2017 Annual Report
Anglo-Eastern Plantations Plc
Company Number: 1884630
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About Anglo-Eastern Plantations
Contents
The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major
producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some
128,200ha.
About AEP
2
Financial Highlights
Key Information
Shareholder Information
Chairman's Statement
Strategic Report
Financial Record
Estate Areas
Location of Estates
Directors' Report
Directors' Responsibilities
Directors
Statement on Corporate Governance
Audit Committee Report
Directors' Remuneration Report
Auditors' Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
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Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
AEP has a Premium Listing on the London Stock
Exchange. The Company was formed and floated in
1985.
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63
Consolidated Statement of Cash Flows
64
Notes to the Consolidated Financial Statements
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the Company Financial Statements
Notice of Annual General Meeting
Primary activities are
the crop production and
processing of palm oil and some rubber through
operations in Indonesia and Malaysia.
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96
The Group is committed to responsible development
and management of its plantations and facilities for the
benefit of the environment and society in which it
operates.
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Form of Proxy and Attendance Card
Company addresses, advisers and website
Separate Attachment
Inside Back Cover
Annual Report 2017 | Anglo-Eastern Plantations Plc
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Company addresses
London Office
Anglo-Eastern Plantations Plc
Quadrant House, 6th Floor
4 Thomas More Square
London E1W 1YW
United Kingdom
Tel: 44 (0)20 7216 4621
Fax: 44 (0)20 7767 2602
Malaysian Office
Anglo-Eastern Plantations Management 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 Anglo-Eastern Plantations Management Indonesia
3rd Floor, Wisma HSBC, Jalan Diponegoro, Kav 11
Medan 20152
North Sumatera
Indonesia
Tel: 62 (0)61 452 0107
Fax: 62 (0)61 452 0029
Secretary and registered office
Anglo-Eastern Plantations Plc
(Number 1884630)
(Registered in England and Wales)
CETC (Nominees) Limited
Quadrant House, 6th Floor
4 Thomas More Square
London E1W 1YW
United Kingdom
Tel: 44 (0)20 7216 4600
Fax: 44 (0)20 7767 2602
Company website
www.angloeastern.co.uk
Company advisers
Auditors
BDO LLP
55 Baker Street
London W1U 7EU
United Kingdom
Principal Bankers
National Westminster Bank Plc
Liverpool Street Station
216 Bishopsgate
London EC2M 4QB
United Kingdom
The Hong Kong and Shanghai Banking Corporation
Limited
Wisma HSBC
Jalan Diponegoro, Kav 11
Medan 20152
North Sumatera
Indonesia
PT Bank DBS Indonesia
Uniplaza Building
Jalan Letjen MT Haryono A-1
Medan 20231
North Sumatera
Indonesia
RHB Bank Bhd
Podium Block, Plaza OSK
Jalan Ampang
50450 Kuala Lumpur
Malaysia
Registrars
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
United Kingdom
Solicitors
Withers LLP
16 Old Bailey
London EC4M 7EG
United Kingdom
Sponsor/Broker
Panmure Gordon (UK) Limited
One New Change
London EC4M 9AF
United Kingdom
About Anglo-Eastern Plantations
About Anglo-Eastern Plantations
About Anglo-Eastern Plantations
The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major
The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major
The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major
producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some
producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some
producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some
128,200ha.
128,200ha.
128,200ha.
AEP has a Premium Listing on the London Stock
AEP has a Premium Listing on the London Stock
AEP has a Premium Listing on the London Stock
Exchange. The Company was formed and floated in
Exchange. The Company was formed and floated in
Exchange. The Company was formed and floated in
1985.
1985.
1985.
Primary activities are
Primary activities are
Primary activities are
the crop production and
the crop production and
the crop production and
processing of palm oil and some rubber through
processing of palm oil and some rubber through
processing of palm oil and some rubber through
operations in Indonesia and Malaysia.
operations in Indonesia and Malaysia.
operations in Indonesia and Malaysia.
The Group is committed to responsible development
The Group is committed to responsible development
The Group is committed to responsible development
and management of its plantations and facilities for the
and management of its plantations and facilities for the
and management of its plantations and facilities for the
benefit of the environment and society in which it
benefit of the environment and society in which it
benefit of the environment and society in which it
operates.
operates.
operates.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
About Anglo-Eastern Plantations
About Anglo-Eastern Plantations
Oil Palm Plantations
Oil Palm Plantations
The Group has developed 53,000ha of mature oil palm in 17 plantations across
The Group has developed 53,000ha of mature oil palm in 17 plantations across
Indonesia and Malaysia.
Indonesia and Malaysia.
Oil Palm Development
Oil Palm Development
An Oil Palm tree usually takes about three years from planting to harvest of the
An Oil Palm tree usually takes about three years from planting to harvest of the
first crop and will reach full production after five years. The Group has
first crop and will reach full production after five years. The Group has
approximately 12,000ha of recently planted immature plantations of which
approximately 12,000ha of recently planted immature plantations of which
3,500ha were planted in 2017, including replanting of 1,694ha.
3,500ha were planted in 2017, including replanting of 1,694ha.
Palm Oil Mills
Palm Oil Mills
The Group operates 6 palm oil mills in Indonesia processing up to a combined
The Group operates 6 palm oil mills in Indonesia processing up to a combined
295mt of fresh fruit bunches (“FFB”) per hour. Besides processing the FFB, three
295mt of fresh fruit bunches (“FFB”) per hour. Besides processing the FFB, three
of its mills have biogas plants equipped to capture methane gas emissions to
of its mills have biogas plants equipped to capture methane gas emissions to
generate electricity. In addition, one of the mills has a biomass plant which
generate electricity. In addition, one of the mills has a biomass plant which
processes the empty fruit bunches (“EFB”) into dried long fibres for export to
processes the empty fruit bunches (“EFB”) into dried long fibres for export to
China.
China.
Third Party Palm Oil Processing
Third Party Palm Oil Processing
In 2017 the Group purchased approximately 998,400mt of FFB from third party
In 2017 the Group purchased approximately 998,400mt of FFB from third party
producers comprising of small plantations and local farmers, for processing
producers comprising of small plantations and local farmers, for processing
through its mills. The total FFB throughput at the Group’s mills in 2017 was 1.9
through its mills. The total FFB throughput at the Group’s mills in 2017 was 1.9
million mt producing 390,600mt of crude palm oil (“CPO”).
million mt producing 390,600mt of crude palm oil (“CPO”).
Rubber Plantations
Rubber Plantations
The Group has 425ha of established rubber plantations which in 2017, produced
The Group has 425ha of established rubber plantations which in 2017, produced
812mt of raw latex and rubber lumps. The size of rubber plantations will reduce
812mt of raw latex and rubber lumps. The size of rubber plantations will reduce
further as the Group replaces ageing rubber trees with oil palm.
further as the Group replaces ageing rubber trees with oil palm.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Financial Highlights
Financial Highlights
Revenue
Revenue
Profit before tax:
Profit before tax:
- before biological assets (“BA”) movement
- before biological assets (“BA”) movement
- after BA movement
- after BA movement
Basic Earnings per ordinary share (“EPS”):
Basic Earnings per ordinary share (“EPS”):
- before BA movement
- before BA movement
- after BA movement
- after BA movement
Dividend (cents)
Dividend (cents)
Anglo-Eastern Plantations Plc
Anglo-Eastern Plantations Plc
2017
2017
$m
$m
2016
2016
$m
$m
291.9
291.9
246.2
246.2
70.0
70.0
69.7
69.7
57.5
57.5
60.8
60.8
91.80cts
91.80cts
91.37cts
91.37cts
4.0cts
4.0cts
82.16cts
82.16cts
87.58cts
87.58cts
3.8cts
3.8cts
%
%
FTSE 100
FTSE 100
Share Price
Share Price
Turnover by volume
Turnover by volume
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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4
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Financial Highlights
Financial Highlights
300,000
300,000
250,000
250,000
200,000
200,000
150,000
150,000
100,000
100,000
50,000
50,000
0
0
Revenue ($000)
Revenue ($000)
Profit Before Tax Before BA
Profit Before Tax Before BA
($000)
($000)
100,000
100,000
80,000
80,000
60,000
60,000
40,000
40,000
20,000
20,000
0
0
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
Basic Earnings Per Share
Basic Earnings Per Share
Before BA ($, cents)
Before BA ($, cents)
Asset Value Per Share
Asset Value Per Share
($, cents)
($, cents)
140.00
140.00
120.00
120.00
100.00
100.00
80.00
80.00
60.00
60.00
40.00
40.00
20.00
20.00
0.00
0.00
1,200
1,200
1,000
1,000
800
800
600
600
400
400
200
200
0
0
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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5
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Key Information
Key Information
Age of Palm Trees
Age of Palm Trees
(as at 31/12/17)
(as at 31/12/17)
(as at 31/12/16)
(as at 31/12/16)
13%
13%
18%
18%
13%
13%
18%
18%
27%
27%
26%
26%
42%
42%
43%
43%
Immature
Immature
Young
Young
Prime
Prime
Old
Old
Own FFB & Outside Purchase (mt)
Own FFB & Outside Purchase (mt)
1,200,000
1,200,000
1,000,000
1,000,000
800,000
800,000
600,000
600,000
400,000
400,000
200,000
200,000
-
-
450,000
450,000
400,000
400,000
350,000
350,000
300,000
300,000
250,000
250,000
200,000
200,000
150,000
150,000
100,000
100,000
50,000
50,000
-
-
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
Own FFB
Own FFB
Outside Purchase
Outside Purchase
Crude Palm Oil & Palm Kernel Production (mt)
Crude Palm Oil & Palm Kernel Production (mt)
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CPO
CPO
Palm Kernel
Palm Kernel
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Shareholder Information
Market capitalisation
The market capitalisation of Anglo-Eastern Plantations Plc at 31 December 2017 was £305 million, the ordinary
share price at the close of business on 19 April 2018 was 760 pence giving a market capitalisation of £301 million.
Website
www.angloeastern.co.uk contains various details and information on the Company and its operations, together with
all the key historical financial and regulatory information on the Company. The website is updated on a continuing
basis for all Company announcements and other relevant developments, including share price movements.
The website was upgraded to enable shareholders and investors to select and receive e-mail alerts from the
Company on selected regulatory news. Shareholders are encouraged to use the e-mail alerts to follow the
development of the Company.
Investor relations
Investors requiring further information on the Company are invited to contact:
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
Anglo-Eastern Plantations Plc
Quadrant House, 6th Floor
4 Thomas More Square
London E1W 1YW
United Kingdom
Tel:
Fax:
44 (0) 20 7216 4621
44 (0) 20 7767 2602
Registrar
Administrative queries about holdings of AEP can be directed to the Company's registrar:
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
United Kingdom
Tel:
Tel:
0871 664 0300 (UK)
+44 371 664 0300 (international)
In November 2017, the Link Group completed the takeover of Capita Plc including Capita Assets Services, the
provider of registry services to AEP. Capita Assets Services has since been renamed as Link Asset Services.
Shareholders can view and update their account details via the Link website, details of which can be found at
www.signalshares.com.
Annual General Meeting
The 33rd Annual General Meeting of the Company will be held at the offices of UHY Hacker Young LLP, 6th floor
Quadrant House, 4 Thomas More Square, London E1W 1YW on 25 June 2018. Notice of the meeting is set out at
the end of this Annual Report on pages 102 to 105.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Shareholder Information
Amalgamation of accounts
Shareholders receiving multiple copies of Company mailings as a result of a number of accounts being maintained in
their name are invited to write to the Company's registrar at the above address to request that their accounts be
amalgamated.
Payment of dividends
While the dividend is declared in US Dollar, shareholders can choose to receive dividends in Pounds Sterling. In the
absence of any specific instruction up to the date of closing of 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
Dollar.
The Pounds Sterling equivalent dividend will be paid at the exchange rate ruling at the date of closing of the register.
Electronic communications
Link Asset Services offer AEP shareholders the opportunity to manage their shareholding through the Signal shares
portal.
Registration is free and can be used to manage shareholdings quickly and securely. To register for this service,
please go to www.signalshares.com and follow the instructions.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Chairman’s Statement
The Group’s FFB production in 2017 was 929,600mt, 4% higher than the previous year of 897,700mt. The better
crop production was attributed primarily to the recovery of yield in the Riau region following a sharp drop last year
and a higher yield from maturing trees in Kalimantan. The throughput at the six mills in 2017 was at a record high as
the Group purchased more external crops. External crops were in abundance and readily available, especially in the
first half of the year, due to a strong recovery of FFB production after the El-Nino weather disruption. FFB bought-in
from surrounding smallholders was 998,400mt (2016: 813,700mt), 23% higher, due to the Group’s favourable
purchasing policy. The mills, as a result, processed 12% more FFB and increased CPO production by 11% to
390,600mt (2016: 353,100mt).
Revenue and profitability were in line with increased CPO production and better prices. The average CPO price ex-
Rotterdam in 2017 was 2% higher at $718/mt, compared to $706/mt in 2016.
The Group’s revenue was higher by 19% at $291.9 million, compared to $246.2 million achieved in 2016. The
operating profit for the Group in 2017, before the biological asset (“BA”) movement was $66.7 million, 27% higher
compared to $52.5 million achieved in 2016. Earnings per share, before BA movement, increased by 12% to
91.80cts, from 82.16cts in 2016. The Group’s operating profit after BA for 2017 was at $66.4 million after a
downward BA movement of $0.3 million as compared to 2016 operating profit of $55.9 million after an upward BA
movement of $3.4 million.
The Group planted 3,500ha of oil palms in 2017 of which 1,694ha comprised of replanting. Replanting is expected to
continue this year in the 480ha of older plantations where the palm trees have reached the end of their productive life
with dropping yield. New planting did not pick up in 2017 due primarily to delays in finalising agreements with
villagers for land compensation payments in South Sumatera, Bangka and Kalimantan. This issue is likely to
continue as villagers demand higher compensation for their land.
The Group has two biogas plants in commercial operation and generated over 11,500MWh of electricity in 2017. The
revenue from the sale of surplus electricity to the national grid was $0.87 million. The 2 megawatt biogas plant in
Bengkulu has underperformed since it started operation in May 2017 due to frequent power blackouts in the state
electricity supply caused by faulty transmission lines and unstable power voltage. The situation, however, is
expected to improve in the second half of 2018 after government upgrade and repairs of transmission lines are
completed. In the coming years, revenue from the sale of surplus electricity is expected to increase further as the
third biogas plant in Kalimantan has been completed and has been operating since the first quarter of 2018. The use
of clean energy in the mills will further reduce their reliance on fossil fuels and improve the Group’s carbon footprint.
In 2018 the Group will embark on the development of its seventh mill and its fourth biogas plant in North Sumatera.
The 60mt/hr mill is estimated to cost approximately $19 million which is higher than the cost of the existing mills, as it
is expected that the civil and structural work including earthwork will be much greater due to the condition of the soil.
The timing of construction of the mill in Labuhan Bilik coincides with the maturity of the trees as the FFB production
is projected to peak in the next two years and an in-house mill would cut down the transport cost on the 180 km
journey to the currently utilised mill. The biogas plant is estimated to cost an additional $3.8 million.
After an absence of one year, AEP, with effect from 1 June 2017, has been included in the Financial Times Stock
Exchange (“FTSE”) Small Cap and FTSE All Shares Index.
The Indian government in March 2018 raised import tax on both CPO and refined palm oil, the fourth increase in less
than six months and the highest level in more than a decade, this increase was designed to protect the local
refineries and support local oilseeds production. This may make CPO and refined palm oil more expensive and may
impact negatively on the consumption in India, the largest consumer of CPO.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Chairman’s Statement
In Europe, which is the second largest consumer of palm oil, the European Parliament’s introduction of a single
certification scheme for palm oil entering the European Union (“EU”) market and the phase out of the use of palm
biodiesel by year 2020 may decrease the demand for CPO. The adverse perception of palm oil continues to feature
in recent years, touching on issues including deforestation, emission of greenhouse gases, planting on peatland and
land rights.
Notwithstanding the aforementioned, global demand for palm oil should continue to be strong given the CPO’s
attractive price discount to soybean oil.
The Board is mindful that given the anticipated further capital commitments, the level of dividend needs to be
balanced against the planned expenditure, as well as other viable investment opportunities in the countries where
the Group operates. The Board is also mindful of shareholders’ sentiment and therefore declared a final dividend of
4.0cts per share, in line with our reporting currency, in respect of the year to 31 December 2017 (2016: 3.8cts
equivalent). Subject to the approval by shareholders at the Annual General Meeting, the final dividend will be paid on
13 July 2018 to those shareholders on the register on 8 June 2018.
On behalf of the Board of Directors, I would like to convey our sincere thanks to our management and all employees
of the Group for their dedication, loyalty, resourcefulness, commitment and contribution to the success of the Group.
I would also like to take this opportunity to thank shareholders, business associates, government authorities and all
other stakeholders for their continued confidence, understanding and support for the Group.
Madam Lim Siew Kim
Chairman
24 April 2018
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Introduction
The strategic report has been prepared to provide shareholders with information to complement the financial
statements. This report may contain forward-looking statements, which have been included by the Board in good
faith based on information available up to the time of approval of this report. Such statements should be treated with
caution going forward given the uncertainties inherent with economic and business risks of the Group.
Business Model
The Group will continue to focus on its strength and expertise, which is planting more oil palms. This includes
replanting old palms with low yield, replacing old rubber trees with palm trees and building more mills to process the
FFB. The Group has, over the years, created value to shareholders through expansion in a responsible way. The
Group remains committed to use its available resources to develop the land bank in Indonesia as regulatory
constraints permit. The Indonesian government has, in recent years, passed laws to prioritise domestic investments
and to limit foreign direct investments over national interest, including a 100,000 ha limit on licensed development of
oil palms for companies that are not listed in Indonesia or under majority local ownership.
The Group’s objectives are to provide appropriate returns to investors in the long-term from its operations as well as
through the expansion of the Group’s business, to foster economic progress in localities of the Group’s activities and
to develop the Group’s operations in accordance with the best corporate social responsibility and sustainability
standards.
We believe that sustainable success for the Group is best achieved by acting in the long-term interests of our
shareholders, our partners and society.
Our Strategy
One of the Group’s objectives is to provide an appropriate level of returns to the investors and to enhance
shareholders’ value. Profitability however is very much dependent on the CPO price, which is volatile and
determined by supply and demand. The Group believes in the long-term viability of palm oil as it can be produced
more economically than other competing oils and remains the most productive source of vegetable oil in a growing
population.
The Group’s strategies therefore focus on maximising yield per hectare above 22mt/ha, mill production efficiency of
110%, minimising production costs below $300/mt and streamlining estate management. For the year under review,
the Group achieved a yield of 17.9mt/ha, 134% mill efficiency and production cost of $281/mt on Indonesian
operations. This compared to 2016 where the Group achieved a yield of 17.3mt/ha, 119% mill efficiency and
production cost of $275/mt. Despite stiff competition for external crops from surrounding millers, the Group is
committed to purchasing more external crops from third parties at competitive, yet fair prices, to maximise the
production efficiency of the mills. With higher throughput, the mills would achieve economies of scale in production.
A mill achieves 100% mill efficiency when it operates 16 hours a day for 300 days per annum.
In line with the commitment to reduce its carbon footprint, the Group plans to construct, in stages, biogas plants at all
of its mills to trap the methane gas emitted from treatment of palm mill effluents to generate electrical power and at
the same time reduce the consumption of fossil fuel. It plans to sell the surplus electricity and progressively reduce
the greenhouse gas emissions per metric ton of CPO produced in the next few years.
The Group will continue to follow-up and offer competitive and fair compensation to villagers so that land can be
cleared and can be planted on.
Financial Review
The financial statements have been prepared in accordance with International Financial Reporting Standards and its
interpretations (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.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
For the year ended 31 December 2017, revenue for the Group was $291.9 million, 19% higher than $246.2 million
reported in 2016 due primarily to higher CPO production and a higher CPO price.
The Group’s operating profit for 2017, before biological asset movement, was $66.7 million, 27% more than $52.5
million in 2016.
FFB production for 2017 was 929,600mt, 4% higher than the 897,700mt produced in 2016. The yield for 2017
improved marginally due to strong recovery of production in Riau and higher yield from maturing trees in Kalimantan.
FFB bought-in from local smallholders in 2017 was 998,400mt (2016: 813,700mt), 23% higher compared to 2016.
During the year, the Group’s mills processed 1.9 million mt of FFB, 12% higher than last year of 1.69 million mt. CPO
production as a result was 11% higher at 390,600mt, compared to 353,100mt in 2016.
Profit before tax and after BA movement for the Group was $69.7 million, 15% higher compared to a profit of $60.8
million in 2016. The BA movement was a debit of $0.3 million, compared to a credit of $3.4 million in 2016.
The average CPO price ex-Rotterdam for 2017 was $718/mt, 2% higher than 2016 of $706/mt.
Earnings per share before BA movement increased by 12% to 91.80cts compared to 82.16cts in 2016. Earnings per
share after BA movement increased from 87.58cts to 91.37cts.
Going Concern
The Group’s balance sheet remains strong. As at 31 December 2017, the Group had cash and cash equivalents of
$139.5 million and borrowings of $27.9 million, giving it a net cash position of $111.6 million, compared to $84.1
million in 2016. The Group’s borrowings in the year reduced to $27.9 million (2016: $34.1 million). For these reasons,
the Directors adopt a going concern basis of accounting and believe the Group will continue in operation and meet
its liabilities for a period of at least twelve months from the date of approval of the financial statements.
Business Review
Indonesia
FFB production in North Sumatera, which aggregates the estates of Tasik, Anak Tasik, Labuhan Bilik, Blankahan,
Rambung, Sg Musam and Cahaya Pelita (“CPA”), produced 289,900mt in 2017 (2016: 303,500mt), 4% lower than
2016. Replanting of over 1,600ha of oil palm in Tasik Raja and Anak Tasik contributed to the overall lower
production. During the year, 82ha of old rubber trees in Rambung were also replanted with oil palm. The average
yield in CPA remains low at 16.8mt/ha as the FFB production during the year was disrupted by flash floods caused
by heavy rain exceeding 4,500mm per annum that regularly occurred over 2,000ha of low laying plantation. The
frequent and prolonged flooding also resulted in an incomplete manuring program which caused the palm growth to
be retarded in some 500ha. To minimise disruption caused by flooding, new planting in some 100ha was carried out
on a raised platform of one metre high and four metres wide, which was completed in August 2017. In some low
laying areas, mounding of palm was carried out to minimise the impact of flooding on existing palms. In 2018 CPA is
expected to construct more water gates, mud bunds and dredging of rivers and drains to reduce the impact of flash
floods.
Ganoderma fungus and Upper Stem Rot which attack about 10% of the productive palms in Anak Tasik remain a
serious threat. Water management, good sanitation and high standards of agronomic practices remain the main
priority to avoid spreading the diseases, including proper disposal of severely diseased palms after detection. Soil
mounding on infected palms was carried out to lengthen the economic lifespan of oil palms, and the continuation of
replanting in 2017 and 2018 in Anak Tasik will significantly reduce the threat of Ganoderma attack. There was no
serious insect damage by the Oryctes beetle, other leaf eating pests, wild animals or rats.
The Blankahan biogas plant sold over 6,700 MWh of surplus electricity since it started commercial operation early
this year and generated $0.53 million in revenue. The biomass plant also exported 7,228mt of dried long fibres worth
over $0.64 million in 2017 compared to 4,000mt last year at $0.32 million.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
FFB production in Bengkulu and South Sumatera, which aggregates the estates of Puding Mas (“MPM”), Alno,
KKST, ELAP and RAA produced 334,000mt (2016: 337,100mt), 1% lower than 2016. Exceptionally high rainfall of
over 5,500mm in Bengkulu has affected the collection of crops and quality of oil. Resurfacing of damaged roads
using sirtu was delayed until August 2017 until the contractors were able to obtain stone mining licenses from the
local authorities. In total 375km of roads were either resurfaced, graded or compacted in 2017. Some remote
locations can only be accessed by tractors and four-wheel drive vehicles for transport of FFB, in-filling and
maintenance work. A total of approximately 22,000 trees were planted at vacant spots in ELAP and KKST which
were previously damaged by wildlife. As most of the estates are situated close to forest reserves, wild boars and
herds of elephants continued to damage palm trees. Deep trenches and fencing provide temporary relief. The
replanting exercise has raised the stems per ha in both ELAP and KKST estates to about 94 palms/ha. Over
71,000mt of EFB was applied to over 1,000ha of oil palm field to improve the soil condition. The protracted
negotiation with the villagers over land compensation will have an effect on the future planting in Bengkulu and South
Sumatera.
The MPM biogas plant which began commercial operation in May 2017 sold over 4,800 MWh of surplus electricity
and generated $0.3 million in revenue in 2017.
FFB production in the Riau region, comprising Bina Pitri estates, produced 124,500mt in 2017 (2016: 111,100mt),
12% higher than 2016. Conducive rainfall patterns have resulted in higher yield and rapid recovery from the severe
drought and haze in 2015. External crop purchase at the mill also exceeded last year’s purchase by 29%. Overall
CPO production improved by 20% to 69,200mt compared to 57,800mt in 2016. Going forward competition for
external crops will remain a challenge due to more up and coming mills in the surrounding areas of Bina Pitri.
FFB production in Kalimantan which comprises of the Sawit Graha Manunggal (“SGM”) and Kahayan Agro
Plantation (“KAP”) estates produced 158,000mt in 2017 (2016: 121,800mt) 30% higher than 2016 as more trees
matured and reached peak production age. However, exceptionally high rainfall in March and April 2017 had affected
the harvest of fruits and quality of oil produced in SGM. In the months that followed, SGM incurred considerably
higher costs to resurface roads using RT20 chemicals, sirtu and laterite. The height of some low laying access roads
was raised to counter floods during the rainy season and to ensure efficient evacuation of FFB. Bagworm attack in
SGM was under control and was below the 5% threshold of its planting. Pesticide containing Klorantraniliprol and
Achepate was sprayed bi-monthly until infestation was eradicated. In the year, over 400ha of palm trees in KAP
matured leading to its first harvest. The FFB from KAP was transported over 600km to SGM mill for processing. Over
4,000ha has been planted with oil palm in KAP. CPO sold in Kalimantan, however, fetched a lower price and is at a
discount to mills in Sumatera due to higher logistics costs caused by the distance to the refinery and poor road
infrastructure.
During the year the Group engaged an independent agronomic consultant to make field visits for underperforming
estates in Indonesia to provide advice on optimizing field disciplines and improving crop yields. The Board believes
that with closer monitoring of field performance and improvements made, the crop yield should further improve in the
coming years.
Overall bought-in crops for Indonesian operations were 23% higher at 998,400mt for the year 2017 (2016:
813,700mt). The average oil extraction rate from our mills was 20.5% in 2017 (2016: 20.9%).
Malaysia
FFB production in 2017 was 9% lower at 21,900mt, compared to 24,000mt in 2016. The Malaysian operations
continued to face a severe shortage of workers due to difficulty in recruiting foreign workers which hampered
harvesting and estate maintenance work such as fertilizing, pruning, weeding and replanting. Despite the increase in
wages and various cash incentives introduced by management, the estate continued to lose its foreign workers who
left for better wages and working conditions in the city. The shortage of labour is the biggest challenge facing the
industry in Malaysia. In 2018, the Group has begun to recruit workers from other countries to complement its
Indonesian workforce. In 2017, the Malaysian plantations had $0.6 million pre-tax profit after BA movement
compared to $0.8 million in 2016.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Commodity Prices
The CPO ex-Rotterdam price started the year at a high of $790mt (2016: $570/mt) but softened as production in both
Indonesia and Malaysia recovered from the low of last year. It dipped to its lowest level at $640/mt in the middle of
June 2017, before increasing to the $700/mt range before news of a steep levy imposed by the Indian government
on the import of CPO and refined oil into India brought the price down again. Its peak at $852/mt in the middle of
January 2017 was due to low stock inventory. It ended the year at $670/mt (2016: $795/mt), averaging $718/mt for
the year, 2% higher than last year (2016: $706/mt). The CPO inventory was at the highest in two years.
CPO CIF Rotterdam
Over a period of ten years, CPO price has touched a high of $1,400/mt and a low of just above $400/mt. The
average price over the ten years is about $837/mt. CPO price is under tremendous pressure and remains
unpredictable due to the impending ban on import of palm biodiesel into the EU by 2020 and the high levy of CPO
imports into India. It was reported that about 46% of total palm oil imports of 6.5 million metric tonnes into the EU
were used in biofuels. Weather remains an important factor that will affect not just the production of CPO but other
oilseeds.
Rubber prices averaged $1,607/mt for 2017 (2016: $1,324/mt). Our small area of 425ha of mature rubber contributed
a revenue of $1.3 million in 2017 (2016: $1.1 million).
Corporate Development
In 2017, the Group opened up new land and planted 1,808ha of oil palm mainly in Kalimantan, boosting planted area
including the smallholder cooperative scheme, known as Plasma, by 2.5% to 68,310ha (2016: 66,670ha). This
excludes the replanting of 1,694ha of oil palm in North Sumatera. New plantings remain behind schedule due to
delays in finalising settlement of land compensation with villagers in South Sumatera, Bangka and Kalimantan. The
villagers seek compensation beyond what the Group considered fair and reasonable resulting in protracted
negotiations.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Strategic Report
Strategic Report
The 2 megawatt biogas plant in Bengkulu is supplying electricity to the State Electricity Company. In the eight
The 2 megawatt biogas plant in Bengkulu is supplying electricity to the State Electricity Company. In the eight
The 2 megawatt biogas plant in Bengkulu are supplying electricity to the State Electricity Company. In the eight
months of operation, it generated 4,807MWh of electricity worth $0.3 million. The sale of electricity is, however,
months of operation, it generated 4,807MWh of electricity worth $0.3 million. The sale of electricity is, however,
months of operation, it generated 4,807MWh of electricity worth $0.3 million. The sale of electricity is, however,
frequently interrupted by power blackouts in the state electricity supply caused by faulty transmission lines and
frequently interrupted by power blackouts in the state electricity supply caused by faulty transmission lines and
frequently interrupted by power blackouts in the state electricity supply caused by faulty transmission lines and
unstable power voltage. The situation is likely to improve in the second half of 2018 after upgrade and repairs of
unstable power voltage. The situation is likely to improve in the second half of 2018 after upgrade and repairs of
unstable power voltage. The situation is likely to improve in the second half of 2018 after upgrade and repairs of
transmission lines are completed. The third biogas plant in Kalimantan has been completed and is ready for
transmission lines are completed. The third biogas plant in Kalimantan has been completed and is ready for
transmission lines are completed. The third biogas plant in Kalimantan has been completed and is ready for
commissioning. The three biogas plants will further reduce the mills’ reliance on fossil fuels and improve the Group’s
commissioning. The three biogas plants will further reduce the mills’ reliance on fossil fuels and improve the Group’s
commissioning. The three biogas plants will further reduce the mills’ reliance on fossil fuels and improve the Group’s
carbon footprint. With the current shortage of power supply in North Sumatera, the Group is conducting a feasibility
carbon footprint. With the current shortage of power supply in North Sumatera, the Group is conducting a feasibility
carbon footprint. With the current shortage of power supply in North Sumatera, the Group is conducting a feasibility
study to build its fourth biogas plant in Rantau Prabat which is expected to cost up to $3.8 million. The state
study to build its fourth biogas plant in Rantau Prabat which is expected to cost up to $3.8 million. The state
study to build its fourth biogas plant in Rantau Prabat which is expected to cost up to $3.8 million. The state
electricity company has reacted positively to the proposal to build a biogas plant in North Sumatera.
electricity company has reacted positively to the proposal to build a biogas plant in North Sumatera.
electricity company has reacted positively to the proposal to build a biogas plant in North Sumatera.
The Group will start construction of its seventh mill in North Sumatera in 2018. The 60mt/hr mill is expected to cost
The Group will start construction of its seventh mill in North Sumatera in 2018. The 60mt/hr mill is expected to cost
The Group will start construction of its seventh mill in North Sumatera in 2018. The 60mt/hr mill is expected to cost
$19 million and will be substantially funded by internal cash flows. Costs of civil and structural works including
$19 million and will be substantially funded by internal cash flows. Costs of civil and structural works including
$19 million and will be substantially funded by internal cash flows. Costs of civil and structural works including
earthworks would be higher as the mill is built on shallow peat soil. The site needs to be compacted with mineral soil
earthworks would be higher as the mill is built on shallow peat soil. The site needs to be compacted with mineral soil
earthworks would be higher as the mill is built on shallow peat soil. The site needs to be compacted with mineral soil
and 38 metre long concrete piles to support the construction of the mill and storage facilities. The Group has over the
and 38 metre long concrete piles to support the construction of the mill and storage facilities. The Group has over the
and 38 metre long concrete piles to support the construction of the mill and storage facilities. The Group has over the
past three years explored various sites outside the plantation and along the Barumun river for the construction of a
past three years explored various sites outside the plantation and along the Barumun river for the construction of a
past three years explored various sites outside the plantation and along the Barumun river for the construction of a
mill, however, it was not able to obtain the necessary permit which allows conversion of agricultural into industrial
mill, however, it was not able to obtain the necessary permit which allows conversion of agricultural into industrial
mill, however, it was not able to obtain the necessary permit which allows conversion of agricultural into industrial
land.
land.
land.
New Biogas Plant
New Biogas Plant
New Biogas Plant
Corporate Social Responsibility
Corporate Social Responsibility
Corporate Social Responsibility
Corporate Social Responsibility (“CSR”) is an integral part of corporate self-regulation incorporated into our business
Corporate Social Responsibility (“CSR”) is an integral part of corporate self-regulation incorporated into our business
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,
model. Our Group embraces responsibility for the impact of its activities on the environment, consumers, employees,
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
communities, stakeholders and all other members of the public sphere. In engaging the social dimension of CSR, the
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
Group’s business has taken cognizance of the contribution and further enrichment of its employees while continuing
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.
to make contributions to improve the well-being of the surrounding community.
to make contributions to improve the well-being of the surrounding community.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Strategic Report
Strategic Report
The majority of employees and their dependents in the plantations and mills are housed in self-contained
The majority of employees and their dependents in the plantations and mills are housed in self-contained
The majority of employees and their dependents in the plantations and mills are housed in self-contained
communities built by the Group. The employees and their dependents are provided with free housing, clean water
communities built by the Group. The employees and their dependents are provided with free housing, clean water
communities built by the Group. The employees and their dependents are provided with free housing, clean water
and electricity. The Group also builds, provides and repairs places of worship for workers of different religious faiths
and electricity. The Group also builds, provides and repairs places of worship for workers of different religious faiths
and electricity. The Group also builds, provides and repairs places of worship for workers of different religious faiths
as well as schools and sports facilities in these communities. Over the years, the Group has built a total of 73
as well as schools and sports facilities in these communities. Over the years, the Group has built a total of 73
as well as schools and sports facilities in these communities. Over the years, the Group has built a total of 73
mosques and 18 churches across its estates. During the fasting month, the management team frequently broke fast
mosques and 18 churches across its estates. During the fasting month, the management team frequently broke fast
mosques and 18 churches across its estates. During the fasting month, the management team frequently broke fast
with the employees from the estates and mills as well as with surrounding villagers. It also sponsored and donated
with the employees from the estates and mills as well as with surrounding villagers. It also sponsored and donated
with the employees from the estates and mills as well as with surrounding villagers. It also sponsored and donated
cows for sacrifice to celebrate religious festivals. The Group spent $326,000 in 2017 to maintain these amenities and
cows for sacrifice to celebrate religious festivals. The Group spent $326,000 in 2017 to maintain these amenities and
cows for sacrifice to celebrate religious festivals. The Group spent $326,000 in 2017 to maintain these amenities and
support the communal activities.
support the communal activities.
support the communal activities.
The Group provides free education for all employees’ children in the local plantations and communities where they
The Group provides free education for all employees’ children in the local plantations and communities where they
The Group provides free education for all employees’ children in the local plantations and communities where they
work. In addition, the Group provides computers and funding to construct educational facilities including laboratories
work. In addition, the Group provides computers and funding to construct educational facilities including laboratories
work. In addition, the Group provides computers and funding to construct educational facilities including laboratories
and libraries. The salaries of teachers in the estates and the cost of school buses to transport employees’ children to
and libraries. The salaries of teachers in the estates and the cost of school buses to transport employees’ children to
and libraries. The salaries of teachers in the estates and the cost of school buses to transport employees’ children to
schools are provided by the Group. Over the years a total of 37 schools which comprised of 20 pre-schools, 11
schools are provided by the Group. Over the years a total of 37 schools which comprised of 20 pre-schools, 11
schools are provided by the Group. Over the years a total of 37 schools which comprised of 20 pre-schools, 11
primary schools, 5 secondary schools and 1 high school have been built with a combined enrolment of over 4,000
primary schools, 5 secondary schools and 1 high school have been built with a combined enrolment of over 4,000
primary schools, 5 secondary schools and 1 high school have been built with a combined enrolment of over 4,000
students. It currently employs 150 teachers in the estates. The Group bought an additional school bus in Tasik Raja
students. It currently employs 150 teachers in the estates. The Group bought an additional school bus in Tasik Raja
students. It currently employs 150 teachers in the estates. The Group bought an additional school bus in Tasik Raja
taking the tally of school buses operated by the Group in 2017 to 35 vehicles. In the year, the Group spent some
taking the tally of school buses operated by the Group in 2017 to 35 vehicles. In the year, the Group spent some
taking the tally of school buses operated by the Group in 2017 to 35 vehicles. In the year, the Group spent some
$693,000 on running the schools and operating the buses.
$693,000 on running the schools and operating the buses.
$693,000 on running the schools and operating the buses.
As part of the Group’s contribution to education, it provides scholarships to qualified students from the communities
As part of the Group’s contribution to education, it provides scholarships to qualified students from the communities
As part of the Group’s contribution to education, it provides scholarships to qualified students from the communities
as well as our employees’ children to pursue tertiary education. It started a partnership with a university in North
as well as our employees’ children to pursue tertiary education. It started a partnership with a university in North
as well as our employees’ children to pursue tertiary education. It started a partnership with a university in North
Bengkulu in 2013 to sponsor and provide students with the chance to pursue higher education. During 2017, over
Bengkulu in 2013 to sponsor and provide students with the chance to pursue higher education. During 2017, over
Bengkulu in 2013 to sponsor and provide students with the chance to pursue higher education. During 2017, over
300 scholarships had been awarded at a cost of $115,000. Similarly, 92 children of our employees were sponsored,
300 scholarships had been awarded at a cost of $115,000. Similarly, 92 children of our employees were sponsored,
300 scholarships had been awarded at a cost of $115,000. Similarly, 92 children of our employees were sponsored,
which cost over $80,000 since its introduction in 1999, to study in various universities in Indonesia. The popular
which cost over $80,000 since its introduction in 1999, to study in various universities in Indonesia. The popular
which cost over $80,000 since its introduction in 1999, to study in various universities in Indonesia. The popular
courses taken ranged from Engineering, Education, Economics to Agriculture. 36 of them had successfully
courses taken ranged from Engineering, Education, Economics to Agriculture. 36 of them had successfully
courses taken ranged from Engineering, Education, Economics to Agriculture. 36 of them had successfully
graduated from the universities with some of them now working for the Group.
graduated from the universities with some of them now working for the Group.
graduated from the universities with some of them now working for the Group.
Professional healthcare for employees Staff houses
Professional healthcare for employees Staff houses
Professional healthcare for employees Staff houses
The Group continues to provide free comprehensive health care for all its workers as we believe that every employee
The Group continues to provide free comprehensive health care for all its workers as we believe that every employee
The Group continues to provide free comprehensive health care for all its workers as we believe that every employee
and their dependents should have easy access to health services. We have established 22 clinics operated by
and their dependents should have easy access to health services. We have established 22 clinics operated by
and their dependents should have easy access to health services. We have established 22 clinics operated by
qualified doctors, nurses and hospital assistants in the estates. The Group upgraded two of its clinics in North
qualified doctors, nurses and hospital assistants in the estates. The Group upgraded two of its clinics in North
qualified doctors, nurses and hospital assistants in the estates. The Group upgraded two of its clinics in North
Sumatera and Bengkulu to meet the minimum standard required by the government under the country’s Health and
Sumatera and Bengkulu to meet the minimum standard required by the government under the country’s Health and
Sumatera and Bengkulu to meet the minimum standard required by the government under the country’s Health and
Social Security Agency. The upgraded clinics also provided health care services to the surrounding community
Social Security Agency. The upgraded clinics also provided health care services to the surrounding community
Social Security Agency. The upgraded clinics also provided health care services to the surrounding community
without the need to travel to faraway cities for medical treatment. In addition, the Group organised fogging to prevent
without the need to travel to faraway cities for medical treatment. In addition, the Group organised fogging to prevent
without the need to travel to faraway cities for medical treatment. In addition, the Group organised fogging to prevent
the spread of dengue mosquitoes.
the spread of dengue mosquitoes.
the spread of dengue mosquitoes.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Strategic Report
Strategic Report
Annual family gathering Scholarship program for employees’ children
Annual family gathering Scholarship program for employees’ children
Annual family gathering Scholarship program for employees’ children
In remote and isolated locations where piped water is not available, the Group drilled tube wells to provide clean
In remote and isolated locations where piped water is not available, the Group drilled tube wells to provide clean
In remote and isolated locations where piped water is not available, the Group drilled tube wells to provide clean
water. This year it built a water treatment plant in Bengkulu to provide clean water to workers and staff at a cost of
water. This year it built a water treatment plant in Bengkulu to provide clean water to workers and staff at a cost of
water. This year it built a water treatment plant in Bengkulu to provide clean water to workers and staff at a cost of
over $40,000. Related healthcare expenses including monthly contribution to Health and Social Security Agency in
over $40,000. Related healthcare expenses including monthly contribution to Health and Social Security Agency in
over $40,000. Related healthcare expenses including monthly contribution to Health and Social Security Agency in
2017 were $518,000.
2017 were $518,000.
2017 were $518,000.
A strong commitment to CSR has a positive impact on employees’ attitudes and boosts employee recruitment. The
A strong commitment to CSR has a positive impact on employees’ attitudes and boosts employee recruitment. The
A strong commitment to CSR has a positive impact on employees’ attitudes and boosts employee recruitment. The
Group realises that employees are valuable assets in order to run an efficient, effective, profitable and sustainable
Group realises that employees are valuable assets in order to run an efficient, effective, profitable and sustainable
Group realises that employees are valuable assets in order to run an efficient, effective, profitable and sustainable
business and operations. Selected employees are given the opportunity to attend seminars and external training to
business and operations. Selected employees are given the opportunity to attend seminars and external training to
business and operations. Selected employees are given the opportunity to attend seminars and external training to
enhance their working skills and capability. The Group constantly recruits potential field employees who are now sent
enhance their working skills and capability. The Group constantly recruits potential field employees who are now sent
enhance their working skills and capability. The Group constantly recruits potential field employees who are now sent
to the Group’s central training facilities in Blankahan, set up in 2014, to undergo a rigorous twelve month training
to the Group’s central training facilities in Blankahan, set up in 2014, to undergo a rigorous twelve month training
to the Group’s central training facilities in Blankahan, set up in 2014, to undergo a rigorous twelve month training
programme which includes theory and practical field work. A total of 303 employees have participated in the
programme which includes theory and practical field work. A total of 303 employees have participated in the
programme which includes theory and practical field work. A total of 303 employees have participated in the
programme since its inception in 1993 with 35% still working for the Group. Over the years, one employee has
programme since its inception in 1993 with 35% still working for the Group. Over the years, one employee has
programme since its inception in 1993 with 35% still working for the Group. Over the years, one employee has
successfully been promoted to General Manager level with another 17 being employed in various senior positions in
successfully been promoted to General Manager level with another 17 being employed in various senior positions in
successfully been promoted to General Manager level with another 17 being employed in various senior positions in
the head office, plantations and mills.
the head office, plantations and mills.
the head office, plantations and mills.
The Group also recognises its obligations to the wider farming communities in which it operates. The Indonesian
The Group also recognises its obligations to the wider farming communities in which it operates. The Indonesian
The Group also recognises its obligations to the wider farming communities in which it operates. The Indonesian
authorities have established that not less than 20% of the newly planted areas acquired from 2007 onwards are to be
authorities have established that not less than 20% of the newly planted areas acquired from 2007 onwards are to be
authorities have established that not less than 20% of the newly planted areas acquired from 2007 onwards are to be
reserved for the benefit of the smallholder cooperative scheme, known as Plasma, and the Group is integrating such
reserved for the benefit of the smallholder cooperative scheme, known as Plasma, and the Group is integrating such
reserved for the benefit of the smallholder cooperative scheme, known as Plasma, and the Group is integrating such
smallholder developments alongside its estates. The Plasma development has commenced in stages for its estates
smallholder developments alongside its estates. The Plasma development has commenced in stages for its estates
smallholder developments alongside its estates. The Plasma development has commenced in stages for its estates
in Sumatera and Kalimantan. Out of the 5,795ha of land compensated for Plasma, the Group has planted oil palm in
in Sumatera and Kalimantan. Out of the 5,795ha of land compensated for Plasma, the Group has planted oil palm in
in Sumatera and Kalimantan. Out of the 5,795ha of land compensated for Plasma, the Group has planted oil palm in
2,862ha. In 2017 the Group received 16,400mt of FFB from Plasma schemes compared to 12,300mt the previous
2,862ha. In 2017 the Group received 16,400mt of FFB from Plasma schemes compared to 12,300mt the previous
2,862ha. In 2017 the Group received 16,400mt of FFB from Plasma schemes compared to 12,300mt the previous
year. Total revenue after deduction of management fees received by Plasma cooperatives was $1.6 million in 2017
year. Total revenue after deduction of management fees received by Plasma cooperatives was $1.6 million in 2017
year. Total revenue after deduction of management fees received by Plasma cooperatives was $1.6 million in 2017
against $1.2 million in 2016. There is a substantial increase in Plasma planting from 2016 of 1,712ha which is in line
against $1.2 million in 2016. There is a substantial increase in Plasma planting from 2016 of 1,712ha which is in line
against $1.2 million in 2016. There is a substantial increase in Plasma planting from 2016 of 1,712ha which is in line
with the Group commitment.
with the Group commitment.
with the Group commitment.
In order to aid the development of Plasma schemes, the Group provided corporate guarantees of over $17 million
In order to aid the development of Plasma schemes, the Group provided corporate guarantees of over $17 million
In order to aid the development of Plasma schemes, the Group provided corporate guarantees of over $17 million
through its subsidiaries to local banks to cover loans raised by the cooperatives. The Group also assisted the
through its subsidiaries to local banks to cover loans raised by the cooperatives. The Group also assisted the
through its subsidiaries to local banks to cover loans raised by the cooperatives. The Group also assisted the
cooperatives to obtain the proper land right certification from the local land office.
cooperatives to obtain the proper land right certification from the local land office.
cooperatives to obtain the proper land right certification from the local land office.
The Group supported the Kas Desa smallholder village development programme to supplement the livelihood of the
The Group supported the Kas Desa smallholder village development programme to supplement the livelihood of the
The Group supported the Kas Desa smallholder village development programme to supplement the livelihood of the
villages. The Group has to-date financed, developed and managed 22 smallholder village schemes of palm oil
villages. The Group has to-date financed, developed and managed 22 smallholder village schemes of palm oil
villages. The Group has to-date financed, developed and managed 22 smallholder village schemes of palm oil
across four companies.
across four companies.
across four companies.
In addition, the Group also develops infrastructure, such as the construction and repair of bridges maintained over
In addition, the Group also develops infrastructure, such as the construction and repair of bridges maintained over
In addition, the Group also develops infrastructure, such as the construction and repair of bridges maintained over
400km of external roads in 2017. The Group also provides initial aid and seed capital to villagers such as fruit
400km of external roads in 2017. The Group also provides initial aid and seed capital to villagers such as fruit
400km of external roads in 2017. The Group also provides initial aid and seed capital to villagers such as fruit
seedlings, fish fries, cattle and ducks to start community sustainable programs.
seedlings, fish fries, cattle and ducks to start community sustainable programs.
seedlings, fish fries, cattle and ducks to start community sustainable programs.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Strategic Report
Strategic Report
Road upgrade in Kalimantan
Road upgrade in Kalimantan
Road upgrade in Kalimantan
Indonesian Sustainable Palm Oil (“ISPO”)
Indonesian Sustainable Palm Oil (“ISPO”)
Indonesian Sustainable Palm Oil (“ISPO”)
The ISPO certification is legally mandatory for all plantations in Indonesia. In March 2012, ISPO, which is
The ISPO certification is legally mandatory for all plantations in Indonesia. In March 2012, ISPO, which is
The ISPO certification is legally mandatory for all plantations in Indonesia. In March 2012, ISPO, which is
fundamentally aligned to RSPO (Roundtable on Sustainable Palm Oil) principles, has become the mandatory
fundamentally aligned to RSPO (Roundtable on Sustainable Palm Oil) principles, has become the mandatory
fundamentally aligned to RSPO (Roundtable on Sustainable Palm Oil) principles, has become the mandatory
standard for Indonesian planters.
standard for Indonesian planters.
standard for Indonesian planters.
A Steering Committee was established to work out a roadmap to support the ISPO implementation at mills and
A Steering Committee was established to work out a roadmap to support the ISPO implementation at mills and
A Steering Committee was established to work out a roadmap to support the ISPO implementation at mills and
estates. Workshops and training sessions on occupational safety and healthcare were carried out to inculcate a
estates. Workshops and training sessions on occupational safety and healthcare were carried out to inculcate a
estates. Workshops and training sessions on occupational safety and healthcare were carried out to inculcate a
safety culture in workplaces at all the estates and mills. In 2017 the regional government in North Sumatera awarded
safety culture in workplaces at all the estates and mills. In 2017 the regional government in North Sumatera awarded
safety culture in workplaces at all the estates and mills. In 2017 the regional government in North Sumatera awarded
two operating companies in the Group Zero Accident Awards for 2016 in recognition of the companies’ effort to
two operating companies in the Group Zero Accident Awards for 2016 in recognition of the companies’ effort to
two operating companies in the Group Zero Accident Awards for 2016 in recognition of the companies’ effort to
reduce accidents at the work place. The Group continued to upgrade its agricultural chemical stores and diesel fuel
reduce accidents at the work place. The Group continued to upgrade its agricultural chemical stores and diesel fuel
reduce accidents at the work place. The Group continued to upgrade its agricultural chemical stores and diesel fuel
storage tanks in various plantations and mills to meet safety and environmental standards. Standard operating
storage tanks in various plantations and mills to meet safety and environmental standards. Standard operating
storage tanks in various plantations and mills to meet safety and environmental standards. Standard operating
procedures were refined and documented based on sustainable oil palm best practices. It also conducts internal
procedures were refined and documented based on sustainable oil palm best practices. It also conducts internal
procedures were refined and documented based on sustainable oil palm best practices. It also conducts internal
audits using an audit checklist adopted from the above practices to determine the level of compliance. The Group
audits using an audit checklist adopted from the above practices to determine the level of compliance. The Group
audits using an audit checklist adopted from the above practices to determine the level of compliance. The Group
worked closely with appointed certification consultants in the implementation of ISPO standard. To-date eight
worked closely with appointed certification consultants in the implementation of ISPO standard. To-date eight
worked closely with appointed certification consultants in the implementation of ISPO standard. To-date eight
companies have been ISPO certified including two in 2017. Another three companies have completed the second
companies have been ISPO certified including two in 2017. Another three companies have completed the second
companies have been ISPO certified including two in 2017. Another three companies have completed the second
stage of ISPO audit while the certification audit has progressed to the second stage for another five companies.
stage of ISPO audit while the certification audit has progressed to the second stage for another five companies.
stage of ISPO audit while the certification audit has progressed to the second stage for another five companies.
ISPO certification provides third party verification and confirmation that the companies are operating according to
ISPO certification provides third party verification and confirmation that the companies are operating according to
ISPO certification provides third party verification and confirmation that the companies are operating according to
national and international standards. The Group targets full ISPO compliance by 2020.
national and international standards. The Group targets full ISPO compliance by 2020.
national and international standards. The Group targets full ISPO compliance by 2020.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Care for the Environment and Sustainable Practices
As a Group, we 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. When it
comes to replanting, the old palms felled are chipped and left to decompose at the site. This mitigates the
greenhouse gas emissions commonly associated with open burning when land is cleared through the traditional
method of slash-and-burn. It also enriches the organic matter in the soil. Where the land is undulating, we build
terraces for planting which helps to prevent landslides, conserve the water and nutrients effectively and provide
better accessibility for employees. Legume cover crops are planted to minimise soil erosion and preserve the soil
moisture. In mature areas, fronds and EFB are placed inter-rows to allow the slow release of organic nutrients while
minimising soil erosion especially sandy soil and degradation. Estates with sandy areas use soft grass, ferns and cut
fronds to cover bare ground which increase soil moisture. Conservation drains are constructed to harvest and
contain rainwater.
The effluents discharged from the mills are fully treated in anaerobic lagoons and in some mills, there are extended
aeration tanks for further treatment of the effluent. The final discharge is applied to the estate’s land where it is used
as fertilisers.
The Group’s three biogas plants will enhance the effluent treatment in the mills and at the same time mitigate
greenhouse biogas emissions. The trapped biogas will be used to generate and supply power to its biomass plant
and national grid without dependency on fossil fuels. Similar undertakings for the Group’s mills are planned and shall
be implemented in stages. The Group intends to sell the surplus power generated.
The Group is committed to implementing good agricultural practices as spelt out in its standard operating procedures
for the planting of oil palm. Integrated Pest Management has been adopted to control the population of damaging
pests and to improve biological balance.
Barn Owls were introduced to control rats. Beneficial plants of Turnera subulata, Cassia cobanensis and Antigonon
leptopus were planted to attract natural predators for biological control of bagworms and leaf-eating caterpillars.
Weeds are controlled selectively by using more environmentally friendly and broad spectrum weed control herbicides
such as Glyphosate which is also less costly.
The use of Paraquat herbicide and chemicals has been reduced and minimised to control weeds and vermin.The
sprayers are also trained in safety and spraying techniques. The chemicals are kept in designated storage and
examined at regular intervals. Employees who handle the use of chemicals undergo medical examination routinely.
Natural vegetation on uncultivable lands such as deep peat, very steep areas and riparian zones along watercourses
are maintained to preserve biodiversity and wildlife corridors.
The Group continues to comply and preserve the High Conservative Value (“HCV”) areas recognised by the
Department of Forestry. All sacred and customary lands are also preserved by the Group out of respect for the local
tribes and customs to pray and conduct their ritual ceremonies.
The six mills in the Group are operating in compliance with criteria set by Program Penelitian Peringkat Kinerja
Perusahaan (“PROPER”) overseen by the Indonesian Department of Environment. Many of the criteria set by
PROPER are also part of the ISPO requirement. Three of the mills are officially graded and rated to adhere to the
criteria set for the management of waste and compliance to environmental conservation over water resources, land
development, air and sea pollution, dangerous and toxic waste treatment which impact the environment. No official
grading is required for the rest of its mills even though they are in compliance.
Principal risks and uncertainties
The Group’s business involves risks and uncertainties of which the Directors currently consider the following to be
material. There are or may be other risks and uncertainties faced by the Group that the Directors currently deem
immaterial, or of which they are unaware, that may have a material adverse impact on the Group. The Board carries
out a robust assessment of the principal risks facing the Group on an annual basis.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Nature of the risk and its origin
Country and regulatory
The likelihood and impact of the
the circumstances
risk and
under which the risk might be
most relevant to the Company
Mitigating or other
considerations
relevant
in
The Group’s operations are located
Indonesia and
substantially
therefore
rely on
significantly
economic and political stability in
Indonesia.
and
upheaval
Political
deterioration
security
the
in
situation may cause disruption on
the operation and consequently
financial loss.
The country has recently benefited
from a period of relative political
stability, steady economic growth
and stable financial system. But
during the Asian financial crisis in
late 1990, there was civil unrest
attributed to ethnic tensions in
Indonesia. The
some parts of
Group’s operations were not
interrupted by the regional security
problems
including occasional
racial conflicts.
Introduction of measures to rein in
the country’s fiscal deficits. This
included the exchange controls and
restriction on repatriation of profit
through payment of dividends.
Transfer of profit from Indonesia to
the United Kingdom (“UK”) will be
restricted affecting servicing of UK
obligations
of
dividends to shareholders.
payment
and
the government
The Board is not aware of any
to
attempt by
impose exchange controls
that
would restrict the transfer of profits
from Indonesia to the UK. The
Board perceives that the Group
will be able to continue to extract
profits
in
Indonesia
foreseeable
future.
its subsidiaries
from
the
for
Changes in land legislation. Based
on National Land Agency Law 2 /
1999, mandatory restriction to land
ownership by non-state plantation
companies and companies not
listed in Indonesia to 20,000ha per
province and a total of 100,000ha in
Indonesia.
Mandatory reduction of
foreign
Indonesian
in
ownership
plantations could force divestment
of interests in Indonesia at below
market values.
The Group realises that there is a
possibility that foreign owners may
be required over time to partially
divest ownership of Indonesia oil
palm operations but has no reason
to believe that such divestment
would be anything other than at
market value.
Group failure to meet the standards
expected in relation to bribery and
corruption.
Reputational damage and criminal
sanctions.
The Group continues to maintain
strong controls in this area as
Indonesia has been classified as
by
relatively
the
International
Transparency
Corruption Perceptions index.
high
risk
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Nature of the risk and its origin
Exchange rates
a
and
revenue costs
CPO is a US Dollar denominated
significant
commodity
proportion of
in
Indonesia (such as fertiliser and
fuel) and development costs (such
as heavy machinery and mill
equipment) are imported and are
US Dollar related.
The likelihood and impact of the
risk and
the circumstances
under which the risk might be
most relevant to the Company
Mitigating or other
considerations
relevant
Adverse movements of Rupiah
against US Dollar can have a
negative effect on the operating
costs and raise funding costs.
The Board has taken the view that
these risks are inherent in the
business and feels that adopting
hedging mechanisms to counter
foreign
the negative effects of
exchange
both
are
volatility
difficult to achieve and would not
be cost effective.
Weather and natural disasters
rainfall but
Oil palms rely on regular sunshine
and
these weather
patterns can vary and extremes
such as unusual dry periods or,
conversely, heavy rainfall leading to
flooding
locations can
occur.
in some
in particular, will
Dry periods,
the short and
in
affect yields
term. Drought induces
medium
moisture stress
trees.
in palm
High levels of rainfall can disrupt
estate operations and result in
harvesting delays with loss of FFB
or deterioration in fruit quality. Any
delay in collection of harvested
FFB during the rainy season could
raise the level of free fatty acid
(“FFA”) in the CPO. CPO with high
FFA will be sold at a discount to
market prices. Low
level of
sunshine could result in delay in
in
formation of FFB
potential loss of revenue.
resulting
levels
is
Where appropriate, bunding
built around flood prone areas and
canals/drainage/retention
ponds
constructed and adapted either to
to
evacuate surplus water or
maintain water
in areas
quick to dry out. Where practical,
natural disasters are covered by
insurance policies. Certain risks
(including the risk of crop loss
through fire, earthquake, flood and
other perils potentially affecting
the planted areas on the Group’s
estates) if they materialise could
dent the potential revenues, for
which insurance cover is either not
available or would in the opinion of
the Directors be disproportionately
expensive, are not insured. These
floods or haze are
risks of
mitigated by
the geographical
spread of the plantations but an
occurrence
adverse
uninsured event could result in the
Group sustaining material losses.
an
of
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Nature of the risk and its origin
Produce prices
CPO is a primary commodity and is
affected by the world economy,
levels of inflation, and availability of
such as
soft oils
alternative
soybean oils. CPO price also
moves in tandem with crude oil
prices which
the
competitiveness of CPO as a
source of biodiesel.
determine
Imposition of
import controls or
taxes in consuming and exporting
Indonesian
The
countries.
government in July 2015 imposed a
$50/mt export levy to fund biodiesel
subsidies.
Indian
In November 2017,
government imposed a steep levy
on the import of CPO and refined oil
into India.
single
introduction of a
The
certification scheme for palm oil
entering the EU market and phase
out of the use of palm biodiesel by
year 2020.
the
Hedging risk
The Group's subsidiaries have
borrowings in US Dollar.
The likelihood and impact of the
risk and
the circumstances
under which the risk might be
most relevant to the Company
Mitigating or other
considerations
relevant
This may lead to significant price
swings. The profitability and cash
flow of the plantation operations
depend upon world prices of CPO
and upon the Group’s ability to sell
CPO at price levels comparable
with world prices, unlike soybean
is sown annually and
which
production can be increased or
decreased to match demand and
prevailing prices.
be moderated
Directors believe that such swings
should
by
continuous demand in economies
like China, India and Indonesia.
Larger exports would lead to a
lower
inventory of CPO which
augurs well for future produce
price.
Indonesian
The
government
allows free export of CPO but
applies a sliding scale of duties on
exports which allows producers
economic margins. The export
regarded as a
levy may be
CPO
support
to
measure
producers through an increase in
biodiesel consumption. Despite
the increase in levy in India and
the ban on use of palm biodiesel
in EU from 2020, CPO remains
amongst the cheapest source of
vegetable oil
in a growing
population.
July
2015,
levy will
impact upon
Reduced revenue and reduction in
cash flow and profit. When CPO
price is below $750/mt, the export
tax
the
Group’s profit. When CPO price
recovers to above $750/mt, the
effective tax rate will be lower
providing some relief to planters.
Effective
the
Indonesian government imposed a
progressive export tax from $3/mt
for CPO exported above $750/mt.
The higher import levy in India will
raise the price of CPO and make it
less competitive in the global oil
market, thus reducing demand.
The single certification plan for
palm oil will make it more difficult
to export palm oil to EU and the
ban of palm biodiesel will hurt the
demand of CPO in EU.
The Group could face significant
exchange losses in the event of
depreciation of their local currency
(i.e. Strengthening of US Dollar) -
and vice versa.
The risk is partially mitigated by
US Dollar denominated cash
balances and the higher average
interest rate on Rupiah deposits
which is 3.31% higher than on US
the
Dollar deposits whereas
interest rate for Rupiah borrowings
is about 4.84% higher compared
to US Dollar borrowings.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Nature of the risk and its origin
The likelihood and impact of the
risk and
the circumstances
under which the risk might be
most relevant to the Company
Mitigating or other
considerations
relevant
Social, community and human rights issues
could
Any material breakdown in relations
between the Group and the host
population in the vicinity of the
the
operations
Group’s operations. The plantations
hire large numbers of people and
have
economic
importance for local communities in
the areas of the Group’s operations.
significant
disrupt
Communication breakdown would
cause disruption on the operation
and consequently financial loss.
local
living standards
The Group endeavours to mitigate
this risk by liaising regularly with
representatives of surrounding
villages and by seeking to improve
local
through
mutually beneficial economic and
social interaction with the local
villages. In particular, the Group,
when possible, gives priority to
applications for employment from
members of the local population
and supports specific initiatives to
encourage
farmers and
tradesmen to act as suppliers to
the Group, its employees and their
dependents. The Group spends
considerable sums of money
constructing new
roads and
bridges and maintaining existing
roads used by villagers. The
Group also provides technical and
management expertise to villagers
to develop oil palm plots or Kebun
Kas Desa (village’s scheme) and
Plasma schemes surrounding the
returns
operating estates. The
from
to
community
improve
welfare.
these plots are used
villages’
Information Technology (“IT”) security risk
to
its
threats
include
The security threats faced by the
Group
IT
infrastructure, unlawful attempts to
gain access to classified information
business
and
disruptions associated with
IT
failures.
potential
for
to combat cyberattack
to our
Failure
could cause disruption
business operations.
The Group has measures in place
including appropriate
tools and
techniques to monitor and mitigate
this risk. The Group through its IT
Consultant has in place antivirus,
threat detection,
log analysis,
DDOS protection and Firewalls.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Strategic Report
Gender diversity
The AEP Plc Board is composed of three men and one woman with extensive knowledge in their respective fields of
Gender diversity
experience. The Board has taken note of the recent legislative initiatives with regard to the representation of women
The AEP Plc Board is composed of three men and one woman with extensive knowledge in their respective fields of
on the boards of Directors of listed companies and will make every effort to conform to its composition based on
experience. The Board has taken note of the recent legislative initiatives with regard to the representation of women
legislative requirement.
on the boards of Directors of listed companies and will make every effort to conform to its composition based on
legislative requirement.
Group Headcount
Group Headcount
Board (Company and subsidiaries)
Board (Company and subsidiaries)
Senior Management (GM and above)
Senior Management (GM and above)
Managers & Executives
Managers & Executives
Full Time
Full Time
Part-time Field Workers
Part-time Field Workers
Total
Total
%
%
2017 average employed during the year
2017 average employed during the year
Total
Total
16
16
6
6
410
410
5,262
5,262
9,997
9,997
15,691
15,691
100%
100%
Women
Women
2
2
-
-
31
31
200
200
4,244
4,244
4,477
4,477
29%
29%
Men
Men
14
14
6
6
379
379
5,062
5,062
5,753
5,753
11,214
11,214
71%
71%
2016 average employed during the year
2016 average employed during the year
Men
Men
14
14
6
6
390
390
5,215
5,215
6,516
6,516
12,141
12,141
72%
72%
Total
Total
16
16
6
6
420
420
5,396
5,396
10,934
10,934
16,772
16,772
100%
100%
Group Headcount
Women
Women
Group Headcount
2
Board (Company and subsidiaries)
2
Board (Company and subsidiaries)
-
Senior Management (GM and above)
-
Senior Management (GM and above)
Managers & Executives
30
30
Managers & Executives
181
Full Time
181
Full Time
4,418
Part-time Field Workers
4,418
Part-time Field Workers
Total
4,631
4,631
Total
28%
%
28%
%
Although the Group provides equal opportunities for female workers in the plantations, the male workers make up a
majority of the field workers due to the nature of work and the remote location of plantations from the towns and
Although the Group provides equal opportunities for female workers in the plantations, the male workers make up a
cities. Nevertheless, the percentage of female workers within the Group increased from 28% in 2016 to 29% in 2017.
majority of the field workers due to the nature of work and the remote location of plantations from the towns and
cities. Nevertheless, the percentage of female workers within the Group increased from 28% in 2016 to 29% in 2017.
Employees
In 2017, the number of full time workers averaged 5,694 (2016: 5,838) while the part-time labour averaged 9,997
Employees
(2016: 10,934). The headcount in 2017 was lower by 6% as the resignation and retirement in certain estates have
In 2017, the number of full time workers averaged 5,694 (2016: 5,838) while the part-time labour averaged 9,997
not been replaced and some positions have been streamlined. Moreover, fewer harvesters were required due to the
(2016: 10,934). The headcount in 2017 was lower by 6% as the resignation and retirement in certain estates have
replanting exercise.
not been replaced and some positions have been streamlined. Moreover, fewer harvesters were required due to the
replanting exercise.
The Group has formal processes for recruitment, particularly for key managerial positions, where psychometric
testing is conducted to support the selection and hiring decisions. Exit interviews are also conducted with departing
The Group has formal processes for recruitment, particularly for key managerial positions, where psychometric
employees to ensure that management can address any significant issues.
testing is conducted to support the selection and hiring decisions. Exit interviews are also conducted with departing
employees to ensure that management can address any significant issues.
The Group has a programme for recruiting graduates from Indonesian universities to join existing employees,
selected on a regular basis, on training programmes organised by the Group’s training centre that provide grounding
The Group has a programme for recruiting graduates from Indonesian universities to join existing employees,
and refresher courses in technical aspects of oil palm estate and mill management. The training centre also conducts
selected on a regular basis, on training programmes organised by the Group’s training centre that provide grounding
regular programmes for all levels of employees to raise the competency and quality of employees in general. These
and refresher courses in technical aspects of oil palm estate and mill management. The training centre also conducts
programmes are often supplemented by external management development courses including attending industry
regular programmes for all levels of employees to raise the competency and quality of employees in general. These
conferences for technical updates. A wide variety of topics are covered including work ethics, motivation, self-
programmes are often supplemented by external management development courses including attending industry
improvement, company values and health and safety.
conferences for technical updates. A wide variety of topics are covered including work ethics, motivation, self-
improvement, company values and health and safety.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
24
24
24
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
All the plantations are at various stages of introducing finger printing to record and mark attendance of daily workers
and to pay all workers through bank transfer to improve the efficiency of estate operations.
A large workforce and their families are housed in the Group’s housing across the Group’s plantations. The Group
further provides at its own cost water and electricity and a host of other amenities including places of worship,
schools and clinics. On top of competitive salaries and bonuses, extensive benefits and privileges help the Group to
retain and motivate its employees.
The Group promotes a policy for the creation of equal and ethnically diverse employment opportunities including with
respect to gender.
The Group has in place key performance linked indicators to determine increment and bonus entitlements for its
employees.
The Group promotes and encourages employee involvement in every aspect wherever practical as it recognises
employees as a valuable asset and is one of the key contributions to the Group’s success. The employees contribute
their ideas, feedback and voice out their concerns through formal and informal meetings, discussions and annual
performance appraisals. In addition, various work related and personal training programmes are carried out annually
for employees to promote employee engagement and interaction.
Although the Group does not have a specific policy on employment of disabled persons, it, however, employs
disabled persons as part of its workforce. The Group welcomes disabled persons joining the Group based on their
suitability.
Outlook
FFB production for the three months to March 2018 was 4% higher against the same period in 2017 mainly due to
the increase in production from the Riau and Kalimantan regions. It is too early to forecast whether the production
will be better for the rest of the year. In 2018 the Group will see ongoing benefit from a range of sustainable
investments made in recent years and capital expenditure, including planting, is expected to increase to $41.6m
(2017: $27.4m).
The CPO price ex-Rotterdam opened in 2018 at $678/mt and prices are expected to be in the range of $600/mt to
$700/mt for the first half of 2018. The temporary suspension of CPO export duty by the Malaysian government and
the increase of biodiesel mandate by the Indonesian government may not sustain the price in view of the sharp
increase in import tax on CPO and refined palm oil in India. A higher import tax would narrow the price difference
between CPO and competing soft oils.
The US Dollar appreciated by approximately 1% (2016: -3%) against the Indonesian Rupiah in 2017 in anticipation of
interest rate hikes in the United States and the weak emerging economies. The Rupiah has further depreciated by
2% in 2018.
The rising material costs and wages in Indonesia are expected to increase the overall production cost in 2018. The
Indonesian government recently announced in 2018 regional increases in minimum wage averaging 8.7%. These
wage hikes will raise overall estate costs and may erode profit margins.
Annual Report 2017 | Anglo-Eastern Plantations Plc
25
25
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Strategic Report
Nevertheless, barring any unforeseen circumstances, the Group is confident that CPO demand will be sustainable in
the long term on the backdrop of global economic recovery and we can expect a satisfactory trading outturn and
cash flow for 2018.
On behalf of the Board
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
24 April 2018
Annual Report 2017 | Anglo-Eastern Plantations Plc
26
26
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Financial Record
Income statement
Revenue
Operating profit before BA
Profit attributable to shareholders after BA
2017
$000
2016
$000
2015
$000
2014
$000
2013
$000
291,907
246,210
196,451
251,258
201,917
66,676
36,214
52,480
34,713
23,667
9,775
78,845
30,762
59,619
93,521
Dividend proposed for year
(1,585)
(1,463)
(1,028)
(1,854)
(1,969)
Financial position
$000
$000
$000
$000
$000
Non-current assets & long term receivables
362,038
360,681
340,099
481,761
484,826
Cash net of short term borrowings
130,895
111,973
102,864
125,624
98,654
Long term loans and borrowings
(19,281)
(27,875)
(32,875)
(34,625)
(34,937)
Other working capital
Deferred tax
Non-controlling interests
Net worth
Share capital
Treasury shares
16,320
17,094
3,898
(10,343)
765
(13,081)
476,891
(91,799)
(16,612)
445,261
(82,150)
(19,373)
394,613
(73,598)
(44,368)
518,049
(90,813)
(55,298)
494,010
(85,964)
385,092
363,111
321,015
427,236
408,046
15,504
15,504
15,504
15,504
15,504
(1,171)
(1,171)
(1,171)
(1,171)
(1,171)
Share premium and capital redemption reserve
25,022
25,022
25,022
25,022
25,022
Revaluation and exchange reserves
(170,147)
(158,532)
(167,402)
(133,474)
(124,340)
Retained earnings
515,884
482,288
449,062
521,355
493,031
Equity attributable to shareholders’ funds
385,092
363,111
321,015
427,236
408,046
Ordinary shares in issue (‘000s)
39,976
39,976
39,976
39,976
39,976
Basic EPS before BA movement (US cents)
91.80cts
82.16cts
25.89cts
132.26cts
90.70cts
Basic EPS after BA movement (US cents)
91.37cts
87.58cts
24.66cts
77.61cts
235.95cts
Dividend per share for year (US cents)
Asset value per share (US cents)
Exchange rates - year end
Rp : $
$ : £
RM: $
Exchange rates - average
Rp : $
$ : £
RM: $
Annual Report 2017 | Anglo-Eastern Plantations Plc
4.0cts
972cts
3.8cts
916cts
2.5cts
4.5cts
5.0cts
810cts
1,078cts
1,029cts
13,548
13,436
13,795
12,385
12,170
1.35
4.05
1.23
4.49
1.48
4.29
1.56
3.50
1.66
3.28
13,383
13,307
13,392
11,861
10,445
1.29
4.30
1.35
4.14
1.53
3.91
1.65
3.27
1.56
3.15
27
27
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
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28
Annual Report 2017 | Anglo-Eastern Plantations Plc
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Location of Estates
Location of Estates
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
29
29
29
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
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 2017.
Accountability and audit
AEP is committed to ensure that the quality of its financial reporting is of a high standard. The Board continually
reviews its internal controls and risk management systems to ensure the Group’s affairs and the Group’s financial
reporting comply with the applicable accounting standards as well as good corporate governance. The main features
of the Group’s internal controls and risk management systems are further disclosed on page 46.
The Board considers the annual report and accounts including the strategic report when taken as a whole, is fair,
balanced and understandable as it provides the information necessary for shareholders to assess the Group’s
position and performance, business model and strategy.
Results and dividends
The audited financial statements for the year ended 31 December 2017 are set out on pages 60 to 101. The Group’s
profit for the year on ordinary activities before taxation was 69,691,000 (2016: profit $60,846,000) and the profit
attributable to ordinary shareholders was $36,214,000 (2016: profit $34,713,000). No interim dividend was paid. The
Directors recommend a final dividend of 4.0cts (2016: 3.8cts equivalent) to be paid to shareholders on 13 July 2018.
Shareholders may elect to receive their dividend in Pounds Sterling as described on page 37.
Viability Statement
The viability assessment considers solvency and liquidity over a longer period than for the purposes of the going
concern assessment made on page 12. Inevitably, the degree of certainty reduces over this longer period.
The Group’s business activities, financial performance, corporate development and principal risks associated with
the local operating environment are covered under the Strategic Report. In undertaking its review of the Group’s
performance in 2017, the Board considered the prospects of the Company over the one and five-year periods. The
process involved a detailed review of the 2018 detailed budget and the five-year income and cash flow projection.
The one-year budget has a greater level of certainty and is used to set detailed budgetary targets at all levels across
the Group. It is also used by the Remuneration Committee to set targets for the annual incentive. The five-year
income and cash flow projection contains less certainty of the outcome but provides a robust planning tool against
which strategic decisions can be made. The Board also considered the five-year cash flow projection under various
scenarios, including the need to support financially loss-making newly matured estates together with the projected
capital expenditure. On the basis of this and other matters considered and reviewed by the Board during the year,
the Board concluded and believed that the Group has adequate resources to continue in operation and meet its
liabilities over the five years from 2018 to 2022. Accordingly, the Directors adopt the going concern basis of
accounting in preparing the financial statements.
Research and Development
The Group did not undertake any research and development activities. It relies on third parties to conduct research
and development of new disease resistant and higher yield oil palm seeds.
Land Valuation
Twelve companies located across North Sumatera, Bengkulu, Riau, Kalimantan and Malaysia were valued by
qualified valuers in 2017 to provide indicative fair values and support the valuation for the estate land. The Directors
revalued the estate land not covered by the valuation exercise based on the regional appreciation rate quantified by
the qualified valuers.
Annual Report 2017 | Anglo-Eastern Plantations Plc
30
30
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Report
Due to the slow rate of planting and land compensation, the Group engaged qualified independent surveyors to carry
out a detailed field survey and in-depth analysis on plantable land using satellite imagery remote sensing. The
determined large tracts of land within the location permit of four companies, the directors had previously estimated to
be plantable cannot be planted on for a variety of reasons. Large areas now have established oil palm, pepper, rice
fields, coffee and rubber small holdings which land owners depend on for their livelihood which means that it is
probable the four companies will not be able to compensate and use the land in the foreseeable future. The directors
have therefore revisited their estimated split of plantable and unplantable land and have reclassified some land from
plantable to unplantable which affects the fair value of the land. The reclassification has reduced the fair value of
land by $15.5 million, of which $14.9 million and $3.7 million was set off against revaluation reserves and deferred
tax respectively with $0.6 million recognised as part of impairment losses for the year.
Political donations, anti-bribery and anti-corruption
The Group made no political donations during the year.
The Group has in place policies and procedures in respect of bribery and corruption, with detailed guidelines and
reporting requirements. Management and senior staff have had training programmes and updates as part of their
responsibility to ensure that bribery and corruption does not exist in the Group’s operation. The Group uses its best
endeavour to seek that it’s business partners are in compliance with the anti-bribery and anti-corruption regulations.
Carbon Reporting
A greenhouse gas (“GHG”) emissions assessment quantifies greenhouse gases produced directly and indirectly
from the Group’s agricultural activities. Also known as a carbon footprint, it is an essential tool in the process of
understanding, monitoring, managing and reducing the Group’s climate change impact. The emissions sources
included in this report were fuel and electricity consumption at the mills, palm oil mill effluent (“POME”) treatment,
nitrogen emissions from mineral fertiliser use, company owned vehicle use, third party vehicle fuel use, electricity
consumption in employee housing and emissions associated with land use change and carbon sequestration.
The report identifies and quantifies GHG emissions in the production of CPO at the Group’s mills and related estate
supply base and planting activities. The Board believes that this report will help the Group plan and facilitate the
design and implementation of effective strategies for reducing the Group’s GHG emissions in the future as well as
providing a benchmark to monitor the reduction of similar gas. We understand the urgent need for the industry to
identify and respond to reducing the environmental risk and impact by developing appropriate sustainable practices.
We remain committed to monitoring, targeting and reducing all our environmental impact across the Group.
This assessment has been carried out in accordance with the World Business Council for Sustainable Development
and World Resources Institute’s (WBCSD/WRI) Greenhouse Gas Protocol; a Corporate Accounting and Reporting
Standard, together with the latest emission factors from recognised public sources including, but not limited to, Defra,
the International Energy Agency, the US Energy Information Association, the US Environmental Protection Agency
and the Intergovernmental Panel on Climate Change. The values for the amount of carbon sequestered by the oil
palm have been taken from the OPRODSIM and OPCABSIM average growth models provided in the PalmGHG
Tool. GHG emissions have been reported by the three WBCSD/WRI scopes. Land use emissions and carbon
sequestration results were calculated in line with the methodology used by The Roundtable for Sustainable Palm Oil
(“RSPO”) GHG Working Group 2 throughout the PalmGHG Calculator. The carbon stock values were derived by the
RSPO based on a review of relevant literature and satellite images for land use changes associated with oil palm
plantations in Indonesia and Malaysia. An estimate of CO2 emissions from cultivation of peat soils has been included
in this report. The detailed methodology in the calculation the GHG emissions under the three scopes can be viewed
at www.ghgprotocol.org.
Cultivation of peat soils results in CO2 emissions due to oxidation of organic carbon; therefore an estimate of these
emissions from AEP’s peat soil estates has been included in this report. There is a lot of uncertainty regarding the
determination of emission factors for peat cultivation and the methodology used in the PalmGHG Tool is based on a
report by Hooijer et al (2010) which determines emissions based on the drainage depth of the soil.
Annual Report 2017 | Anglo-Eastern Plantations Plc
31
31
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
The gross overall emissions computed by the outsourced agent were 1,180,752 tCO2e for 2017 compared to
The gross overall emissions computed by the outsourced agent were 1,180,752 tCO2e for 2017 compared to
The gross overall emissions computed by the outsourced agent were 1,180,752 tCO2e for 2017 compared to
The gross overall emissions computed by the outsourced agent were 1,180,752 tCO2e for 2017 compared to
903,684 tCO2e for 2016. The overall emissions have increased by 277,068 tCO2e, or 31%, during the 2016 to 2017
903,684 tCO2e for 2016. The overall emissions have increased by 277,068 tCO2e, or 31%, during the 2016 to 2017
The gross overall emissions computed by the outsourced agent were 1,180,752 tCO2e for 2017 compared to
903,684 tCO2e for 2016. The overall emissions have increased by 277,068 tCO2e, or 31%, during the 2016 to 2017
903,684 tCO2e for 2016. The overall emissions have increased by 277,068 tCO2e, or 31%, during the 2016 to 2017
assessment period. This increase was mainly due to an increase in emissions associated with land clearance by
assessment period. This increase was mainly due to an increase in emissions associated with land clearance by
903,684 tCO2e for 2016. The overall emissions have increased by 277,068 tCO2e, or 31%, during the 2016 to 2017
assessment period. This increase was mainly due to an increase in emissions associated with land clearance by
assessment period. This increase was mainly due to an increase in emissions associated with land clearance by
AEP and out-growers where AEP mills bought the crops from.
AEP and out-growers where AEP mills bought the crops from.
assessment period. This increase was mainly due to an increase in emissions associated with land clearance by
AEP and out-growers where AEP mills bought the crops from.
AEP and out-growers where AEP mills bought the crops from.
AEP and out-growers where AEP mills bought the crops from.
Emissions source
Emissions source
Emissions source
Emissions source
POME treatment
Emissions source
POME treatment
POME treatment
POME treatment
Fertiliser application
POME treatment
Fertiliser application
Fertiliser application
Fertiliser application
Premises energy consumption
Fertiliser application
Premises energy consumption
Premises energy consumption
Premises energy consumption
Company owned vehicles
Premises energy consumption
Company owned vehicles
Company owned vehicles
Company owned vehicles
Third party vehicle use
Company owned vehicles
Third party vehicle use
Third party vehicle use
Third party vehicle use
Employee housing
Third party vehicle use
Employee housing
Employee housing
Employee housing
Employee housing
2017 Emissions in tCO2e
2017 Emissions in tCO2e
2017 Emissions in tCO2e
2017 Emissions in tCO2e
2017 Emissions in tCO2e
2016 Emissions in tCO2e
2016 Emissions in tCO2e
2016 Emissions in tCO2e
2016 Emissions in tCO2e
2016 Emissions in tCO2e
204,771
204,771
204,771
204,771
25,952
204,771
25,952
25,952
25,952
14,800
25,952
14,800
14,800
14,800
6,361
14,800
6,361
6,361
6,361
7,110
6,361
7,110
7,110
7,110
1,736
7,110
1,736
1,736
1,736
260,730
1,736
260,730
260,730
260,730
Own crop Out-grower crop
260,730
Own crop Out-grower crop
Own crop Out-grower crop
Own crop Out-grower crop
780,038
Own crop Out-grower crop
780,038
780,038
780,038
-588,675
780,038
-588,675
-588,675
-588,675
58,838
-588,675
58,838
58,838
58,838
920,022
58,838
920,022
920,022
920,022
1,180,752
920,022
1,180,752
1,180,752
1,180,752
1,180,752
708,166
708,166
708,166
708,166
-534,435
708,166
-534,435
-534,435
-534,435
496,090
-534,435
496,090
496,090
496,090
496,090
235,069
235,069
235,069
235,069
28,510
235,069
28,510
28,510
28,510
14,499
28,510
14,499
14,499
14,499
6,022
14,499
6,022
6,022
6,022
7,667
6,022
7,667
7,667
7,667
1,581
7,667
1,581
1,581
1,581
293,348
1,581
293,348
293,348
293,348
Out-grower crop
293,348
Out-grower crop
Out-grower crop
Out-grower crop
445,778
Out-grower crop
445,778
445,778
445,778
-404,103
445,778
-404,103
-404,103
-404,103
28,516
-404,103
28,516
28,516
28,516
610,336
28,516
610,336
610,336
610,336
903,684
610,336
903,684
903,684
903,684
903,684
Own crop
Own crop
Own crop
Own crop
Own crop
571,623
571,623
571,623
571,623
-518,184
571,623
-518,184
-518,184
-518,184
486,706
-518,184
486,706
486,706
486,706
486,706
Total operational emissions
Total operational emissions
Total operational emissions
Total operational emissions
Total operational emissions
Land clearance
Land clearance
Land clearance
Land clearance
Carbon sequestered by standing crop
Land clearance
Carbon sequestered by standing crop
Carbon sequestered by standing crop
Carbon sequestered by standing crop
Peat soils cultivation
Carbon sequestered by standing crop
Peat soils cultivation
Peat soils cultivation
Peat soils cultivation
Peat soils cultivation
Total land use emissions
Total land use emissions
Total land use emissions
Total land use emissions
Overall emissions
Total land use emissions
Overall emissions
Overall emissions
Overall emissions
Overall emissions
2017 and 2016 emissions in tCO2e
2017 and 2016 emissions in tCO2e
2017 and 2016 emissions in tCO2e
2017 and 2016 emissions in tCO2e
Operational emissions (Exc. POME) combined
Operational emissions (Exc. POME) combined
2017 and 2016 emissions in tCO2e
Operational emissions (Exc. POME) combined
Operational emissions (Exc. POME) combined
Operational emissions (Exc. POME) combined
POME treatment
POME treatment
POME treatment
POME treatment
POME treatment
Operational
Operational
Operational
emissions
Operational
emissions
emissions
Operational
emissions
emissions
Land clearance
Land clearance
Land clearance
Land clearance
Land clearance
Carbon sequestered
Carbon sequestered
Carbon sequestered
by standing crop
Carbon sequestered
by standing crop
by standing crop
Carbon sequestered
by standing crop
by standing crop
Peat soils
Peat soils
Peat soils
cultivation
Peat soils
cultivation
cultivation
Peat soils
cultivation
cultivation
2017
2017
2017
2017
2016
2017
2016
2016
2016
2016
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
500,000
500,000
500,000
500,000
500,000
0
0
0
0
0
e
e
2
e
2
O
e
2
O
C
2
O
e
C
t
O
C
2
t
C
t
O
t
C
t
-500,000
-500,000
-500,000
-500,000
-500,000
-1,000,000
-1,000,000
-1,000,000
-1,000,000
-1,000,000
-1,500,000
-1,500,000
-1,500,000
-1,500,000
-1,500,000
The following chart displays 2016 and 2017 overall emissions by scope.
The following chart displays 2016 and 2017 overall emissions by scope.
The following chart displays 2016 and 2017 overall emissions by scope.
The following chart displays 2016 and 2017 overall emissions by scope.
The following chart displays 2016 and 2017 overall emissions by scope.
Scope 1 are direct GHG emissions from sources owned and controlled by the Company which cover emissions
Scope 1 are direct GHG emissions from sources owned and controlled by the Company which cover emissions
Scope 1 are direct GHG emissions from sources owned and controlled by the Company which cover emissions
Scope 1 are direct GHG emissions from sources owned and controlled by the Company which cover emissions
associated with own cropland clearance, natural gas combustion and company owned vehicles. This made up the
associated with own cropland clearance, natural gas combustion and company owned vehicles. This made up the
Scope 1 are direct GHG emissions from sources owned and controlled by the Company which cover emissions
associated with own cropland clearance, natural gas combustion and company owned vehicles. This made up the
associated with own cropland clearance, natural gas combustion and company owned vehicles. This made up the
majority of the GHG emissions. This has increased in 2017 due primarily to an increase in land clearance emissions.
majority of the GHG emissions. This has increased in 2017 due primarily to an increase in land clearance emissions.
associated with own cropland clearance, natural gas combustion and company owned vehicles. This made up the
majority of the GHG emissions. This has increased in 2017 due primarily to an increase in land clearance emissions.
majority of the GHG emissions. This has increased in 2017 due primarily to an increase in land clearance emissions.
Scope 2 accounts for GHG emissions from purchased electricity, heat and steam generated off-site. Scope 3
Scope 2 accounts for GHG emissions from purchased electricity, heat and steam generated off-site. Scope 3
majority of the GHG emissions. This has increased in 2017 due primarily to an increase in land clearance emissions.
Scope 2 accounts for GHG emissions from purchased electricity, heat and steam generated off-site. Scope 3
Scope 2 accounts for GHG emissions from purchased electricity, heat and steam generated off-site. Scope 3
includes all other indirect emissions such as out-grower crop, waste disposal, business travel and staff commuting.
includes all other indirect emissions such as out-grower crop, waste disposal, business travel and staff commuting.
Scope 2 accounts for GHG emissions from purchased electricity, heat and steam generated off-site. Scope 3
includes all other indirect emissions such as out-grower crop, waste disposal, business travel and staff commuting.
includes all other indirect emissions such as out-grower crop, waste disposal, business travel and staff commuting.
The increase in 2017 was due to the increase in emissions associated with out-grower crop land clearance.
The increase in 2017 was due to the increase in emissions associated with out-grower crop land clearance.
includes all other indirect emissions such as out-grower crop, waste disposal, business travel and staff commuting.
The increase in 2017 was due to the increase in emissions associated with out-grower crop land clearance.
The increase in 2017 was due to the increase in emissions associated with out-grower crop land clearance.
The increase in 2017 was due to the increase in emissions associated with out-grower crop land clearance.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
32
32
32
32
32
32
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
2017 and 2016 Emissions in tCO2e by Scope
2017 and 2016 Emissions in tCO2e by Scope
2017 and 2016 Emissions in tCO2e by Scope
2017 and 2016 Emissions in tCO2e by Scope
1,000,000
1,000,000
1,000,000
1,000,000
e
e
e
e
2
2
2
2
O
O
O
O
C
C
C
C
t
t
t
t
900,000
900,000
900,000
900,000
800,000
800,000
800,000
800,000
700,000
700,000
700,000
700,000
600,000
600,000
600,000
600,000
500,000
500,000
500,000
500,000
400,000
400,000
400,000
400,000
300,000
300,000
300,000
300,000
200,000
200,000
200,000
200,000
100,000
100,000
100,000
100,000
0
0
0
0
Scope 1
Scope 1
Scope 1
Scope 1
Scope 2
Scope 2
Scope 2
Scope 2
Scope 3
Scope 3
Scope 3
Scope 3
Comparison of GHG emissions per production metrics (excluding land use change emissions):
Comparison of GHG emissions per production metrics (excluding land use change emissions):
Comparison of GHG emissions per production metrics (excluding land use change emissions):
Comparison of GHG emissions per production metrics (excluding land use change emissions):
Operational emissions reporting metric
Operational emissions reporting metric
Operational emissions reporting metric
Operational emissions reporting metric
2017 in tCO2e
2017 in tCO2e
2017 in tCO2e
2017 in tCO2e
2016 in tCO2e
2016 in tCO2e
2016 in tCO2e
2016 in tCO2e
GHG per tonne of CPO production
GHG per tonne of CPO production
GHG per tonne of CPO production
GHG per tonne of CPO production
GHG per tonne of FFB production
GHG per tonne of FFB production
GHG per tonne of FFB production
GHG per tonne of FFB production
GHG per tonne of FFB processed
GHG per tonne of FFB processed
GHG per tonne of FFB processed
GHG per tonne of FFB processed
GHG per hectare of planted area
GHG per hectare of planted area
GHG per hectare of planted area
GHG per hectare of planted area
0.67
0.67
0.67
0.67
0.28
0.28
0.28
0.28
0.14
0.14
0.14
0.14
3.92
3.92
3.92
3.92
0.83
0.83
0.83
0.83
0.33
0.33
0.33
0.33
0.17
0.17
0.17
0.17
4.43
4.43
4.43
4.43
t
t
t
t
i
i
i
n
i
n
n
n
u
u
u
u
r
r
r
r
e
e
e
e
p
p
p
p
e
e
e
e
2
2
2
2
O
O
O
O
C
C
C
C
t
t
t
t
4.5
4.5
4.5
4.5
4
4
4
4
3.5
3.5
3.5
3.5
3
3
3
3
2.5
2.5
2.5
2.5
2
2
2
2
1.5
1.5
1.5
1.5
1
1
1
1
0.5
0.5
0.5
0.5
0
0
0
0
2017 and 2016 emissions per reporting metric in tCO2e
2017 and 2016 emissions per reporting metric in tCO2e
2017 and 2016 emissions per reporting metric in tCO2e
2017 and 2016 emissions per reporting metric in tCO2e
(excluding land use change emissions)
(excluding land use change emissions)
(excluding land use change emissions)
(excluding land use change emissions)
per tonne of CPO
per tonne of CPO
per tonne of CPO
per tonne of CPO
production
production
production
production
per tonne of FFB
per tonne of FFB
per tonne of FFB
per tonne of FFB
production
production
production
production
per tonne of FFB
per tonne of FFB
per tonne of FFB
per tonne of FFB
processed
processed
processed
processed
per hectare of planted
per hectare of planted
per hectare of planted
per hectare of planted
area
area
area
area
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
2017
2017
2017
2017
2016
2016
2016
2016
2017
2017
2017
2017
2016
2016
2016
2016
33
33
33
33
33
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Report
Directors’ Report
Directors’ Report
Comparison of GHG total emissions per production metrics (including land use change emissions):
Comparison of GHG total emissions per production metrics (including land use change emissions):
Comparison of GHG total emissions per production metrics (including land use change emissions):
Operational emissions reporting metric
Operational emissions reporting metric
Operational emissions reporting metric
2017 in tCO2e
2017 in tCO2e
2017 in tCO2e
2016 in tCO2e
2016 in tCO2e
2016 in tCO2e
GHG per tonne of CPO production
GHG per tonne of CPO production
GHG per tonne of CPO production
GHG per tonne of FFB production
GHG per tonne of FFB production
GHG per tonne of FFB production
GHG per tonne of FFB processed
GHG per tonne of FFB processed
GHG per tonne of FFB processed
GHG per hectare of planted area
GHG per hectare of planted area
GHG per hectare of planted area
3.02
3.02
3.02
1.27
1.27
1.27
0.62
0.62
0.62
17.77
17.77
17.77
2.56
2.56
2.56
1.01
1.01
1.01
0.54
0.54
0.54
13.65
13.65
13.65
2017 and 2016 total emissions per reporting metric in tCO2e
2017 and 2016 total emissions per reporting metric in tCO2e
2017 and 2016 total emissions per reporting metric in tCO2e
(including land use change emissions)
(including land use change emissions)
(including land use change emissions)
2017
2017
2017
2016
2016
2016
t
t
t
i
i
i
n
n
n
u
u
u
r
r
r
e
e
e
p
p
p
e
e
e
2
2
2
O
O
O
C
C
C
t
t
t
18
18
18
16
16
16
14
14
14
12
12
12
10
10
10
8
8
8
6
6
6
4
4
4
2
2
2
0
0
0
per tonne of CPO
per tonne of CPO
per tonne of CPO
production
production
production
per tonne of FFB
per tonne of FFB
per tonne of FFB
production
production
production
per tonne of FFB
per tonne of FFB
per tonne of FFB
processed
processed
processed
per hectare of planted
per hectare of planted
per hectare of planted
area
area
area
Principal risks
Principal risks
Principal risks
Information on financial instruments risks is set out in note 24 to the consolidated financial statements and
Information on financial instruments risks is set out in note 24 to the consolidated financial statements and
Information on financial instruments risks is set out in note 24 to the consolidated financial statements and
information on other risks is set out in Strategic Report.
information on other risks is set out in Strategic Report.
information on other risks is set out in Strategic Report.
Property, plant and equipment
Property, plant and equipment
Property, plant and equipment
Information relating to changes in property, plant and equipment is given in note 10 to the consolidated financial
Information relating to changes in property, plant and equipment is given in note 10 to the consolidated financial
Information relating to changes in property, plant and equipment is given in note 10 to the consolidated financial
statements.
statements.
statements.
Directors
Directors
Directors
Madam Lim Siew Kim, Dato’ John Lim Ewe Chuan, Mr. Lim Tian Huat and Mr. Jonathan Law Ngee Song will be
Madam Lim Siew Kim, Dato’ John Lim Ewe Chuan, Mr. Lim Tian Huat and Mr. Jonathan Law Ngee Song will be
Madam Lim Siew Kim, Dato’ John Lim Ewe Chuan, Mr. Lim Tian Huat and Mr. Jonathan Law Ngee Song will be
submitting themselves for re-appointment at the forthcoming annual general meeting.
submitting themselves for re-appointment at the forthcoming annual general meeting.
submitting themselves for re-appointment at the forthcoming annual general meeting.
Brief profiles of all Directors are set out on page 39 of this Annual Report.
Brief profiles of all Directors are set out on page 39 of this Annual Report.
Brief profiles of all Directors are set out on page 39 of this Annual Report.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
34
34
34
34
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Report
Substantial share interests
As at 19 April 2018 and 31 December 2017, 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
As at 19.4.2018
As at 31.12.2017
Number
Percentage of
voting rights held
Number
Percentage of
voting rights held
Genton International Limited
20,247,814
51.08% 20,247,814
Nokia Bell Pensioenfonds Ofp
7,015,000
17.70%
7,000,000
KBC Securities
1,551,464
3.91%
1,517,498
Value Square Asset Management
1,193,506
3.01%
1,167,774
51.08%
17.66%
3.83%
2.95%
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. This accords 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 has expressed its willingness to continue in office and a resolution to re-appoint them will be proposed as
Resolution 8 at the forthcoming annual general meeting.
Authority to allot shares
At the annual general meeting held on 27 June 2017 shareholders authorised the Board under the provisions of
section 551 of the Companies Act 2006 to allot relevant securities within specified limits for a period of five years.
Renewal of this authority is being sought under Resolution 10 at the forthcoming annual general meeting.
The aggregate nominal value which can be allotted under the authority set out in paragraph (i) of the resolution is
limited to £3,303,031 (representing 13,212,124 ordinary shares of 25p each) which is approximately one third of the
issued ordinary capital of the Company as at 24 April 2018 (being the latest practicable date before publication of
this notice). In accordance with guidance issued by The Investment Association, the authority in paragraph (ii) of the
resolution will authorise the Directors to allot shares, or to grant rights to subscribe for or convert any security into
shares, only in connection with a fully pre-emptive rights issue, up to a further nominal value of £3,303,031
(representing 13,212,124 ordinary shares). This amount (together with the authority provided under paragraph (a) of
the resolution) represents approximately two thirds of the Company’s issued ordinary share capital (excluding
treasury shares) as at 24 April 2018. This authority will expire at the conclusion of the next annual general meeting of
the Company. The Directors have no present intention of issuing new shares, or of granting rights to subscribe for or
to convert any security into shares.
Annual Report 2017 | Anglo-Eastern Plantations Plc
35
35
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Report
Disapplication of pre-emption rights
A fresh authority is also being sought under the provisions of sections 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 empower the Board to make issues of shares for cash to persons other
than existing shareholders up to a maximum aggregate nominal amount of £495,454 representing 5% of the current
issued share capital. The authority will be expiring at the forthcoming annual general meeting or on 30 June 2018,
whichever is earlier. Renewal of this authority on similar terms is being sought under Resolution 11 at the
forthcoming annual general meeting.
Acquisition of the Company’s own shares and authority to purchase own shares
At 24 April 2018, the Directors had remaining authority under the shareholders’ resolution of 27 June 2017, to make
purchases of 3,963,637 of the Company’s ordinary shares. This authority expires on 30 June 2018. The Board will
only make purchases if they believe the earnings or net assets per share of the Company would be improved by
such purchases. All such purchases will be market purchases made through the London Stock Exchange.
Companies can hold their own shares which have been purchased in this way in treasury rather than having to
cancel them. The Directors would, therefore, consider holding the Company’s own shares which have been
purchased by the Company as treasury shares as this would give the Company the flexibility of being able to sell
such shares quickly and effectively where it considers it in the interests of shareholders to do so. Whilst any such
shares are held in treasury, no dividends will be payable on them and they will not carry any voting rights.
Resolution 12 to be proposed at the forthcoming annual general meeting seeks renewed authority to purchase up to
a maximum of 3,963,637 ordinary shares of 25p each on the London Stock Exchange, representing 10% of the
Company’s issued ordinary share capital. The minimum price which may be paid for an ordinary share is 25p. The
maximum price which may be paid for an ordinary share on any exercise of the authority will be restricted to the
highest of (i) an amount equal 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 and (ii) the
higher of price of the last independent trade and the highest current independent bid on the London Stock Exchange.
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.
Adoption of new articles of association
Resolution 13 to be proposed at the forthcoming annual general meeting proposes that the Company's articles of
association (the 'Existing Articles') be replaced by new articles of association (the 'New Articles'). In accordance with
section 21 of the Companies Act 2006, shareholder approval will be sought for the adoption of the New Articles.
Some of the defined terms have been updated to ensure consistency with changes to the law (and a number of
articles have been amended to ensure consistent use of definitions throughout the New Articles). For example,
article 12 relating to bearer shares has been deleted entirely as the use of bearer shares was abolished on 26 May
2015. Additionally, the language contained in article 9.2 regarding the disapplication of pre-emption rights has been
amended to include a reference to treasury shares and to be set out in a more common format and article 79
(defining 'mental incapacity') and article 103 (relating to a director's termination) have been amended to comply with
the Equality Act 2010 and the discrimination provisions relating to mental health. A number of formatting changes
have also been made. Full details of the main amendments to the Existing Articles are set out in Note 15 of the
notes to the Notice of Annual General Meeting.
In accordance with Listing Rule 13.8.10, a copy of the Company's Existing Articles and the proposed New Articles
marked to show all the changes (as described above) will be available for inspection during normal business hours
(excluding Saturdays, Sundays and bank holidays) at Quadrant House, Floor 6, 4 Thomas More Square, London,
E1W 1YW from the date of the notice of the annual general meeting until the close of the annual general meeting.
The proposed New Articles will also be available for inspection at the annual general meeting at least 15 minutes
prior to the start of the meeting and up until the close of the meeting.
Annual Report 2017 | Anglo-Eastern Plantations Plc
36
36
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Report
Dividends
The Board is mindful that given the anticipated further capital commitments, the level of dividend needs to be
balanced against the planned expenditure, as well as other viable investment opportunities in the countries where
the Group operates. The Board is also mindful of shareholders’ sentiment and therefore declared a final dividend of
4.0cts per share, in line with our reporting currency, in respect of the year to 31 December 2017 (2016: 3.8cts
equivalent). Subject to shareholders approval of Resolution 3 at the annual general meeting, the final dividend will be
paid on 13 July 2018 to those shareholders on the register on 8 June 2018.
In addition, shareholders can choose to receive the dividends in Pounds Sterling and they can do so at the rate
ruling on 8 June 2018, being the dividend record date. Based on the exchange rate at 18 April 2018 of $1.42/£, the
proposed dividend would be equivalent to 2.8p (2016: 3.0p). The last day to elect to receive or revoke a currency
election is 18 June 2018.
AEP operates a dividend reinvestment plan (“DRIP”). Holders of the shares may elect to reinvest their final dividend.
The latest election date is 18 June 2018.
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.
On behalf of the Board
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
24 April 2018
Annual Report 2017 | Anglo-Eastern Plantations Plc
37
37
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Responsibilities
Directors’ Responsibilities
The Directors are responsible for preparing the annual report and the financial statements in accordance with
applicable law and regulations.
The Directors are responsible for preparing the annual report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the
Directors are required to prepare the Group financial statements in accordance with International Financial Reporting
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the
Standards (“IFRSs”) as adopted by the European Union. The Directors have elected to prepare the Company
Directors are required to prepare the Group financial statements in accordance with International Financial Reporting
financial statements in accordance with FRS 101 Reduced Disclosure Framework under the UK Generally Accepted
Standards (“IFRSs”) as adopted by the European Union. The Directors have elected to prepare the Company
Accounting Practice (UK GAAP). Under company law, the Directors must not approve the financial statements
financial statements in accordance with FRS 101 Reduced Disclosure Framework under the UK Generally Accepted
unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of
Accounting Practice (UK GAAP). Under company law, the Directors must not approve the financial statements
the profit or loss for the Group for that period.
unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of
the profit or loss for the Group for that period.
In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
In preparing these financial statements, the Directors are required to:
make judgements and accounting estimates that are reasonable and prudent;
select suitable accounting policies and then apply them consistently;
state whether they have been prepared in accordance with applicable accounting standards, subject to any
make judgements and accounting estimates that are reasonable and prudent;
material departures disclosed and explained in the financial statements;
state whether they have been prepared in accordance with applicable accounting standards, subject to any
prepare a Strategic Report, a Director’s Report and Director’s Remuneration report which comply with the
material departures disclosed and explained in the financial statements;
requirements of the Companies Act 2006;
prepare a Strategic Report, a Director’s Report and Director’s Remuneration report which comply with the
make an assessment of the Company and Group’s ability to continue as a going concern.
requirements of the Companies Act 2006;
make an assessment of the Company and Group’s ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
and enable them to ensure that the financial statements comply with the Companies Act 2006 and, as regards the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company
Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of
and enable them to ensure that the financial statements comply with the Companies Act 2006 and, as regards the
the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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.
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.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on a
Website publication
website. Financial statements are published on the Company’s website in accordance with the legislation in the UK
The Directors are responsible for ensuring the annual report and the financial statements are made available on a
governing the preparation and dissemination of financial statements, which may vary from legislation in other
website. Financial statements are published on the Company’s website in accordance with the legislation in the UK
jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The
governing the preparation and dissemination of financial statements, which may vary from legislation in other
Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The
Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
Directors’ responsibilities pursuant to DTR4
All of the Directors listed on page 39 confirm to the best of their knowledge:
Directors’ responsibilities pursuant to DTR4
The Group financial statements have been prepared in accordance with IFRSs as adopted by the European
All of the Directors listed on page 39 confirm to the best of their knowledge:
Union and Article 4 of the IAS Regulation and give a true and fair view of the assets, liabilities, financial position
The Group financial statements have been prepared in accordance with IFRSs as adopted by the European
and profit and loss of the Group.
Union and Article 4 of the IAS Regulation and give a true and fair view of the assets, liabilities, financial position
The Strategic Report in the annual report includes a fair review of the development and performance of the
and profit and loss of the Group.
business and the financial position of the Group, together with a description or the principal risks and
The Strategic Report in the annual report includes a fair review of the development and performance of the
uncertainties that they face.
business and the financial position of the Group, together with a description or the principal risks and
The annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide
uncertainties that they face.
the information necessary for shareholders to assess the Company’s performance, business model and strategy.
The annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess the Company’s performance, business model and strategy.
On behalf of the Board
On behalf of the Board
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
24 April 2018
24 April 2018
38
38
38
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors
Directors
Directors
Directors
Directors
Directors
Directors
Madam Lim Siew Kim
Madam Lim Siew Kim
Madam Lim Siew Kim
Madam Lim Siew Kim
Madam Lim Siew Kim
Madam Lim Siew Kim
Madam Lim Siew Kim
(Non-Executive Chairman, age 69)
(Non-Executive Chairman, age 69)
(Non-Executive Chairman, age 69)
(Non-Executive Chairman, age 69)
(Non-Executive Chairman, age 69)
(Non-Executive Chairman, age 69)
(Non-Executive Chairman, age 69)
Non-Executive Director since 29 November 1993 and appointed as Non-Executive Chairman on 31 January 2011.
Non-Executive Director since 29 November 1993 and appointed as Non-Executive Chairman on 31 January 2011.
Non-Executive Director since 29 November 1993 and appointed as Non-Executive Chairman on 31 January 2011.
Non-Executive Director since 29 November 1993 and appointed as Non-Executive Chairman on 31 January 2011.
Non-Executive Director since 29 November 1993 and appointed as Non-Executive Chairman on 31 January 2011.
Non-Executive Director since 29 November 1993 and appointed as Non-Executive Chairman on 31 January 2011.
Non-Executive Director since 29 November 1993 and appointed as Non-Executive Chairman on 31 January 2011.
Madam Lim does not hold any directorship in other public listed company.
Madam Lim does not hold any directorship in other public listed company.
Madam Lim does not hold any directorship in other public listed company.
Madam Lim does not hold any directorship in other public listed company.
Madam Lim does not hold any directorship in other public listed company.
Madam Lim does not hold any directorship in other public listed company.
Madam Lim does not hold any directorship in other public listed company.
Dato’ John Lim Ewe Chuan
Dato’ John Lim Ewe Chuan
Dato’ John Lim Ewe Chuan
Dato’ John Lim Ewe Chuan
Dato’ John Lim Ewe Chuan
Dato’ John Lim Ewe Chuan
Dato’ John Lim Ewe Chuan
(Executive Director, Corporate Finance and Corporate Affairs, member of Audit, Nomination and Corporate
(Executive Director, Corporate Finance and Corporate Affairs, member of Audit, Nomination and Corporate
(Executive Director, Corporate Finance and Corporate Affairs, member of Audit, Nomination and Corporate
(Executive Director, Corporate Finance and Corporate Affairs, member of Audit, Nomination and Corporate
(Executive Director, Corporate Finance and Corporate Affairs, member of Audit, Nomination and Corporate
(Executive Director, Corporate Finance and Corporate Affairs, member of Audit, Nomination and Corporate
(Executive Director, Corporate Finance and Corporate Affairs, member of Audit, Nomination and Corporate
Governance and Remuneration Committees, age 68)
Governance and Remuneration Committees, age 68)
Governance and Remuneration Committees, age 68)
Governance and Remuneration Committees, age 68)
Governance and Remuneration Committees, age 68)
Governance and Remuneration Committees, age 68)
Governance and Remuneration Committees, age 68)
Appointed 26 April 2008. On 1 September 2010 appointed as Executive Director. Prior to 1 September 2010, Dato’
Appointed 26 April 2008. On 1 September 2010 appointed as Executive Director. Prior to 1 September 2010, Dato’
Appointed 26 April 2008. On 1 September 2010 appointed as Executive Director. Prior to 1 September 2010, Dato’
Appointed 26 April 2008. On 1 September 2010 appointed as Executive Director. Prior to 1 September 2010, Dato’
Appointed 26 April 2008. On 1 September 2010 appointed as Executive Director. Prior to 1 September 2010, Dato’
Appointed 26 April 2008. On 1 September 2010 appointed as Executive Director. Prior to 1 September 2010, Dato’
Appointed 26 April 2008. On 1 September 2010 appointed as Executive Director. Prior to 1 September 2010, Dato’
John Lim was the Senior Independent Non-Executive Director.
John Lim was the Senior Independent Non-Executive Director.
John Lim was the Senior Independent Non-Executive Director.
John Lim was the Senior Independent Non-Executive Director.
John Lim was the Senior Independent Non-Executive Director.
John Lim was the Senior Independent Non-Executive Director.
John Lim was the Senior Independent Non-Executive Director.
Chartered Certified Accountant; partner with UHY Hacker Young LLP, London, since 1998; previously he had a
Chartered Certified Accountant; partner with UHY Hacker Young LLP, London, since 1998; previously he had a
Chartered Certified Accountant; partner with UHY Hacker Young LLP, London, since 1998; previously he had a
Chartered Certified Accountant; partner with UHY Hacker Young LLP, London, since 1998; previously he had a
Chartered Certified Accountant; partner with UHY Hacker Young LLP, London, since 1998; previously he had a
Chartered Certified Accountant; partner with UHY Hacker Young LLP, London, since 1998; previously he had a
Chartered Certified Accountant; partner with UHY Hacker Young LLP, London, since 1998; previously he had a
professional accounting career in Singapore and the UK.
professional accounting career in Singapore and the UK.
professional accounting career in Singapore and the UK.
professional accounting career in Singapore and the UK.
professional accounting career in Singapore and the UK.
professional accounting career in Singapore and the UK.
professional accounting career in Singapore and the UK.
Lim Tian Huat
Lim Tian Huat
Lim Tian Huat
Lim Tian Huat
Lim Tian Huat
Lim Tian Huat
Lim Tian Huat
(Senior Independent Non-Executive Director, Chairman of Audit Committee, Chairman of Nomination & Corporate
(Senior Independent Non-Executive Director, Chairman of Audit Committee, Chairman of Nomination & Corporate
(Senior Independent Non-Executive Director, Chairman of Audit Committee, Chairman of Nomination & Corporate
(Senior Independent Non-Executive Director, Chairman of Audit Committee, Chairman of Nomination & Corporate
(Senior Independent Non-Executive Director, Chairman of Audit Committee, Chairman of Nomination & Corporate
(Senior Independent Non-Executive Director, Chairman of Audit Committee, Chairman of Nomination & Corporate
(Senior Independent Non-Executive Director, Chairman of Audit Committee, Chairman of Nomination & Corporate
Governance Committee and member of Remuneration Committee, age 63)
Governance Committee and member of Remuneration Committee, age 63)
Governance Committee and member of Remuneration Committee, age 63)
Governance Committee and member of Remuneration Committee, age 63)
Governance Committee and member of Remuneration Committee, age 63)
Governance Committee and member of Remuneration Committee, age 63)
Governance Committee and member of Remuneration Committee, age 63)
Appointed 8 May 2015.
Appointed 8 May 2015.
Appointed 8 May 2015.
Appointed 8 May 2015.
Appointed 8 May 2015.
Appointed 8 May 2015.
Appointed 8 May 2015.
Fellow member of the Association of Chartered Certified Accountants and member of the Malaysian Institute of
Fellow member of the Association of Chartered Certified Accountants and member of the Malaysian Institute of
Fellow member of the Association of Chartered Certified Accountants and member of the Malaysian Institute of
Fellow member of the Association of Chartered Certified Accountants and member of the Malaysian Institute of
Fellow member of the Association of Chartered Certified Accountants and member of the Malaysian Institute of
Fellow member of the Association of Chartered Certified Accountants and member of the Malaysian Institute of
Fellow member of the Association of Chartered Certified Accountants and member of the Malaysian Institute of
Accountants and Malaysian Institute of Certified Public Accountants. He is the founding President of Insolvency
Accountants and Malaysian Institute of Certified Public Accountants. He is the founding President of Insolvency
Accountants and Malaysian Institute of Certified Public Accountants. He is the founding President of Insolvency
Accountants and Malaysian Institute of Certified Public Accountants. He is the founding President of Insolvency
Accountants and Malaysian Institute of Certified Public Accountants. He is the founding President of Insolvency
Accountants and Malaysian Institute of Certified Public Accountants. He is the founding President of Insolvency
Accountants and Malaysian Institute of Certified Public Accountants. He is the founding President of Insolvency
Practitioners Association of Malaysia. He holds a degree in Bachelor of Arts in Economics.
Practitioners Association of Malaysia. He holds a degree in Bachelor of Arts in Economics.
Practitioners Association of Malaysia. He holds a degree in Bachelor of Arts in Economics.
Practitioners Association of Malaysia. He holds a degree in Bachelor of Arts in Economics.
Practitioners Association of Malaysia. He holds a degree in Bachelor of Arts in Economics.
Practitioners Association of Malaysia. He holds a degree in Bachelor of Arts in Economics.
Practitioners Association of Malaysia. He holds a degree in Bachelor of Arts in Economics.
Mr. Lim is a practising Chartered Accountant with his own Corporate Restructuring and Insolvency practice Rodgers
Mr. Lim is a practising Chartered Accountant with his own Corporate Restructuring and Insolvency practice Rodgers
Mr. Lim is a practising Chartered Accountant with his own Corporate Restructuring and Insolvency practice Rodgers
Mr. Lim is a practising Chartered Accountant with his own Corporate Restructuring and Insolvency practice Rodgers
Mr. Lim is a practising Chartered Accountant with his own Corporate Restructuring and Insolvency practice Rodgers
Mr. Lim is a practising Chartered Accountant with his own Corporate Restructuring and Insolvency practice Rodgers
Mr. Lim is a practising Chartered Accountant with his own Corporate Restructuring and Insolvency practice Rodgers
Reidy & Co. He is also the Managing Director of Andersen Corporate Restructuring Sdn. Bhd. He was previously a
Reidy & Co. He is also the Managing Director of Andersen Corporate Restructuring Sdn. Bhd. He was previously a
Reidy & Co. He is also the Managing Director of Andersen Corporate Restructuring Sdn. Bhd. He was previously a
Reidy & Co. He is also the Managing Director of Andersen Corporate Restructuring Sdn. Bhd. He was previously a
Reidy & Co. He is also the Managing Director of Andersen Corporate Restructuring Sdn. Bhd. He was previously a
Reidy & Co. He is also the Managing Director of Andersen Corporate Restructuring Sdn. Bhd. He was previously a
Reidy & Co. He is also the Managing Director of Andersen Corporate Restructuring Sdn. Bhd. He was previously a
partner at Ernst & Young from 2002 to 2009 and prior to that, partner at Arthur Andersen & Co from 1990 to 2002.
partner at Ernst & Young from 2002 to 2009 and prior to that, partner at Arthur Andersen & Co from 1990 to 2002.
partner at Ernst & Young from 2002 to 2009 and prior to that, partner at Arthur Andersen & Co from 1990 to 2002.
partner at Ernst & Young from 2002 to 2009 and prior to that, partner at Arthur Andersen & Co from 1990 to 2002.
partner at Ernst & Young from 2002 to 2009 and prior to that, partner at Arthur Andersen & Co from 1990 to 2002.
partner at Ernst & Young from 2002 to 2009 and prior to that, partner at Arthur Andersen & Co from 1990 to 2002.
partner at Ernst & Young from 2002 to 2009 and prior to that, partner at Arthur Andersen & Co from 1990 to 2002.
He co-authored a book entitled “The Law and Practice of Corporate Receivership in Malaysia and Singapore”.
He co-authored a book entitled “The Law and Practice of Corporate Receivership in Malaysia and Singapore”.
He co-authored a book entitled “The Law and Practice of Corporate Receivership in Malaysia and Singapore”.
He co-authored a book entitled “The Law and Practice of Corporate Receivership in Malaysia and Singapore”.
He co-authored a book entitled “The Law and Practice of Corporate Receivership in Malaysia and Singapore”.
He co-authored a book entitled “The Law and Practice of Corporate Receivership in Malaysia and Singapore”.
He co-authored a book entitled “The Law and Practice of Corporate Receivership in Malaysia and Singapore”.
Mr. Lim also served as Commissioner of the United Nations Compensations Commission for a period of five years.
Mr. Lim also served as Commissioner of the United Nations Compensations Commission for a period of five years.
Mr. Lim also served as Commissioner of the United Nations Compensations Commission for a period of five years.
Mr. Lim also served as Commissioner of the United Nations Compensations Commission for a period of five years.
Mr. Lim also served as Commissioner of the United Nations Compensations Commission for a period of five years.
Mr. Lim also served as Commissioner of the United Nations Compensations Commission for a period of five years.
Mr. Lim also served as Commissioner of the United Nations Compensations Commission for a period of five years.
He was also appointed by the Domestic Trade Minister to be a member of the Corporate Law Reform Committee
He was also appointed by the Domestic Trade Minister to be a member of the Corporate Law Reform Committee
He was also appointed by the Domestic Trade Minister to be a member of the Corporate Law Reform Committee
He was also appointed by the Domestic Trade Minister to be a member of the Corporate Law Reform Committee
He was also appointed by the Domestic Trade Minister to be a member of the Corporate Law Reform Committee
He was also appointed by the Domestic Trade Minister to be a member of the Corporate Law Reform Committee
He was also appointed by the Domestic Trade Minister to be a member of the Corporate Law Reform Committee
under the purview of the Companies Commission of Malaysia.
under the purview of the Companies Commission of Malaysia.
under the purview of the Companies Commission of Malaysia.
under the purview of the Companies Commission of Malaysia.
under the purview of the Companies Commission of Malaysia.
under the purview of the Companies Commission of Malaysia.
under the purview of the Companies Commission of Malaysia.
Independent Non-Executive Director of Malaysia Building Society Berhad and UEM Sunrise Berhad, both of which
Independent Non-Executive Director of Malaysia Building Society Berhad and UEM Sunrise Berhad, both of which
Independent Non-Executive Director of Malaysia Building Society Berhad and UEM Sunrise Berhad, both of which
Independent Non-Executive Director of Malaysia Building Society Berhad and UEM Sunrise Berhad, both of which
Independent Non-Executive Director of Malaysia Building Society Berhad and UEM Sunrise Berhad, both of which
Independent Non-Executive Director of Malaysia Building Society Berhad and UEM Sunrise Berhad, both of which
Independent Non-Executive Director of Malaysia Building Society Berhad and UEM Sunrise Berhad, both of which
are listed on Bursa Malaysia.
are listed on Bursa Malaysia.
are listed on Bursa Malaysia.
are listed on Bursa Malaysia.
are listed on Bursa Malaysia.
are listed on Bursa Malaysia.
are listed on Bursa Malaysia.
Jonathan Law Ngee Song
Jonathan Law Ngee Song
Jonathan Law Ngee Song
Jonathan Law Ngee Song
Jonathan Law Ngee Song
Jonathan Law Ngee Song
Jonathan Law Ngee Song
(Independent Non-Executive Director, Chairman of Remuneration Committee, member of Audit Committee and
(Independent Non-Executive Director, Chairman of Remuneration Committee, member of Audit Committee and
(Independent Non-Executive Director, Chairman of Remuneration Committee, member of Audit Committee and
(Independent Non-Executive Director, Chairman of Remuneration Committee, member of Audit Committee and
(Independent Non-Executive Director, Chairman of Remuneration Committee, member of Audit Committee and
(Independent Non-Executive Director, Chairman of Remuneration Committee, member of Audit Committee and
(Independent Non-Executive Director, Chairman of Remuneration Committee, member of Audit Committee and
Nomination & Corporate Governance Committees, age 52)
Nomination & Corporate Governance Committees, age 52)
Nomination & Corporate Governance Committees, age 52)
Nomination & Corporate Governance Committees, age 52)
Nomination & Corporate Governance Committees, age 52)
Nomination & Corporate Governance Committees, age 52)
Nomination & Corporate Governance Committees, age 52)
Appointed 4 July 2013.
Appointed 4 July 2013.
Appointed 4 July 2013.
Appointed 4 July 2013.
Appointed 4 July 2013.
Appointed 4 July 2013.
Appointed 4 July 2013.
He was admitted as an Advocate and Solicitor, to the High Court of Malaya in 1991.
He was admitted as an Advocate and Solicitor, to the High Court of Malaya in 1991.
He was admitted as an Advocate and Solicitor, to the High Court of Malaya in 1991.
He was admitted as an Advocate and Solicitor, to the High Court of Malaya in 1991.
He was admitted as an Advocate and Solicitor, to the High Court of Malaya in 1991.
He was admitted as an Advocate and Solicitor, to the High Court of Malaya in 1991.
He was admitted as an Advocate and Solicitor, to the High Court of Malaya in 1991.
Following his graduation from Australia National University in 1989 with a Bachelor of Commerce and Bachelor of
Following his graduation from Australia National University in 1989 with a Bachelor of Commerce and Bachelor of
Following his graduation from Australia National University in 1989 with a Bachelor of Commerce and Bachelor of
Following his graduation from Australia National University in 1989 with a Bachelor of Commerce and Bachelor of
Following his graduation from Australia National University in 1989 with a Bachelor of Commerce and Bachelor of
Following his graduation from Australia National University in 1989 with a Bachelor of Commerce and Bachelor of
Following his graduation from Australia National University in 1989 with a Bachelor of Commerce and Bachelor of
Laws, he practised as a legal assistant in Allen & Gledhill (1991 to 1995) and was promoted to a partner (1995 to
Laws, he practised as a legal assistant in Allen & Gledhill (1991 to 1995) and was promoted to a partner (1995 to
Laws, he practised as a legal assistant in Allen & Gledhill (1991 to 1995) and was promoted to a partner (1995 to
Laws, he practised as a legal assistant in Allen & Gledhill (1991 to 1995) and was promoted to a partner (1995 to
Laws, he practised as a legal assistant in Allen & Gledhill (1991 to 1995) and was promoted to a partner (1995 to
Laws, he practised as a legal assistant in Allen & Gledhill (1991 to 1995) and was promoted to a partner (1995 to
Laws, he practised as a legal assistant in Allen & Gledhill (1991 to 1995) and was promoted to a partner (1995 to
1996). In 1996 he joined the Malaysian law firm Messrs Nik Saghir & Ismail as a partner of the firm.
1996). In 1996 he joined the Malaysian law firm Messrs Nik Saghir & Ismail as a partner of the firm.
1996). In 1996 he joined the Malaysian law firm Messrs Nik Saghir & Ismail as a partner of the firm.
1996). In 1996 he joined the Malaysian law firm Messrs Nik Saghir & Ismail as a partner of the firm.
1996). In 1996 he joined the Malaysian law firm Messrs Nik Saghir & Ismail as a partner of the firm.
1996). In 1996 he joined the Malaysian law firm Messrs Nik Saghir & Ismail as a partner of the firm.
1996). In 1996 he joined the Malaysian law firm Messrs Nik Saghir & Ismail as a partner of the firm.
Independent Non-Executive Director of Karex Berhad and Evergreen Fibreboard Berhad, public listed companies in
Independent Non-Executive Director of Karex Berhad and Evergreen Fibreboard Berhad, public listed companies in
Independent Non-Executive Director of Karex Berhad and Evergreen Fibreboard Berhad, public listed companies in
Independent Non-Executive Director of Karex Berhad and Evergreen Fibreboard Berhad, public listed companies in
Independent Non-Executive Director of Karex Berhad and Evergreen Fibreboard Berhad, public listed companies in
Independent Non-Executive Director of Karex Berhad and Evergreen Fibreboard Berhad, public listed companies in
Independent Non-Executive Director of Karex Berhad and Evergreen Fibreboard Berhad, public listed companies in
Malaysia. Appointed Independent Non-Executive Chairman of Evergreen Fibreboard Berhad on 22 February
Malaysia. Appointed Independent Non-Executive Chairman of Evergreen Fibreboard Berhad on 22 February
Malaysia. Appointed Independent Non-Executive Chairman of Evergreen Fibreboard Berhad on 22 February
Malaysia. Appointed Independent Non-Executive Chairman of Evergreen Fibreboard Berhad on 22 February
Malaysia. Appointed Independent Non-Executive Chairman of Evergreen Fibreboard Berhad on 22 February
Malaysia. Appointed Independent Non-Executive Chairman of Evergreen Fibreboard Berhad on 22 February
Malaysia. Appointed Independent Non-Executive Chairman of Evergreen Fibreboard Berhad on 22 February
2010. He is also the Chairman of Remuneration Committee and a member of Nomination Committee of Evergreen
2010. He is also the Chairman of Remuneration Committee and a member of Nomination Committee of Evergreen
2010. He is also the Chairman of Remuneration Committee and a member of Nomination Committee of Evergreen
2010. He is also the Chairman of Remuneration Committee and a member of Nomination Committee of Evergreen
2010. He is also the Chairman of Remuneration Committee and a member of Nomination Committee of Evergreen
2010. He is also the Chairman of Remuneration Committee and a member of Nomination Committee of Evergreen
2010. He is also the Chairman of Remuneration Committee and a member of Nomination Committee of Evergreen
Fibreboard Berhad.
Fibreboard Berhad.
Fibreboard Berhad.
Fibreboard Berhad.
Fibreboard Berhad.
Fibreboard Berhad.
Fibreboard Berhad.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Statement on Corporate Governance
Application of the UK Corporate Governance Code
AEP is committed to business integrity, appropriately high ethical standards and professionalism in all its activities
and operations. This includes a commitment to high standards in corporate governance relating in particular to
appropriate systems and controls adopted at a senior level of management of the Group and operation of the Board.
The benchmark standards in this regard are set out in the UK Corporate Governance Code (‘the Code’), as most
recently revised in June 2016 which forms part of the Listing Rules of the London Stock Exchange. The Code is
available from the Financial Reporting Council’s (“FRC”) website at www.frc.org.uk. Where provisions of the Code
were not met during 2017, the particular comment is made in the statements below and in the Directors’
remuneration report on pages 47 to 51.
Relationship Agreement with Controlling Shareholder
The UK Listing Rules require a premium listed issuer with a controlling shareholder to have in place a relationship
agreement with the controlling shareholder. The mandatory requirement for the relationship agreement is intended to
prevent controlling shareholders from exercising their influence in a way that is improper or unfair to minority
shareholders. The requirement is not intended to prevent a controlling shareholder from engaging fairly with an
issuer or legitimately disagreeing with the issuer and neither are they intended to prevent shareholders from holding
board positions. AEP Plc has identified all controlling shareholders and regarded its major shareholder, Genton
International Limited (“Genton”) as the only controlling shareholder. In this respect, the Company entered into a
relationship agreement with Genton on 14 November 2014. The agreement is available for inspection by the
shareholders upon request from the Company Secretary. AEP Plc has complied with the independence provisions
included in the agreement and that, so far as it is aware, those independence provisions have been complied with by
Genton.
The Board
AEP is led by a strong and experienced Board of Directors (see biographical details set out on page 39). During
2017 the Board comprised the Non-Executive Chairman, one Executive Director and two Non-Executive Directors,
both of whom are considered by the Board to be Independent.
Dato’ John Lim Ewe Chuan was appointed as the Executive Director, Corporate Finance and Corporate Affairs on 1
September 2010. Prior to 1 September 2010, Dato’ John Lim was the Senior Independent Non-Executive Director.
Madam Lim Siew Kim was appointed as the Non-Executive Chairman on 31 January 2011. Neither external search
consultancy nor open advertising was used for the appointment. The Nomination and Corporate Governance
Committee is of the view that Madam Lim, who indirectly owns 52% of the Company’s shares, with her experience in
plantation as she was the Chairman of the Company from 1993 to 1998 is an appropriate candidate for the position.
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-Executive Directors, there is a reasonable balance of influence.
Independence of the Non-Executive Directors
The Board has evaluated the independence of each of its Non-Executive Directors. Following this assessment, the
Board has determined that, throughout the reporting period, both of its Non-Executive Directors, who were appointed
for specified terms of office, were independent, based above all on their objectivity and integrity. The terms and
conditions relating to the appointment of the Non-Executive Directors are available from the Company Secretary.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Statement on Corporate Governance
In arriving at its conclusion, the Board considered the factors set out in the FRC’s UK Corporate Governance Code
including, inter alia, whether any of the Non-Executive Directors:
• has been an employee of the Group within the last five years;
• has, or had within the last three years, a material business relationship with the Group;
• receives remuneration from the Group other than a Director’s fee;
• has close family ties with any of the Group’s advisors, Directors or senior employees;
• holds cross-directorships or has significant links with other Directors through involvement in other companies or
bodies;
• has served more than nine years on the Board; or
• represents a significant shareholder
The FRC’s UK Corporate Governance Code acknowledges that a Director may be regarded as independent
notwithstanding the existence of any of the above factors.
The 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.
Senior Independent Non-Executive Director
Mr. Lim Tian Huat, an experienced Chartered Accountant acted in the capacity of Senior Independent Non-Executive
Director from 8 May 2015.
Operation of the Board
A schedule of duties and decisions reserved for the Board and management respectively has been adopted. The
Audit, Nomination & Corporate Governance and Remuneration Committees have written terms of reference which
are available for inspection upon request from the Company Secretary.
Unless warranted by unusual matters, the Board normally meets two to three times each year. Otherwise, all other
matters are dealt with by written resolution and telephone conference. During 2017 there were two Board meetings
and were attended by all directors except for Mr Lim Tian Huat who attended only one Board meeting. Agenda and
minutes of previous meetings were circulated prior to meetings.
The Independent Non-Executive Directors met on their own during 2017. Telephone discussions between the
Chairman and the Non-Executive Directors also took place outside these meetings.
The Board is supplied with relevant, timely and accurate information for review prior to each meeting to enable them
to discharge their duties. The Audit Committee is responsible for the integrity of the financial information and this is
achieved by interacting with the management and with the internal auditors. The Board has identified and formally
adopted a schedule of key matters that are reserved for its decision, including the annual fiscal and capital budgets,
interim, preliminary and final results announcements, final dividends, the appointment of Directors and the Company
Secretary, circulars to shareholders, Group treasury policies and acquisitions. Certain other matters are delegated to
Board committees, the details of which are set out below.
During 2017, the Board followed the Group results and the development of the activities of the various subsidiaries
by means of reports prepared by the management in Malaysia and Indonesia. It received further reports and minutes
of Executive Committee meetings in Indonesia chaired by a senior manager from Malaysia. The objectives of the
Executive Committee are to resolve operational issues and to drive the performance budget set at the beginning of
every year by the Board. The other members of the Executive Committee are made up of senior members of the
management team based in Indonesia which amongst others includes the Chief Executive Officer, the two Chief
Operating Officers, the Finance Director and the Engineering Director.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Statement on Corporate Governance
Each Board member has access to the impartial advice and services of the Company Secretary, who is responsible
to the Board for ensuring that appropriate procedures are followed. Where necessary the Board members may seek
independent advice including legal counsel at the Company’s expense. The Company maintained Directors’ and
officers’ liability insurance throughout 2017.
Non-Executive Directors are appointed for two year terms renewable on the recommendation of the Board. 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 yearly re-election under the Code.
Dato’ John Lim, the only Executive Director on the Board, sits on the Audit, Nomination and Remuneration
Committees for 2017. The UK Corporate Governance Code provides for smaller companies like AEP to have two
independent Non-Executive Directors in the Audit and Remuneration Committees and a majority independent Non-
Executive Directors in the Nomination Committee. The Code does not expressly provide for the exclusion of the
Executive Director in the Audit and Remuneration Committees. In practice, companies would normally exclude the
Executive Director from membership so as not to taint the independence of both the Audit and Remuneration
Committees. However, the Board felt strongly that given the small composition of the various Committees, they
would benefit from Dato’ John Lim’s wealth of commercial and audit experience. It was also felt that Dato’ John Lim
being the only Director based in London could only adequately represents the Company in any shareholders and
investor meetings if he sits in the three Committees. The Board also believes that the Non-Executive Directors, being
professionals in their own areas of expertise would maintain their impartiality and independence by their majority
presence in all three Committees.
In 2017 the Board conducted a review of its performance by discussion. It concluded that the Board is performing
effectively and that the Board members have the complementary skills appropriate to propel the Group in its strategic
direction and for challenges ahead. No other major issues arose from this review.
Following a review of the internal control and risks management in April 2018 and in the absence of any reported
failure and weaknesses which the Board considered significant, it concluded that these remain effective and
sufficient for their purpose.
Nomination Committee
The Nomination and Corporate Governance Committee currently comprises Mr. Lim Tian Huat (Chairman), Dato’
John Lim Ewe Chuan and Mr. Jonathan Law Ngee Song. The committee had two meetings during 2017, attended by
all members.
The policy on gender diversity is described on page 24 of the Strategic Report.
During the year, the Nomination Committee reviewed and deliberated on the Statement of Corporate Governance for
inclusion in the Annual Report. It also met to discuss and approve the extension of the contract of three of its
Directors.
Relations with shareholders
The Executive Director contacted and met certain principal shareholders during the year to understand their
concerns and at all times are pleased to speak to and meet any shareholder. The views of the shareholders were
communicated to the Board to ensure that it is mindful of the shareholders’ sentiment and issues arising at all times.
Given the dispersion of Directors and shareholders, it is not possible for every Director to meet shareholders. A
member of the Audit, Nomination and Remuneration Committees will be available at the 2018 AGM. It is the intention
of the Board that the Company would engage with identifiable shareholders who have voted against Company’s
resolutions in the past.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Statement on Corporate Governance
The annual report, interim report and trading statements are intended to keep the shareholders informed as to the
progress in the operational and financial performance of the Group. The Company maintains a corporate website at
http://www.angloeastern.co.uk. This website has detailed information on various aspects of the Group’s operations.
The website is updated regularly and includes information on the Company’s share price and the price of crude palm
oil.
The Company’s results and other news releases issued via the London Stock Exchange’s Regulatory News Service
are published on the “Investors Information” and “News” sections of the website and together with other relevant
information concerning the Company and the Industry, are available for downloading. The website was upgraded
recently to enable shareholders and investors to select and receive e-mail alerts from the Company on the selected
regulatory news to follow the development of the Company.
Environmental and corporate responsibility
In 2004 a group of growers, processors, retailers and wildlife and conservation groups founded the “Roundtable for
Sustainable Palm Oil”, known as RSPO, to codify and promote best practices in the industry. Although AEP is not a
member of the RSPO, 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 RSPO. Many of these principles overlap with
ISPO of which compliance is mandatory for AEP. 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.
AEP seeks to comply with these principles in all areas of its activities.
Lim Tian Huat
Chairman, Nomination and Corporate Governance Committee 24 April 2018
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Audit Committee Report
Audit Committee
The Audit Committee comprises Mr. Lim Tian Huat (Chairman), Dato’ John Lim Ewe Chuan and Mr. Jonathan Law
Ngee Song, all of whom are considered by the Directors to have relevant financial and professional experiences to
discharge their specific duties with respect to the Audit Committee.
Mr. Lim is a Fellow member of the Association of Chartered Certified Accountants and a member of the Malaysian
Institute of Accountants and Malaysian Institute of Certified Public Accountants. He is also the founding President of
Insolvency Practitioners of Malaysia. He has extensive experience in accounting, auditing, finance and corporate
insolvency. He attended and participated in eight courses and seminars in 2017, three of which were organised by
Malaysian Institute of Accountants. Topics covered training for directors, risk management, trends, insolvency,
review and update of accounting standards.
Dato’ John Lim attended webinars hosted by UHY Hacker Young LLP on the update of accounting and auditing
standards.
Mr. Jonathan Law attended two seminars covering topics on impact and compliance of new regulations under the
Malaysian Companies Act 2016 and also the Fintech legality.
Both Mr. Lim and Dato’ John Lim have recent and relevant financial experience in their discharge of duties on the
Audit Committee.
Overview
The Audit Committee met prior to the completion of the 2017 accounts and five times during 2017 with full
attendance.
During the year, the Committee reviewed and discussed the 2016 Annual Report, Interim Results, 1st Quarter and 3rd
Quarter Trading Statement for 2017. The Committee also deliberated and recommended to the Board the dividend
rate for AEP and the Indonesian subsidiaries. It also assessed the risks management report and concluded that the
risks generally remained unchanged. The industry continues to face many challenges and uncertainties over
sustainable issues and governmental protective policies. The internal audit reports were tabled bi-annually at the
Audit Committee meetings and were discussed in detail. In its effort to improve yield, the Committee also
recommended the appointment of external agronomists to make field visits for underperforming estates in Indonesia
to provide advice on optimizing field disciplines and improving crop yields. Due to the slower than expected progress
in new planting, the Committee approved an independent survey of some estates to map out areas that can be
planted expediently. In line with the recommendation of the Committee, the Group in 2017 recruited additional
manpower and reorganized the internal audit teams with separate team leaders to spearhead and focus on financial
and operational audits respectively. It also approved the Internal Audit Plan for the year. The Committee also
deliberated extensively and made changes before recommending the Budget for 2017 to the Board. In May 2017,
Audit Committee held its meeting in Medan and took the opportunities to meet the key managers of the Indonesian
operations. There are regular dialogues, both formal and informal between the Audit Committee and the senior
management in Indonesia and Malaysia and the discussions are open and constructive.
The Committee met with the external auditors twice in 2017 to discuss and to agree the 2016 Group accounts for the
Board’s approval and another meeting to plan the audit for 2017. In the audit planning meeting, the external auditors
updated the Audit Committee on directors’ responsibilities and stressed on the UK Corporate Governance Code
relating to audit partners’ rotation and independence. During the year the audit engagement team from BDO (UK)
visited Indonesia and Malaysia to review the work of the component auditors.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Audit Committee Report
In the 2017 Annual Report, the management has taken reasonable steps to assess whether there is any indication
that an asset may be impaired, in particular, the plantations. Impairment for plantations is measured by comparing its
carrying amount with its recoverable amount, which is the higher of the fair value less cost to sell and its value in
used. Its recoverable amount was based on value in use calculation on the basis that it will be higher than fair value
less cost to sell, given the mechanics of the two calculations and the nature of the business. This requires the
management to exercise significant judgement in determining the underlying assumptions used in the calculation of
the recoverable amount. In 2017, the reversal of impairment loss of the plantations of the Group was $1.7 million
(2016: impairment loss of $2.7 million). The details of the calculation of the recoverable amount are disclosed in note
10 - Property, plant and equipment to the consolidated financial statements.
To provide indicative fair values and to support the valuation of the estate land, twelve companies located across
North Sumatera, Bengkulu, Riau, Kalimantan and Malaysia were valued by qualified valuers in 2017. The Directors
revalued the estate land not covered by the valuation exercise based on the regional appreciation rate quantified by
the qualified valuers. The land is valued on a rotational basis and all the land is valued by qualified valuers every two
years. More details on land valuation work are covered on page 30 to 31.
The Committee also reviewed the policy on revenue recognition and believes that revenue is recognized when
significant risks and rewards of ownership of the FFB and CPO have been transferred to the buyers. The Group
generates revenue predominantly from the sale of CPO from processed FFB.
The Board receives reports from executive management in Indonesia and Malaysia and focuses principally on
reviewing reports from management and considers whether significant risks in the Group are identified, evaluated,
managed and whether significant weaknesses are promptly remedied including, but not limited to, commodity price
movements, exchange rate movements, political and social change and government legislation.
During the year the Committee carried out an assessment of the effectiveness of the external audit process. The
assessment was led by the Chairman of the Audit Committee, assisted by the Senior General Manager and the
Group Accountant and focused on certain criteria which the Committee considered to be important factors in
demonstrating an effective audit process. These factors included the quality of audit staff, the planning and execution
of the audit according to agreed plans and timeline, provision of sound advice on technical issues and degree of
independence and professionalism displayed during the audit for 2016. The tenure of audit and extent of non-audit
work that will affect the independence of the auditors were reviewed. During 2017, the non-audit work undertaken by
BDO (UK) was on the review of the interim report for compliance before the announcement. The Committee
considered the nature, scope of engagement and remuneration paid were such that the independence and
objectivity of the auditors were not impaired. Fees paid for audit and non-audit services are provided in Note 4. The
Committee considered the key members of the audit engagement team and component auditors involved in the
Group Audit. This includes the Audit Partner, the Audit Senior Manager and the Audit Manager from BDO (UK) and
the various partners from BDO in Malaysia and Indonesia. The current Audit Partner from BDO (UK) has been the
Company’s audit engagement partner for four years since 2014 and the Audit Partner for Malaysia audit has
completed one year. The Audit Partner for the Indonesian audit has been involved for two years since 2015.
Following this assessment, the Committee concluded that the external audit process remained effective, and that the
objectivity of the external auditors was not impaired and that it provides an appropriate independent challenge of the
senior management of the Group.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Audit Committee Report
Responsibility
Audit Committee is responsible for:
Monitoring the integrity of the financial statements and reviewing formal announcements of financial
performance and significant reporting issues and judgements that such statements and announcements are fair
and balanced;
Reviewing the effectiveness of the internal control functions (including the internal financial controls and the
internal audit function);
Making recommendations to the Board in relation to the appointment, reappointment and removal of the
external auditors, their remuneration and terms of engagement;
Reviewing and monitoring the independence of the external auditors and the effectiveness of the audit process;
Providing advice to the Board on the assessment of the principal risks facing the Group; and
Providing advice to the Board on the form and basis underlying the longer term viability statement and going
concern statement to be contained in Annual Reports.
The Committee also monitors the engagement of the auditors to perform non-audit work. The Committee considered
that the nature and scope of, and remuneration payable in respect of, these engagements were such that the
independence and objectivity of the auditors were not impaired.
The members of the Committee discharge their responsibilities by informal discussions between themselves, by
meeting with the external auditors, the internal auditors and management and by consideration of reports by
management and by holding at least one formal meeting in each year.
Internal control
The Company has followed the Code provisions on internal control since 1999 and the Guidance on Risk
Management, Internal Control and Related Financial and Business Reporting issued by the Financial Reporting
Council in 2014.The Board has overall responsibility for the Group’s systems of internal control and risk management
and for reviewing its effectiveness. Such a system is designed to manage, rather than eliminate, the risk of failure to
achieve business objectives and can only provide reasonable and not absolute assurance against material
misstatement or loss. 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 Group has internal auditors who visit operating sites in Indonesia and Malaysia regularly based on an approved
Internal Audit Plan and provide summarized internal audit reports to the Audit Committee on a regular basis. The
Internal Audit also conducts special audits throughout the year as and when required by management. The internal
audit team provides objective assurance as to the effectiveness of the Group’s systems of internal control and risk
management of the Group’s operating management to the Committee. Follow-up audits and discussions are also
held to ensure remedial actions are taken promptly. The internal audit review is a continuous and 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.
Lim Tian Huat
Chairman, Audit Committee 24 April 2018
Annual Report 2017 | Anglo-Eastern Plantations Plc
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46
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Remuneration Report
I am pleased to report on the activities of the Remuneration Committee for the year ended 31 December 2017. It
sets out the remuneration policy and remuneration details for the Executive and Non-Executive directors of the
Group. It has been prepared in accordance with Schedule 8 of The Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 as amended in August 2013.
The Companies Act 2006 requires the auditors to report to the shareholders on certain parts of the Directors’
Remuneration Report and to state whether, in their opinion, those parts of the report have been properly prepared in
accordance with the Regulations. The parts of the annual report on remuneration that are subject to audit are
indicated in that report. The report by the Chairman of the Remuneration Committee and the policy statement are not
subject to audit.
The Executive Director’s compensation is not linked to the profitability of the Group. It is linked to his role in respect
of activities relating to corporate finance and corporate affairs, including liaising with the Company’s advisers and
regulators and interaction with shareholders.
The Executive Director basic salary remains and is capped at £90,000 per annum until August 2018.
The operating units in Indonesia and Malaysia, however, have in place a variable compensation policy that rewards
senior executives and employees with bonuses ranging from two to seven months’ pay based on individual’s and
operating units’ performance. The key criteria used in the determination of the variable compensation policy for the
bonus was revised in May 2014 following discussion and consultation with the Company’s Chairman.
The Remuneration policy and the Director’s remuneration report was last approved at Company’s AGM on 27 June
2017. In the meeting, the shareholders voted in the following manner:
To approve Directors’ Remuneration Report
For
44
Against
12
% For
98.94%
% Against
1.06%
The Committee would welcome your support for our Remuneration Report. The report excluding the policy statement
will be subject to the shareholder vote in 2018 AGM.
Remuneration Committee
The Remuneration Committee comprises of Mr. Jonathan Law Ngee Song (Chairman), Dato’ John Lim Ewe Chuan
and Mr. Lim Tian Huat.
The Committee had one meeting in 2017, attended by all members.
Besides formal meetings, it also has informal discussions and consultation with the Company’s Chairman in relation
to the variable bonuses for operational staff in Indonesia. During the year the Remuneration Committee reviewed the
annual
the necessary
recommendation to the Board after making an informal comparison with other plantation companies. The Committee
also deliberated on the 2017 Remuneration Report and recommended to the Board for acceptance.
increment and bonus entitlement of senior management
Indonesia.
It made
in
Policy
The Remuneration Committee makes recommendations on senior management pay and conditions, after
consultation with the Chairman, and recommends to the Board the terms for the Executive Director. It periodically
assesses the remuneration of the Non-Executive Directors and submits a proposal to the Board.
In determining the remuneration policy of senior management, the Committee takes into account the need to attract,
retain and motivate employees. It also makes external comparison with the current market trends and practices of
equivalent roles taking into account the size, business complexity and relative performance.
Non-Executive Directors’ remuneration is considered by the Board and consists exclusively of a fixed payment.
Annual Report 2017 | Anglo-Eastern Plantations Plc
47
47
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Remuneration Report
When determining Executive Director’s remuneration, the Committee reviews the pay policy and levels for
executives below the Board, as well as pay and conditions of employees throughout the Group. Other factors
considered are individual performance, market conditions, the Company’s performance, pay and employment
conditions of its other employees in the organisation and the need to maintain an economic operation. This policy
continues to be consistently applied.
Components
Base salary
Base salaries of senior management are reviewed on an annual basis by the Remuneration Committee or when an
individual changes his responsibilities. Non-Executive Directors receive no benefit 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 including crop production, external crop purchase, increases in planted area,
efficiency of mill performance and overall profitability. There is no bonus scheme for the Executive Director.
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 ten 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 vest over three years. The total grant to each holder is determined by seniority and total market
value at the 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
The operating units in Indonesia participate in mandatory pension schemes for their local executives and
management. There is no company-sponsored scheme for senior executives outside of Indonesia.
Remuneration Policy Table for Executive Director
The table below summarises the key aspects of the Group’s Remuneration Policy for Executive Director effective 1
January 2015.
Type
Purpose
Base salary - fixed pay
To contain fixed costs
Maximum payment
Capped at £90,000. The cap is reviewed
periodically. The policy permits the cap to be
changed if this is deemed necessary to meet
regulatory
business,
requirements.
legislative
or
There is no bonus, fringe benefits or employee share option scheme for the Executive Director.
Annual Report 2017 | Anglo-Eastern Plantations Plc
48
48
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Remuneration Report
Directors’ Remuneration Report
Executive Director’s Remuneration over 9 Years
Executive Director’s Remuneration over 9 Years
Benefit
Benefit
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Year ended 31 Dec
Year ended 31 Dec
2017
2017
2016
2016
2015
2015
2014
2014
2013
2013
2012
2012
2011
2011
2010
2010
2009
2009
* The Executive Director’s basic salary from 2015 to 2017 was £90,000 per annum. The fluctuations shown above
* The Executive Director’s basic salary from 2015 to 2017 was £90,000 per annum. The fluctuations shown above
during this period were the result of exchange translations.
during this period were the result of exchange translations.
Salary
Salary
$113,000*
$113,000*
$127,000*
$127,000*
$137,000*
$137,000*
$133,000
$133,000
$117,000
$117,000
$105,000
$105,000
$83,000
$83,000
$114,000
$114,000
$137,000
$137,000
Total
Total
$113,000
$113,000
$127,000
$127,000
$137,000
$137,000
$133,000
$133,000
$117,000
$117,000
$105,000
$105,000
$83,000
$83,000
$114,000
$114,000
$137,000
$137,000
Pension
Pension
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bonus
Bonus
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Percentage change of remuneration
Percentage change of remuneration
The following table shows a comparison of the percentage change in salaries of the Executive Director, senior
The following table shows a comparison of the percentage change in salaries of the Executive Director, senior
management in Indonesia and total wages and salaries between 2016 and 2017.
management in Indonesia and total wages and salaries between 2016 and 2017.
Percentage change in Executive Director’s salary
Percentage change in Executive Director’s salary
Salary
Salary
$113,000
$113,000
$127,000
$127,000
-11.0%
-11.0%
2017
2017
2016
2016
Change
Change
Percentage change in selected Group senior management salaries
Percentage change in selected Group senior management salaries
Salaries
Salaries
$1,587,000
$1,587,000
$1,816,000
$1,816,000
-12.6%
-12.6%
Percentage change in total wages and salaries
Percentage change in total wages and salaries
Total wages and salaries
Total wages and salaries
Relative importance of spend on pay
Relative importance of spend on pay
$31,608,000
$31,608,000
$28,764,000
$28,764,000
+9.9%
+9.9%
$'000
$'000
35,000
35,000
30,000
30,000
25,000
25,000
20,000
20,000
15,000
15,000
10,000
10,000
5,000
5,000
-
-
34,926
34,926
31,564
31,564
1,003
1,003
1,515
1,515
2016 2017 2016 2017
2016 2017 2016 2017
Total Group Employee Remuneration
Total Group Employee Remuneration
Total Dividend Paid
Total Dividend Paid
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
49
49
49
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Remuneration Report
Service contracts
All Directors, Executive and Non-Executive, have formal appointment letters. The Executive and Non-Executives are
appointed normally on two year terms with notice periods of one month to two months. The service contracts are
kept at the registered office and may be inspected by shareholders on request. Notice periods for all other senior
management are generally two months. Therefore any remuneration payment for loss of office will be capped at a
maximum of two months.
At 31 December 2017, the unexpired term of the retiring Directors are:
Madam Lim Siew Kim
Dato’ John Lim Ewe Chuan
Lim Tian Huat
Jonathan Law Ngee Song
Expiry 30 January 2019
Expiry 31 August 2018
Expiry 7 May 2019
Expiry 3 July 2019
Performance Graph
The performance graph is set out on page 4 and shows the Company’s share price performance compared to the
FTSE 100 index for the period of 2009 to 2017 (last nine years) to indicate the volatility and trend of the market
generally. Our share price performance consistently outperformed the FTSE 100 index throughout these periods. In
determining senior management compensation, the Remuneration Committee is influenced by the operating
performance of the Company and not directly by the share price. AEP was removed from the FTSE All Share Index
in June 2016 resulting in a large sell down of its shares as index related funds reweighted their holdings. The drop in
AEP share price coincided with the sell down. The removal was primarily based on the liquidity of the shares after it
failed to meet the monthly median of 0.015% of the stock for eight out of twelve months. However, after an absence
of one year, AEP with effect from 1 June 2017, has been included in the FTSE Small Cap and FTSE All Share Index.
Directors’ interests (audited)
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:
Madam Lim Siew Kim
Dato' John Lim Ewe Chuan
Lim Tian Huat
Jonathan Law Ngee Song
2017
Ordinary shares
20,551,914
2016
Ordinary shares
20,551,914
-
-
-
-
-
-
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 2017 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. There is no
requirement for Directors to hold shares in the Company. Other than as set out in notes 6 and 21 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.
Annual Report 2017 | Anglo-Eastern Plantations Plc
50
50
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Directors’ Remuneration Report
Directors’ remuneration (audited)
The following part provides details of the remuneration of all the Directors for the year ended 31 December 2017. The
numerical components of these disclosures have been audited in accordance with Section 421 of the UK Companies
Act 2006.
The remuneration of all Directors who served during the year was:
Audited information
Name of Directors
Executive:
Dato' John Lim Ewe Chuan (1)
Non-Executive:
Lim Siew Kim (2)
Lim Tian Huat (3)
Jonathan Law Ngee Song (4)
Total
Total 2017 Fees
Total 2016 Fees
$000
$000
113
55
20
20
208
127
59
21
21
228
Directors’ remuneration comprises of directors fees only.
Unaudited information
Notes:
(1) Appointed as Executive Director on 1 September 2010. Previously was the Senior Independent Non-Executive Director.
(2) Appointed on 29 November 1993 and appointed as Non-Executive Chairman on 31 January 2011.
(3) Appointed on 8 May 2015.
(4) Appointed on 4 July 2013.
Jonathan Law Ngee Song
Chairman, Remuneration Committee 24 April 2018
Annual Report 2017 | Anglo-Eastern Plantations Plc
51
51
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Auditors’ Report
Auditors’ Report
Auditors’ Report
Auditors’ Report
Auditors’ Report
Auditors’ Report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
Opinion
Opinion
Opinion
Opinion
Opinion
Opinion
We have audited the financial statements of Anglo Eastern Plantations Plc (the ‘parent company’) and its
We have audited the financial statements of Anglo Eastern Plantations Plc (the ‘parent company’) and its
We have audited the financial statements of Anglo Eastern Plantations Plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 December 2017 which comprise the consolidated income statement,
We have audited the financial statements of Anglo Eastern Plantations Plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 December 2017 which comprise the consolidated income statement,
We have audited the financial statements of Anglo Eastern Plantations Plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 December 2017 which comprise the consolidated income statement,
We have audited the financial statements of Anglo Eastern Plantations Plc (the ‘parent company’) and its
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
subsidiaries (the ‘group’) for the year ended 31 December 2017 which comprise the consolidated income statement,
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
subsidiaries (the ‘group’) for the year ended 31 December 2017 which comprise the consolidated income statement,
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
subsidiaries (the ‘group’) for the year ended 31 December 2017 which comprise the consolidated income statement,
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
the Company statement of changes in equity and notes to the financial statements, including a summary of
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
the Company statement of changes in equity and notes to the financial statements, including a summary of
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
the Company statement of changes in equity and notes to the financial statements, including a summary of
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
significant accounting policies. The financial reporting framework that has been applied in their preparation of the
the Company statement of changes in equity and notes to the financial statements, including a summary of
significant accounting policies. The financial reporting framework that has been applied in their preparation of the
the Company statement of changes in equity and notes to the financial statements, including a summary of
significant accounting policies. The financial reporting framework that has been applied in their preparation of the
the Company statement of changes in equity and notes to the financial statements, including a summary of
group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
significant accounting policies. The financial reporting framework that has been applied in their preparation of the
group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
significant accounting policies. The financial reporting framework that has been applied in their preparation of the
group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
significant accounting policies. The financial reporting framework that has been applied in their preparation of the
the European Union. The financial reporting framework that has been applied in respect of the parent company
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 respect of the parent company
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 respect of the parent company
group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
financial statements is applicable law and United Kingdom Accounting Standards including Financial Reporting
the European Union. The financial reporting framework that has been applied in respect of the parent company
financial statements is applicable law and United Kingdom Accounting Standards including Financial Reporting
the European Union. The financial reporting framework that has been applied in respect of the parent company
financial statements is applicable law and United Kingdom Accounting Standards including Financial Reporting
the European Union. The financial reporting framework that has been applied in respect of the parent company
Standard 101 ‘Reduced reporting Framework’ (United Kingdom Generally Accepted Accounting Practice).
financial statements is applicable law and United Kingdom Accounting Standards including Financial Reporting
Standard 101 ‘Reduced reporting Framework’ (United Kingdom Generally Accepted Accounting Practice).
financial statements is applicable law and United Kingdom Accounting Standards including Financial Reporting
Standard 101 ‘Reduced reporting Framework’ (United Kingdom Generally Accepted Accounting Practice).
financial statements is applicable law and United Kingdom Accounting Standards including Financial Reporting
Standard 101 ‘Reduced reporting Framework’ (United Kingdom Generally Accepted Accounting Practice).
Standard 101 ‘Reduced reporting Framework’ (United Kingdom Generally Accepted Accounting Practice).
Standard 101 ‘Reduced reporting Framework’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
In our opinion:
In our opinion:
In our opinion:
In our opinion:
In our opinion:
The financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
The financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
The financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
as at 31 December 2017 and of the group’s profit for the year then ended;
The financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
The financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
as at 31 December 2017 and of the group’s profit for the year then ended;
The financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
as at 31 December 2017 and of the group’s profit for the year then ended;
as at 31 December 2017 and of the group’s profit for the year then ended;
as at 31 December 2017 and of the group’s profit for the year then ended;
as at 31 December 2017 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
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
European Union;
European Union;
the parent company financial statements have been properly prepared in accordance with United Kingdom
the parent company financial statements have been properly prepared in accordance with United Kingdom
the parent company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
the parent company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
the parent company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
the parent company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
Generally Accepted Accounting Practice; and
Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006;
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006;
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.
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.
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.
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.
and, as regards the group financial statements, Article 4 of the IAS Regulation.
and, as regards the group financial statements, Article 4 of the IAS Regulation.
Basis for opinion
Basis for opinion
Basis for opinion
Basis for opinion
Basis for opinion
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
financial statements section of our report. We are independent of the group and the parent company in accordance
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are independent of the group and the parent company in accordance
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are independent of the group and the parent company in accordance
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
financial statements section of our report. We are independent of the group and the parent company in accordance
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
financial statements section of our report. We are independent of the group and the parent company in accordance
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
financial statements section of our report. We are independent of the group and the parent company in accordance
Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
appropriate to provide a basis for our opinion.
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
appropriate to provide a basis for our opinion.
appropriate to provide a basis for our opinion.
Use of our report
Use of our report
Use of our report
Use of our report
Use of our report
Use of our report
This report is made solely to the parent company’s members, as a body, in accordance with Chapter 3 of Part 16 of
This report is made solely to the parent company’s members, as a body, in accordance with Chapter 3 of Part 16 of
This report is made solely to the parent 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 parent company’s
This report is made solely to the parent 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 parent company’s
This report is made solely to the parent 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 parent company’s
This report is made solely to the parent company’s members, as a body, in accordance with Chapter 3 of Part 16 of
members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company’s
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company
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 parent company
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 parent company
members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company
and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company
and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company
and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Conclusions relating to principal risks, going concern and viability statement
Conclusions relating to principal risks, going concern and viability statement
Conclusions relating to principal risks, going concern and viability statement
Conclusions relating to principal risks, going concern and viability statement
Conclusions relating to principal risks, going concern and viability statement
Conclusions relating to principal risks, going concern and viability statement
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs
(UK) require us to report to you whether we have anything material to add or draw attention to:
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs
(UK) require us to report to you whether we have anything material to add or draw attention to:
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs
(UK) require us to report to you whether we have anything material to add or draw attention to:
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs
(UK) require us to report to you whether we have anything material to add or draw attention to:
(UK) require us to report to you whether we have anything material to add or draw attention to:
(UK) require us to report to you whether we have anything material to add or draw attention to:
the disclosures in the annual report set out on pages 20-23 that describe the principal risks and explain how
the disclosures in the annual report set out on pages 20-23 that describe the principal risks and explain how
the disclosures in the annual report set out on pages 20-23 that describe the principal risks and explain how
they are being managed or mitigated;
the disclosures in the annual report set out on pages 20-23 that describe the principal risks and explain how
they are being managed or mitigated;
the disclosures in the annual report set out on pages 20-23 that describe the principal risks and explain how
they are being managed or mitigated;
the disclosures in the annual report set out on pages 20-23 that describe the principal risks and explain how
they are being managed or mitigated;
they are being managed or mitigated;
they are being managed or mitigated;
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Auditors’ Report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
the directors’ confirmation set out on page 19 in the annual report that they have carried out a robust
assessment of the principal risks facing the group, including those that would threaten its business model, future
performance, solvency or liquidity;
the directors’ statement set out on page 12 in the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting in preparing the financial statements and the
directors’ identification of any material uncertainties to the group and the parent company’s ability to continue to
do so over a period of at least twelve months from the date of approval of the financial statements;
whether the directors’ statement relating to going concern required under the Listing Rules in accordance with
Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or
the directors’ explanation set out on page 30 in the annual report as to how they have assessed the prospects of
the group, over what period they have done so and why they consider that period to be appropriate, and their
statement as to whether they have a reasonable expectation that the group will be able to continue in operation
and meet its liabilities as they fall due over the period of their assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
Revenue recognition
Our audit response
Substantially all revenue is derived from the sale of crude
palm oil and palm kernel, the revenue from which is
recognised when the goods are delivered or allocated to a
purchaser subsequent to payment as detailed in note 1.
Revenue is calculated as the quantity of crude palm oil
multiplied by the crude palm oil price, net of processing
and transportation charges. We consider there to be a risk
over the accuracy of the recorded weight of crude palm oil
sales and therefore the completeness of revenue.
We tested, on a sample basis, that sale invoices were
raised on the delivery date based on the goods
dispatched note and that the total weight stated in the
goods dispatched note agreed with that in the delivery
order. We identified revenue from sales of crude palm
oil and palm kernel at the end of the current financial
year and the beginning of the new financial year and
tested a sample to ensure that revenue had been
recognised in the correct period.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Auditors’ Report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
Key audit matter
Valuation of biological assets
The unharvested fresh fruit bunches (FFB) on the bearer
plants at the year-end remain within the scope of IAS 41
Biological assets and are therefore held at fair value less
costs to sell determined on the basis of the net present
value of expected
the
future cash
production of FFB. Management exercise significant
judgement in determining the underlying assumptions
used in the calculation of fair value. These assumptions
include the estimation of the weight of unharvested FFB at
the balance sheet date, FFB production, FFB selling price
and costs to sell. We identified this as a risk due to the
inherent uncertainty around the future estimates.
flows arising
in
Valuation of estate land
Estate land is carried at fair value, based on periodic
valuations on an open market basis by an independent
professionally qualified valuer. The directors obtain a
professional valuation on land on a rotational basis and all
land has been professionally valued at least once at the
current or previous financial year end. We identified the
valuation of estate land as a risk due to the subjective
judgements involved in the estimation and the volatility of
land market prices within Indonesia.
Our audit response
The directors performed
the valuation exercise
internally. We challenged the assumptions in the
underlying data input by management at the balance
to
sheet date
industry peers, independent external data sources
and where available to corroboration with supporting
documentation and historical trends.
through discussions, comparisons
to
in which
the current year
the prior year and applying
the other
the directors engaged an
In
independent valuer
to perform a market-based
valuation on all land that was not independently
valued in the prior year along with a selection of land
which had been, to ensure geographical coverage of
all areas
they operate. The directors
performed their own valuation on the remaining land
by considering the movements on the valued land
those same
from
movements
the same
geographical region. We assessed the capabilities,
objectivity and competence of the independent valuer
and considered
to be satisfactory. We
challenged the assumptions applied by the valuer,
verified the input data utilised and assessed the
reasonableness of the movements the valuation on
an estate by estate basis in light of movements in
plantation land area and market valuation trends. We
challenged the assumptions applied by the Directors
in their own valuation, most notably their rationale for
the application of the movements determined by the
independent valuers to the remaining estates.
them
land
in
Impairment of bearer plants classified as PPE
Bearer plants fall within the scope of IAS 16 – Property,
Plant and Equipment and are therefore held at historical
cost less depreciation. At the end of each reporting period,
the directors are required to assess whether there is any
indication that an asset may be impaired. If any such
indication exists,
the
recoverable amount of the asset.
the directors shall estimate
We considered the various indicators of impairment
listed in IAS 36 to determine whether any additional
plantations to those already identified by the directors
should be reviewed for impairment at 31 December
2017.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Auditors’ Report
Auditors’ Report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
(continued)
Key audit matter
Key audit matter
Impairment of bearer plants classified as PPE
Impairment of bearer plants classified as PPE
(continued)
(continued)
The directors have identified an indicator of impairment on
The directors have identified an indicator of impairment on
five plantations and have carried out an impairment review
five plantations and have carried out an impairment review
for those plantations, calculating the recoverable amount
for those plantations, calculating the recoverable amount
to be the asset’s value in use. The directors exercise
to be the asset’s value in use. The directors exercise
significant
the underlying
judgement
the underlying
judgement
significant
assumptions used in this calculation.
assumptions used in this calculation.
in determining
in determining
Our audit response
Our audit response
comparisons
comparisons
The directors engaged an independent valuer to
The directors engaged an independent valuer to
determine the value in use using data provided by
determine the value in use using data provided by
management. We challenged the assumptions in the
management. We challenged the assumptions in the
through
underlying data made by
through
underlying data made by
discussions,
peers,
peers,
discussions,
independent external data sources and where
independent external data sources and where
supporting
available
supporting
available
documentation and historical trends. We performed
documentation and historical trends. We performed
sensitivity analysis on the key assumptions in the
sensitivity analysis on the key assumptions in the
value in use calculation which were considered to be
value in use calculation which were considered to be
CPO price and discount rate.
CPO price and discount rate.
the valuer
the valuer
industry
to
industry
to
corroboration
corroboration
through
through
to
to
Our application of materiality
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could
influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
We determined materiality for the group financial statements
We determined materiality for the group financial statements
as a whole to be US$3.00 million (2016: US$2.00 million)
as a whole to be US$3.00 million (2016: US$2.00 million)
which approximates to 4.3% of profit before tax (2016:
which approximates to 4.3% of profit before tax (2016:
3.3%). In previous years, materiality has been based on
3.3%). In previous years, materiality has been based on
revenue but in the current year we have based materiality on
revenue but in the current year we have based materiality on
profit before tax. We consider profit before tax to be a more
profit before tax. We consider profit before tax to be a more
appropriate basis for materiality as it is a key indicator of the
appropriate basis for materiality as it is a key indicator of the
Group’s financial performance. Performance materiality was
Group’s financial performance. Performance materiality was
set at 75% of the above materiality levels (2016: 75%).
set at 75% of the above materiality levels (2016: 75%).
Performance materiality is applied at the individual account
Performance materiality is applied at the individual account
or balance level set at an amount to reduce to an
or balance level set at an amount to reduce to an
appropriately low level the probability that the aggregate of
appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds
uncorrected and undetected misstatements exceeds
materiality for the financial statements as a whole. Where
materiality for the financial statements as a whole. Where
from components was audited
financial
from components was audited
financial
separately, component materiality was set at lower levels
separately, component materiality was set at lower levels
varying up to 50% of group materiality. Materiality levels are
varying up to 50% of group materiality. Materiality levels are
higher than in previous years due to the change in basis and
higher than in previous years due to the change in basis and
the improvement in results for the year.
the improvement in results for the year.
information
information
We agreed with the Audit Committee that we would report to the Committee all individual audit differences identified
We agreed with the Audit Committee that we would report to the Committee all individual audit differences identified
during the course of our audit in excess of US$60,000 (2016: US$50,000). We also agreed to report differences
during the course of our audit in excess of US$60,000 (2016: US$50,000). We also agreed to report differences
below this threshold that, in our view, warranted reporting on qualitative grounds.
below this threshold that, in our view, warranted reporting on qualitative grounds.
We determined materiality for the parent company financial statements to be US$1.13 million (2016: US$1.38
We determined materiality for the parent company financial statements to be US$1.13 million (2016: US$1.38
million) which is based on 2% of gross assets as the entity does not trade and acts as a holding company.
million) which is based on 2% of gross assets as the entity does not trade and acts as a holding company.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Auditors’ Report
Auditors’ Report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
(continued)
An overview of the scope of our audit
An overview of the scope of our audit
The Group financial statements are a consolidation of twenty six companies made up of the parent company, four
The Group financial statements are a consolidation of twenty six companies made up of the parent company, four
management companies, four dormant companies and seventeen trading companies, all of which now contain
management companies, four dormant companies and seventeen trading companies, all of which now contain
mature plantations. Sixteen of the plantations are located in Indonesia and one in Malaysia. The head office and
mature plantations. Sixteen of the plantations are located in Indonesia and one in Malaysia. The head office and
main accounting location is located in Kuala Lumpur, Malaysia, at a separate location from the plantations. Our
main accounting location is located in Kuala Lumpur, Malaysia, at a separate location from the plantations. Our
Group audit scope focused on the group’s principal operating companies and based on our risk assessment we
Group audit scope focused on the group’s principal operating companies and based on our risk assessment we
identified six operating plantation companies which, in our view, required an audit of their complete financial
identified six operating plantation companies which, in our view, required an audit of their complete financial
information due to their size and a further eleven which required audit procedures on specific areas due to their risk
information due to their size and a further eleven which required audit procedures on specific areas due to their risk
characteristics. This, together with additional procedures performed at Group level in respect of the audit of biological
characteristics. This, together with additional procedures performed at Group level in respect of the audit of biological
assets, leasehold land and the impairment reviews of bearer plants classified as property plant and equipment, gave
assets, leasehold land and the impairment reviews of bearer plants classified as property plant and equipment, gave
us the evidence we needed to form our opinion on the Group financial statements as a whole.
us the evidence we needed to form our opinion on the Group financial statements as a whole.
Audits of the subsidiary companies were performed at materiality levels lower than Group materiality and determined
Audits of the subsidiary companies were performed at materiality levels lower than Group materiality and determined
by us to be appropriate to the relative size of the company concerned. The audits of each of the operating
by us to be appropriate to the relative size of the company concerned. The audits of each of the operating
companies were performed entirely in Malaysia and Indonesia. All audits were conducted by BDO network firms with
companies were performed entirely in Malaysia and Indonesia. All audits were conducted by BDO network firms with
teams drawn from the UK, Malaysia and Indonesia. As part of our audit strategy, the Senior Statutory Auditor and
teams drawn from the UK, Malaysia and Indonesia. As part of our audit strategy, the Senior Statutory Auditor and
other senior members of the team between them visit Malaysia and Indonesia every year. During these visits the
other senior members of the team between them visit Malaysia and Indonesia every year. During these visits the
Group audit team reviewed the complete audit files for the six operating plantation companies considered to be
Group audit team reviewed the complete audit files for the six operating plantation companies considered to be
significant by size and focused on the audit work in relation to the specific areas identified for the remaining eleven
significant by size and focused on the audit work in relation to the specific areas identified for the remaining eleven
companies considered to be significant by risk. Following the review, any further work required by the Group audit
companies considered to be significant by risk. Following the review, any further work required by the Group audit
team was performed by the component auditor. The component auditors visit the plantation estates on a rotational
team was performed by the component auditor. The component auditors visit the plantation estates on a rotational
basis so that each estate is visited at least once every three years.
basis so that each estate is visited at least once every three years.
The remaining components of the Group include non-significant holding companies and these components were
The remaining components of the Group include non-significant holding companies and these components were
principally subject to analytical review procedures performed by the Group audit team.
principally subject to analytical review procedures performed by the Group audit team.
Total assets
Total assets
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Auditors’ Report
Auditors’ Report
Auditors’ Report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
(continued)
(continued)
Profit before tax
Profit before tax
Profit before tax
Revenue
Revenue
Revenue
Other information
Other information
Other information
The other information comprises the information included in the annual report, set out on pages 2 to 51, other than
The other information comprises the information included in the annual report, set out on pages 2 to 51, other than
The other information comprises the information included in the annual report, set out on pages 2 to 51, other than
the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our
the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our
the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our
opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the
stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the
stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the
financial statements, our responsibility is to read the other information and, in doing so, consider whether the other
financial statements, our responsibility is to read the other information and, in doing so, consider whether the other
financial statements, our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material misstatement in the financial statements or
misstatements, we are required to determine whether there is a material misstatement in the financial statements or
misstatements, we are required to determine whether there is a material misstatement in the financial statements or
a material misstatement of the other information. If, based on the work we have performed, we conclude that there is
a material misstatement of the other information. If, based on the work we have performed, we conclude that there is
a material misstatement of the other information. If, based on the work we have performed, we conclude that there is
a material misstatement of the other information, we are required to report that fact.
a material misstatement of the other information, we are required to report that fact.
a material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
We have nothing to report in this regard.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our responsibility to specifically address the following
In this context, we also have nothing to report in regard to our responsibility to specifically address the following
In this context, we also have nothing to report in regard to our responsibility to specifically address the following
items in the other information and to report as uncorrected material misstatements of the other information where we
items in the other information and to report as uncorrected material misstatements of the other information where we
items in the other information and to report as uncorrected material misstatements of the other information where we
conclude that those items meet the following conditions:
conclude that those items meet the following conditions:
conclude that those items meet the following conditions:
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Auditors’ Report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
Fair, balanced and understandable – the statement given by the directors that they consider the annual report
and financial statements taken as a whole is fair, balanced and understandable and provides the information
necessary for shareholders to assess the group’s performance, business model and strategy, is materially
inconsistent with our knowledge obtained in the audit; or
Audit committee reporting – the section describing the work of the audit committee does not appropriately
address matters communicated by us to the audit committee; or
Directors’ statement of compliance with the UK Corporate Governance Code – the parts of the directors’
statement required under the Listing Rules relating to the company’s compliance with the UK Corporate
Governance Code containing provisions specified for review by the auditor in accordance with Listing Rule
9.8.10R(2) do not properly disclose a departure from a relevant provision of the UK Corporate Governance
Code.
Opinions 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.
In our opinion, based on the work undertaken in the course of the audit the information given in the strategic report
and the directors’ report for the financial year for which the financial statements are prepared is consistent with the
financial statements and those reports have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained
in the course of the audit, we have not identified material misstatements in the strategic report or the directors’
report.
We have nothing to report in respect of the following matters in relation to which 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.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 38, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Auditors’ Report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent
company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were appointed by the Chairman in 2001 to audit the
financial statements for the year ending 31 December 2001 and subsequent financial periods. The period of total
uninterrupted engagement is 17 years, covering the years ending 31 December 2001 to 31 December 2017.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent
company and we remain independent of the group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
Anna Draper (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
United Kingdom
24 April 2018
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Annual Report 2017 | Anglo-Eastern Plantations Plc
59
59
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Consolidated Income Statement
For the year ended 31 December 2017
Consolidated Income Statement
For the year ended 31 December 2017
Continuing operations
Continuing operations
Revenue
Cost of sales
Revenue
Gross profit
Cost of sales
Administration expenses
Gross profit
Reversal of impairment / (impairment
Administration expenses
losses)
Reversal of impairment / (impairment
Operating profit
losses)
Exchange (losses) / gains
Operating profit
Finance income
Exchange (losses) / gains
Finance expense
Finance income
Profit before tax
Finance expense
Tax expense
Profit before tax
Profit for the year
Tax expense
Attributable to:
Profit for the year
- Owners of the parent
Attributable to:
- Non-controlling interests
- Owners of the parent
- Non-controlling interests
Earnings per share for profit
Earnings per share for profit
attributable to the owners of the
parent during the year
attributable to the owners of the
parent during the year
- basic
- diluted
- basic
- diluted
Result
before
BA
Result
before
movement
BA
movement
$000
291,907
$000
(217,543)
291,907
74,364
(217,543)
Note
Note
2
2
(8,611)
74,364
923
(8,611)
66,676
923
(272)
66,676
5,337
(272)
(1,753)
5,337
69,988
(1,753)
(23,451)
69,988
46,537
(23,451)
46,537
36,386
10,151
36,386
46,537
10,151
46,537
3
3
3
4
3
7
4
7
8
8
8
8
2017
2017
BA
movement
BA
movement
$000
Result
before
BA
Result
before
movement
BA
movement
$000
2016
2016
BA
movement
BA
movement
$000
Total
Total
$000
-
$000
3,383
-
3,383
3,383
-
3,383
-
-
3,383
-
-
3,383
-
-
-
-
3,383
-
(844)
3,383
2,539
(844)
2,539
2,150
389
2,150
2,539
389
2,539
-
$000
(297)
-
(297)
(297)
-
(297)
-
-
(297)
-
-
(297)
-
-
-
-
(297)
-
73
(297)
(224)
73
(224)
(172)
(52)
(172)
(224)
(52)
291,907
$000
(217,840)
291,907
246,210
$000
(184,337)
246,210
74,067
(217,840)
61,873
(184,337)
(8,611)
74,067
923
(8,611)
66,379
923
(272)
66,379
5,337
(272)
(1,753)
5,337
69,691
(1,753)
(23,378)
69,691
46,313
(23,378)
46,313
36,214
10,099
36,214
46,313
10,099
(6,653)
61,873
(2,740)
(6,653)
52,480
(2,740)
845
52,480
5,881
845
(1,743)
5,881
57,463
(1,743)
(16,021)
57,463
41,442
(16,021)
41,442
32,563
8,879
32,563
41,442
8,879
(224)
46,313
41,442
91.37cts
91.29cts
91.37cts
91.29cts
Total
Total
$000
246,210
$000
(180,954)
246,210
65,256
(180,954)
(6,653)
65,256
(2,740)
(6,653)
55,863
(2,740)
845
55,863
5,881
845
(1,743)
5,881
60,846
(1,743)
(16,865)
60,846
43,981
(16,865)
43,981
34,713
9,268
34,713
43,981
9,268
43,981
87.58cts
87.58cts
87.58cts
87.58cts
Earnings per share before BA movement are shown in note 8.
Earnings per share before BA movement are shown in note 8.
The accompanying notes are an integral part of this consolidated income statement.
The accompanying notes are an integral part of this consolidated income statement.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
60
60
60
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2017
Consolidated Statement of Comprehensive Income
Profit for the year
For the year ended 31 December 2017
46,313
2017
$000
Other comprehensive (expenses) / income:
Items may be reclassified to profit or loss:
(Loss) / Gain on exchange translation of foreign operations
Profit for the year
Net other comprehensive (expenses) / income may be reclassified to profit or loss
Other comprehensive (expenses) / income:
Items not to be reclassified to profit or loss:
Items may be reclassified to profit or loss:
Unrealised (loss) / gain on revaluation of leasehold land, net of tax
(Loss) / Gain on exchange translation of foreign operations
Remeasurement of retirement benefits plan, net of tax
Net other comprehensive (expenses) / income may be reclassified to profit or loss
Net other comprehensive (expenses) / income not being reclassified to profit or loss
Items not to be reclassified to profit or loss:
Total other comprehensive (expenses) / income for the year, net of tax
Unrealised (loss) / gain on revaluation of leasehold land, net of tax
Total comprehensive income for the year
Remeasurement of retirement benefits plan, net of tax
Attributable to:
Net other comprehensive (expenses) / income not being reclassified to profit or loss
- Owners of the parent
Total other comprehensive (expenses) / income for the year, net of tax
- Non-controlling interests
Total comprehensive income for the year
Attributable to:
- Owners of the parent
- Non-controlling interests
2017
$000
(1,718)
46,313
(1,718)
(9,948)
(1,718)
(1,271)
(1,718)
(11,219)
(12,937)
(9,948)
33,376
(1,271)
(11,219)
23,496
(12,937)
9,880
33,376
33,376
23,496
9,880
33,376
2016
$000
43,981
2016
$000
8,860
43,981
8,860
1,752
8,860
(567)
8,860
1,185
10,045
1,752
54,026
(567)
1,185
43,099
10,045
10,927
54,026
54,026
43,099
10,927
54,026
The accompanying notes are an integral part of this consolidated statement of comprehensive income.
The accompanying notes are an integral part of this consolidated statement of comprehensive income.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
61
61
61
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
As at 31 December 2017
As at 31 December 2017
Company Number: 1884630
Company Number: 1884630
Non-current assets
Non-current assets
Property, plant and equipment
Property, plant and equipment
Receivables
Receivables
Deferred tax assets
Deferred tax assets
Current assets
Current assets
Inventories
Inventories
Tax receivables
Tax receivables
Biological assets
Biological assets
Trade and other receivables
Trade and other receivables
Cash and cash equivalents
Cash and cash equivalents
Current liabilities
Current liabilities
Loans and borrowings
Loans and borrowings
Trade and other payables
Trade and other payables
Tax liabilities
Tax liabilities
Dividend payables
Dividend payables
Net current assets
Net current assets
Non-current liabilities
Non-current liabilities
Loans and borrowings
Loans and borrowings
Deferred tax liabilities
Deferred tax liabilities
Retirement benefits - net liabilities
Retirement benefits - net liabilities
Net assets
Net assets
Issued capital and reserves attributable to owners of the parent
Issued capital and reserves attributable to owners of the parent
Share capital
Share capital
Treasury shares
Treasury shares
Share premium
Share premium
Capital redemption reserve
Capital redemption reserve
Revaluation reserves
Revaluation reserves
Exchange reserves
Exchange reserves
Retained earnings
Retained earnings
Non-controlling interests
Non-controlling interests
Total equity
Total equity
Note
Note
31.12.2017
$000
31.12.2017
$000
31.12.2016
$000
31.12.2016
$000
10
10
11
11
17
17
12
12
7
7
13
13
14
14
15
15
16
16
15
15
17
17
18
18
19
19
19
19
353,680
353,680
8,358
8,358
9,309
9,309
371,347
371,347
9,398
9,398
29,430
29,430
6,772
6,772
5,184
5,184
139,489
139,489
190,273
190,273
(8,594)
(8,594)
(16,805)
(16,805)
(8,637)
(8,637)
-
-
(34,036)
(34,036)
156,237
156,237
(19,281)
(19,281)
(22,390)
(22,390)
(9,022)
(9,022)
(50,693)
(50,693)
476,891
476,891
15,504
15,504
(1,171)
(1,171)
23,935
23,935
1,087
1,087
51,288
51,288
(221,435)
(221,435)
515,884
515,884
385,092
385,092
91,799
91,799
476,891
476,891
356,790
356,790
3,891
3,891
13,451
13,451
374,132
374,132
9,219
9,219
26,695
26,695
7,107
7,107
5,767
5,767
118,176
118,176
166,964
166,964
(6,203)
(6,203)
(16,054)
(16,054)
(8,974)
(8,974)
-
-
(31,231)
(31,231)
135,733
135,733
(27,875)
(27,875)
(30,063)
(30,063)
(6,666)
(6,666)
(64,604)
(64,604)
445,261
445,261
15,504
15,504
(1,171)
(1,171)
23,935
23,935
1,087
1,087
61,038
61,038
(219,570)
(219,570)
482,288
482,288
363,111
363,111
82,150
82,150
445,261
445,261
The financial statements were approved by the Board of Directors and authorised for issue on 24 April 2018 and were signed on its behalf by
The financial statements were approved by the Board of Directors and authorised for issue on 24 April 2018 and were signed on its behalf by
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
The accompanying notes are an integral part of this consolidated statement of financial position.
The accompanying notes are an integral part of this consolidated statement of financial position.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
62
62
62
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
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63
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Consolidated Statement of Cash Flows
For the year ended 31 December 2017
Cash flows from operating activities
Profit before tax
Adjustments for:
BA movement
Gain on disposal of property, plant and equipment
Depreciation
Retirement benefit provisions
Net finance income
Unrealised loss / (gain) in foreign exchange
Property, plant and equipment written off
(Reversal of impairment) / impairment losses
Operating cash flow before changes in working capital
Increase in inventories
Increase in non-current, trade and other receivables
Decrease / (Increase) in trade and other payables
Cash inflow from operations
Interest paid
Retirement benefits paid
Overseas tax paid
Net cash flow from operations
Investing activities
Property, plant and equipment
- purchases
- sales
Interest received
Net cash used in investing activities
2017
$000
2016
$000
69,691
60,846
297
(18)
16,284
1,520
(3,584)
272
585
(923)
84,124
(252)
(4,413)
837
80,296
(1,753)
(774)
(26,412)
51,357
(3,383)
(13)
15,677
1,700
(4,138)
(845)
731
2,740
73,315
(2,353)
(1,460)
(1,749)
67,753
(1,743)
(250)
(27,133)
38,627
(27,192)
(30,484)
267
5,337
931
5,881
(21,588)
(23,672)
Annual Report 2017 | Anglo-Eastern Plantations Plc
64
64
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Consolidated Statement of Cash Flows
For the year ended 31 December 2017
Financing activities
Dividends paid by Company
Consolidated Statement of Cash Flows
For the year ended 31 December 2017
Dividends paid to non-controlling interests
Drawdown of long term loans
Repayment of existing long term loans
Net cash used in financing activities
Increase in cash and cash equivalents
Financing activities
Dividends paid by Company
Cash and cash equivalents
Dividends paid to non-controlling interests
At beginning of year
Drawdown of long term loans
Foreign exchange
Repayment of existing long term loans
At end of year
Net cash used in financing activities
Increase in cash and cash equivalents
Comprising:
Cash at end of year
Cash and cash equivalents
At beginning of year
Foreign exchange
At end of year
Comprising:
Cash at end of year
Note
Note
2017
$000
(1,515)
(231)
-
(6,197)
2017
(7,943)
$000
21,826
(1,515)
(231)
118,176
-
(513)
(6,197)
139,489
(7,943)
21,826
2016
$000
(1,003)
(2,375)
1,250
(1,797)
2016
(3,925)
$000
11,030
(1,003)
(2,375)
104,614
1,250
2,532
(1,797)
118,176
(3,925)
11,030
27
139,489
118,176
118,176
(513)
139,489
104,614
2,532
118,176
27
139,489
118,176
The accompanying notes are an integral part of this consolidated statement of cash flows.
.
The accompanying notes are an integral part of this consolidated statement of cash flows.
.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
65
65
65
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
1 Accounting policies
1 Accounting policies
1 Accounting policies
1 Accounting policies
1 Accounting policies
1 Accounting policies
1 Accounting policies
Anglo-Eastern Plantations Plc (“AEP”) is a company incorporated in the United Kingdom under the Companies Act 2006 and is listed on the
Anglo-Eastern Plantations Plc (“AEP”) is a company incorporated in the United Kingdom under the Companies Act 2006 and is listed on the
Anglo-Eastern Plantations Plc (“AEP”) is a company incorporated in the United Kingdom under the Companies Act 2006 and is listed on the
Anglo-Eastern Plantations Plc (“AEP”) is a company incorporated in the United Kingdom under the Companies Act 2006 and is listed on the
Anglo-Eastern Plantations Plc (“AEP”) is a company incorporated in the United Kingdom under the Companies Act 2006 and is listed on the
Anglo-Eastern Plantations Plc (“AEP”) is a company incorporated in the United Kingdom under the Companies Act 2006 and is listed on the
Anglo-Eastern Plantations Plc (“AEP”) is a company incorporated in the United Kingdom under the Companies Act 2006 and is listed on the
London Stock Exchange. The registered office of AEP is located at Quadrant House, 6th Floor, 4 Thomas More Square, London E1W 1YW,
London Stock Exchange. The registered office of AEP is located at Quadrant House, 6th Floor, 4 Thomas More Square, London E1W 1YW,
London Stock Exchange. The registered office of AEP is located at Quadrant House, 6th Floor, 4 Thomas More Square, London E1W 1YW,
London Stock Exchange. The registered office of AEP is located at Quadrant House, 6th Floor, 4 Thomas More Square, London E1W 1YW,
London Stock Exchange. The registered office of AEP is located at Quadrant House, 6th Floor, 4 Thomas More Square, London E1W 1YW,
London Stock Exchange. The registered office of AEP is located at Quadrant House, 6th Floor, 4 Thomas More Square, London E1W 1YW,
London Stock Exchange. The registered office of AEP is located at Quadrant House, 6th Floor, 4 Thomas More Square, London E1W 1YW,
United Kingdom. The principal activity of the Group is plantation agriculture, mainly in the cultivation of oil palm.
United Kingdom. The principal activity of the Group is plantation agriculture, mainly in the cultivation of oil palm.
United Kingdom. The principal activity of the Group is plantation agriculture, mainly in the cultivation of oil palm.
United Kingdom. The principal activity of the Group is plantation agriculture, mainly in the cultivation of oil palm.
United Kingdom. The principal activity of the Group is plantation agriculture, mainly in the cultivation of oil palm.
United Kingdom. The principal activity of the Group is plantation agriculture, mainly in the cultivation of oil palm.
United Kingdom. The principal activity of the Group is plantation agriculture, mainly in the cultivation of oil palm.
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have
been consistently applied to all years presented, except as detailed in the following paragraph.
been consistently applied to all years presented, except as detailed in the following paragraph.
been consistently applied to all years presented, except as detailed in the following paragraph.
been consistently applied to all years presented, except as detailed in the following paragraph.
been consistently applied to all years presented, except as detailed in the following paragraph.
been consistently applied to all years presented, except as detailed in the following paragraph.
been consistently applied to all years presented, except as detailed in the following paragraph.
Basis of preparation
Basis of preparation
Basis of preparation
Basis of preparation
Basis of preparation
Basis of preparation
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards and its interpretations (IFRS
The financial statements have been prepared in accordance with International Financial Reporting Standards and its interpretations (IFRS
The financial statements have been prepared in accordance with International Financial Reporting Standards and its interpretations (IFRS
The financial statements have been prepared in accordance with International Financial Reporting Standards and its interpretations (IFRS
The financial statements have been prepared in accordance with International Financial Reporting Standards and its interpretations (IFRS
The financial statements have been prepared in accordance with International Financial Reporting Standards and its interpretations (IFRS
The financial statements have been prepared in accordance with International Financial Reporting Standards and its interpretations (IFRS
and IFRIC interpretations) issued by the International Accounting Standards Board (“IASB”) as adopted by the European Union (“EU”) and
and IFRIC interpretations) issued by the International Accounting Standards Board (“IASB”) as adopted by the European Union (“EU”) and
and IFRIC interpretations) issued by the International Accounting Standards Board (“IASB”) as adopted by the European Union (“EU”) and
and IFRIC interpretations) issued by the International Accounting Standards Board (“IASB”) as adopted by the European Union (“EU”) and
and IFRIC interpretations) issued by the International Accounting Standards Board (“IASB”) as adopted by the European Union (“EU”) and
and IFRIC interpretations) issued by the International Accounting Standards Board (“IASB”) as adopted by the European Union (“EU”) and
and IFRIC interpretations) issued by the International Accounting Standards Board (“IASB”) as adopted by the European Union (“EU”) and
with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS as adopted by the EU.
with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS as adopted by the EU.
with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS as adopted by the EU.
with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS as adopted by the EU.
with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS as adopted by the EU.
with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS as adopted by the EU.
with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS as adopted by the EU.
Changes in accounting standards
Changes in accounting standards
Changes in accounting standards
Changes in accounting standards
Changes in accounting standards
Changes in accounting standards
Changes in accounting standards
a)
a)
a)
a)
a)
a)
a)
Amendments to IAS 12 Recognition of deferred tax assets for unrealised losses (effective for accounting periods beginning on
Amendments to IAS 12 Recognition of deferred tax assets for unrealised losses (effective for accounting periods beginning on
Amendments to IAS 12 Recognition of deferred tax assets for unrealised losses (effective for accounting periods beginning on
Amendments to IAS 12 Recognition of deferred tax assets for unrealised losses (effective for accounting periods beginning on
Amendments to IAS 12 Recognition of deferred tax assets for unrealised losses (effective for accounting periods beginning on
Amendments to IAS 12 Recognition of deferred tax assets for unrealised losses (effective for accounting periods beginning on
Amendments to IAS 12 Recognition of deferred tax assets for unrealised losses (effective for accounting periods beginning on
or after 1 January 2017)
or after 1 January 2017)
or after 1 January 2017)
or after 1 January 2017)
or after 1 January 2017)
or after 1 January 2017)
or after 1 January 2017)
Disclosure Initiative: Amendments to IAS 7 (effective for accounting periods beginning on or after 1 January 2017)
Disclosure Initiative: Amendments to IAS 7 (effective for accounting periods beginning on or after 1 January 2017)
Disclosure Initiative: Amendments to IAS 7 (effective for accounting periods beginning on or after 1 January 2017)
Disclosure Initiative: Amendments to IAS 7 (effective for accounting periods beginning on or after 1 January 2017)
Disclosure Initiative: Amendments to IAS 7 (effective for accounting periods beginning on or after 1 January 2017)
Disclosure Initiative: Amendments to IAS 7 (effective for accounting periods beginning on or after 1 January 2017)
Disclosure Initiative: Amendments to IAS 7 (effective for accounting periods beginning on or after 1 January 2017)
The following amendments are effective for the first time in these financial statements:
The following amendments are effective for the first time in these financial statements:
The following amendments are effective for the first time in these financial statements:
The following amendments are effective for the first time in these financial statements:
The following amendments are effective for the first time in these financial statements:
The following amendments are effective for the first time in these financial statements:
The following amendments are effective for the first time in these financial statements:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
New standards, interpretations and amendments not yet effective.
New standards, interpretations and amendments not yet effective.
New standards, interpretations and amendments not yet effective.
New standards, interpretations and amendments not yet effective.
New standards, interpretations and amendments not yet effective.
New standards, interpretations and amendments not yet effective.
New standards, interpretations and amendments not yet effective.
The following new standards, interpretations and amendments are effective for periods beginning after 1 January 2018 and have not
The following new standards, interpretations and amendments are effective for periods beginning after 1 January 2018 and have not
The following new standards, interpretations and amendments are effective for periods beginning after 1 January 2018 and have not
The following new standards, interpretations and amendments are effective for periods beginning after 1 January 2018 and have not
The following new standards, interpretations and amendments are effective for periods beginning after 1 January 2018 and have not
The following new standards, interpretations and amendments are effective for periods beginning after 1 January 2018 and have not
The following new standards, interpretations and amendments are effective for periods beginning after 1 January 2018 and have not
been applied in these financial statements:
been applied in these financial statements:
been applied in these financial statements:
been applied in these financial statements:
been applied in these financial statements:
been applied in these financial statements:
been applied in these financial statements:
•
•
•
•
•
•
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•
IFRS 9 Financial Instruments (effective for accounting periods beginning on or after 1 January 2018)
IFRS 9 Financial Instruments (effective for accounting periods beginning on or after 1 January 2018)
IFRS 9 Financial Instruments (effective for accounting periods beginning on or after 1 January 2018)
IFRS 9 Financial Instruments (effective for accounting periods beginning on or after 1 January 2018)
IFRS 9 Financial Instruments (effective for accounting periods beginning on or after 1 January 2018)
IFRS 9 Financial Instruments (effective for accounting periods beginning on or after 1 January 2018)
IFRS 9 Financial Instruments (effective for accounting periods beginning on or after 1 January 2018)
IFRS 15 Revenue from Contracts with Customers (effective for accounting periods beginning on or after 1 January 2018)
IFRS 15 Revenue from Contracts with Customers (effective for accounting periods beginning on or after 1 January 2018)
IFRS 15 Revenue from Contracts with Customers (effective for accounting periods beginning on or after 1 January 2018)
IFRS 15 Revenue from Contracts with Customers (effective for accounting periods beginning on or after 1 January 2018)
IFRS 15 Revenue from Contracts with Customers (effective for accounting periods beginning on or after 1 January 2018)
IFRS 15 Revenue from Contracts with Customers (effective for accounting periods beginning on or after 1 January 2018)
IFRS 15 Revenue from Contracts with Customers (effective for accounting periods beginning on or after 1 January 2018)
IFRS 16 Leases (effective for accounting periods beginning on or after 1 January 2019)
IFRS 16 Leases (effective for accounting periods beginning on or after 1 January 2019)
IFRS 16 Leases (effective for accounting periods beginning on or after 1 January 2019)
IFRS 16 Leases (effective for accounting periods beginning on or after 1 January 2019)
IFRS 16 Leases (effective for accounting periods beginning on or after 1 January 2019)
IFRS 16 Leases (effective for accounting periods beginning on or after 1 January 2019)
IFRS 16 Leases (effective for accounting periods beginning on or after 1 January 2019)
Classifications to IFRS 15 revenue from Contracts with Customers (effective for accounting periods beginning on or after 1
Classifications to IFRS 15 revenue from Contracts with Customers (effective for accounting periods beginning on or after 1
Classifications to IFRS 15 revenue from Contracts with Customers (effective for accounting periods beginning on or after 1
Classifications to IFRS 15 revenue from Contracts with Customers (effective for accounting periods beginning on or after 1
Classifications to IFRS 15 revenue from Contracts with Customers (effective for accounting periods beginning on or after 1
Classifications to IFRS 15 revenue from Contracts with Customers (effective for accounting periods beginning on or after 1
Classifications to IFRS 15 revenue from Contracts with Customers (effective for accounting periods beginning on or after 1
January 2018)
January 2018)
January 2018)
January 2018)
January 2018)
January 2018)
January 2018)
Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions (effective for accounting
Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions (effective for accounting
Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions (effective for accounting
Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions (effective for accounting
Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions (effective for accounting
Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions (effective for accounting
Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions (effective for accounting
periods beginning on or after 1 January 2018)
periods beginning on or after 1 January 2018)
periods beginning on or after 1 January 2018)
periods beginning on or after 1 January 2018)
periods beginning on or after 1 January 2018)
periods beginning on or after 1 January 2018)
periods beginning on or after 1 January 2018)
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (effective for accounting
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (effective for accounting
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (effective for accounting
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (effective for accounting
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (effective for accounting
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (effective for accounting
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (effective for accounting
periods beginning on or after 1 January 2018)
periods beginning on or after 1 January 2018)
periods beginning on or after 1 January 2018)
periods beginning on or after 1 January 2018)
periods beginning on or after 1 January 2018)
periods beginning on or after 1 January 2018)
periods beginning on or after 1 January 2018)
Annual Improvements to IFRSs (2014 – 2016 Cycle)
Annual Improvements to IFRSs (2014 – 2016 Cycle)
Annual Improvements to IFRSs (2014 – 2016 Cycle)
Annual Improvements to IFRSs (2014 – 2016 Cycle)
Annual Improvements to IFRSs (2014 – 2016 Cycle)
Annual Improvements to IFRSs (2014 – 2016 Cycle)
Annual Improvements to IFRSs (2014 – 2016 Cycle)
IFRIC 22 Foreign Currency Transactions and Advance Consideration (effective for accounting periods beginning on or after 1
IFRIC 22 Foreign Currency Transactions and Advance Consideration (effective for accounting periods beginning on or after 1
IFRIC 22 Foreign Currency Transactions and Advance Consideration (effective for accounting periods beginning on or after 1
IFRIC 22 Foreign Currency Transactions and Advance Consideration (effective for accounting periods beginning on or after 1
IFRIC 22 Foreign Currency Transactions and Advance Consideration (effective for accounting periods beginning on or after 1
IFRIC 22 Foreign Currency Transactions and Advance Consideration (effective for accounting periods beginning on or after 1
IFRIC 22 Foreign Currency Transactions and Advance Consideration (effective for accounting periods beginning on or after 1
January 2018)
January 2018)
January 2018)
January 2018)
January 2018)
January 2018)
January 2018)
IFRIC 23 Uncertainty over Income Tax Treatments (effective for accounting periods beginning on or after 1 January 2019)
IFRIC 23 Uncertainty over Income Tax Treatments (effective for accounting periods beginning on or after 1 January 2019)
IFRIC 23 Uncertainty over Income Tax Treatments (effective for accounting periods beginning on or after 1 January 2019)
IFRIC 23 Uncertainty over Income Tax Treatments (effective for accounting periods beginning on or after 1 January 2019)
IFRIC 23 Uncertainty over Income Tax Treatments (effective for accounting periods beginning on or after 1 January 2019)
IFRIC 23 Uncertainty over Income Tax Treatments (effective for accounting periods beginning on or after 1 January 2019)
IFRIC 23 Uncertainty over Income Tax Treatments (effective for accounting periods beginning on or after 1 January 2019)
b)
b)
b)
b)
b)
b)
b)
None of the above new standards, interpretations and amendments are expected to have a material effect on the Group's future financial
None of the above new standards, interpretations and amendments are expected to have a material effect on the Group's future financial
None of the above new standards, interpretations and amendments are expected to have a material effect on the Group's future financial
None of the above new standards, interpretations and amendments are expected to have a material effect on the Group's future financial
None of the above new standards, interpretations and amendments are expected to have a material effect on the Group's future financial
None of the above new standards, interpretations and amendments are expected to have a material effect on the Group's future financial
None of the above new standards, interpretations and amendments are expected to have a material effect on the Group's future financial
statements except IFRS 9 and IFRS 15 which the Group provides the following information regarding their likely impact:
statements except IFRS 9 and IFRS 15 which the Group provides the following information regarding their likely impact:
statements except IFRS 9 and IFRS 15 which the Group provides the following information regarding their likely impact:
statements except IFRS 9 and IFRS 15 which the Group provides the following information regarding their likely impact:
statements except IFRS 9 and IFRS 15 which the Group provides the following information regarding their likely impact:
statements except IFRS 9 and IFRS 15 which the Group provides the following information regarding their likely impact:
statements except IFRS 9 and IFRS 15 which the Group provides the following information regarding their likely impact:
IFRS 9 Financial instruments replaces IAS 39 and introduces some new requirements in relation to impairment based on an expected credit
IFRS 9 Financial instruments replaces IAS 39 and introduces some new requirements in relation to impairment based on an expected credit
IFRS 9 Financial instruments replaces IAS 39 and introduces some new requirements in relation to impairment based on an expected credit
IFRS 9 Financial instruments replaces IAS 39 and introduces some new requirements in relation to impairment based on an expected credit
IFRS 9 Financial instruments replaces IAS 39 and introduces some new requirements in relation to impairment based on an expected credit
IFRS 9 Financial instruments replaces IAS 39 and introduces some new requirements in relation to impairment based on an expected credit
IFRS 9 Financial instruments replaces IAS 39 and introduces some new requirements in relation to impairment based on an expected credit
loss model. The Group is still assessing the impact of this new standard.
loss model. The Group is still assessing the impact of this new standard.
loss model. The Group is still assessing the impact of this new standard.
loss model. The Group is still assessing the impact of this new standard.
loss model. The Group is still assessing the impact of this new standard.
loss model. The Group is still assessing the impact of this new standard.
loss model. The Group is still assessing the impact of this new standard.
IFRS 16 provides a single lessee accounting model, requiring lessees to recognise right of use assets and lease liabilities for all applicable
IFRS 16 provides a single lessee accounting model, requiring lessees to recognise right of use assets and lease liabilities for all applicable
IFRS 16 provides a single lessee accounting model, requiring lessees to recognise right of use assets and lease liabilities for all applicable
IFRS 16 provides a single lessee accounting model, requiring lessees to recognise right of use assets and lease liabilities for all applicable
IFRS 16 provides a single lessee accounting model, requiring lessees to recognise right of use assets and lease liabilities for all applicable
IFRS 16 provides a single lessee accounting model, requiring lessees to recognise right of use assets and lease liabilities for all applicable
IFRS 16 provides a single lessee accounting model, requiring lessees to recognise right of use assets and lease liabilities for all applicable
leases. The Group is still assessing the impact of this new standard.
leases. The Group is still assessing the impact of this new standard.
leases. The Group is still assessing the impact of this new standard.
leases. The Group is still assessing the impact of this new standard.
leases. The Group is still assessing the impact of this new standard.
leases. The Group is still assessing the impact of this new standard.
leases. The Group is still assessing the impact of this new standard.
Basis of consolidation
Basis of consolidation
Basis of consolidation
Basis of consolidation
Basis of consolidation
Basis of consolidation
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
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. The Company controls a subsidiary if all three of the following elements are present;
subsidiaries) made up to 31 December each year. The Company controls a subsidiary if all three of the following elements are present;
subsidiaries) made up to 31 December each year. The Company controls a subsidiary if all three of the following elements are present;
subsidiaries) made up to 31 December each year. The Company controls a subsidiary if all three of the following elements are present;
subsidiaries) made up to 31 December each year. The Company controls a subsidiary if all three of the following elements are present;
subsidiaries) made up to 31 December each year. The Company controls a subsidiary if all three of the following elements are present;
subsidiaries) made up to 31 December each year. The Company controls a subsidiary if all three of the following elements are present;
power over the subsidiary, exposure to variable returns from the subsidiary, and the ability of the investor to use its power to affect those
power over the subsidiary, exposure to variable returns from the subsidiary, and the ability of the investor to use its power to affect those
power over the subsidiary, exposure to variable returns from the subsidiary, and the ability of the investor to use its power to affect those
power over the subsidiary, exposure to variable returns from the subsidiary, and the ability of the investor to use its power to affect those
power over the subsidiary, exposure to variable returns from the subsidiary, and the ability of the investor to use its power to affect those
power over the subsidiary, exposure to variable returns from the subsidiary, and the ability of the investor to use its power to affect those
power over the subsidiary, exposure to variable returns from the subsidiary, and the ability of the investor to use its power to affect those
variable returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
variable returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
variable returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
variable returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
variable returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
variable returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
variable returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
commences until the date control ceases.
commences until the date control ceases.
commences until the date control ceases.
commences until the date control ceases.
commences until the date control ceases.
commences until the date control ceases.
commences until the date control ceases.
Business combinations
Business combinations
Business combinations
Business combinations
Business combinations
Business combinations
Business combinations
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated
statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values
statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values
statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values
statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values
statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values
statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values
statement of financial position, 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
at the acquisition date. Acquisitions of entities that comprise principally land with no active plantation business do not represent business
at the acquisition date. Acquisitions of entities that comprise principally land with no active plantation business do not represent business
at the acquisition date. Acquisitions of entities that comprise principally land with no active plantation business do not represent business
at the acquisition date. Acquisitions of entities that comprise principally land with no active plantation business do not represent business
at the acquisition date. Acquisitions of entities that comprise principally land with no active plantation business do not represent business
at the acquisition date. Acquisitions of entities that comprise principally land with no active plantation business do not represent business
combinations, in such cases, the amount paid for each acquisition is allocated between the identifiable assets/liabilities at the acquisition
combinations, in such cases, the amount paid for each acquisition is allocated between the identifiable assets/liabilities at the acquisition
combinations, in such cases, the amount paid for each acquisition is allocated between the identifiable assets/liabilities at the acquisition
combinations, in such cases, the amount paid for each acquisition is allocated between the identifiable assets/liabilities at the acquisition
combinations, in such cases, the amount paid for each acquisition is allocated between the identifiable assets/liabilities at the acquisition
combinations, in such cases, the amount paid for each acquisition is allocated between the identifiable assets/liabilities at the acquisition
combinations, in such cases, the amount paid for each acquisition is allocated between the identifiable assets/liabilities at the acquisition
date.
date.
date.
date.
date.
date.
date.
Foreign currency
Foreign currency
Foreign currency
Foreign currency
Foreign currency
Foreign currency
Foreign currency
The individual financial statements of each subsidiary are presented in the currency of the country in which it operates (its functional
The individual financial statements of each subsidiary are presented in the currency of the country in which it operates (its functional
The individual financial statements of each subsidiary are presented in the currency of the country in which it operates (its functional
The individual financial statements of each subsidiary are presented in the currency of the country in which it operates (its functional
The individual financial statements of each subsidiary are presented in the currency of the country in which it operates (its functional
The individual financial statements of each subsidiary are presented in the currency of the country in which it operates (its functional
The individual financial statements of each subsidiary are presented in the currency of the country in which it operates (its functional
currency) with the exception of the Company and its UK subsidiaries which are presented in US Dollar. The presentation currency for the
currency) with the exception of the Company and its UK subsidiaries which are presented in US Dollar. The presentation currency for the
currency) with the exception of the Company and its UK subsidiaries which are presented in US Dollar. The presentation currency for the
currency) with the exception of the Company and its UK subsidiaries which are presented in US Dollar. The presentation currency for the
currency) with the exception of the Company and its UK subsidiaries which are presented in US Dollar. The presentation currency for the
currency) with the exception of the Company and its UK subsidiaries which are presented in US Dollar. The presentation currency for the
currency) with the exception of the Company and its UK subsidiaries which are presented in US Dollar. The presentation currency for the
consolidated financial statements is also US Dollar, chosen because, as internationally traded commodities, the price of the bulk of the
consolidated financial statements is also US Dollar, chosen because, as internationally traded commodities, the price of the bulk of the
consolidated financial statements is also US Dollar, chosen because, as internationally traded commodities, the price of the bulk of the
consolidated financial statements is also US Dollar, chosen because, as internationally traded commodities, the price of the bulk of the
consolidated financial statements is also US Dollar, chosen because, as internationally traded commodities, the price of the bulk of the
consolidated financial statements is also US Dollar, chosen because, as internationally traded commodities, the price of the bulk of the
consolidated financial statements is also US Dollar, chosen because, as internationally traded commodities, the price of the bulk of the
Group’s products are ultimately link to the US Dollar.
Group’s products are ultimately link to the US Dollar.
Group’s products are ultimately link to the US Dollar.
Group’s products are ultimately link to the US Dollar.
Group’s products are ultimately link to the US Dollar.
Group’s products are ultimately link to the US Dollar.
Group’s products are ultimately link to the US Dollar.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
1 Accounting policies - continued
Foreign currency - continued
On consolidation, the results of overseas operations are translated into US Dollar at average exchange rates for the year unless exchange
rates fluctuate significantly in which case the actual rate is used. All assets and liabilities of overseas operations are translated at the rate
ruling at the balance sheet date. Exchange differences arising on re-translating the opening net assets at opening rate and the results of
overseas operations at actual rate are recognised directly in equity (the “exchange reserves”). Exchange differences recognised in the
income statement of Group entities’ separate financial statements on the translation of long-term monetary items forming part of the Group’s
net investment in the overseas operation concerned are reclassified to the exchange reserves if the item is denominated in the
presentational currency of the Group or of the overseas operation concerned.
On disposal of a foreign operation, the cumulative exchange differences recognised in the exchange reserves relating to that operation up to
the date of disposal are transferred to the income statement as part of the profit or loss on disposal.
All other exchange profits or losses are credited or charged to the income statement.
Revenue recognition
Revenue includes
-
-
amounts receivable for produce provided in the normal course of business, net of sales related taxes and levies, including export taxes;
amounts received for sales of palm kernel shell, rubber wood, biomass products, biogas products and other income of an operating
nature.
Sales of CPO, palm kernel, FFB, shell nut, biomass products, biogas products and rubber slab 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 latex are recognised on signing of
sales contract, this being the point at which the significant risks and rewards of ownership are passed over to the buyer.
Share based payments
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 binomial 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.
Tax
UK and foreign corporation tax are 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.
The directors consider that the carrying amount of tax receivables approximates its fair value.
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.
Fair value measurement
A number of assets and liabilities included in the Group’s financial statements require measurement at, and/or disclosure of, fair value. The
fair value measurement of the Group’s financial and non-financial assets and liabilities utilises market observable inputs and data as far as
possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used
in the valuation technique utilised are (the ‘fair value hierarchy’):
• Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly;
• Level 3 - unobservable inputs for the asset or liability.
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value
measurement of the item. Transfers of items between levels are recognised in the period they occur.
The Group measures the following assets at fair value:
• Revalued land - Property, plant and equipment (note 10)
• Biological assets (note 13)
For more detailed information in relation to the fair value measurement of the items above, please refer to the applicable notes.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
1 Accounting policies - continued
Property, plant and equipment
All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the
acquisition of the items. After initial recognition, all items of property, plant and equipment except land and construction in progress, are
stated at cost less accumulated depreciation and any accumulated impairment losses.
Plantations comprise of the cost of planting and development on oil palm and other plantation crops. Costs of new planting and development
of plantation crops are capitalised from the stage of land clearing up to the stage of maturity or subject to certificate of Land Exploitation
Rights (HGU) being obtained, whichever is earlier. The costs of immature plantations consist mainly of the accumulated cost of land clearing,
planting, fertilising and maintaining the plantation, borrowing costs and other indirect overhead costs up to the time the trees are harvestable
and to the extent appropriate. Oil palm plantations are considered mature within three to four years after planting and generating average
annual FFB of four to six metric tons per hectare. Immature plantations are not depreciated.
The Indonesian authorities have granted certain land exploitation rights and operating permits for the estates. The land rights are usually
renewed without significant cost subject to compliance with the laws and regulations of Indonesia. Therefore, the Group has classified the
land rights as leasehold land and accounted for as an indefinite finance lease. The leasehold land is recognised at cost initially and is not
depreciated. The land is subsequently carried at fair value, based on periodic valuations on an open market basis by a professionally
qualified valuer. These revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from that
which would be determined using fair value at the end of the reporting period. Changes in fair value are recognised in other comprehensive
income and accumulated in the revaluation reserve except to the extent that any decrease in value in excess of the credit balance on the
revaluation reserve, or reversal of such a transaction, is recognised in income statement. On the disposal of a revalued estate, any related
balance remaining in the revaluation reserve is transferred to retained earnings as a movement in reserves.
Construction in progress is stated at cost. The accumulated costs will be reclassified to the appropriate class of assets when construction is
completed and the asset is ready for its intended use. Construction in progress is also not depreciated until such time when the asset is
available for use.
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.
Plantations, buildings and oil mills are depreciated using the straight-line method. All other property, plant and equipment items are
depreciated using the double-declining-balance method. The yearly rates of depreciation are as follows:
Plantations - 5%
Buildings - 5% to 10% per annum
Oil Mill - 5% per annum
Estate plant, equipment & vehicle - 12.5% to 50% per annum
Office plant, equipment & vehicle - 25% to 50% per annum
Biological assets
Biological assets comprise an estimation of the fair value less costs to sell of unharvested FFB at balance sheet date. Changes in the fair
value of biological assets are charged or credited to the income statement within the cost of sales.
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
in accordance with Group depreciation policy for those held at cost. Land rights are held at fair value and revalued at the balance sheet date.
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. All other
leases are treated as operating leases. Their annual rentals are charged to the income statement on a straight line basis over the term of the
lease.
Impairment
Impairment tests on property, plant and equipment 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 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. In the case of processed produce
for sale which comprises palm oil and kernel, cost represents the monthly weighted-average cost of production and appropriate production
overheads. Estate and mill consumables are valued on a weighted average cost basis.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
1 Accounting policies - continued
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 with an original maturity of not exceeding three months.
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.
The Group recognises deferred tax liabilities arising from taxable temporary differences on investments in subsidiaries, except where the
Group is able to control the reversal of the temporary differences and it is probable that the temporary difference will not reverse in the
foreseeable future.
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 from property revaluation surpluses or deficits.
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 other comprehensive income; in this case assets and liabilities are offset.
Retirement benefits
Defined contribution schemes
Contributions to defined contribution pension schemes are charged to the consolidated income statement in the year to which they relate.
Defined benefit schemes
The Group operates a number of defined benefit schemes in respect of its Indonesian operations. These schemes’ surpluses and deficits are
measured at:
• The fair value of plan assets at the reporting date; less
• Plan liabilities calculated using the projected unit credit method discounted to its present value using yields available on high quality
corporate bonds that have maturity dates approximating to the terms of the liabilities; plus
• Unrecognised past service costs; less
• The effect of minimum funding requirements agreed with scheme trustees.
Remeasurements of the net defined obligation are recognised directly within equity. The remeasurements include:
• Actuarial gains and losses;
• Return on plan assets (interest exclusive);
• Any asset ceiling effects (interest inclusive).
Service costs are recognised in comprehensive income and include current and past service costs as well as gains and losses on
curtailments.
Annual Report 2017 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
1 Accounting policies - continued
1 Accounting policies - continued
1 Accounting policies - continued
Retirement benefits - continued
Retirement benefits - continued
Retirement benefits - continued
Defined benefit schemes - continued
Defined benefit schemes - continued
Defined benefit schemes - continued
Net interest expense / (income) is recognised in comprehensive income, and is calculated by applying the discount rate used to measure the
Net interest expense / (income) is recognised in comprehensive income, and is calculated by applying the discount rate used to measure the
Net interest expense / (income) is recognised in comprehensive income, and is calculated by applying the discount rate used to measure the
defined benefit obligation / (asset) at the beginning of the annual period to the balance of the net defined benefit obligation / (asset),
defined benefit obligation / (asset) at the beginning of the annual period to the balance of the net defined benefit obligation / (asset),
defined benefit obligation / (asset) at the beginning of the annual period to the balance of the net defined benefit obligation / (asset),
considering the effects of contributions and benefit payments during the period.
considering the effects of contributions and benefit payments during the period.
considering the effects of contributions and benefit payments during the period.
Gains or losses arising from changes to scheme benefits or scheme curtailment are recognised immediately in comprehensive income.
Gains or losses arising from changes to scheme benefits or scheme curtailment are recognised immediately in comprehensive income.
Gains or losses arising from changes to scheme benefits or scheme curtailment are recognised immediately in comprehensive income.
Settlements of defined benefit schemes are recognised in the period in which the settlement occurs.
Settlements of defined benefit schemes are recognised in the period in which the settlement occurs.
Settlements of defined benefit schemes are recognised in the period in which the settlement occurs.
Treasury shares
Treasury shares
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,
Consideration paid or received for the purchase or sale of the Company’s own shares for holding in treasury is recognised directly in equity,
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 shares. Any excess of the consideration received on the sale of treasury shares over the
where the cost is presented as the treasury shares. Any excess of the consideration received on the sale of treasury shares over the
where the cost is presented as the treasury shares. 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.
weighted average cost of shares sold is taken to the share premium account.
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.
Any shares held in treasury are treated as cancelled for the purpose of calculating earnings per share.
Any shares held in treasury are treated as cancelled for the purpose of calculating earnings per share.
Financial guarantee contracts
Financial guarantee contracts
Financial guarantee contracts
Where the Company and its subsidiaries enter into financial guarantee contracts and guarantee the indebtedness of other companies within
Where the Company and its subsidiaries enter into financial guarantee contracts and guarantee the indebtedness of other companies within
Where the Company and its subsidiaries enter into financial guarantee contracts and guarantee the indebtedness of other companies within
the Group and/or third party entities, the Group considers these to be insurance arrangements and accounts for them as such. In this
the Group and/or third party entities, the Group considers these to be insurance arrangements and accounts for them as such. In this
the Group and/or third party entities, the Group considers these to be insurance arrangements and accounts for them as such. In this
respect, the Group treats the guarantee contract as a contingent liability until such time that it becomes probable that the Group will be
respect, the Group treats the guarantee contract as a contingent liability until such time that it becomes probable that the Group will be
respect, the Group treats the guarantee contract as a contingent liability until such time that it becomes probable that the Group will be
required to make a payment under the guarantee.
required to make a payment under the guarantee.
required to make a payment under the guarantee.
Critical accounting estimates and judgements
Critical accounting estimates and judgements
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
The preparation of the Group financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the
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
reported assets and liabilities and reported revenue and expenses. Actual results could differ from those estimates and accordingly, they are
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 the fair value of biological assets, property, plant and
reviewed on an on-going basis. The main areas in which estimates are used are the fair value of biological assets, property, plant and
reviewed on an on-going basis. The main areas in which estimates are used are the fair value of biological assets, property, plant and
equipment, deferred tax and retirement benefits.
equipment, deferred tax and retirement benefits.
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
Revisions to accounting estimates are recognised in the period in which the estimate is revised or the revision affects only that period, or in
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 current and future periods.
the period of revision and future periods if the revision affects both current and future periods.
the period of revision and future periods if the revision affects both current and future periods.
Assumptions regarding the valuation of property, plant and equipment and biological assets are set out in note 10 and note 13 respectively.
Assumptions regarding the valuation of property, plant and equipment and biological assets are set out in note 10 and note 13 respectively.
Assumptions regarding the valuation of property, plant and equipment and biological assets are set out in note 10 and note 13 respectively.
The Group's policy with regard to impairment of such assets is set out above.
The Group's policy with regard to impairment of such assets is set out above.
The Group's policy with regard to impairment of such assets is set out above.
Details on deferred tax are given in note 17 and retirement benefits in note 18.
Details on deferred tax are given in note 17 and retirement benefits in note 18.
Details on deferred tax are given in note 17 and retirement benefits in note 18.
2 Revenue
2 Revenue
2 Revenue
Sales of produce:
Sales of produce:
Sales of produce:
- CPO, palm kernel and FFB
- CPO, palm kernel and FFB
- CPO, palm kernel and FFB
- Rubber
- Rubber
- Rubber
- Shell nut
- Shell nut
- Shell nut
- Biomass products
- Biomass products
- Biomass products
- Biogas products
- Biogas products
- Biogas products
- Others
- Others
- Others
3 Finance income and expense
3 Finance income and expense
3 Finance income and expense
Finance income
Finance income
Finance income
Interest receivable on:
Interest receivable on:
Interest receivable on:
Credit bank balances and time deposits
Credit bank balances and time deposits
Credit bank balances and time deposits
Finance expense
Finance expense
Finance expense
Interest payable on:
Interest payable on:
Interest payable on:
Development loans - (note 15)
Development loans - (note 15)
Development loans - (note 15)
Net finance income recognised in income statement
Net finance income recognised in income statement
Net finance income recognised in income statement
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
2017
2017
2017
$000
$000
$000
286,164
286,164
286,164
1,305
1,305
1,305
2,214
2,214
2,214
644
644
644
865
865
865
715
715
715
291,907
291,907
291,907
2017
2017
2017
$000
$000
$000
5,337
5,337
5,337
(1,753)
(1,753)
(1,753)
3,584
3,584
3,584
2016
2016
2016
$000
$000
$000
243,020
243,020
243,020
1,149
1,149
1,149
1,717
1,717
1,717
324
324
324
-
-
-
-
-
-
246,210
246,210
246,210
2016
2016
2016
$000
$000
$000
5,881
5,881
5,881
(1,743)
(1,743)
(1,743)
4,138
4,138
4,138
70
70
70
70
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
4 Profit before tax
Profit before tax is stated after charging
Depreciation (note 10)
(Reversal of impairment) / impairment losses (note 10)
Exchange losses / (gains)
Movement of inventories
Operating lease expense
- Property
Professional fees
Staff costs (note 6)
Remuneration received by the group’s auditor or associates of the group’s auditor:
- Audit of parent company
- Audit of consolidated financial statements
- Audit of consolidated financial statements (prior year)
- Audit related assurance service
- Audit of UK subsidiaries
Total audit services
Audit of overseas subsidiaries
- Malaysia
- Indonesia
Total audit services
Total auditors’ remuneration
5 Segment information
2017
$000
16,284
(923)
272
(179)
388
1,211
34,926
5
118
13
6
13
155
17
83
100
255
2016
$000
15,677
2,740
(845)
(2,526)
515
760
31,564
5
132
-
6
13
156
21
70
91
247
Description of the types of products and services from which each reportable segment derives its revenues
In the opinion of the Directors, the operations of the Group comprise one class of business which is the cultivation of plantation in Indonesia
and Malaysia. From the result of the cultivation of plantation, the Group has produced the crude palm oil and associated products such as
palm kernel, shell nut, biomass products, and biogas products.
Factors that management used to identify reportable segments in the Group
The reportable segments in the Group are strategic business units based on the geographical spread. Operating segments are consistent
with the internal reporting provided to the Board of Directors. The Board of Directors is responsible for allocating resources and assessing
the performance of the operating segments. The Board decision is implemented by the Executive Committee, that is made up of a Senior
General Manager in Malaysia, the Chief Executive Officer, the Chief Operating Officers, Finance Director and the Engineering Director.
Measurement of operating segment profit or loss, assets and liabilities
The Group evaluates segmental performance on the basis of profit or loss from operations calculated in accordance with IFRS but excluding
non-recurring losses, such as share based payments.
Inter-segment transactions are made based on terms mutually agreed by the parties to maximise the utilisation of Group’s resources at a
rate acceptable to local tax authorities. This policy was applied consistently throughout the current and prior period.
The Group’s assets are allocated to segments based on geographical location.
Annual Report 2017 | Anglo-Eastern Plantations Plc
71
71
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
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72
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
6 Employees' and Directors' remuneration
6 Employees' and Directors' remuneration
6 Employees' and Directors' remuneration
6 Employees' and Directors' remuneration
Average numbers employed (primarily overseas) during the year:
Average numbers employed (primarily overseas) during the year:
- full time
Average numbers employed (primarily overseas) during the year:
Average numbers employed (primarily overseas) during the year:
- full time
- part-time field workers
- full time
- full time
- part-time field workers
- part-time field workers
- part-time field workers
Staff costs (including Directors) comprise:
Staff costs (including Directors) comprise:
Wages and salaries
Staff costs (including Directors) comprise:
Staff costs (including Directors) comprise:
Wages and salaries
Social security costs
Wages and salaries
Wages and salaries
Social security costs
Retirement benefit costs
Social security costs
Social security costs
Retirement benefit costs
Retirement benefit costs
Retirement benefit costs
- Indonesia (note 18)
- Indonesia (note 18)
- Malaysia
- Indonesia (note 18)
- Indonesia (note 18)
- Malaysia
- Malaysia
- Malaysia
- United Kingdom
- United Kingdom
- United Kingdom
- United Kingdom
The information required by the Companies Act and the Listing Rules of the Financial Conduct Authority are contained in the Directors'
The information required by the Companies Act and the Listing Rules of the Financial Conduct Authority are contained in the Directors'
remuneration report on pages 47 – 51 of which certain information on page 51 has been audited.
The information required by the Companies Act and the Listing Rules of the Financial Conduct Authority are contained in the Directors'
The information required by the Companies Act and the Listing Rules of the Financial Conduct Authority are contained in the Directors'
remuneration report on pages 47 – 51 of which certain information on page 51 has been audited.
remuneration report on pages 47 – 51 of which certain information on page 51 has been audited.
remuneration report on pages 47 – 51 of which certain information on page 51 has been audited.
Directors emoluments
Directors emoluments
Directors emoluments
Directors emoluments
Remuneration expense for key management personnel comprise:
Remuneration expense for key management personnel comprise:
Salaries
Remuneration expense for key management personnel comprise:
Remuneration expense for key management personnel comprise:
Salaries
Social security costs
Salaries
Salaries
Social security costs
Retirement benefit costs
Social security costs
Social security costs
Retirement benefit costs
Retirement benefit costs
Retirement benefit costs
The Executive Director, Non-Executive Directors and senior management (general managers and above) are considered to be the key
The Executive Director, Non-Executive Directors and senior management (general managers and above) are considered to be the key
management personnel. The remuneration of Executive Director and Non-Executive Directors is shown on page 51.
The Executive Director, Non-Executive Directors and senior management (general managers and above) are considered to be the key
The Executive Director, Non-Executive Directors and senior management (general managers and above) are considered to be the key
management personnel. The remuneration of Executive Director and Non-Executive Directors is shown on page 51.
management personnel. The remuneration of Executive Director and Non-Executive Directors is shown on page 51.
management personnel. The remuneration of Executive Director and Non-Executive Directors is shown on page 51.
7 Tax expense
7 Tax expense
7 Tax expense
7 Tax expense
Foreign corporation tax - current year
Foreign corporation tax - current year
Foreign corporation tax - prior year
Foreign corporation tax - current year
Foreign corporation tax - current year
Foreign corporation tax - prior year
Deferred tax adjustment - origination and reversal of temporary differences
Foreign corporation tax - prior year
Foreign corporation tax - prior year
Deferred tax adjustment - origination and reversal of temporary differences
Total tax charge for year
Deferred tax adjustment - origination and reversal of temporary differences
Deferred tax adjustment - origination and reversal of temporary differences
Total tax charge for year
Total tax charge for year
Total tax charge for year
Corporation tax rate in Indonesia is at 25% whereas Malaysia is at 24%. The standard rate of corporation tax in the UK for the current year is
Corporation tax rate in Indonesia is at 25% whereas Malaysia is at 24%. The standard rate of corporation tax in the UK for the current year is
19%. The Group’s charge for the year differs from the standard UK rate of corporation tax is explained below.
Corporation tax rate in Indonesia is at 25% whereas Malaysia is at 24%. The standard rate of corporation tax in the UK for the current year is
Corporation tax rate in Indonesia is at 25% whereas Malaysia is at 24%. The standard rate of corporation tax in the UK for the current year is
19%. The Group’s charge for the year differs from the standard UK rate of corporation tax is explained below.
19%. The Group’s charge for the year differs from the standard UK rate of corporation tax is explained below.
19%. The Group’s charge for the year differs from the standard UK rate of corporation tax is explained below.
2017
2017
Number
2017
2017
Number
Number
Number
5,694
5,694
9,997
5,694
5,694
9,997
15,691
9,997
9,997
15,691
15,691
15,691
2017
2017
$000
2017
2017
$000
$000
$000
31,608
31,608
1,282
31,608
31,608
1,282
1,282
1,282
62
62
1,922
62
62
1,922
52
1,922
1,922
52
34,926
52
52
34,926
34,926
34,926
2017
2017
$000
2017
2017
$000
$000
$000
208
208
208
208
2017
2017
$000
2017
2017
$000
$000
$000
1,790
1,790
-
1,790
1,790
-
5
-
-
5
1,795
5
5
1,795
1,795
1,795
2017
2017
$000
2017
2017
$000
$000
$000
22,796
22,796
365
22,796
22,796
365
217
365
365
217
23,378
217
217
23,378
23,378
23,378
2017
2017
$000
2017
2017
$000
$000
$000
69,691
69,691
69,691
69,691
13,241
13,241
13,241
13,241
4,093
4,093
167
4,093
4,093
167
4,474
167
167
4,474
(1,473)
4,474
4,474
(1,473)
365
(1,473)
(1,473)
365
36
365
365
36
2,475
36
36
2,475
23,378
2,475
2,475
23,378
23,378
23,378
2016
2016
Number
2016
2016
Number
Number
Number
5,838
5,838
10,934
5,838
5,838
10,934
16,772
10,934
10,934
16,772
16,772
16,772
2016
2016
$000
2016
2016
$000
$000
$000
28,764
28,764
773
28,764
28,764
773
773
773
64
64
1,911
64
64
1,911
52
1,911
1,911
52
31,564
52
52
31,564
31,564
31,564
2016
2016
$000
2016
2016
$000
$000
$000
228
228
228
228
2016
2016
$000
2016
2016
$000
$000
$000
1,888
1,888
-
1,888
1,888
-
156
-
-
156
2,044
156
156
2,044
2,044
2,044
2016
2016
$000
2016
2016
$000
$000
$000
20,438
20,438
(30)
20,438
20,438
(30)
(3,543)
(30)
(30)
(3,543)
16,865
(3,543)
(3,543)
16,865
16,865
16,865
2016
2016
$000
2016
2016
$000
$000
$000
60,846
60,846
60,846
60,846
12,169
12,169
12,169
12,169
2,301
2,301
4,810
2,301
2,301
4,810
309
4,810
4,810
309
(2,656)
309
309
(2,656)
(30)
(2,656)
(2,656)
(30)
(38)
(30)
(30)
(38)
-
(38)
(38)
-
16,865
-
-
16,865
16,865
16,865
75
75
75
75
75
Profit before tax
Profit before tax
Profit before tax
Profit before tax
Profit before tax multiplied by standard rate of UK corporation tax of 19% (2016: 20%)
Profit before tax multiplied by standard rate of UK corporation tax of 19% (2016: 20%)
Effects of:
Profit before tax multiplied by standard rate of UK corporation tax of 19% (2016: 20%)
Profit before tax multiplied by standard rate of UK corporation tax of 19% (2016: 20%)
Effects of:
Rate adjustment relating to overseas profits
Effects of:
Effects of:
Rate adjustment relating to overseas profits
Group accounting adjustments not subject to tax
Rate adjustment relating to overseas profits
Rate adjustment relating to overseas profits
Group accounting adjustments not subject to tax
Expenses not allowable for tax
Group accounting adjustments not subject to tax
Group accounting adjustments not subject to tax
Expenses not allowable for tax
Income not subject to tax
Expenses not allowable for tax
Expenses not allowable for tax
Income not subject to tax
Under / (Over) provision of prior year income tax
Income not subject to tax
Income not subject to tax
Under / (Over) provision of prior year income tax
Utilisation of tax losses brought forward
Under / (Over) provision of prior year income tax
Under / (Over) provision of prior year income tax
Utilisation of tax losses brought forward
Under provision of prior year deferred tax assets
Utilisation of tax losses brought forward
Utilisation of tax losses brought forward
Under provision of prior year deferred tax assets
Total tax charge for year
Under provision of prior year deferred tax assets
Under provision of prior year deferred tax assets
Total tax charge for year
Total tax charge for year
Total tax charge for year
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
7 Tax expense - continued
The tax receivables represent the corporate income tax (“CIT”) and value added tax (“VAT”) that have yet to be refunded by the Indonesia
tax authority. The tax receivables relating to CIT arose due to over payments of tax. The tax receivables relating to VAT arose because the
majority of the Groups’ CPO was sold to bonded zones which do not attract output VAT and thus the input VAT incurred is claimable. Upon
submission of a tax return (for CIT) or a request letter (for VAT refund), a tax audit will be conducted by the tax authority and the refund
process takes up to 12 months.
8 Earnings per ordinary share (“EPS”)
Profit for the year attributable to owners of the Company before BA movement
BA movement
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 movement
Basic EPS after BA movement
Dilutive EPS before BA movement
Dilutive EPS after BA movement
9 Dividends
Paid during the year
Final dividend of 3.0p per ordinary share for the year ended 31 December 2016
(2015: 1.75p)
2017
$000
36,386
(172)
36,214
Number
‘000
39,636
33
39,669
91.80cts
91.37cts
91.72cts
91.29cts
2016
$000
32,563
2,150
34,713
Number
‘000
39,636
-
39,636
82.16cts
87.58cts
82.16cts
87.58cts
2017
$000
2016
$000
1,515
1,003
Proposed final dividend of 4.0cts per ordinary share for the year ended 31 December 2017
(2016: 3.8cts equivalent)
1,585
1,463
The proposed dividend for 2017 is subject to shareholders’ approval at the forthcoming annual general meeting and has not been included
as a liability in these financial statements.
Annual Report 2017 | Anglo-Eastern Plantations Plc
76
76
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
10 Property, plant and equipment - continued
The Group engaged Muttaqin Bambang Purwanto Rozak Uswatun & Rekan (MBPRU) with its head office located in Jakarta, Indonesia to
undertake the land valuation for the Group. The valuation was carried out independently by MBPRU who has the appropriate professional
qualifications and recent experience in the location and category of the properties being valued. Further information of MBPRU can be
obtained from ‘www.kjpp-mbpru.com’. For the year ended 31 December 2017, valuations were undertaken on the land of twelve
subsidiaries. The increase per hectare derived from the current valuation was then applied to the land value of the remaining companies in
the same geographical location to derive the fair value of land as at 31 December 2017. For the year ended 31 December 2016, independent
land valuations were undertaken for eight subsidiary companies in Indonesia and Malaysia. The same methodology to fair value land was
adopted to value the land of the remaining companies as at 31 December 2016. Unplantable land was excluded in this exercise since it has
zero value. Land is valued on a rotational basis and all the land is valued by qualified valuers every two years. Had the revalued land been
measured on a historical cost basis, their net book value would have been $50,336,000 (2016: $46,982,000).
PT Simpang Ampat’s land was valued on the basis that its highest and best use is oil palm plantation. At present the land is planted with
rubber trees, however, the Group has the intention to replace the ageing rubber trees with oil palm trees.
Details of the information about the fair value hierarchy in relation to land at 31 December are as follows:
Land
At 31 December 2017
At 31 December 2016
Level 1
$000
Level 2
$000
Level 3
$000
Fair value
$000
-
-
-
-
137,543
148,577
137,543
148,577
There were no items classified under Level 1 and Level 2 and thus there were no transfers between Level 1 and Level 2 during the year.
The valuation techniques and significant unobservable inputs used in determining the fair value measurement of land and the inter-
relationship between key unobservable inputs and fair value are set out in the table below:
Item
Valuation approach
Inputs used
Inter-relationship
unobservable inputs and fair value
between
key
Land
location
Selling prices of comparable land in
for
similar
differences
in key attributes. The
valuation model is based on price per
hectare.
adjusted
Selling prices of comparable land
The higher the selling price, the higher
the fair value
Location, legal title, land area,
land type and topography
These are qualitative
require
significant
professional valuer, MBPRU
inputs which
by
judgement
There were no changes to the valuation techniques during the year.
The fair value measurement is based on the above items’ highest and best use, which does not differ from their actual use.
The estates include $235,000 (2016: $325,000) of interest and $3,727,000 (2016: $3,930,000) of overheads capitalised during the year in
respect of expenditure on estates under development.
The Indonesian authorities have granted certain land exploitation rights and operating permits for the estates. In the case of established
estates in North Sumatera, these rights and permits expire between 2023 and 2038 with rights of renewal thereafter. As of estates in
Bengkulu land titles were issued between 1994 and 2008 and the titles expire between 2028 and 2034 with rights of renewal thereafter for
two consecutive periods of 25 and 35 years respectively. In Riau, land titles were issued in 2004 and expire in 2033. In the case of PT
Cahaya Pelita Andhika’s estate acquired in 2007 land titles were issued in 1996 to expire in 2029.
Subject to compliance with the laws and regulations of Indonesia, land rights are usually renewed. The cost of renewing the land rights is not
significant.
The land title of the estate in Malaysia is a long-term lease expiring in 2084.
Impairment for plantations is measured by comparing its carrying amount with its recoverable amount, which is the higher of the fair value
less cost to sell and its value in use. The impairment loss of $2,740,000 recognised in 2016 was primarily due to the higher cost of new
planting. In 2017, the impairment surplus of $1,738,000 was due to the increase in CPO price.
Annual Report 2017 | Anglo-Eastern Plantations Plc
78
78
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
10 Property, plant and equipment - continued
The recoverable amount of the Group’s plantations in 2017 was based on value in use calculation on the basis that it will be higher than fair
value less cost to sell, given the mechanics of the two calculations and the nature of the business. The recoverable amount of the Group’s
plantations carried at value in use was $27,224,000 (2016: $19,739,000).
The value in use is the net present value of the projected future cash flows over the expected 20-year economic life of the asset discounted
at 17.4% (2016: 15.0%). Projected future cash flows are calculated based on historical data, industry performance, economic conditions and
any other readily available information.
The value in use is computed by the professional valuer, MBPRU using discounted cash flow (“DCF”) over the expected 20-year economic
life of the asset. The assumptions applied in the valuation are, inter-alia, listed as below:
CPO selling price
Inflation rate
Overhead cost as a percentage of revenue
Income tax rate
Pre-tax discount rate
The plantations carried at value in use are classified as Level 3 in the fair value hierarchy.
2017
$725/mt
5.41%
10%
25%
17.4%
2016
$700/mt
5.2%
10%
25%
15.0%
11 Receivables: non-current
Due from non-controlling interests
Due from cooperatives under Plasma scheme
2017
2016
Book value
$000
Fair value
$000
Book value
$000
Fair value
$000
3,161
5,197
8,358
1,882
4,621
6,503
578
3,313
3,891
424
2,973
3,397
The non-controlling interests in PT Alno Agro Utama and PT Cahaya Pelita Andhika have acquired their interests on deferred terms (see
note 24, Credit risk). In 2017, there is a change in the ownership of the non-controlling interests in PT Sawit Graha Manunggal, PT Karya
Kencana Sentosa Tiga, PT Riau Agrindo Agung and PT Empat Lawang Agro Plantation. The non-controlling interests have acquired their
interests on deferred terms (see note 24, Credit risk).
Plasma scheme is an initiative by the Indonesian Government that seeks to encourage plantation owners in Indonesia to provide economic
and social assistance to surrounding villagers by helping them improve their income and welfare. During the year, certain subsidiary
companies have funded the plantation development cost of $5,197,000 (2016: $3,313,000) for the land allocated to the cooperatives which
the cooperatives will repay.
The fair value disclosed above are for disclosure purposes and all non-current receivables are classified as Level 3 in the fair value
hierarchy.
The valuation techniques and significant unobservable inputs used in determining the fair value measurement of non-current receivables, as
well as the inter-relationship between key unobservable inputs and fair value, are set out in the table below:
Item
Valuation approach
Inputs used
Inter-relationship between key
unobservable
inputs and fair
value
Due from non-controlling
interests
Based on cash flows discounted using
current lending rate of 6% (2016: 6%)
Discount rate
The higher the discount rate, the
lower the fair value
from cooperatives
Due
under Plasma scheme
Based on cash flows discounted using
an estimated current lending rate of
6.05% (2016: 5.56%)
Discount rate
The higher the discount rate, the
lower the fair value
Annual Report 2017 | Anglo-Eastern Plantations Plc
79
79
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
12 Inventories
12 Inventories
Estate and mill consumables
Estate and mill consumables
Processed produce for sale
Processed produce for sale
13 Biological assets
13 Biological assets
At 1 January
At 1 January
Changes in fair value less cost to sell
Changes in fair value less cost to sell
Decreases due to harvest
Decreases due to harvest
Exchange translations
Exchange translations
At 31 December
At 31 December
2017
2017
$000
$000
4,252
4,252
5,146
5,146
9,398
9,398
2017
2017
$000
$000
7,107
7,107
111,419
111,419
(111,716)
(111,716)
(38)
(38)
6,772
6,772
2016
2016
$000
$000
4,720
4,720
4,499
4,499
9,219
9,219
2016
2016
$000
$000
3,673
3,673
108,013
108,013
(104,630)
(104,630)
51
51
7,107
7,107
The valuation of the unharvested FFB was carried out internally for each plantation of the Group. It involved an estimation of the weight of
The valuation of the unharvested FFB was carried out internally for each plantation of the Group. It involved an estimation of the weight of
unharvested FFB at balance sheet date multiplied by the sum of average FFB selling price less average harvesting cost of the last month
unharvested FFB at balance sheet date multiplied by the sum of average FFB selling price less average harvesting cost of the last month
prior to the balance sheet date. The weight derived from the computation of the percentage of growth based on the data extracted from the
prior to the balance sheet date. The weight derived from the computation of the percentage of growth based on the data extracted from the
research reference "The Reflection of Moisture Content on Palm Oil Development during the Ripening Process of Fresh Fruits" multiplied
research reference "The Reflection of Moisture Content on Palm Oil Development during the Ripening Process of Fresh Fruits" multiplied
with the estimated FFB harvested two months’ post balance sheet date.
with the estimated FFB harvested two months’ post balance sheet date.
The fair value of biological assets is classified as Level 3 in the fair value hierarchy.
The fair value of biological assets is classified as Level 3 in the fair value hierarchy.
The valuation techniques and significant unobservable inputs used in determining the fair value measurement of biological assets, as well as
The valuation techniques and significant unobservable inputs used in determining the fair value measurement of biological assets, as well as
the inter-relationship between key unobservable inputs and fair value, are set out in the table below:
the inter-relationship between key unobservable inputs and fair value, are set out in the table below:
Item
Item
Valuation approach
Valuation approach
Biological assets
-
-
Biological assets
Unharvested produce
Unharvested produce
Based on FFB weight multiply by the
Based on FFB weight multiply by the
sum of FFB selling price
less
less
sum of FFB selling price
harvesting cost
harvesting cost
Inputs used
Inputs used
FFB weight
FFB weight
FFB selling price
FFB selling price
Harvesting cost
Harvesting cost
key
key
between
between
Inter-relationship
Inter-relationship
unobservable inputs and fair value
unobservable inputs and fair value
The higher the weight, the higher the fair
The higher the weight, the higher the fair
value
value
The higher the selling price, the higher
The higher the selling price, the higher
the fair value
the fair value
The higher the harvesting cost, the lower
The higher the harvesting cost, the lower
the fair value
the fair value
14 Trade and other receivables
14 Trade and other receivables
Trade receivables
Trade receivables
Other receivables
Other receivables
Prepayments and accrued income
Prepayments and accrued income
2017
2017
$000
$000
1,574
1,574
3,308
3,308
302
302
5,184
5,184
2016
2016
$000
$000
778
778
4,683
4,683
306
306
5,767
5,767
The carrying amount of trade and other receivables classified as loans and receivables approximates fair value.
The carrying amount of trade and other receivables classified as loans and receivables approximates fair value.
As at 31 December 2017, trade receivables of $637,000 (2016: $114,000) were past due but not impaired. They were related to the
As at 31 December 2017, trade receivables of $637,000 (2016: $114,000) were past due but not impaired. They were related to the
customers with no default history. The ageing analysis of trade receivables of the Group are as follows:
customers with no default history. The ageing analysis of trade receivables of the Group are as follows:
Neither past due nor impaired
Neither past due nor impaired
Past due but not impaired
Past due but not impaired
31 to 60 days
31 to 60 days
61 to 90 days
61 to 90 days
91 to 120 days
91 to 120 days
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
2017
2017
$000
$000
937
937
2016
2016
$000
$000
664
664
378
378
259
259
-
-
637
637
1,574
1,574
52
52
62
62
-
-
114
114
778
778
80
80
80
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
15 Loans and borrowings
Non-current
Long term loan (a)
Long term loan (b)
Current
Long term loan (a)
Long term loan (b)
2017
2016
Book value
$000
Fair value
$000
Book value
$000
Fair value
$000
1,312
17,969
19,281
1,563
7,031
8,594
1,233
17,428
18,661
1,563
7,031
8,594
2,875
25,000
27,875
1,125
5,078
6,203
2,782
24,426
27,208
1,125
5,078
6,203
Total loans and borrowings
27,875
27,255
34,078
33,411
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
11,078
8,203
19,281
8,594
19,281
27,875
(a)
(b)
A subsidiary company, PT Hijau Pryan Perdana, has obtained a long term loan of $10,000,000 for a period of seven years (including
two years grace repayment period) to support the capital expenditures requirement for planting, development and maintenance of oil
palm estate and to finance mill construction and other property, plant and equipment owned by the subsidiary company as well to
utilise for repayment of amount due to related parties. It is secured by the subsidiary company’s land with a carrying amount of $6.3
million measured in fair value and its plantation with a carrying amount of $7.7 million as at 31 December 2017 and is guaranteed by
PT Tasik Raja and by the Company. This loan bears interest rate based on Base Lending Rate which is payable quarterly in arrears.
Average interest rate in 2017 was about 5.91% (2016: 5.38%). The loan is repayable from 30 November 2014 to 30 August 2019.
Another subsidiary company, PT Sawit Graha Manunggal, has obtained a long term loan of $35,000,000 for a period of eight years
(including four years grace repayment period) to support the capital expenditures requirement for planting, development and
maintenance of oil palm estate and to finance oil mill construction and other property, plant and equipment owned by the subsidiary
company. It is secured by the subsidiary company’s land with a carrying amount of $5.7 million measured in fair value and its
plantation with a carrying amount of $25.5 million as at 31 December 2017 and is guaranteed by the Company. This loan bears
interest rate based on SIBOR + 4.5% + Liquidity Premium which is payable quarterly in arrears. Average interest rate in 2017 was
about 6.18% (2016: 5.73%). The loan is repayable from 30 December 2016 to 30 September 2020.
All the loans and borrowings are denominated in USD, hence, no effect of changes in foreign exchange rates.
The fair value of the items classified as loans and borrowings is disclosed below and is classified as Level 3 in the fair value hierarchy:
2017
2016
Book value
$000
Fair value
$000
Book value
$000
Fair value
$000
Loans and borrowings
27,875
27,255
34,078
33,411
The fair value for disclosure purposes has been determined using discounted cash flows. Significant inputs include the discount rate used to
reflect the credit risk associated with the Group. The fair value reduces as higher discount rate being used.
16 Trade and other payables
Trade payables
Other payables
Accruals
2017
$000
6,028
3,443
7,334
16,805
2016
$000
5,950
3,234
6,870
16,054
The carrying amount of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value.
Annual Report 2017 | Anglo-Eastern Plantations Plc
81
81
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
17 Deferred tax
The movement on the deferred tax account is as shown below:
At 1 January
Recognised in profit and loss:
Tax expense
BA movement
Revaluation of leasehold land
Recognised in other comprehensive income:
Revaluation of leasehold land
Retirement benefits
Exchange differences
At 31 December
2017
$000
(16,612)
(494)
73
204
3,325
424
(1)
(13,081)
2016
$000
(19,373)
4,387
(844)
-
(494)
188
(476)
(16,612)
The deferred tax asset and liability, together with the amounts recognised in profit or loss and other comprehensive income are detailed as
follows:
2017
Revaluation surplus
Retirement benefits
BA movement
Unutilised tax losses
Unremitted earnings
Other temporary differences
Tax assets / (liabilities)
Set off of tax
Net tax assets / (liabilities)
2016
Revaluation surplus
Retirement benefits
BA movement
Unutilised tax losses
Unremitted earnings
Other temporary differences
Tax assets / (liabilities)
Set off of tax
Net tax assets / (liabilities)
Asset
$000
-
2,250
-
10,524
-
194
12,968
(3,659)
9,309
-
1,661
-
11,558
-
232
13,451
-
13,451
Liability
$000
(23,953)
-
(1,692)
-
(403)
(1)
(26,049)
3,659
(22,390)
(27,585)
-
(1,775)
-
(545)
(158)
(30,063)
-
(30,063)
Net
$000
(23,953)
2,250
(1,692)
10,524
(403)
193
(13,081)
-
(13,081)
(27,585)
1,661
(1,775)
11,558
(545)
74
(16,612)
-
(16,612)
A deferred tax asset has not been recognised for the following items:
Unutilised tax losses
(Charged)/
credited to
profit or loss
$000
(Charged)/
credited
to equity
$000
204
187
73
(950)
-
269
(217)
-
(217)
-
320
(844)
4,444
(545)
168
3,543
-
3,543
2017
$000
2,892
3,325
424
-
-
-
-
3,749
-
3,749
(494)
188
-
-
-
-
(306)
-
(306)
2016
$000
2,832
The Groups recognised tax assets arising from the unutilised tax losses of certain subsidiaries as the Group believes that the tax assets of
these subsidiaries can be realised in the future periods based on its budget. However, the Group does not recognise the tax losses of certain
companies in the Group as tax assets as the future recoverability of losses of these companies cannot be certain.
Annual Report 2017 | Anglo-Eastern Plantations Plc
82
82
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
18 Retirement benefits
The Group operates two defined benefit schemes in respect of its Indonesian operations in accordance with Indonesia Labour Law No.
13/2003 ("the Law") dated 25 March 2003. The law does not impose funding requirement on the Company to create fund asset to pay the
defined benefit obligations.
The first scheme is defined benefit pension scheme offered to certain employees. This scheme is funded and managed by SKU UKINDO
Pension Fund authorised by the Ministry of Finance of the Republic of Indonesia. When an employee reaches normal retirement age, dies or
becomes disabled, the Group shall pay the higher of the benefit from the pension scheme and the benefit calculated under the Law. The
asset value of the pension scheme is adequate to fund the annual payment of benefits.
The Group also established a funding programme through a savings plan managed by PT Asuransi Allianz Life Indonesia for the payment of
severance / pension for eligible staff. The assets of the fund are to be used only to settle defined benefit obligations. The asset value of the
funding programme is adequate to fund the annual payment of benefits.
The scheme is valued by an actuary at the end of each financial year. The major assumptions used by the actuary were:
Rate of increase in wages
Rate of return on scheme assets
Discount rate
Mortality rate*
Disability rate
2017
2016
8.0%
8.5%
7.5%
100% TMI3
10% TMI3
8.0%
9.0%
8.5%
100% TMI3
10% TMI3
* Mortality rate was derived from observation of Indonesian life insurance policyholders released in 2011 and load 10% to allow for disability.
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 benefits are accrued by the Group and charged in the income statement based on
individual employee’s service up to the end of the financial year.
The Group provides other long-term employee benefits in form of Long Service Award. Long Service Award is eligible for staff employees
who have 10 and 20 years of service and non-staff employees who have 25 years of service and every 5 years after.
Service cost
Current service cost
Past service cost
Net interest expense
Actuarial gain
Total employee benefits expense
2017
$000
1,339
(71)
587
67
1,922
2016
$000
1,076
385
465
(15)
1,911
Annual Report 2017 | Anglo-Eastern Plantations Plc
83
83
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
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85
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
18 Retirement benefits - continued
(ii)
Disaggregation of defined benefit scheme assets
The fair value of the funded assets is analysed as follows:
Bonds
- Corporate bonds
- Government bonds
- Mutual fund bonds
Cash / deposits
2017
$000
108
80
233
421
3,893
4,314
2016
$000
73
51
216
340
3,671
4,011
(iii)
Defined benefit obligation – sensitivity analysis
The following table exhibits the sensitivity of the Group’s retirement benefits to the fluctuation in the discount rate, wages and mortality rate:
Discount rate
Growth in wages
Future mortality rate
Reasonably
Possible
Change
(+ / - 1.00%)
(+ / - 1.00%)
(+ / - 10.00%)
Defined benefit obligation
Decrease
Increase
$000
$000
(1,311)
1,545
56
1,509
(1,363)
(57)
The following contributions, which reflect expected future service, as appropriate are expected to be paid:
Year
2018
2019 to 2022
2023 to 2027
after 2027
Total
19 Share capital and treasury shares
Ordinary shares of 25p each
Beginning and end of year
Treasury shares:
Beginning of year
Share options exercised
End of year
Market value of treasury shares:
Beginning of year (674.5p/share)
End of year (769.0p/share)
$000
509
3,737
10,185
102,577
117,008
Authorised
Number
Issued and
fully paid
Number
Authorised
£000
Issued and
fully paid
£000
Authorised
$000
Issued and
fully paid
$000
60,000,000
39,976,272
15,000
9,994
23,865
15,504
2017
Number
339,900
-
339,900
2016
Number
339,900
-
339,900
Cost
2017
$’000
(1,171)
-
(1,171)
Cost
2016
$’000
(1,171)
-
(1,171)
$’000
2,821
3,531
No treasury shares were purchased in 2017 (2016: Nil).
All the fully paid ordinary shares have full voting rights, as well as to receive the distribution of dividends and repayment of capital upon
winding up of company.
Annual Report 2017 | Anglo-Eastern Plantations Plc
86
86
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
20 Ultimate controlling shareholder
At 31 December 2017, Genton International Limited, a company registered in Hong Kong, held 20,247,814 (2016: 20,247,814) shares of the
Company representing 51.1% (2016: 51.1%) of the issued share capital of the Company. Together with other deemed interested parties, the
Genton‘s shareholding totals 20,551,914 or 51.9%. Madam Lim, a Director of the Company, has advised the Company that she is the
controlling shareholder of Genton International Limited.
21 Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not
disclosed in this note.
During the year the Company engaged UHY Hacker Young LLP, an accounting firm of which Dato’ John Lim Ewe Chuan is a partner, to
provide company secretarial and taxation services for a fee of $34,809 (2016: $21,348). The fee for the services provided is on an arm’s
length basis. There was no outstanding fee at the year end (2016: Nil).
An office premises lease agreement was entered with Infra Sari Sdn Bhd, a company controlled by Madam Lim Siew Kim. The rental paid
during the year was $281,664 (2016: $275,610). There was no balance outstanding at the year end (2016: Nil).
22 Reserves
Nature and purpose of each reserve:
Share capital
Share premium
Amount of shares subscribed at nominal value.
Amount subscribed for share capital in excess of nominal value.
Capital redemption reserve
Amounts transferred from share capital on redemption of issued shares.
Treasury shares
Cost of own shares held in treasury.
Revaluation reserves
Gains/losses arising on the revaluation of the Group's property.
Exchange reserves
Gains/losses arising from translating the net assets of overseas operations into US Dollar.
Retained earnings
Cumulative net gains and losses recognised in the consolidated income statement.
23 Guarantees and other financial commitments
Capital commitments at 31 December
Contracted but not provided - normal estate operations
Authorised but not contracted - plantation and mill development
2017
$000
183
41,583
2016
$000
755
32,034
A subsidiary company, PT Sawit Graha Manunggal (“SGM”) has provided a corporate guarantee to Koperasi Bartim Sawit Sejahtera
(“KBSS”), a party under Plasma scheme as disclosed in note 11, in relation to a loan taken by KBSS from PT Bank Mandiri (Persero) Tbk. of
Rp226.02 billion ($16.7 million) (2016: Rp226.02 billion, $16.8 million). The corporate guarantee remains until the loan is fully settled by 23
December 2027. The HGU (land right) that belongs to the Plasma scheme is currently held under SGM’s master title. An application to
separate the HGU was submitted to the Land Office and the land and its plantation with a carrying amount of $13.4 million as at 31
December 2017 will be pledged to the bank as security once the title separation approval is obtained. In addition, the terms and conditions of
the loan agreement require KBSS to sell all the FFB produce to SGM and its plantation estate is to be managed by SGM. In view of these,
the Group exposure to this contingent liability is minimised.
On 3 February 2017, a subsidiary company, PT Alno Agro Utama and Koperasi Perkebunan Plasma Maju Sejahtera (“KPPM”) signed a
Refinancing Agreement with PT Bank Syariah Mandiri ("BSM") to fund its plasma development. The Agreement provides a loan of Rp 8.75
billion ($0.6 million), with 10 (Ten) years maturity period effective from 24 July 2017 with an interest rate of 13.25% per annum. KPPM
pledges its 147.04 hectares oil palm plantation located in Desa Serami Baru, Kecamatan Malin Deman, Kabupaten Mukomuko, Bengkulu
and its plantation with a carrying amount of $0.8 million as at 31 December 2017 as security under the agreement while the Company
provides corporate guarantee amounting to Rp 8.75 billion ($0.6 million).
Annual Report 2017 | Anglo-Eastern Plantations Plc
87
87
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
24 Disclosure of financial instruments and other risks
24 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 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 2017 and 2016 were:
The Group’s accounting classification of each class of financial asset and liability at 31 December 2017 and 2016 were:
2017
Non-current receivables
2017
Trade and other receivables
Non-current receivables
Cash and cash equivalent
Trade and other receivables
Loans and borrowings due within one year
Cash and cash equivalent
Trade and other payables
Loans and borrowings due within one year
Loans and borrowings due after one year
Trade and other payables
Loans and borrowings due after one year
2016
Non-current receivables
2016
Trade and other receivables
Non-current receivables
Cash and cash equivalent
Trade and other receivables
Loans and borrowings due within one year
Cash and cash equivalent
Trade and other payables
Loans and borrowings due within one year
Loans and borrowings due after one year
Trade and other payables
Loans and borrowings due after one year
Loans and
receivables
Loans and
$000
receivables
$000
8,358
4,882
8,358
139,489
4,882
-
139,489
-
-
-
-
152,729
-
152,729
Loans and
receivables
Loans and
$000
receivables
$000
3,891
5,461
3,891
118,176
5,461
-
118,176
-
-
-
-
127,528
-
127,528
Financial
liabilities at
Financial
amortised cost
liabilities at
$000
amortised cost
$000
-
-
-
-
-
(8,594)
-
(16,805)
(8,594)
(19,281)
(16,805)
(44,680)
(19,281)
(44,680)
Financial
liabilities at
Financial
amortised cost
liabilities at
$000
amortised cost
$000
-
-
-
-
-
(6,203)
-
(16,054)
(6,203)
(27,875)
(16,054)
(50,132)
(27,875)
(50,132)
Total carrying
value
Total carrying
$000
value
$000
8,358
4,882
8,358
139,489
4,882
(8,594)
139,489
(16,805)
(8,594)
(19,281)
(16,805)
108,049
(19,281)
108,049
Total carrying
value
Total carrying
$000
value
$000
3,891
5,461
3,891
118,176
5,461
(6,203)
118,176
(16,054)
(6,203)
(27,875)
(16,054)
77,396
(27,875)
77,396
Financial instruments not measured at fair value
Financial instruments not measured at fair value include cash and cash equivalents, trade and other receivables, trade and other payables,
Financial instruments not measured at fair value
and borrowings due within one year.
Financial instruments not measured at fair value include cash and cash equivalents, trade and other receivables, trade and other payables,
and borrowings due within one year.
Due to their short-term nature, the carrying value of cash and cash equivalents, trade and other receivables, trade and other payables
approximates their fair value.
Due to their short-term nature, the carrying value of cash and cash equivalents, trade and other receivables, trade and other payables
approximates their fair value.
Please refer to the applicable notes for details of the fair value hierarchy, valuation techniques, and significant unobservable inputs related to
determining the fair value of the following items:
Please refer to the applicable notes for details of the fair value hierarchy, valuation techniques, and significant unobservable inputs related to
- Non-current receivables (note 11); and
determining the fair value of the following items:
- Loans and borrowings (note 15).
- Non-current receivables (note 11); and
- Loans and borrowings (note 15).
The principal financial risks to which the Group is exposed are:
- commodity selling price changes;
The principal financial risks to which the Group is exposed are:
- exchange movements; and
- commodity selling price changes;
which, in turn, can affect financial instruments and/or operating performance.
- exchange movements; and
which, in turn, can affect financial instruments and/or operating performance.
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.
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.
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.
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 Company and Group accounts are prepared in US Dollar which is not the functional
Currency risk
currency of the operating subsidiaries. The Group does not hedge its net investment in its overseas subsidiaries and is therefore exposed to
Most of the Group's operations are in Indonesia. The Company and Group accounts are prepared in US Dollar which is not the functional
a currency risk on that investment. The historical cost of investment (including intercompany loans) by the parent in its subsidiaries amounted
currency of the operating subsidiaries. The Group does not hedge its net investment in its overseas subsidiaries and is therefore exposed to
to $61,876,000 (2016: $66,971,000), while the balance sheet value of the Group's share of underlying assets at 31 December 2017
a currency risk on that investment. The historical cost of investment (including intercompany loans) by the parent in its subsidiaries amounted
amounted to $385,092,000 (2016: $363,111,000).
to $61,876,000 (2016: $66,971,000), while the balance sheet value of the Group's share of underlying assets at 31 December 2017
amounted to $385,092,000 (2016: $363,111,000).
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
88
88
88
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
24 Disclosure of financial instruments and other risks - continued
Currency risk - continued
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 US Dollar terms and vice versa.
The Group's subsidiaries which are borrowing in US Dollar, 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 US Dollar denominated cash
balances in those subsidiaries. The Company will continue to partially match US Dollar cash balances with US Dollar financial liabilities. The
average interest rate on local currency deposits was 3.31% higher than on US Dollar deposits whereas interest rate for local currency
borrowing was about 4.84% higher as compared to US Dollar borrowing. The unmatched balance at 31 December 2017 is represented by
the $11,619,000 shown in the table below (2016: $20,991,000). If the Group's net cash position continues to improve then US Dollar cash
balances will continue to increase through 2018.
The table below shows the net monetary assets and liabilities of the Group as at 31 December 2017 and 2016 that were not denominated in
the operating or functional currency of the operating unit involved.
Functional currency of Group operation
2017
Indonesian Rupiah
US Dollar
Total
2016
Indonesian Rupiah
US Dollar
Total
Net foreign currency assets/(liabilities)
US Dollar
$000
(11,619)
-
(11,619)
(20,991)
-
(20,991)
Sterling
$000
-
1,663
1,663
-
63
63
Total
$000
(11,619)
1,663
(9,956)
(20,991)
63
(20,928)
The following table summarises the sensitivity of the Group’s financial assets and financial liabilities to foreign exchange risk. The impact on
profit before tax and equity if Ringgit or Rupiah strengthen or weaken by 10% against US Dollar is:
2017
2016
Carrying
Amount
US$
$000
-10% in
Rp : $ and
RM : $
$000
+10% in
Rp : $ and
RM : $
$000
Carrying
Amount
US$
$000
-10% in
Rp : $ and
RM : $
$000
+10% in
Rp : $ and
RM : $
$000
8,358
4,882
139,489
(472)
(261)
(12,512)
(8,594)
(16,805)
(19,281)
781
1,425
1,753
(9,286)
577
319
15,292
(955)
(1,742)
(2,142)
11,349
3,891
5,461
118,176
(301)
(245)
(10,721)
(6,203)
(16,054)
(27,875)
564
1,373
2,534
(6,796)
368
300
13,103
(689)
(1,679)
(3,097)
8,306
Financial Assets
Non-current receivables
Trade and other receivables
Cash and cash equivalents
Financial Liabilities
Borrowings due within one year
Trade and other payables
Borrowings due after one year
Total (decrease) / increase
Liquidity risk
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 development period and the cash requirement is 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 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 required to bring existing immature plantings to maturity.
Annual Report 2017 | Anglo-Eastern Plantations Plc
89
89
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
24 Disclosure of financial instruments and other risks - continued
Liquidity risk - continued
The Group's trade and tax payables are all due for settlement within a year. At 31 December 2017, the Group had the following loans and
facilities.
Indonesia:
US Dollar denominated - long term loan
27,875
45,000
2018 - 2020 (note 15)
Borrowings
$000
Facilities
$000
Repayable
The total loan borrowings together with interest at current rates are as follows:
Principal
Interest
Total
Amount repayable within one year
Amount repayable after one year but not more than two years
Amount repayable after two years but not more than five years
Amount repayable after five years
2017
$000
27,875
2,710
30,585
9,121
1,003
20,461
-
30,585
2016
$000
34,078
3,890
37,968
6,555
1,388
30,025
-
37,968
Forecasts prepared in December 2017 indicate that the Group has sufficient funds to meet its development plans and financial commitments
through 2018.
All the long term loans include varying covenants covering minimum net worth and cash balances, dividend and interest cover and debt
service ratios. The subsidiary companies concerned have complied with the covenants as stated in the loan agreement.
Interest rate risk
Both the Group's surplus cash and its borrowings are subject to variable interest rates. The Group had net cash throughout 2017, 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 Group’s reported results as shown in the table below. The rates on borrowings are set out in note 15.
Financial Assets
Cash and cash equivalents
Financial Liabilities
Borrowings due within one year
Borrowings due after one year
Total (decrease) / increase
2017
2016
Carrying
amount
$000
-1% in
interest rate
$000
+1% in
interest rate
$000
Carrying
amount
$000
-1% in
interest rate
$000
+1% in
interest rate
$000
139,489
(987)
1,046
118,176
(820)
865
(8,594)
(19,281)
-
279
(708)
-
(279)
767
(6,203)
(27,875)
-
341
(479)
-
(341)
524
There is no policy to hedge interest rates, partly because of the net cash position and the net interest income position of the Group.
Annual Report 2017 | Anglo-Eastern Plantations Plc
90
90
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
24 Disclosure of financial instruments and other risks - continued
24 Disclosure of financial instruments and other risks - continued
Interest rate risk - continued
Interest rate risk - continued
Interest rate profiles of the Group's financial assets (comprising non-current receivables, trade and other receivables and cash) at 31
Interest rate profiles of the Group's financial assets (comprising non-current receivables, trade and other receivables and cash) at 31
December were:
December were:
2017
2017
Sterling
Sterling
US Dollar
US Dollar
Rupiah
Rupiah
Ringgit
Ringgit
Total
Total
2016
2016
Sterling
Sterling
US Dollar
US Dollar
Rupiah
Rupiah
Ringgit
Ringgit
Total
Total
Total
Total
$000
$000
1,663
1,663
20,214
20,214
124,648
124,648
6,204
6,204
152,729
152,729
64
64
15,922
15,922
107,162
107,162
4,380
4,380
127,528
127,528
Fixed rate
Fixed rate
$000
$000
Variable rate
Variable rate
$000
$000
No interest
No interest
$000
$000
-
-
3,161
3,161
-
-
-
-
3,161
3,161
-
-
578
578
-
-
-
-
578
578
20
20
6,042
6,042
93,698
93,698
4,867
4,867
104,627
104,627
19
19
4,652
4,652
77,897
77,897
3,959
3,959
86,527
86,527
1,643
1,643
11,011
11,011
30,950
30,950
1,337
1,337
44,941
44,941
45
45
10,692
10,692
29,265
29,265
421
421
40,423
40,423
Long term receivables of $3,161,000 (2016: $578,000) comprise US Dollar denominated amounts due from non-controlling interests as
Long term receivables of $3,161,000 (2016: $578,000) comprise US Dollar denominated amounts due from non-controlling interests as
described in note 11 on which interest is due at a fixed rate of 6%.
described in note 11 on which interest is due at a fixed rate of 6%.
Average US Dollar deposit rate in 2017 was 1.25% (2016: 1.25%) and Rupiah deposit rate was 4.56% (2016: 5.15%).
Average US Dollar deposit rate in 2017 was 1.25% (2016: 1.25%) and Rupiah deposit rate was 4.56% (2016: 5.15%).
Interest rate profiles of the Group's financial liabilities (comprising bank loans and other financial liabilities and trade and other payables) at
Interest rate profiles of the Group's financial liabilities (comprising bank loans and other financial liabilities and trade and other payables) at
31 December were:
31 December were:
2017
2017
Sterling
Sterling
US Dollar
US Dollar
Rupiah
Rupiah
Ringgit
Ringgit
Total
Total
2016
2016
Sterling
Sterling
US Dollar
US Dollar
Rupiah
Rupiah
Ringgit
Ringgit
Total
Total
Total
Total
$000
$000
Fixed rate
Fixed rate
$000
$000
Variable rate
Variable rate
$000
$000
No interest
No interest
$000
$000
-
-
(28,869)
(28,869)
(15,470)
(15,470)
(341)
(341)
(44,680)
(44,680)
-
-
(34,890)
(34,890)
(14,942)
(14,942)
(300)
(300)
(50,132)
(50,132)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(27,875)
(27,875)
(27,875)
(27,875)
(34,078)
(34,078)
(34,078)
(34,078)
-
-
(994)
(994)
(15,470)
(15,470)
(341)
(341)
(16,805)
(16,805)
-
-
(812)
(812)
(14,942)
(14,942)
(300)
(300)
(16,054)
(16,054)
Weighted average interest rate on variable rate borrowings was 6.16% in 2017 (2016: 5.69%).
Weighted average interest rate on variable rate borrowings was 6.16% in 2017 (2016: 5.69%).
Credit risk
Credit risk
Sales of CPO and kernel are not despatched unless payment has been received in advance. Remaining sales are on credit for about 30
Sales of CPO and kernel 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 2017 (2016: Nil).
days. No provisions were considered necessary at 31 December 2017 (2016: Nil).
Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. The Group has taken necessary steps
Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. The Group has taken necessary steps
and precautions in minimising the credit risk by lodging cash and cash equivalents only with reputable licensed banks, and particularly in
and precautions in minimising the credit risk by lodging cash and cash equivalents only with reputable licensed banks, and particularly in
Indonesia independently rated banks with minimum rating of “A”. The cash and cash equivalents are in US dollars, Rupiah, Ringgit and
Indonesia independently rated banks with minimum rating of “A”. The cash and cash equivalents are in US dollars, Rupiah, Ringgit and
Sterling according to the requirements of the Group. The list of the principal banks used by the Group is given on the inside of the back cover
Sterling according to the requirements of the Group. The list of the principal banks used by the Group is given on the inside of the back cover
of this report.
of this report.
Amounts receivable from local partners, amounting to $3,161,000 (2016: $578,000), in relation to their investments in operating subsidiaries
Amounts receivable from local partners, amounting to $3,161,000 (2016: $578,000), in relation to their investments in operating subsidiaries
are secured on those investments and are repayable from their share of dividends from those subsidiaries.
are secured on those investments and are repayable from their share of dividends from those subsidiaries.
Amount receivable due from cooperatives under Plasma scheme as disclosed in note 11, are unsecured and are to be repaid from FFB
Amount receivable due from cooperatives under Plasma scheme as disclosed in note 11, are unsecured and are to be repaid from FFB
supplied by the cooperatives. Two subsidiaries have provided corporate guarantee for two cooperatives in obtaining bank loans in 2013 and
supplied by the cooperatives. Two subsidiaries have provided corporate guarantee for two cooperatives in obtaining bank loans in 2013 and
2017. The amount drawdown from this loan was used to repay the advances made by the subsidiaries. See note 23.
2017. The amount drawdown from this loan was used to repay the advances made by the subsidiaries. See note 23.
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
91
91
91
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
24 Disclosure of financial instruments and other risks – continued
Capital
The Group defines its Capital as Share capital and Reserves, shown in the statement of financial position as "Issued capital attributable to
owners of the parent" and amounting to $385,092,000 at 31 December 2017 (2016: $363,111,000).
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.
Group policy presently to attempt to fund development from self-generated funds and loans and not from the issue of new share capital. At
31 December 2017 (2016: Nil) the Group had no net borrowings but, depending on market conditions, the Board is prepared for the Group to
have net borrowings.
Plantation industry risk
Please refer to pages 19 - 23.
Annual Report 2017 | Anglo-Eastern Plantations Plc
92
92
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
25 Subsidiary companies
25 Subsidiary companies
25 Subsidiary companies
25 Subsidiary companies
The principal subsidiaries of the Company all of which have been included in these consolidated financial statements are as follows:
The principal subsidiaries of the Company all of which have been included in these consolidated financial statements are as follows:
The principal subsidiaries of the Company all of which have been included in these consolidated financial statements are as follows:
The principal subsidiaries of the Company all of which have been included in these consolidated financial statements are as follows:
Name
Name
Name
Name
Principal sub-holding company
Principal sub-holding company
Principal sub-holding company
Anglo-Indonesian Oil Palms Limited
Principal sub-holding company
Anglo-Indonesian Oil Palms Limited
Anglo-Indonesian Oil Palms Limited
Anglo-Indonesian Oil Palms Limited
Management company
Management company
Management company
Management company
Indopalm Services Limited
Indopalm Services Limited
Indopalm Services Limited
Indopalm Services Limited
Operating companies
Operating companies
Operating companies
Anglo-Eastern Plantations (M) Sdn Bhd
Operating companies
Anglo-Eastern Plantations (M) Sdn Bhd
Anglo-Eastern Plantations (M) Sdn Bhd
Anglo-Eastern Plantations Management Sdn Bhd
Anglo-Eastern Plantations (M) Sdn Bhd
Anglo-Eastern Plantations Management Sdn Bhd
Anglo-Eastern Plantations Management Sdn Bhd
PT Alno Agro Utama
Anglo-Eastern Plantations Management Sdn Bhd
PT Alno Agro Utama
PT Alno Agro Utama
PT Anak Tasik
PT Alno Agro Utama
PT Anak Tasik
PT Anak Tasik
PT Bangka Malindo Lestari
PT Anak Tasik
PT Bangka Malindo Lestari
PT Bangka Malindo Lestari
PT Bina Pitri Jaya
PT Bangka Malindo Lestari
PT Bina Pitri Jaya
PT Bina Pitri Jaya
PT Cahaya Pelita Andhika
PT Bina Pitri Jaya
PT Cahaya Pelita Andhika
PT Cahaya Pelita Andhika
PT Empat Lawang Agro Perkasa
PT Cahaya Pelita Andhika
PT Empat Lawang Agro Perkasa
PT Empat Lawang Agro Perkasa
PT Hijau Pryan Perdana
PT Empat Lawang Agro Perkasa
PT Hijau Pryan Perdana
PT Hijau Pryan Perdana
PT Kahayan Agro Plantation
PT Hijau Pryan Perdana
PT Kahayan Agro Plantation
PT Kahayan Agro Plantation
PT Karya Kencana Sentosa Tiga
PT Kahayan Agro Plantation
PT Karya Kencana Sentosa Tiga
PT Karya Kencana Sentosa Tiga
PT Mitra Puding Mas
PT Karya Kencana Sentosa Tiga
PT Mitra Puding Mas
PT Mitra Puding Mas
PT Musam Utjing
PT Mitra Puding Mas
PT Musam Utjing
PT Musam Utjing
PT Riau Agrindo Agung
PT Musam Utjing
PT Riau Agrindo Agung
PT Riau Agrindo Agung
PT Sawit Graha Manunggal
PT Riau Agrindo Agung
PT Sawit Graha Manunggal
PT Sawit Graha Manunggal
PT Simpang Ampat
PT Sawit Graha Manunggal
PT Simpang Ampat
PT Simpang Ampat
PT Tasik Raja
PT Simpang Ampat
PT Tasik Raja
PT Tasik Raja
PT United Kingdom Indonesia Plantations
PT Tasik Raja
PT United Kingdom Indonesia Plantations
PT United Kingdom Indonesia Plantations
PT Anglo-Eastern Plantations Management
PT United Kingdom Indonesia Plantations
PT Anglo-Eastern Plantations Management
PT Anglo-Eastern Plantations Management
PT Anglo-Eastern Plantations Management
Indonesia
Indonesia
Indonesia
Indonesia
Dormant companies
Dormant companies
Dormant companies
Dormant companies
Limited
Limited
Limited
Limited
The Ampat (Sumatra) Rubber Estate (1913)
The Ampat (Sumatra) Rubber Estate (1913)
The Ampat (Sumatra) Rubber Estate (1913)
The Ampat (Sumatra) Rubber Estate (1913)
Gadek Indonesia (1975) Limited
Gadek Indonesia (1975) Limited
Gadek Indonesia (1975) Limited
Mergerset (1980) Limited
Gadek Indonesia (1975) Limited
Mergerset (1980) Limited
Mergerset (1980) Limited
Musam Indonesia Limited
Mergerset (1980) Limited
Musam Indonesia Limited
Musam Indonesia Limited
Musam Indonesia Limited
Country of
Country of
Country of
incorporation and
Country of
incorporation and
incorporation and
principal place of
incorporation and
principal place of
principal place of
business
principal place of
business
business
business
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Indonesia
Malaysia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Proportion of
Proportion of
Proportion of
ownership interest at
Proportion of
ownership interest at
ownership interest at
31 December
ownership interest at
31 December
31 December
31 December
2016
2016
2016
2016
100%
100%
100%
100%
2017
2017
2017
2017
100%
100%
100%
100%
100%
100%
100%
100%
55%
55%
55%
100%
55%
100%
100%
90%
100%
90%
90%
100%
90%
100%
100%
95%
100%
95%
95%
80%
95%
80%
80%
90%
80%
90%
90%
95%
90%
95%
95%
80%
95%
80%
80%
95%
80%
95%
95%
95%
95%
95%
95%
90%
95%
90%
90%
75%
90%
75%
75%
95%
75%
95%
95%
82%
95%
82%
82%
100%
82%
100%
100%
80%
100%
80%
80%
75%
80%
75%
75%
100%
75%
100%
100%
100%
100%
100%
100%
100%
55%
55%
55%
100%
55%
100%
100%
90%
100%
90%
90%
100%
90%
100%
100%
95%
100%
95%
95%
80%
95%
80%
80%
90%
80%
90%
90%
95%
90%
95%
95%
80%
95%
80%
80%
95%
80%
95%
95%
95%
95%
95%
95%
90%
95%
90%
90%
75%
90%
75%
75%
95%
75%
95%
95%
82%
95%
82%
82%
100%
82%
100%
100%
80%
100%
80%
80%
75%
80%
75%
75%
100%
75%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Non-controlling
Non-controlling
Non-controlling
interests ownership /
Non-controlling
interests ownership /
interests ownership /
voting interest at 31
interests ownership /
voting interest at 31
voting interest at 31
December
voting interest at 31
December
December
December
2016
2016
2016
2016
-
-
-
-
2017
2017
2017
2017
-
-
-
-
-
-
-
-
45%
45%
45%
-
45%
-
-
10%
-
10%
10%
-
10%
-
-
5%
-
5%
5%
20%
5%
20%
20%
10%
20%
10%
10%
5%
10%
5%
5%
20%
5%
20%
20%
5%
20%
5%
5%
5%
5%
5%
5%
10%
5%
10%
10%
25%
10%
25%
25%
5%
25%
5%
5%
18%
5%
18%
18%
-
18%
-
-
20%
-
20%
20%
25%
20%
25%
25%
-
25%
-
-
-
-
-
-
-
45%
45%
45%
-
45%
-
-
10%
-
10%
10%
-
10%
-
-
5%
-
5%
5%
20%
5%
20%
20%
10%
20%
10%
10%
5%
10%
5%
5%
20%
5%
20%
20%
5%
20%
5%
5%
5%
5%
5%
5%
10%
5%
10%
10%
25%
10%
25%
25%
5%
25%
5%
5%
18%
5%
18%
18%
-
18%
-
-
20%
-
20%
20%
25%
20%
25%
25%
-
25%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The principal United Kingdom sub-holding company, UK management company and UK dormant companies are registered in England and
The principal United Kingdom sub-holding company, UK management company and UK dormant companies are registered in England and
The principal United Kingdom sub-holding company, UK management company and UK dormant companies are registered in England and
Wales and are direct subsidiaries of the Company. The Malaysian operating companies are incorporated in Malaysia and are direct
The principal United Kingdom sub-holding company, UK management company and UK dormant companies are registered in England and
Wales and are direct subsidiaries of the Company. The Malaysian operating companies are incorporated in Malaysia and are direct
Wales and are direct subsidiaries of the Company. 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
Wales and are direct subsidiaries of the Company. 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
subsidiaries of the Company. The Indonesian operating companies are incorporated in Indonesia and are direct subsidiaries of the principal
sub-holding company. The principal activity of the operating companies is plantation agriculture. The registered office of the principal
subsidiaries of the Company. The Indonesian operating companies are incorporated in Indonesia and are direct subsidiaries of the principal
sub-holding company. The principal activity of the operating companies is plantation agriculture. The registered office of the principal
sub-holding company. The principal activity of the operating companies is plantation agriculture. The registered office of the principal
subsidiaries are disclosed below:
sub-holding company. The principal activity of the operating companies is plantation agriculture. The registered office of the principal
subsidiaries are disclosed below:
subsidiaries are disclosed below:
subsidiaries are disclosed below:
Subsidiaries by country
Subsidiaries by country
Subsidiaries by country
UK registered subsidiaries
Subsidiaries by country
UK registered subsidiaries
UK registered subsidiaries
UK registered subsidiaries
Malaysia registered subsidiaries
Malaysia registered subsidiaries
Malaysia registered subsidiaries
Malaysia registered subsidiaries
Indonesia registered subsidiaries
Indonesia registered subsidiaries
Indonesia registered subsidiaries
Indonesia registered subsidiaries
Registered address
Registered address
Registered address
Quadrant House, 6th Floor
Registered address
Quadrant House, 6th Floor
Quadrant House, 6th Floor
4 Thomas More Square
Quadrant House, 6th Floor
4 Thomas More Square
4 Thomas More Square
London E1W 1YW
4 Thomas More Square
London E1W 1YW
London E1W 1YW
United Kingdom
London E1W 1YW
United Kingdom
United Kingdom
United Kingdom
7th Floor, Wisma Equity
7th Floor, Wisma Equity
7th Floor, Wisma Equity
150 Jalan Ampang
7th Floor, Wisma Equity
150 Jalan Ampang
150 Jalan Ampang
50450 Kuala Lumpur
150 Jalan Ampang
50450 Kuala Lumpur
50450 Kuala Lumpur
Malaysia
50450 Kuala Lumpur
Malaysia
Malaysia
Malaysia
3rd Floor, Wisma HSBC, Jalan Diponegoro, Kav 11
3rd Floor, Wisma HSBC, Jalan Diponegoro, Kav 11
3rd Floor, Wisma HSBC, Jalan Diponegoro, Kav 11
Medan 20152
3rd Floor, Wisma HSBC, Jalan Diponegoro, Kav 11
Medan 20152
Medan 20152
North Sumatera
Medan 20152
North Sumatera
North Sumatera
Indonesia
North Sumatera
Indonesia
Indonesia
Indonesia
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
Annual Report 2017 | Anglo-Eastern Plantations Plc
93
93
93
93
93
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
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About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Consolidated Financial Statements
27 Notes supporting statement of cash flows
Cash and cash equivalents for purposes of the statement of cash flows comprises:
Cash at bank available on demand
Short-term deposits
Cash in hand
Significant non-cash transactions from investing activities are as follows:
Property, plant and equipment purchased but not yet paid at year end
2017
$000
26,533
112,937
19
139,489
2017
$000
193
Non-cash transactions from financing activities are shown in the reconciliation of liabilities from financing transactions as follows:
At 1 January 2017
Cash Flows
Non-cash flows
- Effect of foreign exchange
- New finance lease
- Loans and borrowings classified as non-current at 31 December 2016 becoming
current during 2017
-Interest accruing during the year
Non-current
loans and
borrowings
$000
Current
loans and
borrowings
$000
Total
$000
(27,875)
-
(6,203)
6,197
(34,078)
6,197
-
-
8,594
-
(19,281)
6
-
(8,594)
-
(8,594)
6
-
-
-
(27,875)
Annual Report 2017 | Anglo-Eastern Plantations Plc
95
95
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Company Balance Sheet
As at 31 December 2017
Company Number: 1884630
Non-current assets
Property, plant & equipment
Investments in subsidiaries
Current assets
Debtors
Cash at bank and in hand
Creditors: amount falling due within one year
Net current assets / (liabilities)
Net assets
Capital and reserves
Share capital
Treasury shares
Share premium
Capital redemption reserve
Exchange reserves
Retained earnings at 1 January
Loss for the year
Dividends paid
Retained earnings
Shareholders' funds
Note
3
4
5
6
6
2017
$000
12
61,876
61,888
2,797
1,860
4,657
(3,403)
1,254
63,142
15,504
(1,171)
23,935
1,087
3,872
22,605
(1,175)
(1,515)
19,915
63,142
2016
$000
-
66,971
66,971
1,837
245
2,082
(3,221)
(1,139)
65,832
15,504
(1,171)
23,935
1,087
3,872
23,719
(111)
(1,003)
22,605
65,832
The loss after tax for the year for the Company dealt with in the consolidated financial statements of the Company was $1,175,000 (2016:
$111,000).
The financial statements were approved by the Board of Directors and authorised for issue on 24 April 2018 and were signed on its behalf by
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
The accompanying notes are an integral part of this balance sheet.
Annual Report 2017 | Anglo-Eastern Plantations Plc
96
96
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
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A
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Company Financial Statements
1 Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with Financial Reporting Standard 100 Application of Financial Reporting
Requirements ("FRS 100") and Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS 101").
Disclosure exemptions adopted
In preparing these financial statements the Company has taken advantage of all disclosure exemptions conferred by FRS 101. Therefore
these financial statements do not include:
•
•
•
•
•
•
certain comparative information as otherwise required by EU endorsed IFRS;
certain disclosures regarding the Company's capital;
a statement of cash flows;
the effect of future accounting standards not yet adopted;
the disclosure of the remuneration of key management personnel; and
disclosure of related party transactions with other wholly owned members of Anglo-Eastern Plantations Plc group of companies.
In addition, and in accordance with FRS 101 further disclosure exemptions have been adopted because equivalent disclosures are included
in the Company's consolidated financial statements. These financial statements do not include certain disclosures in respect of:
• Share based payments;
• Financial instruments (other than certain disclosures required as a result of recording financial instruments at fair value); or
• Fair value measurement (other than certain disclosures required as a result of recording financial instruments at fair value).
Principal accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been
consistently applied to all the years presented unless otherwise stated.
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 cost convention. The presentation currency used is US Dollar and amounts have been presented in round thousands ("$000").
The principal accounting policies are summarised below.
Foreign currency
The functional currency of the Company is US Dollar, chosen because the prices of the bulk of the Group’s products are ultimately
denominated in US Dollar. Transactions in sterling are translated to US Dollar at the actual exchange rate and exchange losses recognised
in profit and loss. Sterling denominated assets and liabilities are converted to US Dollar at the rate ruling at the balance sheet date.
Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss.
Investments
Investments in subsidiaries are stated at cost less provision for any permanent diminution in value.
Property, plant and equipment
All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the
acquisition of the items. After initial recognition, all items of property, plant and equipment except land and construction in progress, are
stated at cost less accumulated depreciation and any accumulated impairment losses.
Office plant and equipment is depreciated using the straight-line method. The yearly rate of depreciation is as follows:
Office plant, equipment & vehicle - 20% per annum
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.
Share based payments
As set out under Group accounting policies on page 67.
Deferred taxation
A deferred tax asset has not been recognised in relation to brought forward tax losses of $10.7m (2016: 9.5m) because it is not certain those
losses can be utilised in the foreseeable future.
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 shares. 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.
Annual Report 2017 | Anglo-Eastern Plantations Plc
98
98
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Company Financial Statements
1 Accounting policies - continued
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 Profit and loss account
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 loss before tax for the year for the Company dealt with in the consolidated financial statements of the Company was
$1,172,000 (2016: $97,000) and loss after tax for the year was $1,175,000 (2016: $111,000).
The remuneration of the directors of the Company is disclosed in note 6 to the consolidated financial statements. Auditor's remuneration is
disclosed in note 4 to the consolidated financial statements.
3
Investments in subsidiaries
At 1 January 2016
Movements during the year
Reclassification
Repayment
At 31 December 2016
Movements during the year:
Repayment
At 31 December 2017
Net carrying amount
At 31 December
Investments in
subsidiaries
undertakings
$000
Loans to
subsidiaries
undertakings
$000
Total
$000
2,810
64,781
67,591
11,378
-
14,188
-
14,188
(11,378)
(620)
52,783
(5,095)
47,688
2017
$000
-
(620)
66,971
(5,095)
61,876
2016
$000
61,876
66,971
Loans to 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 as investments in subsidiaries.
On 5 December 2017, the shareholders of Anglo-Eastern Plantations (M) Sdn Bhd, subject to the approval from the Companies Commission
of Malaysia, resolved to fully redeemed the 8.4% Cumulative Preference Shares of 7,356,000 issued to Anglo-Eastern Plantation Plc for
$1,818,000.
The details of the subsidiaries are disclosed in Note 25 of the consolidated financial statements.
Annual Report 2017 | Anglo-Eastern Plantations Plc
99
99
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Company Financial Statements
4 Debtors
Amounts owed by group undertakings:
Anglo-Eastern Plantations Management Sdn Bhd
Anglo-Eastern Plantations (M) Sdn Bhd
PT Hijau Pyran Perdana
PT Sawit Graha Manunggal
Other debtors
2017
$000
2,319
-
100
350
2,769
28
2,797
2016
$000
1,299
291
50
175
1,815
22
1,837
The amounts owed by group undertakings arise as a result of advances to subsidiary companies and expenses paid on their behalf. The
amounts are unsecured, interest free and do not have fixed repayment terms.
5 Creditors: amounts falling due within one year
Amounts owed to group undertakings
Mergerset (1980) Limited
Musam Indonesia Limited
Accruals
2017
$000
2,163
246
2,409
994
3,403
2016
$000
2,163
246
2,409
812
3,221
The amounts owed to group undertakings arise as a result of advances from subsidiary companies and expenses paid on our behalf. The
amounts are unsecured, interest free and do not have fixed repayment terms.
6 Share capital and treasury shares
The details of the share capital and treasury shares are disclosed in Note 19 of the consolidated financial statements.
7 Related party transactions
The details of the related party transactions for UHY Hacker Young LLP are disclosed in Note 21 of the consolidated financial statements.
An office premises lease agreement was entered with Infra Sari Sdn Bhd, a company controlled by Madam Lim Siew Kim. The rental paid
during the year was $210,264 (2016: $203,896). There was no balance outstanding at the year end (2015: Nil).
Transactions between the Company and its subsidiaries are disclosed below:
Nature of transactions
Name
Management fees from
Corporate guarantee fees from
Corporate guarantee fees from
Receivable from
Payable to
Anglo-Eastern Plantations Malaysia Sdn Bhd
PT Hijau Pryan Perdana
PT Sawit Graha Manunggal
Subsidiaries (note 4)
Subsidiaries (note 5)
2017
$000
44
50
175
2,769
2,409
2016
$000
65
50
175
1,815
2,409
The details of the intercompany receivables and payables are disclosed in note 4 and note 5 of the Company financial statements
respectively.
Annual Report 2017 | Anglo-Eastern Plantations Plc
100
100
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notes to the Company Financial Statements
8 Employees' and Directors' remuneration
Average numbers employed during the year
- directors
- staff
Staff costs
Wages and salaries
Social security costs
Retirement benefits
2017
Number
2016
Number
4
-
4
2017
$000
-
-
62
62
4
-
4
2016
$000
(481)
-
64
(417)
The information required by the Companies Act and the Listing Rules of the Financial Conduct Authority are contained in the Directors'
remuneration report on pages 47 - 51 of which certain information on page 51 has been audited.
Directors' emoluments
9 Dividends
2017
$000
208
2016
$000
228
The details of the dividends are disclosed in Note 9 of the consolidated financial statements.
10 Guarantees and other financial commitments
The Company has provided guarantees for loans to subsidiaries totalling $45,000,000 (2016: $45,000,000) as set out in note 15 of the
consolidated financial statements.
Annual Report 2017 | Anglo-Eastern Plantations Plc
101
101
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notice of Annual General Meeting
Notice is hereby given that the thirty-third 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 25 June 2018 at 11.00 a.m. for the following purposes:
1
2
3
4
5
6
7
8
9
To receive and consider the accounts and the reports of the directors and auditors thereon for the year ended 31 December 2017.
To approve the Directors' Remuneration Report (excluding the part containing the remuneration policy) as set out in the Company’s annual
report and accounts for the year ended 31 December 2017.
To declare a final dividend.
To re-elect Madam Lim Siew Kim, a Non-Executive Director, who has served more than nine years.
To re-elect Dato’ John Lim Ewe Chuan as a director.
To re-elect Mr Lim Tian Huat as a Non-Executive Director.
To re-elect Mr Jonathan Law Ngee Song as a Non-Executive Director
To re-appoint BDO LLP as auditors.
To authorise the directors to fix the remuneration of the auditors.
10 To consider the following resolution as an ordinary resolution:
That the directors be generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006, in substitution for
all existing authorities to the extent unused, to exercise all the powers of the Company to allot:
(i)
(ii)
shares in the Company up to an aggregate nominal amount of £3,303,031 (representing 13,212,124 ordinary shares of 25p each)
which is equal to one third of the issued ordinary share capital (excluding treasury shares) at the date of this resolution: and in
addition
equity securities of the Company (within the meaning of section 560(1) of the Companies Act 2006) in connection with an offer of
such securities by way of a rights issue up to an aggregate nominal amount of £3,303,031
provided that this authority shall expire on the date of the next annual general meeting after the passing of this resolution or 30 June 2019
whichever is earlier 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.
"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).
11 To consider the following resolution as a special resolution:
That subject to and conditional on the passing of Resolution 10, the directors be empowered pursuant to section 570 of the Companies Act
2006) to allot equity securities (within the meaning of section 560 of that Act) for cash pursuant to the authority conferred by Resolution 10
and/or by way of sale of treasury shares as if section 561(1) of that Act did not apply to any such allotment or sale, provided that this
authorisation shall be limited to:
(i)
the allotment of equity securities and sale of treasury shares for cash in connection with an offer or issue of, or invitation to apply for,
equity securities made to (but in the case of the authority granted under paragraph (ii) of Resolution 10 by way of a rights issue
only);
(a)
(b)
ordinary shareholders in proportion (as nearly may be practicable) to their existing holdings: and
holders of other equity securities, as required by the rights of those securities, or as the directors otherwise consider
necessary,
and permitting the directors to impose any limited or restrictions and make any arrangements which they consider necessary or
appropriate to deal with treasury shares, fractional entitlement, record dates, legal regulatory or practical problems in, or under, the
laws of any territory, or any other matter; and
Annual Report 2017 | Anglo-Eastern Plantations Plc
102
102
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notice of Annual General Meeting
(ii)
in the case of the authority granted under paragraph (i) of Resolution 10 and/or the sale of treasury shares for cash, to the allotment
of equity shares or sale of treasury shares up to an aggregate nominal amount of £495,454.
Such power shall apply during the period expiring on the date of the next annual general meeting or on 30 June 2019 (whichever
shall be earlier) but the directors may during such periods make offers or agreements which would or might require equity securities
to be allotted (and treasury shares to be sold) after the expiry of such period.
12 To consider the following as a special resolution:
That the Company be generally and unconditionally authorised to make market purchases (within the meaning of section 693(4) of the
Companies Act 2006) of ordinary shares of 25p each in the capital of the Company on such terms as the directors think fit, provided that:
(a)
the maximum number of ordinary shares hereby authorised to be purchased is 3,963,637 (representing 10% of the issued ordinary
share capital);
(b)
the minimum price (exclusive of expenses) which may be paid for each ordinary share is 25p;
(c)
the maximum price (exclusive of expenses) which may be paid for each ordinary share is the higher of:
(i)
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 for the five business days immediately preceding the date of purchase; and
(ii)
the price of the last independent trade and the highest current independent bid on the London Stock Exchange; and
(d)
the authority hereby conferred shall expire on 30 June 2019 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.
13 To consider the following resolution as a special resolution:
That with effect from the conclusion of the meeting the draft articles of association produced to the meeting and, for the purposes of
identification, initialled by the Chairman be adopted as the articles of association of the Company in substitution for, and to the exclusion of,
the Company's existing articles of association.
14 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
18 May 2018
Annual Report 2017 | Anglo-Eastern Plantations Plc
103
103
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notice of Annual General Meeting
Notes:
1.
2.
3.
4.
5.
6.
7.
8.
9.
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 close of business on 21 June 2018 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 21 June 2018 or, if the meeting is adjourned, in the register of members at
close of business 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.
As at 18 May 2018 (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 339,900 shares held as treasury shares and therefore the total number of voting rights in
the Company as at 9.00 am on 18 May 2018 is 39,636,372.
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 the meeting. Where
more than one proxy is appointed in relation to the meeting, each proxy must be appointed to exercise rights attaching to a different share or 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.
The instrument appointing a proxy must be deposited at the office of the registrars by 11.00 a.m. on 21 June 2018 not less than forty-eight hours before the
time appointed for holding the meeting (or any adjournment thereof).
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).
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 to be held on 25 June 2018 and any adjournment thereof by using the procedures described in the CREST Manual on the Euroclear website
(www.euroclear.com/CREST). 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 Link Asset Services [CREST ID: RA10] by 11.00 a.m. on 21 June 2018. 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.
You may submit your proxy electronically using The Share Portal service at www.signalshares.com. If not already registered for The Share Portal you will
need your Investor Code which can be found on your share certificate.
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.
A member of the Company which is a corporation may authorise a person or persons to act as its representative(s) at the meeting. In accordance with the
provisions of the Companies Act 2006, each such representative may exercise (on behalf of the corporation) the same powers as the corporation could
exercise if it were an individual member of the Company, provided that they do not do so in relation to the same shares. It is no longer necessary to
nominate a designated corporate representative.
10. 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. 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.
11.
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.
12.
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.
Annual Report 2017 | Anglo-Eastern Plantations Plc
104
104
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
Notice of Annual General Meeting
13.
14.
If you are in any doubt as to any aspect of Resolutions 11 to 14 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.
15. Resolution 13 proposes that the Company's articles of association (the 'Existing Articles') be replaced by new articles of association (the 'New Articles').
Some of the defined terms have been updated to ensure consistency with changes to the law (and a number of articles have been amended to ensure
consistent use of definitions throughout the New Articles). For example, article 12 relating to bearer shares has been deleted entirely as the use of bearer
shares was abolished on 26 May 2015. Additionally, the language contained in article 9.2 regarding the disapplication of pre-emption rights has been
amended to include a reference to treasury shares and to be set out in a more common format and article 79 (defining 'mental incapacity') and article 103
(relating to a director's termination) have been amended to comply with the Equality Act 2010 and the discrimination provisions relating to mental health. A
number of formatting changes have also been made.
Further to the above explanation of the proposed changes, the main amendments to the Existing Articles are as follows:
1.1
deleting the whole of Article 9.2 and replacing it with a new Article 9.2 as follows:
9.2 Subject to the provisions of this Article 9, and where the Board has general authority under Article 9.1, the Company may pass a special
resolution in accordance with section 570 of the Companies Act 2006 authorising the Directors to allot equity securities (as defined in section
560 of the Companies Act 2006) for cash:
in connection with a rights issue; and
(a)
(b) otherwise than in connection with a rights issue up to an aggregate nominal value not exceeding the sum specified in the special resolution, as
if section 561 of the Companies Act 2006 (existing shareholders' right of pre-emption) did not apply to the allotment or applied to the allotment
with such modifications as the directors may determine.
1.2
deleting the whole of Article 9.3 and replacing it with a new Article 9.3 as follows:
9.3 For the purposes of this Article 9:
(a)
rights issue means an offer of equity securities (as defined by the Companies Act 2006) open for acceptance for a period fixed by the Board to
holders of equity securities on the Register on a fixed record date in proportion to their respective holdings of such securities or in accordance
with the rights attached to them but subject to such exclusions or other arrangements as the Board may deem necessary or expedient with
regard to treasury shares, fractional entitlements or legal or practical problems under the laws of any territory or under the requirements of any
recognised regulatory body or stock exchange in any territory; and
the nominal value of any securities shall be taken to be, in the case of rights to subscribe for or to convert any securities into shares of the
Company, the nominal amount of such shares which may be allotted pursuant to such rights.
(b)
1.3
deleting the whole of Article 12 (Issue of share warrants to the bearer) and re-numbering all the subsequent Articles and cross-references
accordingly,
1.4
deleting the whole of Article 79 (formerly Article 80) and replacing it with a new Article 79 as follows:
79. Member who lacks mental capacity
A Member who is a patient for any purpose of any statute relating to mental health or in respect of whom an order has been made by any court
having jurisdiction for the protection or management of the affairs of Persons incapable of managing their own affairs may vote, whether on a
show of hands or on a poll, by his committee, deputy, receiver, curator bonis or other Person appointed by that court. That committee, deputy,
receiver, curator bonis or other Person may on a poll vote by proxy. The right to vote is exercisable only if evidence satisfactory to the Board of
the authority of the Person claiming to vote has been deposited at the Office or at such other place within the United Kingdom as is specified in
the notice of meeting not less than 48 hours before the time for holding the meeting or adjourned meeting at which that Person claims to vote.
1.5
1.6
replacing the word "insanity" wherever it occurs in Article 87 (formerly Article 88) with the words "mental incapacity",
deleting Article 103 (d) (formerly Article 104 (d)) in its entirety and replacing it with a new Article 103 (d) as follows:
(d) a registered medical practitioner who is treating that person gives a written opinion to the Company stating that person has become physically
or mentally incapable of acting as a director and may remain so for more than three months, or he is or has been suffering from mental or
physical ill health and the Board resolves that his office be vacated;
16.
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) a copy of the Executive Director’s service agreement;
(b) copies of Non-Executive Directors’ letters of appointment;
(c)
relationship agreement with the majority shareholder; and
(d) a copy of the Existing Articles and the New Articles and a blackline showing the amendments made to the Existing Articles.
Annual Report 2017 | Anglo-Eastern Plantations Plc
105
105
About Anglo-Eastern Plantations Annual Report 2017 | Anglo-Eastern Plantations Plc 2 The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200ha. AEP has a Premium Listing on the London Stock Exchange. The Company was formed and floated in 1985. Primary activities are the crop production and processing of palm oil and some rubber through operations in Indonesia and Malaysia. The Group is committed to responsible development and management of its plantations and facilities for the benefit of the environment and society in which it operates.
About Anglo-Eastern Plantations
Contents
The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major
producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some
128,200ha.
About AEP
2
Financial Highlights
Key Information
Shareholder Information
Chairman's Statement
Strategic Report
Financial Record
Estate Areas
Location of Estates
Directors' Report
Directors' Responsibilities
Directors
Statement on Corporate Governance
Audit Committee Report
Directors' Remuneration Report
Auditors' Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
4
6
7
9
11
27
28
29
30
38
39
40
44
47
52
60
61
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
AEP has a Premium Listing on the London Stock
Exchange. The Company was formed and floated in
1985.
63
62
Consolidated Statement of Cash Flows
64
Notes to the Consolidated Financial Statements
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the Company Financial Statements
Notice of Annual General Meeting
Primary activities are
the crop production and
processing of palm oil and some rubber through
operations in Indonesia and Malaysia.
66
96
The Group is committed to responsible development
and management of its plantations and facilities for the
benefit of the environment and society in which it
operates.
102
98
97
Form of Proxy and Attendance Card
Company addresses, advisers and website
Separate Attachment
Inside Back Cover
Annual Report 2017 | Anglo-Eastern Plantations Plc
2
Company addresses
London Office
Anglo-Eastern Plantations Plc
Quadrant House, 6th Floor
4 Thomas More Square
London E1W 1YW
United Kingdom
Tel: 44 (0)20 7216 4621
Fax: 44 (0)20 7767 2602
Malaysian Office
Anglo-Eastern Plantations Management 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 Anglo-Eastern Plantations Management Indonesia
3rd Floor, Wisma HSBC, Jalan Diponegoro, Kav 11
Medan 20152
North Sumatera
Indonesia
Tel: 62 (0)61 452 0107
Fax: 62 (0)61 452 0029
Secretary and registered office
Anglo-Eastern Plantations Plc
(Number 1884630)
(Registered in England and Wales)
CETC (Nominees) Limited
Quadrant House, 6th Floor
4 Thomas More Square
London E1W 1YW
United Kingdom
Tel: 44 (0)20 7216 4600
Fax: 44 (0)20 7767 2602
Company website
www.angloeastern.co.uk
Company advisers
Auditors
BDO LLP
55 Baker Street
London W1U 7EU
United Kingdom
Principal Bankers
National Westminster Bank Plc
Liverpool Street Station
216 Bishopsgate
London EC2M 4QB
United Kingdom
The Hong Kong and Shanghai Banking Corporation
Limited
Wisma HSBC
Jalan Diponegoro, Kav 11
Medan 20152
North Sumatera
Indonesia
PT Bank DBS Indonesia
Uniplaza Building
Jalan Letjen MT Haryono A-1
Medan 20231
North Sumatera
Indonesia
RHB Bank Bhd
Podium Block, Plaza OSK
Jalan Ampang
50450 Kuala Lumpur
Malaysia
Registrars
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
United Kingdom
Solicitors
Withers LLP
16 Old Bailey
London EC4M 7EG
United Kingdom
Sponsor/Broker
Panmure Gordon (UK) Limited
One New Change
London EC4M 9AF
United Kingdom