Contents
Financial Highlights
Chairman's Statement
Financial Record
Estate Areas
Location of Estates
Business Review
Directors' Report
Directors' Responsibilities
Directors
Statement on Corporate Governance
Directors' Remuneration Report
Auditors' Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
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
3
6
7
8
9
11
15
16
17
19
22
23
24
25
26
27
29
47
48
51
Form of Proxy and Attendance Card Separate Attachment
Company addresses, advisers and website
Inside Back Cover
Anglo-Eastern Plantations Plc, quoted on the London Stock Exchange, owns, operates and
develops plantations in Indonesia and Malaysia, amounting to some 123,000 hectares
producing mainly palm oil and some rubber.
2009
$ m
150.1
61.2
62.1
2008
$ m
174.7
76.5
77.9
94.11cts
94.99cts
5.0cts
*3.3p
103.0cts
105.1cts
5.0cts
3.0p
Financial Highlights
Revenue
Profit before tax
- before biological asset (BA) adjustment
- after BA adjustment
EPS before BA adjustment
EPS after BA adjustment
Dividend (cents)
Dividend (pence)
Note: * Based on exchange rate at 15 March 2010 of $1.5052/£
1 Annual Report 2009 | Anglo-Eastern Plantations Plc
Finan
ncial Hig
ghlights
Rev
venue ($'00
00)
200,0
000
180,0
000
160,0
000
140,0
000
120,0
000
100,0
000
80,0
000
60,0
000
40,0
000
20,0
000
0
45,00
00
40,00
00
35,00
00
30,00
00
25,00
00
20,00
00
15,00
00
10,00
00
5,00
00
0
Profit
Before Tax
x ($'000)
90,0
000
80,0
000
70,0
000
60,0
000
50,0
000
40,0
000
30,0
000
20,0
000
10,0
000
0
2005
2006
7
2007
2008
200
09
2005
2006
200
07
2008
2009
2
Profit
Share
t Attribute
holders ($
d to
$'000)
Basic E
Afte
Earnings P
er BA (U$,
Per Share
,cents)
120
0.0
100
0.0
80
0.0
60
0.0
40
0.0
20
0.0
0.0
0
2005
2006
2007
2008
200
09
2005
2006
200
07
2008
2009
Denomin
nated in US D
Dollar
2 Annual Repo
2
ort 2009 | Anglo-
Eastern Plantat
ions Plc
Chairman’s Statement
On behalf of the Board of Directors of Anglo-Eastern Plantations Plc, I am pleased to present to you the 2009 Annual
Report and Audited Financial Statements detailing the performance and operations of the Group and the Company
for the year ended 31 December 2009.
Performance
For the year ended 31 December 2009, revenue was $150.1 million compared to $174.7 million in 2008. This
generated a group operating profit for 2009, before biological asset (BA) adjustment of $59.0 million, 20% less than
in 2008. Estates fresh fruit bunch (FFB) output for 2009 was 9% above the previous year.
Profit before tax and after BA adjustment was $62.1 million, compared to $77.9 million in 2008. The BA adjustment
was a credit of $0.9 million, compared to a credit of $1.3 million in 2008, reflecting our estate valuations.
Earnings per share before BA adjustment decreased by 8.6% to 94.11 cts, compared to 103.0 cts in 2008.
The group’s balance sheet remains strong. The group continued to experience strong cash flow generation for 2009,
enabling it to have strong cash reserves and reduce its borrowings. As at 31 December 2009, the group had a cash
position of $63.8 million and lower borrowings of $27.0 million, giving it a net cash position of $36.8 million,
compared to $33.8 million in 2008.
During the year, we have repaid $8.6 million out of our existing borrowings of $35.6 million.
Corporate Development
In 2009, we succeeded in getting the crucial land conversion permit from the Indonesian Forestry Department in
Central Kalimantan project.
We hope to plant up to 5,000 hectares in Central Kalimantan 2010. We have set a target to plant up to 10,900
hectares for the group in 2010 and 10,000 hectares per year for the next five years. This means we shall be able to
more than double the current area of 45,000 hectares to 100,000 hectares by 2014. In 2010, we acquired PT
Kahayan with the initial “Izin Lokasi” area of 17,500 hectares.
The new Sumindo mill (45 MT/hour) is expected to be commissioned in the second quarter of 2010. In 2010,
Blankahan oil mill’s milling capacity shall be increased from the current 25 MT/hour to 40 MT/hour.
Directors
I am pleased to welcome the appointment of Drs. Kanaka Puradiredja as Independent Non-Executive Director, with
effect from 1 August 2009. Brief profiles of the directors are set out in page 16 of this Annual Report. He will be
submitting himself for re-appointment at the forthcoming annual general meeting.
Madam Lim Siew Kim, our non-executive director, will be submitting herself for re-election at the forthcoming annual
general meeting.
I will be submitting myself for re-appointment at the same annual general meeting.
3 Annual Report 2009 | Anglo-Eastern Plantations Plc
Chairman’s Statement
Corporate Social Responsibility
Corporate social responsibility (CSR) is an integral part of corporate self-regulation incorporated into our business
model. Our group embraces responsibility for the impact of its activities on the environment, consumers, employees,
communities, stakeholders and all other members of the public sphere. In engaging the social dimension of CSR, the
Group’s business has taken cognizance of the contribution and further enrichment of its employees while continuing
to make contributions to improve the well being of the surrounding community.
We are in the preliminary stage of moving towards the RSPO (Roundtable on Sustainable Palm Oil) standards.This
multinational multi-stakeholder organisation, founded by the World Wildlife Fund for Nature (“WWF”), is focused
upon delivering certified sustainable palm oil to the world market through one of the world’s most comprehensive
certification program for agricultural products. This initiative is focused on protecting and enhancing the principles of
people, planet and profit for the benefit of all. RSPO principles are clearly stated under the Statement on Corporate
Governance
Care For The Environment
As a group, we equally highlight the importance of creating awareness and implementation of good environmental
management practices throughout the organisation. The Group has been consistently practising good agricultural
practices such as zero burning, integrated pest management, land terracing and recycling of biomass and reducing
fossil fuel consumption.
Invest In People
Our employees are our major asset and here at Anglo-Eastern Plantations Plc, we value their trust and support. We
make it our responsibility to improve their quality of life as we always believe the right employee training,
development and education, at the right time, provides returns for the employer in increased productivity, knowledge,
loyalty, and contribution to the group
Outlook
Fresh Fruit Bunch (FFB) production as of February 2010 was lower by 8% against the same period in 2009. The
abnormal low cropping trend appears to be nationwide and mainly caused by adverse weather conditions compared
to the same period in 2009. It is too early to forecast whether the performance will be better for the rest of the year.
The CIF (Cost, Insurance, Freight) Rotterdam CPO (Crude Palm Oil) price opened the year 2009 at $495/mt and
ended the year at $780/mt, averaging $679/mt for the year. Low interest rates, non-traditional monetary easing,
extremely accommodative fiscal policy coupled with a weak US dollar have generated considerable liquidity into the
global economy and this together with the increased demand from China and India have helped underpin the
commodity prices.
Oil World has revised its 2010 CPO production forecasts upward for Indonesia to 22.4m tonnes and exports at 17m
tonnes, while for Malaysia CPO production forecasts were revised downward to 18m tonnes, while exports were
revised down to 16m tonnes. With the latest revisions, Oil World expects 2010 global CPO production growth of
5.6% (from 4.4% growth in 2009) and demand growth of 5.8% (from 5.1% demand growth for 2009), which results in
a lower global stock/usage ratio for CPO of 12% (from 15.2% in 2009 and 15.9% from 2008). This is positive for the
CPO price.
The US dollar depreciated by approximately 15% against the Indonesian Rupiah during 2009. Indonesian Rupiah
has not experienced adverse fluctuations against the US dollar during early 2010. We expect a stable exchange
level to be attainable for the rest of the year. To mitigate the exposure to currency exchange volatility, the group is
managing its cash in dollar and local currencies prudently, taking into consideration its dollar-denominated
borrowings and operational cost currency requirements.
4 Annual Report 2009 | Anglo-Eastern Plantations Plc
Chairman’s Statement
Outlook - continued
Prospects for 2010 should be cautiously optimistic in view of the higher CPO price during 1Q2010 due to a global
economic recovery. Indonesia’s economy has been resilient through the downturn while current political
developments now pave the way for economic policies to underpin long term sustainable growth, with strong support
from the government in palm oil industries. The group is confident that CPO demand will be sustainable in view of a
global economy recovery and we can expect a satisfactory profit level and cash flow for 2010.
Dividends
The board is mindful that the group’s development programme will require a considerable capital commitment. In this
respect, the dividend level needs to be balanced against the planned capital expenditure. The board is proposing to
declare a final dividend of 5.0cts in respect of 2009 (5.0cts in 2008). Shareholders choosing to receive their dividend
in Sterling will do so at the rate ruling on 30 April 2010, when the register closes. Based on the exchange rate at 15
March 2010 of $1.5052/£, the proposed dividend would be equivalent to 3.3p, compared to 3.0p declared in respect
of 2008.
Acknowledgment
On behalf of the Board of Directors, I would like to convey our sincerest thanks to our Directors, Management and all
employees of the Group for their strong dedication, loyalty, resourcefulness, commitment and contribution to the
success of the Group. The year ahead will continue to be challenging given the turbulence of the global market. With
similar commitment, perseverance and effort as exhibited in the past, I am certain we can deliver a good level of
performance to all our shareholders.
I would also like to take this opportunity to thank the shareholders, business associates, government authorities and
all other stakeholders for their continued confidence, understanding and support for the Group.
CHAN TEIK HUAT 8 April 2010
Chairman
5 Annual Report 2009 | Anglo-Eastern Plantations Plc
Financial Record
Income statement
Revenue
Trading profit
Biological asset (BA) movement
Exchange profits/(losses)
Net finance – (costs)/income
Profit before tax
Tax
Minority interests
Profit attributable to shareholders
Dividend proposed for year
Balance Sheet
Fixed assets
Cash net of short term borrowings
Long term loans
Other working capital
Deferred tax
Minority interests
Net worth
Share capital
Treasury shares
Share premium and capital redemption account
Revaluation and exchange reserve
Profit and loss account
Equity attributable to shareholders’ funds
Ordinary shares in issue (‘000s)
Earnings per share before BA adj. (US cents)
Earnings per share after BA adj. (US cents)
Dividend per share for year (US cents)
Asset value per share (US cents)
Earnings per share before BA adj (pence
equivalent)
Dividend per share for year (pence)
Asset value per share (pence equivalent)
Exchange rates – year end
Rp : $
$ : £
RM: $
Exchange rates – average
Rp : $
$ : £
RM: $
2009
IFRS
$000
2008
IFRS
$000
2007
IFRS
$000
150,080
58,955
888
1,259
983
62,085
(16,934)
(7,657)
37,494
(1,973)
$000
248,022
54,337
(17,589)
1,962
(28,772)
257,960
(46,989)
210,971
15,504
(1,744)
25,022
(7,405)
179,594
210,971
174,684
74,064
1,347
1,503
959
77,873
(25,891)
(9,981)
42,001
(1,973)
$000
198,855
60,803
(27,025)
(11,894)
(28,450)
192,289
(31,558)
160,731
15,504
(1,785)
25,022
(22,083)
144,073
160,731
127,898
52,521
1,001
215
(145)
53,592
(15,628)
(6,964)
31,000
(5,524)
$000
187,023
59,065
(35,719)
(8,979)
(23,052)
178,338
(32,367)
145,971
15,504
(1,785)
25,022
46
107,184
145,971
2006
IFRS
$000
79,094
26,270
2,312
368
90
29,040
(9,289)
(3,277)
16,474
(4,266)
$000
160,823
15,079
(5,454)
(1,919)
(21,152)
147,377
(25,421)
121,956
15,495
(1,387)
24,991
2,407
80,450
121,956
39,976
39,976
94.11cts 103.0cts
94.99cts 105.1cts
5.0cts
402cts
5.0cts
535cts
39,976
77.2cts
78.5cts
14.0cts
370cts
39,958
38.3cts
41.7cts
10.8cts
309cts
59.94p
3.3p
332p
55.9p
3.0p
285p
9,400
1.61
3.42
10,950
1.41
3.48
10,158
1.57
3.52
9,735
1.84
3.34
38.4p
7.0p
186p
9,419
1.99
3.31
9,170
2.01
3.43
20.6p
5.5p
158p
9,020
1.96
3.53
9,141
1.86
3.66
2005
IFRS
$000
64,321
22,201
(35)
(550)
(196)
21,420
(7,097)
(2,140)
12,183
(3,514)
$000
129,518
9,091
(3,940)
255
(16,941)
117,983
(20,519)
97,464
15,481
(1,387)
24,955
(9,121)
67,536
97,464
39,928
31.0cts
30.9cts
8.8cts
244cts
17.1p
5.0p
142p
9,830
1.72
3.78
9,751
1.81
3.79
6 Annual Report 2009 | Anglo-Eastern Plantations Plc
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Annual Report 2009 | Anglo-Eastern Plantations Plc
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Annual Report 2009 | Anglo-Eastern Plantations Plc
8
Business Review
Commodity Prices
2009 had been a volatile year for vegetable oil prices, including CPO. The global economic crisis resulted in weak
business sentiment across the globe with credit markets seizing up and unprecedented amounts of liquidity having to
be injected into the global financial system to recapitalise major financial institutions and prevent systemic defaults.
This has led to a sharp deterioration in economic growth with the turmoil in financial markets impacting on business
and consumer confidence in both developed and developing markets. Given these adverse developments, world
output has shown a decline in 2009 with a gradual recovery not expected until 2010.
The CPO price opened 2009 at $495/mt and ended the year at $780/mt, averaging $679/mt for the year (down 28%
from the 2008 average price of $945/mt). Low interest rates, non-traditional monetary easing, extremely
accommodative fiscal policy coupled with a weak USD have generated considerable liquidity into the global
economy. This, together with the increased demand from China and India has helped underpin the commodity
prices. Pricing in CPO is the result of a complex relationship between competing oils and meals, oil seed production
in both hemispheres, and as can be seen correlates to a certain extent with crude oil due to its biodiesel potential.
Rubber prices averaged $1,800/mt for 2009 (2008-$2,500/mt). Our small area of 406 ha of mature rubber
contributed a pre-tax profit of $1.8 million in 2009. The newly planted 270 ha of rubber is expected to start production
in 2011.
Valuation
Since 2007 the main valuation assumptions have been changed to reflect the improving outlook for palm oil and also
Indonesia to reflect increasing operating costs. In 2009, we have maintained the principal assumptions at 2008
levels, with CPO price assumption at $550/mt and the discount rate at 16.25%.
Indonesia
FFB production in North Sumatra, which aggregates the estates of Tasik, Anak Tasik, Labuhan Bilik, Blankahan,
Rambung, Sungai Musam and CPA, produced 266,000mt in 2009 (2008-261,000mt), 2% higher than 2008. The
small increase is encouraging, considering the mature age of the trees in Tasik, which ordinarily would become less
yielding as the trees mature. As a counter measure to maintain core critical mass, the group has begun a replanting
program. Tasik contributed 60% of the total production in the North Sumatra estates.
FFB production in Bengkulu (South Sumatra), which aggregates the estates of Puding Mas and Alno as well as three
newly acquired land areas of KKST, ELAP and RAA, produced 233,000mt (2008-186,000mt), 25% higher than 2008.
The absence of a more pronounced drought effect compared to last year, coupled with the improved road
infrastructure, contributed to this improved performance. The new Sumindo mill (45 MT/hour) is expected to be
commissioned in the second quarter of 2010. It is expected to result in saving in transport costs as well as procuring
more bought-in crop from smallholders once it is fully commissioned.
FFB production in the Riau region, comprising Bina Pitri estates, produced 87,000mt in 2009 (2008-79,000mt), 10%
higher than 2008. The improved performance was a result of higher productivity arising from a fertilisation and
rehabilitation programme started in 2005/6, immediately after Bina Pitri was acquired.
Overall bought-in crops for Indonesia operations were at 435,000mt for the year 2009 (2008-443,000mt). The
average oil extraction rate from our mills was 20.9% in 2009 (2008-21%).
9 Annual Report 2009 | Anglo-Eastern Plantations Plc
Business Review
Malaysia
FFB production in 2009, at 32,000mt, was 20% below 2008 due to shortage of labour available for harvesting and
disruption in harvesting due to adverse weather conditions towards the end of the year. Malaysian estates
contributed pre-tax profit of $0.7 million, 61% lower than 2008.
Development
The Group's total area planted on recently acquired land is on schedule, with 4,479 ha already planted in 2009
compared to 2,242 ha in 2008. This significant increase shows that we are giving more attention to the replanting
and planting of our newly acquired land. Field planting had commenced in PT ELAP in South Sumatra region, with
PT SGM in Central Kalimantan starting in November 2009.
In 2009, we have succeeded in obtaining the crucial land conversion permit from the Indonesian Forestry
Department in respect of Central Kalimantan project. As mentioned in the Chairman’s Statement, we hope to plant
up to 5,000 hectares in Central Kalimantan in 2010. We have set a target to plant up to 10,000 hectares per year for
the next five years. This means we shall be able to more than double the current area of 45,000 hectares to 100,000
hectares by 2014.
10 Annual Report 2009 | 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 2009.
Principal activity
The company is incorporated in the United Kingdom under the Companies Act 2006. The address of the registered
office is on the inside back cover.
The company acts as a holding company and co-ordinates the businesses of its subsidiaries. At 31 December 2009,
the core activities of the group are 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 26 to the
consolidated financial statements.
Results and dividends
The audited financial statements for the year ended 31 December 2009 are set out on pages 23 to 50. The group
profit for the year on ordinary activities before taxation was $62,085,000 (2008 - $77,873,000) and the profit
attributable to ordinary shareholders was $37,494,000 (2008 - $42,001,000). No interim dividend was paid. The
directors recommend a final dividend of 5.0cts (2008 – 5.0cts) to be paid to shareholders on the register on 30 April
2010. Shareholders may elect to receive their dividend in sterling as described on page 14.
Business Review
The review of the group’s business is set out in pages 9 to 10. In addition, the prevailing risks and uncertainties of
the group’s business are:
• Unexpected variations in crop, principally caused by unusual weather patterns.
• 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 23 of the consolidated financial statements.
• Input cost inflation.
• Changes in the policy of the Indonesian or Malaysian governments towards the plantation
industry and towards foreign investment e.g. export taxes.
• Protectionist tariffs or controls against CPO for either economic or environmental reasons by
importing countries.
• Negative media publicity of the RSPO and the sustainability of palm oil as a vegetable oil.
The group’s key performance indicators, being revenue, profit after tax, profit before tax production volume,
extraction rates and yield are set out in “Financial record” on page 6 and in the business review on pages 9 to 10.
Environmental and corporate responsibility
The group’s management and directors take a serious view of their environmental and social responsibilities and are
fully committed to the principles developed by the “Round Table for Sustainable Palm Oil” (RSPO), which was
founded by a group of growers, processors, retailers and wildlife and conservation groups to codify and promote best
practices in the industry. The key RSPO principles are set out on page 18 in the “Statement on Corporate
Governance”.
Financial risk
Information on financial instruments and other risks is set out in note 23 to the consolidated financial statements.
11 Annual Report 2009 | Anglo-Eastern Plantations Plc
Directors’ Report
Biological assets, property, plant and equipment
Information relating to changes in fixed assets is given in note 10 to the consolidated financial statements.
Directors
A full list of directors appears on page 16. Drs. Kanaka Puradiredja was appointed as Independent Non-Executive
Director on 1 August 2009 and Nik Din Bin Nik Sulaiman was appointed on 1 April 2009. Madam Lim will be
submitting herself for re-election while Mr.Chan and Drs.Kanaka Puradiredja will be submitting themselves for re-
appointment by shareholders.
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
Chan Teik Huat
Donald H Low
Lim Siew Kim
Dato' John Lim Ewe Chuan
Nik Din Bin Nik Sulaiman ( appointed on 1 April 2009)
Drs. Kanaka Puradiredja ( appointed on 1 August 2009)
David W. Smith ( resigned on 4 March 2009)
Datuk Henry Chin (retired on 19 June 2009)
2009
Ordinary shares
-
-
20,521,314
-
-
-
-
-
2008
Ordinary shares
-
-
20,521,314
-
-
-
-
-
The interests disclosed for Madam Lim are held by Genton International Ltd 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
2009 and the date of this report. Other than Madam Lim, none of the directors, had any interest in the securities of
the company between the date of their appointments and the date of this report.
Other than as set out in note 20 to the consolidated 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 15 March 2010, 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
Liberty Square Asset Management
S N Roditi
Number
20,247,814
7,209,571
1,689,039
1,216,900
Percentage of voting rights held
51.30%
18.26%
4.28%
3.08%
12 Annual Report 2009 | Anglo-Eastern Plantations Plc
Directors’ Report
Share capital, restrictions on transfer of shares, arrangements affected by change of control and other
additional information
The company has one class of share capital, ordinary shares. All the shares rank pari passu. The articles of
association of the company contain provisions governing the transfer of shares, voting rights, the appointment and
replacement of directors and amendments to the articles of association. These accord with usual English company
law provisions. There are no special control rights in relation to the company’s shares. There are no significant
agreements to which the company is a party which take effect, alter or terminate in the event of a change of control
of the company. There are no agreements providing for compensation for directors or employees on change of
control.
Auditors
All of the current directors have taken all the steps 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 LLP have expressed their willingness to continue in office and a resolution to re-appoint them will be proposed
as Resolution 7 at the forthcoming annual general meeting.
Authority to allot shares
At the annual general meeting held on 19 June 2009, 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 8 at the forthcoming annual general
meeting. Such authority will be limited to shares up to a maximum nominal amount of £3,331,356 which represents
33.3% of the company’s current issued share capital. The authority will last for up to five years from the date of the
resolution. The directors do not have any present intention of issuing any shares under this authority.
A fresh authority is also being sought under the provisions of section 570 and 573 of the Companies Act 2006 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 £499,703 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 9 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 2009 final dividend.
Acquisition of the company’s own shares and authority to purchase own shares
At 8 April 2010, the directors had remaining authority under the shareholders’ resolution of 19 June 2009, to make
purchases of 3,997,627 of the company’s ordinary shares. This authority expires on 18 September 2010. 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.
13 Annual Report 2009 | Anglo-Eastern Plantations Plc
Directors’ Report
Acquisition of the company’s own shares and authority to purchase own shares - continued
Resolution 10 to be proposed at the forthcoming annual general meeting seeks renewed authority to purchase up to
a maximum of 3,997,627 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 five 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.
Supplier payment policy
It is the company’s policy to pay suppliers promptly in accordance with agreed terms of payment. The company had
no trade creditors at 31 December 2009 (2008 – nil).
Liability insurance for company officers
As permitted by the Companies Act the company has maintained insurance cover for the directors against liabilities
in relation to the company.
By order of the board
Donald H Low
Director 8 April 2010
14 Annual Report 2009 | Anglo-Eastern Plantations Plc
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 2006.
The directors are responsible for preparing the annual report and the financial statements in accordance with the
Companies Act 2006. The directors are also required to prepare financial statements for the group in accordance
with International Financial Reporting Standards (IFRS) as adopted by the European Union 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 International Financial Reporting Standards. 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 the group and of the profit or loss of the company and the group 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.
15 Annual Report 2009 | Anglo-Eastern Plantations Plc
Directors
Chan Teik Huat (Non-executive Chairman, aged 70) – appointed 10 February 2010 as Non-executive Chairman
Bachelor of Commerce (Melbourne); Fellow of Institute of Chartered Accountants and Certified Public
Accountants (Malaysia); former managing director of Metroplex Berhad until January 2006; founder and
former managing partner of a leading accounting firm, Kassim Chan, Malaysia for some 17 years. The firm has been
renamed Deloitte Kassim Chan and, subsequently, Deloitte.
Donald Han Low (Executive Director/Acting Chief Executive Officer, aged 45) – appointed 26 August 2008
Chairman of Atech Holdings Limited, listed on the Australian Stock Exchange, and director of Oriented Media Group
Berhad, listed on Bursa Malaysia.
Madam Lim Siew Kim (Non-executive director, aged 61) – appointed 29 November 1993
Executive chairman of Metroplex Berhad.
Dato’ John Lim Ewe Chuan (Senior Independent non-executive director, chairman of audit committee, nomination,
corporate governance committee and remuneration committee, aged 60) – appointed 26 April 2008
Chartered Certified Accountant; partner with UHY Hacker Young LLP, London, since 1998; previously he had a
professional accounting career in Singapore and the UK.
Nik Din Bin Nik Sulaiman (Independent non-executive director, member of audit committee, nomination &
corporate governance committee, aged 62) – appointed 1 April 2009
Non-executive director of MTD Capital Berhad and MTD ACPI Engineering Berhad, both listed on Bursa Malaysia.
Drs. Kanaka Puradiredja (Independent non-executive director, member of audit committee and remuneration
committee, age 66) – appointed 1 August 2009
Founded Kanaka Puradiredja Suhartono, an Indonesian based accounting firm, in 2000 and was a Senior Partner
until October 2007. He currently holds the positions of Chairman of both the Institute of Audit Committee and
Honorary Board of Indonesian Institute of Accountants and is an Independent Commissioner of PT Bakrieland
Development Tbk and PT Dharma Henwa Tbk, listed in Indonesia.
16 Annual Report 2009 | Anglo-Eastern Plantations Plc
Statement on Corporate Governance
During 2009 the company has complied with the majority of the requirements of the Combined Code of Corporate
Governance. Where provisions of the Combined Code were not met during 2009, particular comment is made in the
statements below and in the Directors’ remuneration report on pages 19 to 21.
The board
As at 8 April 2010, the board comprises one executive and five non-executive directors, three of whom are
independent. Excluding Madam Lim and Mr. Chan, the remaining three non-executive directors are considered by
the board to be independent. All three independent non-executive directors have a wide range of business interests
beyond their position with the company and the rest of the board agree unanimously that they have shown
themselves to be fully independent. Mr. Chan, who retired as Executive Chairman on 10 February 2010 is now the
Non-executive Chairman. The other members of the board are satisfied that through the specific powers reserved for
the board, and given the presence of the 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 & corporate governance committees have written terms of reference.
Unless warranted by unusual matters, the board normally meets three times each year. Otherwise all other matters
are dealt with by written resolution. During 2009, there were two meetings, attended by all the directors.
All the independent non-executive directors met on their own during 2009. The Chairman met all the non-executive
directors, in the absence of the executive directors, twice in 2009.
Dato’ John Lim is the senior independent non-executive director, a position he assumed in June 2008.
Non-executives are appointed for two to three year terms. To maintain the vitality of the board, the directors specify
fixed terms of office for non-executives. However, the board will review the position of each director for the normal
three yearly re-election under the Articles.
New directors do not receive formal training on the occasion of their appointment to the board as all have previous
experience of public listed company directorship and/or some of them have worked in financial or accounting service
industries.
In 2010 the board conducted a review of its performance by discussion. No major issues arose from this review.
The nomination and corporate governance committee currently comprises Dato’ John Lim (Chairman), Mr. Nik Din
Bin Nik Sulaiman. The committee had three meetings during 2009, attended by all members. There were four audit
committee meetings and one remuneration committee meeting in 2009.
Relations with shareholders
Company executives and the senior independent non-executive director attempt to contact principal shareholders
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 2010 annual general meeting.
The Board have decided that in order to save costs the Annual Report 2009 will be printed in Malaysia, as a result
the notice of the Annual General Meeting will be given before the Report is fully printed but the company will remain
in full compliance with the Companies Act 2006. However, the company will be in technical breach of paragraph
D.2.4. of the Combined Code of Corporate Governance (which states that the Notice of AGM and related papers
should be sent to shareholders at least 20 working days before the meeting) by five days.
17 Annual Report 2009 | Anglo-Eastern Plantations Plc
Statement on Corporate Governance
Accountability and audit
The responsibilities of the directors as regards the financial statements are set out on page 15. A statement of going
concern is also on page 15.
The audit committee comprises Dato’ John Lim (chairman), Mr. Nik Din Bin Nik Sulaiman and Drs.Kanaka
Puradiredja. Dato’ John Lim has current financial experience from his present principal occupations in the accounting
services profession. The committee met prior to the completion of the 2009 accounts and four times during 2009.
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 and for
reviewing its effectiveness; 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 but cannot eliminate the risk of
loss. In 2009 and early 2010, for example, the audit committee reviewed, among other things, in relation to risk –
internal audit and succession planning.
The board receives 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 internal auditors who visit operating sites in Indonesia and Malaysia regularly and provide wide
ranging report.
Environmental and corporate 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
• 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 areas designated for new or replanting
• 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
• To pay to individuals with residual rights over land only freely agreed compensation, in addition to
following government land regulations.
18 Annual Report 2009 | Anglo-Eastern Plantations Plc
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 during the year Dato’ John Lim (chairman), Datuk Henry Chin (former
chairman until retirement on 19 June 2009) and Drs.Kanaka Puradiredja (appointed 1 August 2009). The committee
met once in 2009 and again in 2010, attended by both members.
Policy
The remuneration committee makes recommendations on senior management pay and conditions, after consultation
with the Chairman, and recommends to the board the terms of executive directors.
Non-executive directors’ remuneration is considered by the board as a whole.
The committee recommends remuneration terms by reference to individual performance, market conditions, the
company’s performance and the need to maintain an economic operation.
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 of operating units, which is determined by
weighted performance criteria. Annual bonuses for the Chairman and executive directors are determined 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 10% 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 normally limited to two times base salary. Exercise of options is only permitted three
years after grant, provided that the holder remains an employee of the group throughout the period. There are no
other performance criteria for exercise of options granted so far.
Pensions
There is no company-sponsored pension scheme for executive directors or senior executives and management.
Service contracts
All directors, executive and non-executive, have formal appointment letters. Those of the non-executives are all for
two to three year terms with notice periods of one month. Mr. Donald Low’s contract had been extended to 25
November 2009 with a further extension until 25 May 2010. Notice periods for all other senior management are
generally between three and six months.
19 Annual Report 2009 | Anglo-Eastern Plantations Plc
Direc
ctors’ Re
emunera
ation Rep
port
Performa
The follow
2005 to 2
consisten
compens
directly b
ance graph
wing graph sh
2009 (last 5 y
ntly outperform
sation, the rem
by the share pr
hows the com
years) to indica
med the FTS
muneration co
rice.
mpany’s share
ate the volatil
SE 100 index
ommittee is in
e price perform
ity and trend
x throughout
nfluenced by
mance compa
of the market
these period
the operating
red to FTSE
generally. Ou
ds. In determ
g performance
100 index for
ur share price
mining senior
e of the comp
f
the period of
e performance
e
management
t
t
pany and not
AEP Sha
are Price Perfo
ormance Vs F
TSE 100 ( 5 y
yrs Chart )
_____
__ Anglo‐East
tern Plantati
ions
_______
__FTSE 100
Audited in
information
Directors
Share op
and Over
s’ share optio
ptions granted
rseas Share O
ons
to the directo
Option Scheme
ors of the comp
e and outstan
pany under th
ding at 31 De
e company’s
cember 2009
1994 Executiv
were:
ve Share Optio
on Scheme
Name o
of Director
Date of Gran
t Exercise p
price
Pe
eriod of option
No. of o
ordinary share
es under optio
n
Chan T
Teik Huat
30/4/2002
44.7p
30/4/2
2005-29/4/20
12
0
30,600
-
30,6
00
1/1/200
09
(Exercise
ed)
31/12/2
2009
ket price of t
the shares at
t 31 Decembe
er 2009 was
The mar
400.00p.
385.0p and t
the range du
ring 2009 wa
o
as 223.00p to
0 Annual Repo
20
ort 2009 | Anglo-
Eastern Plantat
ions Plc
Directors’ Remuneration Report
Directors’ remuneration
The remuneration of all directors who served during the year was:
Fees
$000
Executive Salary
Bonus
Benefits in kind
$000
$000
$000
Total
2009
$000
Total
2008
$000
-
-
-
21
42
13
7
14
-
-
-
97
146
137
-
-
-
-
-
-
-
-
-
64
25
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
235
137
-
21
42
13
7
14
-
-
-
221
45
124
24
31
-
-
32
143
23
20
283
64
25
469
663
Name of Director
Executive:
Chan Teik Huat (1)
Donald H Low (2)
R O B Barnes (3)
Non-executive
Lim Siew Kim (4)
Dato'John Lim Ewe Chuan (5)
Nik Din Bin Nik Sulaiman (6)
Drs. Kanaka Puradiredja (7)
Datuk Henry Chin (8)
David W Smith (9)
Ho Soo Ching (10)
Peter E O' Connor (10)
Total
Notes:
(1) Retired as Executive Chairman and appointed to Non-executive Chairman on 10 February 2010
(2) Appointed on 26 August 2008
(3) Retired on 30 April 2008
(4) Appointed on 29 November 1993
(5) Appointed on 26 April 2008
(6) Appointed on 1 April 2009
(7) Appointed on 1 August 2009
(8) Retired on 19 June 2009
(9) Resigned on 4 March 2009
(10)Retired on 31 July 2008
On behalf of the board
Dato' John Lim Ewe Chuan
Chairman, Remuneration Committee 8 April 2010
21 Annual Report 2009 | Anglo-Eastern Plantations Plc
Auditors’ Report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
We have audited the financial statements of Anglo Eastern Plantations Plc for the year ended 31 December 2009 which comprise
the group statement of financial position and parent company balance sheet, the group statement of comprehensive income, the
group statement of cash flow, the group statement of changes in equity, the parent company reconciliation of movements in
shareholders’ funds and the related notes. The financial reporting framework that has been applied in the preparation of the group
financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
The financial reporting framework that has been applied in preparation of the parent company financial statements is applicable law
and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the
opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements
in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an
assessment of: whether the accounting policies are appropriate to the group’s and the parent company’s circumstances and have
been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors;
and the overall presentation of the financial statements.
Opinion on financial statements
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the group’s and the parent company’s affairs as at 31
December 2009 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006; and, as regards
the group financial statements, Article 4 of the IAS Regulation.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
•
•
the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act
2006; and
the information given in the directors’ report for the financial year for which the financial statements are prepared is consistent
with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our
opinion:
•
•
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
the parent company financial statements and the part of the directors’ remuneration report to be audited are not in agreement
with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Under the Listing Rules we are required to review:
•
•
the directors’ statement, set out on page 15, in relation to going concern; and
the part of the corporate governance statement relating to the company’s compliance with the nine provisions of the June 2008
Combined Code specified for our review.
Nicholas Taylor (senior statutory auditor) 8 April 2010
For and on behalf of BDO LLP, statutory auditor
55 Baker Street, London
United Kingdom
22 Annual Report 2009 | Anglo-Eastern Plantations Plc
Consolidated Income Statement
For the year ended 31 December 2009
Continuing operations
Notes
2009
Result
before
BA
adjustment
$000
BA
adjustment
$000
Total
$000
Result
before
BA
adjustment
$000
2008
BA
adjustment
$000
2
150,080
-
150,080
174,684
Revenue
Cost of sales
Gross profit
Biological asset revaluation
movement (BA adjustment)
Administration expenses
Operating profit
Exchange profits
Finance income
Finance costs
Profit before tax
Tax
3
3
4
7
(88,202)
(96,812)
61,878
77,872
Total
$000
174,684
(96,812)
77,872
-
-
-
888
-
1,347
1,347
(2,923)
59,843
(3,808)
74,064
-
1,347
1,259
3,202
1,503
3,645
(2,219)
(2,686)
-
-
-
(3,808)
75,411
1,503
3,645
(2,686)
(88,202)
61,878
-
(2,923)
58,955
1,259
3,202
(2,219)
-
-
888
-
888
-
-
-
61,197
888
62,085
76,526
1,347
77,873
(16,667)
(267)
(16,934)
(25,487)
(404)
(25,891)
Profit for the year
44,530
621
45,151
51,039
943
51,982
Attributable to:
- Equity holders of the parent
- Non-controlling interest
Earnings per share
- basic
- diluted
8
8
37,146
7,384
44,530
348
273
621
37,494
41,182
7,657
9,857
45,151
51,039
819
124
943
42,001
9,981
51,982
94.99cts
94.99cts
105.1 cts
104.8cts
Earnings per share before BA adjustment are shown in note 8.
The accompanying notes are an integral part of this consolidated income statement.
23 Annual Report 2009 | Anglo-Eastern Plantations Plc
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2009
Profit for the year
Other comprehensive income:
2009
$000
45,151
2008
$000
51,982
Unrealised (loss)/ surplus on revaluation of the estates
(12,320)
5,302
Profit/(loss) on exchange translation of
foreign operations
Deferred tax on revaluation
Other comprehensive income/(expense) for the year
41,058
(6,286)
22,452
(29,944)
(1,128)
(25,770)
Total comprehensive income for the year
67,603
26,212
Attributable to:
- Equity holders of the parent
- Minority interest
52,172
15,431
67,603
19,872
6,340
26,212
The accompanying notes are an integral part of this consolidated statement of comprehensive income and expense.
24 Annual Report 2009 | Anglo-Eastern Plantations Plc
Consolidated Balance Sheet
As at 31 December 2009
Non-current assets
Biological assets
Property, plant and equipment
Receivables
Current assets
Inventories
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 benefits - 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
Note
2009
$000
2008
$000
10
10
11
12
13
14
15
14
16
17
18
18
47,608
200,414
1,677
38,843
160,012
1,677
249,699
200,532
3,720
5,181
2,582
63,761
75,244
4,196
761
4,143
69,442
78,542
(9,424)
(8,639)
(5,077)
(4,291)
(10,749)
(10,428)
(18,792)
(29,816)
56,452
48,726
(17,589)
(28,772)
(1,830)
(27,025)
(28,450)
(1,494)
257,960
192,289
15,504
(1,744)
23,935
1,087
(7,405)
179,594
210,971
46,989
257,960
15,504
(1,785)
23,935
1,087
(22,083)
144,073
160,731
31,558
192,289
The financial statements were approved by the board of directors and authorised for issue on 8 April 2010 and were
signed on its behalf by
Donald Han Low
The accompanying notes are an integral part of this consolidated balance sheet.
25 Annual Report 2009 | Anglo-Eastern Plantations Plc
Consolidated Statement of Changes in Equity
For the Financial Year Ended 31 December 2009
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26
Annual Report 2009 | Anglo-Eastern Plantations Plc
2009
$000
2008
$000
62,085
77,873
(888)
21
5,070
11
336
(983)
65,652
476
1,561
(5,672)
62,017
(2,219)
(1,347)
(53)
4,902
-
40
(959)
80,456
712
(2,730)
(3,935)
74,503
(2,728)
(27,169)
(17,898)
32,629
53,877
-
(11,363)
(39,925)
(19,738)
108
3,202
489
3,645
(36,615)
(26,967)
Consolidated Cash Flow Statement
For the year ended 31 December 2009
Cash flows from operating activities
Profit before tax
Adjustments for:
BA adjustment
Profit on disposal of tangible fixed assets
Depreciation
Share based remuneration expense
Retirement benefit provisions
Net finance (income)/expense
Operating cash flow before changes in working capital
Decrease/(increase) in inventories
(Increase)/decrease in trade and other receivables
(Decrease)/increase in trade and other payables
Cash inflow from operations
Interest paid
Overseas tax paid
Net cash flow from operations
Investing activities
Acquisition of subsidiaries
Property, plant and equipment
- purchase
- sale
Interest received
Net cash used in investing activities
27 Annual Report 2009 | Anglo-Eastern Plantations Plc
Consolidated Cash Flow Statement
For the year ended 31 December 2009
Financing activities
Dividends paid by parent company
Share options exercised
Repayment of existing long term loans
Finance lease (repayment)/drawdown
Dividends paid to minority shareholders
Repayment of loan by minority shareholder
Net cash (used in)/from financing activities
(Decrease)/Increase in cash and cash equivalents
Cash and cash equivalents less overdrafts
At beginning of period
Foreign exchange
At end of period
Comprising:
Cash at end of year
Overdraft at end of year
Net cash at end of year
2009
$000
2008
$000
(1,973)
(5,112)
30
(8,638)
(13)
-
-
(10,594)
(14,580)
69,442
8,899
63,761
-
(4,237)
(110)
(2,378)
48
(11,789)
15,121
63,357
(9,036)
69,442
63,761
69,443
-
(1)
63,761
69,442
The accompanying notes are an integral part of this consolidated cash flow statement.
28 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
1 Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS and IFRIC
interpretations) issued by the International Accounting Standards Board (IASB) as adopted by the EU and with those parts of
the Companies Act 2006 applicable to companies preparing their accounts under IFRS. The principal accounting policies
adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all
the years presented, unless otherwise stated.
Changes in accounting policies
(a) The group adopted IAS1 Presentation of Financial Statements: A Revised Presentation and IFRS8 during the year.
(b) Standards effective in 2009 but not relevant to the group, or relevant but have no impact on the financial statements
IAS 23, Borrowing Costs (revised) (effective for accounting periods beginning on or after 1 January 2009).
Improving disclosures about Financial Instruments (Amendments to IFRS 7). Effective for accounting periods beginning
on or after 1 January 2009.
IFRIC 13, Customer Loyalty Programmes (effective for accounting periods after 1 July 2008), which is not relevant to the
group.
Amendment to IFRS 2, Share-based payments; vesting conditions and cancellations (effective for accounting periods
beginning on or after 1 January 2009).
Amendment to IAS 32, Financial Instruments; Presentation and IAS 1, Presentation of Financial Statements (effective for
accounting periods beginning on or after 1 January 2009).
Amendments to IAS 39 and IFRS 7: Reclassification of Financial Instruments (effective for accounting periods after 1 July
2008).
Amendments to IFRS 1 and IAS 27 Cost of an Investment in a subsidiary, jointly-controlled entity or associate1 (effective
for accounting periods beginning on or after 1 January 2009).
IFRIC 15 Agreements for the Construction of Real Estate (effective for accounting periods beginning on or after 1 January
2009).
Revised IFRS 1 First-time Adoption of international Financial Reporting Standards (effective for accounting periods after 1
July 2009).
(c) Standards, not yet effective
Certain new standards, amendments and interpretations to existing standards have been published that are mandatory
for the group's accounting periods beginning on or after 1 January 2010 or later periods and which the group has decided
not to adopt early. These are:
Improvements to IFRSs 2009 (effective for accounting periods beginning on or after 1 January 2010).
Amendments to IFRS 2 Group Cash-settled Share-based Payment Transactions (effective for accounting periods
beginning on or after 1 January 2010).
*Amendments to IFRS 1 Additional Exemptions for First-time Adopters (effective for accounting periods beginning on or
after 1 January 2010).
Amendment to IAS 32 Classification of Rights Issues (effective for accounting periods after 1 February 2010).
* IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective for accounting periods after 1 April 2010).
* Revised IAS 24 Related Party Disclosures (effective for accounting periods beginning on or after 1 January 2011).
* Amendments to IFRIC 14 IAS 19 Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
(effective for accounting periods beginning on or after 1 January 2011).
* IFRS 9 Financial Instruments (effective for accounting periods beginning on or after 1 January 2013).
29 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
1 Accounting policies - continued
* Revised IFRS 3, Business Combinations and complementary Amendments to IAS 27, 'Consolidated and Separate
Financial Statements' (both effective for accounting periods beginning on or after 1 July 2009).
* Amendment to IAS 39 Financial Instruments: Recognition and Measurement: Eligible Hedged Items (effective for
accounting periods after 1 July 2009).
* IFRIC 16 Hedges of a Net Investment in a Foreign Operation (effective for accounting periods after 1 October 2008).
* IFRIC 17 Distributions of Non-cash Assets to Owners (effective for accounting periods after 1 July 2009).
* IFRIC 18 Transfer of Assets from Customers (effective for transfers of assets from customers received on or after 1 July
2009).
(*) Not yet EU endorsed.
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.
Business combinations
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the
consolidated balance sheet, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their
fair values at the acquisition date. Acquisitions of entities that comprise principally land with no active plantation business do
not represent business combination, in such case, the amount paid for each acquisition is allocated between the identifiable
assets/liabilities at the acquisition date.
Revenue recognition
Revenue includes
-
amounts receivable for produce provided in the normal course of business, net of sales related taxes and levies, including
export taxes;
amounts received for sales of palm kernel shell, rubber wood and other income of an operating nature.
-
Sales of CPO and palm kernel are recognised when goods are delivered or allocated to a purchaser. Delivery or allocation
does not take place until contracts are paid for. Sales of rubber are recognised on signing of a sales contract.
Share based payments
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.
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.
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. These interest rates are booked at the rate prevailing at the time.
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 substantively 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, and 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 for the Indonesian estates, including replanting
where required. The cash flows for the Malaysian estates are over a period of thirty years.
30 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
1 Accounting policies - continued
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 as a proportion of total
estate value and, as required by IAS41, the movement in valuation surplus of biological assets is charged or credited to the
income statement 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 expense.
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 in processed form as oil or kernel and therefore the requirement under IAS41 to value
agricultural produce at market value, does not apply.
Financial assets
All the group's receivables and loans are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They are recognised at fair value at inception and subsequently at amortised cost. No impairment
provisions have been considered necessary.
Cash and cash equivalents consist of cash in hand and short term deposits at banks. Bank overdrafts are shown within loans
and borrowings under current liabilities on the balance sheet.
There are no assets in hedging relationships and no financial assets or liabilities available for sale.
Financial liabilities
All the group's financial liabilities are non-derivative financial liabilities.
Bank borrowings and long term development loans are initially recognised at fair value and subsequently at amortised cost,
which is the total of proceeds received net of issue costs. 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.
Trade and other payables are shown at fair value at recognition and subsequently at amortised cost.
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 except for differences in the initial recognition of an asset or liability in a transaction which is not a business
combination and at the time of the transaction affects neither accounting nor taxable profit.
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. Deferred tax is recognised on temporary differences arising on property
revaluation surpluses.
31 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
1 Accounting policies - continued
Deferred tax is determined using the tax rates that are enacted or substantively enacted at the balance sheet date. 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; in this case assets and liabilities are offset.
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.
Critical 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 on-going basis. The main areas in which estimates are used are: fair value of
biological assets, property, plant and equipment, deferred tax and retirement benefits.
Revisions to accounting estimates are recognised in the period in which the estimate is revised or the revision affects only that
period, or in the period of revision and future periods if the revision affects both and current and future periods.
Assumptions regarding the valuation of biological assets, property, plant and equipment are set out in note 10. The group's
policy with regard to impairment of such assets is set out above.
Details on deferred tax are given in note 16 and retirement benefits in note 17.
32 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
2 Revenue
Sales of produce
Other income
3
Finance income and expense
Finance income
Finance expense
Interest payable on:
Development loans
Overdraft
Finance leases
Interest capitalised on loans related to field development and construction in progress
- (note 14)
- (note 14)
Net finance income/(expense) recognised in income statement
4
Profit before tax
Profit before tax is stated after charging
Depreciation (including $Nil(2008: $61,400) in respect of leased assets)
Staff costs (note 6)
Auditors’ remuneration
- group audit (company $8,800 (2008: $25,000)
- audit of subsidiaries
- Total
2009
$000
148,976
1,104
150,080
2009
$000
3,202
2,260
-
-
(41)
2,219
983
2009
$000
5,070
14,415
82
50
132
2008
$000
174,175
509
174,684
2008
$000
3,645
2,717
8
3
(42)
2,686
959
2008
$000
4,902
14,601
77
62
139
33 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
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Annual Report 2009 | Anglo-Eastern Plantations Plc
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T
Notes to the Consolidated Financial Statements
5 Segment information - continued
Save for a small amount of rubber, all the group's operations are devoted to oil palm. Therefore the group's report is by
geographical area, as the estates in each specific area tend to be at the same stage of development and each area tends to
have different agricultural conditions.
6
Employees' and directors' remuneration
Average numbers employed (primarily overseas) during the year
- full time
- casual
Staff costs (including directors) comprise:
Wages and salaries
Social security costs
Retirement benefit costs (note 17)
2009
number
3,640
6,934
2009
$000
13,769
224
422
14,415
2008
number
3,582
5,007
2008
$000
13,873
195
533
14,601
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 19 -21 of which the information on pages 20 and 21 has been audited.
Directors emoluments
Pension contributions
Remuneration expense for key management personnel
2009
$000
469
-
469
372
2008
$000
641
22
663
533
Executive directors are considered to be the only key management personnel: their remuneration is shown on page 21.
7
Tax
Foreign corporation tax - current year
Foreign withholding tax on remittances
Deferred tax adjustment - current year
Total tax charge for year
2009
$000
16,034
-
900
16,934
2008
$000
20,552
4,550
789
25,891
The corporation tax rates in Indonesia and Malaysia are 28% and 26% respectively. The standard rate of corporation tax in the
UK for the current year is 28%. The group’s charge for the year differs from the standard UK rate of corporation tax for the
reasons below.
Profit before tax
Profit before tax multiplied by standard rate of UK corporation tax of 28% (2008 – 28%)
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
Foreign withholding tax
Deferred tax adjustments (note 16)
Total tax charge for year
2009
$000
62,085
17,384
(285)
(583)
178
(724)
194
(130)
16,034
-
900
16,934
2008
$000
77,873
21,804
1,129
(1,080)
244
(904)
55
(696)
20,552
4,550
789
25,891
35 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
8
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 after BA adjustment
2009
$000
37,146
348
37,494
Number
‘000
39,470
-
39,470
2008
$000
41,182
819
42,001
Number
‘000
39,976
101
40,077
94.11cts
94.99cts
103.0 cts
105.1 cts
Options over 243,300 ordinary shares have been excluded from the calculation of diluted earnings per share. They are
considered anti-dilutive as the weighted average exercise price was above the market average price in 2009.
9 Dividends
Paid during the year
Final dividend of 5.0 cts per ordinary share for the year ended 31 December 2008
(2007 – 14.0 cts)
2009
$000
2008
$000
1,973
5,112
Proposed final dividend of 5.0cts per ordinary share for the year ended 31 December
2009 (2008 – 5.0 cts)
1,973
1,973
The proposed dividend for 2009 is subject to shareholder approval at the forthcoming annual general meeting and has not
been included as a liability in these financial statements.
36 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
10 Biological assets, property, plant and equipment
Cost or valuation
At 1 January 2008
Exchange translations
Revaluations
Additions
Estates acquired at valuation on acquisition of a subsidiary
Disposals
At 31 December 2008
Exchange translations
Revaluations
Additions
Development costs
Disposals
At 31 December 2009
Accumulated depreciation and impairment
At 1 January 2008
Exchange translations
Revaluations
Charge for the year
Disposals
At 31 December 2008
Exchange translations
Revaluations
Charge for the year
Disposals
At 31 December 2009
Carrying amount
At 31 December 2007
At 31 December 2008
At 31 December 2009
Non-
biological
plantation
assets
$000
131,208
(16,743)
-
17,854
11,363
(333)
143,349
16,070
(15,935)
12,443
26,039
(183)
181,783
-
-
3,083
(3,083)
-
-
-
3,218
(3,218)
54
54
Total
property
plant and
equipment
$000
Biological
assets
$’000
Total
$'000
152,915
(19,099)
-
19,738
11,363
(408)
164,509
19,369
(18,739)
13,886
26,039
(183)
204,881
(4,472)
177
3,901
(4,130)
27
(4,497)
1,052
3,217
(4,293)
54
(4,467)
5,969
38,580 191,495
(5,706) (24,805)
5,969
- 19,738
- 11,363
(408)
-
38,843 203,352
7,877 27,246
888 (17,851)
- 13,886
- 26,039
(183)
-
47,608 252,489
-
-
772
(772)
-
-
-
777
(777)
-
-
(4,472)
177
4,673
(4,902)
27
(4,497)
1,052
3,994
(5,070)
54
(4,467)
Mills
$'000
21,707
(2,356)
-
1,884
-
(75)
21,160
3,299
(2,804)
1,443
-
-
23,098
(4,472)
177
818
(1,047)
27
(4,497)
1,052
(1)
(1,075)
-
(4,521)
131,208
143,349
181,837
17,235
16,663
18,577
148,443
38,580 187,023
160,012
200,414
38,843 198,855
47,608 248,022
The directors valued the estates (comprising biological assets, non-biological plantation assets, plantation infrastructure and oil
mills) at 31 December 2009 and 2008 at value in use derived from discounted estimated future cash flows of each estate.
Among the principal assumptions underlying the calculations were an assumed CPO selling price CIF Rotterdam of $550/mt
(2008 - $500/mt) and a discount rate of 16.25% (2008 – 12%). Biological assets are estimated as a proportion of these
calculations.
The assumption of $550/mt price represents the directors’ current estimate of the long term average CPO price based on
current market expectations. Pricing CPO is the result of a complex relationship between competing oils and mills, oil seed
production in both hemispheres and, to a certain extent, a correlation with crude oil. Actual experience may therefore differ
from these estimates and assumptions.
The estates include $40,745 (2008: $42,000) of interest and $3,882,000 (2008: $3,303,000) of overheads capitalised during
the year in respect of expenditure on estates under development.
Original cost and depreciation at historical rates of exchange of the estates at 31 December 2009:
Original cost
Cumulative depreciation based on original cost
Estates
$000
233,469
(40,741)
192,728
Mills
$000
32,664
(11,976)
20,688
Total
$000
266,133
(52,717)
213,416
The Indonesian authorities have granted certain land exploitation rights and operating permits for the estates. In the case of
established 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; in the case of CPA's estate
acquired in 2007 land titles were issued in 1996 to expire in 2029.
37 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
10 Biological assets, property, plant and equipment - continued
In both cases there are subsequent rights of renewal similar to those in Bengkulu. Renewal is subject to compliance with the
laws and regulations of Indonesia. As described in note 1 the values in use of the Indonesian estates are depreciated over a
period of fifty years, since the directors expect the renewals will take place.
The land title of the estate in Malaysia is a long lease expiring in 2084.
11 Receivables: non-current
Due from minority shareholders
Due from village smallholder schemes
2009
$000
1,363
314
1,677
2008
$000
1,363
314
1,677
The minority shareholders in PT Alno Agro Utama and PT Cahaya Pelita Andhika have acquired their interests on deferred
terms (see note 23, Credit risk).
Amounts due from village smallholder schemes represents expenditure on planting and maintaining to maturity oil palms on
communal land owned by 21 separate villages neighbouring the group's estates.
The book values of the amounts due from minority shareholders and village smallholder schemes approximates to their fair
values.
12
Inventories
Estate and mill consumables
Processed produce for sale
13 Trade and other receivables
Trade receivables
Other receivables
Prepayments and accrued income
2009
$000
2,530
1,190
3,720
2009
$000
362
1,978
242
2,582
The carrying amount of trade and other receivables approximates to their fair value.
14 Bank loans and other financial liabilities
2009
2008
Bank Overdraft
Long term development loan (a)
Long term development loan (b)
Long term development loan (c)
Total bank loans
Finance lease obligations (d)
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
1
938
800
6,900
8,639
-
8,639
under one
year
$000
-
-
800
8,624
9,424
-
9,424
more than
one year
$000
-
-
1,200
16,389
17,589
-
17,589
11,150
6,439
-
17,589
2008
$000
3,510
686
4,196
2008
$000
390
3,402
351
4,143
more than
one year
$000
-
-
2,000
25,013
27,013
12
27,025
9,437
11,150
6,438
27,025
(a) The long term development loan, which was 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
guaranteed the loan. Interest was at 5.5% below the Bank’s prime lending rate. The loan was repayable in sixteen
quarterly instalments of $312,500 from October 2005 to July 2009.
(b) The long term development loan of $2,000,000 (2008: $2,800,000), 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.
This loan bears interest rate at 5.5% below the Bank’s prime lending rate per annum. The loan is repayable in sixteen
quarterly instalments of $200,000 from July 2008 to April 2012.
38 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
14 Bank loans and other financial liabilities – continued
(c) The long term development loan of $25,013,000 (2008: $31,913,000) to finance the purchase and development of new
land or developed estates, was made in June and July 2007. It is secured by a fixed and floating charge on the land titles
and other assets of PT Alno Agro Utama and of PT Tasik Raja (Tasik) and is guaranteed by Tasik and by the parent
company. Interest is at 3% over SIBOR up to the month of September 2008. However, interest was revised based on
DBS’s cost of funds from October 2008 onwards. Interest for 2009 was about 6.3 % (2008: 6.2%). The loan is repayable
from August 2008 over four years in quarterly instalments amounting for each 12 months to 15%; 25%; 25% and 35% of
the loan.
(d) Finance lease obligations relate to vehicles and machinery, on which the obligations are secured, in the Malaysian
subsidiaries. Interest is effectively fixed at 3.0%. This finance lease is fully repaid in 2009.
15 Trade and other payables
Trade creditors
Other creditors
Accruals
16 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 2009
Revaluation surplus
Accelerated capital allowances
Employee pension liabilities
Other temporary and deductible differences
Available losses
Details of movements in 2008
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
2009
$000
2,773
1,092
1,212
5,077
2009
$000
(27,600)
208
(1,380)
(28,772)
2008
$000
1,041
7,004
2,704
10,749
2008
$000
(27,800)
130
(780)
(28,450)
(28,450)
(23,025)
(900)
(6,286)
6,864
(28,772)
(Charged)/
credited
to income
2009
$000
(517)
(16)
60
(480)
53
(900)
(Charged)/
credited to
income
2008
$000
(420)
(25)
74
(473)
55
(789)
2009
$000
11,815
(789)
(1,128)
(3,508)
(28,450)
(Charged)/
credited to
reserves
2009
$000
(6,286)
-
-
-
-
(6,286)
(Charged)/
credited) to
reserves
2008
$000
(1,128)
-
-
-
-
(1,128)
2008
$000
9,309
(Liability)
2009
$000
(27,600)
(96)
488
(1,772)
208
(28,772)
Liability
2008
$000
(27,800)
(67)
363
(1,076)
130
(28,450)
The group does not recognise the tax losses of certain companies in the group as tax assets as the future recoverability of the
losses cannot be certain.
39 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
17 Retirement benefits
The group maintains a defined benefit funded pension scheme for some employees in Indonesia. The scheme is valued by an
actuary at the end of each financial year. Any excess of the actuarial liability over the fund assets is provided and charged to
the income statement. The major assumptions used by the actuary were:
Inflation
Rate of increase in wages
Discount rate
2009
10%
8%
12%
2008
10%
8%
12%
2007
10%
10%
12%
2006
10%
10%
12%
2005
10%
10%
12%
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.
Defined
benefit
- funded
schemes
2009
$000
1,675
(1,781)
(106)
Defined
benefit –
unfunded
schemes
2009
$000
-
(1,724)
(1,724)
1,241
222
162
138
(84)
(4)
1,675
(1,408)
(243)
(214)
84
(1,781)
-
-
-
-
-
-
-
(1,327)
(160)
(342)
105
(1,724)
Total
2009
$000
1,675
(3,505)
(1,830)
1,241
222
162
138
(84)
(4)
1,675
(2,735)
(403)
(556)
189
(3,505)
Reconciliation to balance sheet
Scheme assets (all cash)
Scheme liabilities
Net 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
The charge/(credit) for the year for retirement benefit comprises:
Defined benefit funded scheme
Current service cost
Expenses
Income
Defined benefit unfunded scheme
Current service cost
Defined contribution schemes
Contributions
18 Share capital
Defined
benefit
- funded
schemes
2008
$000
Defined
benefit –
unfunded
schemes
2008
$000
Total
2008
$000
1,241
(1,408)
(167)
-
(1,327)
(1,327)
1,241
(2,735)
(1,494)
1,195
(195)
187
112
(53)
(5)
1,241
(1,408)
222
(275)
53
(1,408)
2009
$000
214
4
(138)
80
342
-
422
-
-
-
-
-
-
-
(1,321)
255
(308)
47
(1,327)
2008
$000
275
5
(112)
168
1,195
(195)
187
112
(53)
(5)
1,241
(2,729)
477
(583)
100
(2,735)
2007
$000
621
6
(107)
520
308
535
57
533
57
1,112
Authorised
Number
Issued and
fully paid
Number
Authorised
£000
Issued and
fully paid
£000
Authorised
$000
Issued and
fully paid
$000
Ordinary shares of 25p each
Beginning and end of year
60,000,000
39,976,272
15,000
9,994
23,865
15,504
40 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
18 Share capital - continued
Treasury shares
Beginning of year
Share options exercised
End of year
Market value of treasury shares:
Beginning of year (272.5p /share)
End of year (385.0p/share)
2009
Number
518,000
(12,000)
506,000
2008
Number
518,000
-
518,000
No treasury shares were purchased in 2009 (2008: Nil).
2009
$’000
(1,785)
41
(1,744)
2008
$’000
(1,785)
-
(1,785)
1,990
3,136
19 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 to subscribe for ordinary shares of 25p each of the company as
follows:
Date of
grant
16.04.02
21.05.03
13.05.04
19.05.06
09.10.06
21.05.07
03.06.08
Price
per share
44.7p
108.5p
181.2p
234.0p
323.25p
360.3p
598.0p
Period of option
30.04.05 – 29.04.12
21.05.06 – 20.05.13
13.05.07 - 12.05.14
19.05.09 – 18.05.16
09.10.09 - 08.10.16
21.05.10 - 20.05.17
03.06.11 – 02.06.18
Granted
1 Jan 08
Number Number
-
30,600
-
2,400
-
30,000
-
51,200
-
15,500
-
78,300
97,700
-
Exercised
Number
-
-
-
-
-
-
-
31 Dec 08
Number
30,600
2,400
30,000
51,200
15,500
78,300
97,700
Exercised
Number
-
(2,400)
(9,600)
-
-
-
-
Lapsed
Number
-
-
-
(6,400)
(6,800)
(13,200)
(24,000)
31 Dec 09
Number
30,600
-
20,400
44,800
8,700
65,100
73,700
208,000
97,700
-
305,700
(12,000)
(50,400)
243,300
Exercisable
63,000
63,000
104,500
Options granted to directors, included above, are shown on page 20.
The weighted average contracted life of options outstanding at the end of the year was 6.6 years (2008 – 7.7 years) and the
weighted average exercise price was 353p (2008 – 362p). The weighted average exercise price of options exercisable at the
end of the year was 176p (2008 – 112p).
The weighted average share price at date of exercise of options exercised in prior year was 360p. 12,000 options (2008: Nil)
were exercised in the year. No share options were granted in 2009 (2008 - 97,700).
The aggregate of the estimated fair value of options granted in 2009 was $Nil (2008: $216,000). 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
2009
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2008
608p
N/A
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 for a period of three years from date of grant.
20 Ultimate controlling shareholder and related party transactions
At 31 December 2009，Genton International Limited, a company registered in Hong Kong, held 20,247,814 (2008 –
20,247,814) shares of the company representing 51.3% (2008 – 50.6%) of the issued share capital of the company. Together
with other deemed interested parties, the company‘s shareholding totals 20,521,314 or 52%. 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 $12,200 (2008 - $21,000), small plantations owned by companies controlled
by Madam Lim. This contract is on an arm's length basis. At 31 December 2009 the amount due under this contract was
$1,400 (2008 - $1,500). During the year the Company engaged UHY Hacker Young, an accounting firm of which Dato’ Lim
Ewe Chuan is a partner, to provide company secretarial and taxation services for a fee of $9,617 (2008 - $49,502). This
contract is on an arm’s length basis.
41 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
21 Reserves and minority interests
Nature and purpose of each reserve:
Share capital
Amount of shares subscribed at nominal value.
Share premium
Amount subscribed for share capital in excess of nominal value.
Share capital redemption
Amounts transferred from share capital on redemption of issued shares.
Treasury shares
Cost of own shares held in treasury.
Revaluation
Gains/loses arising on the revaluation of the group's property.
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.
22 Guarantees and other financial commitments
Capital commitments at 31 December
Contracted but not provided
Authorised but not contracted
- normal estate operations
- normal estate operations
2009
$000
2,648
Nil
2008
$000
6,748
23,554
23 Disclosure of financial instruments and other risks
The group's principal financial instruments comprise cash, short and long term bank loans, trade receivables and payables and
receivables from local partners in respect of their investments.
The group’s accounting classification of each class of financial asset and liability at 31 December 2009 and 2008 were:
2009
Non-current receivables
Trade and other receivables
Cash and cash equivalent
Borrowings due within one year
Trade and other payables
Borrowings due after one year
2008
Non-current receivables
Trade and other receivables
Cash and cash equivalent
Borrowings due within one year
Trade and other payables
Borrowings due after one year
Loans and
receivables
$000
1,363
2,582
63,761
-
-
-
67,706
Amortised
cost
$000
-
-
-
(9,424)
(5,077)
(17,589)
(32,090)
Loans and
receivables
$000
1,363
4,143
69,442
-
-
-
74,948
Amortised
cost
$000
-
-
-
(8,639)
(10,749)
(27,025)
(46,413)
Total
carrying
value and
fair value
$000
1,363
2,582
63,761
(9,424)
(5,077)
(17,589)
35,616
Total
carrying
value and
fair value
$000
1,363
4,143
69,442
(8,639)
(10,749)
(27,025)
28,535
The principal financial risks to which the group is exposed are:
- commodity selling price changes; and
- exchange movements;
which, in turn, can affect financial instruments and/or operating performance.
42 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
23 Disclosure of financial instruments and other risks - continued
With the exception described below, the company does not hedge any of its risks. Its trade credit risks are low. There are no
financial assets or liabilities that are held at fair value through the profit and loss.
The board is directly responsible for setting policies in relation to financial risk management and monitors the levels of the
main risks through review of regular operational reports.
Commodity selling prices
The group does not normally contract to sell produce more than one month ahead.
Currency risk
Most of the group's operations are in Indonesia. The parent company and group accounts are prepared in US dollars which is
not the functional currency of the operating subsidiaries. The group does not hedge its net investment in its overseas
subsidiaries and is therefore exposed to a currency risk on that investment. The historic cost of investment (including
intercompany loans) by the parent in its subsidiaries amounted to $78,624,000 (2008: $77,948,000), while the fair value of the
group's share of underlying assets at 31 December 2009 amounted to $213,771,000 (2008 - $160,731,000).
All the group's sales are made in local currency and any trade receivables are therefore denominated in local currency. No
hedging is therefore necessary.
Selling prices of the group's produce are directly related to the US dollar denominated world prices. Appreciation of local
currencies therefore reduces profits and cash flow of the Indonesian and Malaysian subsidiaries in terms of local currency and,
to a lesser extent, US dollar consolidated profits – and vice versa.
The group's subsidiaries which are borrowing in US dollars, as set out under Liquidity Risk below could face significant
exchange losses in the event of depreciation of their local currency – and vice versa. This risk is mitigated to some extent by
dollar denominated cash balances in those subsidiaries. While the company was in a position to match dollar cash balances
with dollar financial liabilities throughout 2008 and 2009, policy has been for only a partial but increasing match because
interest rates on local currency deposits were 6.22% higher than on dollar deposits and about the same as dollar borrowing
costs. The unmatched balance at 31 December 2009 is represented by the $16,154,000 shown in the table below (2008:
$16,034,000). If the group's net cash position continues to improve then dollar cash balances will continue to be increased
through 2010.
The table below shows the net monetary assets and liabilities of the group at 31 December 2009 and 2008 that were not
denominated in the operating or functional currency of the operating unit involved.
Functional currency of group operation
2009
Indonesian rupiah
US dollar
Total
2008
Indonesian rupiah
US dollar
Total
Net foreign currency assets/(liabilities)
US dollar
$000
Ringgit
$000
Sterling
$000
(16,154)
-
(16,154)
$000
(16,034)
-
(16,034)
-
-
-
$000
-
(26)
(26)
-
302
302
$000
-
(549)
(549)
Total
$000
(16,154)
302
(15,852)
$000
(16,034)
(575)
(16,609)
Liquidity risk
Development to profitability of new sizable plantations requires a period of between six and seven years before cash flow turns
positive. Because oil palms do not begin yielding significantly until four years after planting, this period and the cash
requirement is little affected by changes in commodity prices.
The group attempts to ensure that it is likely to have either self-generated funds or further loan/equity capital to complete its
development plans and to meet loan repayments. Long term forecasts are updated about twice a year for review by the board.
In the event that falling commodity prices reduce self-generated funds below expectations and to a level where group
resources may be insufficient, further new planting may be restricted. Consideration is given to the funds continued to be
required to bring existing immature plantings to maturity.
The group's trade and tax payables are all due for settlement within a year. At 31 December 2009 the group had the following
loans and facilities.
43 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
23 Disclosure of financial instruments and other risks – continued
Liquidity risk- continued
Indonesia: US dollar denominated
- long term loan
Borrowings
$000
Facilities
$000
Repayable
27,013
27,013
2008 - 2012 (note 14)
The Indonesian overdraft was repaid in full in January 2008. The facility remains in place and will be reviewed monthly through
2010. The Malaysian overdraft facility is reviewed annually. The total long term loan facilities of $27,013,000 together with
interest at current rates is repayable as follows:
Principal
Interest
Total
2010
$000
9,424
1,829
11,253
2011
$000
11,150
985
12,135
2012
$000
6,439
264
6,703
Forecasts prepared in December 2009 indicate that the group has sufficient funds to meet its development plans and financial
commitments through 2010.
All the long term loans include varying covenants covering minimum net worth and cash balances, dividend and interest cover
and debt service ratios.
Interest rate risk
Both the group's surplus cash and its borrowings are subject to variable interest rates. The group had net cash throughout
2009, so the effect of variations in borrowing rates is more than offset. A 1% change in the borrowing or deposit interest rate
would not have a significant impact on the groups’ reported results. The rates on borrowings are set out in note 14.
There is no policy to hedge interest rates, partly because of the net cash position and partly because net interest is a relatively
small proportion of group profits.
Interest rate profiles of the group's financial assets (comprising non current receivables, tax receivables, trade and other
receivables and cash) at 31 December 2009 were:
2009
Sterling
US dollar
Rupiah
Ringgit
Total
2008
Sterling
US dollar
Rupiah
Ringgit
Total
Total
$000
425
13,361
51,645
7,770
73,201
$000
691
21,290
47,763
6,279
76,023
Fixed rate
$000
-
1,363
-
-
1,363
Variable rate
$000
425
11,998
44,054
7,284
63,761
No interest
$000
-
-
7,591
486
8,077
$000
-
1,363
-
-
1,363
$000
1
19,907
43,745
5,789
69,442
$000
690
20
4,018
490
5,218
Long term receivables of $1,363,000 (2008-$1,363,000) comprise dollar denominated amounts due from minority shareholders
as described in note 11 on which interest is due at a fixed rate of 6%.
Average US dollar deposit rates in 2009 were 3.94% (2008 – 4.23%) and rupiah deposit rates were 10.41% (2008 – 10.45%).
Interest rate profiles of the group's financial liabilities (comprising bank loans and other financial liabilities, trade and other
payables and retirement benefit liabilities) at 31 December were:
2009
Sterling
US dollar
Rupiah
Ringgit
Total
2008
Sterling
US dollar
Rupiah
Ringgit
Total
44 Annual Report 2009 | Anglo-Eastern Plantations Plc
Total
$000
(123)
(27,013)
(5,931)
(853)
33,920
$000
(142)
(35,664)
(10,992)
(1,097)
(47,895)
Fixed rate
$000
-
-
Variable rate
$000
-
(27,013)
-
-
$000
-
-
-
-
-
-
(27,013)
$000
-
(35,651)
-
(1)
(35,652)
No interest
$000
(123)
-
(5,931)
(853)
6,907
$000
(142)
(13)
(10,992)
(1,096)
(12,243)
Notes to the Consolidated Financial Statements
23 Disclosure of financial instruments and other risks - continued
Interest rate risk- continued
Weighted average interest rate on variable rate borrowings was 6.24% in 2009 (2008: 6.12%).
Credit risk
CPO and kernel amounting to 86% of group revenue are not despatched unless payment has been received in advance.
Remaining sales are on credit for about 30 days. No provisions were considered necessary at 31 December 2009 (2008 – nil).
All cash is deposited with licensed banks. The list of the principal banks used by the group is given on the inside of the back
cover of this report.
Amounts receivable from local partners, amounting to $1,363,000 (2008 - $1,363,000), in relation to their investments in
operating subsidiaries are secured on those investments and are repayable from their share of dividends from those
subsidiaries. Amounts due from village smallholder schemes are unsecured and are to be repaid from FFB supplied.
Capital
The group defines its Capital as Share capital and Reserves, shown in the consolidated balance sheet as "Equity attributable
to equity holders of the parent" and amounting to $210,971,000 at 31 December 2009. (2008: $160,731,000)
Group policy is presently to attempt to fund development from self-generated funds and loans and not from issue of new share
capital. At 31 December 2009 (2008: Nil) the group had no net borrowings but, depending market conditions, the board is
prepared for the group to have net borrowings.
24 Acquisitions
For each of the acquisitions below, since they were not active plantations, the directors consider that they have obtained
control of an entity that is not a business and accordingly have not accounted for these acquisitions as business combinations.
Instead, the amount paid for each acquisition has been allocated between individual identifiable assets and liabilities in the
entity based on their fair values at the acquisition date.
2009
Nil
2008
(1) PT Riau Agrindo Agung
In January 2008, the group acquired a 95% interest in PT Riau Agrindo Agung (RAA) for a cash consideration of $3,676,000.
RAA has no assets or liabilities other than the right to a land title over 15,000 ha near the group's existing estates in Bengkulu.
Plantable area is approximately 70%. The assets and liabilities and their fair value adjustment were assessed as follows:
Fixed assets only acquired
Group share (95%)
Book value
$000
1,369
Revaluation to fair value
$000
2,501
Fair value
$000
3,870
3,676
RAA was inactive throughout 2008 and therefore the group's share of any profit or loss from the date of acquisition to the end
of 2008 was nil.
(2) PT Karya Kencana Sentosa Tiga
In June 2008, the group acquired a 95% interest in PT Karya Kencana Sentosa (KKST) for a cash consideration of
$4,086,000. KKST has no assets or liabilities other than the right to a land title over 16,000 ha near the group's existing estates
in Bengkulu. Plantable area is approximately 70%. The assets and liabilities and their fair value adjustment were assessed as
follows:
Fixed assets only acquired
Group share (95%)
Book value
$000
913
Revaluation to fair value
$000
3,388
Fair value
$000
4,301
4,086
KKST was inactive throughout 2008 and therefore the group's share of any profit or loss from the date of acquisition to the end
of 2008 was nil.
45 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Consolidated Financial Statements
24 Acquisitions - continued
(3) PT Empat Lawang Agro Perkasa
In July 2008, the group acquired a 95% interest in PT Empat Lawang Agro Perkasa (ELAP) for a cash consideration of
$3,601,000. ELAP has no assets or liabilities other than the right to a land title over 14,100 ha near the group's existing estates
in Bengkulu. Plantable area is approximately 70%. The assets and liabilities and their fair value adjustment were assessed as
follows:
Fixed assets only acquired
Group share (95%)
Book value
$000
913
Revaluation to fair value
$000
2,877
Fair value
$000
3,790
3,601
ELAP was inactive throughout 2008 and therefore the group's share of any profit or loss from the date of acquisition to the end
of 2008 was nil.
(4) Other Acquisitions – Land Rights
Also in January 2008 the group's subsidiary PT Hijau Pryan Perdana acquired for a consideration of $600,000 the right to a
land title over a further 2,379 ha of land contiguous to its existing rights over 3,715 ha.
In March 2008 the group's subsidiary PT Cahaya Pelita Andhika was able to restore, at minimal cost, a previously lapsed right
to a land title over a further 1,300 ha of land contiguous to its existing confirmed land title of 4,469 ha.
25 Post Balance Sheet Events
In early 2010, the group acquired PT Kahayan with the initial “Izin Lokasi” area of 17,500 hectares for $2.9m.
26 Subsidiary companies
The principal subsidiaries of the company all of which have been included in these consolidated financial statements are as
follows:
Percentage holding of
ordinary shares
Principal United Kingdom sub-holding company
Anglo-Indonesian Oil Palms Limited
UK management company
Indopalm Services Limited
Malaysian operating companies
Anglo-Eastern Plantations (M) Sdn Bhd
Anglo-Eastern Plantations Management Sdn Bhd
Indonesian operating companies
PT Alno Agro Utama
PT Anak Tasik
PT Bangka Malindo Lestari
PT Bina Pitra Jaya
PT Cahaya Pelita Andhika
PT Empat Lawang Agro Perkasa
PT Hijau Pryan Perdana
PT Karya Kencana Sentosa Tiga
PT Mitra Puding Mas
PT Musam Utjing
PT Riau Agrindo Agung
PT Sawit Graha Manunggal
PT Simpang Ampat
PT Tasik Raja
PT United Kingdom Indonesia Plantations
100
100
55
100
90
100
95
80
90
95
80
95
90
75
95
95
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.
46 Annual Report 2009 | Anglo-Eastern Plantations Plc
Company Balance Sheet
As at 31 December 2009
Non-current assets
Investment in subsidiaries
Current assets
Debtors
Cash and cash equivalents
Current liabilities
Other creditors
Net current assets
Net assets
Equity
Share capital
Treasury shares
Share premium reserve
Share capital redemption reserve
Exchange reserve
Retained earnings
Shareholders' funds
Notes
2
3
5
6
6
7
7
7
7
2009
$000
78,624
78,624
-
1,564
1,564
(124)
1,440
2008
$000
77,948
77,948
690
311
1,001
(168)
833
80,064
78,781
15,504
(1,744)
23,935
1,087
3,872
37,410
80,064
15,504
(1,785)
23,935
1,087
3,872
36,168
78,781
The financial statements were approved by the board of directors and authorised for issue on 8 April 2010 and were
signed on its behalf by Donald Han Low
The accompanying notes are an integral part of this balance sheet.
47 Annual Report 2009 | 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 2006. 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 prices 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.
Investments
Investments in subsidiaries are stated at cost less provision for any permanent diminution in value.
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 30.
Deferred tax
A deferred tax asset has not been recognised in relation to brought forward tax losses of $1.8m (2008: $1.6m)
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
Where the company enters into financial guarantee contracts and guarantees the indebtedness 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.
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
70,203
676
70,879
Total
$000
77,948
676
78,624
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
investment of preference shares in subsidiaries of $6.146m is due for redemption in 2012.
The principal subsidiaries of the company are listed in note 26 to the consolidated financial statements on page
46.
48 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Company Financial Statements
3 Debtors
Prepayments and accrued income
4 Dividends
Paid during the year
Final dividend of 5.0 cts for the year ended 31 December 2008 (2007 –
14.0cts)
Proposed final dividend of 5.0cts for the year ended 31 December 2009 (2008
– 5.0cts)
2009
$000
-
2008
$000
690
2009
$000
2008
$000
1,973
5,112
1,973
1,973
The proposed dividend for 2009 is subject to shareholder approval at the forthcoming annual general meeting
and has not been included as a liability in these financial statements.
5. Other creditors
Accruals
6 Share capital
2009
$000
124
2008
$000
168
Authorised
Number
Issued and
fully paid
Number
Authorised
£000
Issued and
fully paid
£000
Authorised
$000
Issued and
fully paid
$000
Ordinary shares of 25p each
Beginning and end of year
60,000,000 39,976,272
15,000
9,994
23,865
15,504
Treasury shares
Beginning of year
Share options exercised
End of year
Market value of treasury shares:
Beginning of year (272.5p /share)
End of year (385.0p/share)
2009
Number
518,000
(12,000)
506,000
2008
Number
518,000
-
518,000
2009
$’000
(1,785)
41
1,744
2008
$’000
(1,785)
-
(1,785)
1,990
3,136
Details of share based payments are set out in note 19 to the consolidated financial statements on page 41.
49 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notes to the Company Financial Statements
7 Reserves
Company balance sheet
Beginning of year
Share options exercised
Profit for the financial year
Dividend paid
End of year
Share
premium
account
$000
23,935
-
-
23,935
Treasury
shares
$000
(1,785)
41
-
-
(1,744)
Share
capital
redemption
$000
1,087
-
-
1,087
Profit and
loss
account
(distributable)
$000
36,168
-
3,215
(1,973)
37,410
Exchange
reserve
$000
3,872
-
-
3,872
As permitted by section 408 of the Companies Act 2006, 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
$4,553,659 (2008 - $36,254,000) and profit for the year was $3,215,000(2008 – $31,704,000).
8 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
2009
number
6
2
2008
number
6
2
2009
$000
145
10
-
11
166
2008
$000
1,280
10
22
-
1,312
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 19 to 21 of which the information on pages 20 and 21
have been audited.
Directors' emoluments
Pension contributions
2009
$000
469
-
469
2008
$000
641
22
663
9 Guarantees and other financial commitments
The company has provided guarantees for loans and overdrafts to subsidiaries totalling $17,589,000 (2008 -
$27,013,000) as set out in note 14 of the consolidated financial statements.
10 Post Balance Sheet Events
In early 2010, the group acquired PT Kahayan with the initial “Izin Lokasi” area of 17,500 hectares for $2.9m.
50 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notice of Annual General Meeting
Notice is hereby given that the twenty-fifth Annual General Meeting of Anglo-Eastern Plantations Plc will be held at
the offices of UHY Hacker Young LLP, Quadrant House, 4 Thomas More Square, London E1W 1YW on Monday 24
May 2010 at 11.00 a.m. for the following purposes:
As Ordinary Business
1 To receive and consider the company’s annual report for the year ended 31 December 2009
2 To declare a dividend
3 To approve the directors' remuneration report for the year ended 31 December 2009
4 To re-appoint Mr Teik Huat Chan, a non-executive director
5 To re-appoint Drs Kanaka Puradiredja, independent non-executive director
6 To re-elect Madam S K Lim, a non-executive director, who has served more than nine years.
7 To appoint BDO LLP as auditors and to authorise the directors to fix their remuneration.
As Special Business
8 To consider and, if thought fit, to pass the following resolution as special resolution:
That
(a) the directors be generally and unconditionally authorised pursuant to and in accordance with section 551 of
the Companies Act 2006 (“the Act”) to exercise all the powers of the company to allot shares in the
company up to an aggregate nominal amount equal to one third of the issued share capital at the date of
this resolution provided that this authority shall expire on 23 May 2015 save that the company may before
such expiry make an offer or agreement which would or might require relevant securities to be allotted after
such expiry and the directors may allot relevant securities in pursuance of such an offer or agreement as if
the authority conferred hereby had not expired;
(b) during the period expiring on the date of the next annual general meeting or on 30 June 2011 (whichever
shall be earlier) the directors be empowered pursuant to section 570 and 573 of the Companies Act 2006
(“the Act”) 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 560 of the Act):
(i)
in connection with a rights issue; and
(ii) up to an aggregate nominal amount of £499,703, otherwise than in connection with a rights issue;
as if section 561(1) of the Act did not apply to any such allotment;
(c) by such authority and power the directors may during such periods make offers or agreements which would
or might require the making of allotments after the expiry of such periods; and
(d) for the purposes of this resolution:
(i)
"rights issue" means an offer of equity securities open for acceptance for a period fixed by the directors
to holders of equity securities (other than the company) on the register on a fixed record date in
proportion to their respective holdings of such securities or in accordance with the rights attached
thereto (but subject to such exclusions or other arrangements as the directors may deem necessary or
expedient in relation to fractional entitlements or legal or practical problems under the laws of, or the
requirements of any recognised regulatory body or any stock exchange in, any territory);
(ii)
the nominal amount of any securities shall be taken to be, in the case of rights to subscribe for or
convert any securities into shares of the company, the nominal amount of such shares which may be
allotted pursuant to such rights; and
51 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notice of Annual General Meeting
(iii) words and expressions defined in or for the purposes of part 17 of the Act shall bear the same meanings
herein.
9 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)
(ii)
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 23 May 2015; and
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 561 of the Companies Act 2006
(“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 23 May 2015 as if sub-section (1) of
section 561 of the Act did not apply thereto and so that this authority shall be without prejudice and
additional to the authority conferred by resolution no 8.
10 To consider and if thought fit to pass the following as a special resolution:
That the company is hereby generally and unconditionally authorised for the purposes of section 701 of the
Companies Act 2006 (“the Act”) to make market purchases (as defined in section 693(2) of the Companies Act
2006) 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 3,997,627 (representing
10% of the issued ordinary share capital);
(b) the minimum price which may be paid for each ordinary share is 25p;
(c) the maximum price which may be paid for each ordinary share is an amount equal to 105% of the average
of the middle market quotations for such share as derived from the Daily Official List of the London Stock
Exchange plc for the five business days immediately preceding the date of purchase; and
(d) the authority hereby conferred shall expire on 30 June 2011 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.
11 To consider and if thought fit to pass the following resolution as a special resolution:
That a general meeting of the company other than an annual general meeting may be called on not less
than 14 clear days’ notice.
By order of the board
CETC (Nominees) Limited
Company Secretary
Notes:
22 April 2010
1. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, the Company has specified that only those
shareholders on the register of members of the company at 11.00 a.m. on 22 May 2010 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
11.00 am on 22 May 2010 or, if the meeting is adjourned, in the register of members at 6.00 p.m. on the date which is two
days before the day of the adjourned meeting shall be disregarded in determining the rights of any person to attend and vote
at the meeting.
2. As at 8 April 2010 (being the latest practicable date prior to the publication of this notice), the Company’s issued share capital
comprised 39,976,272 Ordinary Shares of 25p each. Each share carries one vote except 506,000 shares held as treasury
shares and therefore the total number of voting rights in the Company as at 9.00 am on 8 April 2010 is 39,470,272.
52 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notice of Annual General Meeting
3. A member of the company entitled to attend and vote at the meeting may appoint one or more proxies to attend, speak and
vote at a meeting. Where more than one proxy is appointed, each proxy must be appointed for different shares. You may not
appoint more than one proxy to exercise rights attached to any one share. A proxy need not be a member of the Company.
4. 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).
5.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment
submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint
holders appear in the Company’s register of members in respect of the joint holding (the first-named being the most senior).
6. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so
for the annual general meeting and any adjournment thereof by using the procedures described in the CREST Manual.
CREST personal members or other CREST sponsored members and those CREST members who have appointed a voting
service provider should refer to their CREST sponsor or voting service provider, who will be able to take the appropriate action
on their behalf. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate
CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear’s specifications
and must contain the information required for such instructions, as described in the CREST Manual. All messages relating to
the appointment of a proxy or an instruction to a previously appointed proxy must be transmitted so as to be received by our
Registrar [CREST ID: RA10] by 22nd May 2010. It is the responsibility of the CREST member concerned to take such action as
shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this
connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in
particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The
company may treat a CREST Proxy Instruction as invalid in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
7. You may submit your proxy electronically using The Share Portal service at www.capitashareportal.com. If not already
registered for The Share Portal you will need your Investor Code which can be found on your share certificate.
8. The statement of the rights of shareholders in relation to the appointment of proxies does not apply to a person who receives
this notice of general meeting as a person nominated to enjoy “information rights” under section 146 of the Companies Act
2006. If you have been sent this notice of meeting because you are such a nominated person the following statements apply:
(i) you may have a right under an agreement between you and the registered shareholder by whom you were nominated to be
appointed (or to have someone else appointed) as a proxy for this general meeting and (ii) if you have no such a right, or do
not wish to exercise it, you may have a right under such an agreement to give instructions to that registered shareholder as to
the exercise of voting rights. Nominated persons should contact the registered member by whom they were nominated in
respect of these arrangements.
9.
In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at the meeting so
that:
(i)
(ii)
if a corporate member has appointed the Chairman of the meeting as its corporate representative with instructions to vote
on a poll in accordance with the directions of all the other corporate representatives for that member at the meeting, then,
on a poll, those corporate representatives will give voting directions to the Chairman and the Chairman will vote (or
withhold a vote) as corporate representative in accordance with those directions; and
if more than one corporate representative for the same corporate member attends the meeting but the corporate member
has not appointed the Chairman of the meeting as its corporate representative, a designated corporate representative will
be nominated, from those corporate representatives who attend, who will vote on a poll and the other corporate
representatives will give voting directions to that designated corporate representative.
10. Corporate members are referred to the guidance issued by the Institute of Chartered Secretaries and Administrators on
proxies and corporate representatives – www.icsa.org.uk – for further details of this procedure. The guidance includes a
sample form of representation letter to appoint the Chairman as a corporate representative as described in 9(i) above.
11. Members satisfying the requirements of section 527 of the Companies Act 2006 may require the Company to publish on a
website a statement by them (at the Company’s cost) relating to the audit of the Company’s accounts which are being laid
before this meeting (including the auditor’s report and the conduct of the audit) or, where applicable, any circumstances
connected with an auditor of the Company ceasing to hold office since the previous general meeting at which accounts were
laid. As at 8 April 2010, no such statement has been received by the Company. Should such a statement be received, it will be
published on the Company’s website at www.angloeastern.co.uk. In those circumstances the Company would be under an
obligation to forward a copy of the statement to the auditors forthwith and the statement would form part of the business which
may be dealt with at this meeting.
12. Any member attending the meeting has the right to ask questions. The Company must cause to be answered any such
questions relating to the business being dealt with at the meeting but no such answer need be given if (a) to do so would
interfere unduly with the preparation of the meeting or involve the disclosure of confidential information, (b) the answer has
already been given on a website in the form of an answer to a question, or (c) it is undesirable in the interests of the Company
or the good order of the meeting that the question be answered.
53 Annual Report 2009 | Anglo-Eastern Plantations Plc
Notice of Annual General Meeting
13. The following documents are available for inspection by members at the registered office of the Company during normal
business hours (except Bank Holidays) and at the place of the meeting not less than 15 minutes prior to and during the
meeting:
(a) The register of directors’ interests, showing any transactions of directors and of their families in the securities of the
company;
(b) Copies of the Director’s service agreements and letters of appointment.
14. A copy of this notice and the other information required by section 311A of the Companies Act 2006 can be found at
www.angloeastern.co.uk.
15.
16.
If you are in any doubt as to any aspect of Resolutions 8 to 10 or as to the action you should take, you should immediately
take your own advice from a stockbroker, solicitor, accountant or other independent financial advisor authorised under the
Financial Services and Markets Act 2000. The Board believes that these Resolutions are in the best interests of the company
and shareholders as a whole.
If you have sold or otherwise transferred all your shares in the company, please hand this document and the accompanying
form of proxy to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was
effected, for transmission to the purchaser or transferee. If you sell or have sold or otherwise transferred only part of your
holding of existing shares please consult the bank, stockbroker or other agent through whom the sale or transfer was effected.
54 Annual Report 2009 | Anglo-Eastern Plantations Plc
Company addresses
Company advisers
Malaysian Office
Anglo-Eastern Plantations (M) Sdn Bhd
7th Floor
Wisma Equity
150 Jalan Ampang
50450 Kuala Lumpur
Malaysia
Tel: 60 (0)3 2162 9808
Fax: 60 (0)3 2164 8922
Indonesian Office
PT United Kingdom Indonesia Plantations
Wisma HSBC
Jalan Diponegoro, Kav 11
Medan 20152
North Sumatra
Indonesia
Tel:
Fax:
62 (0)61 452 8683
60 (0)61 452 0029
Secretary and registered office
Anglo-Eastern Plantations Plc
(Number 1884630)
(Registered in England and Wales)
CETC (Nominees) Limited
Quadrant House
Floor 6
4 Thomas More Square
London E1W 1YW
United Kingdom
Tel:
Fax:
44 (0)20 7216 4600
44 (0)20 7767 2602
Company website
www.angloeastern.co.uk
Auditors
BDO LLP
55 Baker Street
London W1U 7EU
United Kingdom
Principal Bankers
National Westminster Bank Plc
15 Bishopsgate
London EC2P 2AP
United Kingdom
The Hong Kong and Shanghai Banking Corporation
Limited
Wisma HSBC
Jalan Diponegoro, Kav 11
Medan 20152
North Sumatra
Indonesia
PT Bank DBS Indonesia
Uniplaza Building
Jalan Letjen MT Haryono A-1
Medan 20231
North Sumatra
Indonesia
Malayan Banking Bhd
Menara Maybank
100 Jalan Tun Razak
50050 Kuala Lumpur
Malaysia
Registrars
Capita Registrars
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
West Yorkshire HD8 0LA
United Kingdom
Solicitors
Withers LLP
16 Old Bailey
London EC4M 7EG
United Kingdom
Sponsor/Broker
Charles Stanley Securities
25 Luke Street
London EC2A 4AR
United Kingdom