in 2004. The good results are attributable to record crops and favourable com-
modity prices.
Operating profit before biological asset (BA) adjustment was $26.3 million in 2006 compared to
$22.2 million in 2005. If not for the exceptionally dry weather in Sumatra in the second half of the
year, the 12% increase in fresh fruit bunch (FFB) crops for the year over 2005 would have been
higher. Average dollar crude palm oil (CPO) prices were 14% higher but, because of the weakness
of the dollar, were only 8% higher in Indonesian rupiah. Also, there were sharp increases in local
costs at the end of 2005 following the withdrawal of fuel price subsidies by the Indonesian govern-
ment. For example, wages in North Sumatra rose by some 25% and diesel by some 160%.
Profit before tax, and after a BA credit adjustment of $2.3 million, was also a record $29.0 million.
However, as I have said in earlier statements on the subject, this adjustment has no bearing on the
operating performance or cash generation for the group.
Earnings per share before BA adjustment were 38.3 cts in 2006, an increase of 24% over the 31.0
cts in 2005.
Financing
During 2006, we repaid $1.6 million of long term loans and drew down a new five year loan of $3.2
million to fund part of the cost of the mill being built at Bina Pitri. As a result, group long term loans
increased from $5.5 million at the beginning of the year to $7.1 million at year end. Total capital
expenditure amounted to $15.4 million (2005 - $7.6 million) comprising mainly $4.4 million on the
Bina Pitri mill, $3.7 million on the new development at Labuhan Bilik and $5.8 million for new plant-
ings at Bengkulu. Notwithstanding these, group cash balances increased from $10.8 million at the
beginning of the year to $16.8 million at year end.
2
ANGLO-EASTERN PLANTATIONS PLC
Chairman’s statement
Valuations
Given the price trends in recent years, the outlook for the entire palm oil industry and the operating
environment in Indonesia, it is thought that the parameters used to ascertain the value of the group’s
Indonesian estates need to be revised. This is also a reflection of the general uptrend in agricultural
property prices in Indonesia in recent years. We have revised our CPO price assumption to be
$440/mt (previously $400/mt), cif Rotterdam, and the discount rate to 12% (previously 15%). The
result is that our Indonesian estates are valued at an average of $4,450/ha compared to $3,790/ha
in our 2005 balance sheet. This valuation is a ‘value in use’ to the company and we feel it is a
prudent figure in relation to current market values. The positive BA adjustment in the income state-
ment reflects this increase in value.
Prices
After 18 months’ trading in a relatively narrow range of $410/mt to $450/mt, the CPO price began to
rise strongly from July 2006 and ended the year at $570/mt. The average for 2006 was $479/mt,
compared to $422/mt in 2005.
By contrast, palm kernel prices, which were relatively strong in 2004 and 2005, fell 15% during 2006.
Palm kernels accounted for about 9% of group oil palm revenue in 2006.
Rubber prices reached an all-time high of $2,750/mt in June 2006, largely on what is regarded as
speculative demand, and ended 2006 at $1,950/mt. Prices averaged $2,080/mt in 2006 compared
to $1,490/mt in 2005.
Indonesia
Starting in July, we experienced a severe and prolonged drought both at Tasik and at Bengkulu.
While crops at these estates were 10% and 19%, respectively, ahead of expectations in the first half
of the year, they were only 4% ahead and 3% below expectations, respectively, for the full year.
ANGLO-EASTERN PLANTATIONS PLC
3
Chairman’s statement
FFB production from Tasik and Anak Tasik was 167,290 mt, about 1.7% lower than in 2005. Tasik
continues to perform well for the age of its plantings. With its satisfactory yield, we might defer the
start of replanting beyond 2008. Bought-in crop rose to 130,000 mt in 2006 as compared to 111,330
mt in 2005. However, margins reduced as a result of increasing competition from surrounding mills.
FFB production from the three smaller estates around Medan was a record at 66,010 mt, up 4% on
the record of 63,450 mt harvested in the previous year. Sungei Musam (a picture of which appears
on the front cover) performed exceptionally well, with yield rising to 28 mt/ha. The mill at Blankahan,
which processes crop from all three estates, completed its second full year of operations. Bought-in
crop rose to 44,950 mt from 26,420 mt in 2005. In spite of this large increase, extraction rates
remained satisfactory at 22.6%. All the remaining 258 ha of cocoa at Rambung has now been
replaced by rubber. The mature rubber area of 434 ha made a contribution of $1.7 million to group
profits.
Production at Bengkulu, at 189,940 mt, was 19% higher than the previous year but below our
budget, due mainly to a severe prolonged drought. We spent considerable sums improving road
surfaces to address the difficulties of FFB transport during the monsoon season. With some 4,000
ha of immature palms to be brought into production in the next few years, Bengkulu will be the
group’s main profit generator. With keen competition from surrounding mills, bought-in crop at Beng-
kulu fell 19% to 119,690 mt. However, the extraction rate improved from 21.0% in 2005 to 21.9% in
2006, reflecting in part the increasing proportion of better planting material used in later years.
Bina Pitri performed well and to our expectation, with crop up 70% on 2005 at 46,760 mt. The new
40 mt/hr mill (a picture of which appears on the previous page) expects to commence production
shortly.
4
ANGLO-EASTERN PLANTATIONS PLC
Chairman’s statement
Malaysia
Production was up 14% over 2005 at 43,900 mt, a significant improvement on earlier performance.
With better FFB prices, our Malaysian properties recorded a much reduced loss of $100,000 from
$607,000 in 2005. At current prices, I expect the Malaysian operation to repay all its borrowings
during the current year, after which, at reasonable CPO prices, it will be in a position to deliver a
cash return to the group.
Development
New planting at Bengkulu accelerated to 1,360 ha in 2006 from 980 ha in 2005, leaving about 1,100
ha to be completed in 2007. This will bring the Bengkulu estates to a planted area of 15,850 ha.
At Labuhan Bilik, 1,400 ha were cleared and drained in early 2006 ready for planting. However, work
was held up while we waited for necessary permits resulting in only 349 ha being planted by year
end. The planted area has increased to 1,250 ha at the end of March 2007. We have acquired a
further 880 ha of land nearby, bringing the plantable area of this estate to 4,000 ha. We are optimis-
tic on yield from this fertile property.
Our management continues to search for new land or estates to acquire. With current high CPO
prices, suitable opportunities are difficult to come by.
Directors
The Combined Code on Corporate Governance requires non-executive directors who have served
for more than nine years to submit themselves for re-election every year. From the notice of the
forthcoming annual general meeting, you will see that three of our independent non-executive direc-
tors are affected by this provision, which assumes that, after nine years, such directors are not inde-
pendent. I commend these directors to you as thoroughly independent and recommend that share-
holders vote in favour of all three.
Outlook
With the exception of North Sumatra, crops so far in 2007 appear to suffer from the effects of the
earlier drought and have been a little disappointing. Against this, the CPO price is now around
$640/mt and most vegetable oil analysts are positive about the outlook for all vegetable oils, driven
by strong consumption in traditional markets as well as prospective demand from the biodiesel
industry. If current prices are maintained and unless there is a significant decline in crops, we can
expect a material improvement in profits and operating cash flows for 2007.
Dividend
On the strength of the improved outlook for palm oil and mindful of the effect of the weaker dollar on
our sterling based shareholders, the board is proposing to increase the annual dividend by 23% to
10.8 cts per share from 8.8 cts in the previous year.
Shareholders’ attention, particularly those who intend to receive a sterling dividend, is drawn to the
reference to dividends in the directors’ report on page 13. In future, any sterling equivalent will be
paid at the rate of exchange ruling at the date the register closes. If the current exchange rate of
$1.96: £ remained unchanged our sterling shareholders would receive a dividend of 5.51p per share
or an increase of 9.8% over the previous year.
CHAN TEIK HUAT
Chairman
3 April 2007
ANGLO-EASTERN PLANTATIONS PLC
5
Estate areas
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6
ANGLO-EASTERN PLANTATIONS PLC
Location of Estates
1
2
3
4
6
5
7
8
9
1 Cenderung
2 Sungei Musam
3 Blankahan
4 Rambung
5 Labuhan Bilik
6 Anak Tasik
7 Tasik
8 Bina Pitri
9 Bengkulu project
©1996 George Philip & Son Ltd Cartography by Philip's
ANGLO-EASTERN PLANTATIONS PLC
7
Kota BaharuGeorge TownIpohKuala TerengganuKuala LumpurSerembanKuantanPalembangTanjungkarangTelukbetungJambi(Telanaipura)PadangPekanbaruMedanBengkuluSawahluntoSolokPadangpanjangBukittinggiPayakumbuhSibolgaShah AlamAlor SetarKangarMelakaPematangsiantarTebingtinggiBirTanjungbalaiPanaitanTg. GedeRanauEquatorUjung Rajanda AcehangPERLISNEGERIMELAKASEMBILANPINANGKEDAHPERAKSELANGORTERENGGANUPAHANGJOHORSINGAPORESELATANRIAUJAMBIUTARAACEHLAMPUNGBARATPENINSULARMALAYSIAKELANTANKepulauanBatuDanauTobaSiberutNiasSimeulueKepulauanBanyakKepulauan LinggaKepulauanRiauKepulauanAnamba Selat Sunda Pulau Rakata ILAND J a v a T r e n c Peurangan Simpangkiri Rokan Siak Kampar Batangkari Tembesi Musi Ogan Tulangbawang Selat Bangka Selat Berhala Str. of Singapore Rompin MS O UINDIANOCEANStrait of Malacca Kepulauan Mentawai B u k i t B a r i s a n S U M A T E R A I B E N G K U L U ▲ 2855▲ 2985▲2130▲1276▲2182▲2190▲ 2108▲17483805▲▲23836073▼6650▼2170▲▲3159▲▲ 2833▲ 3381Pahang PTLeuserGeureudongAbongabongKerinciLangkawiP. TiomanKundurSinkepG. ChamahG. BesarLahatEngganoPulau PagaiSelatanPulau PagaiUtaraKuala LipisG. KorbuG. Batu PutehG. LedangG. TahanMetroKotabumiBaturajaCurupLubuklinggauSekayuKualatungkalBengkalisChoa ChukangTuasNee SoonJohor BaharuTeberauBatu PahatKeluangLabisPandang EndauMuarTampinAlur GajahPort DicksonRembauTelok DatokKelangKajangKuala SelangorBentongTanjong MalimKuala Kubu BaharuRaubTapahKamparBatu GajahCameron HighlandsPort WeldTaipingParit BuntarBukit MertajamKulimSungai PetaniKuala NerangGerikNarathiwatKuala KeraiMarangKuala DungunCukaiPasir MasSelamaTeluk AnsonTemerlohSegamatKuala PilahChangiTanjungpinangBangkoSungaipenuhPariamanBatusangkarLubuksikapingPadangsidempuanGunungsitoliTarutungKabanjaheLangsaLhokseumaweSigliRantauprapatBangkinangSijunjungMuarabungoMuaraenimRengatGadis Lalang Bernam SebangkaLinggaJemajaKualaPandegelangBintanBatamTanahmasaTanahbalaSeblatDempoBengkalisRupatSamosirPadangRangsangTebingtinggiLabuhanAnyerKaliandoKotaagungMannaPerabumulihKayuagungMuntokBelinSarolangunMuarateboSungaipakningDumaiBagansiapiapiMersingSinabangLahewaMeureuduBireuenPeureulakPangkalansusuMartapuraSukadonoPiniUjungKualasimpangTelukdalemNatalPrapatBatangButterworthJerantutGemasBenomDanungTanah MerahKuala KangsarLumutSabakPekanKuala RompinKota TinggiDaboTanjungbatuLabuhanbilikBaharokKutacanePangkalanbrandanGeumpangokkruetSidikajangSeribudolokBakunganKandangBlangpidreBelawanIdiBaligeKisaranRantaukamparSiaksrinderapuraKotatengahKotapinangSipiongotSingkriSingkuangSirambuSibigoLasiaSibuhuanRaoPantiAirmolekCirentiKotabaruMuarasabakKenaliasamJebusSungsangSungaigerongTgPendopoMenggalaBukitkemuningKruiKotajawaMuararupuArgamakmurTaisBintuhanMuaraamanIpuhPatnanPasarkuokSabulubekIndrapuraMukomukaTalukMuaraLipatkamMinasMasuraiSipuraKirakatauTg. CinaMusalaTuangkuTakenganMeulabohTapaktuanTembilahanMuaratembesi Financial record
Profit and Loss Account
Revenue
Trading profit
Biological asset (BA) adjustment
Exchange profits/(losses)
Net interest - income/(charged)
Profit before tax
Tax
Minority interests
2006
IFRS
$000
79,094
26,270
2,312
368
90
2005
IFRS
$000
64,321
22,201
(35
)
(550
)
(196
)
2004
IFRS
$000
2003
UK GAAP
$000
2002
UK GAAP
$000
65,676
24,793
1,950
147
(287)
48,519
19,994
31,139
12,767
-
-
-
-
(537)
(895)
29,040
21,420
26,744
19,587
12,092
(9,289
)
(3,277
)
(7,097
)
(2,140
)
(8,450
)
(2,901
)
(6,141
)
(2,201
)
(4,367
)
(1,250
)
Profit attributable to shareholders
16,474
12,183
14,809
11,245
6,475
Dividend proposed for year
(4,265)
(3,514)
(3,147)
(2,375)
(1,571)
Balance Sheet
Fixed assets
Cash net of short term borrowings
Long term loans
Other working capital
Deferred tax
$000
$000
$000
$000
$000
160,823
129,518
127,302
105,096
103,558
15,079
(5,454
)
(1,919
)
9,091
(3,940
)
255
9,357
(5,558
)
(4,341
)
(21,152
)
(16,941
)
(16,698
)
13,067
(6,108
)
(4,677
)
1,013
6,376
(8,085
)
(4,554
)
1,215
Minority interests
147,377
117,983
110,062
108,391
98,510
(25,421)
(20,519)
(19,276)
(19,229)
(17,377)
Net worth
121,956
97,464
90,786
89,162
81,133
Share capital
Treasury shares
15,495
(1,387
)
(1,387
)
(1,387
)
15,481
15,424
15,319
15,171
Share premium and capital redemption account
24,991
24,955
24,912
Revaluation and exchange reserve
Profit and loss account
2,407
80,450
(9,121
)
(6,674
)
67,536
58,511
-
24,766
5,375
43,702
-
24,657
6,586
34,719
Equity attributable to shareholders’ funds
121,956
97,464
90,786
89,162
81,133
Ordinary shares in issue (‘000s)
Earnings per share before BA adj (US cents)
Dividend per share for year (US cents)
Asset value per share (US cents)
39,958
38.3cts
10.8cts
309cts
Earnings per share before BA adj (pence equivalent)
20.6p
Asset value per share (pence equivalent)
Borrowings net of cash: shareholders’ funds (%)
158p
-
39,928
31.0cts
8.8cts
244cts
17.1p
142p
-
39,804
34.5cts
8.0cts
228cts
18.7p
135p
-
39,581
28.6cts
6.0cts
225cts
17.4p
126p
-
39,227
16.5cts
4.0cts
207cts
10.9p
128p
2%
Relevant exchange rates shown on page 9.
8
ANGLO-EASTERN PLANTATIONS PLC
Additional information
Planted area
Oil palm - mature
- immature
- total
Rubber
Cocoa
Total
Crops
FFB - all estates
- bought-in or processed for third parties
- mill throughput
Saleable crude palm oil (CPO)
Saleable palm kernels
Rubber
Cocoa
Average yields
FFB
Rubber
Cocoa
Extraction rates
CPO
Kernel
Sales
CPO
Palm kernel
FFB
Rubber
Cocoa
Average ex-factory sales prices – Indonesia
CPO
Palm kernels
Rubber
Cocoa
FFB (ex-estate)
Average ex-estate sales prices – Malaysia
FFB
Exchange rates – year end
Rp : $
$ : £
RM: $
Exchange rates – average
Rp : $
$ : £
RM: $
ANGLO-EASTERN PLANTATIONS PLC
2006
Ha
27,390
6,005
33,395
534
-
33,929
mt
513,902
294,647
717,888
156,285
36,596
1,088
46
mt/ha
18.8
2.0
-
%
21.8
5.1
mt
157,326
36,556
90,659
1,074
67
Rp/kg
3,586
1,879
17,932
9,303
754
RM/mt
299
9,020
1.96
3.53
9,141
1.86
3.66
2005
Ha
26,393
5,481
31,874
434
258
32,566
mt
459,080
284,705
677,845
145,820
35,049
946
157
mt/ha
17.7
2.2
0.6
%
21.5
5.1
mt
145,943
35,220
65,864
947
125
Rp/kg
3,332
2,218
13,716
10,923
702
RM/mt
277
9,830
1.72
3.78
9,751
1.81
3.79
2004
Ha
25,533
4,500
30,033
434
258
30,725
mt
428,657
241,359
562,134
118,197
28,526
1,370
208
mt/ha
18.9
2.3
0.8
%
21.5
5.2
mt
119,250
28,315
107,844
1,376
221
Rp/kg
3,600
2,233
10,618
10,894
764
RM/mt
319
9,290
1.92
3.80
9,001
1.84
3.80
2003
Ha
19,910
4,507
24,417
757
258
25,432
mt
372,290
170,948
453,717
94,523
22,325
1,800
154
mt/ha
19.0
2.3
0.6
%
20.8
4.9
mt
91,238
22,302
90,119
1,800
141
Rp/kg
3,320
1,500
8,451
14,544
719
RM/mt
284
8,447
1.79
3.80
8,563
1.65
3.80
2002
Ha
19,335
3,389
22,724
843
258
23,825
mt
294,062
101,906
302,592
63,240
15,033
1,491
178
mt/ha
16.3
1.6
0.7
%
21.1
5.0
mt
63,042
15,018
93,929
1,508
170
Rp/kg
3,113
1,468
6,698
15,214
617
RM/mt
242
8,940
1.61
3.80
9,253
1.51
3.80
9
Additional information
FFB PRODUCTION
RUBBER AND COCOA PRODUCTION
550
500
450
400
350
300
250
200
150
100
50
650
600
550
500
450
400
350
300
250
200
)
0
0
0
’
(
s
e
n
n
o
T
e
n
n
o
t
/
$
s
e
n
n
o
T
2000
1800
1600
1400
1200
000
800
600
400
200
0
2001
2002
2003
2004
2005
2006
2001
2002
2003
2004
2005
2006
PALM OIL - PRICE
(Rotterdam)
RUBBER AND COCOA PRICES
e
n
n
o
t
/
$
2750
2500
2250
2000
1750
1500
1250
1000
750
500
250
2001
2002
2003
2004
2005
2006
2007
2001
2002
2003
2004
2005
2006
2007
ANGLO-EASTERN SHARE PRICE
(Month opening)
PLANTED AREAS - HECTARES
Rubber
(534 ha - 1.6%)
Oil palm - immature
(6,005 ha - 17.7%)
Oil palm - mature
(27,390 ha - 80.7%)
e
c
n
e
P
340
320
300
280
260
240
220
200
180
160
140
120
100
80
60
40
20
2001
2002
2003
2004
2005
2006
2007
10
ANGLO-EASTERN PLANTATIONS PLC
Directors’ report
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 2006.
Principal activity
The company is incorporated in the United Kingdom under the Companies Act 1985. The address of the
registered office and company number are on the inside back cover.
The company acts as a holding company and co-ordinates the businesses of its subsidiaries. At 31
December 2006 these comprised principally the cultivation of oil palm and rubber 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 27 to the consolidated financial statements.
Results and dividends
The audited financial statements for the year ended 31 December 2006 are set out on pages 21 to 44. The
group profit for the year on ordinary activities before taxation was $29,040,000 (2005 - $21,420,000) and the
profit attributable to ordinary shareholders was $16,474,000 (2005 - $12,183,000). As usual no interim
dividend was paid. The directors recommend a final dividend per share of 10.8cts (2005 – 8.8cts) to be paid
on 9 July 2007 to shareholders on the register on 8 June 2007. Shareholders may elect to receive their
dividend in sterling as described on page 13.
Enhanced business review
Refer to the chairman's statement on pages 2 to 5. In addition the principal risks and uncertainties of the
group’s business are:
• Unexpected variations in crop, principally caused by unusual weather
• Variations in commodity prices
• Variations in the rates of exchange of the Indonesian rupiah and the Malaysian ringgit against the
US dollar, which affect directly the local selling prices of the group’s products and the cost of
imported inputs, as well as the value of financial assets and liabilities as set out in note 26 of the
financial statements
• Input cost inflation and
• Changes in the policy of the Indonesian or Malaysian governments towards the plantation industry
and towards foreign investment.
Financial risk
Information on financial instruments and other risks is set out in note 26 to the financial statements.
Biological assets, property, plant and equipment
Information relating to changes in these fixed assets is given in note 11 to the financial statements.
Directors
A full list of directors appears on page 15. All the directors served throughout the year. Datuk Chin, who
will have served for nine years, together with Madam Lim, Mr O'Connor and Mr Ho, who will have each
served for 13 years, will be submitting themselves for re-election at the forthcoming annual general meeting,
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
R O B Barnes
T H Chan
Datuk Chin
S K Foo (resigned 16 Sept 2005)
S C Ho
L Y Kee
S K Lim
P E O'Connor
2006
Ordinary
shares
186,000
-
-
-
300,000
-
20,521,314
200,000
2005
Ordinary
shares
186,000
-
-
-
300,000
-
20,521,314
250,000
ANGLO-EASTERN PLANTATIONS PLC
11
Directors’ report
The interests disclosed for Madam Lim are held by Genton International Limited and certain other
companies of which Madam Lim is the controlling shareholder.
There have been no changes in the interests of the directors in the securities of the company between 31
December 2006 and the date of this report.
Other than as set out in note 22 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.
Substantial share interests
As at 3 April 2007 the following interests had been notified to the company, 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
50.7%
14.9%
5.3%
Auditors
All of the current directors have taken the steps that they ought to have taken to make themselves aware of
any information needed by the company's auditors for the purposes of their audit and to establish that the
auditors are aware of the information. The directors are not aware of any relevant audit information of which
the auditors are unaware.
BDO Stoy Hayward LLP have expressed their willingness to continue in office and a resolution to re-appoint
them will be proposed as Resolution 5 at the forthcoming annual general meeting.
Authority to allot shares
At the annual general meeting held on 26 May 2006 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
£5,127,432 which represents the company's authorised but unissued 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 £499,478
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 2006 final dividend.
Acquisition of the company's own shares and authority to purchase own shares
At 3 April 2007 the directors had remaining authority, under the shareholders' resolution of 26 May 2006, to
make purchases of 3,992,837 of the company's ordinary shares. This authority expires on 31 May 2007.
12
ANGLO-EASTERN PLANTATIONS PLC
Directors’ report
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 can 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.
Resolution 8 to be proposed at the forthcoming annual general meeting seeks renewed authority to
purchase up to a maximum of 3,995,827 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.
Payment of dividends
The group reporting currency is US dollars. However 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 closure of the register.
This is a change from previous years when the exchange rate was that ruling at the date of the preliminary
announcement of the company’s results.
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 (2005 – 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 (2005 - $62,000).
By order of the board
R O B Barnes
Secretary
ANGLO-EASTERN PLANTATIONS PLC
3 April 2007
13
Directors’ responsibilities
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at
any time the financial position of the group, for safeguarding the assets of the company, for taking reasonable
steps for the prevention and detection of fraud and other irregularities and for the preparation of a directors' report
and directors' remuneration report which comply with the requirements of the Companies Act 1985.
The directors are responsible for preparing the annual report and the financial statements in accordance with the
Companies Act 1985. The directors are also required to prepare financial statements for the group in accordance
with International Financial Reporting Standards as adopted by the European Union (IFRS) and Article 4 of the
IAS Regulation. The directors have chosen to prepare financial statements for the company in accordance with
UK Generally Accepted Accounting Practice (GAAP).
After making enquiries, the directors have a reasonable expectation that the company and the group have
adequate resources to continue operations for the foreseeable future. For this reason, they continue to adopt the
going concern basis in preparing the financial statements.
Group financial statements
International Accounting Standard 1 requires that financial statements present fairly for each financial year the
group's financial position, financial performance and cash flows. This requires the faithful representation of the
effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for
assets, liabilities, income and expenses set out in the International Accounting Standards Board's 'Framework for
the preparation and presentation of financial statements'. In virtually all circumstances, a fair presentation will be
achieved by compliance with all applicable IFRS. A fair presentation also requires the directors to:
•
•
•
consistently select and apply appropriate accounting policies
present information, including accounting policies, in a manner that provides relevant, reliable, comparable
and understandable information and
provide additional disclosures when compliance with the specific requirements of IFRS is insufficient to
enable users to understand the impact of particular transactions, other events and conditions on the entity's
financial position and financial performance.
Parent company financial statements
Company law requires the directors to prepare financial statements for each financial year which give a true and
fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing
these financial statements, the directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business
make judgements and estimates that are reasonable and prudent and
state whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements.
Financial statements are published on the group's website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the group's website is the responsibility of the directors. The
directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
14
ANGLO-EASTERN PLANTATIONS PLC
Directors
Chan Teik Huat (Chairman and CEO, aged 67) – appointed 29 November 1993
Chartered Accountant; until January 2006 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.
Kee Lian Yong (Executive director, aged 50) – appointed 1 August 2005
Chartered Accountant; from January 2006 managing director of Metroplex Berhad; previously chief
executive for ten years of Ecofirst Consolidated Berhad (formerly Kumpulan Mas Berhad), a company
quoted on the Kuala Lumpur Stock Exchange with interests in plantations, water engineering, property
development and education.
R O B Barnes (Chief financial officer, aged 62) – appointed 10 July 1989
Chartered Accountant; director of The Chillington Corporation Plc from 1986 to 1989.
Madam Lim Siew Kim (Non-executive, aged 58) – appointed 29 November 1993
Executive chairman of Metroplex Berhad.
Datuk H Chin Poy-Wu (Independent non-executive, chairman of remuneration committee, aged 69) –
appointed 1 May 1998
Deputy chairman of Hap Seng Consolidated Berhad, director of Glenealy Plantations Berhad, both listed on
the Kuala Lumpur Stock Exchange. Board member of University Malaysia, Sabah. Commissioner of Police
- Kuala Lumpur, retired 1993.
P E O'Connor (Senior independent non-executive, chairman of nomination committee, aged 66) –
appointed 3 June 1994
Chairman of Advance Developing Markets Plc; lead director of NEO Material Technologies Inc and deputy
chairman of IMS Investment Manager Selection Limited; director of GT Management Plc 1975 to 1990 (in
London and Hong Kong).
Ho Soo Ching (Independent non-executive, chairman of audit committee, aged 57) – appointed 29
November 1993
From September 2006 chief executive officer of Manhattan Resources Limited, a Singapore listed company
involved in the Indonesian coal mining sector. Prior to that involved mainly in the financial services sector
including some time within Singapore Technologies Group. Director of Morgan Grenfell, Singapore from
1981 to 1987.
ANGLO-EASTERN PLANTATIONS PLC
15
Statement on corporate governance
During 2006 the company has complied with the great majority of the requirements of the Combined Code
of Corporate Governance. Where provisions of the Combined Code were not met during 2006, particular
comment is made in the statements below and in the Directors' remuneration report on page 18. This
statement does not attempt to rehearse all the provisions of the Combined Code.
The board
The board comprises three executive and four non-executive directors, three of whom are independent. All
of these three have served for over nine years, which is the limit reckoned by the Combined Code to indicate
prima facie independence. All three have a wide range of business interests beyond their position with the
company and the rest of the board agrees unanimously that they have shown themselves to be fully
independent. Mr Chan has been both chairman and chief executive since 1998. Madam Lim, who is a
non-executive director, is the controlling shareholder of the company. In the opinion of the board, given the
size of his family's commitment to the company, his common interest as a family member and manager in
the company make it reasonable that the post of chairman and chief executive are combined. The other
members of the board are satisfied that through the specific powers reserved for the board, and given the
presence of three wholly independent non-executives, there is a reasonable balance of influence. A
schedule of duties and decisions reserved for the board and management respectively has been adopted.
The audit, remuneration and nomination committees have written terms of reference.
Unless warranted by unusual matters, the board normally meets three times each year. Other meetings to
deal with formalities take place by telephone or written resolution. During 2006 there were three full
meetings, attended by all the directors except Madam Lim who did not attend any, and Mr O’Connor who
was absent from one.
All the independent non-executive directors met on their own in early 2006 and 2007. The chairman met all
the non-executive directors, in the absence of the other executive directors, twice in 2006.
Mr O’Connor has been senior non-executive director since January 1999.
Non-executives are appointed for three year terms. There have been changes in non-executive directors at
intervals in the past (as recently as 2005) for a variety of reasons. While accepting the need to maintain the
vitality of the board the directors do not intend to specify fixed terms of office for non-executives. However,
the board will review the position of each director at the time set for his normal three yearly reappointment
under the Articles.
New directors have not received formal training on the occasion of their appointment to the board as all
have previous experience of public company directorships and some of them have worked in financial or
accounting service industries.
In January 2007 the board conducted a review of its performance. No major issues arose from this review.
The nomination committee comprises Mr O’Connor (chairman), Mr Ho and Datuk Chin. The committee did
not need to meet during 2006.
Relations with shareholders
Company executives attempt to contact principal shareholders at least twice a year and at all times are
pleased to speak to and meet any shareholder. Given the dispersion of directors and shareholders it is not
possible for every non-executive director to meet shareholders in the presence of management.
A member of the audit and remuneration committees will be available at the 2007 annual general meeting.
Accountability and audit
The responsibilities of the directors as regards the financial statements are set out on page 14. A statement
of going concern is also on page 14.
16
ANGLO-EASTERN PLANTATIONS PLC
Statement on corporate governance
Accountability and audit - continued
The audit committee comprises Mr Ho (chairman), Mr O'Connor and Datuk Chin. Mr Ho and Mr O'Connor
have current financial experience from their present or previous principal occupations in corporate finance
and investment. The committee met prior to the completion of the 2006 accounts and three times during
2006. These meetings were attended by all members, except Mr O’Connor, who was absent from one.
Internal control
The company has followed the Combined Code provisions and Turnbull Committee guidance on internal
control since 1999. The board has overall responsibility for the group’s internal control and risk
management; the audit committee reviews and monitors specific risks and internal control procedures and
reports to the board where appropriate. Executive staff and directors are responsible for implementation of
control procedures and for identifying and managing business risks. The audit committee review is a
continuous but sequential process and in any one year does not necessarily cover all risks which are
significant to the group. The process aims to provide reasonable assurance against material misstatement
or loss. In 2006 for example the audit committee reviewed, among other things, industrial relations policy,
exchange exposure, environmental risks and risks in acquisitions in Indonesia.
The board receives monthly reports from executive management in Indonesia and Malaysia and focuses at
each meeting on the principal continuing risks to which the group is exposed including, but not limited to,
commodity price movements, exchange rate movements, political and social change and government
legislation.
The group has an internal audit department which visits each operating site in Indonesia and Malaysia twice
a year and provides a wide ranging report to the managing director of those operations.
Environmental and corporate social responsibility
In 2004 a group of growers, processors, retailers and wildlife and conservation groups founded the “Round
Table for Sustainable Palm Oil”, known as RSPO, to codify and promote best practices in the industry. The
group’s management and directors take a serious view of their environmental and social responsibilities and
are fully committed to the principles being developed by RSPO. These principles cover eight headings as
follows:
• Transparency
• Compliance with local laws and regulations
• Commitment to long term economic and financial viability
• Use of appropriate best practices by growers and millers
• Environmental responsibility and conservation of natural resources and biodiversity
• Responsible consideration of individuals and communities affected by growers and mills
• Responsible development of new plantings and
• Commitment to continuous improvement in key areas of activity
Within these headings are 40 detailed principles. Among the most important are
• Not to remove primary forest
• Not to use fire for clearing new or replantings
• To follow accepted soil and water conservation practices
• To use agrochemicals in ways that do not endanger health or the environment and to promote non-
chemical methods of pest management
• To leave wild areas for wildlife corridors, water catchment and riparian protection
• Provide full treatment of mill effluent water
• Ensure the wishes of local communities and individuals are taken account of and
• Only freely agreed compensation is paid to individuals with residual rights over land, in addition
to following government land regulations
ANGLO-EASTERN PLANTATIONS PLC
17
Directors’ remuneration report
This report by the remuneration committee has been approved by the board of directors for submission to
shareholders for their approval at the forthcoming annual general meeting.
Membership
The remuneration committee comprised throughout the year Mr Ho and Mr O'Connor and was chaired by
Datuk Chin. The committee met three times in 2006 attended by all members, except Mr O’Connor who
was absent from one.
Policy
The remuneration committee makes recommendations on senior management pay and conditions, after
consultation with the chief executive, and recommends to the board the terms of executive directors. The
committee recommends remuneration terms by reference to individual performance, market conditions, the
company's performance and the need to maintain an economic operation.
Non-executive directors' remuneration is considered by the board as a whole.
Components
Base salary
Base salaries are reviewed on an annual basis by the remuneration committee or when an individual
changes responsibilities. Non-executive directors receive no benefits other than a fee.
Bonus
The group operates a bonus scheme for senior executives and managers which is generally determined by
operating performance criteria. Annual bonuses for senior executives and managers are capped at 66% of
base salary. Executive directors receive a bonus which has ranged from 0% to 41% in past years, at the
discretion of the board.
Share options
The UK and overseas executive share option schemes of the company are administered and supervised by
a committee consisting, in the majority, of non-executive directors. These schemes are limited over their
10 year life to issuing no more than 5% of the issued ordinary share capital of the company from time to
time. They provide for options to be granted over treasury shares as well as over new shares. To avoid
dilution, the board intends generally to follow the treasury share route.
Individual grants are phased over three years. The total grant to each holder is determined by seniority and
total market value at date of grant is limited to four times base salary. Exercise of options is only permitted
three years after grant. There are no performance criteria for exercise.
Pensions
There is no company pension scheme for executive directors or senior executives and management. In the
case of one executive director, Mr Barnes, the company makes contributions based on base salary only to
a personal money purchase scheme. Senior executives who leave voluntarily after more than five years'
service are entitled to a gratuity of one month's base salary for each year of service.
Service contracts
All directors, executive and non-executive, have service contracts. Those of the non-executives are all
dated 24 February 2006 for three year terms with notice periods of one month. Mr Barnes has a contract
dated 29 March 2005 which expires on 31 May 2007. In the event of an early termination by the company
this contract provides for a termination payment equivalent to the lower of one year or the outstanding term
of the contract. Mr Chan and Mr Kee have rolling contracts dated 22 February 2007 and 22 June 2005,
respectively, each having a notice period of six months. Notice periods for all other senior management are
generally between three and six months.
18
ANGLO-EASTERN PLANTATIONS PLC
Directors’ remuneration report
Performance graph
The following graph shows the company's performance,
measured by share price, compared to the Kuala
Lumpur Stock Exchange (KLSE) Plantation Index for the
period 1 January 2002 to 19 March 2007. This is the
only relevant index available in terms of sector but any
comparison should be qualified; many Malaysian
plantation companies are diversified, as well as not
holding as great a proportion of their assets in Indonesia
as the company.
In determining senior management compensation, the
remuneration committee is influenced by the operating
performance of the company and not directly by the
share price.
Audited information
Directors' share options
Anglo-Eastern Plant (EQ) --------- Kuala Lumpur SE/Plantation CR (IN)
900
850
800
750
700
650
600
550
500
450
400
350
300
250
200
150
100
50
0
-50
h
t
w
o
r
g
e
g
a
t
n
e
c
r
e
P
2002
2003
2004
2005
2006
2007
5 years from 01/01/02 to 19/03/07
Share options granted to the directors of the company under the company's 1994 Executive Share Option
Scheme and Overseas Share Option Scheme and outstanding at 31 December 2006 were:
Name of director
Date of grant
Exercise price
Period of option
No of ordinary shares under option
T H Chan
16.04.02
44.7p
30.04.05-29.04.12
1 Jan 06
30,600
(Exercised)
-
31 Dec 06
30,600
The market price of the shares at 31 December 2006 was 312.5p and the range during 2006 was 218.25p to
330p.
Directors' remuneration
The remuneration of all directors who served during the year was:
Name of director
Executive:
T H Chan (Chairman and CEO)
R O B Barnes
L Y Kee (appointed 1 August 2005)
Non-executive:
S K Lim
Datuk H Chin
S K Foo (resigned 16 Sep 2005)
S C Ho
P E O'Connor
2006
2005
Fees
$000
Executive
salary
$000
Bonus
(re 2005)
$000
Benefits
in kind
$000
Total
2006
$000
Total
2005
$000
Pension contribution
2005
$000
2006
$000
-
-
15
22
-
22
22
81
92
86
196
82
-
-
-
-
-
364
293
14
31
4
-
-
-
-
-
49
107
6
31
14
-
-
-
-
-
51
35
106
258
100
15
22
-
22
22
545
118
276
41
15
22
11
22
22
527
-
34
-
-
-
-
-
-
34
-
31
-
-
-
-
-
-
31
Apart from the salaries of Mr Chan and Mr Kee, which are denominated in Malaysian ringgit, all the other above
salaries are denominated in sterling.
On behalf of the board
Datuk H Chin Poy-Wu
Chairman, remuneration committee
ANGLO-EASTERN PLANTATIONS PLC
3 April 2007
19
Auditors’ report
Independent auditors' report to the shareholders of Anglo-Eastern Plantations Plc
We have audited the group and parent company financial statements (the ''financial statements'') of Anglo-Eastern Plantations Plc for
the year ended 31 December 2006 which comprise the consolidated income statement, the consolidated and parent company balance
sheets, the consolidated cash flow statement, the consolidated statement of recognised income and expenses and the related notes.
These financial statements have been prepared under the accounting policies set out therein. 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 and the group financial statements in accordance with applicable law and
International Financial Reporting Standards (IFRS) as adopted by the European Union, and for preparing the parent company financial
statements and the directors' remuneration report in accordance with applicable law and United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice) are set out in the statement of directors' responsibilities.
Our responsibility is to audit the financial statements and the part of the directors' remuneration report to be audited in accordance with
relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
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
and whether the information in the directors' report is consistent with those financial statements. The financial statements have been
properly prepared in accordance with Article 4 of the IAS Regulation. We also report to you if, in our opinion 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 regarding directors' remuneration and other transactions is not disclosed.
We review whether the corporate governance statement reflects the company's compliance with the nine provisions of the 2003 FRC
Combined 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 statements on internal control cover 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. The
other information comprises only the financial summary, the chairman's statement, financial record, additional information, location of
estates, estate areas, the directors' report, 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 International Standards on Auditing (UK and Ireland) 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 judgments made
by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group's and
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 group financial statements give a true and fair view, in accordance with IFRS as adopted by the European Union, of the state
of the group's affairs as at 31 December 2006 and of its profit for the year then ended;
the group financial statements have been properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS
Regulation.
the parent company financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted
Accounting Practice, of the state of the parent company's affairs as at 31 December 2006; and
the parent company financial statements and the part of the directors' remuneration report to be audited have been properly
prepared in accordance with the Companies Act 1985.
the information given in the directors' report is consistent with the financial statements.
•
•
•
•
BDO STOY HAYWARD LLP
Chartered Accountants and Registered Auditors
8 Baker Street
London W1U 3LL
3 April 2007
20
ANGLO-EASTERN PLANTATIONS PLC
Consolidated income statement
for the year ended 31 December 2006
Continuing operations
Notes
2006
2005
Result before
BA adjustment
$000
BA adjustment
$000
Total
$000
Result before
BA adjustment
$000
BA adjustment
$000
Total
$000
Revenue
Cost of sales
Gross profit
Biological asset revaluation
movement (BA adjustment)
Other income
Administration expenses
Operating profit
Exchange profits/(losses)
Finance income
Finance costs
Profit before tax
Tax
Profit for the year
Attributable to:
- Equity holders of the parent
- Minority interests
Earnings per share
- basic
- diluted
3
4
5
8
9
9
2
79,094
(50,089
)
29,005
-
13
(2,748
)
-
-
-
79,094
64,321
(50,089
)
(39,514
)
29,005
24,807
2,312
2,312
13
-
-
(2,748
)
(2,721
)
-
115
-
-
-
64,321
(39,514
)
24,807
(35
)
(35
)
-
-
115
(2,721
)
26,270
2,312
28,582
22,201
(35
)
22,166
368
538
(448
)
-
-
-
368
538
(448
)
(550
)
302
(498
)
-
-
-
(550
)
302
(498
)
26,728
2,312
29,040
21,455
(35
)
21,420
(8,595
)
(694
)
(9,289
)
(7,107
)
10
(7,097
)
18,133
1,618
19,751
14,348
(25
)
14,323
15,153
2,980
18,133
1,321
16,474
12,235
(52
)
12,183
297
3,277
2,113
27
2,140
1,618
19,751
14,348
(25
)
14,323
41.7 cts
41.7 cts
30.9 cts
30.9 cts
Earnings before BA adjustment are shown in note 9
The accompanying notes are an integral part of this consolidated income statement.
ANGLO-EASTERN PLANTATIONS PLC
21
Consolidated statement of recognised income and expenses
for the year ended 31 December 2006
Profit for the year
Unrealised surplus on revaluation of the estates
Profit/(loss) on exchange translation
Deferred tax on revaluation
Total recognised income and expense for the year
Attributable to:
- Equity holders of the parent
- Minority interests
Notes
23
23
23
23
23
2006
$000
19,751
6,016
11,718
(3,327)
2005
$000
14,323
3,112
)
(5,703
)
(176
34,158
11,556
28,002
6,156
9,736
1,820
34,158
11,556
The accompanying notes are an integral part of this consolidated statement of recognised income and expenses.
22
ANGLO-EASTERN PLANTATIONS PLC
Consolidated balance sheet
as at 31 December 2006
Non-current assets
Biological assets
Property, plant and equipment
Receivables
Current assets
Inventories
Investments
Tax receivables
Trade and other receivables
Cash and cash equivalents
Current liabilities
Bank loans and other financial liabilities
Trade and other payables
Tax liabilities
Net current assets
Non-current liabilities
Bank loans and other financial liabilities
Deferred tax liabilities
Retirement benefit net liabilities
Net assets
Equity
Share capital
Treasury shares
Share premium reserve
Share capital redemption reserve
Revaluation and exchange reserves
Retained earnings
Equity attributable to equity holders of the parent
Minority interests
Total equity
Notes
2006
$000
2005
$000
11
11
12
13
14
15
16
17
16
18
19
20
20
23
23
23
23
23
33,255
127,568
1,071
161,894
1,785
-
2,684
1,918
17,246
23,633
(2,167
)
(5,308
)
(3,235
)
(10,710
)
12,923
(5,454
)
(21,152
)
(834
)
147,377
15,495
(1,387
)
23,904
1,087
2,407
80,450
121,956
25,421
147,377
26,975
102,543
1,071
130,589
2,499
259
1,106
2,003
11,194
17,061
)
(2,103
)
(3,487
)
(2,594
)
(8,184
8,877
(3,940
)
(16,941
)
(602
)
117,983
15,481
)
(1,387
23,868
1,087
)
(9,121
67,536
97,464
20,519
117,983
The financial statements were approved by the board of directors and authorised for issue on 3 April 2007 and were
signed on its behalf by
R O B Barnes
The accompanying notes are an integral part of this consolidated balance sheet.
ANGLO-EASTERN PLANTATIONS PLC
23
Consolidated cash flow statement
for the year ended 31 December 2006
Operating profit
Adjustments for:
BA adjustment
Net loss/(profit) on disposal of current and fixed asset investments
Depreciation
Share-based remuneration expense
Retirement benefit provisions
Foreign exchange
Operating cash flow before changes in working capital
Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables
Increase in trade and other payables
Cash inflow from operations
Interest paid
Overseas tax paid
Net cash flow from operations
Investing activities
Property, plant and equipment
- purchase
- sale
Interest received
Net cash used in investing activities
2006
$000
28,582
(2,312
)
158
3,551
20
232
715
30,946
714
85
1,007
32,752
(541
)
(9,321
)
22,890
2005
$000
22,166
35
)
(77
3,243
14
)
(491
)
(994
23,896
)
(964
)
(258
542
23,216
(600
)
(9,809
)
12,807
(15,370
)
(7,596
)
119
538
116
302
(14,713
)
(7,178
)
24
ANGLO-EASTERN PLANTATIONS PLC
Consolidated cash flow statement (continued)
for the year ended 31 December 2006
Financing activities
Dividends paid by parent company
Share options exercised
Repayment of existing long term loans
Drawdown of new long term loan
Finance lease (repayment)/drawdown
Dividends paid to minority shareholders
Repayment by minority shareholders
Subscriptions to subsidiary share capital by minority shareholders
Receipt from sale of portfolio investment
Net cash used in financing activities
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents less overdrafts
At beginning of year
At end of year
Comprising:
Cash at end of year
Overdraft at end of year
2006
$000
(3,560
)
50
(1,645
)
3,200
(11
)
(460
)
-
-
267
(2,159
)
6,018
2005
$000
)
(3,158
100
)
(5,531
-
74
)
(2,587
693
448
227
)
(9,734
)
(4,105
10,805
16,823
14,910
10,805
17,246
(423
)
16,823
11,194
)
(389
10,805
ANGLO-EASTERN PLANTATIONS PLC
25
Notes to the financial statements
1 Accounting policies
Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS and IRFIC
interpretations) issued by the International Accounting Standards Board (IASB) as adopted by the EU and with those parts of the
Companies Act 1985 applicable to companies preparing their accounts under IFRS. The principal accounting policies are set out
below. The policies have been applied consistently to all the years presented.
The group has elected not to adopt IFRS 7 Financial Instruments early. IFRS 7 will apply to the group for accounting periods beginning
on or after 1 January 2007 and contains provisions relating to the disclosure of the significance of financial instruments, the risk
exposures arising therefrom and the approach taken in managing those risks, replacing the existing provisions of IAS 32.
IFRS 8 Operating Segments will apply to the group for accounting periods beginning on or after 1 January 2009 and will replace the
existing provisions of IAS 14. The board will monitor the effect of the standard on the future disclosure of segment information by the
group.
IAS 23 Borrowing Costs will apply to the group for accounting periods beginning on or after 1 January 2009 and will require interest to
be capitalised for assets that take a substantial period of time to get ready for use or sale. The board will monitor the effect of the
standard on future disclosures.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the company and entities controlled by the company (its
subsidiaries) made up to 31 December each year. Control is achieved where the company has the power to govern the financial and
operating policies of an investee entity so as to obtain benefits from its activities.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the
consolidated balance sheet, the acquiree’s identifiable assets and contingent liabilities are initially recognised at their fair values at the
acquisition date.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective
date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with
those used by the group.
All intergroup transactions, balances, income and expenses are eliminated on consolidation.
Foreign currency
The individual financial statements of each subsidiary are presented in the currency of the country in which it operates (its functional
currency) with the exception of the company and its UK subsidiaries which are presented in US dollars. The presentation currency for
the consolidated financial statements is also US dollars, chosen because the price of the bulk of the group’s products are ultimately
denominated in dollars.
On consolidation, the results of overseas operations are translated into US dollars at average exchange rates for the year unless
exchange rates fluctuate significantly. All assets and liabilities of overseas operations are translated at the rate ruling at the balance
sheet date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations
at average rate are recognised directly in equity (the “foreign exchange reserve”). Exchange differences recognised in the income
statement of group entities’ separate financial statements on the translation of long-term monetary items forming part of the group’s net
investment in the overseas operation concerned are reclassified to the foreign exchange reserve if the item is denominated in the
presentational currency of the group or of the overseas operation concerned.
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that
operation up to the date of disposal are transferred to the income statement as part of the profit or loss on disposal.
All other exchange profits or losses are credited or charged to the income statement.
Revenue recognition
Revenue includes
- amounts receivable for produce provided in the normal course of business, net of sales related taxes, including export taxes;
- amounts received for sales of palm kernel shell, rubber wood and other income of an operating nature.
Sales of CPO, palm kernel and cocoa are recognised when contracts have been signed and when payment in full has been received
which is shortly after signature of contract. Sales of rubber are recognised on signature of sales contract.
Share based payments
In accordance with the transitional provisions, IFRS 2 has been applied to all share options granted after 7 November 2002 unvested
at 1 January 2005.
The resulting outstanding share options are measured at fair value (excluding the effect of non market-based vesting conditions) at the
date of grant. This fair value is expensed on a straight-line basis over the vesting period, based on the group’s estimate of shares that
will eventually vest and adjusted for the effect of non market-based vesting conditions.
26
ANGLO-EASTERN PLANTATIONS PLC
Notes to the financial statements
1
Accounting policies - continued
Share based payments - continued
Fair value is measured by use of a binominal model. The expected life used in the model has been adjusted, based on management’s
best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
Provided that all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are
satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
Interest capitalisation
Interest on third party 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.
Tax
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.
Dividends
Equity dividends are recognised when they become legally payable. The company pays only one dividend each year as a final dividend
which becomes legally payable when approved by the shareholders at the next following annual general meeting.
Biological assets, property, plant and equipment
Estates, which comprise biological assets, property, plant and equipment, are shown at fair values in use, which are calculated
internally every year and reviewed by an external valuer every five years. Value in use is calculated as the 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 of property, plant and equipment 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 income statement.
On the disposal or recognition of a provision for impairment of a revalued estate, any related balance remaining in the revaluation and
exchange reserve is transferred to retained earnings as a movement on reserves.
Oil mills, which are part of property, plant and equipment are shown 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 5% per annum. The Malaysian leasehold land is depreciated over the remaining term of the
lease. Mature plantations in Malaysia are depreciated at 5% per annum.
Within the estate valuations described above the value of biological assets is estimated separately and, as required by IAS 41, the
movement in valuation surplus of biological assets is charged or credited to the income statment for the relevant period (BA
adjustment).
Leased assets
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 income statement to produce a constant rate
of charge on the balance of capital repayments outstanding. There are no operating leases.
Impairment
Impairment tests on tangible assets are undertaken annually on 31 December. Where the carrying value of an asset exceeds its
recoverable amount (i.e. the higher of value in use or fair value, less costs to sell), the asset is written down accordingly.
Impairment charges are included in the administrative expenses line item in the income statement, except to the extent they reverse
gains previously recognised in the statement of recognised income and expenses.
Inventories
Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost comprises all costs of
purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
Weighted average cost is used to determine the cost of ordinarily interchangeable items.
All produce inventories are already processed and therefore the requirement under IAS 41 to value agricultural produce at market
value, does not apply.
Trade receivables
Trade receivables are carried at cost less any provision for impairment.
Current asset investment
In the case of the group, the only investments are in shares listed on a recognised stock exchange and available for sale. These shares
are carried at market value and changes in market value are recognised in the income statement.
Bank borrowings
Interest bearing bank loans and overdrafts are recorded at the proceeds received. Finance charges are accounted for on an accruals
basis and charged in the income statement, unless capitalised according to the policy as set out under Interest capitalisation above.
ANGLO-EASTERN PLANTATIONS PLC
27
Notes to the financial statements
1
Accounting policies - continued
Trade and other payables
Trade and other payables are shown at fair value at recognition.
Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs from
its tax base.
Recognition of deferred tax assets is restricted to those instances where it is possible that taxable profit will be available against which
the difference can be utilised. Within these parameters, deferred tax is recognised on temporary differences arising on revalued
properties.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, such
as revaluations, in which case the deferred tax is also dealt with in equity.
Retirement benefits
Contributions to defined contribution pension schemes are charged to the income statement in the year to which they relate.
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 income statement 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.
Treasury shares
Consideration paid or received for the purchase or sale of the company’s own shares for holding in treasury is recognised directly in
equity, where the cost is presented as the treasury share reserve. Any excess of the consideration received on the sale of treasury
shares over 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.
Significant accounting estimates and judgements
The preparation of the group financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the
reported assets and liabilities and reported revenue and expenses. Actual results could differ from those estimates and accordingly
they are reviewed on an ongoing basis. The main areas in which estimates are used are:
fair value of biological assets, property, plant and equipment; deferred tax; retirement benefits. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods. Assumptions regarding the valuation of biological assets, property, plant
and equipment are set out in note 11. The group’s policy with regard to impairment of such assets is set out above.
2 Revenue
Sales of produce
Other operating income
3 Other income
Income from current asset investments
Profit on disposal of current asset investments
4 Finance costs
Interest payable on:
Development loans - (note 16)
Overdraft - (note 16)
Finance leases
Interest capitalised on loans related to field development and construction in progress
2006
$000
78,863
231
79,094
2005
$000
64,186
135
64,321
2006
$000
5
8
13
2006
$000
478
57
6
)
(93
448
2005
$000
79
36
115
2005
$000
576
20
4
)
(102
498
28
ANGLO-EASTERN PLANTATIONS PLC
Notes to the financial statements
5 Profit before tax
Profit before tax is stated after charging
Depreciation (including $41,000 (2005 – $25,000) in respect of leased assets)
Staff costs (note 7)
Auditors’ remuneration - audit (company $25,000 (2005 – $25,000)
- other advisory services
6 Segment information
2006
Revenue
Profit/(loss) before tax and BA movement
BA movement
Profit/(loss) before tax
Assets
(Liabilities ex tax)
Net assets ex tax
Tax (liabilities)/assets
Deferred tax (liability)/asset
Net assets
Capital expenditure
Depreciation
North
Sumatra
$000
42,768
17,919
1,161
19,080
75,900
(2,628
73,272
589
(13,711
60,150
)
)
Bengkulu
$000
28,829
8,955
175
9,130
60,224
(1,591
58,633
(1,228
(5,679
51,726
)
)
)
Riau
$000
3,857
1,071
1,013
2,084
23,472
(7,712
15,760
570
(3,154
13,176
)
)
Total
Indonesia
$000
76,454
27,945
2,349
30,294
159,596
(11,931
)
147,665
(69
)
(22,544
)
125,052
5,374
(1,304
)
4,714
(1,190
)
5,147
(209
)
15,235
(2,703
)
2005
$000
$000
$000
$000
Revenue
Profit/(loss) before tax and BA movement
BA movement
Profit/(loss) before tax
Assets
(Liabilities ex tax)
Net assets ex tax
Tax (liabilities)/assets
Deferred tax (liability)/asset
Net assets
Capital expenditure
Depreciation
34,889
16,720
)
(17
16,703
53,016
)
(1,822
51,194
)
(264
)
(11,640
39,290
2,536
)
(1,152
24,632
7,263
(519
6,774
)
53,049
(1,261
51,788
(820
(5,248
45,720
)
)
)
3,937
(1,096
)
1,975
)
(937
506
)
(431
12,306
)
(4,944
7,362
4
)
(1,202
6,164
61,496
23,046
)
(30
23,016
118,371
(8,027
110,344
(1,080
(18,090
91,174
)
)
)
2006
$000
3,551
10,772
110
-
UK
$000
2
(1,386
)
-
(1,386
)
2,832
(613
)
2,219
(7
)
-
2,212
2005
$000
3,243
7,559
120
-
Total
$000
79,094
26,728
2,312
29,040
182,843
(13,763
)
169,080
(551
)
(21,152
)
147,377
-
-
15,463
3,551
$000
-
)
(988
-
)
(988
8,755
)
(534
8,221
6
-
8,226
$000
64,321
21,455
)
(35
21,420
146,545
)
(10,133
136,412
)
(1,488
)
(16,940
117,983
Malaysia
$000
3,638
169
(37
132
)
)
)
20,415
(1,219
19,196
(475
1,392
20,113
228
(848
)
$000
2,825
(603
)
(5
)
)
(608
19,419
)
(1,572
17,847
)
(414
1,150
18,583
861
)
(176
7,334
(2,424
)
363
)
(819
-
-
7,697
)
(3,243
Turnover
Profit/(loss) before tax
Secondary reporting format by crop:
By activity:
Oil palm
Rubber
Cocoa
Gross profit
BA movement
Administration expenses
Unallocated
assets/income/(expenses)
Interest
ANGLO-EASTERN PLANTATIONS PLC
Net assets
2006
$000
2005
$000
129,962
2,357
-
106,434
2,254
72
-
-
-
-
2006
$000
76,862
2,186
46
-
-
2005
$000
62,798
1,331
192
-
-
15,058
-
147,377
9,223
-
117,983
-
-
79,094
-
-
64,321
2006
$000
27,557
1,725
(277
)
29,005
2,312
(2,748
)
381
90
29,040
2005
$000
23,796
999
12
24,807
)
(35
)
(2,721
)
(435
)
(196
21,420
29
Notes to the financial statements
7 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/(write back of provisions) (note 19)
Share based remuneration expense (equity settled)
2006
number
3,463
4,406
2006
$000
9,923
234
595
20
10,772
2005
number
3,466
4,008
2005
$000
7,583
189
(227
14
7,559
)
The information required by the Companies Act and the listing rules of the Financial Services Authority is contained in
the directors' report on remuneration on pages 18 to 19 of which the information on page 19 has been audited.
Directors emoluments
Pension contributions
2006
$000
545
34
579
Executive directors are considered to be the key management personnel; their remuneration is shown on page 19.
8 Tax
Foreign corporation tax - current year
Foreign withholding tax on remittances
Deferred tax adjustment - current year
2006
$000
7,794
590
905
9,289
2005
$000
527
31
558
2005
$000
6,509
539
49
7,097
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% (2005 – 30%)
Effects of:
Rate adjustment relating to overseas profits
Group accounting adjustments not subject to tax
Expenses not allowable for tax
Temporary differences
Losses not offsetable against fellow subsidiary profits
Utilisation of tax losses brought forward
Foreign corporation tax charge for year
Deferred tax adjustments (note 18)
Foreign withholding tax
Total tax charge for year
2006
$000
29,040
2005
$000
21,420
8,712
6,426
)
(13
)
(785
150
)
(46
99
)
(323
7,794
905
590
9,289
)
)
)
)
(13
(176
102
(219
702
(313
6,509
49
539
7,097
30
ANGLO-EASTERN PLANTATIONS PLC
Notes to the financial statements
9 Earnings per ordinary share (EPS)
Profit for the year attributable to equity holders of the parent company before BA adjustment
Net BA adjustment
Earnings used in basic and diluted EPS
Weighted average number of shares in issue in year
- used in basic EPS
- dilutive effect of outstanding share options
- used in diluted EPS
Basic EPS before BA adjustment
Basic EPS
There is no significant difference between basic and diluted EPS.
2006
$000
15,153
1,321
16,474
Number
‘000
39,478
55
39,533
2005
$000
12,235
(52)
12,183
Number
‘000
39,411
50
39,461
38.3cts
31.0cts
41.7cts
30.9cts
10 Dividends
Paid during the year
Final dividend of 8.80 cts for the year ended 31 December 2005 (2004 – 8.00 cts)
2006
$000
3,560
2005
$000
3,158
Proposed final dividend of 10.8 cts for the year ended 31 December 2006 (2005 – 8.80 cts)
4,265
3,473
The proposed dividend for 2006 is subject to shareholder approval at the forthcoming annual general meeting and has not been
included as a liability in these financial statements.
11 Biological assets, property, plant and equipment
Cost or valuation
At 1 January 2005
Exchange translations
Revaluations
Additions
Disposals
At 31 December 2005
Exchange translations
Revaluations
Additions
Disposals
At 31 December 2006
Non-biological
plantation assets
$000
Total property
plant and
equipment
$000
Mills
$'000
Biological
assets
$000
Total
$000
90,037
)
(4,063
451
5,148
)
(28
91,545
12,852
)
(704
-
1,566
)
(106
13,608
7,959
3,930
7,844
(272
111,006
)
1,218
-
5,453
(92
20,187
)
102,889
(4,767
451
6,714
(134
105,153
)
)
9,177
3,930
13,297
(364
131,193
)
)
26,558
(1,193
627
983
-
26,975
129,447
(5,960
1,078
7,697
(134
132,128
)
)
2,341
1,773
2,166
-
33,255
11,518
5,703
15,463
(364
164,448
)
ANGLO-EASTERN PLANTATIONS PLC
31
Notes to the financial statements
11
Biological assets, property, plant and equipment - continued
Accumulated depreciation and impairment
At 1 January 2005
Exchange translations
Revaluations
Charge for the year
Disposals
At 31 December 2005
Exchange translations
Revaluations
Charge for the year
Disposals
At 31 December 2006
Carrying amount
At 31 December 2005
At 31 December 2006
Non-biological
plantation assets
$000
-
-
2,065
(2,065
-
-
)
-
2,163
(2,163
-
-
)
Total property
plant and
equipment
$000
Biological
assets
$000
(2,145
123
2,065
(2,712
59
(2,610
(246
2,163
(3,011
79
(3,625
)
)
)
)
)
)
-
-
531
)
(531
-
-
-
540
)
(540
-
-
Mills
$'000
(2,145
123
-
(647
59
(2,610
(246
-
(848
79
(3,625
)
)
)
)
)
)
Total
$000
(2,145
123
2,596
(3,243
59
(2,610
(246
2,703
(3,551
79
(3,625
)
)
)
)
)
)
91,545
10,998
102,543
26,975
129,518
111,006
16,562
127,568
33,255
160,823
The directors valued the estates (comprising biological assets, non-biological plantation assets, plantation infrastructure and oil
mills) at 31 December 2006 and 2005 at the higher of net realisable value and value in use. These values were reviewed at
December 2006 by PT Nagadi Ekasakti, Jakarta based consultants, who are familiar with the properties and the necessary
assumptions underlying the calculations; principal among these were: an assumed CPO selling price of $440/mt (cif Rotterdam)
(2005 - $400/mt) and a discount rate of 12% (2005 - 15%). Biological assets are estimated as a proportion of these calculations.
The Indonesian estates have been included at values in use. The change in assumptions reflects the rising price of and
improved outlook for CPO, as well as increasing agricultural property values and replacement costs and falling interest rates in
Indonesia. If the Indonesian estates had been valued at December 2006 using an assumed CPO price of $400/mt and a
discount rate of 15% the total carrying value of biological assets, property, plant and equipment would have been $111,770,000.
The Malaysian estates were professionally valued by PPC International, Kuala Lumpur based valuers, in December 2006 on an
open market existing use basis and are included at this valuation less potential sale costs.
The estates include $93,000 (2005 - $102,000) of interest and $1,491,000 (2005 - $1,403,000) of overheads capitalised during
the year in respect of expenditure on estates under development during 2006.
Original cost and depreciation at historical rates of exchange of the estates at 31 December 2006 :
Original cost
Cumulative depreciation based on original cost
Estates
$000
152,144
(30,826
121,318
)
Mills
$000
27,306
)
(8,452
18,854
Total
$000
179,450
(39,278
140,172
)
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 2026 with rights of renewal thereafter for periods
from 35 to 60 years. In the case of estates in Bengkulu land titles were issued between 1993 and 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.
12
Receivables: non-current
Due from minority shareholders
2006
$000
1,071
2005
$000
1,071
The minority shareholders in PT Mitra Puding Mas and PT Alno Agro Utama have acquired their interests on deferred terms.
The resulting debts will be settled from dividends arising from these projects over the next five years.
The book value of the amount due from minority shareholders approximates its fair value.
32
ANGLO-EASTERN PLANTATIONS PLC
Notes to the financial statements
13
Inventories
Estate and mill consumables
Processed produce for sale
14 Current asset investments
2006
$000
1,309
476
1,785
2005
$000
1,847
652
2,499
This represents a short term investment listed on the Kuala Lumpur Stock Exchange, shown at market value but sold during
2006. Cost (2005 - $309,194).
15 Trade and other receivables
Trade debtors
Other debtors
Prepayments and accrued income
The carrying amount of trade and other receivables approximates to their fair value.
16
Bank loans and other financial liabilities
Bank overdraft (a)
Long term development loan (b)
Long term development loan (c)
Long term development loan (d)
Total bank loans
Finance lease obligations (e)
Total bank loans and lease obligations
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
In more than five years but not more than six years
under
one year
$000
423
1,250
-
444
2,117
50
2,167
2006
more than
one year
$000
-
2,188
3,200
-
5,388
66
5,454
1,677
3,377
400
5,454
2006
$000
644
1,038
236
1,918
2005
$000
368
1,413
222
2,003
2005
under
one year
$000
389
1,250
-
425
2,064
39
2,103
more than
one year
$000
-
3,437
-
415
3,852
88
3,940
1,704
2,236
-
3,940
(a)
(b)
(c)
(d)
(e)
The bank overdraft is secured by a fixed and floating charge over the land titles and assets of the parent company’s Malay-
sian operating subsidiary, Anglo-Eastern Plantations (M) Sdn Bhd (“AEP Malaysia”) as well as over the parent company’s
shareholding in AEP Malaysia. The parent company has guaranteed the overdraft. Interest is at 2% above Malaysian Bank
Lending Rate or about 8.7% (2005 - 8.0%).
The long term development loan, which is part of an original 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. The parent company has guaranteed
the loan. Interest was at 3% under the US dollar Indonesian prime rate or about 8.0% through 2006 (2005 - 7.25%). The
loan is repayable in sixteen quarterly instalments of $312,500 from October 2005 to July 2009.
The long term development loan of $3,200,000, to part finance construction of a mill, was made in September 2006 to, and
secured by a fixed and floating charge on the land titles and other assets of, PT Bina Pitri Jaya. Interest and security is on
the same terms as for the loan under (b) above. The loan is repayable in sixteen quarterly instalments of $200,000 from
July 2008 to April 2012.
The long term development loan is made to AEP Malaysia on the same interest and security terms described for the
overdraft in note (a) above. The loan is part of an original facility of $2,266,000 and is to be fully repaid in 2007.
Finance lease obligations relate to vehicles and machinery, on which the obligations are secured, in the Malaysian subsid-
iaries (2005 – Malaysia). Interest is effectively at 3.0%. Payments complete by the end of 2010.
ANGLO-EASTERN PLANTATIONS PLC
33
Notes to the financial statements
17 Trade and other payables
Trade creditors
Other creditors
Accruals
18 Deferred tax liabilities
Year end (liability) relates to
Revaluation surplus
Unutilised tax losses
Other temporary differences
Movement:
At beginning of year (liability)
(Charge) to
- income statement
- equity: revaluation and exchange reserve
Exchange adjustment
At end of year (liability)
Details of movement in 2006
Revaluation surplus
Accelerated capital allowances
Employee pension liabilities
Other temporary and deductible differences
Available losses
Details of movement in 2005
Revaluation surplus
Accelerated capital allowances
Employee pension liabilities
Other temporary and deductible differences
Available losses
A deferred tax asset has not been recognised for the following items
Unutilised tax losses
19 Retirement benefits
2006
$000
1,737
2,200
1,371
5,308
2005
$000
1,451
939
1,097
3,487
2006
$000
2005
$000
(21,244
330
(238
(21,152
)
)
)
(17,223
)
605
(323
)
(16,941
)
(16,941
)
)
(16,698
(905
(3,327
21
(21,152
)
)
)
)
(49
)
(176
)
(18
)
(16,941
(Charged)/
credited to
income
2006
$000
(694
(7
82
38
(324
(905
(Charged)/
credited to
income
2005
$000
10
(4
(18
(35
(2
(49
)
)
)
)
)
)
)
)
)
(Charged)/
credited to
reserves
2006
$000
(3,327
-
-
-
-
(3,327
)
)
(Charged)/
credited to
reserves
2005
$000
(176
)
-
-
-
-
(176
)
2006
$000
2005
$000
15,186
14,691
(Liability)
2006
$000
(21,244
)
(39
)
158
(357
)
330
(21,152
)
(Liability)
2005
$000
)
(17,223
)
(29
69
)
(363
605
)
(16,941
The group maintains a defined funded pension scheme for some 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
2006
10%
10%
12%
2005
10%
10%
12%
2004
10%
10%
12%
Any excess of the actuarial liability over the fund assets is provided and charged to the income statement.
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 and charged in the income
statement based on individual employees’ service up to the end of the financial year.
34
ANGLO-EASTERN PLANTATIONS PLC
Notes to the financial statements
19 Retirement benefits - continued
Reconciliation to balance sheet
Scheme assets (all cash)
Scheme (liabilities)
Net assets/(liabilities)
Reconciliation of scheme assets
At beginning of year
Exchange gain/(loss)
Contributions by group
Income
Benefits paid
Expenses
At end of year
Reconciliation of scheme (liabilities)
At beginning of year
Exchange (loss)/gain
Current service (cost)/write back
Benefits paid
At end of year
Defined benefit funded scheme
Defined benefit unfunded scheme
Defined contribution schemes
20 Share capital
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
Market value of treasury shares
Beginning of year (245p/share)
End of year (312.5p/share)
Defined
benefit
- funded
schemes
2006
$000
Defined
benefit –
unfunded
schemes
2006
$000
Total
2006
$000
Defined
benefit
- funded
schemes
2005
$000
Defined
benefit
- unfunded
schemes
2005
$000
Total
2005
$000
1,032
(906
126
)
789
73
151
65
(42
(4
1,032
)
)
(748
(67
(134
43
(906
)
)
)
)
-
(960
(960
)
)
1,032
(1,866
(834
)
)
-
-
-
-
-
-
-
(643
(31
(477
191
(960
)
)
)
)
789
73
151
65
(42
(4
1,032
)
)
(1,391
(98
(611
234
(1,866
)
)
)
)
789
(748
41
)
669
(38
178
50
(42
(28
789
(865
46
29
42
(748
)
)
)
)
)
-
(643
)
)
(643
789
(1,391
)
(602
)
-
-
-
-
-
-
-
669
)
(38
178
50
)
(42
)
(28
789
)
(907
24
200
40
)
(643
)
(1,772
70
229
82
)
(1,391
2006
$000
72
475
48
595
2005
$000
(50
(225
48
(227
)
)
)
Authorised
Number
60,000,000
-
60,000,000
Issued and
fully paid
Number
39,928,372
29,900
39,958,272
Authorised
£000
Issued and
fully paid
£000
Authorised
$000
Issued and
fully paid
$000
15,000
-
15,000
9,982
7
9,989
23,865
-
23,865
15,481
14
15,495
Number
468,000
-
468,000
$000
(1,387
-
(1,387
)
)
1,972
2,867
The charge (credit) for the year for retirement benefit comprises:
The above treasury shares were purchased in December 2004 at 153p/share.
ANGLO-EASTERN PLANTATIONS PLC
35
Notes to the financial statements
21 Share based payment
Options have been granted under the company's 1994 Executive Share Option Scheme and Overseas Share Option Scheme
and the 2005 Unapproved Executive Share Option Scheme (all of which schemes are equity settled) to subscribe for ordinary
shares of 25p each of the company as follows:
Date of grant
16.10.00
16.04.02
21.05.03
13.05.04
19.05.06
09.10.06
Price per share
38.0p
44.7p
108.5p
181.2p
234.0p
323.25p
Period of option
16.10.03 - 15.10.10
30.04.05 - 29.04.12
21.05.06 - 29.05.13
13.05.07 - 12.05.14
19.05.09 - 18.05.16
09.10.09 - 08.10.16
Exercisable
1 Jan 05
5,400
159,700
42,800
30,000
-
-
237,900
5,400
)
(Lapsed
-
)
(2,400
-
-
-
-
)
(2,400
Exercised
(5,400
)
)
(119,200
-
-
-
-
)
(124,600
1 Jan 06
-
38,100
42,800
30,000
-
-
110,900
38,100
Granted
-
-
-
-
51,200
15,500
66,700
Exercised
-
(7,500
)
)
(22,400
-
-
-
)
(29,900
31 Dec 06
-
30,600
20,400
30,000
51.200
15,500
147,700
51,000
Options granted to directors, included above, are shown on page 19.
The weighted average contracted life of options outstanding at the end of the year was 8 years (2005 – 7 years) and the
weighted average exercise price was 176p (2005 – 106p).
The weighted average share price of options exercised during the year was 92p (2005 – 44p).
66,700 share options were granted in 2006 (2005 – nil). The aggregate of the estimated fair value of options granted in 2006
was $48,000 The assumptions applied in the binomial model used to calculate this fair value were:
Weighted average share price at grant date
Weighted average exercise price
Weighted average contracted life
Weighted average expected period to exercise
Expected volatility
Risk free rate
Expected dividend yield
256p
255p
10 years
3.5 years
25%
5%
2%
There are no vesting conditions other than that option holders may exercise their options at any time within three and ten years
after grant, provided they remain employees of the group throughout that period.
22 Ultimate controlling shareholder and related party transaction
At 31 December 2006 Genton International Limited, a company registered in Hong Kong, held 20,247,814 (2005 – 20,247,814)
shares of the company representing 50.7% (2005 – 50.7%) of the issued share capital of the company. Madam 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 (2005 - $8,000), small plantations owned by compa-
nies controlled by Madam Lim. This contract is on an arm's length basis. At 31 December 2006 the amount due under this
contract was $2,200 (2005 - $700).
36
ANGLO-EASTERN PLANTATIONS PLC
Notes to the financial statements
6
5
5
,
1
1
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37
Notes to the financial statements
23 Reserves and minority interests - continued
Nature and purpose of each reserve:
Share premium
Amount susbscribed for share capital in excess of nominal value.
Capital redemption
Amounts transferred from share capital on redemption of issued shares.
Treasury shares
Weighted average cost of own shares held in treasury.
Revaluation
Gains/loses arising on the revaluation of the group's estates.
Foreign exchange
Gains/losses arising on translating the net assets of overseas operations into dollars.
Retained earnings
Cumulative net gains and losses recognised in the consolidated income statement.
24 Guarantees and other financial commitments
Capital commitments at 31 December
Contracted but not provided - normal estate operations
- new/extended oil mills
Authorised but not contracted - normal estate operations
- new/extended oil mills
- land acquisition
2006
$000
306
710
7,336
1,520
476
2005
$000
78
4,005
3,746
2,343
950
25 Finance leases
The group leases a few tractors and cars, included under non-biological plantation assets at a net carrying value $137,000
(2005 - $145,000). Such assets are classified as finance leases as the rental period amounts to the estimated useful economic
life of the assets concerned and the group has the right to purchase the assets outright at the end of the minimum lease term
by paying a nominal amount.
Future lease payments are due as follows:
Not later than one year
Later than one year and not later than five years
Not later than one year
Later than one year and not later than five years
The present value of future lease payments are analysed as:
Current liabilities
Non-current liabilities
Minimum
lease
payments
2006
$000
50
66
116
Minimum
lease
payments
2005
$000
39
88
127
Interest
2006
$000
8
14
22
Interest
2005
$000
3
18
21
2006
$000
42
52
94
Present
value
2006
$000
42
52
94
Present
value
2005
$000
36
70
106
2005
$000
36
70
106
38
ANGLO-EASTERN PLANTATIONS PLC
Notes to the financial statements
26 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 2006 the group had the following loans and facilities.
Malaysia: ringgit denominated
- overdraft
- long term loan
Indonesia: US dollar denominated
- long term loan
The total long term loan facilities of $7,082,000 are repayable as follows:
Borrowings
$000
Facilities
$000
Repayable
423
444
850
444
On demand
2007 (note 16)
6,638
6,638
2007 - 2012 (note 16)
2007
$000
1,694
2008
$000
1,650
2009
$000
1,738
2010
$000
800
2011
$000
800
2012
$000
400
The loans listed above are all at variable rates of interest as described in note 16.
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 12, on which amounts interest is due at 6% (2005 - 6%) (fixed)
but not accrued in the group accounts; these debtors are expected to be settled in about five years.
The interest rate profiles of the group’s financial liabilities at 31 December 2006 and 2005 were:
2006
Sterling
US dollar
Rupiah
Ringgit
Total
2005
Sterling
US dollar
Rupiah
Ringgit
Total
Total
$000
(156
(7,196
(7,921
(1,725
(16,998
)
)
)
)
)
$000
(162
(5,985
(4,988
(1,591
(12,726
)
)
)
)
)
Fixed rate
$000
-
-
-
(116
(116
)
)
Variable rate
$000
-
)
(6,638
-
(867
)
)
(7,505
Interest free
$000
(156
(558
(7,921
(742
(9,377
)
)
)
)
)
$000
-
-
-
(126
(126
)
)
$000
-
(5,528
)
-
(389
)
(5,917
)
$000
(162
(457
(4,988
(1,076
(6,683
)
)
)
)
)
All currencies – 2006
Fixed rate financial liabilities
Weighted average
interest rate
%
3
Weighted average
period on which
rate is fixed
Years
3
Interest free
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.
ANGLO-EASTERN PLANTATIONS PLC
39
Notes to the financial statements
26 Disclosure of financial instruments and other risks - continued
Value of estates 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. Estates 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 estate values into US dollars are offset against
revaluation surpluses.
The exchange profits or losses arising in overseas subsidiaries holding foreign currency balances are credited or charged in the
group income statement.
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 income statement. 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.
Gains and losses arising from structural currency exposures are taken to the revaluation and exchange reserve and are
therefore recognised in the movement in reserves.
The table below shows the net monetary assets and liabilities of the group at 31 December 2006 and 2005 that were not denomi-
nated in the operating (or “functional”) currency of the operating unit involved.
Functional currency of group operation
2006
Indonesian rupiah
US dollar
Total
2005
Indonesian rupiah
US dollar
Total
Net foreign currency assets/(liabilities)
US dollar
$000
Ringgit
$000
Sterling
$000
(6,626
-
(6,626
)
)
$000
(3,139
-
(3,139
)
)
-
)
(31
)
(31
$000
-
532
532
Total
$000
)
(6,626
)
(113
)
(6,739
-
(82
(82
)
)
$000
$000
-
(82
(82
)
)
)
(3,139
450
)
(2,689
Credit risks
CPO and kernel, amounting to 97% of group revenue are not despatched unless payment has been received in advance.
Remaining sales are on credit for about 30 days.
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 2006 and 2005.
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 6.
40
ANGLO-EASTERN PLANTATIONS PLC
Notes to the financial statements
27 Subsidiary companies
The principal subsidiaries of the company all of which have been included in these consolidated financial statements are as
follows:
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
PT Hijau Pryan Perdana
PT Mitra Puding Mas
PT Musam Utjing
PT Simpang Ampat
PT Tasik Raja
PT United Kingdom Indonesia Plantations
Percentage holding of
ordinary shares
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 16.
ANGLO-EASTERN PLANTATIONS PLC
41
Company balance sheet
(UK GAAP)
as at 31 December 2006
Fixed assets
Investment in subsidiaries
Current assets
Debtors
Investments
Cash and cash equivalents
Current liabilities
Other creditors
Net current assets
Net assets
Equity
Share capital
Treasury
Share premium reserve
Share capital redemption reserve
Exchange reserve
Retained earnings
Shareholders' funds
Notes
2006
$000
2005
$000
2
3
4
6
7
7
8
8
8
8
50,949
50,949
49,810
49,810
45
-
1,720
1,765
31
259
1,360
1,650
(187
)
(192
)
1,578
52,527
15,495
(1,387
)
23,904
1,087
3,872
9,556
1,458
51,268
15,481
(1,387
)
23,868
1,087
3,872
8,347
52,527
51,268
The financial statements were approved by the board of directors and authorised for issue on 3 April 2007 and were
signed on its behalf by R O B Barnes
The accompanying notes are an integral part of this balance sheet.
42
ANGLO-EASTERN PLANTATIONS PLC
Notes to the company financial statements
1 Accounting policies
Basis of accounting
The separate financial statements of the company are presented as required by the Companies Act 1985. They have been prepared
under the historical costs convention and in accordance with applicable United Kingdom Accounting Standards and law.
The principal accounting policies are summarised below.
Foreign currency
The functional currency of the company is US dollars, chosen because the price of the bulk of the group’s products are ultimately
denominated in dollars. Transactions in sterling are translated to US dollars at the actual exchange rate and exchange losses
recognised in profit and loss. Sterling denominated assets and liabilities are converted to US dollars at the rate ruling at the balance
sheet date.
Dividends
In accordance with FRS21 equity dividends are recognised when they become legally payable.
Share based payments
As set out under group accounting policies on page 26.
Current asset investment
The company's investments are in shares listed on a recognised stock exchange and available for sale. These shares are carried at
the lower of cost or market value and, where relevant, changes in market value are recognised in the income statement.
Deferred tax
A deferred tax asset has not been set up in relation to brought forward tax losses because it is not certain those losses can be utilised.
Treasury shares
Consideration paid or received for the purchase or sale of the company’s own shares for holding in treasury is recognised directly in
equity, where the cost is presented as the treasury share reserve. Any excess of the consideration received on the sale of treasury
shares over 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.
Financial guarantee contracts
The company has not adopted amendments to FRS26 in relation to financial guarantee contracts which applies for periods
commencing on or after 1 January 2006. Where the company enters into financial guarantee contracts and guarantees the indebted-
ness of other companies within the group, the company considers these to be insurance arrangements and accounts for them as such.
In this respect, the company treats the guarantee contract as a contingent liability until such time that it becomes probable that the
company will be required to make a payment under the guarantee. It has no impact on the financial statements for the period commenc-
ing 1 January 2006.
2 Investments in subsidiaries
At beginning of year
Movements in year
At end of year
Investments in
subsidiary
undertakings
$000
7,745
-
7,745
Loans to
subsidiary
undertakings
$000
42,065
1,139
43,204
Total
$000
49,810
1,139
50,949
Loans to and from subsidiary companies do not have fixed repayment terms and are repayable on demand. In practice they are
effectively long term in nature and therefore classified with investments in subsidiaries.
The principal subsidiaries of the company are listed in note 27 to the consolidated financial statements on page 41.
3 Debtors
Prepayments and accrued income
Other debtors
4 Current asset investments
2006
$000
41
4
45
2005
$000
26
5
31
This represents a short term investment listed on the Kuala Lumpur Stock Exchange, shown at market value but sold during
2006. Cost (2005 - $309,000).
5 Dividends
Paid during the year
Final dividend of 8.80cts for the year ended 31 December 2005 (2004 – 8.00cts)
Proposed final dividend of 10.8cts for the year ended 31 December 2006 (2005 – 8.80cts)
2006
$000
3,560
4,265
2005
$000
3,158
3,473
The proposed dividend for 2006 is subject to shareholder approval at the forthcoming annual general meeting and has not been
included as a liability in these financial statements.
ANGLO-EASTERN PLANTATIONS PLC
43
Notes to the company financial statements
6 Other creditors
Accruals
Other creditors
7 Share capital
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
Market value of treasury shares
Beginning of year (245p/share)
End of year (312.5p/share)
2006
$000
172
15
187
2005
$000
192
-
192
Authorised
Number
Issued and
fully paid
Number
60,000,000
-
60,000,000
39,928,372
29,900
39,958,272
Authorised
£000
15,000
-
15,000
Issued and
fully paid
£000
9,982
7
9,989
Authorised
$000
23,865
-
23,865
Number
468,000
-
468,000
Issued and
fully paid
$000
15,481
14
15,495
$000
)
(1,387
-
)
(1,387
1,972
2,867
The above treasury shares were purchased in December 2004 at 153p/share.
Details of share based payments are set out in note 21 to the consolidated financial statements on page 36.
8 Reserves
Company balance sheet
Beginning of year
Share options exercised
Profit for the year
Dividend paid
End of year
Share
premium
account
$000
23,868
36
-
-
23,904
Share
capital
redemption
$000
1,087
-
-
-
1,087
Exchange
reserve
$000
3,872
-
-
-
3,872
Profit and loss
account
(distributable)
$000
8,347
-
4,769
)
(3,560
9,556
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 $4,801,000 (2005 - $4,356,000) and profit for the year was
$4,769,000 (2005 – $4,319,000). Of the 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.
9 Employees' and directors' remuneration
Average numbers employed during the year - directors
- staff
Staff costs
Wages and salaries
Social security costs
Retirement benefit costs
Share based remuneration expense (equity settled)
2006
number
7
2
2006
$000
627
57
48
20
752
2005
number
7
2
2005
$000
637
57
45
14
753
The information required by the Companies Act and the listing rules of the Financial Services Authority is contained in the
directors' report on remuneration on pages 18 to 19 of which the information on page 19 has been audited.
Directors' emoluments
Pension contributions
2006
$000
545
34
579
2005
$000
527
31
558
10 Guarantees and other financial commitments
The company has provided guarantees for loans and overdrafts to subsidiaries totalling $7,505,000 (2005 - $5,916,000) as set
out in note 16 to the consolidated financial statements.
44
ANGLO-EASTERN PLANTATIONS PLC
Notice of annual general meeting
Notice is hereby given that the twenty-second Annual General Meeting of Anglo-Eastern Plantations Plc will
be held at the offices of Lovells, Atlantic House, Holborn Viaduct, London EC1A 2FG on 1 June 2007 at
11.30am for the following purposes:
As Ordinary Business
1 To receive and consider the company’s annual report for the year ended 31 December 2006.
2 To declare a dividend.
3 To approve the directors' remuneration report for the year ended 31 December 2006.
4 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 P E O'Connor
c) Mr Ho Soo Ching
d) Datuk Chin Poy-Wu
5 To re-appoint BDO Stoy Hayward LLP as auditors and to authorise the directors to fix their remuneration.
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 31 May
2012 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 31 August
2008 (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):
(c)
(d)
(i)
(ii)
in connection with a rights issue; and
up to an aggregate nominal amount of £499,478 otherwise than in connection with a rights
issue;
as if section 89 (1) of the Act did not apply to any such allotment;
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
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);
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
words and expressions defined in or for the purposes of part IV of the Act shall bear the same
meanings herein.
(ii)
(iii)
ANGLO-EASTERN PLANTATIONS PLC
45
Notice of annual general meeting
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 31
May 2012; 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 any time or times prior to 31 May 2012
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 8.
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 3,992,837
(representing 10% of the issued ordinary share capital);
(b)
the minimum price which may be paid for each ordinary share is 25p;
(c)
(d)
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
the authority hereby conferred shall expire on 31 August 2008 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.
By order of the board
R O B BARNES
Secretary
3 April 2007
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 11.30am on 30 May 2007 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 11.30am on 30 May 2007 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.
46
ANGLO-EASTERN PLANTATIONS PLC
Company addresses
Company advisers
Malaysian Office
8th Floor
Wisma Equity
150 Jalan Ampang
50450 Kuala Lumpur
Tel
:
60 (3) 2162 9808
Fax
:
60 (3) 2164 8922
Indonesian Office
PT United Kingdom Indonesia Plantations
Wisma HSBC
Jalan Diponegoro, Kav 11
Medan 20152
North Sumatra
Tel
:
62 (0) 61 452 8683
Fax
:
62 (0) 61 452 0029
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
Company website
www.angloeastern.co.uk
Menara Promenade
100 Jalan Tun Razak
50050 Kuala Lumpur
Registrars
Capita Registrars
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
West Yorkshire HD8 0LA
Solicitors
Lovells
Atlantic House
Holborn Viaduct
London EC1A 2FG